TMoney, et.al.: Too bad you missed all the fun. As others have stated, it was good to put faces to pseudonyms. It was a pleasure to meet everyone from Rich Wolf, to Mooter, HellCat to Mark Johnson and LOT'S of other folk. Everyone certainly had that "I've just hit the Lotto" radiance about themselves, and there were grins aplenty. 'Course, it was help by the evening dinners libations; speaking of which....hey, Mark, kudos to your brothers winery. Who'da thunk New Mexico could produce such a product. Heh! Dang if it wasn't tasty. The only downside to the whole adventure, from my point of view, was trying to swing from "right coast, to left coast, to right coast", all within 36 hours. It's left me a lip smacking, yawning, head scratching sleepy mess(and Lev's done this 24 times around the planet, all at 63 and with a variety of ailments??! Whoo wee). But even so, it was a small price to pay. Oh...and a parenthetical aside....Las Vegas...jeeezus...I got a chance to drive up, and down, the "strip" after the SH meeting concluded, what with having time before my flight...WHAT a carnival atmosphere THAT must be at night, eh? Where else on the planet are you going to see a 10(?) story scale representation of the Effiel Tower smack up against a neo-classical building smack up against a Circus-Circus type piece of architecture. What a jumbled, garish mess. Quite an adult playground, nooo question about that. And whatda'ya think archeologists are going to think when they're digging through the ruins of the place in a few thousand years. Do you think they'll "get" it? But I digress...
Net-net, imho the share-holder meeting was very positive. And it definitely was PACKED with people. As others have stated, it was confirmed that Qualcom is one of the OEM's using VLNC's battery. And the battery will be used inside of QCOM's satellite phone. Indeed, the head of Marketing was walking around the place with an example of QCOM's satellite product. The device itself is hands-down better than what IRIDF was producing, and can function in three modes; analog, digital, & satellite. 'Course, the question I had, and which cannot be answered at this time, is the quantity of sat. phone's to be produced. The product is high-end, and therefore will have a limited market(imho) at the beginning. Still, it's a beginning. I did find it odd, however, the manner in which this information was released. Lev stated he had "their approval to mention their--QCOM's--name, but couldn't write it down". Ahh, corporate games. Where would we be without them, eh?
Speaking of corporate, the entire board of directors, including Bert Roberts, were there and made themselves available for questions. Management also had product demonstrations along one wall of the meeting. They had examples of the product. They had it powering a diverse set of devices, from palm tops to laptop's to cell-phones, etc.. And of course, the QCOM phone.
As for the "guts" of the meeting, that is, the presentation to shareholders, Lev did most of the "center stage" talking. He started by basically doing the minutes and having the announcement of preliminary voting numbers. Need I say the vast majority of shares were voted the way VLNC management suggested? ;-) Lev also did a demonstration of the products efficacy by attaching the battery to a small light bulb and while lit, proceeding to drive two nails through it. And there was nary a blip in the lights output. Indeed, at the end of the meeting it was still burning. An impressive statement, no doubt about that.
But of course such a demonstration, regardless of how impressive, doesn't speak to the core issue. Can they mass manufacture the things? It appears they can. We saw an updated video of the N.I. plant. The video shows the entire process in operation; an operation for which all the world...as one retired Dupont employee exclaimed, "looks like you're making photographic film...right down to the acetone!" Ultimately the video reinforces the view that making Lith-poly batteries is a very complex operation. This view was further reinforced by the subsequent R&D plant tour. It's no wonder it took this long for VLNC to reach this point(despite the fact that Lev stated that when he came back all the technology was "there, but sitting on the shelf"), as the complexities involved in this ground-breaking task are sizable, to say the least.
Lev went on to discuss, in general terms, their business plan. Basically, although VLNC wants to build batteries(and has N.I. set up to do just this) he feels the core of their strategy is in licensing the manufacturing technology. Think, if you will, franchising. VLNC will reap royalties off each unit of production. Think QCOM. There are difficulties with this approach, however. The difficulties involve the "franchisee" not only getting a VLNC license to use their patents which involve their material discoveries and such enabling discoveries as they've derived from being "up close and personal" with the manufacturing process, but also having to get approval from Bellcore for the basic patents as well. I asked Lev if VLNC would be willing, or able, to be the "one stop shop" for this process(getting the Bellcore license to the franchisee). He said, "No". The licensee will have to get Bellcore approval in addition. Whether this is a sizeable hurdle has yet to be determined. Still, this is the general direction the company is moving in.
He went on to discuss, briefly, Hanil. He's not happy with Hanils progress. He feels that in focusing so heavily in getting N.I. ramped, VLNC didn't attend as closely to Hanil. As a consequence they're lagging behind, and now need closer attention. This VLNC is now doing. He does feel, however, that later this summer(as originally projected I believe) Hanil will be producing. He then opened the floor to questions.
I didn't capture all of the questions(I'm sure others can provide some minutia), but the highlights were such as a question about the ~million share settlement and what the recipients of those shares are obligated to do(that is--are there any restrictions on the shares). The answer is the recipients may do as they please with the shares. They're common shares, after all. However the legal representative for VLNC, who was present to answer just these sorts of questions, stated it'd most probably be another 4 months before the shares would be available to the recipients(s), as there are still legal processes to be completed.
There was a question about the N.I. plant, the answer to which can be summarized by saying N.I. is now handling 4, to 5 metric tons of raw material at a time. Quality assurance testing has been passed, and they're running a 52"(?) size regularly, and with a high level of recycling of the material detris of the process. They've one "basic" line and two high-speed machines, one of the high speed machines has been completely installed and producing 24 batteries(cells) a minute. The other machine in just about complete as well. They've also a $1.4 Million flexible manufacturing line at N.I. now, capable of producing a variety of cell sizes at the "flip" of a computer button/programm. This line has just passed factory acceptance testing.
There was a question about when can we expect consistent earnings. Lev's reply, "Fairly soon..."
Question about carrying charge of the materials. Lev stated that "typically" manganese carries ~105 milliamperes per gram, and cobalt carries ~118 milliampers per gram. VLNC's proprietary discoveries in corrosion inhibition, etc., allow them to effect a manganese milliampere per gram rating greater than cobalt. He wouldn't share the exact specifics however.
There was also a question/discussion about the feasibility of branding. Lev stated he'd like to be able to brand the product. That is, put the VLNC logo on every single shipped product, and this might ultimately occur. But here at the beginning OEM's are not willing to discuss this area, probably for two reasons. One, should VLNC prove superior in their product, and the OEM clients begin to request VLNC only(our dream of course), this would leave the OEM "holding the bag" with other manufactured batteries that couldn't be put into their devices. Also, at the get-go there may still be problems with VLNC's product, so it's a face-saving mechanism to not brand. Even so, the serial numbers will be distinctly VLNC, so you'll be able to tell whose battery is powering the OEM device.
At the close of the SH discussion they then conducted a plant tour in small, manageable groups. I was in the last group. The process, as stated earlier, is intricate, and impressive. They were, at that time, making laminate for Alliant so we got to watch part of the process in actual operation. Think bakery line(with an overtone of acetone smell). Slurry goes in one area, and it is smoothed out onto a line into a thin(millimeters thin) substrata, from which anode, cathode, etc., are further "refined". Very interesting. Very intricate to say the least. The most interesting stop on the tour, to me, was the product testing category. They're routinely getting 500, to 550 recycles on a device(each recycle takes 5 hours so do the math as to how long the total testing period could last). And this comes even when testing under a variety of stressor conditions, with temperatures ranging from -20 degrees C, to +60 degrees C. Indeed, several of their tests went on for CONSIDERABLE longer numbers of cycles than the above mentioned 550, so far that they basically felt..."Okay, enough of this", and they were STILL getting satisfactory characteristics out of the product. (Can we say Energizer Bunny on steroids?) Not bad....not bad at all. Ultimately, as a capitalist, it comes down to this. As Lev stated, we should say a resounding THANK YOU to all the VLNC employees. All of them. From the PhD'ed researchers to the folks supporting the lines. Without them this enterprise would be nothing. Take a bow folks, you deserve it for getting VLNC to this point! May your options make you as happy as your performance to date has made all of us.
Through their efforts the game for VLNC has now become one of continuing to refine, build-out the process, sell into demand, and assuage any/all client concerns in the process. That is, continuance of commercial ramp-up. And with QCOM now using the product, I'd like to think they just might make a good source VLNC's marketing/sales arm can use to validate themselves to other customers. Yup...it's stands to be a great year ahead. Once again VLNC employees...take a BIG bow!
Regards!
John~ |
