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

To: P. Ramamoorthy who wrote (13347)	7/23/1999 1:41:00 PM
From: Rich Wolf	Respond to of 27311

No, Ram, there are no 'Reg S' deals lurking in the closet. I made sure of that when I first looked into Valence, and continually monitor their filings. They are not a desperate cash-starved company. They are 'cash starved' in the sense of needing $25M for the rest of the fiscal year, BUT primarily because over half of that is for additional production equipment to EXPAND their production capacity beyond the 3 lines they currently have in NI. The company told us the 4th line, which they will take delivery of after they raise this capital, will be the real moneymaker down the road. It has a maximum capacity of 40 laptop cells/min, which more than doubles the revenue output of the facility. But it is not required that they even put it in place to be producing both laptop and cellphone cells off lines 1-3. So is it a 'necessary' expense, or something they could defer if they were forced to? I would posit that their maximum current burn rate is less than $1M/month, without adding in this additional equipment.