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

To: John Curtis who wrote (14170)	9/2/1999 3:32:00 PM
From: MGV	Read Replies (2) \| Respond to of 27311

The critical point is at what cost to VLNC. The JIT financing smacks of desperation. The confirmation? Look at the prices at which they are selling equity in each successive month. They need more - much more -capital than they keep getting. They have now sold in three successive months approx. $3 Million of shares at successively lower prices of $6, $5, and $4. Among other insights, it raises questions about the judgement of management and, in particular, the CFO. The decision to raise only $3 Million in June cost them big time. Capital is about 1/3 more expensive in the latest desperation tranche. Who said this? VLNC desperately needs its share price to go up yet the share price keeps going down. They have been trying to get their share price up since at least February and could not. Finally, in June and July they sold equity at then low prices because they were desperate for capital. Why were they desperate? Why do I characterize it that way? There are a number of signals. One prominent one is that they sold minimal amounts each time - apparently, given their balance sheet and income statements, only enough to make it "one more month" then "one more." There is no question, VLNC is in a dire situation, racing the clock now and apparently losing the race. Message 11130688 Message 11107209

To: John Curtis who wrote (14170)	9/2/1999 5:15:00 PM
From: Larry Brubaker	Read Replies (1) \| Respond to of 27311

Does not appear Castle Creek has converted any yet. 26.7 million shares were outstanding as of 6/27. Approximately 1 million shares were sold through the first two $3 million financings since then = 27.7 million shares. Another (approx) 700,000 shares sold in latest financing brings total to 28.4 million shares. 28.4 million is the amount mentioned in today's filing. Therefore, no conversion as of the time the filing was written. If subsequent calls to the transfer agent indicate significantly more than 28.4 million shares, you can guess that Castle Creek is converting. If Castle Creek converts a significant number of shares, that indicates they think they've got their best price. If no conversion, they may be waiting for a better price. Or, alternatively, they may have never hedged against their convertibles to begin with, and are simply waiting for the stock to go to $100 before they convert:-)