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Greg
What was the answer to this question asked in post 5169?
Need an updated Business Plan based on the changes and delays. Verify revenue estimates for the next 3 years and expected profit. Proforma balance sheets and income statements
Thank you
KP/Greg
5,000,000 shares is alot of selling pressure to chew through. I posted a few months ago from the SEC filing where Ferris's parents had loaned their son's company a ton of $ which VTSI aquired by they purchased the company.
I will try to find it when I have time so people who want a fair and balanced approach and review "the facts" or as they say "the rest of the story".
Greg 100% sure is saying alot - especially for a BB company trying to make it in a very competitive environment.
Question to start a real discussion is what exchange is the company looking to move to from the BB? NASDAQ or AMEX? Timeframe? It would be worthwhile to review and post the requirements of each exchange and see which ones Vitra qualifies for?
Trout
This board needs more of the FOX news network approach - "fair and balanced" vs just Pom Pom. The company of course would paint an opportunistic view and their "dog and pony" show would be impressive and up beat last Friday.
Sounded good - but time will tell. Looking forward to the results and SEC filings which are the true picture of a campany.
Good luck and take care
Greg
Share update please - last one posted is as of 11/4 - info to 12/31 I am sure is available.
Thank you
Govt Quiet Period?
So much for the quiet period on US Federal Govt spending!
Enjoy your meeting - looking forward to the next SEC filing and results - mid Feb?
Take care
To All
Be real - There is no quiet period for the Federal Govt especially for the #1 priority for the Bush Administration and the country - Homeland Securiy. The company I work for does business with the DOD, DIA - Defense Intelligence Agency, Centcom and many others. Business is Verry Good and ongoing.
If VTSI had the better mousetrap than others in the industry the PO's would be coming. The US Federal Govt is only the biggest buyer the world - budget in the Trillions of $'s.
Take this the right way but a handful of locals would not get an audience with "all of our senior staff will be present, either in person or telephonically, to answer inquiries from the attendees" from a company on a roll.
We look forward to the responses to the shareholder questions. The other point well taken is there is never any value provided to the PR's. Like for example - Vitra Systems has signed a $5M contract over the the next 3yrs with Red Baron" - like most other companies do.
Take care
Greg
You said: "I wouldn't call it an official conference call. IMO an official conference call would be issued in a PR. This is simply a group of investors that are visiting the company and will post the information they receive on this message board. IMO Kelly would issue a PR like the one below if he wanted to make a meeting such as this official. He also wouldn't be able to say as much at the meeting Friday than he could at an official conference call. I hope this makes some sense he can't tell us things that haven't been publicly announced without telling everyone in an official conference call the assumption is that everyone would/should hear the information at the same time. He should be able to discuss anything that has already been officially announced"
Huh? Read those word again slowly to me - sounds a little like Howard Dean's speach last night. Basically nothing will come from from the meeting because Kelly cannot provide any information in this forum not already public as it would be construed as inside information. What should happen is questions should be submitted and posted on the company website the company's public forum.
Take care
Greg
Is there a final list of questions you plan on asking Kelly to address?
Thanks
Hound
Talk about minds on the same track - had not seen your message as I was typing mine...
Looking forward to the report back.
Other questions are:
Update on Q4 ending 12/31 - if in "quiet period" - when will announcement of results be made?
When will the SEC filing for Qtr ending 12/31 be filed?
Thanks
Greg
My suggestion is to poll the board for a list of shareholder questions otherwise it turns into a Pom Pom meeting. All is fine - revenue delayed, trust me, etc. Question: Has there ever been a negative letter to the shareholders from Kelly? Have the expecations worked out? Credibility is a huge issue in today's environment which created Sarbanes-Oxley in 2002.
Some issues to be addressed are:
Need an updated Business Plan based on the changes and delays. Verify revenue estimates for the next 3 years and expected profit. Proforma balance sheets and income statements
Funding needs and where will it come from based on the lack of positive cash flow to pay for the cash crunch. Cash crunch from huge amount of current liabilies due in excess of current assets. Need more cash without revenue and the only other real asset is stock - catch 22 - additional dilution concerns.
Viability concerns by the govt and other vendors - has that hindered getting contract awards?
Post mortem on deals not won - need to know the why so mistakes are not repeated.
Those are some quick ones off the top of my head.
Take care
Barnabus
Understand as they say don't let the facts get in the way of a good arguement.
Like they have no cash - had to use overdraft to pay bills in Q3. They have a major cash crunch and thought major revenue would kick in to assist but hasn't happened. Kelly has been promising for years and years and years but has come up empty. Take a look at their short term obligations/liablities - daunting to say the least.
The SEC filing as of 12/31/03 will tell the real truth. Beating the drum has caused the share price to go up IMO and unless something concrete comes through the drop will be quick. In addition, the overhang from the Dutchess deal and convertibles is a major issue. The sell pressure from Dutchess is a major issue IMHO...
Dilution:
Shares as of 12/01 32M
Shares as of 12/02 35M
Shares of of 12/03 ????
As of 12/1 Share # was 48M or a 13M increase in 11 mos or 37%
Take care
Charliebunny
As they say it's all about the $...and the financials or lack thereof.
Bills Bills Bills and no $ or revenue to pay for them.
Didn't Kitchen come on board in August? At the end of the day need some big contracts...where are they? I think a company this small - negative net worth, no $ has a very tough time making the cut for govt awards.
Can't wait to see the SEC filing for the year ending 12/31. Looks like the hype is over...
Time will tell
VTSI's Cash Position?
At the end of 9/30/03 the company did not have any cash and had to draw on their overdraft account for operating expenses.
I hope you sold at least half of your position when the stock ran from .10 to .40 from the runup aka pump. High teens by the end of the month?
Have there been substantive sales in Q4? Review the SEC filing as of 9/30 - the financial position is very precarious as you all know.
Good luck to all
Bylo
JP
From 6/25/03 - a person who has things in perspective. The same way I felt when I entered and lost in the BB arena.
Best of luck
"after 4 plus years in this stock find myself in a bit of a quandry....I used to feel pretty good about my 'investment'...
do I sell at a nickle and lose about 20 thousand ?
or do I wait till its possibly a penny and bump up my loss a bit........
Its kinda like the difference between 100 degrees and 105 outside.... not a whole helluva a lot of perceived difference, but it sure hurts
Unlike others, I can blame only myself for any losses I will incur. I have no hard feelings whatsoever......After all this is a BB company."
Hound
We are in agreement. "Under a quarter" - the issue with all the stock being purchased under $.10 (mostly by Dutchess) my opinion is there will be alot a stock to chew through in the mid teens to even reach $.20.
The vagueness of the PR - no value espeically was the main reason there was no real movement IMO
Golfdad
The following is from the link. My experience is the standard restriction holding period is one year. Therefore the stock will become freetrading 7/15/04 unless a different arrangement was made. We should be able to find out in the SEC filing for Q3 unless VTSI mgmt wants to disclose to their shareholders prior.
I know this type of arrangement is standard in the BB world to make it a typical BB stock but does anyone view this as a conflict of interest? With the compensation, does anyone think OTC Journal will be writing anything negative about the company? Just a thought
Coverage Period: July 15, 2003 - July 15, 2004
Company Symbol: VTSI
Compensation: MarketByte LLC has been paid a fee of $25,000 in cash and one million newly issued restricted shares by Virtra Systems for coverage of the company
Sir Felix
We are in agreement: "the more I start siding with ghound's idea of VTSI being a typical OTCBB stock."
Cyber - looked at your posting history and your cryptic 20 word posts or the past months with no substance smell of "overrational exhuberance" to coin a phrase from Fed chief Greenspan from a few years ago. Truer words never spoken by Alan....
Kelly no need to check your short payroll or consultant records for Bylo as an ex-employee/consultant as you won't find my name there - lol
Dutchess - Convertible Financing
Fyi - interesting reading. Here's an article that should be read by anyone who plays the pennies, and especially by those who believe they're an "investment".
http://www.nera.com/wwt/publications/6066.pdf
Bylo
Greg
Good discussion of the facts!
Bottom line we all know VTSI needs to grow the top line.
Take care
Bylo
George
Greetings from New England - USA
That issue was resolved back in 11/01. Period, end of story.
There has been more discussion on this board with the facts I have recently posted. Is the purpose of the board just for rah rah or discussion?
Actually I have done some research on post 3986 on Mr Kitchen and his previous employer. Seems like a fit and some potential. Arotech has their share of losses but Michael hopefully can build a pipeline and close some business for VTSI.
http://www.arotech.com/
Take care
Bylo
Greg - All
You said: "To put it another way even if all the shares were issued that were offered in the SB2 that would make the total outstanding 55,783,634 = (35,791,931 + 19,991,703) that is if the company drew down the whole 5 million and dutchess converted the whole debenture.
The company may or may not have the votes to do a Reverse Split without shareholder consent. That isn't the issue anyway the company is no where near the scenario you presented.
"Even if the below scenario you mentioned holds true they are a long way from reaching 100M outstanding and they also mentioned deals in the pipeline.
Even if the below scenario you mentioned holds true they are a long way from reaching 100M outstanding and they also mentioned deals in the pipeline.
Outstanding Shares:
12/31/01 32M Shares
12/31/02 35M Shares
3/26/03 38M Shares
6/30/03 41M Shares
8/6/03 45M Shares"
Question: Not sure if/when the Dutchess deal is complete the outstanding will be 56M but isn't that a very large increase from the 35M on 12/31/02? I think along with facts people should express opinions - is this good or bad? It'll be ok if there is a huge spike in profitable revenue IMO - without revenue and the drawdown is used or operating expenses it is not not a good thing.
As far the when the outstanding gets close to the authorized it does not mean they will vote for a reverse split but just vote to increase the authorized to 200M or whatever they feel is needed.
IMO if Dutchess's strike price is .05 to .09 and the outstanding shares continues to grow the market will need to chew through their lower cost basis to increase the price. That is why a low float company is much better - takes less buys to increase the price. But everyone knows that.
Red Sox lose again to the Yankees but it's a beautiful day in New England...
Take care
KP
Dutchess buys at 92% of the ask. So the latest I saw was bid .10 and ask .12 (a big spread) - most people buy at .12 and Dutchess buys at 92% of .10 or .092. They are already in the black. A very expensive financing deal.
Yes typo on my part it is the bid and as you noted the math was based on the bid.
I have more years of investing experience than you think but maybe some of the other shareholders do not - maybe you should learn not to assume for all.
If the company wants a reverse split they can do it because they have the votes - over 50% of the shares in friendly hands (Kelly, Ferris and his parents, and Ackner (sp) ) so the regular shareholder is a pawn. Your reply? Agree or disagree
It is interesting in each of the last few posts there are many arrows thrown my way but I throw just a few and I am the bad guy.
I am posting facts from the company. I noticed from your post after you did not utilize the 20 minute edit function - lol.
Have a good day
Greg
My reply was to this comment of yours:
"Dutchess has only converted half of the debenture so they have 200,000 dollars left or so to go. Since I am not smart enough to find this in the filings, this is just a guess"
Let's see what happens - I was looking back at some of the PR's namely 11/14/01 more facts - and I know things change but it seems the company is back to square one and pretty much a developmental stage company again.
ARLINGTON, Texas--(BUSINESS WIRE)--Nov. 14, 2001--GameCom Inc. (OTCBB:GAMZ) today announced the unaudited results for the third quarter of its fiscal year 2001 ended Sept. 30, 2001.
In September 2001, GameCom completed the acquisition of Ferris Productions Inc., a leading developer and operator of virtual reality systems. The acquisition was accounted for as a pooling of interests. Due to the nature of a pooling of interests transaction, GameCom is required to report the combined net revenues and net loss of Ferris Productions Inc. for the year 2000, and through the third quarter of 2001, on a pro forma historical basis, as if the companies had already been combined. With the acquisition of Ferris, GameCom is now referred to as GameCom/Ferris.
Net revenues for the third quarter of fiscal year 2001 were $941,672, compared to $1,088,519 in the third quarter of fiscal year 2000. The net loss for the quarter was $649,384, or a loss of $0.02 per share, compared to a net loss of $270,721, or a loss of $0.01 per share, in the third quarter of fiscal year 2000. The weighted average number of common shares outstanding for the three months ended Sept. 30, 2001, was 31,791,572, compared to 29,972,161 for the same period in 2000.
Net revenues for the nine months ended Sept. 30, 2001, were $2,313,790, compared to $2,485,173 for the nine months ended Sept. 30, 2000. The net loss for the current nine months was $2,011,698, or a loss of $0.06 per share, compared to a net loss of $807,122, or a loss of $0.03 per share, during the same period a year ago. The weighted average number of common shares outstanding for the nine months ended Sept. 30, 2001, was 31,414,243, compared to 29,922,358 for the same period in 2000.
Commenting on the quarter's results, L. Kelly Jones, GameCom/Ferris' chief executive officer, stated: "With the acquisition of Ferris Productions in September 2001, we transitioned from a development stage company to an operating company. We now possess an exciting product line, leading-edge technologies, an established, high-profile customer base, and with the acquisition have positioned GameCom/Ferris as the recognized leader in immersive virtual reality.
"PC Magazine only two months ago proclaimed virtual reality as one of the 10 technologies most likely to `profoundly affect our lives over the next 20 years,' and our company is now the leader in this exciting and innovative technology.
"In looking at Ferris' historical operating results, we knew its revenue growth had plateaued as it faced the challenges of matching capital with expanding market opportunities. Now that we have assumed financial control, and through public markets have access to growth capital, we believe we can achieve sustained quarter-to-quarter revenue growth, and, in the near term, profitability. In fact, based upon initiatives currently under negotiations, we are confident of our future."
Greg
So this is your board and only your opinions count?
I do apologize for any comments directed at you but...
Many of the comments you copied and pasted from my posts are generic in nature and I have stated many many times these are facts from the company's SEC filings and opinions based on those facts and my experience.
I have directed many of my comments and opinions to Kelly direct in my messages and information for "the shareholder base"
He has the opporunity to respond direct or through you which is his option. The internet or stock message boards should be an exchange of information. Why don't you and others want to conduct an objective discussion of the facts?
Take care
Bylo
Dennis/Gitman
You say you are informed, excellent - some of Greg's replies indicate he isn't. My questions are not gripes purely issues that should be addressed. Maybe you get them addressed along with Greg privately with Kelly? Is that fair or is that insider info?
How about the other 119 shareholders?
Actually ETPI's financial position is better than VTSI's - no real interest to me at this time...
I have an interest and I'll leave it at that.
Take care
Blacknight
Pedro didn't have it today...there's always tommorrow
Have a great weekend
Bylo
Greg
When you sold on 3/10/03 did you make $ on this investment?
"I sold around 117,000 shares today due to financial pressures"
Remember do not get personally attached to a stock.
I hope things are better financially for you. I see Gitman is your assistant with this profile. Not sure why you guys are so defensive.
Take care
Bylo
Git
One more thing - the issue between Gamecom now VTSI and ETPI was the acquisition of Ferris and its revenue.
In hindsight was the acquisition a good thing for VTSI? They recently sold off the themepark in the spring and basically all the revenue Ferris brought with it and kept the DEBT. VTSI balance sheet looks much worse because of the acquisition IMO.
Now VTSI has no revenue, plenty of cost and debt.
I thought these message boards were to be discussion and pro and con.
Your thoughts?
Git
8% I'll take it every time. I am no expert and do not pretend to be and my experience was not with ETPI because Dutchess did not fund them.
What's your ROI in VTSI?
At $.10 you making $$$ or is Greg? You can bust me all you want but the facts won't lie...
Take care
Greg
Kelly is biased - he has a huge personal stake - I did see where some of the investors have personal guarantees on the debt. Kelly will always attempt to put a positive spin on things. Here's an example with the 8/15 PR announcing the Q2 losses note with amusement park revenues out - revenue up 167% from $30K to $80K - most companies make $80K in 1 sale not for the qtr.
"Total revenues reported for the second quarter were $80,858, up 167% compared to $30,283 for the same period one year ago. While revenues increased over the second quarter of 2002, cost of sales declined 19% for the quarter, from $31,484 last year to $26,412. Net losses for the quarter were ($527,785), or ($0.01) per share, down from net losses of ($768,309), or ($0.02) per share, for the second quarter of fiscal 2002."
Conference call 4/22/03 - 38M
8/6/03 Outstanding - 45M
Greg - Kelly added $70,000 for this reason in my opinion:
Liquidity and Plan of Operations
As of March 31, 2003 our liquidity position remained precarious. However, our recent increase in revenue from custom applications for the advertising/promotional market has given us some breathing room. As of March 31, 2003 we had current liabilities of $9,375,286, including $5,426,982 in obligations under the lease financing for the virtual reality systems formerly utilized in our amusement applications, $1,214,491 in accounts payable, and short-term notes payable of $859,106, some of which were either demand indebtedness or were payable at an earlier date and were in default. As of March 31, 2003 there were only $100,846 in current assets available to meet those liabilities. We will be able to continue operations only if holders of our short-term notes and lease obligations continue to forebear enforcement of those obligations.
On July 12, 2002, we entered into an agreement with Dutchess Private Equities, L.P., pursuant to which Dutchess and other investors participated in the private placement of $450,000.00 in convertible debentures, as well as a private equity line of $5,000,000.00 over the next two years. Registration of the shares to be issued under the terms of the agreement was accomplished pursuant to the terms of an SB-2 filed with the Securities and Exchange Commission on August 12, 2002, and which became effective on September 2, 2002. Dutchess has fully funded the debentures.
The Dutchess private equity line may not be a viable funding mechanism, as the price and volume of trading in our shares may be too low to make that source of financing attractive. To date we have met our capital requirements by acquiring needed equipment under non-cancelable leasing arrangements, through capital contributions, loans from principal shareholders and officers, certain private placement offerings, and the Dutchess convertible debentures. For the three months ended March 31, 2003, the net loss was ($320,459). Approximately $210,225 of the loss was attributable to non-cash charges for depreciation and amortization, amortization of interest and debt issuance costs, payment in common stock of financing fees and interest, and increases in accounts payable and accrued liabilities. After taking into account the non-cash items included in that loss, our cash requirements were approximately $130,000. To cover these cash requirements, we utilized our cash on hand in the sum of $98,442, and increased our book overdraft by $31,585.
As they say don't let the facts get in the way of a good discussion. Bankoverdraft $31K that means no cash I think[/b}
Kelly said: "we believe we are very, very close to penetrating this huge market."
Please define very very close for us.
Red Sox are on - talk to you later.
Take care
Bylo
Greg
You said: "Since I am not smart enough to find this in the filings, this is just a guess. Will they convert the rest or will Virtra get contracts to buy back the rest"
In order to invest in this game you need to be smart enough to find out the info in the filings or you lose your hard earned $$$.
Stock buyback??? That's just too funny... You're showing your ignorance again.
By the way that's Bond funds last year and stock funds this year.
You seem like you want to sweep the issues under the rug and give Kelly a free ride and not address them. Maybe someone with some stones with ask him for some answers.
Let's see where we are next share update with the outstanding # of shares. 10M increase from 35M to 45M in 7 mos this year - that's a 29% increase for the 7 mos or or 49% annualized.
Take care
Bylo
BTW - how about those Red Sox and the Patriots are going to be be great this year as well. Parcells has a long way to go with the Cowboys.
KP - A few ramblings
I do know the history for the last three years. Greg posted on Raging Bull 75% of the posts there as well when the company was Gamecom. He would post link after link of "information" that my guess people didn't take the time to wade through sounded great but in 98% of the cases was not germaine to this company.
Many times the BB becomes the herd mentality with OTC Journal, OTCFN, an OTC Daily, etc putting out a rosy profile with projections like the one dated 4/15/03 on the company website and this site. People get on the bandwagon believing and get hurt. Well the company has little or no contracts and $80+K in revenue last qtr which in no way will come close to projections being made.
If some the 121 shareholders of record as of 12/31 read the SEC filings I posted then at least they have more information to make an informed decision.
Greg tries hard and has latched onto this company for some reason when someone gives a dissenting opinion just like others when issues occurred with Gamecom he would run to Kelly for reassurance like he did yesterday. Kelly would put a positive/reassuring email to shareholders like he's done over the years. He's got them down like boilerplate as all good attorneys do. Greg - keep it simple - all the links above overwhelm people.
The information I posted I beleive was relevent - the main facts - Revenue, Debt, Financing, Management, Balance Sheet, Income Statement, Products and Business Plan - then assess. SEC filings are where the real info is when in doubt go there. All BB companies are reporting (starting a few years ago) and with the accounting scandels the reporing requirements are even strict for BB comapnies. Right Kelly? - He probably spends the main part of his and his accountants time staying in compliance
This is small startup started as a brewery (didn't make it), then switched business plans over the years gaming, now home security - not sure they know what they want to be. The real problem it has been a startup for too long. Undercapitalized, large debt, little or no revenue, negative cash flow, in a bad financing situation (Dutchess) which causes great dilution of the stock. For those of you who don't know it, stock prices rise based on profits and EPS (earnings per share) and Price earning ratios on the EPS. As the outstanding shares goes up the EPS potential goes down. Profit is a dream at this point until they get revenue.
Dutchess is not in the business of losing $$$ and I have seen how they operate in previous BB companies I was involved in. I read the stipulations in the contract between them and VTSI in the 12/31 filing. You attempt to figure it out. The 3/31 and 6/30 filings show the comaany is drawing down - probably because the people mgmt got to invest the no interest usecured loans for operating capital aren't willing to provide more as they know it is probably lost $. Dutchess lives in the BB world where 95% of the companies in the past were corrupt and scams. You could say that for many NYSE companies as well - Tyco and Worldcom. Dutchess knows the ropes and if they take a huge stock share they will short to make $$$. Note: I didn't say VTSI was a scam but a small company with huge roadblocks to overcome and the dilution does not help. Kelly has options reverse split. Say 1 for 10 when the outstanding gets to 100M the 1 for 10 reverse brings it to 10M and your 100,000 shares are now 10,000. They hardly ever work from my experience.
Most people when they buy stock on the market buy at the at ask not Dutchess. If I read the filing correct (someone correct me if I am wrong) Kelly here's a chance to give some layman's terms on the what the deal is and address the dilution potential reverse split issue. Dutchess buys at 92% of the ask. So the latest I saw was bid .10 and ask .12 (a big spread) - most people buy at .12 and Dutchess buys at 92% of .10 or .092. They are already in the black. A very expensive financing deal.
Excerpt from the 12/31/02 SEC filing Re Dutchess transaction
In July 2002, the Company entered into an agreement for up to a maximum $5,000,000 sale of its common stock to Dutchess Private Equities Fund, LP (“Dutchess”). Under this investment agreement the Company has the right to issue a “put notice” to Dutchess to purchase the Company’s common stock. Put notices cannot be issued more frequently than every seven days. The required purchase price is equal to 92% of the average of the four lowest closing bid prices of the common stock during the five-day period immediately following the issuance of the put notice. Each individual put notice is subject to a maximum amount equal to 175% of the daily average volume of the common stock for the 40 trading days before the issuance of the put notice multiplied by the average of the closing bid prices of the common stock for the three trading days immediately preceding the put notice date. Regardless of the amount stated in a put notice, the maximum amount that Dutchess is required to purchase is the lesser of the amount stated in the put notice or an amount equal to 20% of the aggregate trading volume of the common stock during the five days immediately following the date of the put notice times 92% of the average of the four lowest closing bid prices of the common stock during this five-day period.
In connection with this investment agreement the Company issued $450,000 in convertible debentures. The debentures bear interest at 5% per year payable in cash or registered common stock at the Company’s option. The debentures mature in September 2005 and are convertible, at the option of the holder, to shares of the Company’s common stock at a conversion price per share equal to the lower of (i) 85% of the average of any four or five closing bid prices for the common stock for the five days prior to the conversion date; or (ii) 125% of the volume weighted average price on the closing date.
In addition, the Company issued to the holders of the convertible debentures warrants to purchase 500,000 shares of the Company’s common stock with a strike price of $0.71 per share and a conversion period of three years. Using the Black-Scholes option pricing model with the following assumptions: (i) volatility of 100%, and (ii) interest rate of 5%, the value of the warrants were estimated to be $89,400, which was recorded as interest expense in the accompanying statement of operations. Accordingly, the actual weighted average interest rate on these debentures, including the effect of the cost of the beneficial conversion feature of $67,500, is approximately 15%.
A few ramblings on a Saturday morning having my coffee. Go Red Sox! They beat the Yankees last night and hopefully will again today.
Good luck and take care
Bylo
Greg
Is this your forum or is it open to facts and dissenting opinions or just POM POM waiving?
This is not a game - many people have large amounts of $$$ at risk.
I know you have little or no experience in the stock market but my opinion is companies like this with their current financial position are in a very precarious position.
Good luck - you are going to need it in my humble opinion.
Bylo
Greg
They were not questions - they were FACTS from the company's filing with the Securities and Exchange Commission and my personal opinions based on those facts.
My opinion on his email was alot of words stating they are still working to attempt to make a go of the business despite the increasing financial obstacles in his path.
Take care
Bylo
Dilution Dilution Dilution Dilution
Outstanding Shares:
12/31/01 32M Shares
12/31/02 35M Shares
3/26/03 38M Shares
6/30/03 41M Shares
8/6/03 45M Shares
That's a share increase of 10M in a little over 7 mos!!! Wow and it will continue to get worse with the type of funding and the convertible stock the company is using
First of all I am sure Kelly is not happy about the increase in dilution of the company's stock from the Dutchess deal which was probably a last resort based on the terms - See the filing.
He went to individuals first for Operating Capital and I am sure he thought Revenue to fund operations would be kicking in now and they would be cash flow positive.
Rent not be paid or funded from operations.
Operating Capital on Unsecured Loans from:
John F Aleckner Jr $274,500 from 3/01 - 4/02
and
Dr Dave and Nancy Ferris $194,031
Unsecured loan figures are from the Company's SEC filing
Revenue?
Greg - You are laughing out loud? You so busy copying and putting things here you don't read them or have the ability to comprehend them it seems. Hopefully some of the other people who read this board do.
The company and you on this page need to update the Financial Highlights of the 4/15/03 corporate profile as it includes Theme park revenue which is no longer in the mix. Please update as you will be intentionally misrepresenting the company's prospects
This is a quote from the SEC filing for the qtr ending 6/30/03 - "We recently sold our theme park operations, so that substantially all our revenue on an ongoing basis is expected to be in Custom Applications and other sources."
Revenue Custom Application and Other:
Qtr Ending 3/31/03 $348K
Qtr Ending 6/30/03 $77K
That's a huge reduction and certainly not enough to service the debt - that's where Dutchess's $$$ comes in and the Dilution of the stock -
More to follow on that subject
One more thing
As Kelly would say and he always refers you to the SEC filings - these are my personal comments and everyone should review and make their own investment decision.
Item 12. Certain Relationships and Related Transactions
Mr. Jones, our chief executive officer, is also president of Jones & Cannon, a Texas professional corporation, which has provided legal services to us and which may continue to provide legal services to us in the future, and which rents to us our executive offices. We currently owe Jones & Cannon more than $261,716 for legal services rendered. Jones & Cannon had also been providing the limited amount of executive office space we require, and some clerical and other services required for our operations without charge until June 5, 2000, under an oral agreement with Mr. Jones. We became obligated to pay Jones & Cannon $1500 per month for this office space effective June 15, 2000, and we currently owe Jones & Cannon $29,000 in past due rent.
Mr. Ferris, our president, is the owner of Ferris Holdings, L.L.C., which is landlord on the lease for our production facilities in Phoenix, Arizona. We currently owe Ferris Holdings, L.L.C. approximately $40,600 in arrearage on our lease.
In December, 1997, we agreed to redeem at par value an aggregate of 1,505,399 shares of the common stock held by the ten former shareholders of First Brewery of Dallas, Inc., a company we had acquired in April, 1997. The aggregate redemption price was to have been $7,527.02. That redemption was to have occurred no later than March 31, 1998. However, we did not have sufficient funds to honor this commitment and are currently in default under the agreement. Messrs. Jones and Aleckner and Ms. Biggs were among those whose shares were to have been redeemed. In February, 2000, we and Messrs. Jones and Aleckner agreed that the shares that were to have been redeemed from those two individuals would not be redeemed. We expect to redeem the remaining shares during the third quarter of 2003.
During the period from July, 1997 through May, 1998 Mr. Jones, our chairman of the board and chief executive officer, lent us an aggregate of $90,000 for use as operating capital. Of this amount, $65,000 was subsequently eliminated when Mr. Jones accepted in full satisfaction of that debt certain equipment securing bank debt which Mr. Jones had guaranteed, leaving a balance of $25,000.00. This indebtedness is evidenced by an unsecured demand promissory note at an annual interest rate of 12 % per annum. During the period from November, 2000 through December, 2001, Mr. Jones lent us an aggregate of $81,000 for use as operating capital, for a total indebtedness of $106,000. This $81,000 indebtedness is evidenced by unsecured promissory notes without interest.
During the period from March, 2001 through April, 2002, Mr. John F. Aleckner, Jr., one of our directors, lent us an aggregate of $274,500 for use as operating capital. This indebtedness is evidenced by unsecured promissory notes with no annual interest rate.
NOTE - OPERATING CAPITAL TO PAY FOR SHORT TERM OBLIGATIONS NORMALLY IS FUNDED BY THE BUSINESS - $275K NO INTEREST WOW!
During the period from June, 1993 through April, 2001, Dr. Dave and Nancy Ferris, who are shareholders, lent us an aggregate of $172,531 for use as operating capital. During October of 2001, Dr. Dave and Nancy Ferris lent us $21,500 for use as operating capital, for a total indebtedness of $194,031. This $21,500 indebtedness is evidenced by an unsecured promissory note with no annual interest rate.
NOW THOSE ARE GOOD PARENTS ATTEMPTING TO HELP THEIR SON!
Lease Obligations
On August 4, 2000 the Company entered into a long-term operating lease for its office and manufacturing facility in Phoenix, Arizona, which is owned by an entity controlled by a stockholder of the Company. The monthly lease cost to the Company is equal to all expenses related to the building, including, but not limited to, mortgage, taxes, fees, maintenance and improvements. The minimum monthly cost is approximately $9,000. As of December 31, 2002 the Company owed approximately $77,664 to the stockholder for rent in 2002 that had not been paid.
Minimum lease payments due under leases with remaining lease terms of greater than one year are as follows:
2003
$185,074
2004
107,410
2005
107,410
2006
107,410
2007 and thereafter
2,110,750
$2,618,054
The Company rents office space in Arlington, Texas on a month-to-month basis at $1,500 per month from an officer and stockholder of the Company. Payments of $9,000 and $-0- were made during the years ended December 31, 2002 and 2001, respectively.
Excerpt from the SEC filing Re Dutchess transaction
In July 2002, the Company entered into an agreement for up to a maximum $5,000,000 sale of its common stock to Dutchess Private Equities Fund, LP (“Dutchess”). Under this investment agreement the Company has the right to issue a “put notice” to Dutchess to purchase the Company’s common stock. Put notices cannot be issued more frequently than every seven days. The required purchase price is equal to 92% of the average of the four lowest closing bid prices of the common stock during the five-day period immediately following the issuance of the put notice. Each individual put notice is subject to a maximum amount equal to 175% of the daily average volume of the common stock for the 40 trading days before the issuance of the put notice multiplied by the average of the closing bid prices of the common stock for the three trading days immediately preceding the put notice date. Regardless of the amount stated in a put notice, the maximum amount that Dutchess is required to purchase is the lesser of the amount stated in the put notice or an amount equal to 20% of the aggregate trading volume of the common stock during the five days immediately following the date of the put notice times 92% of the average of the four lowest closing bid prices of the common stock during this five-day period.
In connection with this investment agreement the Company issued $450,000 in convertible debentures. The debentures bear interest at 5% per year payable in cash or registered common stock at the Company’s option. The debentures mature in September 2005 and are convertible, at the option of the holder, to shares of the Company’s common stock at a conversion price per share equal to the lower of (i) 85% of the average of any four or five closing bid prices for the common stock for the five days prior to the conversion date; or (ii) 125% of the volume weighted average price on the closing date.
In addition, the Company issued to the holders of the convertible debentures warrants to purchase 500,000 shares of the Company’s common stock with a strike price of $0.71 per share and a conversion period of three years. Using the Black-Scholes option pricing model with the following assumptions: (i) volatility of 100%, and (ii) interest rate of 5%, the value of the warrants were estimated to be $89,400, which was recorded as interest expense in the accompanying statement of operations. Accordingly, the actual weighted average interest rate on these debentures, including the effect of the cost of the beneficial conversion feature of $67,500, is approximately 15%.