VirTra Inc (VTSI)

[ByloCellhi]

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As of December 31, 2007, we are illiquid. We have $554,448 in current assets and $4,608,645 in current liabilities for a net working capital deficit of $4,054,197.


We have several liabilities that we have not had the resources to service. These liabilities include our large assessment from the Internal Revenue Service for unpaid payroll taxes from Ferris Productions and our existing obligations under product financing arrangements from Ferris Productions. Moreover, in March, 2008, our operating accounts were seized by the Internal Revenue Service for these back taxes. However, we were able to successfully negotiate payment terms with the IRS. See Note 13 to our financial statements for information regarding this liability.


The opinion of our independent auditor for the year ended December 31, 2007 expressed substantial doubt as to our ability to continue as a going concern. We will still need substantial additional capital in order to build new systems and reduce our debt load. During 2007, we have financed most of our operations through cash flows from operations. As a result, we have been unable to service most of our debt.