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

To: Rich Wolf who wrote (12871)	7/6/1999 10:32:00 PM
From: Larry Brubaker	Read Replies (2) \| Respond to of 27311

Rich, actually I was talking about accounting for capital expenditures. Capital expenditures cannot be expensed in the time period in which they occurred, but must be capitalized over a longer period of time through expenses for depreciation. Therefore, a reduction in capital expenditures will do nothing to put them in the black (as Zeev has already pointed out), although it would result in a reduction in their burn rate. This, I'm sure is the reason why Zeev is puzzled about the alleged comment by the COO that a reduction in capital expenditures will help put them in the black in the October quarter.

To: Rich Wolf who wrote (12871)	7/6/1999 10:53:00 PM
From: Zeev Hed	Read Replies (1) \| Respond to of 27311

Rich, manganese oxide does indeed cost much less than cobalt oxide (but as the purity increases this gap rapidly disappears, for instance, a "two nine" cobalt oxide cost about 10 times the same purity of manganese oxide, but at five nines the cost is only twice as much ), but I doubt that the electrode material itself is more than 10% to 20% of the total cost of materials, if that, thus the perception that VLNC cost of material has a 10 to 1 advantage over competitive batteries, is, IMHO. misleading. Does anyone know what is the electrodes cost as a percentage of total cost? If one would want to have good reproducibility of these electrodes, is it necessary to use raw oxides that are 5 nines or are two nines sufficient? Zeev