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VirTra Systems Inc. Message Board

  • mvpcapital mvpcapital Oct 27, 2009 8:48 PM Flag

    No issue with Convertibles! People blowing smoke!

    People might want you to think that there is naked shorting going on here with the convertible debt but they fail to state 1)that the convertible debt is only $450k and 2)that the convertible debt can be paid with cash or shares of the stock.

    If the convertible debt holder shorts 1,000,000 shares @ 10 cents and the stock rises to 50 cents, then Vitra decides to pay them in stock valued at 80% of the last 15 trading days, they would get 110,000 shares (40 cents valuation assuming 50 cent average). Oh but they are in the hole now $440,000, guess it's pretty much a break-even for them. They could have just waited to get their $450,000 VTSI owes them. You see, there are a lot of possible scenarios, but there is a huge risk of shorting for the convertible debt holders as people may lead you to believe that they will short based on them being able to convert at a share price of 10 cents; such is not the case, it is the average of 15 days and 4.5 million shares is what they would get today ... but if they short 4.5 million shares and oops, the stock doubles due to high volume, they are going to be in the hole $450k because their debt of $450,000 will only convert to 2.25 million shares @ 20 cents a share.

    Read the 10Q:

    On September 30, 2008 VirTra Systems, Inc. entered into a Settlement and Release Agreement with Dutchess. The agreement
    states that VirTra agrees to pay Dutchess $550,000 in stock or cash without a prepayment penalty. No interest shall accrue on
    the Principal Settlement Amount. This agreement supersedes and clears all prior obligations with Dutchess. As of June 30,
    2009 the total amount owed to Dutchess was $450,660.
    Derivative Liability
    Based on the judgment described above, the Company concluded that these convertible debentures have no further rights or
    obligations arising out of the financing relationship.
    At June 30, 2008, the Company has valued this derivative liability at $0 and has recognized a gain resulting from the change invalue of this derivative liability of $338,135.

    Long-term buy here, 40+ cents by end of November!

    Will I be right?

    We'll find out in 33 days! :)

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    • Hope you are learning something here, mvCapitol:

      http://finance.yahoo.com/echarts?s=VTSI.PK#chart1:symbol=vtsi.pk;range=1d;indicator=volume;charttype=line;crosshair=on;ohlcvalues=0;logscale=on;source=undefined

      .06 - .07 target. which would mean a 40%+ profit for the CDH's :) You have to understand how this game is played my friend.

    • Greetings MVcapitol!
      You said: "People might want you to think that there is naked shorting going on here with the convertible debt but they fail to state 1)that the convertible debt is only $450k and 2)that the convertible debt can be paid with cash or shares of the stock."

      CD is "only" $450K? $450K CD on a 12mm market cap stock is a very large CD. You must ;earn to keep things in perspective here if you want to analyze the situation correctly.

      The company MUST pay the CD holder in STOCK since they have no cash. Why do you think they went with the CDF in the first place? So what do CD holders do when they KNOW the co. cannot pay them back in cash right away? They immediately begin printing money by NAKED SHORTING the stock. You have to look at what the stock price was when the CD first took place. The CDF took place at a MUCH MUCH lower PPS than up here at .09-.13.

      Why do you suppose there is a lid on this stock at .10? Why do you think the stock cannot get above that mark and stay there? Do you think it is simply an arbitrary number and it is coincidence? I assure you, it is not. The CDH's have been naked shorting this stock heavily for weeks and WILL bring the PPS lower and make a very nice profit on the millions of shares they hold short. Unfortunately, there is nothing you can do about that unless you plan on purchasing 25mm shares in the open market, which I highly doubt you have the financial backing to do.

      This is the downfall on CDF...always has been and always will be. There will always be talk about making new rules to stop this naked shorting following CDF, but it will remain just that...talk. Co.'s need CDF when they are desperate for cash and are unable to get it by way of conventional financing. It sounds to me like you are a bit frustrated holding on to VTSI since you cannot "understand" why the PPS has not rocketed higher in the face of all the good news released over the past month. Well, now you know!

      When I see people like you post things such as "This stock will be in the teens in a few days and then .20+ the day after that" I know they simply don't know what they are talking about. Why would you make such an absurd statement like that? There are no crystal balls in this game that will get you ahead. Stick to doing research, research and more research and you'll be better off. Just my .02 (or should I say .06-07 cents).

      I've done my research on your recent plays and it looks like you are underwater heavily on all of them since you purchased them. You're track record doesn't exactly lend credence to your DD analysis as it pertains to this stock.

      As I said, in time the PPS of this co. WILL RISE as long as the company can continue to show a solid increase in revenue and most importantly EARNINGS. But whenever you make a "deal with the devil" you must understand that they will be naked shorting heavily at opportune times...and this is one of those times.

      .40 by end of November? You need to step back and re-think your analysis because in my humble opinion, you are way off the mark.

    • Thanks I was just looking for the amounts and terms.

      Breaking Convertibles
      http://www.iflr.com/Article/2283053/Breaking-convertibles.html

    • aarongb@ymail.com aarongb Oct 28, 2009 10:17 AM Flag

      GREAT points

 
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