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

To: Phil Jacobson who wrote (2184)	2/17/1998 11:39:00 AM
From: Jake Soriano	Read Replies (1) \| Respond to of 27311

Looks like somebody bailed out early or is there some bad news that leaked out .......

To: Phil Jacobson who wrote (2184)	2/17/1998 12:16:00 PM
From: John Curtis	Read Replies (2) \| Respond to of 27311

To All: CONFERENCE CALL SYNOPSIS: Okay folks, the call started with host Jordan Goldstein announcing the players. They are Les Dawson(LD) and David Archibald(DA). LD started off immediately with "forward looking" commentary and from there went right to it. First; VLNC will be building batteries in Henderson, Nevada as well as in N.I.. The reason he is doing this is he doesn't believe scientists should be designing these new batteries in isolation. As such he is diverting redundant equipment originally slated for N.I.. This MAY delay the N.I. commercial rampup. It's highly probable N.I. will not be building batteries until 2nd qrtr as a result of diverting this equipment. So much for the bombshell. He then went directly to Q&A. Covington Associates: "Nothing personal, but LD was on board before CR. Now he's back. Why did the board choose LD? And can he talk towards what's going on within the battery technology industry?" LD-"I won't speak for the boards." As for the second question, VLNC has invested a significant amount into the equipment and has significant lead times over everyone else. He's optomistic of achieving significant market share. Preferred Technology: Are you still planning to ship production this qrtr? And how about the power density? LD-Hopefully, but it'll be tight. The biggest problem is in scaling up to mass production levels. He then went on to talk briefly about scale-up issues. Power density is competitive with Lith-Ion. New Partners(spelling?): Who is taking CR's "overseer" of production role? LD-"T'Bour"(spelling?) has been moved into this role. A further question about burn rate, raising additional capital, etc.. LD-VLNC is tight on cash and they are taking steps. He referenced having no debt right now, so they'll consider taking some on. Last question, based on this equipment diversion how does this impact Korea? LD-First, remember there is sufficient production capacity in N.I. already that, with yields, can put VLNC in the black. This diversion will not impact Korea. They are simply taking redundant equipment so that they can bring Henderson into production along with N.I.. Preferred Technology: Is VLNC going with a cylindrical battery and are you planning a manual method of building batteries, vis-a-vie Ultralife? LD-VLNC will not be making cylindrical batteries. As for the Ultralife question, he doesn't know them, but will not divulge VLNC's production strategy. Red Chip: Several questions: 1. How long ago was the Henderson decision made? LD-Within 2 days of my being on boards. 2. Why is he doing this(ie. why is the current production methodology so difficult)? LD-He doesn't believe an industry works well on a new technology basis when your R&D location is separated by 6 timezones(I guess he's never heard of the WEB, eh?--that's my parenthical aside). He's not comfortable initializing production of new technology at a foreign site and much prefers having the scientists working on new/upgraded products in a production environment. 3. The decision to re-focus on Henderson. Why should the ability to ramp-up its line be any different from N.I.? LD-It shouldn't, in fact he's hopefull Henderson will deliver production samples(free) to potential clients in the 1st qrtr as well. 4. How long will the clients need to test these production samples before they're satisfied? LD-He didn't directly answer the question but stated that he expects some purchase orders in a couple of months, after which he expects several months to go by while customers get comfortable with the technology, and begin to order larger quantities. Another house: Regarding Korea, is everything still going forward? LD-Yes, he expects them to be on-line by end of year, at the earliest. 2. Is the Korean agreement still in place? LD-He has been assured by Korea that they are still proceeding on time, as planned. 3. What about the Alliance arrangement? LD-This, too, is proceeding as planned. 4. How will Henderson be used. LD-Henderson will initiate production on all new/improved products at modest volumes. Once they're satisfied they'll move volume production to N.I.. In closing LD stated he feels the need to be more pro-active with company news, announcements, conference calls. We should look for a more actively communicative VLNC going forward. ------ This just about summarizes the call. Sorry for any/all typo's, and any/all probable mis-statements(however slight they may be), but I wanted to get this out asap. Clearly, once again, production is most likely gonna be delayed. The Henderson bombshell has clearly had its effect, ie $5 3/8 x $5 1/2, although one should note it's going to use redundant equipment, so SHOULDN'T necessarily impact H.I. as it is now. The bottom line is I now see VLNC trading around the level it's current at without any reason to see it move up from here until they COMMERCIALLY PRODUCE. John~