Good afternoon and welcome to VirTra's Third Quarter 2024 Earnings Conference Call. My name is Matt, and I'll 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 the remarks, we will open the call for questions. Before we begin the call, I'd like to provide VirTra's Safe Harbor statement that includes cautions 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 markets 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 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 would like to turn the call over to VirTra's CEO, Mr. John Givens. Thank you. You may begin.

Thank you, Matt, 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 third quarter ending September 30, 2024, along with highlighted business accomplishments. I'll start by reviewing our third quarter performance, including a discussion about the progress in our bookings growth and our V-XR platform introduction. I'll also provide updates on strategic advancements in core-markets and early-stage growth markets, where we are seeing promising progress. Afterwards, I'll hand it over to Alanna for a detailed financial review, then I'll provide some closing remarks before moving to the Q&A. In the third quarter we made positive strides towards accelerating our sales momentum. Our revenues came in at $7.5 million, up 23% from Q2 of 2024 and in-line with the $7.6 million in Q3 of 2023. Importantly, Q3 bookings increased to $8.9 million, up 51% from the $5.9 million in Q2 of 2024, and up 22% from the $7.3 million in Q3 of 2023. The performance reflects the early impact of our sales enhancement initiatives in the second half of 2023 and marks a solid recovery from earlier in the year. This bookings revenue growth confirms the substantial run rate ahead indicates we are only beginning to unlock our full potential. The rebound in Q3 bookings is also an encouraging sign of continued performance gains in Q4 and into 2025. Despite the top-line pressures, we've maintained a robust gross margin profile, demonstrating the resilience and efficiencies of our operating model. In Q3, our gross margins improved to 73% from 71% in Q3 of 2023 demonstrating the effectiveness of our operational efficiencies and our focus on lowering the cost of sales as we scale. As we anticipate sales accelerations in the coming quarters, we are well-positioned for…

Thank you, John and good afternoon, everyone. Now let's review our unaudited financial results for the third quarter ended September 30, 2024. Total revenue was $7.5 million, slightly down from the $7.6 million in the prior year period. This modest decline is primarily due to lower bookings in the prior three quarters, largely stemming from funding delays and extended decision-making cycles among our government customers. Total revenue for the first nine months of 2024 was $21.7 million compared to $27.9 million in the prior year period. Gross profit for the quarter was $5.5 million, representing a 73% gross margin, an increase from the 71% in the prior year period. This improvement reflects operational efficiencies and a favorable mix of high-margin service and STEP contracts, which entail limited cost of sales. Gross profit was $16.5 million for the first nine months of 2024, representing a 76% gross margin compared to $18.3 million or 65% gross margin in the prior year period. These improvements were driven by lower cost of sales, which were in part due to a reclassification of labor-related to our development projects. This expense will be reflected in the income statement when we have corresponding matching revenue. Additionally, for the nine month period, STEP and services made up 30% of total revenue, which have a lower cost of goods associated. Net operating expense for the quarter was $4.7 million, marking a 28% increase year-over-year. This increase is tied to strategic investments in sales and marketing, as well as hiring to support our ongoing growth initiatives. Additionally, we made enhancements to our IT infrastructure to ensure compliance with current and future contract requirements. Net operating expense for the first nine months of 2024 was $13.2 million compared to $11.2 million. The increase is a result of those strategic investments in…

Thank you, Alanna. As we look ahead, it's clear that we still have work to do to be where we want to be. That said, our strategic initiatives and operational improvements are setting us up well for continued progress in 2025. We’re focused on driving meaningful improvements in our marketing and sales functions in the coming months, which we expect to help grow our pipeline. These efforts alongside an introduction of our V-XR platform and continued progress towards penetrating military channels, gives us confidence in our ability to execute our goals for the remainder of 2024 and into the early months of 2025. We recognize that while temporary funding dynamics may introduce some timing variability, our current backlog and sales pipeline along with our focus on innovation, it positions us to convert our opportunities as funding becomes available. We are especially well prepared to respond as both grant funding and federal contracts become more certain over the coming months to include, despite near-term fluctuations, we are dedicated and more equipped than ever to lead the virtual training industry with innovation, adaptable solutions that meet the complex needs of our customers. We appreciate your continued support and interest, and we look forward to updating you on our progress in the coming quarters. And with that, we'll open the call up for questions. Operator, please provide the appropriate instructions.

Great. Thank you. We’d now be conducting a question-and-answer session. [Operator Instructions] There's no further questions. I'd like to turn the floor back to management for any closing comments.

Thank you. VirTra's dedication to our customers and their life-saving mission remains as strong as ever. The passion, hard work and expertise of our team are the cornerstone of our success. And our ability to provide thought leadership to our customers will continue to keep us at top of the industry. I'd like to thank our shareholders for their continued support and confidence as we continue driving meaningful impact in communities around the world. Wishing everyone a safe, healthy and positive close to 2024, and we look forward to a successful year together in 2025. Operator?

This concludes today's teleconference. You may disconnect your lines at this time. Thank you again for your participation.