I just communicated with a friend, whom I know well for over 20 years and totally believe to be telling the truth, who told me that he spent 20 minutes talking on the phone to Lev today about investor concerns. This individual has himself a large position in VLNC and also represents many others with large positions in the company. Although I have no direct personal knowledge, this information was valuable to me and therefor I throw it into the discussion for all to ponder. While it is just "Hearsay" and I do not usually post this type of communication I toss it out for all to evaluate for themselves.
Lev's main message was that he & the company had far too much legal trouble already and he does not have any time to deal with lawsuits. He can and will make forward looking statements - he pretty much has full legal protection because he is describing events which MIGHT happen.
But he will not make any complete status statements because if e.g. he ships batteries to customers and they find problems with them, the fact that he stated he shipped batteries will be used against him. His lawyers are advising him to be very, very cautious and he is taking their advice very, very seriously. He was obviously very burned by the lawsuit VLNC spent $6M defending.
He explained that the above reasoning is why he could tell us in advance that line 1 was expected to be operational by end-of-September, but never followed up with any report of reaching that goal.
He said he will not pre-announce any kind of PO, because then he will be hounded by 'when will the revenue stream begin'. He intends to let revenue speak for itself. He said that any P.O.'s will be followed very quickly by shipping the product and booking the revenue. He implied that we need to read the financial statements and let them speak for themselves. i.e. revenues coming in and before that build up of inventory would show up as an increased burn rate. There will not be any early announcement of P.O.'s in advance of customers actually receiving the product (when they are ready to start shipping their own product).
He said customers like the product, and that they have 'programs' with various customers. The customer will be relying on the resellers to do the full range of testing. The resellers have their own full reputation at stake in putting their name on the product which they receive from VLNC & or sell to their customers. As per the above, those programs will not become public until shortly before the customers start taking delivery of the batteries. VLNC will be providing product to resellers (the packagers) who will sell to customer, so the process is indirect.
He said everything he has said or will say will end up getting twisted
(especially with 20-20 hindsight if anything goes wrong). Says he really bit his tongue after his remarks about break even on a cash basis - and that statement was immediately twisted into 'make a profit'..... Said he doesn't have time but does read the internet
sometimes.
Asked whether we would see Revenues before the end of the year...He predicted that would very definitely be the case. He said his inability to give positive status just has to be priced into the stock. He doesn't like the near term price swings, but that's just
something investors have to live with. If you are trying to time the stock, he doesn't care. He says you should be in only if you are an investor and willing to wait.
Concerning the CFO, he confirmed the rumour that he had had what
he thought was a firm employment agreement with a candidate who then backed out at the very last moment. He thinks he's found the right guy now, but will not know for sure until he is actually aboard.
Happy Investing....... Jacques |
