VirTra Inc (VTSI)

[ByloCellhi]

The Seller - Dilution

Major concern is dilution due to the negative cash flow. The company stock is their only real liquid asset to obtain working capital until they become cash positive. Issuing shares to Dutchess and are they selling so they are not left holding many many shares?

Stock Issuance and Outstanding Share #'s:

12/31/01 32,931,842
12/31/02 37,331,448 4.4M increase
12/31/03 48,568,628 11.2M increase
5/12/04 51,366,906 2.8M for 4 mos - 8.4M annualized

Will become increasingly more difficult for the share price to increase as the outstanding and float increases. Reverse split coming???

For the quarter ended March 31, 2004, our net loss was $(523,465). After taking into account the non-cash items included in that loss, our cash requirements foroperations were approximately $310,509. In addition, we made capitalexpenditures of $42,429 and repaid notes in the amount of $34,160. To coverthese cash requirements, we used existing cash and issued [b[1,545,628 shares of our common stock under the Dutchess equity line for net cash proceeds of $373,887.