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

To: Larry Brubaker who wrote (12972)	7/9/1999 8:28:00 AM
From: Eli74	Read Replies (2) \| Respond to of 27311

Larry- A couple of comments re: your deferred revenue issue. 1) The 10-k is dated as of 3/28; the shipments to Hanil first came in late May (5/25 announcement) and late June (6/23 announcement). The cautionary language in the 10-k is understandable to me, given their history with lawsuits. 2) I would certainly characterize shipping nearly 20 miles of cathode "stuff" to be signficant; although we won't know the revenue until the end of this quarter, unless the company is giving it away, then we should start seeing any positive results until the company releases results for the current quarter sometime this fall. Guess you'll just have to be patient, Larry.

To: Larry Brubaker who wrote (12972)	7/9/1999 8:59:00 AM
From: Cathi Wierzbicki	Respond to of 27311

Thanks, Larry....very interesting information. I appreciate your posting it. Cathi

To: Larry Brubaker who wrote (12972)	7/9/1999 10:31:00 AM
From: FMK	Read Replies (2) \| Respond to of 27311

Larry, The "Deferred revenue" comment regarding Hanil likely means that it is expected that Hanil will become profitable sometime in year 2000. Under the terms of the joint venture agreement, Valence will share 50% of the profits from the joint venture. If you recall, Valence has put up essentially zero capital to build the plant or to purchase the equipment for Hanil. 50% of their profits is payback for Valence's years of R&D that have gone into the Laminate, cell assembly and manufacturing techniques. This payback has been described as "deferred revenue". For Hanil to have built the plant just last year and to become profitable next year speaks well for the technology. For example, what is Valence's % return on investment on $250,000 in travel expenses after they receive $10 million next year of Hanil's perhaps $20 million profit? Hanil's profits depend on many factors, of course, but would they have built the plant if they weren't confident about making a profit? Remember also the Alliant Tech joint venture is structured similarly. Is there is money to be made supplying the Government and military with high tech batteries? As you can see, there is much more to the formula than can be found in the SEC documents, and in the least, much more to the picture than you choose to acknowledge.