Some forward looking statements some deals that haven't been announced yet.
Overview
Effective May 6, 2002, our name was changed from “GameCom, Inc.” to “VirTra Systems, Inc.,” pursuant to authority granted to the board of directors by the shareholders at their September, 2001 meeting.
VirTra Systems, Inc. was organized in 1996 to operate theme concept microbrewery restaurants. We closed our microbrewery operations in early 1999.
From 1999, when we closed our microbrewery operations, until we acquired Ferris Productions, Inc. as described below, we devoted substantially all of our efforts to developing our 'Net GameLink™ product.
In February, 2000, we changed our jurisdiction of incorporation from Nevada to Texas.
In September, 2001, we completed the acquisition of Ferris Productions, Inc., a leading developer and operator of virtual reality devices. Ferris designed, developed, distributed, and operated technically-advanced products for the entertainment, simulation, promotion, and education markets. The acquisition provided us with a wider array of products within our industry, an experienced management team, an existing revenue stream, and established distribution channels.
The Ferris acquisition was accounted for as a pooling of interests. Ferris was much larger than GameCom in terms of assets, and had substantial revenues whereas GameCom had essentially no revenues at the time of the acquisition.
Our “immersive virtual reality™” devices are computer-based, and allow participants to view and manipulate graphical representations of physical reality. Stimulating the senses of sight, sound, touch, and smell simultaneously, our virtual reality devices envelop the participant in dynamic filmed or computer-generated imagery, and allow the participant to interact with what he or she sees using simple controls and body motions. Our historic areas of application have included the entertainment/amusement, advertising/promotion, and training/simulation markets.
We sold our entertainment/amusement sector -- our “VR Zones” -- in the spring of 2003, in order to more fully focus on the advertising/promotional and training/simulation markets.
We entered the advertising/promotion market with our 2000 “Drive With Confidence Tour™” for Buick, featuring a virtual reality “test-drive” of a Buick LeSabre with PGA professional Ben Crenshaw accompanying the participant. This project led us to additional projects within this market, such as:
• a virtual reality bi-plane experience for Red Baron® Pizza,
• a virtual reality ski jump promotional program for Chevrolet in conjunction with its “Olympic Torch City Celebration Tour™,”
• an interactive promotional project for Shell Oil Product’s Pennzoil® division’s “Vroom Tour™”, which featured Jay Leno “inside” an automobile engine demonstrating how oil functions inside an automobile engine, and ended with the visitor driving Pennzoil’s Formula One car around the Las Vegas Motor Speedway at speeds in excess of 220 miles per hour,
• a 50-seat, 3-D immersive theatre for Red Baron® Pizza’s “3-D Flying Adventure™,” which featured special glasses, Dolby® 5.1 sound, and special effects that literally “jump” off the screen, and
• a recently-delivered recruitment tool for the United States Army, in which participants “ride” in an Army Black Hawk helicopter performing an exciting rescue mission.
We recently announced our new non-headset virtual reality delivery system for the advertising/promotional market, named the “Immersa-Dome™.” We hold exclusive rights to the patent behind the Immersa-Dome’s technology, and have recently announced our initial sale of four Immersa-Domes to an automotive concern for delivery later this month. The Immersa-Dome has been well-received, and we are currently in advanced discussions regarding the Immersa-Dome with, among others, several large advertising agencies, major automobile manufacturers, a search and rescue company, and the United States Army.
Our long-planned entry into the training/simulation market was advanced by the aftermath of September 11, 2001. During the past two and one-half years, we have gained valuable market feedback from direct contact, meetings with, and demonstrations to several governmental agencies that resulted in completing the design of our patent-pending virtual reality-based training systems for judgmental use-of-force and tactical judgment objectives. The systems provide the law enforcement, military, and security markets with a first-of-its-kind 360-degree immersive training environment. Our projection-based, patent-pending IVR™ HD series was completed in January of 2004, and was publicly debuted to the domestic law enforcement market in late March of 2004 at the industry’s Trexpo West trade show in Long Beach, California. We announced our initial sale in this market in September of 2003, and, as of May 17, 2004, we had received orders for ten systems, all variations of the IVR HD series, to the United States Air Force, an undisclosed United States military branch, and to state police organizations in the United States, Mexico, and India. As of May 17, 2004, we had shipped and/or delivered and installed three systems, a demonstration system in Mexico City, and to regional law enforcement training centers in Veracruz and Chihuahua, Mexico.
We have developed significant ongoing relationships with numerous domestic and international security-related municipal, state, and federal agencies, and branches of the military, which have resulted in the submission of confidential proposals currently under review, as well as strategic relationships with large federal defense contractors. We have numerous scheduled demonstrations over the next few months.
We face all the risks, expenses, and difficulties frequently encountered in connection with the expansion and development of a business, difficulties in maintaining delivery schedules if and when volume increases, the need to develop support arrangements for systems at widely dispersed physical locations, and the need to control operating and general and administrative expenses. While the Ferris acquisition provided an established stream of revenues and historically favorable gross margins, Ferris had not yet generated a profit, and substantial additional capital, or major highly-profitable custom applications, will be needed if those operations are to become profitable.
AI
