VirTra Inc (VTSI)

[ByloCellhi]

From the filing:

Liquidity and Plan of Operations

As of September 30, 2005, our liquidity position was extremely precarious. We had current liabilities of $4,880,964, including $482,860 in unconverted obligations under the lease financing for the old Ferris Productions virtual reality systems, $991,531 in accounts payable, and short-term notes payable of $1,125,149, some of which were either demand indebtedness or were payable at an earlier date and were in default. The $1,125,149 is with a bank with which we recently negotiated a renewal and a new amortization period. As of September 30, 2005, there was only $352,978 in current assets available to meet those liabilities.

To date we have met our capital requirements by acquiring needed equipment under the Ferris non-cancelable leasing arrangements, through capital contributions, loans from principal shareholders and officers, certain private placement offerings, through our previous equity line financing with Dutchess Private Equities Fund, L.P., and through our current convertible debentures with Dutchess Private Equities Fund, L.P. and Dutchess Private Equities Fund II, L.P.

For the nine months ended September 30, 2005, our net loss was $1,115,287. After taking into account the non-cash items included in that loss, our cash requirements for operations were $1,286,076. In addition, we made capital expenditures of $5,845 and repaid notes in the amount of $214,915. To cover these cash requirements, we used existing cash, borrowed $1,250,000 on convertible debentures, and issued 246,352 shares of our common stock under the old Dutchess equity line, for net cash proceeds of $76,142.