Iceethings - They have a 5 million dollar private equity line to draw against. The CEO has put in at least 70,000 of his own money and I would expect he would fund the building of the systems if there was an issue drawing down the funds. However more than likely they will be up front money deals. The company has been in business since 1993 I believe so they aren't a fly by night operation. Time will tell if their lack of cash on their balance sheet will be an issue. They should have some cash from their recent deals to fund a government project. I would expect the government to order a limted number of systems one or two at first to try them out before ordering a big shipment. They shouldn't take to long to build since all the main compoents are already built so the filming will be the only thing to do besides putting the pieces together. Once the government agency likes the first system they built for them they will probably purchase a few more. This is all just my opinion.
Founded in 1993, VirTra Systems is a publicly-traded company (OTCBB-VTSI) and is the world leader in virtual reality development. VirTra Systems provides consulting, design, and manufacturing of customized systems for use in promotions, exhibits, special events, entertainment, education, and simulation training. Utilizing the latest in technological developments, VirTra Systems has become the experts for producing proficient turnkey virtual reality and advanced system solutions. As a VirTra Systems design trait, the virtual reality systems allow for network capability, new or additional software content to be incorporated for future applications, and modular architecture for upgrade capability.
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. As of June 30, 2003, the balance owed on the debentures to Dutchess had been reduced to $209,967.
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 six months ended June 30, 2003, the net loss from continuing operations was ($794,791). Approximately $474,609 of the loss was attributable to non-cash charges. After taking into account the non-cash items included in that loss, our cash requirements for continuing operations were approximately $320,182. In addition, we repaid $75,913 in principal amount of notes and used $20,764 in discontinued operations, bringing total cash requirements to $416,859. To cover our cash requirements, we received $90,000 from sale of assets used in our theme park operations, issued $35,000 in notes to non-stockholders, utilized our cash on hand in the sum of $98,442, increased our book overdraft by $14,385 and drew down $179,032 under our equity line of credit.
Good luck to you,
Greg
