0001851734-22-000227 | 10-Q | XBRL Viewer

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, 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 above referenced Form 10-K. 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 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, restricted stock units and warrants exercisable or issuable for a total of 5,350,111 shares of Common Stock were outstanding at March 31, 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 FASB issued ASU 2021-08 (“ASU No. 2021-08”), Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, to require that an acquirer recognize, and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606, Revenue from Contracts with Customers. 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 this update 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 this standard 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 2 - Revenue and Product Costs

3 Months Ended

Mar. 31, 2022

Revenue from Contract with Customer [Text Block]

2.	REVENUE AND PRODUCT COSTS

On January 1, 2018, the Company adopted FASB ASC Topic 606, Revenue from contracts with customers (“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.

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 virtual reality 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 three months ended March 31, 2022.

	Customer			Deferred
	Deposits			Revenue
Balance at January 1, 2022	$	43		$	265
Additions, net		-			56
Transfer to revenue		(43	)		(39	)
Balance at March 31, 2022	$	-		$	282
Current portion	$	-		$	121
Long-term portion	$	-		$	161

At March 31, 2022, the Company’s deferred revenue of $282 consisted of $170 related to virtual reality training and $112 related to BolaWrap extended warranties and services. At December 31, 2021, the Company’s deferred revenue of $265 consisted of $172 related to virtual reality training and $67 related to extended warranties.

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 March 31, 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 3 - Fair Value Measurements

3 Months Ended

Mar. 31, 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 March 31, 2022, and December 31, 2021.

	As of March 31, 2022
	Adjusted		Unrealized		Unrealized			Market
	Cost		Gains		Losses			Value
Level 1:
Money Market Funds	$	3,277	$	-	$	-		$	3,277
U.S. Treasury securities in short-term investments		24,985		-		(29	)		24,956
Total Financial Assets	$	28,262	$	-	$	(29	)	$	28,233

	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 months ended March 31, 2022, $23 was recorded to accumulated other comprehensive loss.

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 4 - Inventories, Net

3 Months Ended

Mar. 31, 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:

	March 31,		December 31,
	2022		2021
Finished goods	$	971	$	1,027
Work in process		-		2
Raw materials		899		537
Inventories, net	$	1,870	$	1,566

Note 5 - Property and Equipment, Net

3 Months Ended

Mar. 31, 2022

Property, Plant and Equipment Disclosure [Text Block]

5.	PROPERTY AND EQUIPMENT, NET

Property and equipment consisted of the following:

	March 31,			December 31,
	2022			2021
Production and lab equipment	$	500		$	500
Tooling		335			273
Computer equipment		485			467
Furniture, fixtures and improvements		177			176
		1,497			1,416
Accumulated depreciation		(553	)		(440	)
Property and equipment, net	$	944		$	976

Depreciation expense was $113 and $56 for the three months ended March 31, 2022, and 2021, respectively.

Note 6 - Intangible Assets, Net

3 Months Ended

Mar. 31, 2022

Intangible Assets Disclosure [Text Block]

6.	INTANGIBLE ASSETS, NET

Intangible assets consisted of the following:

	March 31,			December 31,
	2022			2021
Amortizable intangible assets:
Patents	$	482		$	416
Trademarks		137			134
Purchased software		1,212			1,212
Other		50			50
		1,881			1,812
Accumulated amortization		(244	)		(174	)
Total amortizable		1,637			1,638
Indefinite life assets (non-amortizable)		344			344
Total intangible assets, net	$	1,981		$	1,982

Amortization expense was $70 and $48 for the three months ended March 31, 2022, and 2021, respectively.

At March 31, 2022, future amortization expense is as follows:

2022 (9 months)	$	210
2023		275
2024		276
2025		271
2026		183
Thereafter		422
Total estimated amortization expense	$	1,637

Note 7 - Accounts Payable and Accrued Liabilities

3 Months Ended

Mar. 31, 2022

Accounts Payable and Accrued Liabilities Disclosure [Text Block]

7.	ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

Accounts payable includes $208 and $228 due to related party Syzygy Licensing, LLC (“Syzygy”) as of March 31, 2022, and December 31, 2021, respectively. See Notes 10, 11, 12 and 14 for additional related party information.

Accrued liabilities consist of the following:

	March 31,		December 31,
	2022		2021
Patent and legal costs	$	77	$	28
Accrued compensation		667		628
Warranty costs		54		96
Consulting costs		-		2
Taxes and other		21		70
Accrued liabilities	$	819	$	824

Accrued compensation includes $317 of future severance payments including a balance of $278 for the Company’s former CEO payable through October 2022.

Changes in our estimated product warranty costs were as follows:

	Three Months Ended March 31,
	2022			2021
Balance, beginning of period	$	96		$	48
Warranty settlements		(54	)		(9	)
Warranty provision		12			19
Balance, end of period	$	54		$	58

Note 8 - Leases

3 Months Ended

Mar. 31, 2022

Lessee, Operating Leases [Text Block]

LEASE

The Company determines if an arrangement is a lease at inception. The guidance in Topic 842 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 $24 and $25 for the three months ended March 31, 2022, and 2021, respectively.

Operating lease expense for capitalized operating leases included in operating activities was $28 and $28 for the three months ended March 31, 2022, and 2021, respectively.

Operating lease obligations recorded on the balance sheet at March 31, 2022, are:

Operating lease liability- short term	$	96
Operating lease liability - long term		275
Total Operating Lease Liability	$	371

Future lease payments included in the measurement of lease liabilities on the balance sheet at March 31, 2022, for future periods are as follows:

2022 (9 months)	$	82
2023		121
2024		126
2025		75
Total future minimum lease payments		404
Less imputed interest		(33	)
Total	$	371

The weighted average remaining lease term is 3.3 years, and the weighted average discount rate is 5.0%.

The Company did not have any short-term lease expense during the three months ended March 31, 2022, or 2021. The Company does not have any finance leases.

Note 9 - Stockholders' Equity

3 Months Ended

Mar. 31, 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”).

Summary of Stock Purchase Warrants

The Company has outstanding Common Stock purchase warrants as of March 31, 2022, as follows:

	Number of		Exercise Price
Description	Common Shares		Per Share		Expiration Date
Purchase Warrants		1,391,667	$	6.00	June 1, 2022

There was no warrant activity during the three months ended March 31, 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
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-URI https://asc.fasb.org/topic&trid=2208762

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 13
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496158-112644

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 13
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496158-112644

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 14
-Subparagraph (c)
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496171-112644

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 14
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496171-112644

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.3-04)
-URI https://asc.fasb.org/extlink&oid=120397183&loc=d3e187085-122770

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 18
-Subparagraph (d)
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496189-112644

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 13
-Subparagraph (g)
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496158-112644

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 18
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496189-112644

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 13
-Subparagraph (h)
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496158-112644

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 14
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496171-112644

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 18
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496189-112644

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 16
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496180-112644

Reference 14: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 13
-Subparagraph (i)
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496158-112644

Reference 15: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(e)(1))
-URI https://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690

Reference 16: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 815
-SubTopic 40
-Section 50
-Paragraph 6
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=126731327&loc=SL126733271-114008

+ Details

Note 10 - Share-based Compensation

3 Months Ended

Mar. 31, 2022

Share-Based Payment Arrangement [Text Block]

10.

SHARE-BASED COMPENSATION

On March 31, 2017, the Company adopted, and the stockholders approved, the 2017 Stock Incentive Plan (the “Plan”) authorizing 2,000,000 shares of Company Common Stock for issuance as stock options and restricted stock units to employees, directors or consultants. In May 2019, the stockholders ratified an increase in the Plan authorizing an additional 2,100,000 shares of Common Stock and in June 2020 ratified a further authorization of 1,900,000 shares of Common Stock for a total of 6,000,000 shares subject to the Plan. In June 2021, the stockholders ratified an increase in the Plan authorizing an additional 1,500,000 shares of Common Stock to a total of 7,500,000 shares. At March 31, 2022, there were 1,528,306 shares of Common Stock available for grant under the Plan.

The Company generally recognizes share-based compensation expense on the grant date and over the period of vesting or period that services will be provided. In January 2022 the Company recognized severance acceleration of $242 of share-based compensation expense resulting from the resignation of the Company’s CEO as part of a management transition plan.

Stock Options

The following table summarizes stock option activity for the three months ended March 31, 2022:

				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		104,000		$	3.55
Exercised		(50,000	)	$	1.50
Forfeited, cancelled, expired		(388,912	)	$	5.01
Outstanding March 31, 2022		3,600,971		$	5.27		3.58	$	774
Exercisable March 31, 2022		2,549,388		$	2.86		2.03	$	761

All outstanding options at March 31, 2022, are service-based options.

The Company uses the Black-Scholes option pricing model to determine the fair value of the options granted. The following table summarizes the assumptions used to compute the fair value of options granted to employees and non-employees:

	For the Three Months
	Ended March 31,
	2022			2021
Expected stock price volatility		49	%		50	%
Risk-free interest rate		1.57	%		0.89	%
Forfeiture rate		0	%		0	%
Expected dividend yield		0	%		0	%
Expected life of options - years		1.39			5.70
Weighted-average fair value of options granted	$	1.72		$	2.42

Estimated volatility is a measure of the amount by which the Company’s stock price is expected to fluctuate each year during the expected life of awards. The Company’s estimated volatility was based on an average of the historical volatility of peer entities whose stock prices were publicly available. The Company’s calculation of estimated volatility is based on historical stock prices of these peer entities over a period equal to the expected life of the awards. The Company uses the historical volatility of peer entities due to the lack of sufficient historical data of its stock price.

The risk-free interest rate assumption is based upon observed interest rates on zero coupon U.S. Treasury bonds whose maturity period is appropriate for the term of the options. The dividend yield of zero is based on the fact that the Company has never paid cash dividends and has no present intention to pay cash dividends. The Company calculates the expected life of the options using the Simplified Method for the employee stock options as the Company does not have sufficient historical data.

Restricted Stock Units

The Plan provides for the grant of restricted stock units (“RSUs”). RSUs are settled in shares of the Company’s Common Stock as the RSUs become vested. The following table summarizes RSU activity under the Plan for the three months ended March 31, 2022:

				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		160,779		$	2.41
Vested		(49,252	)	$	4.72
Forfeited and cancelled		(23,357	)	$	4.19
Unvested at March 31, 2022		357,473		$	5.03	2.05

Share-Based Compensation Expense

The Company recorded share-based compensation for options and RSUs in its statements of operations for the relevant periods as follows:

	Three Months Ended March 31,
	2022		2021
Selling, general and administrative	$	894	$	602
Research and development		135		257
Total share-based expense	$	1,029	$	859

As of March 31, 2022, total estimated compensation expense of stock options granted and outstanding but not yet vested was $1,826 which is expected to be recognized over the weighted average period of 2.2 years. As of March 31, 2022, total estimated compensation cost of RSUs granted and outstanding but not yet vested was $1,422 which is expected to be recognized over the weighted average period of 2.05 years.

Subsequent Equity Awards

On April 19, 2022, the Company granted the following equity awards to the Company’s newly appointed CEO under the Plan, subject to the terms of the Plan and a related employment agreement:

●

An RSU award on 17,301 shares of Common Stock vesting in one year.

●

An RSU award on 233,564 shares of Common Stock vesting in annual installments over three years.

●

A non-qualified stock option with a ten-year term on 475,662 shares of Common Stock at an exercise price of $2.89 per share vesting in annual installments over three years.

●

A non-qualified performance-based stock option with a ten-year term on 921,832 shares of Common Stock at an exercise price of $2.89 per share vesting on achievement of market capitalization targets.

On April 19, 2022, the Company also granted the following equity awards to the Company’s newly appointed President as inducement grants outside the Plan and subject to the terms of a related employment agreement:

●

An RSU award on 175,173 shares of Common Stock vesting in annual installments over three years.

●

A non-qualified stock option with a ten-year term on 356,747 shares of Common Stock at an exercise price of $2.89 per share vesting in annual installments over three years.

●

A non-qualified performance-based stock option with a ten-year term on 692,398 shares of Common Stock at an exercise price of $2.89 per share vesting on achievement of market capitalization targets.

Note 11 - Commitments and Contingencies

3 Months Ended

Mar. 31, 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/officer 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 $1,000,000 in royalties or until September 30, 2026, whichever occurs earlier. The Company recorded $49 and $51 for royalties incurred during the three months ended March 31, 2022, and 2021, respectively.

Purchase Commitments

At March 31, 2022, the Company was committed for approximately $2.3 million for future component deliveries that are generally subject to modification or rescheduling in the normal course of business.

Shareholder Derivative Litigation

On November 13, 2020, Naresh Rammohan filed a shareholder derivative action in the United States District Court for the Central District of California against current and former Company officers Tom Smith, James Barnes, Mike Rothans, Marc Thomas, and David Norris, as well as current and former Company directors Messrs. Scot Cohen, Patrick Kinsella, Michael Parris, and Wayne Walker, alleging unjust enrichment, breach of fiduciary duty, waste of corporate assets, and contribution claims under the Securities Exchange Act of 1934, docketed as Case No. 2:20-cv-10444-DMG-PVCx. On January 20, 2021, Ray Westerman filed a second derivative action in the same court against the same parties, alleging breach of fiduciary duty and contribution claims under the Securities Exchange Act of 1934, docketed as Case No. 2:21-cv-00550-DMG-PVCx. On January 22, 2021, Jesse Lowe filed a third derivative action in the same court against the same parties, alleging breach of fiduciary duty and asserting various claims under the Securities Exchange Act of 1934, docketed as Case No. 2:21-cv-00597-DMG-PVCx. The Company is named as a nominal defendant in each of these actions.

On February 16, 2021, the Honorable Dolly M. Gee issued an order consolidating the three derivative actions under the caption In re Wrap Technologies, Inc. Shareholder Derivative Litigation, Case No. 2:20-10444-DMG-PVCx, (the “Derivative Action”) and stayed the Derivative Action at least until the resolution of the action captioned In re Wrap Technologies, Inc. Securities Exchange Act Litigation, Case No. 2:20-cv-08760-DMG (the “Securities Action”). On December 20, 2021, Judge Gee dismissed the Securities Action with prejudice. On April 29, 2022 the above-mentioned parties jointly filed a stipulation of voluntary dismissal in order to dismiss the Derivative Action without prejudice to the plaintiffs, the Company, or Wrap shareholders (“the Stipulation”). The Stipulation is currently pending before Judge Gee.

Note 12 - Related Party Transactions

3 Months Ended

Mar. 31, 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 $4.5 during the three months ended March 31, 2022, and 2021, respectively.

See Notes 7, 10, 11 and 14 for additional information on related party transactions and obligations.

Note 13 - Major Customers and Related Information

3 Months Ended

Mar. 31, 2022

Concentration Risk Disclosure [Text Block]

13.

MAJOR CUSTOMERS AND RELATED INFORMATION

For the three months ended March 31, 2022, revenues from two distributors accounted for approximately 25% and 14% of revenues with no other single customer accounting for more than 10% of total revenues. For the three months ended March 31, 2021, revenues from three distributors accounted for approximately 28%, 22% and 10% of revenues with no other single customer accounting for more than 10% of total revenues.

At March 31, 2022, accounts receivable from two distributors accounted for 50% and 13% of accounts receivable with no other single customer accounting for more than 10% of the accounts receivable balance. Accounts receivable from three distributors accounted for 48%, 16% and 15% of net accounts receivable at December 31, 2021.

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

	For the Three Months
	Ended March 31,
	2022		2021
Americas	$	1,194	$	626
Europe, Middle East and Africa		174		877
Asia Pacific		231		39
	$	1,599	$	1,542

Note 14 - Subsequent Events

3 Months Ended

Mar. 31, 2022

Subsequent Events [Text Block]

14.

SUBSEQUENT EVENTS

In connection with the Company’s management transition plan announced in January 2022, the Company effective on April 18, 2022, appointed a new CEO and a new President. See Note 10 for subsequent equity awards.

In April 2022, the Board of the Company approved, subject to stockholder ratification, an increase in the 2017 Stock Incentive Plan authorizing an additional 1,500,000 shares of Common Stock to a total of 9,000,000 shares.

The Company evaluated other 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.

Significant Accounting Policies (Policies)	3 Months Ended
Significant Accounting Policies (Policies)	Mar. 31, 2022
Accounting Policies [Abstract]
Organization and Business Description [Policy Text Block]	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 Accounting, Policy [Policy Text Block]	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, 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 above referenced Form 10-K. 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 Consolidation The Company has one wholly-owned subsidiary, Wrap Reality, Inc. formed in December 2020 that sells a virtual reality 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 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.
Earnings Per Share, Policy [Policy Text Block]	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, restricted stock units and warrants exercisable or issuable for a total of 5,350,111 shares of Common Stock were outstanding at March 31, 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 Guidance In October 2021, the FASB issued ASU 2021-08 (“ASU No. 2021-08”), Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, to require that an acquirer recognize, and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606, Revenue from Contracts with Customers. 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 this update 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 this standard 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 2 - Revenue and Product Costs (Tables)

3 Months Ended

Mar. 31, 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		-			56
Transfer to revenue		(43	)		(39	)
Balance at March 31, 2022	$	-		$	282
Current portion	$	-		$	121
Long-term portion	$	-		$	161

Note 3 - Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2022

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

	As of March 31, 2022
	Adjusted		Unrealized		Unrealized			Market
	Cost		Gains		Losses			Value
Level 1:
Money Market Funds	$	3,277	$	-	$	-		$	3,277
U.S. Treasury securities in short-term investments		24,985		-		(29	)		24,956
Total Financial Assets	$	28,262	$	-	$	(29	)	$	28,233

	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 4 - Inventories, Net (Tables)

3 Months Ended

Mar. 31, 2022

Schedule of Inventory, Current [Table Text Block]

	March 31,		December 31,
	2022		2021
Finished goods	$	971	$	1,027
Work in process		-		2
Raw materials		899		537
Inventories, net	$	1,870	$	1,566

Note 5 - Property and Equipment, Net (Tables)

3 Months Ended

Mar. 31, 2022

Property, Plant and Equipment [Table Text Block]

	March 31,			December 31,
	2022			2021
Production and lab equipment	$	500		$	500
Tooling		335			273
Computer equipment		485			467
Furniture, fixtures and improvements		177			176
		1,497			1,416
Accumulated depreciation		(553	)		(440	)
Property and equipment, net	$	944		$	976

Note 6 - Intangible Assets, Net (Tables)

3 Months Ended

Mar. 31, 2022

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

	March 31,			December 31,
	2022			2021
Amortizable intangible assets:
Patents	$	482		$	416
Trademarks		137			134
Purchased software		1,212			1,212
Other		50			50
		1,881			1,812
Accumulated amortization		(244	)		(174	)
Total amortizable		1,637			1,638
Indefinite life assets (non-amortizable)		344			344
Total intangible assets, net	$	1,981		$	1,982

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

2022 (9 months)	$	210
2023		275
2024		276
2025		271
2026		183
Thereafter		422
Total estimated amortization expense	$	1,637

Note 7 - Accounts Payable and Accrued Liabilities (Tables)

3 Months Ended

Mar. 31, 2022

Schedule of Accrued Liabilities [Table Text Block]

	March 31,		December 31,
	2022		2021
Patent and legal costs	$	77	$	28
Accrued compensation		667		628
Warranty costs		54		96
Consulting costs		-		2
Taxes and other		21		70
Accrued liabilities	$	819	$	824

Schedule of Product Warranty Liability [Table Text Block]

	Three Months Ended March 31,
	2022			2021
Balance, beginning of period	$	96		$	48
Warranty settlements		(54	)		(9	)
Warranty provision		12			19
Balance, end of period	$	54		$	58

Note 8 - Leases (Tables)

3 Months Ended

Mar. 31, 2022

Lessee, Operating Lease, Disclosure [Table Text Block]

Operating lease liability- short term	$	96
Operating lease liability - long term		275
Total Operating Lease Liability	$	371

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

2022 (9 months)	$	82
2023		121
2024		126
2025		75
Total future minimum lease payments		404
Less imputed interest		(33	)
Total	$	371

Note 9 - Stockholders' Equity (Tables)

3 Months Ended

Mar. 31, 2022

Schedule of Stockholders' Equity Note, Warrants or Rights [Table Text Block]

	Number of		Exercise Price
Description	Common Shares		Per Share		Expiration Date
Purchase Warrants		1,391,667	$	6.00	June 1, 2022

Note 10 - Share-based Compensation (Tables)

3 Months Ended

Mar. 31, 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		104,000		$	3.55
Exercised		(50,000	)	$	1.50
Forfeited, cancelled, expired		(388,912	)	$	5.01
Outstanding March 31, 2022		3,600,971		$	5.27		3.58	$	774
Exercisable March 31, 2022		2,549,388		$	2.86		2.03	$	761

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

	For the Three Months
	Ended March 31,
	2022			2021
Expected stock price volatility		49	%		50	%
Risk-free interest rate		1.57	%		0.89	%
Forfeiture rate		0	%		0	%
Expected dividend yield		0	%		0	%
Expected life of options - years		1.39			5.70
Weighted-average fair value of options granted	$	1.72		$	2.42

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		160,779		$	2.41
Vested		(49,252	)	$	4.72
Forfeited and cancelled		(23,357	)	$	4.19
Unvested at March 31, 2022		357,473		$	5.03	2.05

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

	Three Months Ended March 31,
	2022		2021
Selling, general and administrative	$	894	$	602
Research and development		135		257
Total share-based expense	$	1,029	$	859

Note 13 - Major Customers and Related Information (Tables)

3 Months Ended

Mar. 31, 2022

Disaggregation of Revenue [Table Text Block]

	For the Three Months
	Ended March 31,
	2022		2021
Americas	$	1,194	$	626
Europe, Middle East and Africa		174		877
Asia Pacific		231		39
	$	1,599	$	1,542

Note 1 - Organization and Summary of Significant Accounting Policies (Details Textual)	3 Months Ended
	Mar. 31, 2022 $ / shares shares	Dec. 31, 2021 $ / shares
Common Stock, Par or Stated Value Per Share (in dollars per share) \| $ / shares	$ 0.0001	$ 0.0001
Number of Wholly-owned Subsidiaries	1
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount (in shares) \| shares	5,350,111

Note 2 - Revenue and Product Costs (Details Textual) - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021
Contract with Customer, Liability, Total	$ 282	$ 265
Contract with Customer, Asset, after Allowance for Credit Loss, Total	0	0
Virtual Reality Training [Member]
Contract with Customer, Liability, Total	170	172
Extended Product Warranties [Member]
Contract with Customer, Liability, Total	$ 112	$ 67

Note 2 - Revenue and Product Costs - Contract Liabilities (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Dec. 31, 2021
Balance at January 1, 2022	$ 265
Balance at March 31, 2022	282
Current portion	121	$ 155
Long-term portion	161	$ 110
Customer Deposits [Member]
Balance at January 1, 2022	43
Additions, net	0
Transfer to revenue	(43)
Balance at March 31, 2022	0
Current portion	0
Long-term portion	0
Deferred Revenue [Member]
Balance at January 1, 2022	265
Additions, net	56
Transfer to revenue	(39)
Balance at March 31, 2022	282
Current portion	121
Long-term portion	$ 161

Note 3 - Fair Value Measurements (Details Textual) $ in Thousands	3 Months Ended
	Mar. 31, 2022 USD ($)
Marketable Securities, Unrealized Gain (Loss)	$ 23

Note 3 - Fair Value Measurements - Instruments by Significant Investment Category (Details) - Fair Value, Inputs, Level 1 [Member] - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2022	Dec. 31, 2021
Adjusted Cost	$ 28,262	$ 31,659
Unrealized Gains	0	0
Unrealized Losses	(29)	(6)
Market Value	28,233	31,653
Money Market Fund [Member]
Adjusted Cost	3,277	1,670
Unrealized Gains	0	0
Unrealized Losses	0	0
Market Value	3,277	1,670
US Treasury Securities in Short-term Investments [Member]
Adjusted Cost	24,985	29,989
Unrealized Gains	0	0
Unrealized Losses	(29)	(6)
Market Value	$ 24,956	$ 29,983

Note 4 - Inventories, Net - Summary of Inventories (Details) - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021
Finished goods	$ 971	$ 1,027
Work in process	0	2
Raw materials	899	537
Inventories, net	$ 1,870	$ 1,566

Note 5 - Property and Equipment, Net (Details Textual) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Depreciation, Total	$ 113	$ 56

Note 5 - Property and Equipment, Net - Summary of Property and Equipment (Details) - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021
Property and equipment, gross	$ 1,497	$ 1,416
Accumulated depreciation	(553)	(440)
Property and equipment, net	944	976
Production and Lab Equipment [Member]
Property and equipment, gross	500	500
Tooling [Member]
Property and equipment, gross	335	273
Computer Equipment [Member]
Property and equipment, gross	485	467
Furniture and Fixtures [Member]
Property and equipment, gross	$ 177	$ 176

Note 6 - Intangible Assets, Net (Details Textual) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Amortization of Intangible Assets	$ 70	$ 48

Note 6 - Intangible Assets, Net - Summary of Intangible Assets (Details) - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021
Amortizable intangible assets, gross	$ 1,881	$ 1,812
Accumulated amortization	(244)	(174)
Total estimated amortization expense	1,637	1,638
Indefinite life assets (non-amortizable)	344	344
Total intangible assets, net	1,981	1,982
Patents [Member]
Amortizable intangible assets, gross	482	416
Trademarks [Member]
Amortizable intangible assets, gross	137	134
Computer Software, Intangible Asset [Member]
Amortizable intangible assets, gross	1,212	1,212
Other Intangible Assets [Member]
Amortizable intangible assets, gross	$ 50	$ 50

Note 6 - Intangible Assets, Net - Future Amortization Expense (Details) - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021
2022 (9 months)	$ 210
2023	275
2024	276
2025	271
2026	183
Thereafter	422
Total estimated amortization expense	$ 1,637	$ 1,638

Note 7 - Accounts Payable and Accrued Liabilities (Details Textual) - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021
Future Severance Payments [Member]
Employee-related Liabilities, Total	$ 317
Former CEO Payable [Member]
Employee-related Liabilities, Total	278
Syzygy Licensing LLC [Member]
Accounts Payable, Total	$ 208	$ 228

Note 7 - Accounts Payable and Accrued Liabilities - Summary of Accrued Liabilities (Details) - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021
Patent and legal costs	$ 77	$ 28
Accrued compensation	667	628
Warranty costs	54	96
Consulting costs	0	2
Taxes and other	21	70
Accrued liabilities	$ 819	$ 824

Note 7 - Accounts Payable and Accrued Liabilities - Changes in Product Warranty Costs (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Balance, beginning of period	$ 96	$ 48
Warranty settlements	(54)	(9)
Warranty provision	12	19
Balance, end of period	$ 54	$ 58

Note 8 - Leases (Details Textual) - USD ($) $ in Thousands	3 Months Ended
Note 8 - Leases (Details Textual) - USD ($) $ in Thousands	Mar. 31, 2022	Mar. 31, 2021
Operating Lease, Right-of-Use Asset, Amortization Expense	$ 24	$ 25
Operating Lease, Expense	$ 28	28
Finance Lease, Weighted Average Remaining Lease Term (Year)	3 years 3 months 18 days
Finance Lease, Weighted Average Discount Rate, Percent	5.00%
Short-Term Lease, Cost	$ 0	$ 0

Note 8 - Leases - Summary of Operating Lease Obligations (Details) - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021
Operating lease liability- short term	$ 96	$ 56
Operating lease liability - long term	275	$ 0
Total Operating Lease Liability	$ 371

Note 8 - Leases - Future Lease Payments (Details) $ in Thousands	Mar. 31, 2022 USD ($)
2022 (9 months)	$ 82
2023	121
2024	126
2025	75
Total future minimum lease payments	404
Less imputed interest	(33)
Total	$ 371

Note 9 - Stockholders' Equity (Details Textual) - $ / shares	Mar. 31, 2022	Dec. 31, 2021
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
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

Note 9 - Stockholders' Equity - Outstanding Common Stock Purchase Warrants (Details) - Purchase Warrants Expiring June 18, 2021 [Member]	Mar. 31, 2022 $ / shares shares
Warrants, number of common shares (in shares) \| shares	1,391,667
Warrants, exercise price per share (in dollars per share) \| $ / shares	$ 6.00

Note 10 - Share-based Compensation (Details Textual) - USD ($) $ / shares in Units, Pure in Thousands, $ in Thousands		1 Months Ended						3 Months Ended		12 Months Ended
	Apr. 19, 2022	Apr. 30, 2022	Jan. 31, 2022	Jun. 30, 2021	Jun. 30, 2020	May 31, 2019	Jan. 31, 2019	Mar. 31, 2022	Mar. 31, 2021	Dec. 31, 2021	Mar. 31, 2017
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Grants in Period, Gross (in shares)								104,000
Share-Based Compensation Arrangements by Share-Based Payment Award, Options, Grants in Period, Weighted Average Exercise Price (in dollars per share)								$ 3.55
Share-Based Payment Arrangement, Option [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Dividend Rate								0.00%	0.00%	0.00%
Restricted Stock Units (RSUs) [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period (Year)								2 years 18 days
The 2017 Stock Incentive Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized (in shares)				7,500,000	6,000,000						2,000,000
Share-based Compensation Arrangement by Share-based Payment Award, Number of Additional Shares Authorized (in shares)				1,500,000	1,900,000	2,100,000
Share-Based Compensation Arrangement by Share-Based Payment Award, Number of Shares Available for Grant (in shares)								1,528,306
Share-Based Payment Arrangement, Accelerated Cost			$ 242
Share-Based Payment Arrangement, Nonvested Award, Option, Cost Not yet Recognized, Amount								$ 1,826
The 2017 Stock Incentive Plan [Member] \| Subsequent Event [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized (in shares)		9,000,000
Share-based Compensation Arrangement by Share-based Payment Award, Number of Additional Shares Authorized (in shares)		1,500,000
The 2017 Stock Incentive Plan [Member] \| Share-Based Payment Arrangement, Option [Member]
Share-Based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition (Year)								2 years 2 months 12 days
The 2017 Stock Incentive Plan [Member] \| Restricted Stock Units (RSUs) [Member]
Share-Based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition (Year)								2 years 18 days
Share-Based Payment Arrangement, Nonvested Award, Excluding Option, Cost Not yet Recognized, Amount								$ 1,422
The 2017 Stock Incentive Plan [Member] \| Restricted Stock Units (RSUs) [Member] \| Officers and Employees [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period (Year)							3 years
The 2017 Stock Incentive Plan [Member] \| RSU Award Vesting in One Year [Member] \| Chief Executive Officer [Member] \| Subsequent Event [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period (Year)	1 year
Share-Based Compensation Arrangement by Share-Based Payment Award, Non-Option Equity Instruments, Granted (in shares)	17,301
The 2017 Stock Incentive Plan [Member] \| RSU Award Vesting Over Three Year [Member] \| Chief Executive Officer [Member] \| Subsequent Event [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period (Year)	3 years
Share-Based Compensation Arrangement by Share-Based Payment Award, Non-Option Equity Instruments, Granted (in shares)	233,564
The 2017 Stock Incentive Plan [Member] \| RSU Award Vesting Over Three Year [Member] \| President [Member] \| Subsequent Event [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period (Year)	3 years
Share-Based Compensation Arrangement by Share-Based Payment Award, Non-Option Equity Instruments, Granted (in shares)	175,173
The 2017 Stock Incentive Plan [Member] \| Non-qualified Stock Options [Member] \| Chief Executive Officer [Member] \| Subsequent Event [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period (Year)	3 years
Share-Based Compensation Arrangement by Share-Based Payment Award, Expiration Period (Year)	10 years
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Grants in Period, Gross (in shares)	475,662
Share-Based Compensation Arrangements by Share-Based Payment Award, Options, Grants in Period, Weighted Average Exercise Price (in dollars per share)	$ 2.89
The 2017 Stock Incentive Plan [Member] \| Non-qualified Stock Options [Member] \| President [Member] \| Subsequent Event [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period (Year)	3 years
Share-Based Compensation Arrangement by Share-Based Payment Award, Expiration Period (Year)	10 years
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Grants in Period, Gross (in shares)	356,747
Share-Based Compensation Arrangements by Share-Based Payment Award, Options, Grants in Period, Weighted Average Exercise Price (in dollars per share)	$ 2.89
The 2017 Stock Incentive Plan [Member] \| Non-qualified Performance-based Stock Option [Member] \| Chief Executive Officer [Member] \| Subsequent Event [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award, Expiration Period (Year)	10 years
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Grants in Period, Gross (in shares)	921,832
Share-Based Compensation Arrangements by Share-Based Payment Award, Options, Grants in Period, Weighted Average Exercise Price (in dollars per share)	$ 2.89
The 2017 Stock Incentive Plan [Member] \| Non-qualified Performance-based Stock Option [Member] \| President [Member] \| Subsequent Event [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award, Expiration Period (Year)	10 years
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Grants in Period, Gross (in shares)	692,398
Share-Based Compensation Arrangements by Share-Based Payment Award, Options, Grants in Period, Weighted Average Exercise Price (in dollars per share)	$ 2.89

Note 10 - Share-based Compensation - Summary of Stock Option Activity (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2022	Dec. 31, 2021
Options on Common Shares, Outstanding (in shares)	3,935,883
Outstanding, weighted average exercise price (in dollars per share)	$ 5.24
Outstanding, remaining contractual term (Year)	3 years 6 months 29 days	4 years 9 months 14 days
Options on Common Shares, Granted (in shares)	104,000
Granted, weighted average exercise price (in dollars per share)	$ 3.55
Options on Common Shares, Exercised (in shares)	(50,000)
Exercised, weighted average exercise price (in dollars per share)	$ 1.50
Options on Common Shares, Forfeited, cancelled, expired (in shares)	(388,912)
Forfeited, cancelled, expired, weighted average exercise price (in dollars per share)	$ 5.01
Options on Common Shares, Outstanding (in shares)	3,600,971	3,935,883
Outstanding, weighted average exercise price (in dollars per share)	$ 5.27	$ 5.24
Outstanding March 31, 2022	$ 774
Exercisable March 31, 2022 (in shares)	2,549,388
Exercisable weighted average exercise price (in dollars per share)	$ 2.86
Exercisable, remaining contractual term (Year)	2 years 10 days
Exercisable March 31, 2022	$ 761

Note 10 - Share-based Compensation - Summary of Stock Option Valuation Assumptions (Details) - $ / shares	3 Months Ended		12 Months Ended
	Mar. 31, 2022	Mar. 31, 2021	Dec. 31, 2021
Forfeiture rate	0.00%	0.00%
Weighted-average fair value of options granted (in dollars per share)	$ 1.72	$ 2.42
Share-Based Payment Arrangement, Option [Member]
Expected stock price volatility	49.00%	50.00%
Risk-free interest rate	1.57%	0.89%
Expected dividend yield	0.00%	0.00%	0.00%
Expected life of options (Year)	1 year 4 months 20 days	5 years 8 months 12 days

Note 10 - Share-based Compensation - Summary of RSU Activity (Details) - Restricted Stock Units (RSUs) [Member]	3 Months Ended
	Mar. 31, 2022 $ / shares shares
Awards other than options, unvested, beginning balance (in shares) \| shares	269,303
Awards other than options, unvested, weighted average grant date fair value, beginning balance (in dollars per share) \| $ / shares	$ 6.47
Awards other than options, Granted (in shares) \| shares	160,779
Awards other than options, granted, weighted average grant date fair value (in dollars per share) \| $ / shares	$ 2.41
Awards other than options, Vested (in shares) \| shares	(49,252)
Awards other than options, vested, weighted average grant date fair value (in dollars per share) \| $ / shares	$ 4.72
Awards other than options, Forfeited and cancelled (in shares) \| shares	(23,357)
Awards other than options, forfeited and cancelled, weighted average grant date fair value (in dollars per share) \| $ / shares	$ 4.19
Awards other than options, unvested, ending balance (in shares) \| shares	357,473
Awards other than options, unvested, weighted average grant date fair value, ending balance (in dollars per share) \| $ / shares	$ 5.03
Weighted average vesting period (Year)	2 years 18 days

Note 10 - Share-based Compensation - Allocation of Share-based Compensation Expense (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Share-based expense	$ 1,029	$ 859
Selling, General and Administrative Expenses [Member]
Share-based expense	894	602
Research and Development Expense [Member]
Share-based expense	$ 135	$ 257

Note 11 - Commitments and Contingencies (Details Textual) - USD ($)	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021	Sep. 30, 2016
Contractual Obligation, Total	$ 2,300,000
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			$ 1,000,000
Royalty Expense	$ 49,000	$ 51,000

Note 12 - Related Party Transactions (Details Textual) - Mr. Elwood Norris [Member] - USD ($)	3 Months Ended		12 Months Ended
	Mar. 31, 2022	Mar. 31, 2021	Dec. 31, 2021
Reimbursement of Expenses to Related Party, Monthly Amount			$ 1,500
Related Party Transaction, Amounts of Transaction	$ 4,500	$ 4,500

Note 13 - Major Customers and Related Information (Details Textual) - Customer Concentration Risk [Member]	3 Months Ended		12 Months Ended
	Mar. 31, 2022	Mar. 31, 2021	Dec. 31, 2021
Revenue Benchmark [Member]
Number of Major Customers	2	3
Revenue Benchmark [Member] \| Distributor One [Member]
Concentration Risk, Percentage	25.00%	28.00%
Revenue Benchmark [Member] \| Distributor Two [Member]
Concentration Risk, Percentage	14.00%	22.00%
Revenue Benchmark [Member] \| Distributor Three [Member]
Concentration Risk, Percentage		10.00%
Accounts Receivable [Member]
Number of Major Customers	2		3
Accounts Receivable [Member] \| Distributor One [Member]
Concentration Risk, Percentage	50.00%		48.00%
Accounts Receivable [Member] \| Distributor Two [Member]
Concentration Risk, Percentage	13.00%		16.00%
Accounts Receivable [Member] \| Distributor Three [Member]
Concentration Risk, Percentage			15.00%

Note 13 - Major Customers and Related Information - Disaggregation of Revenue by Geographic Region (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Revenues	$ 1,599	$ 1,542
Americas [Member]
Revenues	1,194	626
Europe, Middle East and Africa [Member]
Revenues	174	877
Asia Pacific [Member]
Revenues	$ 231	$ 39