To OTC Journal Members:

As I mentioned in the weekend edition, one of the big winners from 2003 is kicking the week off with an outstanding news event. Tomorrow after the close I am going to introduce my microcap idea for the exploding market in low carb/sugar free; Atkins/South Beach food products. I have a really strong feeling about this one, so stay tuned.
 

VirTra Systems (OTC BB: VTSI); US Air Force Places Initial Order

VirTra was one of the big winners of the second half of 2003. After making a four fold move from the introduced level of $.10, the stock made a new all time high last October at $.47. Since then, the stock has been grinding back down to about the mid point of its move.

VirTra Systems has taken its years of expertise and experience in virtual reality technology and turned it into products which are timely for today's unsettled world. In September of last year, VirTra introduced its 360 degree Judgemental-Use-Of-Force training simulator. You are looking at a picture a simulator in use for training law enforcement officers. I'll have better pictures in future editions.

Customers already include Mexico and India. Systems were ordered before the company even had the first working prototype set up for users. In fact, the first working version of the IVR 300 was unveiled last month at the TREXPO Show in Long Beach (Law Enforcement's Tactical Response Show).

I took the time to attend the show, not only to experience the technology first hand, but also to view competing technologies. My conclusion on the competition: There isn't any.

Every other use-of-force training simulator on the market today wasn't much different than the shooting games you would find at the arcade on the Santa Monica pier. You simply shoot a beam at a two dimensional image on a screen.

VirTra's technology puts you right in a real environment. Things are happening all around you, and you have to react. You are holding the actual weapon either the military or law enforcement would use in a similar situation.

I was able to shoot down a terrorist suicide bomber holding some children hostage. Unfortunately, I was killed from behind by a car thief in the next simulation.

Observing the reaction of law enforcement experts was far more interesting than experiencing the simulator myself. People from law enforcement were very impressed, and I personally cannot imagine any major metro area in the US without several of these for training police. For a minimal cost, law enforcement who have been trained on this system will simply be better when handling use-of-force situations in the real world.

My impression from first hand observation: It is simply a matter of time before VirTra Systems starts getting major sales traction in US and International law enforcement community. While we're waiting, the military is starting to make purchases.
 

First Military Contract- US Air Force Steps Up

VirTra Systems announced its first purchase order from the US Military today. In light of recent activity in microcaps that have delivered events of this nature, I would expect the stock to trade extremely well as a result of this news.

According to the press release, the Air Force sent a team to the Trexpo show to experience the simulator. An order for the first unit followed shortly behind.

In the press release Michael Kitchen, VP of Sales for VirTra, discloses: "This is a huge endorsement by the US military for utilization of our IVR HD series simulators. We are already working towards finalization of plans to install additional training systems at further Air Force locations."

It is evident from the language in the quote that the company anticipates further orders from the Air Force. Observers of the interaction between different branches of the armed services know that once one branch of the military has something new and useful, they all need it.

For $.25 is seems like a great bet that VirTra can keep delivering more and larger multi unit sales. The company is in the sweet spot of the market today, as the unfortunate recent escalation of violence in Iraq has put homeland security and defense related companies back on the front burner for investors.

I still believe this stock will eventually find its way to $1. There has been a lag since the end of October when the stock made its new all time high, but the market may have assumed the big sales were going to materialize sooner.

So far this year they have achieved a multi unit sale to Mexico and opened channels of distribution in India. Perhaps the news of the first order from the US Air Force is their best achievement to date, as it marks the first domestic sale. Their simulator has both military and law enforcement uses, so the upside is virtually unlimited.

I provided a longer term chart today, so you could get the big picture. The chart goes back to last July when I first wrote about this company at $.10. As looked at since last July, the stock is parked on a perfect 50% retracement. This suggests the stock is ready to begin climbing again.

If you think a four fold move in 2004 is too optimistic, recall that the stock made a four fold move in the second half of 2003. It happened before, so it could happen again.

Here is the complete text of the news release for your review:
 

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