Replies to post #10167 on VirTra Inc (VTSI)

[ByloCellhi]

Bill

I agree - the company has a big debt hole to dig out and large, profitable contracts are the only way to resolve the situation. Profitability is more likely in 2005 assuming the contracts and the company needs company friendly funding (not shylocks like Dutchess) to turn this ship around. IMHO

[SirFelix]

bill, did you see my posts concerning a Convertible Preferred Stock plan?
This plan allows the company to provide a longterm payoff of the debt and yes, it can be wiped off the books, as preferred stock.

The leaseholders have two options:
1. Get nothing and hope they will get some money in court, through longterm lawsuits....or
2. Accept Kelly's "plan" to pay them off with shares over a period of time.

Dilution will occur, not all at once, but over months or years as leaseholders convert their shares.

I gave an example Oct 14, here it is again.....

Convertible preferred shares are preferred shares that are convertible, either at the option of the company or the shareholder, to common shares. Convertible preferred shares give a potential investor the comfort level of guaranteed income on their investment, along with the option to convert to common shares when the company becomes profitable.

And looks something like this....

The Virtra Series B Preferred is sold in the form of a unit. Each unit is priced at $1 and consists of 1 share of Series B Cumulative Convertible Preferred Stock ("Series B Preferred") at $1.00 per share and 6 warrants to acquire common shares at $0.50 per share for a period of three years. Each share of the Series B Preferred carries a cumulative dividend of 3% and is convertible into 6 common shares of the Company. The conversion price is subject to adjustment to the lowest price at which the Company in the future sells shares of common stock, with limited exceptions. The Company has the right to force conversion of the Series B Preferred into common stock upon the satisfaction of a number of conditions, including the Company's common stock trading at a price in excess of $0.75 for twenty consecutive trading days. The initial purchasers of Series B units have also been granted an option to purchase additional units on the same terms at any time prior to 1/01/2005 ..... Blah, Blah, Blah.....

As you can see, we have just turned $3M of Dutchess equity into 3M preferred shares = 18M common shares @ $0.50 = $9M. And the key is that the leaseholders can convert at 75c therefore making an extra 50% on their investment.