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

To: Tickertype who wrote (25682)	11/17/2002 5:43:28 PM
From: P. Ramamoorthy	Read Replies (2) \| Respond to of 27311

Ticker, From the last conf call, Stephan and Kevin seem to be following a cost-efficient plan (low-cost manufacturing strategy) for VLNC products, viz. Mexican assembly plant for N-Charge, JV with FengFan in China. Kevin expects to burn $8 Million for the current qtr due to insurance payments, etc. and burn less next qtr. Recall Stephan's target was 5 million whr/month for the NI plant by last summer and a remark from their manufacturing VP that their NI plant could do 2 million whr/month, as of February, 2002. The technical green light was given by Wistron as stated in the Nov 13, press release. That usually is a big hurdle. Stephan believed that Wistorn's sales and marketing people would give their green light soon. I suspect a slow and cautious ramp up in production, to assure a consistent battery quality. Who knows? Stephan did not talk about the second "Tier 1" OEM during the call. It is probably Acer since both Acer and Wistron signed the manufacturing agreement. It is good that VLNC N-Charge faced a technical glitch early in the cycle and is gaining OEM's credibility after addressing the problem. A PO from Wistron may be just the beginning. A technical green light from their second "Tier 1" OEM product qualification may not be too far off. If these PO's grow with time and if more OEM's join, the demand can push the NI plant production rate to 5 million whr/month during 2003. If the Chinese govt. approves the FengFan JV, VLNC has the opportunity of increasing the production volume even further, in 2004. By the end of 2003, if they finalize the USABC battery testing successfully, that will increase revenue potential. There may be disappointments or bottlenecks along the way. cylindrical cells - I also wish they have them ready. But it is not that easy, especially under the current financial conditions they now have to survive, making hard choices where they invest their R&D resources and the borrowed funds. Stephan is much different from Lev. That may be a reason why Berg wants him to continue as CEO. Stephan's time line: (1) came out with the N-Charge product last year for the world to see and test the Saphion technology battery, (2) started on-line sales and sales through indirect channels, (3) within about a year from last October, announced the technical green light for the product manufactured at NI plant, not Henderson. It is imperative to generate some revenue soon and show a trend of increasing revenue, instead of diluting the stock by borrowing from Berg. If they can grow a significant revenue in a quarter or two as Kevin hopes to see, they can redirect some of the resources at other battery products like cylindrical cells. Personally I want to see the NI Plant producing 5 million whr/month as soon as possible and generating revenues. Aside - There was a question concerning the bid price of VLNC under $1 and the possibility of getting delisted. "....Question 4 Stock trading below $1, Did you get a notice for delisting? Stephan: Yes, VLNC did receive the notice. But it takes an average price over 180 days. Stephan is confident that the recent price changes and further changes in price responding to PO's, etc. and revenues, will meet or exceed the requirement of the 180-day average price of $1...." VLNC dropped below $1 after the August conf call announcing the technical glitch with their N-Charge battery and stopping shipment. Closed at $0.84 with 2.1 Million share volume. After 63 trading days, the news of shipment to Wistron pushed it up to $1 on 974700 share volume. (14-Aug-02 1.18 1.2 0.67 0.84 2100000 13-Nov-02 0.95 1.11 0.94 1 974700) 63 trading days under $1 ****************************************************************************** NASD Manual October 31, 2002 nasdr.com 4310. Qualification Requirements for Domestic and Canadian Securities To qualify for inclusion in Nasdaq, a security of a domestic or Canadian issuer shall satisfy all applicable requirements contained in paragraphs (a) or (b), and (c) hereof. ...... (4) For initial inclusion, common or preferred stock shall have a minimum bid price of $4 per share. For continued inclusion the minimum bid price per share shall be $1. ..... (8) (D) A failure to meet the continued inclusion requirement for minimum bid price on The Nasdaq SmallCap Market shall be determined to exist only if the deficiency continues for a period of 30 consecutive business days. Upon such failure, the issuer shall be notified promptly and shall have a period of 180 calendar days from such notification to achieve compliance. If the issuer has not been deemed in compliance prior to the expiration of the 180 day compliance period, it will be afforded an additional 180 day compliance period, provided that on the 180th day following the notification of the deficiency, the issuer meets any of the three criteria for initial inclusion set forth in Rule 4310(c)(2)(A), based on the issuer's most recent publicly filed financ ial information. Compliance can be achieved during either 180 day compliance period by meeting the applicable standard for a minimum of 10 consecutive business days. ******************************************************************* VLNC bid price seems to be in compliance, not requiring delisting action due to bid price.** 180d-avg price = simple moving average of closing prices over preceding 180 days Date Price 180d avg Date Price 180d avg 15-Nov-02 1.35 1.59 23-Sep-02 0.67 2.26 14-Nov-02 1.08 1.6 20-Sep-02 0.69 2.28 13-Nov-02 1 1.61 19-Sep-02 0.6 2.29 12-Nov-02 0.9 1.62 18-Sep-02 0.67 2.31 11-Nov-02 0.73 1.63 17-Sep-02 0.68 2.32 8-Nov-02 0.69 1.64 16-Sep-02 0.63 2.34 7-Nov-02 0.67 1.66 13-Sep-02 0.61 2.35 6-Nov-02 0.69 1.67 12-Sep-02 0.61 2.37 5-Nov-02 0.7 1.69 11-Sep-02 0.62 2.38 4-Nov-02 0.69 1.7 10-Sep-02 0.59 2.4 1-Nov-02 0.71 1.72 9-Sep-02 0.68 2.41 31-Oct-02 0.7 1.74 6-Sep-02 0.65 2.43 30-Oct-02 0.72 1.76 5-Sep-02 0.68 2.44 29-Oct-02 0.7 1.78 4-Sep-02 0.72 2.46 28-Oct-02 0.69 1.8 3-Sep-02 0.76 2.47 25-Oct-02 0.68 1.82 30-Aug-02 0.72 2.49 24-Oct-02 0.68 1.84 29-Aug-02 0.74 2.5 23-Oct-02 0.68 1.86 28-Aug-02 0.68 2.52 22-Oct-02 0.7 1.88 27-Aug-02 0.67 2.53 21-Oct-02 0.69 1.9 26-Aug-02 0.72 2.55 18-Oct-02 0.68 1.92 23-Aug-02 0.7 2.57 17-Oct-02 0.59 1.94 22-Aug-02 0.68 2.58 16-Oct-02 0.65 1.96 21-Aug-02 0.7 2.6 15-Oct-02 0.68 1.98 20-Aug-02 0.7 2.61 14-Oct-02 0.65 1.99 19-Aug-02 0.83 2.63 11-Oct-02 0.67 2.01 16-Aug-02 0.85 2.65 10-Oct-02 0.66 2.03 15-Aug-02 0.81 2.66 9-Oct-02 0.63 2.05 14-Aug-02 0.84 2.68 8-Oct-02 0.67 2.07 13-Aug-02 1.31 2.7 7-Oct-02 0.65 2.08 12-Aug-02 1.4 2.71 4-Oct-02 0.7 2.1 9-Aug-02 1.35 2.73 3-Oct-02 0.69 2.11 8-Aug-02 1.44 2.74 2-Oct-02 0.65 2.13 7-Aug-02 1.44 2.76 1-Oct-02 0.7 2.15 6-Aug-02 1.44 2.77 30-Sep-02 0.71 2.16 5-Aug-02 1.41 2.78 27-Sep-02 0.67 2.18 2-Aug-02 1.53 2.79 26-Sep-02 0.69 2.2 1-Aug-02 1.66 2.81 25-Sep-02 0.55 2.22 31-Jul-02 1.72 2.82 24-Sep-02 0.53 2.24 Ram