Good afternoon, welcome to VirTra's First Quarter 2026 Earnings Conference Call. My name is Ryan, and I will be your operator for today's call. Joining us for today's presentation are the company's CEO, John Givens, and CFO, Alanna Boudreau. Following their remarks, we will open the call for questions. Before we begin the call, I would like to provide VirTra's safe harbor statement that includes cautionary 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 market 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'd like to remind everyone that this call will be made available for replay via a link in the investor relations section on the company's website at www.virtra.com. Now, I'd like to turn the call over to VirTra's CEO, Mr. John Givens. Thank you. You may proceed, sir. Thank you, Ryan, and thank you everyone for joining us this afternoon. After the market closed today, we issued a press release that provided our financial results for the first quarter end March 31st, 2026, along with an update of our business and operating environment. Since first quarter- end, we have continued to see important movement across the business. Funding programs are moving back into the system. Customers are working through grants and procurement steps. Our team is actively engaged with agencies as they move from interest and planning towards purchasing decisions. Q1 was still impacted by timing, particularly around government funding, customer procurement timelines, and the ability of certain customers to accept delivery. The most important point for today is how the environment is progressing as we move through the rest of 2026. I wanna focus today's discussion on where we are seeing progression, what has moved forward since quarter- end, and how we are positioning VirTra as funding and procurement activities continue to pick up in the system. Across our core markets, customers' activity has continued to move forward. Agencies are re-engaging as funding programs reopen. Customers are working through grant applications and procurement steps, and our team is staying closely involved to help move those opportunities forward. Our sales team is supporting customers as they identify the appropriate grant programs, prepare required materials, update quotes, and submit applications by the application deadlines. Once applications are submitted, the agencies must still move through the review and award process and then through local procurement before a purchase order can be issued. As we discussed on our last call, this remains a multi-step process. Customers must apply for funding, applications must be reviewed, awards must be determined, purchase orders must be issued, and the systems must be delivered and accepted before our revenue can be recognized. That timing is still not fully in our control, and we expect conversions to play out over the coming quarters. The movement we are seeing today supports our expectations for improved sales momentum as we track through the second half of 2026. The key change is that we are no longer talking about a frozen environment. Customers are actively working through funding and procurement processes, giving us a more constructive backdrop and clearer line of sight into the opportunities we're pursuing. The need for VirTra's solution remains evident across law enforcement, corrections, federal, international, and military markets. Our customers are looking for training systems that help them prepare for real-world situations in a safe, repeatable, and measurable way. That includes judgmental use-of-force, de-escalation, marksmanship, scenario-based decision-making, and the newer threat areas such as drone defense. While we expect near-term conversion timing to vary from customer to customer, we have systematically remained close to those customers over the last several quarters. We are now focused on helping them move through each step of the funding and purchasing process. Some agencies are waiting on recently opened grant awards. Some are working through the procurement stage. Some customers have funding but need to complete facility or internal readiness steps before they can accept the deliveries. With some of our international customers, we're seeing similar dynamics where contracts or customer commitments may be in place, but the delivery timing depends on the customer's side funding or operational readiness. Providing best-in-class training remains at the top priority, we are laser-focused on converting increasing activities into orders, deliveries, and revenue as those processes advance. We are also controlling the controllables. We are seeing tangible progress from a more targeted commercial strategy in recent months. Over the past three months, qualified leads have approximately doubled. That improvement is being driven by better lead capture, improved customer segmentation, more needs-based marketing campaigns, and a more disciplined process for moving prospects from initial interest into the sales pipeline. Through our updated website and lead capture process, we are getting better visibility into who is engaging with VirTra, what solutions they are viewing, and where they may be in the buying process. We are also organizing prospects more effectively by customer type, training need, funding status, product interest, and stage in the sales process, which allows our team to prioritize higher quality opportunities and tailor follow-up more efficiently. Customers are increasingly looking for solutions tied to specific operational needs, including the judgmental use of force, de-escalation, and marksmanship readiness, among others. A corrections agency evaluating drone-related perimeter threat has a different training requirement than a police department focused on de-escalation or military customers evaluating portable marksmanship training. Our sales and marketing process is becoming more aligned with those distinct use cases. We are seeing this translate into more qualified activities across a business, including inbound interest, direct marketing responses, event-driven conversations, and customer follow-up activities. While lead activity does not convert into bookings immediately, we believe this more disciplined commercial approach process should support improved pipeline progression as customers move through the funding steps in the coming quarters. From a product standpoint, we continue to focus on expanding the ways customers can apply VirTra's technology. A key part of that, which we discussed, is our APEX data analytics platform. APEX is becoming an increasingly important part of how customers capture and analyze performance data. Early customer feedback indicates that these analytics can enhance training outcomes around accuracy, reaction times, and decision-making. We also spoke about our next-generation drone defense training system on the last call. During the quarter, we demonstrated at the American Correctional Association Winter Conference and received positive feedback. Unauthorized drones are creating new challenges for correction facilities, including contraband delivery and perimeter security. Our simulation-based training gives agencies a way to prepare officers for those threats safely, repeatedly, and without the cost and complexities of live-fire ranges. We have generated several ongoing conversations from these demonstrations, and I look forward to sharing our commercial progress in this emerging area over time. Across our product development initiatives, the through line is VirTra helping customers train in ways that are realistic, measurable, and tightly aligned with the situations their personnel are facing in the field. We continue to see encouraging activity across the military and federal markets. Military opportunities are long cycles by nature, and we are not treating them as a near-term revenue certainty. The level of engagement here has continued to advance as expected. We have had demonstrations and evaluations across multiple branches, including Army and Marine Corps groups. Customer interest has continued to build as our systems have become more robust, data-driven, and aligned with evolving training requirements. Across several prospects, we have moved from early discussions and market research towards requirements development and potential RFP pathways. The precise revenue timing for these opportunities is not clear yet. As we reach critical milestones such as RFP issuance, additional evaluations, selection decisions, awards, and follow-on procurement activities, we will update the market as appropriate. We are active here. Our technology is being seriously evaluated. Our product capabilities are increasingly relevant to the market. To summarize, the first quarter continued to reflect revenue timing variability. The business has continued to progress. As we move through 2026, our focus remains on converting increased customer activity, grant progression, procurement movement, and pipeline opportunities into delivered systems and revenue. With that, I'll turn it over to Alanna for the detailed financial review. Alanna? Thank you, John, good afternoon, everyone. Now let's re-review our unaudited financial results for the first quarter and March 31st, 2026. Total revenue for the first quarter was $3.5 million, compared to $7.2 million in the prior year period. This decrease was due to a delay in the conversion of backlog to revenue as several customers could not accept delivery of the orders received in Q3 and Q4. Breaking the revenue down by market, government revenue was $2.7 million, compared to $5.2 million in Q1 of 2025. International revenue was $0.7 million, compared to $1.9 million in Q1 of 2025. Commercial revenue was approximately $84,000, consistent year-over-year. During the quarter, the Subscription Training Equipment Partnership, or STEP, revenue was approximately $1 million, compared to approximately $0.9 million in the prior year period. STEP represented 28% of the total revenue in Q1 2026, compared to 13% of the total revenue in Q1 2025, primarily due to the lower level of capital system sales. STEP provides recurring revenue visibility and remains an attractive access model for agencies. Revenue from these agreements is recognized over the length of the contract. As a result, STEP represents a larger share of revenue in a lower capital sales quarter. Our gross profit for the first quarter was $2.1 million or 61% of total revenue, compared to $5.2 million or 73% in the prior year period. The decline was primarily due to the lower revenue volumes, along with the company continuing to work on integrations and new content to help drive future revenue. Our net operating expense for the first quarter was $3.5 million, compared to $3.8 million in the prior year period, as we continue to manage expenses carefully while investing in key areas of the business. Our operating loss for the first quarter was $1.3 million, compared to operating income of $1.4 million in the prior year period. Our net loss for the first quarter was $1.3 million, or $0.12 per diluted share, compared to the net income of $1.3 million or $0.11 per diluted share in the prior year period. Our adjusted EBITDA for the first quarter was - $0.8 million compared to $1.7 million in the prior year period. As we turn to the balance sheet, we ended the quarter with $17.9 million in cash and cash equivalents compared to $18.6 million at December 31st, 2025. This provides flexibility to navigate the current timing dynamics in the business while continuing to invest in areas that will support our future growth. VirTra defines bookings as the total of newly signed contracts, awarded RFPs, and purchase orders received in a given period. Our bookings for the first quarter totaled $3.8 million. VirTra defines backlog as the accumulation of bookings from signed contracts and purchase orders that are not yet started or an incomplete performance obligation and therefore cannot be recognized as revenue until delivered in a future period. We segment this backlog into three primary categories. Capital, which includes our simulators, accessories, installation, training, custom content, and design work. Service, which is primarily our extended warranties and support contracts. STEP, which is that long-term subscription-based program. Our backlog at March 31st, 2026 stood at $25.2 million. That includes $13.2 million in capital, $4.4 million in service, and $7.6 million in STEP contracts. That concludes my prepared remarks. I'll turn the call back over to John for his closing comments. John? Thank you, Alanna. It is clear that our disciplined cost management has been important during a volatile period for new business conversion. It is also clear to me that VirTra's underlying business activity is moving in the right direction. Customers are re-engaging, funding and procurement processes are advancing, and our commercial execution is improving. We believe this activity positions us for improved financial performance as funding and procurement activities continue to convert over the course of 2026. That concludes my prepared remarks. Operator, please open the call for questions. We take the first question from the line of Jaeson Schmidt from Lake Street Capital Markets. Please go ahead. Hey, guys. Thanks for taking my questions. John, you highlighted that qualified leads have approximately doubled over the past three months here. Can you just give us a sense on the conversion timeline from a qualified lead to a quote or to a PO historically, and whether you're seeing any compression in that cycle as funding reopens? Great question, Jaeson. Thanks for asking. The leads have doubled because we've gone to more events this year, and we're talking to customers and qualifying them at the shows before they're entered into the system. It's based on activity. The conversion cycle on those range anywhere from 6-12 months. It just depends on what agency it is and if they have money or they have to put in for a budget. Law enforcement is pretty much the same, unless they've already been awarded a grant or they have funding available without having to go to the budget cycle. Usually it's six to 12 months is what we're seeing. We will see a bit of a compression on that this year because they're so far behind. I mentioned before on the last call that, they're so far behind that the funding for fiscal year 2025 that came about was approved in October of 2024, still hasn't been put out there and hasn't been released. We're seeing those funds start to come, and then 2026 is right behind that, and 2027 is in October of this year. You've got the big beautiful bill. All of those across all of our market segments, be it law enforcement that are looking for grants to supplement their training and purchase of training equipment to Department of War to three-letter agencies that rely on government funding. We do see that happening, but the doubling has been more of the marketing campaign and how we are collecting them now and the results of the new website that we had put together and how we qualify. Okay, that's helpful. Just as a follow-up, going back to your comments on the APEX data analytics and specifically that international win, any additional color can you provide on sort of the size of that and if there's an opportunity for additional expansion? That was published. It was the INL Colombia deal that the government wants to be able to monitor all the systems that they're placing out in these foreign countries under the International Narcotics Law Enforcement Agency that's under the State Department. So they wanna be able to report back to them, not just are they being used, but how they're being used and how effective the training is for fighting crime in those different countries rather than reaching our shore. They wanted something to be able to collect that type of data. What simulation and simulators typically do is they'll collect the data for the near -term and what you're doing. So I've shot this target, here's your number of shots, or I ran through this scenario, here's what you did, and then that's it. It doesn't collect and send it anywhere so that it can be housed and then analyzed, and then do trending analysis on it. The government and other agencies and law enforcement want to use that to justify ROI for the simulators and the training curriculum that they're providing new mid-career and end of career soldiers and law enforcement. Okay. Thanks a lot, guys. Thanks, Jaeson. Thank you. We take the next question from the line of Richard Baldry from Roth Capital Partners. Please go ahead. Thanks. The bookings were slightly above the revenues on the quarter, but the backlog went down a little bit. I was just wondering if you could walk me through sort of the pieces there, whether it's cancellations or other factors that drove that. Alanna, you wanna take that? Yeah. There, the bookings, the way the calculation is done is the bookings come in, and then we take out the revenue. Some things do convert in the same quarter to revenue, so it's sort of it's not everything that came in. Some things converted immediately. Does that help? Okay. Yep. Does that, Rich? Yeah. On the balance sheet note, the inventory levels went up a little more than, well, let's call it about 10% sequentially. Sort of curious about the drivers there. Is it something you're seeing in the pipeline that you wanna be ready for? Is it some scarcity issues you wanna make sure you've got, you know, redundant inventories capable for? Just curious about that driver. So we are- Oh, sorry. Go ahead. Go ahead, John. Yeah. I'd say there's a little bit of both. Go ahead, Alanna. I'll stand by. Yeah, there's a little bit of both, Rich. There are, in some cases, where we were aware of computer prices about to skyrocket. Knowing what we had in the backlog that we needed those computers for, we purchased them a little ahead of schedule to make sure we got a lower price instead of paying the other ones. There's also some of that is our work in progress as we are working on some more integration pieces where dollars have gone into that development work as well for that and for the Colombia contract that we spoke about. There's development work that's in there that's driving the work in progress numbers up in the inventory. The other part of that, Rich, is that, when we had, quite a few when we were converting some of the backlog in the past, we had certain parts and certain components that we had everything was on hold, waiting on, back-ordered items, so, and things we needed to manufacture. We brought all the inventory up to their max levels so that we won't have any problem converting them instantly and trying to wait on manufacturing to build those parts. It's anticipation as well. Okay. With sort of an improving backdrop and knowing it's, you know, multi-step, you know, process to kind of gear back up, do you feel like Q1 should probably be, you know, a good base level for revenues here forward? It was up from Q4 sequentially. Do you think that pattern can start to sort of grind higher? How do you think of sort of the cadence of recovery here? I think if I give you a little bit of history from 2025, you know, everything lags. I mean, the budget climate posed challenges for our industry. I mean, in 2025, we faced unprecedented appropriation processes. I mean, for the first time, both the Defens e Department and law enforcement under the federal grants operated under a continuing resolution for the entire fiscal year and experienced that historic 43-day lapse in appropriation or shutdown. That was the longest in government history. You know, additionally, the government continues to operate under those continuing resolutions through January, through the first month of the quarter, and some of the federal law enforcement agencies are still without approved funds, some of our existing customers, a funding line. While the outlook for 2026 is kinda complex, you know, there are signs of improvement as evident by the recent releases of funding for several grants and some of the appropriation bills that are making its way through legislation. We do see all of those opening up, but even if they do open up, quarter one was the indication that even as they open up, there's still all those items that I talked about. You have to apply, you have to get it, they have to assign the funds if it's a contract, and then they have to go through the RFP process, and then they have to award. Typically what would happen is, you know, for a quarter or two till they get the money there, and then you convert it in the, in the following quarters, if all of that lines up. Got it. Last for me would be, when we look at this, the operating expense levels, looks like it's run rating about down 10% year-over-year. Sort of, I assume, you know, reacting to the backdrop. Do you think we sort of sit at this level until the top line starts to open up? Are there other investments you wanna make on the way? How do we think about, you know, your discretionary spending short term? I think our discretionary spending short term remains a watch and see, just because of the complexities of the market space. As we start to see those, we'll adjust appropriately. Got it. Thanks. Yep. Thanks, Rich. Thank you. Ladies and gentlemen, at this time, this concludes our question and answer session. Thank you for joining us for today's VirTra's First Quarter 2026 Conference Call. You may now disconnect your lines.