Mail Stop 03-05
June 7, 2005
Via U.S. Mail
Mr. L. Kelly Jones
Chief Executive Officer
VirTra Systems, Inc.
440 North Center
Arlington, TX 76011
Re: VirTra Systems, Inc.
Amendment No. 2 on Form SB-2
Filed May 31, 2005
File No. 333-123890
Dear Mr. Jones,
We have reviewed your filing and have the following
comments.
Where indicated, we think you should revise your document in
response
to these comments. If you disagree, we will consider your
explanation as to why our comment is inapplicable or a revision is
unnecessary. Please be as detailed as necessary in your
explanation.
In some of our comments, we may ask you to provide us with
supplemental information so we may better understand your
disclosure.
After reviewing this information, we may or may not raise
additional
comments. All page number references are to the marked copy that
you
provided to us.
The purpose of our review process is to assist you in your
compliance with the applicable disclosure requirements and to
enhance
the overall disclosure in your filing. We look forward to working
with you in these respects and welcome any questions you may have
about our comments or on any other aspect of our review. Feel
free
to call us at the telephone numbers listed at the end of this
letter.
Registration Statement Cover Page
1. We note your response to prior comment 1; however, the box is
not
checked on the EDGAR version. Please revise.
2. We note your response to prior comment 2; however, the column
titled "Amount of Registration Fee" is not complete on the EDGAR
version. Please revise.
Prospectus Cover Page
3. We note your response to prior comment 3 that the exercise
price
of the warrants is $0.28 per share on the prospectus cover page
and
in the Use of Proceeds section on page 11. We also note that in
the
section titled "The Offering" on page 3, you state that the
"warrants
provide for a strike price of $0.33 per share as to 500,000
shares,
and $0.27 per share as to 250,000 shares." Please revise to
reconcile these two statements or advise.
Prospectus Summary, page 2
4. We note your response to prior comment 7. It appears that you
provided updated information under the Liquidity section on page
17.
Please revise on page 2 accordingly.
The Offering, page 3
5. We note your response to prior comment 8. Please revise to
disclose the amount you may receive if all the warrants are
exercised.
Risk Factors, page 4
Our past inability to pay our debts as they come due, page 6
6. We note your response to prior comment 10. Please revise to
clarify for investors your disclosure that "Collection on some of
these notes is barred by the statute of limitations." For
example,
explain the statute of limitations and how it applies to the debts
you owe. Please quantify the amount so that investors can better
understand this risk.
The success of our new line of virtual reality simulators will be
affected, page 5
7. We note your response to prior comment 13. Please revise to
disclose the information about the ordering process that you
provided
in your supplemental response. Please revise to clarify whether
you
have received purchase orders for the amounts you have disclosed.
We may not have enough funding to complete our business plan, page
8
8. We reissue comment 17. We note your response but since there
are
no integration issues with a selling shareholder filing such as
this
one, we are not sure what you mean. Either comply or tell us why
you
believe your language is necessary.
Business, page 18
Training/Simulation, page 20
9. Please refer to the last sentence of this section. We note
that
you have received several "confidential purchase commitments."
Please revise to clarify whether these commitments are oral
commitments or purchase orders as you discuss in your response to
prior comment 13.
Virtual Reality Products, page 20
Training/Simulation Products, page 21
10. We note your response to prior comment 29 and reissue. Please
revise to disclose the aggregate dollar amount of contracts for
these
products. We note your disclosure on page 5 of the risk factor
section under the subheading, "The success of our new line of
virtual
reality training simulators." If the amount of any contract is so
material to your results that it should be filed, please file it
with
the next amendment. If none is, please disclose that fact and
tell
us information to support it.
Warrants, page 35
11. Please tell us whether the warrants you identify in the first
paragraph are the same warrants that the selling shareholders may
exercise to obtain the shares for this offering. If so, please
revise this section considering your response to comment number 3
above.
12. We note your response to prior comment 38. Please revise to
clarify whether you have issued the shares to Swartz Private
Equity
L.P. and explain to investors the current status of your dispute.
* * * * *
As appropriate, please amend the registration statement in
response to these comments. You may wish to provide us with
marked
copies of the amendment to expedite our review. Please furnish a
cover letter with your amendment that keys your responses to our
comments and provides any requested supplemental information.
Detailed cover letters greatly facilitate our review. Please
understand that we may have additional comments after reviewing
your
amendment and responses to our comments.
We urge all persons who are responsible for the accuracy and
adequacy of the disclosure in the filings reviewed by the staff to
be
certain that they have provided all information investors require
for
an informed decision. Since the company and its management are in
possession of all facts relating to a company`s disclosure, they
are
responsible for the accuracy and adequacy of the disclosures they
have made.
Notwithstanding our comments, in the event the company
requests
acceleration of the effective date of the pending registration
statement, it should furnish a letter, at the time of such
request,
acknowledging that
* Should the Commission or the staff, acting pursuant to delegated
authority, declare the filing effective, it does not foreclose the
Commission from taking any action with respect to the filing;
* The action of the Commission or the staff, acting pursuant to
delegated authority in declaring the filing effective, does not
relieve the company from its full responsibility for the adequacy
and
accuracy of the disclosure in the filing; and
* The company may not assert this action as a defense in any
proceeding initiated by the Commission or any person under the
federal securities laws of the United States.
In addition, please be advised that the Division of
Enforcement
has access to all information you provide to the staff of the
Division of Corporation Finance in connection with our review of
your
filing or in response to our comments on your filing.
We will consider a written request for acceleration of the
effective date of the registration statement as a confirmation of
the
fact that those requesting acceleration are aware of their
respective
responsibilities under the Securities Act of 1933 and the
Securities
Exchange Act of 1934 as they relate to the proposed public
offering
of the securities specified in the above registration statement.
We
will act on the request and, pursuant to delegated authority,
grant
acceleration of the effective date.
We direct your attention to Rules 460 and 461 regarding
requesting acceleration of a registration statement. Please allow
adequate time after the filing of any amendment for further review
before submitting a request for acceleration. Please provide this
request at least two business days in advance of the requested
effective date.
You may contact Rolaine Bancroft at (202) 551-3313 or me at
(202) 551-3755 with any questions.
Regards,
Max A. Webb
Assistant Director
cc: David C. Thomas, Esq.
Rayce, Paikin, Greenblatt, Lesser & Krieg LLP
via facsimile: (212) 684-9022
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Mr. L. Kelly Jones
VirTra Systems, Inc.
June 7, 2005
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