From A to Zeev" -- SI Sacks Zeev Message Board

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Pastimes : From A to Zeev" -- SI Sacks Zeev

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To: Zeev Hed who wrote (514)	10/21/1998 11:08:00 AM
From: Larry Brubaker	of 708

Zeev, they had to redesign their production line. As of mid-August during the last CC, they said that was essentially complete. Insider buying began in late August, suggesting the redesign was successful. Potential customers have had non-production samples for some time, and are presumably testing production samples now. Speculation is there will be a contract announcement soon. The bottom was reached after announcement of their "hybrid" convertible preferred shares. I call them a hybrid because if VLNC announces a material contract before 1/27/99, the conversion to common is at about $6. If no contract before 1/27/99, conversion can be at a floorless variable rate. I'm sure insiders are well aware of the dangers of floorless variable conversions, and their buying of 600,000 shares suggests to me there will be a contract before 1/27. Also, short interest had been increasing during the spring and summer, hitting 600,000+ shares after the private placement was announced. It has recently begun to decline. Down to a little more than 400,000 shares. Thanks for the read.

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