VirTra, Inc
For the period ended Dec 31, 2024. Filed Mar 27, 2025.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2024 · Filed Mar 27, 2025
VTSI$2.67-1.1%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2023-12-31; filed 2024-04-01.
0001493152-24-012364
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2024-12-31; filed 2025-03-27.
0001641172-25-000951
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 57 previous paragraphs and 58 current paragraphs.
40 unchanged; 10 reworded; 8 added; 7 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 11 previous and 12 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (8)
Current report
***Revenues.***Revenues were $26,350,819 for the year ended December 31, 2024, compared to $38,791,337 for the same period in 2023, representing a decrease of $12,440,518 or 32%. The decrease was primarily the result of a challenging booking year in a continuing resolution environment which started at the beginning of 2024. This delayed the signing of multiple contracts until Q3 and mainly Q4 2024, As a result, we were unable to convert these bookings to revenue by the end of the year. Also contributing to the decrease was a particularly large contract in 2023, for which revenues of approximately $7.1 million were recognized. This contract is ongoing, but only $2.8 million of this contract was recognized in 2024.
Current report
***Gross Profit.***Gross profit was $19,412,515 for the year ended December 31, 2024, compared to $27,413,073 for the same period in 2023, representing a decrease of $8,000,558 or 29%. The gross profit margin was 74% for the year ended December 31, 2024, and 71% for the same period in 2023. The gross profit decrease was mainly due to the decrease in revenue. The Company, however, was able to slightly increase its margins as it continues to optimize its processes.
Current report
***Other Income.***Other net income was $254,636 for the year ended December 31, 2024, compared to other income of $586,082 for the same period in 2023, representing a decrease of $331,446. This decrease is due to seven fewer months of rental income, partially offset by an increase in interest income.
Current report
***Net Income.***Net income was $1,363,681 for the year ended December 31, 2024, compared to $9,150,835 for the same period in 2023, representing a decrease of $7,787,154 or 85%. All the factors above played a role in the net result, with our main issue being the revenue year over year decrease. We continue to improve our margins, which offset some of the decrease in revenues.
Current report
Bookings and Backlog
Current report
The Company defines bookings as the total of newly signed contracts, awarded RFP’s and purchase orders received in a defined time period. The Company received bookings totaling $12.2 million for the three months ended December 31, 2024. This brings the total booking for the year ended 2024 to $29.6 million. The Company has made one change to the booking qualifications. We have strengthened the language in the STEP contract Terms and Conditions to guarantee the agreement for the full three-year term. This means beginning in Q4 we had 8 STEP contracts with the full contract 3-year value recorded as bookings amounting to an additional $1.9 million. This change also secures future revenue and lowers our risk of unsigned or cancelled contracts. Since the change was only made in Q4 we still estimate, there are $5.3 million in renewable STEP contract options still outstanding, based on current renewal rates the Company believes 95% of those options will be exercised.
Current report
With a new federal administration in place at the beginning of 2025, it is unknown what impact that will have on our bookings for 2025. Budget cuts have been discussed and we have seen some grants and other federal funding frozen for most of the first quarter, but nothing definitive has occurred as of the date of this report.
Current report
Allowance for Credit Losses
Removed paragraphs (7)
Previous report
***Revenues.***Revenues were $38,043,360 for the year ended December 31, 2023, compared to $28,302,244 for the same period in 2022, representing an increase of $9,741,116 or 34%. The increase was the result of increases in sales of simulators, STEP sales, accessories, custom content, custom design work, curriculum, and training, and recurring extended warranty revenue in 2023.
Previous report
***Gross Profit.***Gross profit was $26,665,096 for the year ended December 31, 2023, compared to $16,254,878 for the same period in 2022, representing an increase of $10,410,218 or 64%. The gross profit margin was 70% for the year ended December 31, 2023, and 57% for the same period in 2022. The gross profit increase was mainly due to the increase in simulator system sales and recurring STEP revenue that helped increase revenue while decreasing the cost of goods sold. Also contributing to this increase was an unusual event of signed contract for custom work that included a large $3 million kickoff milestone payment for which no significant costs are associated
Previous report
***Income from Operations.***Income from operations was $9,635,588 for the year ended December 31, 2023, compared to $2,593,705 for the same period in 2022, representing an increase of $7,041,883, or 271%, resulting from an increase in revenue, and a decrease in cost of goods despite an increase in operating expenses.
Previous report
***Other Income.***Other income was $586,082 for the year ended December 31, 2023, compared to other expense of $66,165 for the same period in 2022, representing a positive change of $652,247. This increase is due to subleasing one of the Kyrene buildings along with making cash moves to increase our interest earnings
Previous report
***Net Income.***Net income was $8,402,858 for the year ended December 31, 2023, compared to $1,955,898 for the same period in 2022, representing an increase of $6,446,960 or 330%. All the factors above played a role in the final numbers finished, including our attention to improving COGS dollars and increasing our revenue by having better production to turn bookings directly into sales and managing our larger contracts in a way to maximize profits
Previous report
Backlog
Previous report
Allowance for Doubtful Accounts
Reworded paragraphs (10)
Previous wording
***Cost of Sales.***Cost of sales were $11,378,264 for the year ended December 31, 2023, compared to $12,047,366 for the same period in 2022, representing a decrease of $669,102 or 6%. The year-over-year decrease was due to a significant increase in capitalized labor as multiple projects are set to complete in 2024 as well as our ability to decease our cost of items going into our production builds and an increase in STEP contract renewals that have minimal costs associated in future years.
Current wording
***Cost of Sales.***Cost of sales were $6,938,304 for the year ended December 31, 2024, compared to $11,378,264 for the same period in 2023, representing a decrease of $4,439,960 or 39%. The year-over-year decrease was due to lower revenues.
Previous wording
***Operating Expenses.***Net operating expense was $17,029,508 for the year ended December 31, 2023, compared to $13,661,173 for the same period in 2022, representing an increase of $3,368,335, or 25%, with general and administrative expenses increasing by $3,180,861 or 29% and research and development expenses increasing by $187,474 or 7%. The increase in general and administrative expenses was driven by an increase in labor costs, cost associated with the final move into the Chandler building, the costs associated with the relaunch of the ERP system, a full year of costs from the Orlando office and additional travel expenses for tradeshows and international sales.
Current wording
***Operating Expenses.***Net operating expense was $17,416,184 for the year ended December 31, 2024, compared to $17,029,508 for the same period in 2023, representing an increase of $386,676, or 2%, with general and administrative expenses increasing by $177,688 or 1% and research and development expenses increasing by $208,988 or 7%. The increase in general and administrative expenses was driven by an increase in travel costs, IT infrastructure to prep VirTra for NIST compliance, and increased labor costs. R&D costs increased as VirTra continues to improve its systems, processes and tools as to remain competitive in its space.
Previous wording
***Income Tax Expense.***Income tax expense was $1,818,812 for the year ended December 31, 2023, compared to an expense of $571,642 for the same period in 2022, representing an increase in expense of $1,247,170 or 218%.
Current wording
**Income Tax Expense. **Income tax expense was $887,286 for the year ended December 31, 2024, compared to an expense of $1,818,812 for the same period in 2023, representing a decrease in expense of $931,526 or 51%.
Previous wording
***Liquidity and Capital Resources.***Liquidity is the ability of an enterprise to generate adequate amounts of cash to meet its needs for cash requirements. The Company had $18,849,842 and $13,483,597 of cash and cash equivalents as of December 31, 2023, and 2022, respectively. Working capital was $33,240,516 and $24,339,089 as of December 31, 2023, and 2022, respectively.
Current wording
***Liquidity and Capital Resources.***Liquidity is the ability of an enterprise to generate adequate amounts of cash to meet its needs for cash requirements. The Company had $18,040,827 and $18,849,842 of cash and cash equivalents as of December 31, 2024 and 2023, respectively. Working capital was $34,826,680 and $33,988,492 as of December 31, 2024 and 2023, respectively.
Previous wording
Net cash provided by operating activities was $6,682,616 for the year ended December 31, 2023, as compared to $2,693,351 of cash used in operating activities for the year ended December 31, 2022. The net cash increase is driven by our changes in terms and condition where we are collecting more money upfront and at a quicker speed than in years past which is allowing us to decrease our unbilled and increase our while also increasing our deferred revenue
Current wording
Net cash provided by operating activities was $1,257,266 for the year ended December 31, 2024, as compared to $6,682,616 of cash provided by operating activities for the year ended December 31, 2023. The decrease in cash provided by operating activities was mostly due to the lower net income.
Previous wording
Net cash used in investing activities was $1,128,187 for the year ended December 31, 2023, and net cash used by investing activities was $3,341,198 for the year ended December 31, 2022. Investing activities in 2023 consisted of the increasing our plant, property and equipment by finishing the remodel of the Chandler office including opening a training center. In 2022, this amount was higher as the bulk of the remodeling work was completed during this period.
Current wording
Net cash used in investing activities was $1,845,572 for the year ended December 31, 2024, and net cash used by investing activities was $1,128,187 for the year ended December 31, 2023. Investing activities for both years consisted of increases to property, plant and equipment, through the addition of the machine shop in 2024 and remodeling the Chandler office and opening a training center in 2023.
Previous wording
Net cash used in financing activities was $188,184 for the year ended December 31, 2023, as compared to $190,419 used in financing activities for the year ended December 31, 2022. Financing activities in 2023 consisted mainly of debt repayment offset by proceeds from the exercise of stock options. Financing activities in 2022 consisted mainly of debt repayments.
Current wording
Net cash used in financing activities was $220,709 for the year ended December 31, 2024, as compared to $188,184 used in financing activities for the year ended December 31, 2023. Financing activities in both years consisted of principal payments of debt, offset by proceeds from the exercise of stock options.
Previous wording
The Company defines bookings as the total number of newly signed contracts and purchase orders received in a defined period. The Company received bookings totaling $13.5 million for the three months ended December 31, 2023. This brings the total booking for the year ended 2023 to $33.6 million. The Company defines backlog as the accumulation of bookings from signed contracts and purchase orders that are not started, or are uncompleted performance objectives, and cannot be recognized as revenue until delivered in a future quarter. The Company splits the backlog into three categories. The first is capital which includes sales of all the simulators, corresponding accessories, installs, training custom content and custom design work. The second and third are extended warranty agreements and STEP agreements that are deferred revenue recognized on a straight-line basis over the life of each respective agreement. As of December 31, 2023, the Company’s backlog was $10.5 million in Capital, $6.3 million in Service and $2.6 million in STEP for a total of $19.4 million. In addition to the signed STEP contracts, there are $6.9 million in renewable STEP contract options in which it has been calculated that we only have a 5% of option years that do not renew.
Current wording
The Company defines backlog as the accumulation of bookings from signed contracts and purchase orders that are not started, or are uncompleted performance objectives, and cannot be recognized as revenue until delivered in a future quarter. The Company splits the backlog into three categories. The first is capital which includes sales of all the simulators, corresponding accessories, installs, training custom content and custom design work. The second and third are extended warranty agreements and STEP agreements that are deferred revenue recognized on a straight-line basis over the life of each respective agreement. As of December 31, 2024, the Company’s backlog was $10.6 million in Capital, $6.6 million in Service and $4.8 million in STEP for a total of $22 million.
Previous wording
Our financial statements have been prepared in accordance with GAAP. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. On an ongoing basis, management evaluates its estimates and judgments. Management bases the estimates on historical experience and on various other factors that it believes are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. For any given individual estimate or assumption, we make, it is possible that other people applying reasonable judgment to the same facts and circumstances could develop different estimates. Significant accounting estimates in these financial statements include valuation assumptions for share-based payments, allowance for doubtful accounts, inventory reserves, accrual for warranty reserves, the carrying value of long-lived assets, income tax valuation allowances, the carrying value of cost basis investments, and the allocation of the transaction price to the performance obligations in our contracts with customers. Actual results could differ significantly from those estimates.
Current wording
Our financial statements have been prepared in accordance with GAAP. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. On an ongoing basis, management evaluates its estimates and judgments. Management bases the estimates on historical experience and on various other factors that it believes are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. For any given individual estimate or assumption, we make, it is possible that other people applying reasonable judgment to the same facts and circumstances could develop different estimates. Significant accounting estimates in these financial statements include valuation assumptions for share-based payments, Allowance for Credit Losses, inventory reserves, accrual for warranty reserves, the carrying value of long-lived assets, income tax valuation allowances, the carrying value of cost basis investments, and the allocation of the transaction price to the performance obligations in our contracts with customers. Actual results could differ significantly from those estimates.
Previous wording
The Company only ships products when it has reasonable assurance that it will receive payment from the customer. When such assurance is not available, the Company will require payment in advance. For customers other than United States governmental agencies, the Company generally requires advance deposits prior to shipment. The assessment of a customer’s creditworthiness is reliant on management’s judgment regarding such factors as previous payment history, credit rating, credit references and market reputation. The company has decide to take a more conservative approach to the bad debt reverse by calculating a percentage of all outstanding AR and updating the reverse quarterly base-on AR buckets
Current wording
The Company only ships products when it has reasonable assurance that it will receive payment from the customer. When such assurance is not available, the Company will require payment in advance. For customers other than United States governmental agencies, the Company generally requires advance deposits prior to shipment. The assessment of a customer’s creditworthiness is reliant on management’s judgment regarding such factors as previous payment history, credit rating, credit references and market reputation. The Company has decided to take a more conservative approach to the bad debt reserve by calculating a percentage of all outstanding AR and updating the reserve quarterly based-on the age of the accounts receivable.