Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: Dennis who wrote (16062)	11/13/1999 1:06:00 PM
From: john t. brice	Respond to of 27311

Dennis; My memory of Levs' comment was that he brought up the subject very briefly almost as an aside. The gist of it was that some time early next year he would step down as CEO while remaining on the BOD, no successor was mentioned and no concrete time frame was given ( he did say that he intended to be back on the sweet potato farm by planting time). My interpretation is that Lev feels that phase he came back for is over or nearly over. duckster

To: Dennis who wrote (16062)	11/13/1999 2:43:00 PM
From: P. Ramamoorthy	Read Replies (2) \| Respond to of 27311

Dennis, You can still listen to the Conf Call at: vcall.com I listened to it this weekend. Lev's remarks were: "sometime early next year he will start going back to his sweet potato farm. He thought it would take about 18 months to turn around VLNC, but it took a bit longer. He will become a technical consultant to VLNC, will stay next year (in active management) until the Gen 2 and Gen 3 installations are completed. He won't let anyone to screw up. He'll remain on the Board. He was pleased with his management team." He owns 1.88 Million VLNC shares! We can understand his interest. Aside - The following comments are noteworthy. "VLNC will not fail due to lack of capital, not due to lack of the technology. But it will fail if they ship bad batteries. Bad batteries were the reason for the failure of many companies that got into the li polymer battery business three years ago." This is an important news to longs, Re.: emphasis on product quality, at the expense of slower expansion. How fast VLNC will ramp up production? Speculators would surely like to see multiple PO's, high revenue numbers, and high stock price, and cash in their chips? Not so fast! Lev provides a reality check: "Product quality will play a major role in how fast they will ramp up. We have a good QC (Quality Control) now. We keep an inventory. It takes months for testing (recharge cycles) them. This is good!" Accounting - I did not see much discussion of this important topic. VLNC will shift from R&D accounting this QTR. How would VLNC account for the IDB funds received (about $32Million during the course of the project? As contract expense, R&D, or revenues? Jay King replied: "depends upon each item and the level of employment. Some would have to be repaid (to IDB), and the rest will show as "reduced expense" in 10Q" Lev added: "actually the numbers are higher. VLNC spent a lot of time and money in engineering and de-bottlenecking the plant since inception. IDB has agreed to allow these expenses to show as capital expenses for the grant." That means a lot to VLNC! VLNC will recover most of the engineering and capital expenses SOONER from the IDB grant. VLNC can offer to sell fewer shares (presumably at higher prices!) to raise the required capital needed for the next year expansion. (Where this will show in their 10Q?) This is also a good news since IDB will inject more cash into VLNC when they start expansion next year. Most of VLNC expenses are capEx. That means they will start depreciating (over how many years) against revenues. With a huge tax loss they have on hand, VLNC may not owe US income taxes for a long, long time! add: any comment on this? Thanks! Ram