OT-Greg~I don't quite understand the reason for this post?
it is not CRGQ it is CXN now a big board stock
1) I understand AMEX to certainly be *bigger* than otcbb <g> but each his own as to what a big board stock it... to a pink listed company the otcbb would be "bigger"
I guess I call any board above the OTCBB the big board because they are real exchanges. I should have said major exchange.
2) I understand CRGQ is now CXN. I first looked at CRGQ's past filing with the hopes of understanding the share price relative to a possible RS speculation.
I was looking at it to see how close their financials matched VTSI
3) in so looking I scanned that filing quickly and saw penny warrants everywhere which prompted my comment; "Then what they are trading for? Go figure. Not one I was interested in investing in. To each their own, I guess"
My mistake I thought you looked over their filings and were surprised that they obtained an AMEX listing based on what you read.
Greg- you posted; I say: What does that say about financials playing a big part in getting on a Big board? Sounds like if you are a good story stock you can get on the AMEX.
Greg, with all due respect you have been saying that for YEARS so one *might* draw from that .... that VTSI might not be the great story stock you think it is? That there are other reasons VTSI can not make the jump? That Kelly is intentionally keeping the share price depressed due to on one hand saying he knows the jeopardy to the shareholders in remaining on the OTCBB while on the other hand is not making the hypothetical move to a better exchange (if that were even possible)?
I will keep saying it until it happens. Kelly's words. Fehrenbach: That’s encouraging. Kelly, also one more thing, then I’ll back off here and give someone else a chance. You also stated the company plans to move away from the Bulletin Board to an exchange, and we’re actually running ahead of our plans. What does running ahead of our plans imply? Is there a target date, and what is it?
Jones: No, there’s really no target date, Dennis. We want it to happen, and we want it to happen sooner rather than later. I can only relate what people have told me, because I’m certainly no expert on getting a company to an exchange. I’ve been told that we could be on the AMEX now, if we wanted to. The AMEX, from what I understand, is fairly aggressive about inviting new companies to be on the exchange. They have the old quantitative standards which are, I think it’s six different alternatives, where if you have X-number of shares and X in the float, and a certain share price -- there’s a number of different factors, and there’s several different scenarios that you can qualify under this one or that one or that one. They also have the qualitative standards, where they review your company independent of those quantitative standards, and make a decision whether to accept your company or not. We feel that the time to do that, Dennis – it almost gets back to my theory of how I think a public company should be run, at least one like ours.
I’m certainly not criticizing Jack Welch at GE, who I understand focused on the share price. No doubt that’s the largest company in the world, and a mature company, and could we say, just a little different from VirTra Systems. At a company like ours, I think the focus should be on the company. Sure I wish the share price was higher, and I wish it wasn’t artificially lowered by the former insiders selling, but we’re not a mature company. If we focus on building the company, if we build the products, put the team together, develop the technology, take care of our financial situation, if we build the company, I sincerely believe the share price will follow. I think the appropriate time for us to contemplate and move to the AMEX, or maybe NASDAQ Small Cap -- I’m not curtailing that opportunity -- is once we have begun to penetrate, once we can convince, we can demonstrate and convince, the investment community that this company is for real, we have revolutionary technology, we are entering new markets, and we are beginning to deeply penetrate those markets, I think that’s the appropriate time.
Greg, what are you saying?
I have spent a good deal of time looking back over September and October posts (2002) in which we discussed the potential of this company... ie the 2Q missed profitability, the potential to be profitable in that 4th Q, the great news of a CC was coming, then your understanding of what YOU heard in that call, and that a move to the AMEX was possible within a year!
It didn't happen, did it?
Did you read this post yet about the back stabbing employee's? It might answer a lot of your questions or maybe not.
Will it happen this time around? Well things are certainly better than they were at the point of the last CC.
Like religion, it all comes down to faith and hope IMhO
I wouldn't still be holding my long core position if I didn't have any hope that they might pull it off. I must add I don't have the "faith" to the degree that I find most here do.
IMO it will happen and most longs appear to agree. Companies have setbacks now they have a good sales staff and the best training product in the world lets see what they do with it. best! kp
Greg~correction... when I mentioned in the post this one threads to, the last CC (things are certainly better than they were at the point of the last CC) I was referring to the Oct '02 CC. Upon reading the posts that followed and your reference to the IBox and the 4/03 call, I guess that was the last call.
BTW, in looking for the Oct 02 call, I found it most interesting looking over the postings at that time. The nice thing about archiving the posts here on IHub is that one can go back and see what was being said, what was being hyped, what was being refuted and what interpretations were at that the time when everyone was posting their "opinions" of what was heard, was said and what it all meant.
It was quite a revelation to see what was being posted then and what is being posted now.
If anyone has the time to read the posts and the discussions at that time I feel your time could not be better spent, It will help you to understand the frustrations I find I am experiencing today.
Also, the CC transcript from 10/02 was found at Post #2131
I am including it here for some of the newbies to read through.
In some ways, it could have been written in '04 <g>
Starting first with my Post #2067 then Post #2091 (Greg's notes) then #2129 which was a response to Greg's comments then the transcript itself.
I am not going to "highlight or use the special text features" that I normally do or did then. If you would rather, just go to the actual post and read it as it happened OR start as I did beginning at 1998 and keep reading the interchanges from that time. I found it most interesting and trust you all will as well?
-------------------------- my post #2067 (kp's post)
I can see why this board likes Kelly so much... handled himself well given the cards he was holding and called them liked he saw them IMO
Also wanted to give credit to quality of questions addressed on the CC and their thoughtful nature (from a business standpoint)
Dennis~was that you asking about the share price and kicking yourself for not buying low and selling during the summer highs?
...sure could have increased your position during these doldrums with the profit that could have been made but hind sight is always 20/20.
The Dennis in the CC made an excellent point re: should they get the deals done to become profitable in Q4, then what could they do to top it in the coming 12 months and Kelly sounded pretty confident in his on going spec revenues!
Greg~ didn't you post awhile back when I was questioning the Racing Vision's financial condition... that they "had the money in the bank" and that they HAD what was needed or else Kelly folks wouldn't have done the deal?
...now it sounds like they didn't get any (or much?) money upfront for that deal as it sounded like they did the preliminary work in exchange for the exclusive rights (future money is best to be hoped for IMO) and he also stated (at around 21 minutes into the call) that they (RV) were *seeking* financing to establish a park presence and that presence is at best sometime into '03????? Sure hope RV has a heck of a Xmas with sales of consumer products into the home side of their business or else they may not ever get the needed money to the disadvantage of VTSI.
and lastly Greg, do you have *any* understanding as to who in Venezuela beat them out on the euro deal and what their technology was like? Doesn't sound to me like VTSI has a lock on the tech after all or am I missing something here?
good luck folks....
kp ps after the discussion on the AMEX --being over a year away at best (or so I think he said)-- is the big board potential anything but a long term dream? At least he wasn't hanging his hat on the BBX and concentrated his attention on the AMEX... he seemed to be a realist that dreams ...a good thing in a CEO (IMHO) ...I wonder when the next CC might be... in January '03?
...sooner? later? any guesses?
TIA Best! ----- #2069 KP - Now let me make myself perfectly clear LOL. See my responses in Bold wouldn't want you to miss them.
Greg~ didn't you post awhile back when I was questioning the Racing Vision's financial condition... that they "had the money in the bank" and that they HAD what was needed or else Kelly folks wouldn't have done the deal?
...now it sounds like they didn't get any (or much?) money upfront for that deal as it sounded like they did the preliminary work in exchange for the exclusive rights (future money is best to be hoped for IMO) and he also stated (at around 21 minutes into the call) that they (RV) were *seeking* financing to establish a park presence and that presence is at best sometime into '03????? Sure hope RV has a heck of a Xmas with sales of consumer products into the home side of their business or else they may not ever get the needed money to the disadvantage of VTSI.
Here is the post and link you are referring to.
Racing Visions has Operating capital money secured.
I asked Kelly if Racing Visions has the funds to honor such a big deal since I couldn't find much information about them. Here is his response "Racing Visions is a relatively new company. We have been advised that its operating capital is secured by the deposit of a $30 million bank CD." Looks like the companies investor awareness campaign is really starting to work.
My take on the information above was that they were told about the operating capital not that they were going to concentrate on the in home market first that probably cost them an appearance at the IAPPA show <http://www.iaapa.org/> since they were planning on displaying one of those racing simulators there.
and lastly Greg, do you have *any* understanding as to who in Venezuela beat them out on the euro deal and what their technology was like? Doesn't sound to me like VTSI has a lock on the tech after all or am I missing something here?
Don't know who the company was. As usual you are missing something this deal involved their Netgamelink systems and would have involved Internet gambling this isn't their new photorealistic technology these are the systems they are putting on the back burner. My guess is the company used Virtra's bid and shopped around and got a cheaper price. That doesn't mean the other companies product is better just cheaper.
Greg ----- #2091 My revised conference call notes. This isn't word for word.
Kelly believes that they can make it to AMEX in a realistic period of time. The reason why AMEX is realistic is because they have quantitative standards and qualitative standards. If the company can demonstrate that it is an emerging up and coming company the AMEX will let them on there.
Advertising/Promotional market
Kelly announced they have closed the largest single short-term project in the company's history. It is a fortune 100 company and they will produce the best immersive experience ever created. The deal is for a million dollars and they received a payment from this deal. This project met their gross margin requirements and they can't announce the contract until it is completed because the company doesn't want to let their competition know what they are up to. The project should be completed by the end of this year.
They have 3 other projects at the advanced negotiation stage. One contract is with the Athens Olympics and the other two are with well-known companies. All these contracts meet their margin requirements and are in excess of one million dollars. One of these deals should be completed by March 2003.
Amusement entertainment
They may have a deal with a major museum in Washington where they will produce a 12-seat theater that will generate 400,000 net revenue next year.
They still believe in their Netgamelink system but that isn't high on their priority list because of all the interest they have in the homeland security field. The gaming market has been flat and they don't see the opportunities in this market that they do in the Advertising/promotion, education and training simulation markets.
Racing visions is currently focusing on their in home product sales and won't seek funding and concentrate on their out of home product sales until next year so Virtra's product development for this company has been pushed back.
The NFL training system may not be completed until the next training camp if the deal is signed.
Training and simulation
Two prototypes are currently being produced (one using headset technology and the other projection technology). They are in discussions with several agencies. They have a conditional sale with one agency if their prototype meets the agencies specifications. The company will provide two other agencies with prototype demonstrations that they need to see before they purchase their systems. They will also demonstrate these systems at the Interservice/Industry Training, Simulation and Education Conference (I/ITSEC). <http://www.iitsec.org/> December 2-5, 2002 Orlando, FL. They submitted white papers to many government agencies, which details their technology. They are working on several large projects for next year.
The other stuff.
Ferris leaseholder debt will be addressed within a years time when the company becomes profitable that is their main obstacle to getting on the AMEX. They owe 4.3 million to lease holders and expect to be able to address this debt using the following options.
1.) A discounted cash payment 2.) A payment plan with interest that would exceed original loan amount. 3.) A payment of shares.
Kelly is driven to address the debt to Ferris leaseholders as well as the Gamecom promissory note holders. Kelly won't take any compensation from the company until that is addressed.
Dutchess is ARISA (not sure it this is the right term) approved and cannot short VTSI it is illegal for them to do so. Dutchess will be their main financing provider since it can provide investment bank services. Dutchess financing will be used to move the company forward and help build the company and address their debt requirements. They believe their stock price will rise when they announce what they have going on publicly. Kelly believes if they build the company by executing their business plan the stock price should appreciate and hold at higher levels.
Exposure from each project should lead to additional projects. They could be profitable in the 4th quarter if some of the other deals come to fruition in the next few weeks.
They expect to open a new Website in 4 weeks.
Take Care,
Greg
VirTra Systems - Ticker: VTSI the OTC stock with big board potential! ----- #2129 care to elaborate on that, Greg?
I'll tell you one thing I'm sure about we make more money than any other 14 cent stock out there
...*make* more money??
Are you suggesting they are MAKING money? lol
Certainly not profits... and if you are referring to *revenues* then I would point out you have missed many other companies that are trading even lower with REAL revenues (no profits?) such as WCOeq.
Since you are quick to point out that I always seem to be missing something, maybe you can tell me what I am missing this time?
too bad the rose colored glasses you like to wear weren't made by VTSI <jk>
as you like to say, *take care*
best to the board and good (IMO) to see more realism expressed in the posts of late
kp
"If knowledge can create problems, it is not through ignorance that we can solve them." -- Isaac Asimov
VIRTRA SYSTEMS SHAREHOLDER CONFERENCE CALL OCTOBER 8, 2002 Good afternoon ladies and gentlemen. Thank you for standing by. Welcome to the VirTra Systems company update conference call. At this time all participants are on the listen-only mode. Following the presentation, we will conduct the question and answer session. Instructions will be provided at that time for you to queue up for questions. If anyone has any difficulties hearing the conference, please press five zero for operator assistance at any time. I would like to remind everyone that this conference is being recorded, and I will now turn the conference over to Mr. Kelly Jones, chief executive officer.
Please go ahead sir. Thank you Bridgette. Welcome ladies and gentlemen to VirTra Systems' shareholder update conference call. I am Kelly Jones, and I am privileged to serve as chief executive officer of VirTra Systems. Before we begin, I want to remind everyone that certain statements I will be making today are of a forward-looking nature. Although I believe these statements are reasonable and accurate, there is no assurance that theanticipated events described, will come to fruition. VirTra Systems' actual results could differ materially from those anticipated in the forward-looking statements, as the result of certain factors including sales levels, distribution, competition trends, and other market factors. As always, I respectfully urge you to review VirTra Systems' filings with the Securities and Exchange Commission.
During this call, I will be discussing the recent progress of our company, current product initiatives, business objectives, our financial status, and, of course, whatever topics might be on the listeners' minds. I am going to bring you up-to-date on a few matters, and then we'll open the conference up for your questions. We have allotted 45 minutes for the call. Let me assure you that VirTra Systems is very much alive and well. Simply because we have not been issuing press releases announcing progress, does not mean that we are not making progress, does not mean that we are not moving forward on our initiatives, and does not mean that we are not executing our business plan. Drawing such conclusions would be grossly in error. After our conversation today, I am highly confident you will conclude that we are making significant progress in all three of our product markets, advertising/promotion, simulation/training, and entertainment/amusement. Let me initially address our current share price. Do I wish the share price were higher? Of course, I do. However, management for this company is not driven by the stock's current share price; rather, we are driven by taking this company to the Amex. I sincerely also believe you have to look at our share price in context of the overall market. Yesterday, the NASDAQ reached its sixyear low, and the Dow has approached a five-year low. This morning, I read that Texas Utilities and EDS are trading at all time lows. There are many, many proven blue chip-quality companies currently available at very attractive prices. Please also remember the risky nature of Bulletin Board stocks in general. I most certainly am not an investment advisor, but in my opinion one should only be interested in a Bulletin Board company if the investor believes it has the products, the energy, the initiative, and management capable of emerging the company onto an exchange. If you look at VirTra Systems in that context, I sincerely believe our opportunities have never been greater to accomplish that goal. Let there be no mistake about it, our objective is to take VirTra Systems to the American Stock Exchange within a reasonable period of time. Let's now look at why I think that's possible.
In the advertising/promotion market, I am pleased to announce that we are currently underway on the largest single short-term project in the company's history. Although I am not at liberty to announce for whom the project is being constructed, I can tell you that it is a Fortune 100 company and the experience we are producing is what we believe to be the most innovative, interactive, and immersive virtual reality experience ever produced. This project, we believe, will be another first in the industry, combining our latest generation of photorealistic live-action video with interactive computer-generated graphics. This particular client is somewhat leery of announcing its promotional projects prior to completion, but we look forward to announcing this at our earliest opportunity. The project should be completed around year-end. The project size is right around a million dollars, it is at our gross margin requirements, and we have already begun receiving payment.
In the advertising/promotional market, we also have three other projects for which we currently have refined proposals outstanding. These are not signed contracts; however, they are also not merely initial proposals; rather, these pending proposals are revisions resulting from a series of negotiations, and meet the project size and characteristics requested of us following those negotiations. One of these I have already publicly identified as involving the Athens Olympics, and the other two are with company names you would instantly know. We believe we have an outstanding chance of receiving each of these projects, all of which are in excess of $1,000,000, and all of which meet or exceed our gross margin requirements. One of these is a quick turnaround project, to be completed prior to March of next year. We have also been moving forward in the amusement/entertainment market. Rob White, our vice-president of operations, did an outstanding job for us in this arena during this past parkseason. Certainly you know that travel was down, and park attendance was down, but the most significant negative impact for amusement parks throughout the country was the high incidence of season pass holders. Season pass holders simply don't spend the type of discretionary money on additional items at the parks as do the destination travelers. However, despite essentially no new equipment or software, we still maintained profitability in these parks, and we intend to upgrade our park presence with new virtual reality experiences prior to next season. Significantly, we have an oral agreement and are working on a written contract with a major name museum in Washington to establish a VR Zone presence at this big-name museum. This placement, probably of between ten to 12 seats, to be inserted early next year, is projected to earn the company approximately $400,000 in net revenue. However, more importantly, this will place our presence and prestige in this market on a new plateau, which we believe will greatly expand our opportunities within this market.
Finally, regarding the training/simulation market, we are moving forward in dramatic fashion. With the Dutchess funding, which we intend to use in an accretive manner to build the company's resources, we are currently constructing two brand-new virtual reality training simulator prototypes. I can't be too definitive here so as to give away a competitive advantage, but I will tell you that one prototype utilizes our recently-expanded headset technology, while the other uses an alternative display technology. We have had a series of meetings with several governmental agencies, and we have designed and developed these two prototypes as a direct result of these meetings and the requested specifications. In short, we are building two different prototypes for interactive educational technology for advanced training purposes. One of the major advantages of these prototypes is the use of our photorealistic technology, which is a vast improvement over computergenerated images. In short, we can offer unparalled realistic scenarios in a 360-degree environment, which we believe our competition simply cannot do. I am pleased to inform you that we have a conditional sale with one particular agency upon expected approval of a prototype, and at least two other agencies have specifically asked us to return when we can physically demonstrate the technology that our prototype will accomplish and demonstrate. These two prototype systems are currently under development, and we intend to unveil them at the Interservice/Industry Training, Simulation, and Education Conference in Orlando in early December. These prototypes will be relatively standardized products, although of course the source content--the scenario for which the particular agency desires training--will of course change. These prototypes in no manner limit our ability on the much, much larger custom projects for which we have had continuous discussions and for which we have presented custom specifications. I trust that these introductory comments will show you that the company has been making tremendous progress, although quietly as we have not been issuing press releases as these matters have not yet quite reached fruition. We most sincerely expect that they will, and we continue to believe that with our immersive virtual reality, we can put people in the middle of an experience, with sight, hearing, smell, and feel that no company in this world can do. I continue to believe in this company, and my optimism for its future success has never been higher. Bridgette, I am now ready for shareholder questions, and I am looking forward to this dialogue. Bridgette: Thank you, sir, one moment please. Ladies and gentlemen we will now conduct the question and answer session. If you have a question, please press *1 on your touchtone phone. You will hear a three-tone prompt acknowledging your request. Your questions will be pulled in the order they are received. If you would like to decline from the polling process please press *2. Please lift the handset if you are using a speakerphone before pressing any keys. One moment please for your first question. Our first question comes from Norma Little, who is a private investor. Little: I would like to know if you ever received or learned that you were trying to get, I know at one time that we heard about that, that you were trying to get a loan. Jones: Ms. Little, we have concluded a financing with Dutchess Private Equities where we received a convertible debenture for $450,000 and we have also finalized an equity line that we can draw down upon from time-to-time in the amount of $5,000,000. We completed that funding, I guess we negotiated it in July, signed the agreement as I recall on July 11th, and then we went through a registration process filing what's called an SB-2 registration statement with the SEC and that I believe that was approved by the SEC in late August. Little: Thank you. What's the website now? Jones: It is www.virtrasystems.com. Little: How is that VirTra--Sir, what? Jones: virtrasystems, and I'm glad…. Little: Is that .com? Jones: Excuse me? .com. I'm glad you brought up the website, because we are in the midst of an entire re-do of the website which hopefully we'll have completed in about three or four weeks. Little: I know I have tried to get you and I couldn't, so I'm glad of this call. Jones: Well, and again, I appreciate your bringing up the money. The Dutchess funding has, and I mentioned briefly in the introductory comments, it's allowed us to move forward and to use the money in a way for us to build the company, and by building the company, we believe that we can address not only our future growth requirements, but also the debt that we carry with it. Little: Thank you very much. Jones: You're welcome. Bridgette: Your next question comes from John Swain who is also a private investor. Please go ahead, sir. Swain: I'm wondering if you've made any plans, definitive plans, to take care of the debt obligations from the various leaseholders from the original Ferris days. Jones: Nothing has changed on that subject from my continuous dialogue perhaps with you and the other leaseholders. We've had to turn the boat around, then we've had to make the boat profitable, which we are close to doing, and by doing so then we can address the leaseholder indebtedness. That is currently the largest obstacle to taking this company to the Amex, and in order for us to be able to do so, we have to address. We continue to believe that as soon as we know we have the funding to allow us to proceed, we're going to offer to the leaseholders a selection of a cash payment at a discount, or a larger amount over time with interest, or a conversion to either our common stock or our preferred stock. Swain: Are you at liberty to advise how much your leaseholder investments are in total? Jones: Sure, my recollection is, it's about $4.3 million. It's right there in all of our financials filed with the SEC. Swain: $4.3, that much? Jones: Yeah, that's one of the things that I've tried to explain to the leaseholders in the dialogue with them is that it's such a large number, that to be able to address that is either going to take profitability from the company, or a proven opportunity with additional outside funding. We have to treat all of the leaseholders similarly, and if we tried to do that prior to being profitable, it would hurt the opportunities in the long run which would further endanger those investments. Swain: One further question. Off the record… Jones: This meeting has been publicly noticed and everything we say up here is going to be available. Swain: To take care of the leaseholder obligation, if you were to guess a time between one and five years, what would you think we might be looking at? Jones: I would be surprised if we have not made a proposal to the leaseholders well before one year from now. Swain: O.K. you've answered my question. Jones: Mr. Swain, I think I've pretty much told everybody, but let me reiterate that we are driven toward making good not only on our leaseholder debt but also the promissory note indebtedness that GameCom brought to the merger. I've publicly stated that I'm not taking a penny out of this company in salary or other compensation until that is addressed. Swain: You've answered my question and I appreciate it. Jones: You're welcome, Mr. Swain. Bridgette: Your next question comes from Tim Rock from First Security Investments. Rock: Hi, Kelly, how are you? Jones: Hello, Mr. Rock. Rock: I have a couple of questions, actually. The first one may be the most difficult. Can you address the speculation that, and you and I have talked about it extensively, but for the public record maybe you could address the speculation that Dutchess is negatively affecting the stock price. Jones: I don't think that's true. There's several reasons for that. First of all, Dutchess is a domestic fund. They are ERISA approved. For a fund that is ERISA approved to short a stock, or to sell long against future delivery, is flat illegal. Additionally, that would violate what's called Dutchess' "investment intent," which is filed with several agencies. That also is illegal. In our contract with Dutchess, it is clearly a breach for them, they are precluded from shorting the stock. Also, it's just not consistent with what Dutchess does. I am pleased to advise that Doug Leighton, the managing director of Dutchess, was at our offices all day yesterday and we went out for dinner last night. One of the reasons we chose Dutchess is because of their long-term relationships with their investment clients. They have funded over 70 companies. Dutchess, sure they make some money on our convertible debenture and they make some money on our equity line, but it's relatively marginal compared to where they make their real money, which is as a full-service investment bank. Again, one of the reasons we chose Dutchess is our belief that by developing a long-term relationship with them as we grow, as we develop more resources, as we need additional capital if necessary to meet these requirements, that Dutchess is the type of entity that can provide through its investment banking resources the funding we need and the guidance to actually take this company to the Amex. Dutchess is the type of company that it makes its real money when one of its clients like us graduates to an exchange. I simply do not believe that Dutchess is involved in our share price. As I mentioned, I mean good grief, it's just like the old saying that a rising tide raises all ships, where we've been swimming upstream with our share price. Also, you have to remember the investment community doesn't know what we know. Some of the things I have just described to you have never been publicly announced, and we also know the breadth of our opportunities in all three of these markets, what we think these two prototypes are going to do once they're accepted and unveiled at the I/ITSEC show, so as I mentioned, of course I wish the share price is higher, but we believe the share price will be higher at the right time, and it's still premature for this company. Rock: Great, thank you for addressing that. The next question I have is in regards to the project you are working on for the Fortune 100 company, do you see any follow on projects coming from this? Jones: Of course we do. One of the reasons we brought Tom Milks on as our national sales director is to focus on the advertising/promotional market. Everything we've done, every project we do, upgrades our technology for the next project. Particularly with this application, the major technological advance is going to be the resolution of the video. We've not had the money, we've not had the funds, to get out and advertise our projects, attend the trade shows, or road shows of the various promotional companies that really put together these types of projects. Every time that we do a project for a major company like this, and they renew, or more people see them, the more that virtual reality becomes an accepted part of promotional projects. So, of course, we expect that the more of these we do, the better the opportunities will become. One of the great sales techniques we have in this area is that Buick and now Red Baron have renewed the experiences. That shows that they're durable, that they exist, that they last, that they have enduring drawing power, and as any successful product goes, exposure leads to new potential customers. Rock: Excellent. The last question, and then I'll open the floor back up to everybody else. I know you can't speak off the record on a publicly announced conference call, but maybe you'd care to comment somehow rather on the speculation that you could be profitable in the fourth quarter. Do you have any comment on that? Jones: Well, we're not offering, as the magic word "guidance" in this comment, and we're not predicting when we're going to be profitable, but it certainly could occur in the fourth quarter. This is a major project. I didn't announce the full size of it--I kind of announced generally where it was. I didn't announce our margins on it, but even with our continued accrual of our obligations under our leaseholder indebtedness, with this project and with the others that should reach fruition within the next few weeks, a profitable fourth quarter is certainly possible. That doesn't include as I alluded to as a major, major project with a particular agency for whom we've been in negations with for months. Rock: Excellent. Thank you very much, Kelly. Jones: Thank you Tim. Bridgette: Ladies and gentlemen, if there are any additional questions at this time, please press *1. As a reminder, if you are using a speaker phone, please lift the handset before pressing any keys. Our next question comes from Richard Deneefe. He is also a private investor. Deneefe: Hi, Kelly. Jones: Hello, Richard. Deneefe: I wonder if we could get a quick update on the VR racing contract that you signed a while ago. Jones: Racing Visions? Deneefe: Yes Jones: Racing Visions, the company is currently focusing on their in-home consumer products for delivery this Christmas. What we understand is that they are quite pleased with their market acceptance. They are not going to really look at the out-of-home market, meaning the amusement park market, until after Christmas. Racing Visions has been seeking funding to establish their park presence. One of the things that we did with that concept, it's a concept that we very much believe in. One of the objectives of that contract was we did some preliminary design and development for Racing Visions and for that we received the right to be the exclusive supplier of their particular applications once they get funding and really focus on this. We had frankly hoped to demonstrate this technology at the upcoming IAAPA show. But, with our development of our prototypes in the training/simulation area, and with their focus on the in-home market, we just felt that this fall wasn't the right time to push on that, Richard. Deneefe: Also, could you give us a quick update on the NFL training system? Jones: The NFL training system is still under negotiation. There's been some health reasons why our discussions have not gone further with that particular client, but the negotiations continue. We continue to narrow the focus in what we can do for this particular team, and we're very optimistic that we very well may have something in place prior to the next NFL pre-season camp. Deneefe: Thank you Kelly. Jones: You're welcome, Richard. Bridgette: Your next question comes from Dennis Fehrenbach, from Bay Company Service. Please go ahead. Dennis: Hi, Kelly. Jones: Hello, Dennis. Dennis: Kelly, during the past year, our hope to secure a Homeland Security contract has been a major company initiative and is taking longer than perhaps the public first thought or hoped for. You mentioned that if we're awarded a contract or contracts that perhaps we could be profitable by the fourth quarter. So let's say this happens, and we do become profitable. How would you improve on next year's revenue and contracts when this size and nature seem to be slow in coming? Would you not have to be working on those contracts now? Jones: Well, we are, Dennis. As I mentioned, we've had input with several different agencies that we have submitted what are called "white papers," to more than agency, which details our technology. One particular agency has agreed to buy units from us pending approval of the prototypes. Essentially, once we can show them that the prototypes will do what we have described to them, and we have every confidence that they will. Several other agencies have said "what you do is revolutionary, it's certainly a step beyond the competing products which we have purchased, but we need to see a prototype before we begin to purchase them." This prototype should be completed by late November. We're going to show them to the particular agency prior to the I/ITSEC show, and then we should be ready to go. You might also know that this is a brand new market--I mean the training and simulation market has changed dramatically within the past year, and we feel that ten months is not a relatively long time to enter a market of this size and magnitude, and with this sale that we have pending approval of the prototype, we will be in the market. We will be in the market with a major, a major federal agency, and there we go. So, I would say, we are, we are, Dennis, working on several large additional projects for next year. Please remember that these prototypes we're developing are products. A particular application for a particular agency will have a number of different scenarios. What is the situation for which the agency wants to train its personnel? So, in addition to showing these agencies what our prototypes can do, both the headset as well as the alternative viewing mechanism, we are already in the process of drafting scenarios for these agencies, so we are much further along than what might appear on the surface. Dennis: This past summer, the share price depreciated to what I believe was .45 there, and only to see it fall back to our 52-week low. How do we prevent this from happening again? Some of the shareholders out there are probably kicking ourselves for not taking advantage of that, but I think some of us believe so much in the company that we're holding on for the long term, but at the same time it's hard sitting here looking at it fall back, and it seems like I could have improved my position here. How do we, once that share price begins to appreciate, how do we hold it up there? Jones: Dennis, the short answer to that is we build the company, which is what we have been doing and one of the reasons I wanted to have this conference call, as everybody was going: "Is the company O.K.? They have not issued any press releases and the stock price is going down and gosh, what's going on?" Well, in reality, we've been fulfilling and performing on our business plan, but nobody knew it because the types of things that we have announced today, for instance the advertising/promotional projects that I mentioned, that's a done deal, we're working on it, we're being paid for that, but that particular company doesn't at this point, and it's more complicated than just this, but it does not typically announce its promotional projects until they're completed. They don't want to tip off their potential competitors as to what type of promotional activity they're doing. But the answer is that we build a company that has the type of revenue, the type of profitability that addresses our debt issue, so if we look at the company from a black and white perspective, there's many reasons to be concerned, but operationally with what we know and what we know of the vast opportunities we have, the huge size of these markets, we have every expectation that we can build the type of company that can stand on business and market fundamentals, and when that happens, and we begin to make those announcements, the share price should perform, the share price should hold, and we should have unprecedented levels of volume in the stock. So, the short answer to that is the old-fashioned way, is that we need to perform under our business plan to build the type of company that deserves the higher share price. Dennis: Excellent. Kelly, I just wanted to say that I really appreciate your taking the time to answer calls and answer questions, and I look forward to continuing. Jones: Dennis, I apologize because this is something that I intended to do on a much more regular basis, and for lots of reasons we simply haven't. Hopefully, people will see that we've been busy. Dennis: Thank you, Kelly. Jones: You're welcome, Dennis. Bridgette: Your next question comes from Al LaRose, a private investor. Al: Hi, Kelly, glad to hear from you again. Jones: Hello, Al. Al: Pretty much my questions have already been covered while I was waiting in line here, which is fine. The only new one that I have is "Are we still pursuing anything as far as the 'Net GameLink'; application?" I know we had a shot at a contract about this time last year, and things didn't work out and I really hadn't heard a lot about it since then. Jones: It's a product that we still believe has viability, but it has been -- its still on the burner, and we haven't turned the burner off -- but it's on the back burner. As I said before, September 11th changed so many things and fundamentally altered our business plan, that we believe we have unprecedented opportunities that should be pursued at the cost of others. Also, we have to be candid here -- the gaming market has been relatively flat and we just don't see the growth opportunities, at least at the present time, that we do in these other three markets. Al: That's why its good for you to have the conferences so you can kind of keep up on some of the things that have been fallen by the wayside, and we know why and where we're headed. Now, you're in for a few months in a market like this, it's a little tough on an individual. Jones: Well sure, Al, and I've read your comments about me saying that a deal was imminent. I've checked the transcript, and I don't think that's what I said. But, we were close a major European deal, and that European deal went to a company out of Venezuela. Let me reiterate here that anything that I'm talking about today, other than that unnamed Fortune 100 company, these are all proposals, they're all advanced proposals, but we don't have anything definitive in hand at the present time. Al: No problem, like I said, I appreciate the update. Jones: My pleasure indeed, thanks Al. Bridgette: Your next question comes from Ernie Cooper, a private investor. Please go ahead. Cooper: Mr. Jones, I was curious to know what is the status now of how many employees we have, where are we located, how many chiefs, how many Indians. Jones: Well, I don't know exactly how many employees we have at the moment. As you probably know, Ernie, our employment is highly seasonal depending on our park operations. We continue to maintain two locations. We have our corporate and sales offices here in Arlington, Texas, where you've attended the shareholders meeting. Our production, our innovative offices, our technological offices, are in the old Ferris headquarters in Phoenix. We have between 15-20 full-time employees. We are adding more employees to assist us in these two prototypes, and in the anticipated manufacture of numerous units after this I/ITSEC show. During the park season, we'll have as many as 130-150 seasonal employees operating at the parks at any one time. Those are managed by Rob White, our vice-president of operations. We have three regional managers that work under him that travel around to all of the parks to maintain the operations the way that we think it should be operated, and then we have park managers and employees underneath them. Cooper: One follow question, and thank you for that answer. Jones: Sure. Cooper: Using the one to five year scenario that one of the previous callers used, when do you anticipate we might be on Amex? Jones: Oh, gee, that's one that I probably shouldn't answer. But with the -- the Amex is advantageous to us for a number of reasons, but one of the reasons that the Amex is realistic, Mr. Cooper, is because they have both quantitative standards and qualitative standards. If a company does not necessarily meet all of the rigid statistical requirements, if the company can demonstrate that it is indeed an emerging and an up and coming company, the Amex will nevertheless let them on there. You've heard my comments that in my opinion the biggest impediment at the present time, because of total asset base and knowing what we know of our projections for next year, I think that will take care of itself. The biggest obstacle would be the indebtedness and the leaseholder debt, and I think I indicated that I think we'll have a proposal on that within the year. Cooper: O.K., I think I read you there. I appreciate it. Thank you very much for your time. Jones: My pleasure, Ernie. Bridgette: Mr. Jones, there are no further questions at this time. Please continue. Jones: Well, I certainly appreciate everyone that called. We allotted 45 minutes for the interview. I hope that it's good that we closed earlier. Bridgette, I certainly appreciate your help as the moderator, and I thank all of you that have been listening and participating in this second shareholder conference call. We will try to make this a regular activity in the future. If you have any questions or wish to learn more about our company, feel free to contact Magnum Financial, or you can contact the company directly by directing your inquiries to our website, www.virtrasystems.com, and of course you can always contact me directly. I make it a priority to respond to both our shareholders and our leaseholders personally. It's getting harder and harder to do, and some of you may notice that it's taking a little more time than it has in the past, but I always do eventually get back to all of our shareholders and leaseholders. Again, I certainly very much appreciate everyone's participation and thanks again for listening. Bridgette: Ladies and gentlemen, this concludes the conference call for today. Thank you for participating and please disconnect all of your lines.
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