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

To: Pallisard who wrote (16583)	12/2/1999 1:16:00 PM
From: John Curtis	Respond to of 27311

Palli: Yah...and to support that, here're VLNC FACTS: 1. VLNC has been a speculative R&D organization long struggling to transit to mass production of a product historically proven extremely difficult to mass manufacture. 2. VLNC had a "fall from grace", from the markets point of view, back in 1994 when their original attempt to mass manufacture the product was proven by MOT to not meet specifications. Out of this came at least two suits, one a class action by shareholders of the period, and one by the company suing the manufacturer of the line(of course, the manufacturer has counter sued). 3. VLNC has spend considerable amounts of money(+$179 Million--this per yesterdays 424B5 filing), and time, from that period until now in correcting/improving/etc. the performance characteristics of the product, and their line(s) at their Northern Ireland facility, as well as helping their joint venture partner in South Korea(Hanil) reach their goals. 4. During that same time the CEO of the company, Lev Dawson, left and returned, and a new member joined the VLNC board, eg. Bert Roberts(CEO of MCI-WCOM). 5. In the past year and a half things have heated up for the company. Insiders have purchased ~500,000 shares in the company, the company has solicited for funds(via 5 tranches floated--5th one was done yesterday--to various major institutional investors plus one hedge fund), withstood and survived a hedge funds(Castle Creek) apparent floor-less convertible "run" on their equity. Additionally, their partner in South Korea, Hanil, has announced they will be capable of manufacturing 1 Million lith-poly products by the mid-point of calendar year 2000, and are forecasting upwards of 6 million units of product per month within 5 years. Please note VLNC is to share, per their SEC filings, 50% of the monies associated with any/all Hanil sales. Also, another partnership with a military sub-contractor, Alliant Technology's, who is bidding on the U.S. military's contract to supply a 21st Century assault rifle, has publicly stated satisfaction with VLNC's product(which is being used to power said rifle). Finally, as it relates to partnership, Delphi, whose 4 year partnership successfully concluded this past year, has gone on to announce a line of lith-poly products of their own(LiPoTek). Please note that although VLNC reaps no profits from the research(all monies flow through to Bellcore from patent aspects of the technology), management is hopeful of being able to provide the "guts", or "goo", of the technology, from which they CAN glean profits. 6. VLNC has announced an initial purchase order for $2 Million from an un-named, yet major(per the PR release) satellite and cellphone OEM provider. VLNC's product will be supplied to this OEM via Moltech, who will most likely be the packager of VLNC's cells. Additionally, VLNC has today announced another contract with a European customer for $15 Million, which translates to 1.5 million units of product to be delivered beginning in January of year 2000. This product is for cellphone batteries. 7. VLNC does have a negative working capital situation to contend with at this time. From management conference calls it is stated that they may need to float one more financing tranche to get them through. Indeed, this they've done based on yesterdays 424B5 filing(this up's the outstanding common to ~32 million shares). Management is projecting a ~$75 Million production run rate by this time next year. This is up from essentially zero of 6 months ago. Summary: I have considered VLNC to be a high-risk, speculative equity. One which needed to be treated as such in terms of any monies you may be willing to put down. However, with the $2 Million purchase order of two weeks ago, and the $15 Million purchase order today, they appear to be on track and have finally reached the point where one can consider them to be rapidly leaving the era of being solely an R&D out-fit and entering into an era wherein they are a mass-manufacturer of a product in hot demand by many sectors of the high-tech world. More purchase orders will only continue to cement this view in my, and more importantly the markets, eyes(imho). This sort of news is what the bulls on this thread(caveat--I'm one of them) have gambled on for a very long time. VLNC has made it. Going forward this equity becomes all about market/manufacturing expansion and meeting customer demand. John~