VirTra Inc (VTSI)

[E pluribus unum]

An acquisition of VTSI by a viable market participant presents some interesting issues, not the least of which is the IRS problem. VTSI has a market cap of less than $900,000 at current prices. Their IRS problem is in excess of that. None of us has seen any progress by VTSI in tackling that particular sword over their head.

If an acquirer were to buy the shares on the open market, they would be acquiring that liability as well, and they would be imprudent not to address that matter right away. For all intents and purposes, that would double the price of the company.

Another matter is that of unpaid bills. Virtra’s payables are way out of line in proportion to their sales turnover, indicating there are serious past due balances. Their balance sheet sports unpaid legal judgments. One could speculate that the only thing keeping creditors from forcing VTSI into involuntary bankruptcy, and it only takes two creditors to do it, is the fact that there would be nothing for the unsecured creditors after the IRS got theirs. Any enterprise that acquired the stock of Virtra would be acquiring that prospect as well.

VirTra has an insignificant market share in its chosen arena. If indeed VirTra’s technology gives them a competitive advantage in the hands of others with resources and management skills, how much in addition to the purchase price would they be willing to pay? How much of a hit to current earnings per share would they be willing to take in order to add VTSI to their arsenal? How much dilution would the new shareholders have to endure?