Distinguish disclosures from disclaimers.
It is not the disclaimers that are troublesome, it is the factual statements of business status - all phases in the case of the VLNC management's fact statements - manufacturing, marketing/sales, liquidity, and distribution channels.
It is a statement of fact that:
* "to achieve broad commercialization of our products, we will need to reduce manufacturing costs of our battery systems."
* "Our current manufacturing technology must be further developed before we will be able to manufacture our batteries in commercial quantities."
* "To date, we have not manufactured batteries on a commercial scale." (Document dated 6/28/99)
* "Until recently, our batteries have been only manufactured on our pilot manufacturing line, which is able to produce prototype cells in quantities sufficient to enable customer sampling and testing and product development. We are currently in the early stages of transitioning production to an automated high volume production line that will work with our newest battery technology in our manufacturing facility in Mallusk, N.I. The redesign and modification of the manufacturing facility, including its customized manufacturing equipment, will continue to require substantial engineering work and expenses ..."
* "WE ARE EXPERIENCING DELAYS IN QUALIFYING OUR MANUFACTURING FACILITIES. We have been unable to meet our prior schedules regarding delivery, installation, de-bugging and qualification of the Northern Ireland production equipment."
* "From our discussions with potential customers, we expect that customers will require an extensive qualification period once the customer receives its first commercial product off a production line."
The above statements are not disclaimers people, the statements are reports on the status of the business.
When fmk or mooter75 state that "he has heard ..." or that "his sources tell him ..." that VLNC is "very close or may have already begun" shipping product or is "about to" announce an OEM contract, it represents a statement that should not be believed, according to VLNC:
"You should rely only on the information provided or incorporated by reference in this prospectus supplement and the prospectus. We have not authorized anyone else to provide you with different information. You should not assume that the information in this prospectus supplement is accurate as of any date other than the date on the front of these documents."
The filings provide enough information to make it clear that an OEM contract should not be expected within weeks or even a couple of months. Read it. Beyond that time frame, it is pure speculation if and/or when. It is significant that VLNC management is clearly suggesting commercial production is not imminent.
Why is it significant? First, competition and Second, liquidity. Those two factors are the key constraints that suggest that even if VLNC produces into the market at some point it likely will be for less rent and more dilution. And that would be the best case, based on a clear reading of the VLNC managements primary comunications to shareholders.
My view of worthwhile risk/reward mootie was and is VISX. MIKL, as you know, is in a different industry stage and has never been an appropriate comparison. You might want to go back for some remedial CFA testing. It would do you some good. |
