I agree that financing is tight, but they're too close to not be able to arrange bridging loans if they get a PO. And as I pointed out, there are outstanding warrants which would raise additional funds. Lev's the wheeler-dealer money-getter, that's partly why he's here. With his stock, he's highly motivated to keep them in business and not
allow excessive share dilution.
But re: the battery specs comment, are you surprised? I don't believe it has anything to do with performance specs at all, unless they're lying about 500 recharge cycles, pulsed current performance, and performance in wide ranges of temperature conditions. Rather, it seems far more likely at this stage that it has everything to do with designing the 'safety envelope.' Lev's comments at the meeting notwithstanding, the last SEC filing stated that the battery had failed an abuse test at high temp (above normal operating temp) when a nail was driven through it, and they were in the process of defining the safety envelope for operating conditions where the gas-venting would not occur. Either they have to be sure to run it cooler (control the recharging rate), or they need to package their product like the liquid electrolyte ones in some fashion. We knew this issue was likely still unresolved. So would the extra packaging become the responsibility of the repackager? I hope so, because Valence doesn't have the money to fix that. I'm hoping if they run the big bricks (laptop cell configurations) cool enough, they can work around it. Either way, I take this as a fixable problem (if it is one at all), but not a 'gotcha' that would prevent them selling the product. And it certainly is nearly a non-issue for the smaller cellphone cells, or else it's one that all the other manufacturers have to surmount as well.
You'll get your crack at Lev during the next conference call, if they open it up to us. If they don't, drop him a line through Betsy at FRB, and she can ask when she checks in with him. I'd say to call him directly, as he was very accessible at the meeting, but I think we're better off letting him do his job and not have everyone calling him up. |
