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Watching the Watchmen


November 6, 2014 - Tempe, AZ

VirTra Systems (PINKSHEETS: VTSI), a leading provider of use of force training and shooting simulators to military, law enforcement agencies and other organizations, today releases a recent article published in the Phoenix Business Journal.

When Gilbert police officers take to the streets, someone always is watching.

Since late 2012, the Gilbert Police Department has been testing Taser International Inc.'s Axon on-body cameras in a pilot project that ends in December. In addition to determining whether the devices can handle the rigors of police duty, the program's goals are to protect employees, improve investigations and provide public transparency.

In a blog, Gilbert Police Chief Tim Dorn said the town chose to use the cameras to combat negative media images of police in movies and on television.

"These images are created by entertainers for the sake of entertainment," he said. "Cameras will hold us accountable to not become these images. If we do wrong, we will be held accountable. Conversely, we will stand behind our officers when their actions are correct, even if correct is not popular."

If the 32-camera program is successful, the department expects to buy at least 100 additional cameras to outfit all patrol officers in January.

Gilbert isn't alone in using high-tech programs. At least three local companies are benefiting from the increased awareness and transparency sought by Police Departments. It's a change resulting in millions of dollars in revenue for these businesses.

Part of that high-tech pursuit was triggered by the August shooting death of Michael Brown, an unarmed 18-year-old, by a police officer in Ferguson, Missouri. The investigation, which is relying on witness reports that vary widely, brought the concept of officers carrying video recording devices more into focus following several days of civil unrest.

On top of that, there has been a 44 percent increase in officers killed by gunfire this year, according to the Officer Down Memorial Page, a non-profit that tracks officer deaths. That number is skewed, however, because 2013 marked a historic low in the number of officers killed with guns, according to Dale Stockton, editor-in-chief of Law Officer Magazine. And a Federal Bureau of Investigation study stretching from 2005 to 2012 found local Police Departments were responsible for 400 killings per year nationwide.

Taser pushes to the forefront
No Valley company has benefited from this new transparency push more than Taser International Inc. Thirty-one Arizona Police Departments use the Scottsdale company's on-body cameras and Evidence.com platform to record video footage.

Taser's financials back up its products' widespread adoption. Its on-body cameras and Evidence.com sales bookings jumped from between $1 million and $2 million in early 2013 to $11.4 million in the last quarter of 2014.

But it's more than transparency police may be after. The increase in sales came in part as a result of a study done on the use of 115 cameras by the Rialto Police Department in California by Cambridge University. The department recorded reductions in complaints, litigation costs and fees during the first 90 days -- enough to pay for the entire first year of the Rialto program, said Steve Tuttle, a Taser spokesman.

"There was an 88 percent drop in complaints that translated to $20,000 per complaint," Tuttle said. "This was a savings of $400,000, which paid for the whole program. If you can stop complaints, you've got a return on investment for wearing the cameras.

"The shocker was truly the 59 percent drop in use of force," he added. "That got the attention of every chief and risk manager nationwide."

Surprise Police Department Assistant Chief Terry Young said the city hasn't seen such a reduction in complaints, but the cameras do provide officials with a way to see how their officers are acting in the field.

"The video evidence has undoubtedly saved numerous hours of additional investigation and, in some cases, perhaps the potential of future litigation," Young said. "In addition, when the video evidence from the camera indicates the officer's performance or conduct was not consistent with our policies and training, the value of that evidence is found in our ability to take necessary action to reduce or eliminate future occurrences. That action may consist of additional training, policy revisions or corrective action as appropriate."

Post-Ferguson order figures were not available before deadline. Taser was set to release its third-quarter earnings Oct. 30.

However, Tuttle said the company received a tenfold increase in page views to the Axon cameras website following the Ferguson shooting. He also said he has conducted more than 80 interviews about Axon cameras with various media since the Ferguson incident.

"What happened in Ferguson has consumers asking why police don't have cameras and videotape as well, since we all carry smartphones with video capabilities," he said. "Now you have this push-pull effect. Uncertainty is the one thing that can change with a camera. Although it doesn't change the outcome, it could have provided some certainty. That's the invaluable aspect of a mutual observer."

Going international
VirTra Systems Inc., a provider of use-of-force training and shooting simulators for military, law enforcement agencies and other organizations, also has benefited from the trend of Police Departments going high-tech.

The Tempe company announced this month a record quarter of sales and purchase orders for both domestic and international customers. VirTra's sales and orders in third-quarter 2014 were $10.68 million, the highest of any quarter of the company's history.

While the company has been busier than normal, VirTra officials can't attribute that to the Ferguson incident, said CEO Bob Ferris.

"We attribute this to the industry embracing a higher standard of training," he said. "Police Departments are focusing on the best use-of-force training."

Iveda Solutions Inc., a pioneer in cloud-based video surveillance solutions, is making big deals around the world to update security systems and provide police officers with wearable surveillance equipment.

Instead of selling directly to police agencies, Iveda works with camera manufacturers to integrate its mobile video streaming software. This makes videos cloud-based for instant remote access to live and recorded video from the field, said Chief Marketing Officer Luz Berg.

Mesa-based Iveda has received more inquiries in the past year from camera manufacturers to embed its software in their products, Berg said.

The company has two new contracts totaling nearly $2 million in Taiwan. In August, Iveda signed a deal with the Philippine Long Distance Telephone Co., and this month it announced a collaboration with a manufacturer from Southeast Asia that distributes body-worn cameras globally.

"With our technology and business model, agencies will have more choices for such features and functionality as more manufacturers are cloud-enabled," Berg said. "This is a good thing for the law enforcement industry."

Iveda already works with law enforcement agencies including the Florence Police Department. But, because of nondisclosure agreements, company executives can't talk about the majority of the agencies that use its Vemo in-vehicle video surveillance system, which launched publically last year, or its body cameras.

However, Iveda CEO David Ly said the Mexican federal government is one of its biggest customers of its in-vehicle product. This platform allows law enforcement headquarters and officers in the field 24/7 on-demand situational awareness through viewing of live and recorded video in the cloud.

STORIES BY HALEY RINGLE
hringle@bizjournals.com
602-308-6514, @PhxBizHayley

About VirTra Systems

VirTra is a global leading provider of the world's most realistic and effective use of force and firearm shooting simulators. VirTra is the higher standard in firearms training simulators, offering a variety of simulator platforms, powerful gas-powered recoil kits and the patented Threat-Fire™ simulated hostile return fire system. VirTra's products provide the very best simulation training available for personnel that are entrusted with lethal force and critical missions. The Company's common stock is not registered under the Securities Exchange Act of 1934 and the Company does not currently file periodic or other reports with the Securities and Exchange Commission.

www.VirTra.com

Forward-looking Statements

This news release includes certain information that may constitute forward-looking statements made pursuant to the safe harbor provision of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are typically identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates," "proposed," "planned," "potential" and similar expressions, or are those, which, by their nature, refer to future events. All statements, other than statements of historical fact, included herein, including statements about VirTra's beliefs and expectations, are forward-looking statements. Forward-looking information is necessarily based upon a number of assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties and other factors which may cause the actual results and future events to differ materially from those expressed or implied by such forward-looking information. Although VirTra believes that such statements are reasonable, it can give no assurance that such forward-looking information will prove to be accurate. VirTra cautions investors that any forward-looking statements by the Company are not guarantees of future results or performance, and that actual results may differ materially from those in forward-looking statements as a result of various factors. Accordingly, due to the risks, uncertainties and assumptions inherent in forward-looking information, readers and prospective investors in the Company's securities should not place undue reliance on forward-looking information. All forward-looking information contained in this press release is given as of the date hereof, is based upon the opinions and estimates of management and information available to management as at the date hereof and is subject to change. The Company assumes no obligation to revise or update forward-looking information to reflect new circumstances, whether as a result of new information, future events or otherwise, except as required by law.

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Investor Relations Counsel
Rudy R. Miller
Chairman, President & CEO
The Miller Group
www.themillergroup.net
tel: 602.225.0505
email: virtra@themillergroup.net

MarketWire

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