# EDGAR Filing Document

**Accession Number:** 0001085243
**File Stem:** 0001493152-23-010253
**Filing Date:** 2023-3
**Character Count:** 25066
**Document Hash:** 584fe23346d09c3017082db6e67f9cb8
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001493152-23-010253.hdr.sgml**: 20230331

**ACCESSION NUMBER**: 0001493152-23-010253

**CONFORMED SUBMISSION TYPE**: 8-K

**PUBLIC DOCUMENT COUNT**: 14

**CONFORMED PERIOD OF REPORT**: 20230331

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

**ITEM INFORMATION**: Financial Statements and Exhibits

**FILED AS OF DATE**: 20230331

**DATE AS OF CHANGE**: 20230331

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** VirTra, Inc
- **CENTRAL INDEX KEY:** 0001085243
- **STANDARD INDUSTRIAL CLASSIFICATION:** MISCELLANEOUS MANUFACTURING INDUSTRIES [3990]
- **IRS NUMBER:** 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:** 23787578

**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="utf-8"?

**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): March 31, 2023**

**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 March 31, 2023, VirTra, Inc. issued a press release announcing its financial results for the fourth quarter and fiscal year ended December 31, 2022. 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 March 31, 2023.](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: March 31, 2023 | By: | */s/ Robert D. Ferris* |
|  | Name: | Robert D. Ferris |
|  | Title: | Co-Chief Executive Officer |

---

## Exhibit 99.1

**Exhibit 99.1**

![](ex99-1_001.jpg)

**VirTra Reports Fourth Quarter and Full Year 2022 Financial Results**

*16% Revenue Growth for Full Year 2022; Ended the Year with Record Backlog of $27.7 Million*

**CHANDLER, Ariz. — March 31, 2023 — <u>VirTra</u>, Inc. (Nasdaq: VTSI) ("VirTra"),** a global provider of judgmental use of force training simulators, firearms training simulators for the law enforcement and military markets, reported results for the fourth quarter and full year ended December 31, 2022. The financial statements are available on VirTra's website and <u>here</u>.

**Fourth Quarter 2022 and Full Year 2022 Highlights:**

● Bookings of $6.4 million in the fourth quarter of 2022 and $33.0 million for 2022.

● Record backlog at December 31, 2022 of $27.7 million, 20% higher than prior year comparable period.

● Launched operations at a new facility in Orlando, Florida to support strategic growth in military end-market.

● Maintained a strong balance sheet with cash and cash equivalents of $13.5 million at year end.

**Fourth Quarter 2022 Financial Summary:**

● Total revenue was $8.7 million

● Gross profit was $5.3 million, or 61% of total revenue

● Net income was $1.4 million

● Adjusted EBITDA totaled $1.7 million

**Full Year 2022 Financial Summary:**

● Total revenue increased 16% to $28.3 million

● Gross profit was $16.3 million, or 57% of total revenue

● Net income was $2.0 million

● Adjusted EBITDA totaled $3.6 million

**Fourth Quarter and Full Year 2022 Financial Highlights:**

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | For the Three Months Ended | For the Three Months Ended | For the Three Months Ended | For the Full Year Ended | For the Full Year Ended | For the Full Year Ended |
| <br>*All figures in millions, except per share data* | **December 31, 2022** | **December 31, 2021** | **% Δ** | **December 31, 2022** | **December 31, 2021** | **% Δ** |
| **Total Revenue** | $**8.7** | $**8.6** | **>1%** | $**28.3** | $**24.4** | **16%** |
| **Gross Profit** | $**5.3** | $**2.8** | **88%** | $**16.3** | $**11.4** | **43%** |
| **Gross Margin** | **61.4%** | **32.7%** | **88%** | **57.4%** | **46.7%** | **23%** |
| **Net Income (Loss)** | $**1.4** | $**0.0** | **N/A** | $**2.0** | $**2.5** | **-23%** |
| **Diluted EPS** | $**0.13** | $**0.00** | **N/A** | $**0.18** | $**0.25** | **N/A** |
| **Adjusted EBITDA** | $**1.70** | $**(0.48)** | **N/A** | $**3.62** | $**1.79** | **102%** |

---

**Management Commentary**

"Our strong performance in 2022 was the result of continued execution against our business strategy as we generated record revenue and bookings and delivered another period of solid profitability," said Bob Ferris, chairman and co-CEO of VirTra. "During the year, we made aggressive investments to expand the breadth and effectiveness of our training offerings, including launching VirTra Volumetric Video, a breakthrough technology that has the potential to provide a step-function change in training content. Operationally, we successfully centralized and expanded our Arizona headquarters, opened a new facility in Orlando to support our military growth opportunities, as well as implemented a new ERP system to prepare for greater scale with an eye to improve efficiencies."

John Givens, co-CEO of VirTra added: "Looking ahead, our operational and technological advancements in 2022 have bolstered our competitive positioning and placed us on a solid growth trajectory for the years ahead. The growing demand and constructive funding environment for VirTra's innovative trainings solutions gives us confidence in our ability to capitalize on the robust pipeline of opportunities in both the law enforcement and military markets."

**Fourth Quarter 2022 Financial Results**

Total revenue was $8.7 million, compared to $8.6 million in the fourth quarter of 2021. The slight increase in revenue was the result of increases in STEP sales, simulator sales, accessories, curriculum and training, and recurring extended warranty revenue, driven by the law enforcement market.

Gross profit was $5.3 million, an improvement compared to $2.8 million in the fourth quarter of 2021. Gross profit margin, defined as total revenue less cost of sales, was 61.4%, an improvement compared to 32.7% in the fourth quarter of 2021. The increase in gross profit was primarily due to lower cost of goods sold and the favorable product mix of systems, accessories and services sold in the quarter.

Net operating expense was $3.4 million, compared to $3.0 million in the fourth quarter of 2021. The increase in net operating expenses was due to increased sales and marketing spend from increased participation in industry trade shows, as well as increases in R&D expenses and an increase in one-time costs related to facility moves.

Operating income (loss) totaled $1.9 million, compared to $(0.2) million in operating income the fourth quarter of 2021.

Net income totaled $1.4 million, or $0.13 per diluted share (based on 10.9 million weighted average diluted shares outstanding), compared to net income of $13,000, or $0.00 per diluted share (based on 10.1 million weighted average diluted shares outstanding), in the fourth quarter of 2021.

Adjusted EBITDA, a non-GAAP metric, totaled $1.7 million, compared to $0.5 million in the fourth quarter of 2021.

**Full Year 2022 Financial Results**

Total revenue increased 16% to $28.3 million from $24.4 million in 2021. The increase in revenue was the result of increases in STEP sales, simulator sales, accessories, curriculum and training, and recurring extended warranty revenue in 2022.

Gross profit was $16.3 million, compared to $11.4 million in 2021, representing an increase of 43%. Gross profit margin, defined as total revenue less cost of sales, was 57.4%, compared to 46.7% for the fiscal year of 2021. The increase in gross profit was primarily due to the increase in simulator system sales and recurring STEP revenue that helped to increase revenue while decreasing cost of goods sold.

Net operating expense was $13.7 million, compared to $10.0 million for the fiscal year of 2021. The increase was the result of increases research and development expenses and general and administrative expenses. General and administrative expense increases were driven by an increase in marketing expenses associated with attendance at tradeshows, which began to open back up in 2022 as well as costs related to the moving of facilities and opening the new facility in Orlando.

Operating income increased 78% to $2.6 million, compared to $1.5 million in 2021.

Net income totaled $2.0 million, or $0.18 per basic and diluted share (based on 10.9 million weighted average basic shares and 10.9 million weighted average diluted shares outstanding), compared to net income of $2.5 million, or $0.26 per basic and $0.25 per diluted share (based on 9.7 million weighted average basic and $10.1 million diluted shares outstanding) in 2021. The decrease in net income includes a $1.3 million impact from PPP loan forgiveness in 2021. Without the PPP forgiveness in 2021, net income in 2022 would have increased 60% year-over-year from 2021.

Adjusted EBITDA, a non-GAAP metric, totaled $3.6 million, compared to $2.1 million in 2021.

**Financial Commentary**

"In 2022, VirTra grew revenue for the 17<sup>th</sup> consecutive year on its way to expanding gross profit margins over 57% and improving operating income by over $1 million," added CFO Alanna Boudreau "The Company's ability to grow profitability amidst operational transformations accentuates the strength of our business model and VirTra's growing role in the law enforcement and military simulator markets. We rounded out the year with a solid bottom line performance, recording operating income of $1.9 million and net income of $1.4 million in the fourth quarter. Entering 2023, we have a meaningful set of opportunities, as we exited 2022 with record bookings of $33.0 million and a record backlog of $27.7 million."

**Conference Call**

VirTra's management will hold a conference call today (March 31, 2023) at 4:30 p.m. Eastern time (1:30 p.m. Pacific time) to discuss these results. VirTra's chairman and co-CEO, Bob Ferris, co-CEO 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: 13736693

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 simultaneously and is available for replay <u>here</u> and via the investor relations section of the company's website.

A replay of the call will be available after 8:30 p.m. Eastern time on the same through April 14, 2023.

U.S. replay dial-in: 1-844-512-2921

International replay dial-in: 1-412-317-6671

Replay ID: 13736693

**About VirTra, Inc.**

VirTra (Nasdaq: VTSI) is a global provider of judgmental use of force training simulators, firearms training simulators and driving 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 Years Ended** | **For the Years Ended** | **For the Years Ended** | **For the Years Ended** |
|  | December 31,<br>2022 | December 31,<br>2021 | Increase<br>(Decrease) | %<br>Change |
| Net Income (Loss) | $1955898 | $2540089 | $(584191) | -23% |
| &nbsp;&nbsp;&nbsp;Adjustments: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;(Provision) Benefit for income taxes | 571642 | 246050 | 325592 | 132% |
| &nbsp;&nbsp;&nbsp;Depreciation and amortization | 887118 | 589059 | 298059 | 51% |
| &nbsp;&nbsp;&nbsp;Interest (net) | 190772 | 35673 | 155099 | 435% |
| EBITDA | $3605430 | $3410871 | $194559 | 6% |
| &nbsp;&nbsp;&nbsp;Impairment loss on That's Eatertainment, former related party |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Right of use amortization |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Reserve for note receivable |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Gain on forgiveness of note | - | (1320714) | 1320714 | -100% |
| Adjusted EBITDA | $3605430 | $2090157 | $1515273 | 72% |

---

***Forward-Looking Statements***

**Investor Relations Contact:**

Matt Glover and Tom Colton

Gateway Group, Inc.

<u>VTSI@gatewayir.com</u>

949-574-3860

**-Financial Tables to Follow-**

**VIRTRA, INC.**

**BALANCE SHEETS**

---

| | | |
|:---|:---|:---|
|  | **December 31, 2022** | **December 31, 2021** |
| **ASSETS** |  |  |
| **Current assets:** |  |  |
| &nbsp;&nbsp;&nbsp;Cash and cash equivalents | $13483597 | $19708565 |
| &nbsp;&nbsp;&nbsp;Accounts receivable, net | 3002887 | 3896739 |
| &nbsp;&nbsp;&nbsp;Inventory, net | 9592328 | 5014924 |
| &nbsp;&nbsp;&nbsp;Unbilled revenue | 7485990 | 3946446 |
| &nbsp;&nbsp;&nbsp;Prepaid expenses and other current assets | 531051 | 940887 |
| &nbsp;&nbsp;&nbsp;**Total current assets** | 34095853 | 33507561 |
| **Long-term assets:** |  |  |
| &nbsp;&nbsp;&nbsp;Property and equipment, net | 15267133 | 12864766 |
| &nbsp;&nbsp;&nbsp;Operating lease right-of-use asset, net | 1212814 | 784306 |
| &nbsp;&nbsp;&nbsp;Intangible assets, net | 587777 | 535079 |
| &nbsp;&nbsp;&nbsp;Security deposits, long-term | 35691 | 19712 |
| &nbsp;&nbsp;&nbsp;Other assets, long-term | 376461 | 189734 |
| &nbsp;&nbsp;&nbsp;Deferred tax asset, net | 2238762 | 1674234 |
| &nbsp;&nbsp;&nbsp;**Total long-term assets** | 19718638 | 16067831 |
| Total assets | $53814491 | $49575392 |
| **LIABILITIES AND STOCKHOLDERS' EQUITY** |  |  |
| **Current liabilities:** |  |  |
| &nbsp;&nbsp;&nbsp;Accounts payable | $1251240 | $789394 |
| &nbsp;&nbsp;&nbsp;Accrued compensation and related costs | 1494890 | 1062078 |
| &nbsp;&nbsp;&nbsp;Accrued expenses and other current liabilities | 1917922 | 991744 |
| &nbsp;&nbsp;&nbsp;Note payable, current | 232537 | 236291 |
| &nbsp;&nbsp;&nbsp;Operating lease liability, short-term | 557683 | 347772 |
| &nbsp;&nbsp;&nbsp;Deferred revenue, short-term | 4302492 | 4135565 |
| &nbsp;&nbsp;&nbsp;**Total current liabilities** | 9756764 | 7562844 |
| **Long-term liabilities:** |  |  |
| &nbsp;&nbsp;&nbsp;Deferred revenue, long-term | 1605969 | 1992625 |
| &nbsp;&nbsp;&nbsp;Note payable, long-term | 8050116 | 8280395 |
| &nbsp;&nbsp;&nbsp;Operating lease liability, long-term | 720023 | 505383 |
| &nbsp;&nbsp;&nbsp;Other long term liabilities | - | 5436 |
| &nbsp;&nbsp;&nbsp;**Total long-term liabilities** | 10376108 | 10783839 |
| **Total liabilities** | 20132872 | 18346683 |
| Commitments and contingencies (See Note 9) |  |  |
| **Stockholders' equity:** |  |  |
| Preferred stock $0.0001 par value; 2,500,000 authorized; no shares issued or outstanding |  |  |
| Common stock $0.0001 par value; 50,000,000 shares authorized; 10,924,724 shares issued and outstanding as of December 31, 2022 and 10,898,259 shares issued and outstanding as of September 30, 2022 | 1089 | 1081 |
| Class A common stock $0.0001 par value; 2,500,000 shares authorized; no shares issued or outstanding |  |  |
| Class B common stock $0.0001 par value; 7,500,000 shares authorized; no shares issued or outstanding |  |  |
| Additional paid-in capital | 31420395 | 30923391 |
| Retained earnings (Accumulated deficit) | 2260135 | 304237 |
| **Total stockholders' equity** | 33681619 | 31228709 |
| **Total liabilities and stockholders' equity** | $53814491 | $49575392 |

---

**VIRTRA, INC.**

**STATEMENTS OF OPERATIONS**

---

| | | |
|:---|:---|:---|
|  | **For the year ended** | **For the year ended** |
|  | **December 31, 2022** | **December 31, 2021** |
| Revenues: |  |  |
| &nbsp;&nbsp;&nbsp;Net sales | $28302244 | $24434056 |
| &nbsp;&nbsp;&nbsp;Total revenue | 28302244 | 24434056 |
| &nbsp;&nbsp;&nbsp;Cost of sales | 12047366 | 13028844 |
| &nbsp;&nbsp;&nbsp;Gross profit | 16254878 | 11405212 |
| Operating expenses: |  |  |
| &nbsp;&nbsp;&nbsp;General and administrative | 11054333 | 8085295 |
| &nbsp;&nbsp;&nbsp;Research and development | 2606840 | 1865880 |
| &nbsp;&nbsp;&nbsp;Net operating expense | 13661173 | 9951175 |
| &nbsp;&nbsp;&nbsp;Income (loss) from operations | 2593705 | 1454037 |
| Other income (expense): |  |  |
| &nbsp;&nbsp;&nbsp;Other income | 194523 | 97100 |
| &nbsp;&nbsp;&nbsp;Gain on forgiveness of note payable |  | 1320714 |
| &nbsp;&nbsp;&nbsp;Other (expense) income | (260688) | (85712) |
| &nbsp;&nbsp;&nbsp;Net other income (expense) | (66165) | 1332102 |
| &nbsp;&nbsp;&nbsp;Income (Loss) before provision for income taxes | 2527540 | 2786139 |
| &nbsp;&nbsp;&nbsp;Provision (Benefit) for income taxes | 571642 | 246050 |
| Net income (loss) | $1955898 | $2540089 |
| Net income (loss) per common share: |  |  |
| &nbsp;&nbsp;&nbsp;Basic | $0.18 | $0.26 |
| &nbsp;&nbsp;&nbsp;Diluted | $0.18 | $0.25 |
| Weighted average shares outstanding: |  |  |
| &nbsp;&nbsp;&nbsp;Basic | 10863680 | 10007386 |
| &nbsp;&nbsp;&nbsp;Diluted | 10873606 | 10060748 |

---

**VIRTRA, INC.**

**STATEMENTS OF CASH FLOWS**

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| | | |
|:---|:---|:---|
|  | **Twelve Months Ended Dec 31,** | **Twelve Months Ended Dec 31,** |
|  | **2022** | **2021** |
| Cash flows from operating activities: |  |  |
| &nbsp;&nbsp;&nbsp;Net income | $1955898 | $2540089 |
| &nbsp;&nbsp;&nbsp;Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Depreciation and amortization | 887118 | 589059 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Right of use amortization | 412335 | 310221 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Deferred taxes | (564528) | 217766 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Gain on forgiveness of note payable |  | (1329280) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Employee stock compensation | 456167 | 223716 |
| &nbsp;&nbsp;&nbsp;Changes in operating assets and liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts receivable, net | 893852 | (2518469) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Inventory, net | (4577404) | (1498927) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Unbilled revenue | (3539544) | 1462152 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prepaid expenses and other current assets | 409836 | (558442) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other assets | (186727) | 310380 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Security deposits, long-term | (15979) | 66788 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts payable and other accrued expenses | 1811646 | 881662 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Operating lease liability | (416292) | (321727) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Deferred revenue | (219729) | (500731) |
| Net cash provided by (used in) operating activities | (2693351) | (125743) |
| Cash flows from investing activities: |  |  |
| &nbsp;&nbsp;&nbsp;Purchase of intangible assets | (120016) | (287106) |
| &nbsp;&nbsp;&nbsp;Purchase of property and equipment | (3221182) | (3448678) |
| Net cash provided by (used in) investing activities | (3341198) | (3735784) |
| Cash flows from financing activities: |  |  |
| &nbsp;&nbsp;&nbsp;Repurchase of stock options |  |  |
| &nbsp;&nbsp;&nbsp;Principal payments of debt | (231264) | (78212) |
| &nbsp;&nbsp;&nbsp;Stock issued for cash in offering, net |  | 16795000 |
| &nbsp;&nbsp;&nbsp;Stock options exercised | 40845 | 11320 |
| Net cash provided by (used in) financing activities | (190419) | 16728108 |
| Net increase (decrease) in cash and restricted cash | (6224968) | 12866581 |
| Cash and restricted cash, beginning of period | 19708565 | 6841984 |
| Cash and restricted cash, end of period | $13483597 | $19708565 |

---