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Technology Stocks : VALENCE TECHNOLOGY (VLNC) -- Ignore unavailable to you. Want to Upgrade?

To: FMK who wrote (12525)	6/30/1999 2:15:00 AM
From: Larry Brubaker	Respond to of 27311

FMK vs. VLNC's official statements: FMK: "I was given an informed interpretation of the $3 million private financing." VLNC Filing 6/28: "You should rely only on the information provided or incorporated by reference in this prospectus supplement and the prospectus. We have not authorized anyone else to provide you with different information." FMK: "The amount was thought sufficient to get some serious production underway to see some "material events" that should get stock price up enough for a larger financing." VLNC Filing 6/28: "Until recently, our batteries have been only manufactured on our pilot manufacturing line, which is able to produce prototype cells in quantities sufficient to enable customer sampling and testing and product development. We are currently in the early stages of transitioning production to an automated high volume production line that will work with our newest battery technology in our manufacturing facility in Mallusk, N.I. The redesign and modification of the manufacturing facility, including its customized manufacturing equipment, will continue to require substantial engineering work and expenses and is subject to significant risks, including risks of cost overruns and significant delays." FMK: "Raising $75 million to build another plant to double NI's production capability will be much more feasible at $15-$25 per share than at today's prices." VLNC Filing 6/28: "We anticipate that,after taking into account projected revenues and receipt of funds from other sources, we will need to raise in either a debt or equity financing a minimum of $25 million to fund planned capital expenditures, research and product development, marketing and general and administrative expenses and to pursue joint venture opportunities in fiscal 2000." FMK: "IMO the higher energy storage of the generation II version should boost the NI's annual capacity to as much as 750 mln watt hours. Add another plant like it and the total might be 1.5 billion watt hours." VLNC Filing 6/28: "We presently have no products available for sale, although we have developed working prototypes of our batteries. These factors raise substantial doubt about our ability to continue as a going concern."

To: FMK who wrote (12525)	6/30/1999 2:27:00 AM
From: Larry Brubaker	Read Replies (1) \| Respond to of 27311

Fred, your estimate of "1 battery per share" seems quite high. Currently outstanding after recent PP 27.2 million shares Minimum shares of common stock to Castle Creek upon conversion of preferred shares 2.5 million shares (assumes no floorless conversion) Shares reserved for warrants (to Castle Creek, Baccarat...)and options (according to 10-K) 6.5 million shares Total fully-diluted shares (before additional financing) 36.2 million "Immediate additional financing needed" $25 million Assume $25 million raised at a 10% discount to current price (or about $6 per share) = @ 4 million shares Total = >40 million shares Again, assuming no floorless conversion, and assuming they can raise the $25 million they need "immediately" at only a 10% discount to the current price.