Dutchess didn't kill VirTra. Dutchess gave them $1.2 mm in cash for 3 years at 8% interest. Virtra gave them back somewhat less than that in common stock.
The IRS didn't kill VirTra. VirTra has yet to give the IRS a dime in back payroll taxes or interest or penalties. They have yet to make the first $25,000 installment on their unprecedented agreement to pay the IRS.
The management of the company killed Virtra. This is a company that two or three guys in a rented suburban office warehouse could have operated. It didn't need a bloated payroll with more Vice Presidents than a community bank. It didn't need a public company presence. It did need the kind of marketing that two guys in a van pulling a trailer and taking the show on the road to every county sheriff and every military base they could afford the gas to get to and from.
It will be interesting to see how this plays out. They can't afford a Chapter 11 unless someone swoops in with a pre-packaged deal. A Chapter 7 puts the meager assets of the company up for auction with any proceeds going first to the IRS and then (as if there would be any more) to Dutchess. Either way, current shareholders are the bride left standing at the altar. Or, perhaps no creditor, knowing those big accounts left in line ahead of them, will bother to spend a dime to push them into bankruptcy, in which case VTSI.OB becomes VTSI.PK with all the baggage from before brought along with it.
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