Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
A lurker's thoughts on recent events:
First, Greg, thank for your input from the show (and doing a wonderful job with this board, along with your assistants).
For the most part, bashing is non-existent & much appreciated. Paul & Bylo, you guys raise some valid questions and despite the heckling you take, I appreciate your objective comments.
Greg, I've some questions for you and I'm hoping that you might be able to answer them when you have more time:
1) Virtra was supposed to debut their 4G system at the show. I'm assuming it has a much larger footprint than their other IVR systems. Was the 4G the demo simulator?
2) How did it compare in size to the competitors?
3) What was the maximum degree of coverage for the competitors? (You said the L3 was a seamless multi-screen ... what 180 degrees? or more?)
4) You said the floor vibrated at Virta's demo. Was it on a raised floor?
5) How did Virtra's images compare? Seamless? Better definition?
6) Were there ANY features that the competitors had that were superior, in any way, to Virtra's offerings?
------
The debt restructuring is a GOOD thing. I look forward to seeing the numbers flow off the books, despite the resulting dilution. I think everyone agrees that this will help Virtra's financials. Good work Kelly & everyone. It also speaks volumes about Kelly's character, IMO.
------
Yes, FATS does seem to get the contracts and that is frustrating. However, in many industries, there are companies that leap-frog each other because of technological breakthroughs. I believe that Virta is on the rise. It will take some time before they can steal significant market share from FATS, because they've been in the game much longer & have the contacts and customer base. IF Virtra has new technology that is desired by the market, they should garner that market share, given time and as long as the following criteria are met:
- they can maintain a technology lead
- they do not develop 'growth pains' that impedes delivery or customer support
- they do not commit corporate hari-kari by making some unrecoverable business blunder
-------
Regarding "superior" technology:
Paul, I think that the answer to your question is this: A company has "superior technology" if its protected technology that they alone make or bring to the market AND it is deemed as a necessary & desirable technology by the majority of the market base.
It's no good to have something that no one else can do if no-one wants it, which, I believe, was one of the points you were trying to make.
---------
Virta's unique capabilities:
1) The immersa-dome. I do not believe that any competitor has a similar product. It remains to be seen what kind of market penetration this product will yield. It's been demonstrated that there is a limited advertising market for this product, but it's up to Virta to improve on the technology, lower the price point and expand the market for this unique product.
2) Rear-projection, live footage, high-definition, single screen through to 360 degree simulator. While competitors may bring SOME of these features to the table, I don't think that there is currently ANYONE who is marketing ANYTHING that wraps it all into this scalable package. Please correct me if I'm wrong here.
3) The threat-belt & blue-tooth cable-less weapons. I believe that the threat-belt will prove to be a valuable addition to the simulation line. Other competitors will (can?) offer wireless weapons. I see the threat-belt as something that will give Virta an advantage (for a while, until competitors engineer something similar, or better).
4) Self-authoring software. This COULD prove to be a big advantage, but I don't know enough about the nature of this software to really speak intelligently about its merits or shortcomings. I've got to believe that once these products are purchased, there is a real need to expand and customize the scenarios, to taylor them to the client. Anything that lessens this cost & shortens delivery time would be an asset. If this could be done BY the client, at minimal cost, I see this as being valuable (though I don't know exactly HOW it would work).
5) Non-tangible superiority: Some things jump out at me about Virtra that I think will HELP them gain market share.
First, as Greg observed, several competitors fell short of their intended or verbal committments regarding the I/ITSEC show: Cubic had a multi-screen presentation, but only single-screen capability. IES & AIS didn't have simulators, but simulations of simulators (a weak showing, IMO). And FATS (perhaps the acronym fits, as they are bloated with contracts & yet...) they put out a PR about having bluetooth-capable weapon(s), but there were NONE at the show. Virta? Delivered what they said they were going to have - A 4G system (I assume), blue-tooth weapon(s) & a threat-belt.
Second, customers with short deadlines & tight budgets continually praise Virtra for delivering what they say they will - on time and on budget. This is IMPORTANT if you are a potential customer.
Lastly, uptime. It's one thing to debut a brand new system at these trade shows, but it's another to hammer these units in front of parading potential customers for 3 or 4 long days. From what I've heard, Virtra has a track record of robust & bomb-proof demonstrations. This HELPS impress customers.
------
What do municipal clients want? I'm not in a position to determine. Virtra is in a much better position. Do cusomers want portability? I'm sure some do. Do they want a low price point? Again, I'm sure some do. Do they have room for a Virtra IVR system? Not everyone will. Customers will have to make compromises, dictated by budget, space & portability requirements. Because Virtra's IVR system is scalable, I think the space & price point issues can be addressed. Portability is out the window, unless Virtra can come up with a portable simulator solution in the future. (One thought here - rather than pitch to individual police forces, it might be advantageous to spread the cost of an IVR system across several municipal police districts - operating in close-geographical quarters - creating a 'simulation training centre' that can be cooperatively shared). This unique solution may address some of the price-point/space issues that owning an IVR system might present.
The military does not have similar requirements. They generally want 'the best' & for that reason, I think that Virtra's offerings may be an excellent match. These products, like the 4G, also come with a higher price tag. Perhaps Virtra can make a business working exclusively at this 'higher end spectrum', though, personally, I think they should attack on all fronts.
I like what is happening with the company. The debt restructuring. The technology advancements. The commitment of the CEO, engineering & sales staff. They're building a good foundation & believe that the rewards (contracts) will come.
Anyway ... you can see why I lurk! Good God ... it takes forever to type all this opinionated verbage.
I apologize for the long read, but I'm still expecting great things from Virtra - just not as soon as I was hoping.
I just wonder what FATS is working on in the background?
-stk42
Trout,
My wife & I hiked the PCT in 2002. We built a website & kept a journal of our trip. (We're west-coasters). Got lots of advice an info if you want to chat off-board.
I'm not a premium I-hub member, so I can't send you a private message with the link. But if you want to drop me a line at pct_thruhiker_2002@yahoo.com I'd be happy to share.
stk42
Thanks, Greg, Doug & Tim for your replies. Missed the Oct27 note from Kelly. All caught up now.
PS - Paul - My French is about as good as my Cantonese, but the AIS website seemed clear that their system is only a 5-panel max system & from the photo on your link (4 panels showing) it looks like only 180-degree capable. Not at all the same. Besides, as Tim pointed out, who'd by from a frog?
What's up with the leaseholder debt issue? I thought they said they'd be announcing something a week (or was it two) ago?
Any word?
Seems very quiet. (Must be busy getting all the Mexican systems together
Sir,
Thanks for the graph. It was interesting.
BTW ... PhotoBucket is the best image server I've found on the net.
You're probably correct, Weeble
I didn't see your original post until after I made mine ... tho not specifically mentioned, it is a shoe that seems to fit.
Nothing like rehashing old news, eh?
When you're so eager to hear of NEW contracts, those with Alzheimers can simply look at OLD contracts and get excited! LOL (OKAY, maybe I wasn't a shareholder then ... yeah, that's it, I didn't own any share then).
I wonder how they like their 'new' system? Follow up with customers would be a good source for P.R. soundbites.
Charlie Bunny,
I concur ... great find! It's interesting that the Virtra IVR300 is 7th (sic) on the Duluth, Georgia Police Department's Purchase Request (priority order?)
That meeting was held on May 10th, 2004.
The minutes from that meeting http://www.duluth-ga.com/Meetings/2004/05-10-04min.pdf (page 7 of 8) indicate:
"A motion was made by Councilmember Garner, seconded by Councilmember Dugan, to approve the expenditure requests as presented from the City of Duluth Federal Forfeiture Account, 850-13425 as requested".
"ALL FOR. Motion carried unanimously."
A quick perusal of the minutes/agendas for subsequent meetings did not reveal anything further on the matter (tho - of mild interest, was the termination of a Police department dispatcher who, among other things, fell asleep on the job and had a personal telephone call in excess of 30 minutes during an on-site murder investigation).
Duluth, GA is approx 23 mi north of Atlanta. The 2000 census has the population at 22,122 in 8,735 households. The uniform division of the Police Dept. (4 Sections - Patrol (30 officers); Traffic (5 officers); K-9 (4 officers) & Communications (7 civilians).
How many OTHER communities, this size or larger, exist in the United States? Granted, the $$ came from a "slush fund" (The federal asset forfeiture acct contains $$ seized, primarily from drug dealters. The $$ has been declared forfeited by a Federal court & can only be used for the purchase of law enforcement-related equipment).
Still ... the market for Vitra must be huge.
So ... if the sale was approved, I wonder if it has been made?
-stk42
Doug,
I think that it's really cool that Kelly took the time to email you. I also think that good things come to those who wait (and wait, and wait ... and wait some more).
My ONLY problem with Kelly's email?
Now there's ONE MORE Texan in Colorado!
I do love it, however, when a PLAN comes together. Let's hope VTSI's is soon (as per the GREAT P.R. recently and the supurb products).
"Build it and they will come."
-stk42
OT: Freetrade
Timhyma,
I concur. I've had a Freetrade account for some time and it's true - you get 20 free trades per month (and after that, it's still only $3 per trade). It's an internet branch of Ameritrade, so this isn't some fly-by-night outfit.
My only complaint - moving money into the account via bank wire is a hassle, though they've recently implemented an ACH route that executes in 3-4 days that doesn't cost anything.
Just thought I'd add my own experience. Why pay ANY commissions?
-stk42
I don't know why we don't have a lock. The systems that I've seen as competitors are, by far, inferior. Have a look at the IES Range 3000 Xp4
. : /\ : .
http://www.ies-interactive.com/html/products/range_3000_xp4.html
. : \/ : .
You have to admit - it's PORTABLE! But if the threat isn't coming down a tunnel, straight at you, then maybe another simulation tool is needed.
The more I see of Virtra, the more I like. The only thing about Arotech that I like (besides the wider array of products) ... are their sales figures for July. Now ... if we can only fast-forward VirTra to that point />/ />/ ... THEN we be talk'in some good share value!!
I did. $0.385 near open. EOM
How much buy-side pressure does it take to punch thru to $0.42? Geez. EOM
Dutchess ... worth printing
Charlie -
Yes, you're right. That link was interesting and I think it's worth copying the pertinent parts to save on this board (look at the bottom for an interesting tidbit of info!). So, here's the link again:
from Financial Engineering News "A New Method for Raising Equity" By Austin Murphy, Ph.D. - http://www.fenews.com/fen37/fin_innovations/fin_innovations.html
"One company, Virtra Systems (which is a start-up firm that designs virtual reality systems in the USA), set an 8% discount for new equity issues. The discount applied to the average of the lowest 4 closing bid prices out of the 5 trading days subsequent to the company indicating it wants to sell new stock to a specific investor (Dutch Private Equities Fund), which has effectively given the company a put option at the foregoing variable exercise price. The number of shares that the company can put to the investor was restricted to equal the average trading volume over the 5 trading days subsequent to the company providing notice of exercise of the put (and the amount raised is further restricted to be less than 175% of the average volume in the 40 trading days prior to the put notice times the average closing bid price in the 3 trading days prior to the put notice). The company could sell up to $5,000,000 in stock in this manner over several years, although it was restricted from exercising a put more frequently than every 7 days.
In Virtra’s case, the investor could, upon receipt of the put notice, sell the stock short over the next 5 trading days in an amount equal to 20% of the volume and have virtually no risk. A quick return of over 8% for so little risk seems excessive. However, Virtra was short on capital and badly needed the cash infusion, and so it contracted to pay what investors demanded.
Virtra obviously benefited from the system, as it gained a very flexible, fairly reliable, and continuous source of equity capital that kept it from running out of cash and going bankrupt. Due to some positive announcements about actual sales of its products, Virtra was able to raise capital while the stock price was rising on heavy volume. Despite its usefulness even with an 8% discount, competition among investors should eventually reduce the size of the discount on new issues of this type. This type of financing is therefore likely to become even more valuable to issuers in the future.
...
Good, Bad or Ugly?
Several decades ago, one noted academic argued for the construction of convertibles with flexible conversion prices for theoretical reasons. However, as the hundreds of actual issues of death spiral convertibles show, this financial engineering concept may be one that is practically flawed.
On the other hand, the contractual selling of equity at a fixed discount to secondary market prices may be a very useful innovation that gives firms the flexibility to issue equity whenever they need it. In fact, Virtra is one of the few successful firms (to date) that has issued death spiral convertibles, and the reason for its success may be at least partially related to the simultaneous special equity offering. In particular, the convertible issue was of relatively small size ($450,000) and had been sold to the same institutional investor, which therefore actually had an incentive to keep the stock price from falling to zero in order to be able to continue to access the 8% discount on the much larger equity issue (of $5,000,000).
One of the prime benefits of the contractual selling of equity at a fixed discount to secondary market prices may in fact be related to the inhibitions it naturally creates against any short selling to drive down the stock price and value. For instance, in a public issue of a specified amount of equity in the primary market at going market prices, short sellers are informed in advance of the issue, and they are motivated to drive the price down. In particular, to the extent that short sellers do drive down the price on the public issue date of the new stock, they also reduce the amount of cash the company receives for a given number of shares offered and thereby reduce stock value as well, thus resulting in the price drop being a self-fulfilling prophecy of an intrinsic value reduction that is likely to be permanent and provide the shorts with a profit. On the other hand, with the private placement of stock at secondary market prices, the short sellers are uninformed of the date and actuality of the issue (other than of the fact that a large amount of stock can be issued over several years), and it becomes difficult for short sellers to profit in such an uncertain long-term environment."
The interesting tidbit at the bottom of the article: *Note: The author currently has long positions in the stock of both companies (Virtra and Dynamotive) mentioned in this article (and, as a past larger shareholder of Dynamotive, advised that company to take its successful legal action). Dr. Austin Murphy is Professor of Finance, School of Business Administration, Oakland University, Rochester, MI USA. He can be reached at jamurphy@oakland.edu
Oops.
OKAY ... I'm new here, but I love to play along.
I'm betting that the 4 new immersa-dome sales were for the VW Golf. http://www.vw.com/golf/
Congrats on the domestic law-enforcement sale. With all the markets now penetrated ... the sky is the limit. (The 360 degree sky, that is). Ha ha.
Post-sales revenue stream ...
It's nice to see VTSI 'gaining traction', I just hope they get their speed up before they run out of gas (i.e. - funds)!
I have a couple questions regarding VTSI post-sales revenue stream.
(1) The focus on this board has been sales, but with many software companies, they charge a 'maintenance fee' (typically 10% of the total cost per year) that insures clients receive software upgrades as they come available. Does VTSI have a similar program?
(2) What is the install base for VTSI systems? (How many 'units' have they sold?)
(3) I get the impression that the 'scenarios' are filmed using actors and the software utilizes a decision tree, based on the actions of the person using the simulator. Does VTSI make money filming these 'scenarios'? Can clients buy more and different scenarios? (I'm thinking that VTSI could build a 'library' of scenarios, as they grow, and generate additional revenue by offering additional scenarios for sale to their installed base of clients). Obviously, some scenarios would be client-specific, but as the number of police installations grow, for example, new police scenarios could be added to a growing "police scenario" libarary. The install base of police clients could then purchase newer scenarios, to expand the number of training options they could provide their personnel.
I don't think that I've come across a discussion of post-sales revenue and believe that such a program would do a couple of things: (1) help generate a steady revenue stream for VTSI ... to help with the boom/bust cycle of unit sales and (2) establish a good after-sales relationship with clients, ensuring they have access to up-to-date scenarios and software.
Thanks for your input.
That's how I felt, then developments DID come (Nestle) which indicated to me that CXN was the real deal. Buyers began to pay a premium to buy CXN stock after that (Jan 15th, 2004).
Read this message on Raging Bull, because it spoke directly to the issue (posted -with premonition?- 17-aug-2003): http://ragingbull.lycos.com/mboard/boards.cgi?board=CXN&read=504
"Granted it is RISKIER now than buying when it has a contract, and is expected to go up from there.. So, I'm not saying this is for everybody. Once it has contracts, the risk will be less, and more conservative investors could buy then with less risk, and hopefully still make a good profit. But, since I fell the contracts ARE coming, I am willing to take the higher risk"
The question seems to be one of risk tolerance. What does it take for you to see that CXN is the "real deal" and what do you consider to be a "development"? A premium is ALREADY there, based on the Nestle contract (share price was hovering around $2 before the Nestle contract).
RAW ...
I ran into it yesterday, when I was following your old posts on RB. If I was younger, I think that swing trading would be the way to go (why limit yourself to just the upside?!) I've never shorted a thing, except my finger in the socket, when I was 4.
Having a difficult time trying to add an image to my signature. HTML code doesn't seem to work and neither does /[chart/]www.image.com/pict.jpg/[/chart/] (Ignore the funny "/'s", just added so it show on the screen) Does it have to be a GIF file?
Any advice?
(Not that I want a volcano ... just want to tame the beast)
Thanks...
Guess I upgraded and didn't even know it ...
I notice now that I'm eligible for 18 posts, whereas I was limited to 3 a few minutes ago. I must have self-confirmed my email?! Anyway ...
I like the image posting capability (but an Anger Management image Raw? Gotta wonder where you spend after-work hours!)
I'll be curious to see what image Rippy uses (probably a sheep!)
Maybe I can start a CXN message board on my personal/hosted site, then it will be more "invitation ONLY". Let me know if that's what you want guys ... and I'll code it up. Need 10 or more people saying "YES" to make it worthwhile...
Hey RAW ... Sorry your board didn't work out, guess you'll just have to x-fer all your (and rip's) posts over here.
Where are the fat chicks? The only thing I saw at the other board were two boobs!
We're all swimming, once again, in the same pool! Only the names have changed, (to protect the innocent).
Hey, I hear CXN has a great product: Z-trim. (Way better than the other trims IMO ... hear me Rip? ... just ask, I'll be happy to list the reasons why!)
I wonder if jrf30 will wander over here? Seems like it will be the same old crowd (the only REAL difference, is that Rip and Raw will be listed to only 3 posts per day, initially). Compared to their old ways, that will REALLY bug them.
Today alone, Raw was over 23+ ... amazing.
If the volume of posts outweighed the Quality of posts, then Raw and Rippy would WIN. Fortunately, that's not the case.
In the meantime, back in Mundelein, IL ... CXN stock continues to rise ....
G'night boys.
OKAY - stk42 is here too. (Too bad someone didn't snatch the CXN site ... can you have more than one? ... because this one doesn't link to the right symbol, now that CRGQ is CXN on the AMEX).
What do you want to bet that Raw, Sheep and Unicorn will be posting here too?
I hope not.
Will be monitoring both for the next while. I have to admit, without detractors, there isn't much to talk about.
When's the NEXT contract coming?! Seems a bit overdue to me...