VirTra, Inc Commitments Disclosure

Note 10. Commitments and Contingencies

 

Litigation

 

There is no pending litigation at this time. However, the Company settled two minor claims, one of which was disclosed and expensed in 2024 as a subsequent event, where the settlement and payment of $275,000 was made in 2025. The other claim was settled and paid in 2025 in the amount of $66,500. Both claims were related to our legacy lease agreement.

 

Employment Agreements

 

On May 2, 2022, VirTra, Inc. announced the appointment of John F. Givens II as its co-Chief Executive Officer, effective April 11, 2022. Mr. Givens has been serving as a director of VirTra since November 2020. VirTra agreed to pay Mr. Givens an initial annual base salary of $298,990, subject to annual review. VirTra issued Mr. Givens a signing bonus of 64,815 shares of common stock which were restricted from transfer until the earlier of: i) 12 months of employment having lapsed or ii) the Company terminating employment with Mr. Givens without cause. Mr. Givens was granted 288,889 Restricted Stock Units, to be awarded based on the achievement of certain performance goals over the next three years.

 

The Company entered into a three-year employment agreement with Mr. Givens effective September 6, 2024 that provides for an annual base salary of $360,499, subject to increases based on the cost of living at a minimum. The agreement automatically extends for additional periods of one year. The salary shall be reviewed annually with upward adjustments each year applying the same percentage increase approved for Company-wide cost-of-living adjustments. The employment agreement entitles Mr. Givens to an annual cash bonus if so determined by VirTra’s Board of Directors. In addition, the agreement entitles Mr. Givens to participate in any equity incentive plan adopted by the Company.

 

Restricted Stock Units

 

In December 2025, the Chief Financial Officer was awarded 5,000 shares (prior to deduction of 1,722 shares to pay tax withholding) for a total of 3,278 shares of common stock upon settlement of restricted stock units.

 

In August 2025, a single employee was granted 10,000 shares (prior to deduction of 3,376 shares to pay tax withholding) for a total issuance of 6,624 shares of common stock upon settlement of restricted stock units pursuant to his employment agreement.

 

 

In September 2025, the Chief Executive Officer was issued 25,000 shares (prior to the deduction of 20,105 shares to pay tax withholding) for a total issuance of 14,895 shares upon settlement of restricted stock units.

 

In October 2025, the non-employee members of the Board of Directors were issued a total of 17,500 shares as compensation for their service on the Board.

 

In April 2025, a single employee was granted 2,188 shares (prior to deduction of 809 shares to pay tax withholding) for a total issuance of 1,379 shares of common stock upon settlement of restricted stock units pursuant to his employment agreement.

 

Profit Sharing

 

VirTra provides a discretionary profit-sharing program that pays out a percentage of Company profits each year as a cash bonus to eligible employees. The cash payment is typically split into two equal payments and distributed pro-rata in April and October of the following year only to active employees. For the year ended December 31, 2025 it was determined that because there was no significant net income in 2025, there would be no profit share. The only item is a relief of the profit share accrual from the prior year for amounts not paid out. For December 31,2024, the amount expensed to operations was $216,255.