0001851734-22-000651 | 10-Q | XBRL Viewer

Lessee, Operating Lease, Disclosure [Table Text Block]

Operating lease liability- short term	$	106
Operating lease liability - long term		221
Total Operating Lease Liability	$	327

Lessee, Operating Lease, Liability, Maturity [Table Text Block]

2022 (3 months)	$	31
2023		121
2024		125
2025		75
Total future minimum lease payments		352
Less imputed interest		(25	)
Total	$	327

Note 6 - Intangible Assets, Net - Summary of Intangible Assets (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Amortizable intangible assets, gross	$ 1,945	$ 1,812
Accumulated amortization	(389)	(174)
Total amortizable	1,556	1,638
Indefinite life assets (non-amortizable)	344	344
Total intangible assets, net	1,900	1,982
Patents [Member]
Amortizable intangible assets, gross	540	416
Trademarks [Member]
Amortizable intangible assets, gross	143	134
Computer Software, Intangible Asset [Member]
Amortizable intangible assets, gross	1,212	1,212
Other Intangible Assets [Member]
Amortizable intangible assets, gross	$ 50	$ 50

Condensed Consolidated Balance Sheets (Current Period Unaudited)-parentheticals (Parentheticals) - $ / shares	Sep. 30, 2022	Dec. 31, 2021
Preferred Stock, Shares Authorized (in shares)	5,000,000	5,000,000
Preferred Stock, Par or Stated Value Per Share (in dollars per share)	$ 0.0001	$ 0.0001
Preferred Stock, Shares Issued (in shares)	0	0
Preferred Stock, Shares Outstanding, Ending Balance (in shares)	0	0
Common Stock, Shares Authorized (in shares)	150,000,000	150,000,000
Common Stock, Par or Stated Value Per Share (in dollars per share)	$ 0.0001	$ 0.0001
Common Stock, Shares, Issued (in shares)	41,125,578	40,851,945
Common Stock, Shares, Outstanding, Ending Balance (in shares)	41,125,578	40,851,945

Note 14 - Subsequent Events

9 Months Ended

Sep. 30, 2022

Subsequent Events [Text Block]

14. SUBSEQUENT EVENTS

On October 11, 2022, the company received an order from an international government agency for the purchase of over 2,000 BolaWrap devices, cassettes and other accessories totaling over $1.5 million. This order will be recorded in the fourth quarter 2022.

The Company evaluated subsequent events for their potential impact on the financial statements and disclosures through the date the financial statements were available to be issued, and determined that, except as disclosed herein, no subsequent events occurred that were reasonably expected to impact the financial statements presented herein.

Note 5 - Property and Equipment, Net - Summary of Property and Equipment (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Property and equipment, gross	$ 1,618	$ 1,416
Accumulated depreciation	(799)	(440)
Property and equipment, net	819	976
Production and Lab Equipment [Member]
Property and equipment, gross	500	500
Tooling [Member]
Property and equipment, gross	424	273
Computer Equipment [Member]
Property and equipment, gross	513	467
Furniture and Fixtures [Member]
Property and equipment, gross	$ 181	$ 176

Note 2 - Revenue and Product Costs (Details Textual) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Contract with Customer, Liability, Total	$ 300	$ 265
Contract with Customer, Asset, after Allowance for Credit Loss, Total	0	0
Virtual Reality Training [Member]
Contract with Customer, Liability, Total	177	172
Extended Product Warranties [Member]
Contract with Customer, Liability, Total	$ 123	$ 67

Note 13 - Major Customers and Related Information (Details Textual) - Customer Concentration Risk [Member]	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021	Dec. 31, 2021
Revenue Benchmark [Member] \| Distributors [Member]
Number of Major Customers	1	2	1	2
Revenue Benchmark [Member] \| Distributor One [Member]
Concentration Risk, Percentage	59.00%	41.00%	39.00%	27.00%
Revenue Benchmark [Member] \| Distributor Two [Member]
Concentration Risk, Percentage		29.00%		21.00%
Accounts Receivable [Member] \| Distributors [Member]
Number of Major Customers			2		3
Accounts Receivable [Member] \| Distributor One [Member]
Concentration Risk, Percentage			42.00%		48.00%
Accounts Receivable [Member] \| Distributor Two [Member]
Concentration Risk, Percentage			15.00%		16.00%
Accounts Receivable [Member] \| Distributor Three [Member]
Concentration Risk, Percentage					15.00%

Note 9 - Stockholders' Equity

9 Months Ended

Sep. 30, 2022

Stockholders' Equity Note Disclosure [Text Block]

9. STOCKHOLDERS' EQUITY

The Company’s authorized capital consists of 150,000,000 shares of Common Stock, par value $0.0001 per share, and 5,000,000 shares of preferred stock, par value $0.0001 per share (“Preferred Stock”).

At December 31, 2021 the Company had outstanding Common Stock purchase warrants exercisable for 1,391,667 shares that expired on June 1, 2022, and had no purchase warrants outstanding at September 30, 2022.

The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
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Reference 3: http://www.xbrl.org/2003/role/disclosureRef
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Reference 4: http://www.xbrl.org/2003/role/disclosureRef
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Reference 5: http://www.xbrl.org/2003/role/disclosureRef
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Reference 6: http://www.xbrl.org/2003/role/disclosureRef
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Reference 7: http://www.xbrl.org/2003/role/disclosureRef
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Reference 8: http://www.xbrl.org/2003/role/disclosureRef
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Reference 9: http://www.xbrl.org/2003/role/disclosureRef
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Reference 10: http://www.xbrl.org/2003/role/disclosureRef
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Reference 11: http://www.xbrl.org/2003/role/disclosureRef
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Reference 12: http://www.xbrl.org/2003/role/disclosureRef
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Reference 13: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
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Reference 14: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021
Cash Flows From Operating Activities:
Net loss	$ (14,082)	$ (19,220)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	574	336
Product line exit expense	0	747
Gain on sale of assets	0	(17)
Warranty provision	55	23
Software impairment charge	0	170
Change in contingent liability	0	(23)
Non-cash lease expense	75	67
Share-based compensation	2,628	4,310
Common shares issued for services	0	239
Provision for doubtful accounts	61	27
Changes in assets and liabilities:
Accounts receivable	1,576	(1,414)
Inventories	(1,396)	(160)
Prepaid expenses and other current assets	268	231
Accounts payable	(834)	271
Operating lease liability	(65)	(71)
Customer deposits	(43)	19
Accrued liabilities and other	175	502
Warranty settlement	(63)	10
Deferred revenue	35	224
Net cash used in operating activities	(11,036)	(13,729)
Cash Flows From Investing Activities:
Purchase of short-term investments	(23,119)	(30,014)
Proceeds from maturities of short-term investments	33,300	25,000
Capital expenditures for property and equipment	(201)	(811)
Payments for Other Deposits	(3)
Proceeds from long-term deposits		4
Net cash provided by (used in) investing activities	9,844	(6,511)
Cash Flows From Financing Activities:
Proceeds from exercise of warrants	0	12,048
Proceeds from exercise of stock options	83	1,678
Repayment of debt	0	(275)
Net cash provided by financing activities	83	13,451
Net (decrease) increase in cash and cash equivalents	(1,109)	(6,789)
Cash and cash equivalents, beginning of period	4,937	16,647
Cash and cash equivalents, end of period	3,828	9,858
Supplemental Disclosure of Non-Cash Investing and Financing Activities:
Change in unrealized gain on short-term investments	62	(2)
Right-of-use asset and liability recorded during period	260	(66)
Patents and Trademarks [Member]
Cash Flows From Investing Activities:
Purchase of intangible assets	(133)	(129)
Intangibles Other than Patents and Trademarks [Member]
Cash Flows From Investing Activities:
Purchase of intangible assets	$ 0	$ (561)

Note 8 - Lease

9 Months Ended

Sep. 30, 2022

Lessee, Operating Leases [Text Block]

8. LEASES

The Company determines if an arrangement is a lease at inception. The guidance in FASB ASC Topic 842, Leases defines a lease as a contract, or part of a contract, that conveys the right to control the use of identified property, plant, or equipment (an identified asset) for a period of time in exchange for consideration. Operating lease right of use (“ROU”) assets and lease liabilities are recognized based on the present value of future minimum lease payments over the lease term at commencement date. The Company’s leases do not provide an implicit rate. Due to a lack of financing history or ability, the Company uses an estimate of low-grade debt rate published by the Federal Reserve Bank as its incremental borrowing rate based on the information available at the commencement date in determining the present value of future payments. The ROU asset includes any lease payments made and excludes lease incentives and initial direct costs incurred.

For leases beginning on or after January 1, 2019, lease components are accounted for separately from non-lease components for all asset classes. On January 21, 2022, the Company’s lease was amended to extend the expiration date to July 31, 2025. Upon execution of the amendment, which was deemed a lease modification, the Company reassessed the lease liability using the discount rate determined at the modification date and recorded an additional ROU asset for the same amount. The Company’s lease contains renewal provisions and escalating rental clauses and generally require the Company to pay utilities, insurance, taxes and other operating expenses. The renewal provisions of the existing lease agreement was not included in the determination of the operating lease liabilities and the ROU assets. The Company also reassessed the lease classification and concluded that the lease continues to be an operating lease.

Amortization of ROU operating lease assets was $26 and $75 for the three and nine months ended September 30, 2022 and was $21 and $67 for the three and nine months ended September 30, 2021, respectively.

Operating lease expense for capitalized operating leases included in operating activities was $30 and $88 for the three and nine months ended September 30, 2022 and was $23 and $73 for the three and nine months ended September 30, 2021, respectively.

Operating lease obligations recorded on the balance sheet at September 30, 2022, are:

Operating lease liability- short term	$	106
Operating lease liability - long term		221
Total Operating Lease Liability	$	327

Future lease payments included in the measurement of lease liabilities on the balance sheet at September 30, 2022, for future periods are as follows:

2022 (3 months)	$	31
2023		121
2024		125
2025		75
Total future minimum lease payments		352
Less imputed interest		(25	)
Total	$	327

The weighted average remaining lease term is 2.83 years, and the weighted average discount rate is 5.0%.

The Company had $3 and $0 short-term lease expense during the nine months ended September 30, 2022, and 2021. The Company does not have any finance leases.

Note 6 - Intangible Assets, Net (Tables)

9 Months Ended

Sep. 30, 2022

Schedule of Finite-Lived Intangible Assets [Table Text Block]

	September 30,			December 31,
	2022			2021
Amortizable intangible assets:
Patents	$	540		$	416
Trademarks		143			134
Purchased software		1,212			1,212
Other		50			50
		1,945			1,812
Accumulated amortization		(389	)		(174	)
Total amortizable		1,556			1,638
Indefinite life assets (non-amortizable)		344			344
Total intangible assets, net	$	1,900		$	1,982

Schedule of Finite-Lived Intangible Assets, Future Amortization Expense [Table Text Block]

2022 (3 months)	$	72
2023		284
2024		284
2025		280
2026		192
Thereafter		444
Total estimated amortization expense	$	1,556

Note 13 - Major Customers and Related Information (Tables)

9 Months Ended

Sep. 30, 2022

Disaggregation of Revenue [Table Text Block]

	For the Three Months					For the Nine months
	Ended September 30,					Ended September 30,
	2022		2021			2022		2021
Americas	$	1,478	$	1,088		$	3,484	$	2,837
Europe, Middle East and Africa		220		745			435		2,424
Asia Pacific		3		(28	)		545		19
Total revenues	$	1,701	$	1,805		$	4,464	$	5,280

Note 9 - Stockholders' Equity (Details Textual) - $ / shares	Sep. 30, 2022	Dec. 31, 2021
Common Stock, Shares Authorized	150,000,000	150,000,000
Common Stock, Par or Stated Value Per Share	$ 0.0001	$ 0.0001
Preferred Stock, Shares Authorized	5,000,000	5,000,000
Preferred Stock, Par or Stated Value Per Share	$ 0.0001	$ 0.0001
Class of Warrant or Right, Outstanding		1,391,667

Note 10 - Share-based Compensation - Summary of Stock Option Valuation Assumptions (Details) - $ / shares	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021
Weighted-average fair value of options granted (in dollars per share)	$ 1.25	$ 2.57
Share-Based Payment Arrangement, Option [Member]
Expected stock price volatility	49.00%	50.00%
Risk-free interest rate	1.17%	0.90%
Expected dividend yield	0.00%	0.00%
Expected life of options (Year)	3 years 5 months 15 days	5 years 8 months 26 days

Note 10 - Share-based Compensation - Summary of RSU Activity (Details) - Restricted Stock Units (RSUs) [Member] - $ / shares	1 Months Ended	9 Months Ended
	Apr. 30, 2022	Sep. 30, 2022
Awards other than options, unvested, beginning balance (in shares)		269,303
Awards other than options, unvested, weighted average grant date fair value, beginning balance (in dollars per share)		$ 6.47
Awards other than options, Granted (in shares)	175,173	753,817
Awards other than options, granted, weighted average grant date fair value (in dollars per share)		$ 2.57
Awards other than options, Vested (in shares)		(218,133)
Awards other than options, vested, weighted average grant date fair value (in dollars per share)		$ 4.93
Awards other than options, Forfeited and cancelled (in shares)		(60,023)
Awards other than options, forfeited and cancelled, weighted average grant date fair value (in dollars per share)		$ 6.57
Awards other than options, unvested, ending balance (in shares)		744,964
Awards other than options, unvested, weighted average grant date fair value, ending balance (in dollars per share)		$ 2.97
Weighted average vesting period (Year)		2 years 3 months 25 days

Note 3 - Fair Value Measurements - Instruments by Significant Investment Category (Details) - Fair Value, Inputs, Level 1 [Member] - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2022	Dec. 31, 2021
Adjusted Cost	$ 23,185	$ 31,659
Unrealized Gains	62	0
Unrealized Losses	0	(6)
Market Value	23,247	31,653
Money Market Fund [Member]
Adjusted Cost	3,382	1,670
Unrealized Gains	0	0
Unrealized Losses	0	0
Market Value	3,382	1,670
US Treasury Securities in Short-term Investments [Member]
Adjusted Cost	19,803	29,989
Unrealized Gains	62	0
Unrealized Losses	0	(6)
Market Value	$ 19,865	$ 29,983

Note 7 - Accounts Payable and Accrued Liabilities - Changes in Product Warranty Costs (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021
Balance, beginning of period	$ 96	$ 48
Warranty settlements	(63)	(16)
Warranty provision	55	42
Balance, end of period	$ 88	$ 74

Note 6 - Intangible Assets, Net - Future Amortization Expense (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
2022 (3 months)	$ 72
2023	284
2024	284
2025	280
2026	192
Thereafter	444
Total amortizable	$ 1,556	$ 1,638

Note 4 - Inventories, Net (Tables)

9 Months Ended

Sep. 30, 2022

Schedule of Inventory, Current [Table Text Block]

	September 30,		December 31,
	2022		2021
Finished goods	$	1,974	$	1,027
Work in process		-		2
Raw materials		988		537
Inventories, net	$	2,962	$	1,566

Note 10 - Share-based Compensation (Tables)

9 Months Ended

Sep. 30, 2022

Share-Based Payment Arrangement, Option, Activity [Table Text Block]

				Weighted Average
	Options on					Remaining		Aggregate
	Common			Exercise		Contractual		Intrinsic
	Shares			Price		Term		Value
Outstanding January 1, 2022		3,935,883		$	5.24		4.79
Granted		2,734,639		$	2.85
Exercised		(55,500	)	$	1.50
Forfeited, cancelled, expired		(978,709	)	$	5.48
Outstanding September 30, 2022		5,636,313		$	3.74		6.01	$	232,778
Exercisable September 30, 2022		2,507,744		$	4.47		2.14	$	232,778

Schedule of Share-Based Payment Award, Stock Options, Valuation Assumptions [Table Text Block]

	For the Nine months
	Ended September 30,
	2022			2021
Expected stock price volatility		49	%		50	%
Risk-free interest rate		1.17	%		0.90	%
Expected dividend yield		0	%		0	%
Expected life of options - years		3.46			5.74
Weighted-average fair value of options granted	$	1.25		$	2.57

Schedule of Nonvested Restricted Stock Units Activity [Table Text Block]

				Weighted Average		Weighted Average
	Service-Based			Grant Date		Vesting
	RSU's			Fair Value		Period (Years)
Unvested at January 1, 2022		269,303		$	6.47
Granted - service based		753,817		$	2.57
Vested		(218,133	)	$	4.93
Forfeited and cancelled		(60,023	)	$	6.57
Unvested at September 30, 2022		744,964		$	2.97		2.32

Disclosure of Share-Based Compensation Arrangements by Share-Based Payment Award [Table Text Block]

	Three Months Ended September 30,				Nine months Ended September 30,
	2022		2021		2022		2021
Selling, general and administrative	$	700	$	1,093	$	2,180	$	3,722
Research and development		172		210		448		588
Total share-based expense	$	872	$	1,303	$	2,628	$	4,310

Note 13 - Major Customers and Related Information

9 Months Ended

Sep. 30, 2022

Concentration Risk Disclosure [Text Block]

13. MAJOR CUSTOMERS AND RELATED INFORMATION

For the three months ended September 30, 2022, revenues from one distributor accounted for approximately 59%, of revenues with no other single customer accounting for more than 10% of total revenues. For the three months ended September 30, 2021, revenues from two distributors accounted for approximately 41% and 29% of revenues with no other single customer accounting for more than 10% of total revenues.

For the nine months ended September 30, 2022, revenues from one distributor accounted for approximately 39% of revenues with no other single customer accounting for more than 10% of total revenues. For the nine months ended September 30, 2021, revenues from two distributors accounted for approximately 27% and 21% of revenues with no other single customer accounting for more than 10% of total revenues.

At September 30, 2022, accounts receivable from two distributors accounted for 42% and 15% of accounts receivable with no other single customer accounting for more than 10% of the accounts receivable balance. Three distributors accounted for 48%, 16% and 15% of accounts receivable at December 31, 2021 with no other single customer accounting for more than 10% of the accounts receivable balance.

The following table summarizes revenues by geographic region. Revenues are attributed to countries based on customer’s delivery location:

	For the Three Months					For the Nine months
	Ended September 30,					Ended September 30,
	2022		2021			2022		2021
Americas	$	1,478	$	1,088		$	3,484	$	2,837
Europe, Middle East and Africa		220		745			435		2,424
Asia Pacific		3		(28	)		545		19
Total revenues	$	1,701	$	1,805		$	4,464	$	5,280

Note 5 - Property and Equipment, Net

9 Months Ended

Sep. 30, 2022

Property, Plant and Equipment Disclosure [Text Block]

5. PROPERTY AND EQUIPMENT, NET

Property and equipment consisted of the following:

	September 30,			December 31,
	2022			2021
Production and lab equipment	$	500		$	500
Tooling		424			273
Computer equipment		513			467
Furniture, fixtures and improvements		181			176
		1,618			1,416
Accumulated depreciation		(799	)		(440	)
Property and equipment, net	$	819		$	976

Depreciation expense was $121 and $359 for the three and nine months ended September 30, 2022 and was $69 and $191 for the three and nine months ended September 30, 2021, respectively.

Note 2 - Revenue and Product Costs - Contract Liabilities (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2022	Dec. 31, 2021
Balance at January 1, 2022	$ 265
Balance at June 30, 2022	300
Current portion	144	$ 155
Long-term portion	156	$ 110
Customer Deposits [Member]
Balance at January 1, 2022	43
Additions, net	0
Transfer to revenue	(43)
Balance at June 30, 2022	0
Current portion	0
Long-term portion	0
Deferred Revenue [Member]
Balance at January 1, 2022	265
Additions, net	171
Transfer to revenue	(136)
Balance at June 30, 2022	300
Current portion	144
Long-term portion	$ 156

Note 3 - Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2022

Fair Value Measurements, Recurring and Nonrecurring [Table Text Block]

	As of September 30, 2022
	Adjusted		Unrealized		Unrealized		Market
	Cost		Gains		Losses		Value
Level 1:
Money Market Funds	$	3,382	$	-	$	-	$	3,382
U.S. Treasury securities in short-term investments		19,803		62		-		19,865
Total Financial Assets	$	23,185	$	62	$	-	$	23,247

	As of December 31, 2021
	Adjusted		Unrealized		Unrealized			Market
	Cost		Gains		Losses			Value
Level 1:
Money Market Funds	$	1,670	$	-	$	-		$	1,670
U.S. Treasury securities in short-term investments		29,989		-		(6	)		29,983
Total Financial Assets	$	31,659	$	-	$	(6	)	$	31,653

Tabular disclosure of financial instruments measured at fair value, including those classified in shareholders' equity measured on a recurring or nonrecurring basis. Disclosures include, but are not limited to, fair value measurements recorded and the reasons for the measurements, level within the fair value hierarchy in which the fair value measurements are categorized and transfers between levels 1 and 2. Nonrecurring fair value measurements are those that are required or permitted in the statement of financial position in particular circumstances.

+ References + Details

Note 5 - Property and Equipment, Net (Tables)

9 Months Ended

Sep. 30, 2022

Property, Plant and Equipment [Table Text Block]

	September 30,			December 31,
	2022			2021
Production and lab equipment	$	500		$	500
Tooling		424			273
Computer equipment		513			467
Furniture, fixtures and improvements		181			176
		1,618			1,416
Accumulated depreciation		(799	)		(440	)
Property and equipment, net	$	819		$	976

Note 12 - Related Party Transactions (Details Textual) - USD ($)	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021
Related Party Transaction, Amounts of Transaction	$ 13,500	$ 13,500
Mr. Elwood Norris [Member]
Reimbursement of Expenses to Related Party, Monthly Amount	$ 1,500

Note 11 - Commitments and Contingencies (Details Textual) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2016
Contractual Obligation, Total	$ 4,376,000		$ 4,376,000
Related Party Technology License Agreement [Member] \| Syzygy Licensing LLC [Member]
Royalty Payments, Percentage of Product Revenue					4.00%
Maximum Royalties to Be Paid Under Agreement					$ 1,000
Royalty Expense	$ 61,000	$ 65,000	$ 147,000	$ 185,000

Note 2 - Revenue and Product Costs (Tables)

9 Months Ended

Sep. 30, 2022

Contract with Customer, Contract Asset, Contract Liability, and Receivable [Table Text Block]

	Customer			Deferred
	Deposits			Revenue
Balance at January 1, 2022	$	43		$	265
Additions, net		-			171
Transfer to revenue		(43	)		(136	)
Balance at September 30, 2022	$	-		$	300
Current portion	$	-		$	144
Long-term portion	$	-		$	156

Note 12 - Related Party Transactions

9 Months Ended

Sep. 30, 2022

12. RELATED PARTY TRANSACTIONS

Commencing in October 2017 the Company began reimbursing Mr. Elwood Norris, a former officer and current stockholder and consultant of the Company, $1.5 per month on a month-to-month basis for laboratory facility expense, for an aggregate of $13.5 during the nine months ended September 30, 2022, and 2021, respectively.

See Notes 7, 10 and 11 for additional information on related party transactions and obligations.

Note 10 - Share-based Compensation - Summary of Stock Option Activity (Details) $ / shares in Units, $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2022 USD ($) $ / shares shares	Dec. 31, 2021 $ / shares shares
Options on Common Shares, Outstanding (in shares) \| shares	3,935,883
Outstanding, weighted average exercise price (in dollars per share) \| $ / shares	$ 5.24
Outstanding, remaining contractual term (Year)	6 years 3 days	4 years 9 months 14 days
Options on Common Shares, Granted (in shares) \| shares	2,734,639
Granted, weighted average exercise price (in dollars per share) \| $ / shares	$ 2.85
Options on Common Shares, Exercised (in shares) \| shares	(55,500)
Exercised, weighted average exercise price (in dollars per share) \| $ / shares	$ 1.50
Options on Common Shares, Forfeited, cancelled, expired (in shares) \| shares	(978,709)
Forfeited, cancelled, expired, weighted average exercise price (in dollars per share) \| $ / shares	$ 5.48
Outstanding September 30, 2022 (in shares) \| shares	5,636,313	3,935,883
Outstanding, weighted average exercise price (in dollars per share) \| $ / shares	$ 3.74	$ 5.24
Outstanding September 30, 2022 \| $	$ 232,778
Exercisable September 30, 2022 (in shares) \| shares	2,507,744
Exercisable weighted average exercise price (in dollars per share) \| $ / shares	$ 4.47
Exercisable, remaining contractual term (Year)	2 years 1 month 20 days
Exercisable September 30, 2022 \| $	$ 232,778

Condensed Consolidated Balance Sheets (Current Period Unaudited) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Current assets:
Cash and cash equivalents	$ 3,828	$ 4,937
Short-term investments	19,865	29,983
Accounts receivable and contract assets	2,222	3,859
Inventories, net	2,962	1,566
Prepaid expenses and other current assets	600	868
Total current assets	29,477	41,213
Property and equipment, net	819	976
Operating lease right-of-use asset, net	311	51
Intangible assets, net	1,900	1,982
Other assets	11	9
Total assets	32,518	44,231
Current liabilities:
Accounts payable	945	1,779
Accrued liabilities	991	824
Customer deposits	0	43
Deferred revenue- short term	144	155
Operating lease liability - short term	106	56
Total current liabilities	2,186	2,857
Long-term liabilities:
Deferred revenue- long term	156	110
Operating lease liability - long term	221	0
Total long-term liabilities	377	110
Total liabilities	2,563	2,967
Commitments and contingencies
Stockholders' equity:
Preferred stock - 5,000,000 authorized; par value $0.0001 per share; none issued and outstanding	0	0
Common stock - 150,000,000 authorized; par value $0.0001 per share; 41,125,578 and 40,851,945 shares issued and outstanding each period, respectively	4	4
Additional paid-in capital	93,736	91,025
Accumulated deficit	(63,841)	(49,759)
Accumulated other comprehensive loss	56	(6)
Total stockholders' equity	29,955	41,264
Total liabilities and stockholders' equity	$ 32,518	$ 44,231

Note 7 - Accounts Payable and Accrued Liabilities

9 Months Ended

Sep. 30, 2022

Accounts Payable and Accrued Liabilities Disclosure [Text Block]

7. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

Accounts payable includes $61 and $228 due to related party Syzygy Licensing, LLC (“Syzygy”) as of September 30, 2022, and December 31, 2021, respectively. See Notes 10, 11, and 12 for additional related party information.

Accrued liabilities consist of the following:

	September 30,		December 31,
	2022		2021
Patent and legal costs	$	131	$	28
Accrued compensation		759		628
Warranty costs		88		96
Taxes and other		13		72
	$	991	$	824

Accrued compensation includes $25 of future severance payments for the Company’s former Chief Executive Officer payable through October 2022.

Changes in our estimated product warranty costs were as follows:

	Nine months Ended September 30,
	2022			2021
Balance, beginning of period	$	96		$	48
Warranty settlements		(63	)		(16	)
Warranty provision		55			42
Balance, end of period	$	88		$	74

Note 14 - Subsequent Events (Details Textual) - USD ($) $ in Thousands	Oct. 11, 2022	Sep. 30, 2022	Dec. 31, 2021
Contract with Customer, Liability, Total		$ 300	$ 265
International Government Agency [Member] \| Subsequent Event [Member]
Contract with Customer, Liability, Total	$ 1,500

Significant Accounting Policies (Policies)	9 Months Ended
Significant Accounting Policies (Policies)	Sep. 30, 2022
Accounting Policies [Abstract]
Organization and Business Description [Policy Text Block]	Organization and Business DescriptionWrap Technologies, Inc., a Delaware corporation (the “Company”, “we”, “us”, and “our”), is a publicly traded company with our Common Stock, par value $0.0001 per share (“Common Stock”), listed on the Nasdaq Capital Market (“Nasdaq”) under the trading symbol “WRAP”. The Company is a developer and supplier of public safety products and training services for law enforcement and security personnel. The Company’s primary product is the BolaWrap® remote restraint device. The principal markets for the Company’s proprietary products and services are in North and South America, Europe, Middle East and Asia.
Basis of Accounting, Policy [Policy Text Block]	Basis of PresentationThe Company’s unaudited interim condensed consolidated financial statements included herein have been prepared in accordance with the instructions to Form 10-Q and Article 8 of Regulation S-X and the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) have been condensed or omitted pursuant to such rules and regulations. In management’s opinion, the accompanying financial statements reflect adjustments necessary to present fairly the financial position, results of operations, and cash flows for those periods indicated, and contain adequate disclosure to make the information presented not misleading. Adjustments included herein are of a normal, recurring nature unless otherwise disclosed in the footnotes. The condensed consolidated financial statements and notes thereto should be read in conjunction with the Company’s audited financial statements and notes thereto for the year ended December 31, 2021, included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 (the “Annual Report”), as filed with the SEC on March 10, 2022. The accompanying condensed consolidated balance sheet at December 31, 2021, has been derived from the audited consolidated balance sheet at December 31, 2021, contained in the Annual Report. Results of operations for interim periods are not necessarily indicative of the results of operations for a full year.Where necessary, the prior year’s information has been reclassified to conform to the current year presentation.
Consolidation, Policy [Policy Text Block]	Principles of ConsolidationThe Company has one wholly-owned subsidiary, Wrap Reality, Inc. formed in December 2020 that sells a virtual reality (“VR”) training system primarily targeting law enforcement agencies. The consolidated financial statements include the accounts of this subsidiary after elimination of intercompany transactions and accounts.
Use of Estimates, Policy [Policy Text Block]	Use of EstimatesThe preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions (e.g., stock-based compensation valuation, allowance for doubtful accounts, valuation of inventory and intangible assets, warranty reserve, accrued expense and recognition and measurement of contingencies) that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities at the date of the financial statements and affect the reported amounts of revenue and expense during the reporting period. Actual results could materially differ from those estimates.
Earnings Per Share, Policy [Policy Text Block]	Loss per ShareBasic loss per common share is computed by dividing net loss for the period by the weighted-average number of shares of Common Stock outstanding during the period. Diluted net loss per Common Share reflects the potential dilution of securities that could share in the earnings of an entity. The Company’s losses for the periods presented cause the inclusion of potential Common Stock instruments outstanding to be antidilutive. Stock options and restricted stock units exercisable or issuable for a total of 6,396,277 shares of Common Stock were outstanding at September 30, 2022. These securities are not included in the computation of diluted net loss per common share for the periods presented as their inclusion would be antidilutive due to losses incurred by the Company.
New Accounting Pronouncements, Policy [Policy Text Block]	Recent Issued Accounting GuidanceIn October 2021, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers (“ASU 2021-08”), to require that an acquirer recognize, and measure contract assets and contract liabilities acquired in a business combination in accordance with FASB Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers (“Topic 606”). At the acquisition date, an acquirer should account for the related revenue contracts in accordance with Topic 606 as if it had originated the contracts. The amendments in ASU 2021-08 should be applied prospectively and are effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. We do not expect the adoption of ASU 2021-08 to have a material impact on our consolidated financial statements and related disclosures.The Company has reviewed other recently issued, but not yet effective, accounting pronouncements and does not believe the future adoptions of any such pronouncements will be expected to cause a material impact on its financial condition or the results of operations.

Note 13 - Major Customers and Related Information - Disaggregation of Revenue by Geographic Region (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Revenues	$ 1,701	$ 1,805	$ 4,464	$ 5,280
Americas [Member]
Revenues	1,478	1,088	3,484	2,837
Europe, Middle East and Africa [Member]
Revenues	220	745	435	2,424
Asia Pacific [Member]
Revenues	$ 3	$ (28)	$ 545	$ 19

Amount of revenue recognized from goods sold, services rendered, insurance premiums, or other activities that constitute an earning process. Includes, but is not limited to, investment and interest income before deduction of interest expense when recognized as a component of revenue, and sales and trading gain (loss).

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+ Details

Note 10 - Share-based Compensation - Allocation of Share-based Compensation Expense (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Share-based expense	$ 872	$ 1,303	$ 2,628	$ 4,310
Selling, General and Administrative Expenses [Member]
Share-based expense	700	1,093	2,180	3,722
Research and Development Expense [Member]
Share-based expense	$ 172	$ 210	$ 448	$ 588

Note 7 - Accounts Payable and Accrued Liabilities (Tables)

9 Months Ended

Sep. 30, 2022

Schedule of Accrued Liabilities [Table Text Block]

	September 30,		December 31,
	2022		2021
Patent and legal costs	$	131	$	28
Accrued compensation		759		628
Warranty costs		88		96
Taxes and other		13		72
	$	991	$	824

Schedule of Product Warranty Liability [Table Text Block]

	Nine months Ended September 30,
	2022			2021
Balance, beginning of period	$	96		$	48
Warranty settlements		(63	)		(16	)
Warranty provision		55			42
Balance, end of period	$	88		$	74

Note 4 - Inventories, Net - Summary of Inventories (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Finished goods	$ 1,974	$ 1,027
Work in process	0	2
Raw materials	988	537
Inventories, net	$ 2,962	$ 1,566

Document And Entity Information - shares	9 Months Ended
Document And Entity Information - shares	Sep. 30, 2022	Nov. 09, 2022
Document Information [Line Items]
Entity Central Index Key	0001702924
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2022
Document Fiscal Period Focus	FY
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 30, 2022
Document Transition Report	false
Entity File Number	000-55838
Entity Registrant Name	Wrap Technologies, Inc.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	98-0551945
Entity Address, Address Line One	1817 W 4th Street
Entity Address, City or Town	Tempe
Entity Address, State or Province	AZ
Entity Address, Postal Zip Code	85281
City Area Code	800
Local Phone Number	583-2652
Title of 12(b) Security	Common Stock, par value $0.0001 per share
Trading Symbol	WRAP
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	true
Entity Ex Transition Period	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		41,124,312

Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Revenues:
Product sales	$ 1,612	$ 1,719	$ 4,042	$ 4,997
Other revenue	89	86	422	283
Total revenues	1,701	1,805	4,464	5,280
Cost of revenues:
Products and services	790	1,094	2,430	3,276
Product line exit expense	0	0	0	747
Total cost of revenues	790	1,094	2,430	4,023
Gross profit	911	711	2,034	1,257
Operating expenses:
Selling, general and administrative	3,586	4,654	11,952	16,210
Research and development	1,236	2,076	4,210	4,303
Total operating expenses	4,822	6,730	16,162	20,513
Loss from operations	(3,911)	(6,019)	(14,128)	(19,256)
Other income (expense):
Investment income	34	13	36	22
Other	12	15	10	14
Nonoperating Income (Expense), Total	46	28	46	36
Net loss	$ (3,865)	$ (5,991)	$ (14,082)	$ (19,220)
Net loss per basic and diluted common share (in dollars per share)	$ (0.09)	$ (0.15)	$ (0.34)	$ (0.50)
Weighted average common shares used to compute net loss per basic and diluted common share (in shares)	41,086,285	40,413,332	40,955,234	38,767,009
Comprehensive loss:
Net loss	$ (3,865)	$ (5,991)	$ (14,082)	$ (19,220)
Net unrealized gain (loss) on short-term investments	73	(2)	62	(4)
Comprehensive loss	$ (3,792)	$ (5,993)	$ (14,020)	$ (19,224)

Note 5 - Property and Equipment, Net (Details Textual) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Depreciation, Total	$ 121	$ 69	$ 359	$ 191

Note 3 - Fair Value Measurements

9 Months Ended

Sep. 30, 2022

Fair Value Disclosures [Text Block]

3. FAIR VALUE MEASUREMENTS

Assets and liabilities recorded at fair value on a recurring basis in the Condensed Consolidated Balance Sheets and assets and liabilities measured at fair value on a non-recurring basis or disclosed at fair value, are categorized based upon the level of judgment associated with inputs used to measure their fair values. The accounting guidance for fair value provides a framework for measuring fair value and requires certain disclosures about how fair value is determined. Fair value is defined as the price that would be received upon the sale of an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the measurement date. The accounting guidance also establishes a three-level valuation hierarchy that prioritizes the inputs to valuation techniques used to measure fair value based upon whether such inputs are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect market assumptions made by the reporting entity. The three-level hierarchy for the inputs to valuation techniques is briefly summarized as follows:

Level 1—Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date;

Level 2—Inputs are observable, unadjusted quoted prices in active markets for similar assets or liabilities, unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the related assets or liabilities; and

Level 3—Unobservable inputs that are significant to the measurement of the fair value of the assets or liabilities that are supported by little or no market data.

The Company’s cash equivalent Money Market Funds and short-term investments consisting of U.S. Treasury bill securities are classified as Level I because they are valued using quoted market prices.

The following table shows the Company’s cash and cash equivalents, Money Market Funds and short-term investments by significant investment category as of September 30, 2022, and December 31, 2021.

	As of September 30, 2022
	Adjusted		Unrealized		Unrealized		Market
	Cost		Gains		Losses		Value
Level 1:
Money Market Funds	$	3,382	$	-	$	-	$	3,382
U.S. Treasury securities in short-term investments		19,803		62		-		19,865
Total Financial Assets	$	23,185	$	62	$	-	$	23,247

	As of December 31, 2021
	Adjusted		Unrealized		Unrealized			Market
	Cost		Gains		Losses			Value
Level 1:
Money Market Funds	$	1,670	$	-	$	-		$	1,670
U.S. Treasury securities in short-term investments		29,989		-		(6	)		29,983
Total Financial Assets	$	31,659	$	-	$	(6	)	$	31,653

Unrealized gains or losses resulting from our short-term investments are recorded in accumulated other comprehensive gain or loss. During the three and nine months ended September 30, 2022, a $73 gain and $62 gain was recorded to accumulated other comprehensive gain (loss), respectively. During the three and nine months ended September 30, 2021, a $2 loss and a $4 loss was recorded to accumulated other comprehensive loss, respectively

Our financial instruments also include accounts receivable, accounts payable, accrued liabilities and business acquisition liabilities. Due to the short-term nature of these instruments, their fair values approximate their carrying values on the balance sheet.

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

Note 2 - Revenue and Product Costs

9 Months Ended

Sep. 30, 2022

Revenue from Contract with Customer [Text Block]

2. REVENUE AND PRODUCT COSTS

On January 1, 2018, the Company adopted Topic 606 and, as it had no prior revenue or contracts with customers, there was no transition required nor any impact on prior results. Topic 606 requires entities to recognize revenue through the application of a five-step model, which includes identification of the contract, identification of the performance obligations, determination of the transaction price, allocation of the transaction price to the performance obligations and recognition of revenue as the entity satisfies the performance obligations.

The Company enters into contracts that include various combinations of products, accessories, software and services, each of which are generally distinct and are accounted for as separate performance obligations. Product sales includes BolaWrap products and accessories. Other revenue includes VR revenues, service, training and shipping revenues.

A performance obligation is a promise in a contract to transfer a distinct good or service to a customer and is the unit of account in Topic 606. For contracts with a single performance obligation, the entire transaction price is allocated to the single performance obligation. For contracts with multiple performance obligations, the Company allocates the contract transaction price to each performance obligation using the Company’s estimate of the standalone selling price (“SSP” or “SSPs”) of each distinct good or service in a contract. The Company determines SSPs based on the relative SSP. If the SSP is not observable through past transactions, the Company estimates the SSP considering available information such as market conditions and internally approved pricing guidelines related to the performance obligations.

Most of the Company’s products and accessories are sold through domestic and international distributors. Performance obligations to deliver products and accessories are generally satisfied at the point in time the Company ships the product, as this is when the customer obtains control of the asset under our standard terms and conditions. Periodically, certain customers request bill and hold transactions for future delivery as scheduled and designated by them. In such cases, revenue is not recognized until after control, title and risk of ownership has transferred which is generally when the customer has requested such transaction under normal billing and payment terms and has been notified that the product (i) has been completed according to customer specifications, (ii) has passed quality control inspections, and (iii) has been tagged and packed for shipment, separated from other inventory and ready for physical transfer to the customer. The value associated with custodial storage services is deemed immaterial in the context of such contracts and in total, and accordingly, none of the transaction price is allocated to such service.

The Company has elected to recognize shipping costs as an expense in cost of revenue when control has transferred to the customer.

Time-based VR system contracts generally include setup, training and the use of software and hardware for a fixed term, generally one to five years and support and upgrade services during the same period. The Company does not sell time-based arrangements without setup, training and support services and therefore revenues for the entire arrangement are recognized on a straight-line basis over the term. When hardware is bundled and not sold separately the Company allocates the contract transaction price to each performance obligation using the SSP of each distinct good and service in the contract.

The timing of revenue recognition may differ from the timing of invoicing to customers. The Company generally has an unconditional right to consideration when customers are invoiced, and a receivable is recorded. A contract asset is recognized when revenue is recognized prior to invoicing, or a contract liability (deferred revenue) when revenue will be recognized subsequent to invoicing. The Company may receive consideration, per terms of a contract, from customers prior to transferring goods to the customer. The Company records customer deposits as a contract liability. Additionally, the Company may receive payments, most typically for service and warranty contracts, at the onset of the contract and before the services have been performed. In such instances, a deferred revenue liability is recorded. The Company recognizes these contract liabilities as revenue after all revenue recognition criteria are met. The table below details the activity in our contract liabilities during the nine months ended September 30, 2022.

	Customer			Deferred
	Deposits			Revenue
Balance at January 1, 2022	$	43		$	265
Additions, net		-			171
Transfer to revenue		(43	)		(136	)
Balance at September 30, 2022	$	-		$	300
Current portion	$	-		$	144
Long-term portion	$	-		$	156

At September 30, 2022, the Company’s deferred revenue of $300 consisted of $177 related to VR training and $123 related to BolaWrap extended warranties and services. At December 31, 2021, the Company’s deferred revenue of $265 consisted of $172 related to VR training and $67 related to extended warranties and services.

The Company recognizes an asset if there are incremental costs of obtaining a contract with a customer such as commissions. These costs are ascribed to or allocated to the underlying performance obligations in the contract and amortized consistent with the recognition timing of the revenue for any such underlying performance obligations. The Company had no such assets at September 30, 2022, and December 31 2021. The Company will apply the practical expedient to expense any sales commissions related to performance obligations with an amortization of one year or less when incurred within selling, general and administrative expense.

Estimated costs for the Company’s standard warranty, generally one-year, are charged to cost of products sold when revenue is recorded for the related product. Royalties are also charged to cost of products sold.

The entire disclosure of revenue from contract with customer to transfer good or service and to transfer nonfinancial asset. Includes, but is not limited to, disaggregation of revenue, credit loss recognized from contract with customer, judgment and change in judgment related to contract with customer, and asset recognized from cost incurred to obtain or fulfill contract with customer. Excludes insurance and lease contracts.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-URI https://asc.fasb.org/topic&trid=49130388

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 10
-URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130551-203045

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 13
-Subparagraph (b)(2)
-URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130556-203045

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130554-203045

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 9
-URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130550-203045

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (e)
-URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130554-203045

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130554-203045

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (d)
-URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130554-203045

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 15
-URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130558-203045

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (c)
-URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130554-203045

+ Details

Note 8 - Lease - Summary of Operating Lease Obligations (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Operating lease liability - short term	$ 106	$ 56
Operating lease liability - long term	221	$ 0
Total Operating Lease Liability	$ 327

Note 11 - Commitments and Contingencies

9 Months Ended

Sep. 30, 2022

Commitments and Contingencies Disclosure [Text Block]

11. COMMITMENTS AND CONTINGENCIES

Facility Lease

See Note 8.

Related Party Technology License Agreement

The Company is obligated to pay royalties and development and patent costs pursuant to an exclusive Amended and Restated Intellectual Property License Agreement dated as of September 30, 2016, with Syzygy, a company owned and controlled by stockholder/consultant Mr. Elwood Norris and stockholder/consultant Mr. James Barnes. The agreement provides for royalty payments of 4% of revenue from products employing the licensed ensnarement device technology up to an aggregate of $1,000 in royalties or until September 30, 2026, whichever occurs earlier. The Company recorded $61 and $147 for royalties during the three and nine months ended September 30, 2022 and $65 and $185 incurred for the three and nine months ended September 30, 2021, respectively.

Purchase Commitments

At September 30, 2022, the Company was committed for approximately $4,376 for future component deliveries that are generally subject to modification or rescheduling in the normal course of business.

Note 6 - Intangible Assets, Net (Details Textual) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Amortization of Intangible Assets	$ 72	$ 48	$ 215	$ 145

Note 6 - Intangible Assets, Net

9 Months Ended

Sep. 30, 2022

Intangible Assets Disclosure [Text Block]

6. INTANGIBLE ASSETS, NET

Intangible assets consisted of the following:

	September 30,			December 31,
	2022			2021
Amortizable intangible assets:
Patents	$	540		$	416
Trademarks		143			134
Purchased software		1,212			1,212
Other		50			50
		1,945			1,812
Accumulated amortization		(389	)		(174	)
Total amortizable		1,556			1,638
Indefinite life assets (non-amortizable)		344			344
Total intangible assets, net	$	1,900		$	1,982

Amortization expense was $72 and $215 for the three and nine months ended September 30, 2022 and was $48 and $145 for the three and nine months ended September 30, 2021, respectively.

At September 30, 2022, future amortization expense is as follows:

2022 (3 months)	$	72
2023		284
2024		284
2025		280
2026		192
Thereafter		444
Total estimated amortization expense	$	1,556

Note 1 - Organization and Summary of Significant Accounting Policies

9 Months Ended

Sep. 30, 2022

Organization, Consolidation, Basis of Presentation, Business Description and Accounting Policies [Text Block]

1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization and Business Description

Wrap Technologies, Inc., a Delaware corporation (the “Company”, “we”, “us”, and “our”), is a publicly traded company with our Common Stock, par value $0.0001 per share (“Common Stock”), listed on the Nasdaq Capital Market (“Nasdaq”) under the trading symbol “WRAP”. The Company is a developer and supplier of public safety products and training services for law enforcement and security personnel. The Company’s primary product is the BolaWrap® remote restraint device. The principal markets for the Company’s proprietary products and services are in North and South America, Europe, Middle East and Asia.

Basis of Presentation

The Company’s unaudited interim condensed consolidated financial statements included herein have been prepared in accordance with the instructions to Form 10-Q and Article 8 of Regulation S-X and the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) have been condensed or omitted pursuant to such rules and regulations. In management’s opinion, the accompanying financial statements reflect adjustments necessary to present fairly the financial position, results of operations, and cash flows for those periods indicated, and contain adequate disclosure to make the information presented not misleading. Adjustments included herein are of a normal, recurring nature unless otherwise disclosed in the footnotes. The condensed consolidated financial statements and notes thereto should be read in conjunction with the Company’s audited financial statements and notes thereto for the year ended December 31, 2021, included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 (the “Annual Report”), as filed with the SEC on March 10, 2022. The accompanying condensed consolidated balance sheet at December 31, 2021, has been derived from the audited consolidated balance sheet at December 31, 2021, contained in the Annual Report. Results of operations for interim periods are not necessarily indicative of the results of operations for a full year.

Where necessary, the prior year’s information has been reclassified to conform to the current year presentation.

Principles of Consolidation

The Company has one wholly-owned subsidiary, Wrap Reality, Inc. formed in December 2020 that sells a virtual reality (“VR”) training system primarily targeting law enforcement agencies. The consolidated financial statements include the accounts of this subsidiary after elimination of intercompany transactions and accounts.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions (e.g., stock-based compensation valuation, allowance for doubtful accounts, valuation of inventory and intangible assets, warranty reserve, accrued expense and recognition and measurement of contingencies) that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities at the date of the financial statements and affect the reported amounts of revenue and expense during the reporting period. Actual results could materially differ from those estimates.

Loss per Share

Basic loss per common share is computed by dividing net loss for the period by the weighted-average number of shares of Common Stock outstanding during the period. Diluted net loss per Common Share reflects the potential dilution of securities that could share in the earnings of an entity. The Company’s losses for the periods presented cause the inclusion of potential Common Stock instruments outstanding to be antidilutive. Stock options and restricted stock units exercisable or issuable for a total of 6,396,277 shares of Common Stock were outstanding at September 30, 2022. These securities are not included in the computation of diluted net loss per common share for the periods presented as their inclusion would be antidilutive due to losses incurred by the Company.

Recent Issued Accounting Guidance

In October 2021, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers (“ASU 2021-08”), to require that an acquirer recognize, and measure contract assets and contract liabilities acquired in a business combination in accordance with FASB Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers (“Topic 606”). At the acquisition date, an acquirer should account for the related revenue contracts in accordance with Topic 606 as if it had originated the contracts. The amendments in ASU 2021-08 should be applied prospectively and are effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. We do not expect the adoption of ASU 2021-08 to have a material impact on our consolidated financial statements and related disclosures.

The Company has reviewed other recently issued, but not yet effective, accounting pronouncements and does not believe the future adoptions of any such pronouncements will be expected to cause a material impact on its financial condition or the results of operations.

Consolidated Statements of Stockholders' Equity (Unaudited)-parentheticals (Parentheticals)	Sep. 30, 2021 $ / shares
Warrants at $6.50 Per Share [Member]
Class of Warrant or Right, Exercise Price of Warrants or Rights (in dollars per share)	$ 6.50
Warrants at $8.125 Per Share [Member]
Class of Warrant or Right, Exercise Price of Warrants or Rights (in dollars per share)	$ 8.125

Note 4 - Inventories, Net

9 Months Ended

Sep. 30, 2022

Inventory Disclosure [Text Block]

4. INVENTORIES, NET

Inventory is recorded at the lower of cost or net realizable value. The cost of substantially all the Company’s inventory is determined by the FIFO cost method. Inventories consisted of the following:

	September 30,		December 31,
	2022		2021
Finished goods	$	1,974	$	1,027
Work in process		-		2
Raw materials		988		537
Inventories, net	$	2,962	$	1,566

Note 10 - Share-based Compensation

9 Months Ended

Sep. 30, 2022