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

To: William Epstein who wrote (12529)	6/30/1999 10:13:00 AM
From: Rich Wolf	Read Replies (2) \| Respond to of 27311

Bill, I can only address what I know. They have three operational assembly lines in NI. Back in Feb we saw the second one you referred to actually dropping out finished cellphone cells like cookies. Recent visitors to NI have confirmed complete automated operation from front to back, just as Lev stated at the shareholders meeting. I believe the prototype production line mentioned in the SEC document is the semi-automated line back in Henderson. If you go back to older SEC documents they still refer to that line, before they began installing their new technology in NI last summer. The SEC disclaimers are overly cautious and misleading, and do not represent the current status. They serve only to provide an extremely wide margin for error in case even the smallest glitch prevents the company from producing, to a contract, at their final desired high speed. Remember they were sued by some shareholders when they said they had a product in '93 and then it turned out the product failed some of the cycling tests. Now they won't say ANYTHING that could lead to a conclusion that they are 'done' building the factory or debugging the lines, until well after the fact. We may not like it, but it's a fact of life for current shareholders. If not being given complete status information is difficult for some, they should not hold the stock. I am comfortable in the knowledge that they are capable of producing at least 10-20,000 cells per day even through their worst current bottleneck at the back end. And Lev told us they had better than 80% yields in Feb, and now reports over 90%. This is why I believe we will see contracts for cells sometime this summer. The work yet to be done to 'complete' the factory may well take until the end of the year, so in this regard the SEC documents are correct. But what does that refer to? They anticipate delivery of line 4 in two months or so, and then there is all the supporting equipment for that line (acetone wash and recovery, packaging, conditioning, etc). But that does not mean that the first 3 lines are not capable. For instance, line 1 is being used to produce large-format cells for Alliant in response to a PO. Line 2 was used to make the cellphone cells based on the new materials that were already sent to customers, as per Lev's comments during the conference call. And since what is installed is already 80% paid for, most of the remaining capital expenses have to do with line 4 and its supporting equipment, as noted above. They could continue to forego this line if they were in financial straits, but they are electing to continue taking delivery. So with respect to financing, they are not in dire straits, but are electing to borrow only the minimal amounts until they are able to raise money more efficiently (at a higher share price). Although they have no 'mother' corporation to fund them, they can comfortably take this approach because their largest shareholder has the resources to assure they get to the point where they can attain much more favorable financing than the current shareprice allows.

To: William Epstein who wrote (12529)	6/30/1999 10:29:00 AM
From: Larry Brubaker	Respond to of 27311

<<What do you make of the disclaimers in the S 2 statement about a second production line being necessary, in order, to ramp up for production and that this line won't be in operation until much later this year?>> William, this is not a disclaimer, it is a statement of fact. The disclaimers are the comments about "no guarantees we can..." This entire discussion about the validity of the SEC filings reminds me of early December when Fred and the crew were predicting major contracts in early January. Then the SEC filings came out saying that they had not completed debugging the first production line and had yet to send out production samples to customers. Fred assured us that the SEC filings were referring to the second, third, or even the fourth line and that a major contract was imminent. Well now it was 7 months later and it is clear the December filings were correct and the hype on this thread is incorrect. Now the filings say they've got one line producing limited numbers of cells, and the second line is only in the early stages of development, and needs substantial redesign and redevelopment which will take time and money. As always, the SEC filings are accurate and everything to the contrary on this thread is complete b.s.