VALENCE TECHNOLOGY (VLNC) Message Board

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Technology Stocks : VALENCE TECHNOLOGY (VLNC)

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To: Larry Brubaker who wrote (11290)	5/22/1999 2:28:00 AM
From: Rich Wolf	Read Replies (1) of 27311

Larry, you're right about getting the balance sheet positive. I was merely speaking to the issue of the minimal amount to allow them to keep operating for the two months while they were waiting to do an offering, from the time they are first able to announce shipping under a PO. You remember right that they only need ship $4M to receive the remaining $28M (?) of IDB grants. That's about 1.5 months of 1+ shift/day of line 1 only (laptop cells), at the low-end price of $2/whr; or only a couple of weeks if they run the first two lines less than two shifts each day (this depends upon run rates for line 2). I don't consider obtaining financing to be the issue. Berg's got a lot riding on the outcome if he can help them succeed, and I would expect he's good for more than the $7.5M 'officially' promised last time. If they are jockeying for POs right now, I would think that Berg would rather loan more money than have them issue debt and dilute his holdings. That's what I'd prefer in his situation. In all honesty, then, the 'negative working capital' is a nonissue from that point of view.

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