WRAP TECHNOLOGIES, INC.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Annual Report on Form 10-K (this "Annual Report") may contain or incorporate by reference forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Such forward-looking statements are based upon management’s assumptions, expectations, projections, intentions and beliefs about future events. In some cases, predictive, future-tense or forward-looking words such as “intend,” “plan,” “predict,” “may,” “will,” “project,” “target,” “strategy,” “estimate,” “anticipate,” “believe,” “expect,” “continue,” “potential,” “opportunity,” “forecast,” “should” and similar expressions, whether in the negative or affirmative, that reflect our current views with respect to future events and operational, economic and financial performance are intended to identify such forward-looking statements, but are not the exclusive means of identifying such statements. Such forward-looking statements are only predictions, and actual results and the timing of certain events and circumstances may differ materially from those described by the forward-looking statements as a result of risks and uncertainties. Factors that could cause actual results to differ materially from the results anticipated in these forward-looking statements are described in this Annual Report, including under the section entitled “Risk Factors,” and in our other reports filed with the Securities and Exchange Commission (the “SEC”). We advise you to carefully review the reports and documents we file from time to time with the SEC, particularly our annual reports on Form 10-K, our quarterly reports on Form 10-Q and our current reports on Form 8-K. The Company cautions readers that the forward-looking statements included in, or incorporated by reference into, this Annual Report on Form 10-K represent our beliefs, expectations, estimates and assumptions only as of the date hereof and are not intended to give any assurance as to future results. New factors emerge from time to time, and it is not possible for us to predict all of these factors. Further, we cannot assess the effect of each such factor on our business or the extent to which any factor, or combination of factors, may cause actual results to be materially different from those contained in any forward-looking statement.

Readers are cautioned not to place undue reliance on forward-looking statements because of the risks and uncertainties related to them and to the risk factors. We disclaim any obligation to update the forward-looking statements contained in, or incorporated by reference into, this Annual Report to reflect any new information or future events or circumstances or otherwise, except as required by the federal securities laws.

RISK FACTOR SUMMARY

Below is a summary of the material risks that make an investment in our common stock, par value $0.0001 per share ("Common Stock"), speculative or risky. This summary does not address all of the risks that we face. Additional discussion of the risks summarized in this risk factor summary, and other risks that we face, can be found under the heading “Risk Factors” in Part I, Item 1A of this Annual Report on Form 10-K and should be carefully considered, together with other information in this Form 10-K and our other filings with the SEC, before making an investment decision regarding our Common Stock.

Risks Relating to Business and Industry

• We have a history of operating losses and may never achieve or sustain profitability.

• We may need to raise additional capital, which may not be available on favorable terms or at all, and which may cause dilution to our stockholders.

• We are substantially dependent on sales of our BolaWrap product line and may not achieve broad market acceptance.

• We may not be successful in commercializing our Wrap Reality VR training platform in a highly competitive market.

• We operate in a highly competitive market and may not be able to compete effectively against larger, better capitalized companies.

• Negative publicity, including from incidents in which our products perform as designed, could harm our reputation and reduce demand for our products.

• Our sales to government customers are subject to lengthy procurement cycles, budget constraints, and political and policy changes.

• Our recent expansion into drone and counter-UAS technologies may not be successful and subjects us to additional risks.

• Our drone and counter-UAS products are subject to evolving regulations that could delay approvals, increase costs, or limit deployment.

• We are exposed to product liability claims because our products are used in dangerous situations that may result in serious injury or death.

• We depend on a limited number of suppliers, including sole-source suppliers, and supply chain disruptions could harm our business.

• Our operations and products are vulnerable to cybersecurity threats that could disrupt our business and harm our reputation.

• The evolving regulatory framework for AI technologies could affect our products and increase our compliance costs.

• Our international operations subject us to additional risks, including currency fluctuations, export controls, and geopolitical instability.

• Our BolaWrap device is classified as a firearm and regulated by the ATF, subjecting us to significant regulatory requirements.

Risks Relating to Intellectual Property

• Our patents and other intellectual property rights may not adequately protect our products from competition.

• We may be unable to prevent the unauthorized disclosure of our trade secrets and proprietary information.

• Third parties may assert that our products infringe their intellectual property rights, which could be costly to defend.

Risks Relating to Preferred Stock

• Our Series A Convertible Preferred Stock, par value $0.0001 per share ("Series A Preferred Stock") contains anti-dilution and dividend provisions that may result in significant dilution to holders of our Common Stock.

• Covenants in our financing documents may restrict our ability to obtain additional financing.

Risks Relating to Common Stock

• The market price of our Common Stock has been and may continue to be volatile.

• We have been and may in the future be subject to securities litigation, which is costly and diverts management's attention.

• We may fail to meet Nasdaq's continued listing requirements, which could result in delisting of our Common Stock.

• Future issuances of our Common Stock or securities convertible into Common Stock may dilute existing stockholders.

• We have never paid dividends and do not expect to pay dividends for the foreseeable future.

General Risk Factors

• Our disclosure controls and internal controls over financial reporting have inherent limitations.

• We incur significant costs as a result of operating as a public company.

Use of Market and Industry Data

This Annual Report on Form 10-K includes market and industry data that we have obtained from third party sources, including industry publications, as well as industry data prepared by our management based on its knowledge of and experience in the industries in which we operate (including our management’s estimates and assumptions relating to such industries based on that knowledge). Management has developed its knowledge of such industries through its experience and participation in these industries. While our management believes the third-party sources referred to in this Annual Report on Form 10-K are reliable, neither we nor our management have independently verified any of the data from such sources referred to in this Annual Report or ascertained the underlying economic assumptions relied upon by such sources. Furthermore, references in this Annual Report to any publications, reports, surveys or articles prepared by third parties should not be construed as depicting the complete findings of the entire publication, report, survey or article. The information in any such publication, report, survey or article is not incorporated by reference in this Annual Report on Form 10-K.

Forecasts and other forward-looking information obtained from these sources involve risks and uncertainties and are subject to change based on various factors, including those discussed in sections entitled “Cautionary Note Regarding Forward-Looking Statements,” “Item 1A. Risk Factors” and “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this Annual Report.

TRADEMARKS, TRADE NAMES AND SERVICE MARKS

Our trademarks include Wrap, the Wrap logo, BolaWrap®, Wrap Reality™, Intrensic, Evidence on A Cloud, WrapVision, WrapTactics, Non-Lethal Response and DFR-X, some of which are registered trademarks in the U.S. and certain other jurisdictions. They, along with our other common law trademarks, service marks or trade names appearing in this Annual Report are the property of the Company. Other trademarks, service marks or trade names appearing in this Annual Report are the property of their owners. We do not intend our use or display of other companies’ trade names or trademarks to imply a relationship with, or endorsement of or sponsorship of us by, any other companies. Solely for convenience, we have omitted the ® and ™ designations, as applicable, for the trademarks used in this Annual Report, but such references are not intended to indicate in any way that we will not assert, to the fullest extent under applicable law, our rights to these trademarks and trade names.

PART I