What changed in this filing

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Item 1. Financial Statements

2022-08-10 compared with 2022-05-03 · 190 added, 150 removed, 466 unchanged (42% of the section changed)

10 unchanged sentences

29,983  

Accounts receivable, net

Accounts receivable and contract assets

Inventories, net

36 unchanged sentences

( 59,976 )  

Accumulated other comprehensive income

Accumulated other comprehensive loss

( 17 )  

5 unchanged sentences

$ 44,231  

See accompanying notes to condensed consolidated interim financial statements.

See accompanying notes to unaudited condensed consolidated interim financial statements.

Wrap Technologies, Inc.

1 unchanged sentence

(in thousands, except share and per share amounts)

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

Product sales

2 unchanged sentences

Cost of revenues:

Products and services

Restructuring inventory charge

Total cost of revenues

Gross profit (loss)

Operating expenses:

10 unchanged sentences

Comprehensive loss

See accompanying notes to condensed consolidated interim financial statements.

See accompanying notes to unaudited condensed consolidated interim financial statements.

Wrap Technologies, Inc.

3 unchanged sentences

Stockholders'

Balance at January 1, 2022

Common shares issued upon exercise of stock options

Income (Loss)

Three Months Ended June 30, 2022

Balance at April 1, 2022

Share-based compensation expense

2 unchanged sentences

Net loss for the period

Balance at March 31, 2022

Balance at June 30, 2022

Six Months Ended June 30, 2022

Balance at January 1, 2022

2 unchanged sentences

Common shares issued upon vesting of restricted stock units

Net unrealized gain on short-term investments

Common shares issued for services

Net unrealized loss on short-term investments

Net loss for the period

Balance at March 31, 2021

See accompanying notes to condensed consolidated interim financial statements.

Balance at June 30, 2022

Comprehensive

Stockholders'

Income (Loss)

Three Months Ended June 30, 2021

Balance at April 1, 2021

37,711,698  

$ 72,777  

$ ( 30,739 )  

$ 42,059  

Common shares issued upon exercise of warrants at $ 6.50 per share

1,661,320  

10,799  

Common shares issued upon exercise of warrants at $ 5.00 per share, net of issuance costs

153,692  

Common shares issued upon exercise of stock options

82,066  

Common shares issued upon vesting of restricted stock units

277,614  

Common shares issued for services

25,000  

Share-based compensation expense

Net unrealized loss on short-term investments

Net loss for the period

( 7,799 )  

Balance at June 30, 2021

39,911,390  

$ 87,277  

$ ( 38,538 )  

$ 48,756  

Six Months Ended June 30, 2021

Balance at January 1, 2021

37,554,162  

$ 71,705  

$ ( 25,310 )  

$ 46,414  

Common shares issued upon exercise of warrants at $ 6.50 per share

1,661,320  

10,799  

Common shares issued upon exercise of warrants at $ 5.00 per share, net of issuance costs

153,692  

Common shares issued upon exercise of stock options

157,066  

Common shares issued upon vesting of restricted stock units

342,274  

Common shares issued for services

42,876  

Share-based compensation expense

Net unrealized loss on short-term investments

Net loss for the period

( 13,228 )  

Balance at June 30, 2021

39,911,390  

$ 87,277  

$ ( 38,538 )  

$ 48,756  

See accompanying notes to unaudited condensed consolidated interim financial statements.

Wrap Technologies, Inc.

1 unchanged sentence

(in thousands)

Three Months Ended March 31,

Six Months Ended June 30,

Cash Flows From Operating Activities:

$ ( 5,432 )  

Adjustments to reconcile net loss to net cash used in operating activities:

Depreciation and amortization

Restructuring and other costs

Gain on sale of assets

6 unchanged sentences

Accounts receivable

( 398 )  

( 304 )  

Prepaid expenses and other current assets

Accounts payable

( 51 )  

Operating lease liability

( 21 )  

Customer deposits

( 43 )  

Accrued liabilities and other

Warranty settlement

( 54 )  

Deferred revenue

Net cash used in operating activities

( 4,850 )  

Cash Flows From Investing Activities:

Purchase of short-term investments

( 4,996 )  

Proceeds from maturities of short-term investments

10,000  

15,000  

Capital expenditures for property and equipment

( 81 )  

Investment in patents and trademarks

( 69 )  

Investment in long-term deposits

Proceeds from long-term deposits

Net cash used in investing activities

Net cash provided by (used in) investing activities

Cash Flows From Financing Activities:

Proceeds from exercise of warrants

Proceeds from exercise of stock options

3 unchanged sentences

Cash and cash equivalents, beginning of period

16,647  

Cash and cash equivalents, end of period

$ 5,014  

$ 2,000  

Supplemental Disclosure of Non-Cash Investing

1 unchanged sentence

Change in unrealized gain on short-term investments

$ ( 23 )  

Right-of-use asset and liability recorded during period

See accompanying notes to condensed consolidated interim financial statements.

See accompanying notes to unaudited condensed consolidated interim financial statements.

Wrap Technologies, Inc.

31 unchanged sentences

formed in 

December 2020 that sells a virtual reality training system primarily targeting law enforcement agencies.

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.

7 unchanged sentences

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.

Stock options and restricted stock units exercisable or issuable for a total of 6,458,823 shares of Common Stock were outstanding at June 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.

Wrap Technologies, Inc.

Notes to Unaudited Condensed Consolidated Interim Financial Statements

(in thousands, except per share and share amounts)

Recent Issued Accounting Guidance

10 unchanged sentences

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.

Wrap Technologies, Inc.

Notes to Unaudited Condensed Consolidated Interim Financial Statements

(in thousands, except per share and share amounts)

REVENUE AND PRODUCT COSTS

8 unchanged sentences

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 accessorites.

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  

11 unchanged sentences

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 

Time-based VR system contracts generally include setup, training and the use of software and hardware for a fixed term, generally 

one  to 

17 unchanged sentences

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.

The table below details the activity in our contract liabilities during the six months ended June 30, 2022.

Balance at January 1, 2022

2 unchanged sentences

( 43 )  

Balance at March 31, 2022

Balance at June 30, 2022

Current portion

Long-term portion

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.

June 30, 2022, 

the Company’s deferred revenue of $ 344  consisted of $ 221 related to VR training and $ 123  related to BolaWrap extended warranties and services.

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’s deferred revenue of $ 265 consisted of $ 172  related to VR 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.

2 unchanged sentences

no  such assets at 

March 31, 2022, 

June 30, 2022, 

December 31 2021 .

19 unchanged sentences

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

June 30, 2022, and December 31, 2021.

As of June 30, 2022

Money Market Funds

21 unchanged sentences

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.

During the three and six months ended June 30, 2022, a $ 12 gain and $ 11 loss was recorded to accumulated other comprehensive gain (loss), respectively.

During the three and six months ended June 30, 2021, $ 4 and $ 2 was recorded to accumulated other comprehensive loss, respectively.

Our financial instruments also include accounts receivable, accounts payable, accrued liabilities and business acquisition liabilities.

5 unchanged sentences

Finished goods

$ 1,254  

$ 1,027  

Work in process

1 unchanged sentence

Inventories, net

$ 2,033  

$ 1,566  

Wrap Technologies, Inc.

7 unchanged sentences

Accumulated depreciation

( 677 )  

Property and equipment, net

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

Depreciation expense was $ 124 and $ 237  for the three and six months ended June 30, 2022 and was $ 66 and $ 122  for the three and six months ended June 30, 2021, respectively.

INTANGIBLE ASSETS, NET

3 unchanged sentences

Accumulated amortization

( 317 )  

Total amortizable

1 unchanged sentence

Total intangible assets, net

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:

$ 1,941  

$ 1,982  

Amortization expense was $ 73 and $ 143  for the three and six months ended June 30, 2022 and was $ 49 and $ 97  for the three and six months ended June 30, 2021, respectively.

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

2022 (6 months)

Total estimated amortization expense

$ 1,597  

Wrap Technologies, Inc.

3 unchanged sentences

Accounts payable includes $ 86 and $ 228 due to related party Syzygy Licensing, LLC (“

Syzygy ”) as of March 31, 2022, and December 31, 2021, respectively.

Syzygy ”) as of June 30, 2022, and December 31, 2021, respectively.

See Notes 10, 11, 12 and 14 for additional related party information.

3 unchanged sentences

Warranty costs

Consulting costs

Taxes and other

Accrued liabilities

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

Accrued compensation includes $ 164 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:

Three Months Ended March 31,

Six Months Ended June 30,

Balance, beginning of period

20 unchanged sentences

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.

Amortization of ROU operating lease assets was $ 25 and $ 49  for the three and six months ended June 30, 2022 and was $ 20  and $ 46  for the three and six months ended June 30, 2021, respectively.

Operating lease expense for capitalized operating leases included in operating activities was $ 30  and $ 58  for the three and six months ended June 30, 2022 and was $ 23  and $ 50  for the three and six months ended June 30, 2021, respectively. 

Wrap Technologies, Inc.

1 unchanged sentence

(in thousands, except per share and share amounts)

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 obligations recorded on the balance sheet at June 30, 2022, are:

Operating lease liability- short term

1 unchanged sentence

Total Operating Lease Liability

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

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

2022 (6 months)

3 unchanged sentences

The Company did 

not  have any short-term lease expense during the three months ended March 31, 2022, or 2021 .

not  have any short-term lease expense during the six months ended June 30, 2022, or 2021 .

The Company does not have any finance leases.

2 unchanged sentences

Preferred Stock ”).

Summary of Stock Purchase Warrants

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

Exercise Price

Common Shares

Expiration Date

Purchase Warrants

1,391,667  

$ 6.00  

There was no warrant activity during the three months ended March 31, 2022.

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 accordingly had no purchase warrants outstanding at June 30, 2022.

SHARE-BASED COMPENSATION

4 unchanged sentences

May 2019 ,  the stockholders ratified an increase in the Plan authorizing an additional 

2,100,000  shares of Common Stock and in 

2,100,000  shares of Common Stock, in 

June 2020 

ratified a further authorization of 

ratified an additional 

1,900,000  shares of Common Stock, in June 2021 ratified an additional 

1,500,000  shares of Common Stock and in June 2022 ratified an additional 

1,500,000  shares of Common Stock for a total of 

9,000,000  shares subject to the Plan.

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.

March 31, 2022, 

there were 

1,528,306  shares of Common Stock available for grant under the Plan.

June 30, 2022, 

there were 1,711,281 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.

In January 2022 the Company recognized severance acceleration of $ 242 of share-based compensation expense resulting from the resignation of the Company’s Chief Executive Officer as part of a management transition plan.

Wrap Technologies, Inc.

2 unchanged sentences

Stock Options

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

The following table summarizes stock option activity for the six months ended June 30, 2022:

Weighted Average

9 unchanged sentences

$ 7.87  

Outstanding March 31, 2022

Outstanding June 30, 2022

5,688,276  

$ 3.88  

Exercisable March 31, 2022

$ 232,778  

Exercisable June 30, 2022

2,351,826  

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.

$ 4.38  

$ 232,778  

At June 30, 2022 outstanding options on 4,074,046 shares of Common Stock were service-based options and 1,614,230 outstanding options granted in April 2022 to the Company’s Chief Executive Officer and President were performance based subject to future market capitalization targets.

A total of 1,049,145 options included in the table above were granted in April 2022 outside the Plan as an employment inducement grant but are subject to the terms and conditions of the Plan.

The Company uses the Black-Scholes option pricing model to determine the fair value of service-based 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,

For the Six Months

Ended June 30,

Expected stock price volatility

19 unchanged sentences

not  have sufficient historical data.

The Company used the Monte Carlo Simulation Model to value at the grant date the aggregate of 1,614,230 market condition performance options granted in April 2022 to the Company’s newly appointed Chief Executive Officer and a newly appointed President.

The assumptions used in the Monte Carlo Simulation were stock price on date of grant of $ 2.89 , contract term of 

10  years, expected volatility of 

49 % and risk-free interest rate of 2.9 %.

Vesting is based on sustained market capitalization of $ 250 million, $ 500 million and $ 1 billion and resulted in implied service periods ranging from approximately 4 to 7 years.

Stock option expense was $ 408 and $ 1,145 for the three and six months ended June 30, 2022 and was $ 689 and $ 1,228  for the three and six months ended June 30, 2021, respectively.

Wrap Technologies, Inc.

5 unchanged sentences

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:

The following table summarizes RSU activity for the six months ended June 30, 2022:

Weighted Average

13 unchanged sentences

$ 5.00  

Unvested at March 31, 2022

Unvested at June 30, 2022

770,547  

$ 3.69  

A total of 175,173 RSUs included in the table above were granted in April 2022 outside the Plan as an employment inducement grant but are subject to the terms and conditions of the Plan.

RSU expense was $ 319 and $ 611 for the three and six months ended June 30, 2022 and was $ 1,459 and $ 1,779  for the three and six months ended June 30, 2021, respectively.

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,

Three Months Ended June 30,

Six Months Ended June 30,

Selling, general and administrative

$ 2,027  

$ 1,485  

$ 2,629  

Research and development

1 unchanged sentence

$ 2,148  

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.

Wrap Technologies, Inc.

Notes to Unaudited Condensed Consolidated Interim Financial Statements

(in thousands, except per share and share amounts)

$ 1,756  

$ 3,007  

As of June 30, 2022, total estimated compensation expense of stock options granted and outstanding but not yet vested was $ 4,590 which is expected to be recognized over the weighted average period of 3.5 years.

As of June 30, 2022, total estimated compensation cost of RSUs granted and outstanding but not yet vested was $ 2,366 which is expected to be recognized over the weighted average period of 2.4 years.

COMMITMENTS AND CONTINGENCIES

7 unchanged sentences

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 

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 $ 49  and $ 51  for royalties incurred during the three months ended 

March 31, 2022, 

2021 ,  respectively.

The Company recorded $ 34  and $ 83  for royalties during the three and six months ended June 30, 2022 and $ 68  and $ 119  incurred for the three and six months ended June 30, 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

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 

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 

2:21 -cv- 00550 -DMG-PVCx.

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 

2:21 -cv- 00597 -DMG-PVCx.  The Company is named as a nominal defendant in each of these actions.

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 

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. 

At June 30, 2022, the Company was committed for approximately $ 3.2 million for future component deliveries that are generally subject to modification or rescheduling in the normal course of business.

Wrap Technologies, Inc.

Notes to Unaudited Condensed Consolidated Interim Financial Statements

(in thousands, except per share and share amounts)

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.

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 $ 9 during the six months ended June 30, 2022, and 2021, respectively.

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

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.

Wrap Technologies, Inc.

Notes to Unaudited Condensed Consolidated Interim Financial Statements

(in thousands, except per share and share amounts)

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 

For the three months ended June 30, 2022, revenues from three distributors and one agency accounted for approximately 

18 %, 12 % and 

15 % of net accounts receivable at 

December 31, 2021 .

11 % of revenues with no other single customer accounting for more than 10% of total revenues.

For the three months ended June 30, 2021, revenues from two distributors accounted for approximately 

37 % and 

22 % of revenues with no other single customer accounting for more than 10% of total revenues.

For the six months ended June 30, 2022, revenues from one distributor accounted for approximately 

25 % of revenues with no other single customer accounting for more than 10% of total revenues.

For the six months ended June 30, 2021, revenues from four distributors accounted for approximately 

13 % and 

12 % of revenues with no other single customer accounting for more than 10% of total revenues.

At June 30, 2021, accounts receivable from two distributors accounted for 

18 % and 

11 % 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.

1 unchanged sentence

For the Three Months

Ended March 31,

For the Six Months

Ended June 30,

$ 1,090  

$ 1,123  

$ 2,285  

$ 1,750  

Europe, Middle East and Africa

1 unchanged sentence

$ 1,934  

$ 2,764  

$ 3,476  

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.

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.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements