# EDGAR Filing Document

**Accession Number:** 0001085243
**File Stem:** 0001641172-25-022970
**Filing Date:** 2025-8
**Character Count:** 25168
**Document Hash:** 9483c30582a64bf413c3ee1cadfcbb34
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001641172-25-022970.hdr.sgml**: 20250811

**ACCESSION NUMBER**: 0001641172-25-022970

**CONFORMED SUBMISSION TYPE**: 8-K

**PUBLIC DOCUMENT COUNT**: 14

**CONFORMED PERIOD OF REPORT**: 20250811

**ITEM INFORMATION**: Results of Operations and Financial Condition

**ITEM INFORMATION**: Financial Statements and Exhibits

**FILED AS OF DATE**: 20250811

**DATE AS OF CHANGE**: 20250811

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** VirTra, Inc
- **CENTRAL INDEX KEY:** 0001085243
- **STANDARD INDUSTRIAL CLASSIFICATION:** MISCELLANEOUS MANUFACTURING INDUSTRIES [3990]
- **ORGANIZATION NAME:** 04 Manufacturing
- **EIN:** 931207631
- **STATE OF INCORPORATION:** NV
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 8-K
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-38420
- **FILM NUMBER:** 251201969

**BUSINESS ADDRESS:**
- **STREET 1:** 295 E CORPORATE PLACE
- **CITY:** CHANDLER
- **STATE:** AZ
- **ZIP:** 85225
- **BUSINESS PHONE:** 4809681488

**MAIL ADDRESS:**
- **STREET 1:** 295 E CORPORATE PLACE
- **CITY:** CHANDLER
- **STATE:** AZ
- **ZIP:** 85225

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** VIRTRA SYSTEMS INC
- **DATE OF NAME CHANGE:** 20020628

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** GAMECOM INC
- **DATE OF NAME CHANGE:** 19991103

?xml version='1.0' encoding='ASCII'?

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**WASHINGTON, D.C. 20549**

**FORM 8-K**

**CURRENT REPORT**

**Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934**

**Date of Report (Date of earliest event reported): August 11, 2025**

**VIRTRA, INC.**

(Exact name of Registrant as Specified in Its Charter)

---

| | | |
|:---|:---|:---|
| **Nevada** | **001-38420** | **93-1207631** |
| (State or Other Jurisdiction | (Commission | (IRS Employer |
| of Incorporation) | File Number) | Identification No.) |

---

---

| | |
|:---|:---|
| **295 E. Corporate Place**<br>**Chandler, AZ** | **85225** |
| (Address of Principal Executive Offices) | (Zip Code) |

---

Registrant's Telephone Number, Including Area Code: **(480) 968-1488**

**<u>Not Applicable</u>**

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

---

| | | |
|:---|:---|:---|
| **Title of each class** | **Trading Symbol(s)** | **Name of each exchange on which registered** |
| Common Stock, $0.0001 par value | VTSI | NASDAQ Capital Market |

---

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

**Item 2.02. Results of Operations and Financial Condition.**

On August 11, 2025, VirTra, Inc. issued a press release announcing its financial results for the second quarter and six months ended June 30, 2025. A copy of this press release is attached hereto as Exhibit 99.1 and incorporated herein by reference. The information contained in the website is not a part of this Current Report on Form 8-K.

The information under this Item 2.02, including Exhibit 99.1, is being furnished and shall not be deemed to be "filed" for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liabilities of such section, nor shall such information be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

**Item 9.01. Financial Statements and Exhibits.**

(d) Exhibits.

---

| | |
|:---|:---|
| **Exhibit No.** | **Description** |
| 99.1 | [Press release of the registrant dated August 11, 2025](ex99-1.htm) |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |

---

**SIGNATURES**

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

---

| | | | |
|:---|:---|:---|:---|
| | | **VIRTRA, INC.** | **VIRTRA, INC.** |
| Date: | August 11, 2025 | By: | */s/ John F. Givens II* |
|  |  | Name: | John F. Givens II |
|  |  | Title: | Chief Executive Officer |

---

## Exhibit 99.1

**Exhibit 99.1**

![](ex99-1_001.jpg)

**VirTra Reports Second Quarter and Six Months 2025 Financial Results**

*Second Quarter Revenue Increases 15% Year-Over-Year; Six-Month Revenue Up 5%*

 

*Delivers Continued Positive Net Income and Strong Gross Margins as Federal Funding Trends Improve*

 

**CHANDLER, Ariz. — August 11, 2025 — <u>VirTra, Inc.</u> (Nasdaq: VTSI) ("VirTra" or the "Company"),** a global provider of judgmental use of force training simulators and firearms training simulators for the law enforcement and military markets, reported results for the second quarter and six months ended June 30, 2025. The financial statements are available on VirTra's website and <u>here</u>.

 

**Second Quarter 2025 and Recent Operational Highlights:**

● **Second quarter bookings of $4.6 million rose from $3.6 million in Q2 2024** and contributed to $32.1 million over the last twelve months, reflecting sustained demand across law enforcement and military customers despite persistent federal funding uncertainty.

● **Backlog totaled $18.8 million as of June 30, 2025**, including $7.1 million in Capital, $5.7 million in Service, and $6.0 million in STEP contracts.

● **STEP® recurring revenue program** maintained renewal rates around 95%, with a growing portion of customers converting to new three-year agreements. These updated terms better align with technology refresh cycles and provide VirTra with earlier renewal opportunities.

● **Maintained robust working capital at $34.1 million**, positioning the Company for sustained growth and operational agility.

**Second Quarter and Six Month 2025 Financial Highlights:**

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **For the Three Months Ended** | **For the Three Months Ended** | **For the Three Months Ended** | **For the Six Months Ended** | **For the Six Months Ended** | **For the Six Months Ended** |
| <br>*All figures in millions, except per share data* | **June 30, 2025** | **June 30, 2024** | **% Δ** | **June 30, 2025** | **June 30, 2024** | **% Δ** |
| **Total Revenue** | $**7.0** | $**6.1** | **15%** | $**14.1** | $**13.4** | **5%** |
| **Gross Profit** | $**4.8** | $**5.5** | **-13%** | $**10.0** | $**10.2** | **-2%** |
| **Gross Margin** | **69%** | **91%** | **N/A** | **71%** | **76%** | **N/A** |
| **Net Income** | $**0.2** | $**1.2** | **N/A** | $**1.4** | $**1.7** | **N/A** |
| **Diluted EPS** | $**0.02** | $**0.11** | **N/A** | $**0.13** | $**0.15** | **N/A** |
| **Adjusted EBITDA** | $**0.7** | $**1.6** | **N/A** | $**2.4** | $**2.9** | **N/A** |

---

*\*The column for the six months ended June 30, 2024 reflects restated financials.*

 

 

**Management Commentary**

VirTra CEO John Givens stated, "In the second quarter, VirTra delivered year-over-year growth in both revenue and bookings in the second quarter, along with continued profitability and a strong cash position. While bookings were lighter sequentially, this primarily reflected timing of orders and the pace of federal funding, with activity expected to improve as we exit the year and move into 2026. The recent reopening of the Department of Justice COPS grant program is a positive development, and we are seeing agencies re-engage as they pursue available funding. We've been working to help policymakers understand the value of immersive training and to support funding initiatives that benefit our customers. These efforts, together with broader improvements in the funding environment, should help stimulate demand through the remainder of 2025 and into 2026.

"Operationally, we continue to run the business with discipline, consistently improving product quality while controlling costs. Customers are recognizing the durability and performance of our hardware, which, along with our operational efficiencies, allows us to remain highly competitive on pricing. These efforts position us to respond effectively as funding conditions improve and demand strengthens."

**Six Months 2025 Financial Results**

*Note: Financials for the first six months of 2024 presented below reflect a restatement made in Q4 2024 to adjust the timing of revenue recognition associated with a 2021 international sale.*

 

**Total revenue** for the first six months was $14.1 million, compared to $13.4 million in the prior year period. The 5% increase was primarily driven by higher capital system deliveries, supported by stable recurring revenue from STEP and service contracts.

**Gross profit** for the first six months was $10.0 million (71% of total revenue), compared to $10.2 million (76% of total revenue) in the prior year period. The change in gross margin reflects a higher mix of capital sales relative to service and STEP revenue. The prior year period benefitted from unusually high gross margins due to capitalized labor related to the development of the V-XR and IVAS programs, as well as a greater mix of high-margin service and STEP revenue.

**Net operating expense** for the first six months was $7.7 million, a 9% decrease from $8.5 million in the prior year period, reflecting disciplined cost management while maintaining investment in core growth initiatives.

**Operating income** for the first six months was $2.3 million, compared to $1.8 million in the prior year period.

**Net income** for the first six months was $1.4 million, or $0.13 per diluted share, compared to $1.7 million, or $0.15 per diluted share, in the prior year period.

**Adjusted EBITDA**, a non-GAAP metric, was $2.4 million for the first six months of 2025, compared to $2.9 million in the prior year period.

**Second Quarter 2025 Financial Results**

**Total revenue** for the second quarter of 2025 was $7.0 million, compared to $6.1 million in the prior year period. The 15% increase was primarily driven by higher capital deliveries and stable recurring revenue from STEP and service contracts.

**Gross profit** for the second quarter was $4.8 million (69% of total revenue), compared to $5.5 million (91% of total revenue) in the prior year period. The prior year quarter benefited from unusually low cost of sales related to capitalized development work.

**Net operating expense** for the second quarter was $3.9 million, an 11% decrease from $4.4 million in the prior year period, reflecting ongoing cost discipline.

**Operating income** for the second quarter was $0.9 million compared to $1.1 million in the prior year period.

**Net income** for the second quarter was $0.2 million, or $0.02 per diluted share, compared to $1.2 million, or $0.11 per diluted share, in the prior year period.

**Adjusted EBITDA**, a non-GAAP metric, was $0.7 million for the second quarter, compared to $1.6 million in the prior year period.

**Cash and cash equivalents** were $20.7 million at June 30, 2025, compared to $17.6 million at March 31, 2025. Working capital was $34.1 million, and the Company maintained a debt-light balance sheet, positioning it well for near- and long-term execution.

**Financial Commentary**

CFO Alanna Boudreau stated, "Our first half results were highlighted by continued strong gross margins and cost discipline. Backlog remains solid at $18.8 million, supported by a balanced mix of capital, service, and STEP contracts. International markets remain an attractive avenue for growth, and we continue to pursue multiple active opportunities. With a strong balance sheet, VirTra maintains the financial strength and flexibility to support our growth strategy and navigate the timing of government funding cycles."

**Conference Call**

VirTra's management will hold a conference call today (August 11, 2025) at 4:30 p.m. Eastern time (1:30 p.m. Pacific time) to discuss these results. VirTra's Chief Executive Officer John Givens and Chief Financial Officer Alanna Boudreau will host the call, followed by a question-and-answer period.

U.S. dial-in number: 1-877-407-9208

International number: 1-201-493-6784

Conference ID: 13754706

Please call the conference telephone number 5-10 minutes prior to the start time. An operator will register your name and organization. If you have any difficulty connecting with the conference call, please contact Gateway Investor Relations at 949-574-3860.

The conference call will be broadcast live and available for replay <u>here</u> and via the investor relations section of the Company's <u>website</u>.

A replay of the call will be available after 7:30 p.m. Eastern time on the same day through August 25, 2025.

Toll-free replay number: 1-844-512-2921

International replay number: 1-412-317-6671

Replay ID: 13754706

**About VirTra, Inc.**

VirTra (Nasdaq: VTSI) is a global provider of judgmental use of force training simulators, firearms training simulators for the law enforcement, military, educational and commercial markets. The company's patented technologies, software, and scenarios provide intense training for de-escalation, judgmental use-of-force, marksmanship, and related training that mimics real-world situations. VirTra's mission is to save and improve lives worldwide through practical and highly effective virtual reality and simulator technology. Learn more about the company at <u>www.VirTra.com</u>.

**About the Presentation of Adjusted EBITDA**

Adjusted earnings before interest, income taxes, depreciation, and amortization and before other non-operating costs and income ("Adjusted EBITDA") is a non-GAAP financial measure. Adjusted EBITDA also includes non-cash stock option expense and other than temporary impairment loss on investments. Other companies may calculate Adjusted EBITDA differently. VirTra calculates its Adjusted EBITDA to eliminate the impact of certain items it does not consider to be indicative of its performance and its ongoing operations. Adjusted EBITDA is presented herein because management believes the presentation of Adjusted EBITDA provides useful information to VirTra's investors regarding VirTra's financial condition and results of operations and because Adjusted EBITDA is frequently used by securities analysts, investors, and other interested parties in the evaluation of companies in VirTra's industry, several of which present a form of Adjusted EBITDA when reporting their results. Adjusted EBITDA has limitations as an analytical tool and should not be considered in isolation or as a substitute for analysis of VirTra's results as reported under accounting principles generally accepted in the United States of America ("GAAP"). Adjusted EBITDA should not be considered as an alternative for net income, cash flows from operating activities and other consolidated income or cash flows statement data prepared in accordance with GAAP or as a measure of profitability or liquidity. A reconciliation of net income to Adjusted EBITDA is provided in the following tables:

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **For the Three Months Ended** | **For the Three Months Ended** | **For the Three Months Ended** | **For the Three Months Ended** | **For the Six Months Ended** | **For the Six Months Ended** | **For the Six Months Ended** | **For the Six Months Ended** |
|  | | | | | **(Restated)** | **(Restated)** | **(Restated)** | **(Restated)** |
|  | | | | | June 30, | June 30, | Increase | % |
|  |<br>June 30,<br>2025 |<br>June 30,<br>2024 |<br>Increase<br>(Decrease) |%<br>Change | 2025 | 2024 | (Decrease) | Change |
| Net Income (Loss) | $175314 | $1200727 | $(1025413) | -85% | $1439375 | $1668923 | $(229548) | -14% |
| &nbsp;&nbsp;&nbsp;Adjustments: |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Provision for income taxes | (9000) | 87564 | $(96564) | -110% | 93000 | 599000 | $(506000) | -84% |
| &nbsp;&nbsp;&nbsp;Depreciation and amortization | 513693 | 288777 | $224916 | 310% | 830333 | 525570 | $304763 | 186% |
| Interest (net) | (26876) | (34379) | $7503 | -22% | (48127) | (88957) | $40830 | -46% |
| EBITDA | $653131 | $1542689 | $(889558) | -14% | $2314581 | $2704536 | $281038) | -10% |
| &nbsp;&nbsp;&nbsp;Right of use amortization | 42501 | 69418 | $(26917) |  | 84365 | 199493 | (389955) |  |
| Adjusted EBITDA | $695632 | $1612107 | $(916475) | -57% | $2398946 | $2904029 | $(505083) | 3% |

---

***Forward-Looking Statements***

 

**Investor Relations Contact:**

Matt Glover and Alec Wilson

Gateway Group, Inc.

<u>VTSI@gateway-grp.com</u>

949-574-3860

**- Financial Tables to Follow -**

**VIRTRA, INC.**

**CONDENSED BALANCE SHEETS**

---

| | | |
|:---|:---|:---|
|  | **June 30, 2025** | **December 31, 2024** |
|  | **(Unaudited)** | |
| **ASSETS** |  |  |
| **Current assets:** |  |  |
| &nbsp;&nbsp;&nbsp;Cash and cash equivalents | $20697354 | $18040827 |
| &nbsp;&nbsp;&nbsp;Accounts receivable, net | 6447542 | 8005452 |
| &nbsp;&nbsp;&nbsp;Inventory, net | 12806733 | 14583400 |
| &nbsp;&nbsp;&nbsp;Unbilled revenue | 1587422 | 2570441 |
| &nbsp;&nbsp;&nbsp;Prepaid expenses and other current assets | 2610223 | 1273115 |
| &nbsp;&nbsp;&nbsp;**Total current assets** | 44149274 | 44473235 |
| **Long-term assets:** |  |  |
| &nbsp;&nbsp;&nbsp;Property and equipment, net | 16451233 | 16204663 |
| &nbsp;&nbsp;&nbsp;Operating lease right-of-use asset, net | 352730 | 437095 |
| &nbsp;&nbsp;&nbsp;Intangible assets, net | 2744180 | 558651 |
| &nbsp;&nbsp;&nbsp;Security deposits, long-term | 15979 | 35691 |
| &nbsp;&nbsp;&nbsp;Other assets, long-term | 148177 | 148177 |
| &nbsp;&nbsp;&nbsp;Deferred tax asset, net | 3508399 | 3595574 |
| &nbsp;&nbsp;&nbsp;**Total long-term assets** | 23220698 | 20979851 |
| **Total assets** | $67369972 | $65453086 |
| **LIABILITIES AND STOCKHOLDERS' EQUITY** |  |  |
| **Current liabilities:** |  |  |
| &nbsp;&nbsp;&nbsp;Accounts payable | $1034497 | $957384 |
| &nbsp;&nbsp;&nbsp;Accrued compensation and related costs | 1005621 | 1253544 |
| &nbsp;&nbsp;&nbsp;Accrued expenses and other current liabilities | 554006 | 657114 |
| &nbsp;&nbsp;&nbsp;Note payable, current | 227849 | 230787 |
| &nbsp;&nbsp;&nbsp;Operating lease liability, short-term | 194917 | 192410 |
| &nbsp;&nbsp;&nbsp;Deferred revenue, short-term | 7011943 | 6355316 |
| &nbsp;&nbsp;&nbsp;**Total current liabilities** | 10028833 | 9646555 |
| **Long-term liabilities:** |  |  |
| &nbsp;&nbsp;&nbsp;Deferred revenue, long-term | 2381845 | 2282996 |
| &nbsp;&nbsp;&nbsp;Note payable, long-term | 7441512 | 7567536 |
| &nbsp;&nbsp;&nbsp;Operating lease liability, long-term | 174696 | 265111 |
| &nbsp;&nbsp;&nbsp;Other long-term liabilities | - | - |
| &nbsp;&nbsp;&nbsp;**Total long-term liabilities** | 9998053 | 10115643 |
| **Total liabilities** | 20026886 | 19762198 |
| Commitments and contingencies (See Note 9) |  |  |
| **Stockholders' equity:** |  |  |
| &nbsp;&nbsp;&nbsp;Preferred stock $0.0001 par value; 2,500,000 authorized; no shares issued or outstanding |  |  |
| &nbsp;&nbsp;&nbsp;Common stock $0.0001 par value; 50,000,000 shares authorized; 11,261,588 shares issued and outstanding as of June 30, 2025, and 11,255,709 shares issued and outstanding as of December 31, 2024 | 1126 | 1125 |
| &nbsp;&nbsp;&nbsp;Class A common stock $0.0001 par value; 2,500,000 shares authorized; no shares issued or outstanding |  |  |
| &nbsp;&nbsp;&nbsp;Class B common stock $0.0001 par value; 7,500,000 shares authorized; no shares issued or outstanding |  |  |
| &nbsp;&nbsp;&nbsp;Additional paid-in capital | 33127935 | 32915112 |
| &nbsp;&nbsp;&nbsp;Retained Earnings | 14214025 | 12774651 |
| &nbsp;&nbsp;&nbsp;**Total stockholders' equity** | 47343086 | 45690888 |
| **Total liabilities and stockholders' equity** | $67369972 | $65453086 |

---

**VIRTRA, INC.**

**CONDENSED STATEMENTS OF OPERATIONS**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three Months Ended** | **Three Months Ended** | **Six Months Ended** | **Six Months Ended** |
|  | **June 30, 2025** | **June 30, 2024** | **June 30, 2025** | **June 30, 2024** |
|  | | | | (Restated) |
| Revenues: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Net sales | $6978938 | $6075040 | $14139185 | $13421461 |
| &nbsp;&nbsp;&nbsp;Total revenue | 6978938 | 6075040 | 14139185 | 13421461 |
| &nbsp;&nbsp;&nbsp;Cost of sales | 2166461 | 550424 | 4129828 | 3182682 |
| &nbsp;&nbsp;&nbsp;Gross profit | 4812477 | 5524616 | 10009357 | 10238779 |
| Operating expenses: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;General and administrative | 3289995 | 3537910 | 6509945 | 6908332 |
| &nbsp;&nbsp;&nbsp;Research and development | 608116 | 855285 | 1217243 | 1548665 |
| &nbsp;&nbsp;&nbsp;Net operating expense | 3898111 | 4393195 | 7727188 | 8456997 |
| &nbsp;&nbsp;&nbsp;Income (loss) from operations | 914366 | 1131421 | 2282169 | 1781782 |
| Other income (expense): |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Other income | 77873 | 156870 | 149883 | 486141 |
| &nbsp;&nbsp;&nbsp;Gain on forgiveness of note payable |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Other (expense) income | (825925) | - | (899677) | - |
| &nbsp;&nbsp;&nbsp;Net other income (expense) | (748052) | 156870 | (749794) | 486141 |
| &nbsp;&nbsp;&nbsp;Income (Loss) before provision for income taxes | 166314 | 1288291 | 1532375 | 2267923 |
| &nbsp;&nbsp;&nbsp;Provision (Benefit) for income taxes | (9000) | 87564 | 93000 | 599000 |
| Net income (loss) | $175314 | $1200727 | $1439375 | $1668923 |
| Net income (loss) per common share: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Basic | $0.02 | $0.11 | $0.13 | $0.15 |
| &nbsp;&nbsp;&nbsp;Diluted | $0.02 | $0.11 | $0.13 | $0.15 |
| Weighted average shares outstanding: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Basic | 11261588 | 11063366 | 11260902 | 10885964 |
| &nbsp;&nbsp;&nbsp;Diluted | 11261588 | 11065866 | 11260902 | 10885964 |

---

**VIRTRA, INC.**

**CONDENSED STATEMENTS OF CASH FLOWS**

---

| | | |
|:---|:---|:---|
|  | **Six Months Ended June 30** | **Six Months Ended June 30** |
|  | **2025** | **2024** |
|  | | **(Restated)** |
| **Cash flows from operating activities:** |  |  |
| &nbsp;&nbsp;&nbsp;Net income | $1439375 | $1668923 |
| Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities: |  |  |
| &nbsp;&nbsp;&nbsp;Depreciation and amortization | 829841 | 525077 |
| &nbsp;&nbsp;&nbsp;Right of use amortization | 84365 | 197312 |
| &nbsp;&nbsp;&nbsp;Employee stock compensation | 212823 | 352005 |
| Changes in operating assets and liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;Accounts receivable, net | 1557910 | 7347700 |
| &nbsp;&nbsp;&nbsp;Inventory, net | 1776667 | (1065835) |
| &nbsp;&nbsp;&nbsp;Deferred taxes | 87175 | (149958) |
| &nbsp;&nbsp;&nbsp;Unbilled revenue | 983019 | (280044) |
| &nbsp;&nbsp;&nbsp;Prepaid expenses and other current assets | (1337108) | (1046213) |
| &nbsp;&nbsp;&nbsp;Other assets | 19712 |  |
| &nbsp;&nbsp;&nbsp;Accounts payable and other accrued expenses | (273918) | (4967236) |
| &nbsp;&nbsp;&nbsp;Operating lease right of use | (87907) | (207208) |
| &nbsp;&nbsp;&nbsp;Deferred revenue | 755476 | (1106299) |
| Net cash provided by operating activities | 6047430 | 1268224 |
| **Cash flows from investing activities:** |  |  |
| &nbsp;&nbsp;&nbsp;Internal intangible assets | (2265489) |  |
| &nbsp;&nbsp;&nbsp;Purchase of property and equipment | (996452) | (1608798) |
| Net cash (used in) investing activities | (3261941) | (1608798) |
| **Cash flows from financing activities:** |  |  |
| &nbsp;&nbsp;&nbsp;Principal payments of debt | (128962) | (117785) |
| &nbsp;&nbsp;&nbsp;Stock issued for options exercised | - | 20151 |
| &nbsp;&nbsp;&nbsp;Net cash (used in) financing activities | (128962) | (97634) |
| **Net increase (decrease) in cash** | 2656527 | (438208) |
| &nbsp;&nbsp;&nbsp;Cash and restricted cash, beginning of period | 18040827 | 18849842 |
| &nbsp;&nbsp;&nbsp;Cash and restricted cash, end of period | $20697354 | $18411634 |
| Supplemental disclosure of cash flow information: |  |  |
| &nbsp;&nbsp;&nbsp;Income taxes paid (refunded) | $720951 | $5314387 |
| &nbsp;&nbsp;&nbsp;Interest paid | $116415 | $84403 |

---