Latest / WTR Small-Cap Spotlight / Wrap Technologies (WRAP): How an ATF Ruling Could Change Everything for a Non-Lethal Restraint Leader

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Wrap Technologies (WRAP): How an ATF Ruling Could Change Everything for a Non-Lethal Restraint Leader · WTR Small-Cap Spotlight

• 0:01
  SPEAKER_01: Welcome to the WTR Small Cap Spotlight Podcast.
• 0:04
  SPEAKER_01: I'm your host, Tim Gerterman, Vice Chair and Co-Founder, and Chief Marketing Officer of Water Tower Research.
• 0:15
  SPEAKER_01: In today's episode, I'm being joined by Scott Cohen, founder, chairman, and CEO of Wrap Technologies, NASDAQ TickerSymbol WRAP.
• 0:24
  SPEAKER_01: Also joining is my Water Tower Research Equity Research Colleague, Eric Goldstein.
• 0:29
  SPEAKER_01: Rap Technologies is a global leader in innovative public safety technologies and non-lethal tools, delivering cutting-edge technology to address the complex, modern-day challenges facing public safety organizations.
• 0:43
  SPEAKER_01: RAP Technologies built its name on Bola Rap, a non-lethal remote restraint device now used by more than a thousand agencies across the U.S.
• 0:52
  SPEAKER_01: and in 60 countries.
• 0:54
  SPEAKER_01: RAP is transforming from a company known for a single breakthrough restraint device into a technology company building an intelligent operating architecture for public safety and security.
• 1:04
  SPEAKER_01: RAP's complete public safety portfolio includes the non-lethal BOLARAP 150 device, RAP Reality Immersive Training Platform, RAP Vision Body Worn Camera System, RAP Tactics Training Programs, and lastly, next generation counter-unmanned aircraft systems such as the 1KC Kinetic Anti-Drome Cassette.
• 1:28
  SPEAKER_01: This impressive list of products and capabilities supports RAP's recently updated mission to position the company at the intersection of artificial intelligence, advanced sensing, autonomous decision support, and measured non-lethal response.
• 1:42
  SPEAKER_01: Over the past month, the company has landed a favorable ATF ruling on Bola Rap's federal classification, announced a strategic investment in Israeli sensing company frontal imaging that includes a four-year exclusive US and NATO license, and launched a new platform called RapShield for counter-drone and autonomous public safety applications recently enhanced with a new multi-shot system called Raptor MX.
• 2:07
  SPEAKER_01: The company has also reiterated a target of roughly 100% growth for 2026.
• 2:13
  SPEAKER_01: Scott and Eric, welcome to today's podcast.
• 2:16
  SPEAKER_00: Thanks, Tim.
• 2:17
  SPEAKER_00: Thanks for having me.
• 2:19
  SPEAKER_00: Tim, thank you.
• 2:20
  SPEAKER_01: Scott, I'm excited to hear the story.
• 2:21
  SPEAKER_01: And uh to kick things off for listeners who previously knew raps solely for Bolo Rap, how do you want them to think about the company today versus the past when you were essentially a one-product company?
• 2:31
  SPEAKER_01: And what is the single most important thing that has changed with the company's broader business model?
• 2:37
  SPEAKER_00: Well, you just said it.
• 2:39
  SPEAKER_00: The biggest takeaway here that I want all your listeners to understand as we have gone from a one-device company to a much larger, complete, multi-tiered response system is what we're talking about.
• 2:54
  SPEAKER_00: That all plays on the theme of a non-lethal, where we don't use pain to bring a subject into compliance.
• 3:02
  SPEAKER_00: And on what we just added, what you saw was the threat awareness capability that uh they from the investment in Fernell.
• 3:11
  SPEAKER_00: So you can't respond to what you can't see.
• 3:14
  SPEAKER_00: So early threat detection is going to be key both for our military and our public safety.
• 3:20
  SPEAKER_00: So what a core part of our training, a core part of finally understanding who we are, is we create time and distance for military, time and distance for public safety.
• 3:36
  SPEAKER_00: That could be police officers, security guards, teachers, and other types of people responsible for keeping the public safe.
• 3:45
  SPEAKER_00: Time and distance is a key element to this whole thing.
• 3:49
  SPEAKER_00: And that's what we discovered in the creation of Bull Rap.
• 3:53
  SPEAKER_00: And when we rolled it out, the biggest unpack, and I think for everybody here is this device is being used way more than anybody has any clue on.
• 4:05
  SPEAKER_00: And the reason why I know it is because I'm making the calls, I'm going to the training centers, I'm talking to the chiefs, and I am talking to the people that are using the device.
• 4:18
  SPEAKER_00: And what's reported, it's not, it's, it's not, um, there's no reporting responsibility for the device.
• 4:26
  SPEAKER_00: So it's not, in most of the departments, it's not a reportable use of force.
• 4:30
  SPEAKER_00: That's how they classify it.
• 4:32
  SPEAKER_00: So we have no way to know unless you actually talk to the people that are using it.
• 4:36
  SPEAKER_00: And here's the best part, Tim deployments are just spiking.
• 4:40
  SPEAKER_00: The device is being used more than anything on the belt when it comes to bringing a subject into custody in at least 75 to maybe 100 departments that I know about.
• 4:52
  SPEAKER_00: But here's a real big unpack for everybody right now.
• 4:58
  SPEAKER_00: It was, let's say the company should take responsibility of this.
• 5:02
  SPEAKER_00: We trained success.
• 5:04
  SPEAKER_00: We didn't make, we didn't make it clear what success looked like.
• 5:08
  SPEAKER_00: The industry thought that it had to be the perfect rap.
• 5:12
  SPEAKER_00: But it turns out the light, the laser, and the sound distracting the oodaloop and confusion is resulting in nine that nine times out of ten de-escalation, where it actually doesn't escalate, the encounter's over.
• 5:29
  SPEAKER_00: So nine times out of ten, the wrap itself isn't even deployed.
• 5:33
  SPEAKER_00: It's called site compliance, and it happens way more than anybody knows.
• 5:37
  SPEAKER_00: And we weren't getting credit for it, either was the officer.
• 5:41
  SPEAKER_00: So the big real learning lesson for me, and I think our stakeholders, and I think this industry is well, if we're not talking about our successes, it's really hard to see where we're going.
• 5:53
  SPEAKER_00: We need to, and if all we're talking about is use of force, use of force, that was a, and we're judged on the amount of forces, use of forces that the department has.
• 6:02
  SPEAKER_00: Is it higher or lower this year?
• 6:03
  SPEAKER_00: Oh, great job, city council says to department, you've lowered your number by 20%.
• 6:08
  SPEAKER_00: It's not about that, Tim.
• 6:10
  SPEAKER_00: It's about preservation of life.
• 6:13
  SPEAKER_00: It's about avoiding the force.
• 6:15
  SPEAKER_00: And our system, in system, not product, system.
• 6:18
  SPEAKER_00: That's with training, policies, all integrated with the device now.
• 6:24
  SPEAKER_00: That's the difference between successful and safe outcomes and outcomes that might escalate pretty quickly.
• 6:32
  SPEAKER_00: And you know what happens when these things escalate.
• 6:35
  SPEAKER_00: It's, it's, I'll tell you what happens: three and a half billion dollars with the damages this country pays a year in settlements.
• 6:42
  SPEAKER_00: Forget about the workers' comp for the officers and the subject.
• 6:46
  SPEAKER_00: It's a financial disaster, shrinking police budgets and resulting in us not being as safe as we need to be.
• 6:53
  SPEAKER_00: And that's what we're fighting for here.
• 6:55
  SPEAKER_01: That's a really helpful overview, and most interesting.
• 6:57
  SPEAKER_01: I gotta say, as a military junkie, I'm very familiar with the uh disorienting of uh bad actors before you have to use lethal force, so it's very clever.
• 7:04
  SPEAKER_01: Uh, with that, I'll turn it over to Eric.
• 7:06
  SPEAKER_02: Okay, thanks, Tim.
• 7:07
  SPEAKER_02: Scott, that was uh a very informative and incredible uh answer to Tim's question.
• 7:13
  SPEAKER_02: So um thanks for joining us today.
• 7:15
  SPEAKER_02: We're really happy to have you.
• 7:16
  SPEAKER_02: You know, we've had a a lot of news flow, so this is very timely, and uh we'll try to cover as much ground as we can.
• 7:22
  SPEAKER_02: So for starters, can we just maybe um give the audience a sense just for your background, um some perspective on how personal this business is to you?
• 7:32
  SPEAKER_02: I know your family is involved in law enforcement.
• 7:35
  SPEAKER_02: What was the original reason for starting RAP and um how long have you been at it?
• 7:40
  SPEAKER_02: And then maybe you can just give us a little bit of detail on how the Bowler Rap 150 actually works.
• 7:46
  SPEAKER_00: Sure.
• 7:47
  SPEAKER_00: Um I describe myself as an entrepreneur.
• 7:49
  SPEAKER_00: Um I came to New York um to start a career in finance.
• 7:52
  SPEAKER_00: I really had no background in it, started at the bottom and worked my way up, and then started um the entrepreneur myself, started a um a uh a merchant bank in 99, 2000, which became a hedge fund, grew the hedge fund with a couple of my partners to uh I think 600 million in AUM and um had a great career, went from there to a uh multiple private equity funds to to invest in energy and walked away from all of that once um once I really was clear about this idea and excited about this idea to go a little bit further with just rather than writing checks and supporting veterans and people that supported public safety from a philanthropic perspective.
• 8:36
  SPEAKER_00: Um I I wanted to go deeper with this and I wanted to provide a solution for officers to be able to use a non-lethal tool as an option to what was available, the tools available to the officer today.
• 8:54
  SPEAKER_00: I wanted to have a new option for them that didn't use pain to bring a subject into custody.
• 9:00
  SPEAKER_00: That's what I was after.
• 9:02
  SPEAKER_00: Captain Inventor to help develop that idea.
• 9:05
  SPEAKER_00: We got a lot of attention on it and launched the company from it and seeing that there was a huge need.
• 9:11
  SPEAKER_00: So that's where this came from and and why the drive towards this, what would what stirred the idea.
• 9:18
  SPEAKER_00: My father served public safety his whole career.
• 9:21
  SPEAKER_00: He worked for the federal government looking after workers and mines.
• 9:25
  SPEAKER_00: He worked for Department of Labor in OSHA as a litigator and looked out for the workers.
• 9:29
  SPEAKER_00: And my brother started off as a cop and uh and went on to uh become a federal agent.
• 9:36
  SPEAKER_00: And so both their whole careers, they gave up the money side for the higher purpose side.
• 9:42
  SPEAKER_00: And I always found that to be that always stuck within me.
• 9:46
  SPEAKER_00: So that that that was where this idea hatched from.
• 9:50
  SPEAKER_00: It's where this passion came from.
• 9:52
  SPEAKER_00: But Eric, to be really honest with with you and and and this audience, um, it became as a it was public and it got a lot of attention.
• 10:04
  SPEAKER_00: And um, yeah, I I started to run and and started to focus more on um, it might have been led with a way less of the purpose.
• 10:15
  SPEAKER_00: I got away from the core idea and what brought me to this in the first place.
• 10:21
  SPEAKER_00: But now as I really reset and as the company resets, we know now that the that the this what's driving this is the purpose is we're talking about um protecting life.
• 10:34
  SPEAKER_00: We're talking about um a device that really is for humanity.
• 10:38
  SPEAKER_00: And I know that sounds a little corny, but the truth is, and just just picture this when a subject 97% of the time when an officer is called and there's resistance and he's coming to the scene, the subject is unarmed and they're not violent.
• 10:54
  SPEAKER_00: It's called passive resistance mostly.
• 10:57
  SPEAKER_00: And when you come and deal with passive resistance, you cannot, and in this day and age, particularly with the body cams and everybody's camera and the constitution and the three main new three Supreme Court decisions, the most recent Barnes v.
• 11:12
  SPEAKER_00: Felix, you cannot use a device that inflicts pain when someone's passively resisting.
• 11:20
  SPEAKER_00: And if you do, if you do, there are consequences that were not, they were not consequences before.
• 11:27
  SPEAKER_00: And Barnes v.
• 11:28
  SPEAKER_00: Felix's 9-0 decision from the Supreme Court nine months, uh, it was about nine uh 18 months ago, has changed the game.
• 11:36
  SPEAKER_00: And that means that when an officer comes on a scene and someone's passively resisting, which is about 5,000 times a day, 25,000 arrests in this country a day, 20% of the time there's resistance, 97% of the time they're unarmed and they're not violent and they're passive.
• 11:53
  SPEAKER_00: So how do you take them into custody?
• 11:55
  SPEAKER_00: They're not cooperating verbally.
• 11:57
  SPEAKER_00: Right here, this is really important.
• 11:59
  SPEAKER_00: How do you close the distance?
• 12:01
  SPEAKER_00: You can't use pain tools, you can't use your guns, show of force does not work anymore.
• 12:05
  SPEAKER_00: Under Barnes v.
• 12:06
  SPEAKER_00: Felix, with all the videos and all this, everything's recorded, doesn't work.
• 12:11
  SPEAKER_00: So now the biggest trend in public safety, hands.
• 12:14
  SPEAKER_00: You got to get your hands, get on, and you have to use understand how to use your body to take that subject into control into into uh into custody.
• 12:23
  SPEAKER_00: Well, guess what?
• 12:24
  SPEAKER_00: 50% of the time you use hands, someone's gonna get hurt.
• 12:27
  SPEAKER_00: It's either the subject or the officer.
• 12:29
  SPEAKER_00: Um, and it's dangerous.
• 12:31
  SPEAKER_00: It's the most one of the most dangerous things an officer can do is close the distance.
• 12:36
  SPEAKER_00: That's you're trying we we we teach and train, create time and distance, but closing the distance is a whole different ballgame.
• 12:44
  SPEAKER_00: This is the first and only tool available to public safety today that allows officers to close the distance without using pain-based tools.
• 12:55
  SPEAKER_00: And the ATF, and Tim just referenced that, just recognize this, and you know what they call that?
• 13:01
  SPEAKER_00: What let's start what they didn't call it a weapon and a firearm.
• 13:05
  SPEAKER_00: And let's call it now, let's end what they did call it, a rescue device.
• 13:10
  SPEAKER_00: So I just ask you and I ask your audience, who doesn't think it's a good idea to equip an officer with a rescue device?
• 13:20
  SPEAKER_00: In a world where 50% of the calls are calls for help from the mentally from the men that are having mental episodes, that are on drugs, that are having just a bad mental day for themselves.
• 13:32
  SPEAKER_00: They're off.
• 13:33
  SPEAKER_00: They're not their normal selves, they're off.
• 13:36
  SPEAKER_00: So is it and when you use aggressive force that uses pain, you know what you're doing?
• 13:42
  SPEAKER_00: You're escalating it.
• 13:44
  SPEAKER_00: You are absolutely escalating it.
• 13:46
  SPEAKER_00: So we gotta stop that.
• 13:47
  SPEAKER_00: And and and that's what we're standing for.
• 13:50
  SPEAKER_00: This is about the human.
• 13:52
  SPEAKER_00: It's not it we're this is a new option that we're training on, that we're with and we're leading with policy training.
• 13:59
  SPEAKER_00: And we think this is not only going to be for every officer in the country to be deploying, but every security guard, every school teacher will have that should have this capability at some point, SROs, hospital workers, global.
• 14:17
  SPEAKER_00: That's how that's how, and it's not just the device, it's the training and policies go with it.
• 14:22
  SPEAKER_00: We weren't positioning any of those other two support, critical support um products, because they are products now, with the bowler app.
• 14:31
  SPEAKER_00: And I believe, and Tim said it right away, that it's a combination of all of this that wins.
• 14:36
  SPEAKER_00: It's not just one, it's not just training.
• 14:39
  SPEAKER_00: It's not just the device, and it's not just policy.
• 14:41
  SPEAKER_00: It's together in a comprehensive system, and that's where I think, and that's where I see it's winning, and that's where I start to see deployments start to take off.
• 14:50
  SPEAKER_00: The usage is is really on a trend that we haven't seen before.
• 14:54
  SPEAKER_02: That makes sense.
• 14:55
  SPEAKER_02: And I would encourage uh any listeners to um to take a look at uh on YouTube, um, your page on YouTube.
• 15:02
  SPEAKER_02: There's a lot of great body cam footage and examples of how the bowl wrap works, and and everyone can see exactly what you're saying uh for themselves.
• 15:12
  SPEAKER_02: So um just to get back to the ATF ruling, so that was on July 2nd, for people that are not familiar.
• 15:19
  SPEAKER_02: The Bureau of Alcohol, Tobacco, and Firearms ruled uh that the bowl wrap, in their words, is a rescue and a restraint tool and not a firearm or any other weapon, uh, as defined by the Gun Control Act and the National Firearms Act.
• 15:36
  SPEAKER_02: And obviously, that seems like a genuinely potentially game-changing uh decision for your business.
• 15:42
  SPEAKER_02: So I guess can you walk us through maybe a little bit uh the timeline, um, how long you've been advocating for this, and then can you address, and I know you just touched on it a little bit, but the importance of being considered a restraint tool and how that potentially reduces the risk for a police officer using your device uh from being accused of potentially using excess force like we've seen with guns and and even with tasers.
• 16:11
  SPEAKER_00: Yeah, great, great question.
• 16:12
  SPEAKER_00: So we've been at it since day one, Eric.
• 16:14
  SPEAKER_00: Since day one, we had to go right to the ATF, and we um obviously never felt like it was a firearm.
• 16:21
  SPEAKER_00: So that was that was almost 10 years ago.
• 16:24
  SPEAKER_00: That was almost 10.
• 16:25
  SPEAKER_00: Now, lots of, I'm sure there's been plenty of attrition in the ATF and and and new leadership, of course, just recently came in.
• 16:32
  SPEAKER_00: Um, and we definitely had an effort, but um, quite frankly, it happened organically.
• 16:38
  SPEAKER_00: We were we were as surprised as everybody else.
• 16:41
  SPEAKER_00: We were there was a time where I was very hopeful, but we hadn't heard anything in such a long period of time.
• 16:48
  SPEAKER_00: Um, and I think um the reason, uh but I'm not I'm not I'm not surprised by the ruling because we've got at least 50,000 or so of these devices out there.
• 16:59
  SPEAKER_00: It is being used much more fruitfully than we knew, and anybody else knows, and not one serious injury, not one litigation, and not one fatality.
• 17:08
  SPEAKER_00: And this is uh you're talking about some pretty uh tense situations.
• 17:13
  SPEAKER_00: Um, and so that the that track record um is is why the ATF, I think that that that was one of the reasons, but it's really it wasn't designed to cause pain.
• 17:26
  SPEAKER_00: It wasn't designed for a fatal to to to um be a fatal uh uh a lethal weapon or a firearm.
• 17:34
  SPEAKER_00: It was never designed for that.
• 17:36
  SPEAKER_00: And and and now to answer that that question about what has it done for us, um, let's just start with insurance companies.
• 17:43
  SPEAKER_00: We used to get calls from pool insurance pools, big and small, reinsurance companies that were insuring cities all the time.
• 17:51
  SPEAKER_00: In fact, um two states were reimbursing any department that would buy the bull wrap.
• 17:56
  SPEAKER_00: Insurance companies were reimbursing them for their purchase.
• 17:58
  SPEAKER_00: I think it was Missouri and I forget the other state.
• 18:01
  SPEAKER_00: But as a result of that ruling, um, we are getting um a lot of inbound insurance company calls.
• 18:09
  SPEAKER_00: So we're fielding them, and it's not it's not just for public safety and and and officers, it's actually for security guards corporations.
• 18:18
  SPEAKER_00: So I would say that's the most immediate thing that I've witnessed, like the the the the uh interest from the insurance business.
• 18:27
  SPEAKER_00: I know you wanted to say something, so uh go for it.
• 18:29
  SPEAKER_00: No, no, no, finish you can no, you keep going.
• 18:32
  SPEAKER_00: Okay.
• 18:32
  SPEAKER_00: Um, and and there are um, I don't know if you know this, but um public say like the world looks up to our military and our our our our our our our country's leadership in terms of the global peace.
• 18:46
  SPEAKER_00: I mean they just they just do and it's the same for policing.
• 18:50
  SPEAKER_00: The world looks up to us for the way we police and the tools that we offer, they follow.
• 18:56
  SPEAKER_00: Why?
• 18:57
  SPEAKER_00: They respect our judicial system, they they respect our constitution, they respect our our our our our rights and and and our process.
• 19:06
  SPEAKER_00: And that's why the world follows what we do.
• 19:11
  SPEAKER_00: Uh but if you look at tasers internationally, um it's very much less of a footprint than they have domestically.
• 19:19
  SPEAKER_00: Um I think they're at 90% of the departments in uh in this country, which is pretty amazing that it's that that they've done a great job of getting it out there and it's heavily utilized, which is great.
• 19:30
  SPEAKER_00: But internationally, they look at it differently.
• 19:33
  SPEAKER_00: And um, and that's that's um, and and there hasn't been a new option.
• 19:37
  SPEAKER_00: So internationally, we get way more interest.
• 19:40
  SPEAKER_00: Internationally, we have domestic at this point, probably half our sales and half our um our devices have have gone overseas.
• 19:47
  SPEAKER_00: Um, but so that ATF for international markets can't tell you how many times we've heard that um once this gets declassified as a weapon, they can re-engage the conversation, which is already starting.
• 20:00
  SPEAKER_00: Obviously, we're calling back the ones that have said that and we're starting to try to move that forward.
• 20:05
  SPEAKER_00: So I see lots more international interests and action as a result of that ruling.
• 20:12
  SPEAKER_00: And um, the other thing that's interesting, just looking back at all the inbound inquiries we have, are mostly from security guard companies.
• 20:20
  SPEAKER_00: There are 10 times more security guards than there are police officers in this country, and it's the same ratios overseas.
• 20:29
  SPEAKER_00: The security guard industry is they really don't carry anything.
• 20:34
  SPEAKER_00: And it depends on their assignment, if it's working for a Walmart, if it's working for um maybe uh a hospital, like a mental ward, um, they have different um uses of force they carry, but most of the time, I'd say 90%, they carry nothing.
• 20:48
  SPEAKER_00: So now the we already half of our inbound was from security guards.
• 20:55
  SPEAKER_00: Obviously, that's increased quite a bit.
• 20:57
  SPEAKER_00: And the surprise, Eric, that we're getting as a fourth kind of level of interest that was surprising or third, is the lawyers, the the uh the prosecute.
• 21:06
  SPEAKER_00: We're we're getting um we're getting legal groups reaching out to us for clarity and want to talk about this because I think there's a day coming soon where the in-court on excessive case, they're gonna ask the officers, what use of force did you use before you went to your non-lethal and lethal portfolio?
• 21:26
  SPEAKER_00: Before you made that choice to escalate the response.
• 21:30
  SPEAKER_00: And if you go to rescue first, um, this is just you start with verbal.
• 21:35
  SPEAKER_00: If that breaks down, you need to go to something else, and that's in your training.
• 21:39
  SPEAKER_00: But we suggest sight, sound sensation, sight, sound slow down is what our mantra is, and that's what we're training.
• 21:47
  SPEAKER_00: But um there's gonna be a time because most of these encounters start off nonviolent and passive resisting.
• 21:57
  SPEAKER_00: So there will be a time where the courts start.
• 22:00
  SPEAKER_00: Asking in this Barnes v.
• 22:02
  SPEAKER_00: Felix environment where what what other things did you do besides verbal commands?
• 22:08
  SPEAKER_00: Show me what you've done.
• 22:09
  SPEAKER_00: And if you haven't trained on the bull wrap, your department doesn't have a bowl wrap.
• 22:13
  SPEAKER_00: I don't think, in my opinion, that doesn't seem like a really good answer.
• 22:18
  SPEAKER_00: And now you do not have an excuse.
• 22:21
  SPEAKER_00: Well, I'm I'm I'm I'm I'm manifesting that this this where I think it's going because it just makes sense to me.
• 22:28
  SPEAKER_00: You the officer needs to exhaust every option that has to be keep obviously very safe, but if the person's not resisting violently and it's passive, well, you've seen we've all seen that on TV.
• 22:42
  SPEAKER_00: I've got endless videos of that on our website.
• 22:46
  SPEAKER_00: And um, at some point in time, the officer has to close the distance, and that's where the risk explodes.
• 22:52
  SPEAKER_00: And that's where we think the bowl wrap should be utilized.
• 22:55
  SPEAKER_01: Eric, I can't help myself as a former equity research analyst.
• 22:58
  SPEAKER_01: I do have to chime in.
• 23:00
  SPEAKER_01: I'm glad that uh Scott pointed out the security guard market because that what I already thought was a massive, total addressable market, is far larger than I would have ever guessed now that you put that in context, because that does cross my mind in kind of dicey neighborhoods where I see security guards, but they're carrying virtually nothing to protect themselves.
• 23:16
  SPEAKER_01: So that is a massive incremental market.
• 23:18
  SPEAKER_02: That's a great point.
• 23:20
  SPEAKER_02: So just along those lines, Scott, uh, you know, with the ruling and all the calls you're receiving from lawyers and the insurance companies, um, how quickly do you think, or do you expect that to potentially translate into orders?
• 23:34
  SPEAKER_02: And how when will we start to see that in the backlog?
• 23:37
  SPEAKER_00: Do you do you think it um I'd like to see yesterday, right?
• 23:42
  SPEAKER_00: And I am seeing signs of it.
• 23:43
  SPEAKER_00: I mean, there's lots of conversations.
• 23:45
  SPEAKER_00: We're we have a look, our we've got a really good pipeline of business that we're that we're trying to progress.
• 23:53
  SPEAKER_00: Um, and I and I and I feel very comfortable about the the 100% guidance that I that that I gave.
• 23:58
  SPEAKER_00: And I'm gonna stick with that for now.
• 24:00
  SPEAKER_00: But um, I am not gonna be surprised if this starts to accelerate.
• 24:05
  SPEAKER_00: And it shouldn't happen like, and when it does, let's just say when it does, because I believe it's gonna have to, based on my 10 years at being associated with this company, not leading it, but being associated.
• 24:18
  SPEAKER_00: It's gonna happen, Eric, because it just makes so much sense.
• 24:21
  SPEAKER_00: That's why it's common sense.
• 24:23
  SPEAKER_00: This is not like the device is proven to work.
• 24:26
  SPEAKER_00: I mean, it's proven that we just take that like mystery off the problem we had, and Tim, you'll appreciate this.
• 24:32
  SPEAKER_00: I think you both will, your audience will too.
• 24:35
  SPEAKER_00: We didn't define what success was the right way.
• 24:39
  SPEAKER_00: If you look at the early body cams in 2000, 2019-20, you'll see the officers just pressing the button.
• 24:47
  SPEAKER_00: And if the wrap get wrapped, it was successful, it wasn't, you know, everybody's just sitting around.
• 24:51
  SPEAKER_00: We weren't training to close the distance.
• 24:53
  SPEAKER_00: We weren't training to the the pre-fight indicators, how to communicate, how to persuade.
• 24:58
  SPEAKER_00: None of that was existing.
• 24:59
  SPEAKER_00: We were just talking about the merits of the device and how it technically works.
• 25:04
  SPEAKER_00: And I'm oversimplifying.
• 25:06
  SPEAKER_00: There was training in our 150-page deck that took eight hours and then we left.
• 25:13
  SPEAKER_00: But we've changed that game.
• 25:14
  SPEAKER_00: We've got connected with every officer that we're positioning that has a bowl wrap now if uh directly through our LMS.
• 25:22
  SPEAKER_00: But what's the simplicity of this is now there's finally an option, and it's been working way more than we know anybody really knows because it's not reported on.
• 25:34
  SPEAKER_00: And now that we have that data, and now the ATF has made it super clear.
• 25:39
  SPEAKER_00: And now the Supreme Court, 18 months ago with Barnes v.
• 25:43
  SPEAKER_00: Felix, totality of circumstances, it's just a matter of time.
• 25:48
  SPEAKER_00: That's what this is.
• 25:49
  SPEAKER_00: And my job as a CEO is I need to accelerate that.
• 25:53
  SPEAKER_00: I need to step into that big time, and I'm going to.
• 25:56
  SPEAKER_00: That's exactly what I'm setting up to do right now.
• 25:59
  SPEAKER_00: Yeah.
• 26:00
  SPEAKER_02: It seems like everything is really lining up, you know, for the company, all your past work, uh, the ATF ruling.
• 26:07
  SPEAKER_02: It seems like everything is kind of coming your way, all the training, all the changes you've made.
• 26:11
  SPEAKER_02: Uh, you said with the training, which seems like a great opportunity for you.
• 26:16
  SPEAKER_02: Uh, training as a service, it seems like a great opportunity for the company uh to generate uh additional revenue and profits.
• 26:24
  SPEAKER_02: Um let's move into um another recent announcement, um the Fresnel Imaging Partnership.
• 26:31
  SPEAKER_02: So that seems like uh a super interesting uh advanced sensing company.
• 26:37
  SPEAKER_02: Uh Fresnel markets their technology as something that can't be spoofed or jammed or turned off and requires no radio frequency.
• 26:45
  SPEAKER_02: Um you mentioned you have the license with uh the NATO in the US, I guess.
• 26:51
  SPEAKER_02: Can you tell us a little bit about the technology and and how you expect to deploy it?
• 26:57
  SPEAKER_00: I'm gonna make this really simple because it is a very complicated technology to be honest.
• 27:02
  SPEAKER_00: The deeper you go, it's using edge computing and it's a lot of AI is is deployed to um um make a lot of calculations, but on the on the on the most simple basis here.
• 27:16
  SPEAKER_00: Um the most common way, the most advanced way to detect threats today, and and these could be missile threats, these could be other uh drone threats, um, and we're just talking about um in air threats at the moment.
• 27:29
  SPEAKER_00: We're not talking about ground threats or water threats, but right now we're just talking about air, um, is thermal detection.
• 27:34
  SPEAKER_00: Okay, thermal detection detects heat signatures.
• 27:37
  SPEAKER_00: And so what's very common in defense systems, you have radio frequency that you can pick up on one side, and then you have heat signatures, thermal.
• 27:47
  SPEAKER_00: And thermal images have been around, and there's obviously infrared, but thermal typically is a next layer, and sometimes all three are in position.
• 27:56
  SPEAKER_00: Thermal imaging has been around for 30 years.
• 27:59
  SPEAKER_00: What Fernell did, and it's not new, people have been after this for years.
• 28:04
  SPEAKER_00: There's a big Army study on this about eight years ago, talking about adding a polarized layer to it.
• 28:09
  SPEAKER_00: How do you look for uh materials in addition to heat?
• 28:15
  SPEAKER_00: How do you how can you identify what mm those materials are?
• 28:20
  SPEAKER_00: What are those shapes, how how's it shaped?
• 28:22
  SPEAKER_00: What is that telling you?
• 28:24
  SPEAKER_00: And and and creating a different signature, a material signature with the heat signature, and now you're able to do the calculations that at the end what that produces is a much more accurate uh idea of what that threat is, so you can differentiate between a bird and a drone, and Tim, if you're listening, um that's a big problem right now in in in in in in in in the in the in any war is just being able to detect because if you're going after the wrong target, it can be very wasteful in time.
• 28:57
  SPEAKER_00: But the other thing this does is gives you more time, you're able to detect the threats earlier.
• 29:04
  SPEAKER_00: And I know this because the very best in the world technology on thermal is in a in a country, it's in Israel with a large company that a lot of people know.
• 29:16
  SPEAKER_00: And when we put this next to their very best thermal detection system and we demoed our polar layer on top of that, we were tracking targets that they just couldn't track.
• 29:30
  SPEAKER_00: And when I saw that, I I had heard about this a couple years ago, and in my personal, I just in my personal account I just invested.
• 29:38
  SPEAKER_00: I was just off just something I had to do because I had never seen anything like I had never heard of an idea like this, and it was an idea and they had pieces of it.
• 29:48
  SPEAKER_00: But uh about six months ago, um they showed me it working.
• 29:53
  SPEAKER_00: And that that just my mind started racing of what this could do.
• 29:58
  SPEAKER_00: Yes, as an investor in this, everybody's gonna make a lot of money.
• 30:03
  SPEAKER_00: But way more importantly, Eric, is is what this does for our safety, our country safety, our city safety.
• 30:10
  SPEAKER_00: You can see right now, we we know the future of this is these threats.
• 30:14
  SPEAKER_00: A 12-year-old can launch a swarm of drones and hit my house, hit a city building, take out a stadium now.
• 30:21
  SPEAKER_00: And if we and and we're just ill-equipped to deal with these type of threats, well, this is a step change forward.
• 30:28
  SPEAKER_00: It's not a small little thing that Fresnel's done.
• 30:32
  SPEAKER_00: They they made a massive discovery here.
• 30:35
  SPEAKER_00: And I um they're they're gonna build a very substantial business, gonna have a lot of impact on the world's safety.
• 30:42
  SPEAKER_00: I believe that very deeply because I'm looking at this, the way this system performs compared to the very best systems that we have today.
• 30:53
  SPEAKER_00: And Fresnel CEO and founder will tell you that once you go to this system, you will never go back to traditional thermal system.
• 31:02
  SPEAKER_00: And that's all over this country.
• 31:03
  SPEAKER_00: And it's a great thing that we have that kind of protection.
• 31:06
  SPEAKER_00: It's a great thing that we have that kind of capability, but guess what?
• 31:10
  SPEAKER_00: It just got a lot better.
• 31:12
  SPEAKER_00: And we're gonna show the world that very, very soon because we're bringing those systems into the states and we're gonna start talking to the people that we've already initiated conversations, but we're not just talking, we're gonna show them.
• 31:24
  SPEAKER_02: Okay, great.
• 31:25
  SPEAKER_02: Uh, it'll be very exciting to see how that how that turns out.
• 31:29
  SPEAKER_02: It sounds like uh super interesting technology.
• 31:31
  SPEAKER_02: I guess in the time that we have left, maybe we can just cover uh a couple of other things, um, some other new product announcements.
• 31:38
  SPEAKER_02: Uh the Raptor MX, um, which is uh a multi-shot version of um of the Bowl Wrap 150.
• 31:47
  SPEAKER_02: I guess can you maybe just talk about how that works?
• 31:50
  SPEAKER_02: And is there any sense maybe you can give us for what the ASP might be for the MX versus a regular Bolo Rap 150?
• 32:00
  SPEAKER_00: Yep.
• 32:00
  SPEAKER_00: Uh and we haven't finalized pricing yet.
• 32:03
  SPEAKER_00: We've we've got 10 accounts that are out there um in the field with the product now.
• 32:07
  SPEAKER_00: We're signing, we're actually signing up accounts now and just making sure we've got the right field test protocols.
• 32:12
  SPEAKER_00: Um, but the the just the first amenity is one shot might not be enough.
• 32:16
  SPEAKER_00: Why not three?
• 32:17
  SPEAKER_00: Why not four?
• 32:18
  SPEAKER_00: Why not six?
• 32:19
  SPEAKER_00: Why not nine?
• 32:20
  SPEAKER_00: So we started with three, but that's gonna shortly go to six.
• 32:24
  SPEAKER_00: It's the same system, the same cartridge, the same mechanism that the bow rap uses in in the in the um on the shoulder mount.
• 32:34
  SPEAKER_00: So um, and and and that shoulder mount is just when you're aiming like this, you're gonna get a lot more accurate, uh uh you're gonna have a lot more accuracy on the aim, less of a jerk, less ability to make a mistake, quite frankly.
• 32:48
  SPEAKER_00: And you also have more ability to put um higher powered sight on there and and much more tech um enabled sound.
• 32:56
  SPEAKER_00: Um, and you can guess how that so you know I have some background in that from past investments with directional sound.
• 33:02
  SPEAKER_00: So we're talking about directional light and sound on the device so we can really step up the sight and sound compliance.
• 33:09
  SPEAKER_00: And now we don't get one shot, we get up to six shots and that same system on a drone, Eric, uh, up to nine shots, which I don't know if you've seen.
• 33:18
  SPEAKER_00: I know we're gonna talk to drones.
• 33:20
  SPEAKER_00: So you're talking about drones coming on subject and starting with light, starting with sound, and then going to sound multi-tiered, and they're still coming forward, not one, but up to nine shots.
• 33:32
  SPEAKER_00: Um, and the and this is really important for this audience to understand, and and all the lawyers and all everybody to understand, the worst we believe, because we haven't seen it yet, and there's been plenty of data and played or points, the worst injury that you could have with this, of course, if you use your air and you fire at somebody's face, it's a different type of injury to use your air.
• 33:54
  SPEAKER_00: You could kill somebody with a pencil if you wanted to.
• 33:56
  SPEAKER_00: So use your air.
• 33:58
  SPEAKER_00: But um, the we're calling it a band-aid incident.
• 34:00
  SPEAKER_00: That's the worst.
• 34:01
  SPEAKER_00: You're gonna be able to break your fall, you're going through the legs.
• 34:03
  SPEAKER_00: The worst thing is you get a like a small little prick.
• 34:07
  SPEAKER_00: And that's that's it, Eric.
• 34:09
  SPEAKER_00: So the so the liability, the risk in this, if it goes bad, which oftentimes it does, um, it's not gonna be because of our device.
• 34:18
  SPEAKER_00: The device isn't gonna use so I just um the simplicity of this and the repeat, it's not a big leap for us to go to the six-mount because it's the same technology, it's the same system, it's the same cartridge, it's the same in the drones, too, and the counter drone, the play that we're putting together as well.
• 34:34
  SPEAKER_00: So just want to make that clear.
• 34:36
  SPEAKER_00: Hopefully that's okay.
• 34:37
  SPEAKER_00: Very exciting.
• 34:38
  SPEAKER_02: And and I guess the other thing that people might not have thought about, I mean, there's so much going on with the company, but that this is really it's a razor, razor blade type business, right?
• 34:47
  SPEAKER_02: I mean, it once once you fire a cassette, then they have to, you know, rebuy with you.
• 34:52
  SPEAKER_00: Uh and not only that, Eric, but you have to retrain.
• 34:55
  SPEAKER_00: So every two years you need recertification.
• 34:57
  SPEAKER_00: And that's when I realized how often this is being used because I think we had 450 recertifications from departments in the last uh, maybe that was six months ago.
• 35:09
  SPEAKER_00: It's just a flood of risk.
• 35:10
  SPEAKER_00: So it shows you that people really care about their programs.
• 35:13
  SPEAKER_00: We they need refresh policies, which we are going to provide them.
• 35:17
  SPEAKER_00: That's another line that we were just weren't responsibly driving policy before we've we are now because it's important.
• 35:24
  SPEAKER_00: If you don't have the right policy at a department, um you're really taking on a tremendous amount of risk.
• 35:30
  SPEAKER_00: So policies matter in this, and the training matters.
• 35:33
  SPEAKER_00: Check the box training is a big waste of time and it's dangerous.
• 35:38
  SPEAKER_00: People have the illusion of being trained.
• 35:41
  SPEAKER_00: We we did something about that.
• 35:42
  SPEAKER_00: We put it in one to three minute first training methods.
• 35:46
  SPEAKER_00: We did it with force sciences on the cognitive side, how to make decisions under pressure, how to persuade, how to communicate effectively.
• 35:55
  SPEAKER_00: Forge Science has been doing this since the 70s.
• 35:58
  SPEAKER_00: They've trained hundreds of thousands of people in de-escalation, and they're the they're the absolute brand in the space when it comes to training.
• 36:06
  SPEAKER_00: And they're our partner.
• 36:07
  SPEAKER_00: They're trusting us to go to market with the first time they took their content and created in the learning management system, which means we get to offer that class to you to pick it right up on your phone in these small microverse training sessions, which builds what?
• 36:24
  SPEAKER_00: Practice, continuity, comfort, and confidence with the device.
• 36:31
  SPEAKER_00: And that was completely missing.
• 36:33
  SPEAKER_00: So that's being offered now for the first time.
• 36:35
  SPEAKER_00: Those classes are, I think it's$1,700 for a week of class, and you need, call it, I think it's a couple hundred, maybe 150 hours for the certification class to get certified from Force Sciences.
• 36:49
  SPEAKER_00: We're not gonna certify all the way, but you're gonna get a certificate for force science to the LMS, and we'll get you enough to really pique your interest to get the whole class, but you're gonna get a taste of force science that I think is gonna be really a um, it's gonna really, I I think, really um de-risk the training of this.
• 37:09
  SPEAKER_00: Um, and then and I think, look, Eric, the device is already being used way more than we thought, more than anything else on the belt today, and the bar is so low.
• 37:20
  SPEAKER_00: We're not counting sight depliance compliance, we're not counting uh sound compliance.
• 37:26
  SPEAKER_00: We were just that was just counting it as a perfect bowl wrap.
• 37:31
  SPEAKER_00: So it's bigger than that because success is did you bring that person home safely?
• 37:38
  SPEAKER_00: Success is you didn't escalate it.
• 37:40
  SPEAKER_00: Success is you avoided force.
• 37:42
  SPEAKER_00: Great job.
• 37:43
  SPEAKER_00: You avoided force.
• 37:45
  SPEAKER_00: Thank you, officer.
• 37:46
  SPEAKER_00: Thank you for serving our community, thank you for serving human humans.
• 37:53
  SPEAKER_00: Thank you for that.
• 37:54
  SPEAKER_00: You know, and they and then and you know, cops do not get the credit they deserve.
• 37:58
  SPEAKER_00: They get a bad, no pun intended rap.
• 38:01
  SPEAKER_00: And we feel very called to do something about that because it's they're doing great work out there, and we're supporting that work, and um, I'm really proud of what we built.
• 38:12
  SPEAKER_02: Great answer.
• 38:13
  SPEAKER_02: Um, thank you, thank you very much for for joining us today.
• 38:17
  SPEAKER_02: You have uh a lot of stuff going on and a lot of interesting developments just really over the past month or so uh with new products, the ATF ruling, and uh a lot of interesting stuff going on at your company.
• 38:32
  SPEAKER_02: Um I know you've guided your your top line growth to uh 100% this year off of last year's base.
• 38:40
  SPEAKER_02: And so um it'll be great, be very interesting to see how everything develops.
• 38:44
  SPEAKER_02: And we'd love to have you back uh maybe in a in a couple months to get an update uh on how things are moving with the company.
• 38:52
  SPEAKER_02: And again, great to see you and uh really appreciate you joining us today.
• 38:57
  SPEAKER_00: Uh thanks, Eric.
• 38:59
  SPEAKER_00: Really appreciate being on the show.
• 39:00
  SPEAKER_00: Tim, thank you very much.
• 39:02
  SPEAKER_01: Yeah, thank you, Eric.
• 39:03
  SPEAKER_01: And uh uh Scott, thanks for joining us today.
• 39:05
  SPEAKER_01: A most interesting company, both uh military, as I told you before we started the podcast, as well as law enforcement are near and dear to my heart.
• 39:12
  SPEAKER_01: So let's be sure to get you back on as developments continue to unfold.
• 39:15
  SPEAKER_01: A really fascinating story.
• 39:17
  SPEAKER_01: I'm glad we had you on today, and thanks for your time.
• 39:19
  SPEAKER_01: Thank you for listening, and don't forget to subscribe, as well as visiting www.watertowerresearch.com to stay up to speed on the company's small cap written research reports, podcasts, fireside chats, industry specific symposiums, and conference schedules.
• 39:35
  SPEAKER_01: We will see you next time for another edition of the WTR Small Cap Spotlight Podcast.
• 39:41
  SPEAKER_01: Finally, a special thanks to the producer and editor of the podcast, Krista Fitzpatrick.