At last we get to talk about the critical issues.
Thanks for getting off your bandwagon long enough to talk about the important issues regarding the company's survivability and growth prospects.
First, can the company mass produce the batteries?
Based on the comments made by the CEO in the last two conference calls, this answer is probably yes, but still subject to some risk. In the May call, he said the critical path issue now is marketing, not mass production, implying that he felt relatively sure the company would achieve mass production capability. But in the last conference call he responded to a question whether the NI had 'demonstrated mass production capability', and he stopped short of answering to the affirmative. Instead he said that every piece of equipment at NI has been tested in production, but not all at the same time in continuous operation yet. A final coordinated test of the line's mass production capability couldn't happen until installation of a second coater. He said that "the limit to mass production is equipment installation". He expected the second coater for NI to be delivered in the next several weeks. He said they need two coaters to mass produce continuously (these coaters are large 12 feet by 120 feet pieces of equipment). Finally he hoped to have NI producing battery samples and shipping them to customers in the next 30 days, and expected volume production out of NI by September. He also said "September is a very good estimated date for volume shipments of batteries, but this of course depends on customers." He indicated that NI was about 1 1/2 weeks behind their previous schedule. He also indicated that the technical problems have been overcome, including the technical problems that they revealed in the February conference call.
All in all the indications are very strong that Valence has indeed overcome the problems with mass producing these batteries. OTOH, Ultralife has not met their own ambitious startup schedule (they expected mass production by the end of June), and their plant has some equipment similar to Valence's first line in NI. Still considering that Ultralife has not spent as much time or money on the development efforts to date, and received much of their line equipment after Valence received theirs, I suspect that ULBI is about 3-6 months behind Valence. I could be wrong on this, but here I'm just trying to determine how realistic is it to expect volume production this fall.
The earliest time that OEMs would first really be realistically ready for volume quantities of the batteries is September. Based on all of the issues discussed above, I believe the probability that Valence can mass produce these batteries by September is greater than 80 to 90%. Remember also, that Valence quarantines the batteries for 30 days prior to shipment (according to Dawson's statements in the cc).
In my next post, I will discuss markets, and then move to revenue projections, and profitability. I hope I have time to post on all these issues today.
Incidentally, I noticed you have a background in law. Since the info I posted here was from the conference call, could I ask you whether there is a different legal standard for the forward looking information disseminated in the conference call compared to the 10K? I know that the financial results published in the 10K must be audited, and that the company is required to disclose known risks in the 10K, but aren't the forward looking statements in both the 10K and the public conference call subject to the same legal disclosure limitations? They read a disclosure statement and referred to the 10K for the risks and uncertainties prior to starting the call. But the company representatives are no freer to lie in the conference call than in the 10K, isn't that true?
Paul
BTW- your labeling Fred Kellet a stock manipulator was a very poor decision. If you had bothered to read his personal profile, or research his posts on this thread, you would know (with some degree of confidence) that he is a working engineer, and lost a lot of money on Valence so far. Furthermore, its easy to e-mail him and contact him by phone, and find more about him. I have. It demonstrated an extraordinary rush to judgement to try to call him a manipulator. He's simply made the investor's cardinal sin of putting too much of his money in one speculative stock, and too soon. This doesn't make him guilty of stock manipulation, and it doesn't make him automatically wrong on the longer term future of Valence. |
