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

To: Bob Childers who wrote (16068)	11/14/1999 2:58:00 AM
From: P. Ramamoorthy	Respond to of 27311

Bob, My understanding of technology development is that companies try to recover their development cost as soon as they can. Drug companies, for example, incur costs for trial and FDA approval. Before their patents run out, they want to recover as much as possible and then more. The fact that many patents of popular drugs are running out is causing some mergers, as you all know. VLNC has sunk much R&D costs over the last 2-3 years. They will recover via tax losses carried forward, IDB grants, sales, etc. They are in no hurry to license because licensing gives them only about 5-10% royalty on sales (or whatever the agreement may be). Plus, VLNC would have to support the licensees and incur marketing and tech support costs. Richard may have some ideas on this. He posted once that significant revenues could be generated from licensing. However, if they come up with JV's like Hanil and Alliant where they get to share 50% of the profits from sales, that will go to the bottom line, earnings per share, and benefit investors. In the Alliant JV example, Alliant-VLNC JV is a sub-contractor for the Alliant Power Systems which is controlled by Alliant Tech (did I get it right?). The Alliant-VLNC JV will supply batteries to Alliant Power. VLNC owns the equipment and the manufacturing expertise. VLNC is still an evolving story. We'll wait and see how it evolves. Ram