VirTra, Inc. (VTSI) Earnings Call Transcript & Summary

Welcome to VirTra, Inc. 2026 Annual Meeting of Stockholders Call. [Operator Instructions] Please note, this conference is being recorded. I would now like to turn the conference over to your host, John Givens, Chairman and CEO of VirTra. John, please go ahead.

Good afternoon. Will the meeting please come to order? My name is John Givens, and I am the Chairman and CEO of VirTra. Welcome to the 2026 Annual Meeting of the Stockholders of VirTra. This meeting is being held in person and also being webcast live. The webcast will be posted on our website for a period of time after the meeting. The matters on which the stockholders at this meeting are voting on are to: one, elect 5 directors; two, ratify the appointment of Haynie & Company as the company's independent registered public accounting firm for the year ending December 31, 2026; three, approve on an advisory basis, the compensation of our named executive officers as they are defined in our 2026 proxy statement; number four, solicit a nonbinding advisory vote from the company's stockholders on the frequency in which the company's stockholders shall have an advisory say-on-pay vote on the compensation of the company's named executive officers; and five, transact any other business that may properly come before the meeting. I'd like to begin the meeting by introducing the current Board members of the company -- the members of the company's Board of Directors. They are besides myself, we have Gregg Johnson, Mike Ayers, Maria Gervais and Grant Barber. We also have present, Alanna Boudreau, our CFO; Fay Matsukage, who will serve as our outside corporate counsel, is attending remotely. Fay will serve as Secretary of the meeting and record the proceedings. She has delivered the affidavit of the Issuers Direct Corporation as to the mailing of the notice of the meeting, which states that on April 29, 2026, notice of Internet availability of proxy material was mailed to all stockholders of record as of the close of business on April 24, 2026, the record date for the meeting, the Affidavit is available if the stockholders wish to examine it, and it will be filed with the minutes of this meeting. I will now discuss the procedures for transacting the business of this meeting. When an item of business on the agenda is before the meeting for consideration, we ask stockholders to limit their participation to one question and one follow-up per person to ensure everyone has an opportunity to engage. Questions and comments should be specific to the business item currently under discussion. If you wish to ask such a question or make such a statement, please raise your hand and wait to be recognized. For those attending remotely, please type your question or comments into the Ask a Question tab on the left-hand side of your screen and then click send. If a stockholder has a question or comment not related to a business item on the agenda, an opportunity to raise other questions and comments will be provided after voting on the proposals described in the proxy statement. For any questions that cannot be answered during the meeting or for individual matters of concern, please feel free to contact our Investor Relations team at [email protected]. I hereby appoint a representative of Issuers Direct and Alanna Boudreau as inspectors of election for this meeting and any adjournment or postponement of this meeting. They have signed an oath to act as inspectors of election, and this oath will be filed with the minutes of this meeting. The inspectors have the stockholders' list of the company as of the close of business on April 24, 2026, the record date for the meeting, which shows the stockholders and their respective number of shares entitled to vote at this meeting. This list is available in any stockholder -- if any stockholder wishes to examine it and will be filed with the minutes of this meeting. Issuers direct, which has been tabulating proxies has advised us that a quorum is present at this meeting, so I declare the meeting duly and lawfully convened. The meeting is now open and ready for business. The first item of business is the election of the 5 directors of the company. The proxy statement made available to you earlier listed the company's nominees for directors. The Board's Nominating and Corporate Governance Committee headed by Gregg Johnson made its recommendations to the Board. The committee examined the need to have continuity at the Board level as well as subject matter expertise, Board composition, continuity planning and good governance. In light of all of this, the committee made the following recommendations, which were accepted and approved by the Board. The retention and inclusion of Gregg Johnson, Michael Ayers, Maria Gervais and Grant Barber in their current roles as independent directors so as to provide continuity of the business and retention and inclusion of John Givens in his role as an inside director so as to provide a bridge between the Board and management. In accordance with the bylaws of the company, stockholders are required to provide advanced notice of their intent to nominate candidates for directors and provide certain information as required by the SEC's proxy rules. We did not receive any nominations from stockholders. Therefore, I declare nominations for the directors closed. A motion to elect 5 directors as described in the proxy statement is now in order.

My name is Chris Gold. As a stakeholder, I hereby move each company's nominees be elected as directors to serve until the next Annual Meeting of Stockholders or until their respective successors are elected and qualified.

Does anyone second the motion?

My name is James Skoulikas, and I am a stockholder. I second the motion.

Are there any questions or comments on the motion? If there is no discussion, I'd like to move on to the second item on the agenda and then have the inspector of elections announce the votes that have been received on each matter after we have presented each agenda item. The next item of business is to ratify the appointment of Haynie & Company as the company's independent registered public accounting firm for the year ending December 31, 2026. The appointment of Haynie & Company is discussed in the proxy statement that was made available to you earlier. A motion to ratify the auditor appointment as described in the proxy statement is now in order.

This is Grant Barber. I'm a stockholder. I hereby move that the stockholders ratify the appointment of Haynie & Company as our independent registered public accounting firm for the current fiscal year.

Does anyone second the motion?

This is Mike Ayers. As a shareholder, I second the motion.

Are there any questions on the motion? If there is no discussion, I'd like to move on to the third item on the agenda. The next item of business is to approve on the advisory basis, the compensation of our named executive officers as this term is defined in our proxy statement. The say-on-pay proposal is discussed in the proxy statement that was made available to you earlier. A motion to approve the compensation of our named executive officers is now in order.

This is Gregg Johnson as a shareholder. I hereby move that the compensation of our named executive officers be approved.

Does anyone second the motion?

This is Maria Gervais, and as a shareholder, I second the motion.

Are there any questions on the motion? If there is no discussion, I'd like to move on to the fourth item on the agenda. The next item of business is to indicate on an advisory basis, the preferred frequency of stockholder advisory votes on the compensation of our named executive officers. This proposal and the Board's recommendation to have an advisory vote every 3 years is discussed in the proxy statement that was made available to you earlier. A motion to vote on the preferred frequency of the stockholders' advisory vote on the executive compensation is now in order.

This is James Skoulikas. I hereby move that the stockholders vote on the preferred frequency of stockholder advisory votes on executive compensation, indicating their presence for 1, 2 or 3 years -- the preference for 1, 2 or 3 years.

Does anyone second the motion?

This is Chris Gold. I second the motion.

Are there any questions or comments on the motion? Are there any other matters to be properly considered at this meeting? Since there are no further motions to be properly considered at this meeting, I will now call for a vote of these items. The Inspector of Elections will report on these results of the voting later in the meeting after tabulation has been completed. We will now wait for the tabulation to occur. And while we wait, I'd like to open the meeting to questions that stockholders may have. If you have any questions related to the company, but not to the matters already voted on that at the meeting. You may raise your hand while the vote is being tabulated. Only matters that may concern all stockholders should be raised at this time. Any matters of individual concern to the stockholders should be raised directly with our Investor Relations professionals. Please note that in some cases, I will not be able to answer due to SEC disclosure restrictions. In light of this, I will try to answer as many questions as I can.

One question from the webcast. With recent shifts in federal priorities and budgets, how has VirTra been positioning themselves to remain aligned with the upcoming opportunities?

There's 2 ways that we've aligned ourselves. One, federal monies and budgets that are out there pertain to the military and federal agencies and then also law enforcement, which are also coming from federal funds through grants. There's been announcement of those grants, and we positioned ourselves and aligned our folks to be able to understand what each of those requirements are for all of those types of grants and make sure that our customer base that has been interested in purchasing systems from VirTra are aware of the requirements needed by them to be able to obtain those funds. The second part in alignment is monitoring what contracts and what request for proposals are out there in the market space and making sure our product line and the requirements that are out there match and the teams have been aligned, keeping a close eye on those appropriations. And then the final thing is spending a lot of time in Washington, D.C. to help guide those requirements for individuals that will be purchasing.

Question from the room.

How are you feeling about upcoming military opportunities as compared to law enforcement opportunities for the company?

I'll take feelings out of it, and I'll put it just to the straight facts. Up until most recently, all funding has been held, and it's been a very difficult year for anybody in law enforcement because they relied on federal funds through the grant program that I just mentioned. And military funding all went towards war and those types of things. So modeling and simulation and training, while it should be a top priority, doesn't always get the attention that it should, but it is now as they're sorting through those funding opportunities. A lot of this funding hasn't been issued since 2024 or the 2025 fiscal year. So that's part of the first question I answered is we're monitoring to make sure that we're aware when they're coming out, what the requirements are and to respond appropriately and on time. I understand that the votes have been counted and the preliminary report of the inspectors of election has been delivered to the company. Alanna, will you please announce the results of the stockholder vote?

The preliminary report of the Inspector of Election indicates the following votes in favor of John Givens, 3,932,220 votes; Gregg Johnson, 3,010,520 votes; Michael Ayers, 3,254,580 votes; Lieutenant General Maria Gervais, 3,616,630 votes; and Grant Barber at 3,942,0446 votes. As the company had 5 directors to be elected by plurality vote, all of the nominees have been elected. Ratification of the appointment of Haynie & Company as the company's independent registered public accounting firm for the year ending December 31, 2026, has been approved by the stockholders by the affirmative vote of a majority of the votes present in person via webcast or by proxy at the meeting. The compensation of our named executive officers has been approved by the stockholders by the affirmative vote of a majority of the votes present in person or by proxy at the meeting and a majority of the votes present in person or by proxy at the meeting has indicated a preference of 1 year as the preferred frequency for obtaining an advisory vote on the executive compensation.

I hereby request that the final report of the Inspector of Elections be filed with the minutes of this meeting. You have now heard the results of the voting, and this completes the business to be conducted at this meeting. Since there is no other matters to come before the meeting, a motion to adjourn this meeting is now in order.

This is Grant Barber. I move that the meeting be adjourned.

Do I have a second on the motion?

This is Gregg Johnson. I second the motion.

All in favor of a motion to adjourn, please signify by saying Aye.

Aye.

Aye.

Aye.

Those opposed, please signify by saying no. The motion has been carried. I'd like to take the opportunity to thank you for your attendance today. Also, please know that your interest in VirTra is very appreciated and that the incredible support of our stakeholders has been critical to our success. Thank you, and God bless. I hereby declare this meeting adjourned.

This concludes today's conference, and you may now disconnect at this time. Thank you for your participation.