VirTra (VTSI) risk factors, FY2024 10-K

Risks Related to Our Business

1. 01We depend on government contracts for substantially all of our revenues and the loss of government contracts or a delay or decline in funding of existing or future government contracts could decrease our backlog or adversely affect our sales and cash flows and our ability to fund our growth
2. 02Government spending priorities and terms may change in a manner adverse to our businesses
3. 03Intense competition could negatively impact on our sales and operating results
4. 04If we are unable to anticipate customer preferences or to effectively identify, market and sell future products, our future revenues and operating results could be adversely affected
5. 05Decline in federal, state, or local government spending would likely negatively affect our product revenues and earnings
6. 06Our failure to comply with export control rules could have a material adverse effect on our business
7. 07Failure to comply with the United States Foreign Corrupt Practices Act could subject us to penalties and other adverse consequences
8. 08We may face competition from providers of comparable products. Increased competition in those product categories could negatively affect our future revenues and operating results
9. 09We operate in a highly competitive market and the size and resources of some of our competitors may allow them to compete more effectively than we can, resulting in a loss of our market share and a decrease in our revenues and gross profit
10. 10Disruptions could negatively impact revenue and results of operation
11. 11Some of the components of our products pose potential safety risks which could create potential liability exposure for us
12. 12Assertions by third parties of infringement or other violation by us of their intellectual property rights could result in significant costs and substantially harm our business and operating results
13. 13Our ability to compete effectively will depend on our ability to maintain the proprietary nature of our technology and content through a combination of patent, trademark, copyright and trade secret protection, non-disclosure agreements and licensing arrangements
14. 14We depend on our executive officers, the loss of whom could materially harm our business
15. 15If we are unable to implement and maintain effective internal control over financial reporting in the future, investors may lose confidence in the accuracy and completeness of our financial reports and the market price of our Common Stock may decline
16. 16We do incur significantly increased costs because of operating as a public company, and our management is required to devote substantial time to new compliance initiatives

Risks Relating to Our Stock

1. 17NASDAQ may delist our Common Stock from trading on its exchange, which could limit stockholders’ ability to trade our Common Stock
2. 18The market price of our Common Stock has been volatile in the past and the market price of our Common Stock could be volatile in the future. You may not be able to resell shares of our Common Stock following periods of volatility because of the market’s adverse reaction to volatility
3. 19Because our officers and Board of Directors will make all management decisions, you should only invest in our securities if you are comfortable entrusting our directors to make all decisions
4. 20Our issuance of additional Common Stock in exchange for services or to repay debt would dilute your proportionate ownership and voting rights and could have a negative impact on the market price of our Common Stock
5. 21Shares eligible for future sale may adversely affect the market
6. 22The provisions of our Articles of Incorporation and Bylaws may delay or prevent a takeover which may not be in the best interests of our stockholders
7. 23We have never paid dividends on our Common Stock and have no plans to do so in the future