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

To: Larry Brubaker who wrote (2947)	5/20/1998 9:41:00 PM
From: wm sharp	Read Replies (2) \| Respond to of 27311

Larry - I listened to the conf call. I have it on tape. The company made no comment about volume production being delayed until 1999. The thrust of Dawson's comments was that the company is ready to produce, and it's now in the hands of OEMs to complete testing and design. I think there is ample incentive for these OEMs (about 1 dozen, according to the statements in the call) to get the deal done ahead of their competitors. It's now clear that Red Chip - as small cap investors - should have given this company a reasonable chance at final development of the product. From Dawson's statements, the product is now clearly developed beyond his and the OEMs' original expectations (ie specs) and is awaiting contracts and ramp up (which, IMO, could come any time.) You ask what this company has achieved in a year. Try 3 months. In answer to a question, Dawson made it clear that the batteries they are shipping this week are a significant improvement over those that shipped just 3 months ago (and were THEN meeting OEM specs.) Bill

To: Larry Brubaker who wrote (2947)	5/20/1998 10:22:00 PM
From: kolo55	Read Replies (1) \| Respond to of 27311

Henderson will be producing about 500 batteries a day range in 3 weeks. And on the same type of production equipment that is in the NI plant. And the batteries from this unit are higher performance than test batteries previously submitted and passed by several OEMs as meeting their specs. If they're using production equipment and beating the specs, then as Lev said, the critical path is marketing. This involves the OEMs completing their tests on the higher performance batteries, finishing negotiation of contracts, and designing and building the batteries in the finished product. Here's my guestimate at a timeline: mid-May OEMs received higher performance batteries. Contract negotiations underway with two OEMS who have passed Valence's previous test batteries. early June Henderson gears up to continuously produce batteries at up to 500 per day rate. mid to late-June Testing of batteries by OEMs reaches point where contract negotiations can be closed, and PO signed. Henderson begins manufacturing at up to 500 batteries per day rate. Northern Ireland sets up and runs production tests on their production equipment based on Henderson production experience. July-AugustOEMs design batteries into product. Henderson stockpiles batteries. Northern Ireland finishes tests and begins mass production. September-October Batteries ship. What has changed since the last conference call? 1. Last call the production equipment had just been re-located to Henderson. Now its up and operational. 2. Last call they were unable to make good laminate. Now this problem has been solved, and they are making good laminate. 3. Last call, no OEMs had the batteries from the production equipment. Now at they do. 4. Last call, no OEMs had passed Valence batteries against their specs. This call, two OEMS have. 5. Last call, debugging the production equipment was the critical path. Now marketing (contract negotiations), OEM testing, OEM design, are the critical path. The critical path is not reliant on solving a particular technical or production bug. This stock is inherently less risky today, than after the last call. Paul