VirTra, Inc.

Good afternoon, and welcome to Vertra's Business Update Call. My name is Shamali, and I will be your operator for today's call. Joining us for today's presentation are the company's Chairman and CEO, Bob Farris, and Chief Accounting Officer, Marcia Fox. Following their remarks, we will open the call for questions from the Vertra's institutional analysts and investors. Before we begin the call, I would like to provide Virtua's safe harbor statement that includes cautions regarding forward-looking statements made during this call. During this presentation, management may discuss financial projections, information or expectations about the company's products and services or markets, or otherwise make statements about the future, which are forward-looking and subject to a number of risks and uncertainties that could cause actual results to differ materially from the statements made. The company does not undertake any obligation to update them as required by law. Finally, I would like to remind everyone that this call will be made available for replay via a link in the Investor Relations section of the company's website at www.virtua.com. Now, I would like to turn the call over to Virtua's Chairman and CEO, Mr. Bob Farris. Sir, please proceed.

Thank you, Shamali, and thank you, everyone, for joining us this afternoon. After the market closed today, we issued a press release that provided a business update highlighting some of our recent accomplishments and providing selected financial disclosures we can provide at this time. Our results for 2021 demonstrate another highly successful year for Virtra with record orders as we continue to grow our market leading position in law enforcement and military with world-class training solutions. Orders for 2021 grew 37% year over year to a record 32.7 million. And we are particularly proud of these results as they came despite COVID-related restrictions that limited our ability to participate in trade shows and visit prospective customers. Over the last several months, we've had a number of noteworthy business wins that I want to highlight for you. Internationally, in early January, we received two sizable orders in two different countries, totaling 2.7 million for multiple simulators, real-world consequence devices, recoil kits, and other tools, along with installation training courses. These are both follow-on orders from countries where we have already established sales, with the repeat business demonstrating the value add and customer loyalty that our products and services engender. In North America, We were very excited to announce in December that we were awarded the standing offer from the Government of Canada to supply marksmanship and judgmental use of force simulation technology to their main police force, the Royal Canadian Mounted Police, or RCMP, and all other law enforcement-related agencies, such as their border protection and correction facilities, just to name a few. This standing offer allows the government of Canada to repeatedly purchase our products and services at prearranged prices from Virta as part of a countrywide effort to standardize purchasing from one simulation training company. That is most important to note about this is the standing offer, it expands our market share, expands those who will benefit from Virta's industry-leading products, and does so without needing to individually compete for each order from each agency. In fact, we are already seeing evidence of business not possible without this award, with our first order that we announced in February. In our market, a win like Canada is possible only once every decade or so, and our sales team and product lineup outperformed all others in our market when it mattered most. Before I go into more detail about our operational initiatives and progress within the context of our growth strategy, I'm going to turn the call over to our Chief Accounting Officer, Marcia Fox, to provide a financial update and discuss the process of our independent audit. Marcia.

Thank you, Bob, and good afternoon, everyone. It's a pleasure to be speaking to you today. Since the independent audit of our financial statements has not yet been completed, We will not, at this time, be reviewing our full financial results for the fourth quarter and full year ended December 31st, 2021, but plan to release them as soon as they are available as we continue to work with our auditor to complete the audit and file our 10-K. As Bob mentioned, during 2021, we received orders totaling $32.7 million, a 37% increase from 2020 to of $23.8 million. Note that orders may not directly correlate to reported revenue over the same periods due to differences in physical delivery of our products, order structure, and other related items. But we feel this metric is important in showing the strong growth our business continues to achieve. While we have not finalized our balance sheet as of December 31, 2021, we can report that we have estimated cash and cash equivalents of $19.7 million as of December 31st, 2021, keeping us in a healthy financial position. I would now like to cover the status of our audit and 10-K filing. As disclosed in our press release, we have filed a Form 12-B-25 with the U.S. Securities and Exchange Commission to disclose our inability to file the annual report on Form 10-K for the year ended December 31st, 2021 by the due date of March 31st, 2022, and we are also not expected to do so within the 15-day extension period allowed by the form. We would characterize this delay as growing pains of a smaller but growing company that is strengthening its infrastructure to catch up with the success of its business. As we have grown significantly over the past several years with continuous new sales records, our back office infrastructure has been increasingly strained. Last year, we reached a point where it made sense to implement a new company-wide enterprise resource planning, or ERP, system. This ERP system is consolidating three independent systems, and we are excited about the future improvements in our operating efficiency. But this has taken time to integrate, even with hiring an ERP consulting firm a year ago to help us and to accelerate the process. Compounding these growing pains was a global pandemic with COVID-19 that put additional pressure on our integration work, supply chain, and staff through remote work and other challenges. It has been difficult at times to manage these various initiatives while still delivering for our growing customers simultaneously with COVID-related restrictions and integrating the largest back office overhaul we have implemented in our company's history. None of these delays are indicative of a lack of effort. And Bob and I continue to be impressed with our staff's incredible work ethic and commitment towards successfully completing our audit in the near future. That concludes my prepared remarks. I'll now turn it back to Bob.