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

To: Tmoore who wrote (3184)	6/29/1998 9:12:00 PM
From: DKR	Respond to of 27311

I am concerned about the 10k, there is no way to smooth over some of the troubling components. However, we have recognized all along, the need for capital and that should be addressed tomorrow by Lev Dawson.(not neccesssarily to our liking but nevertheless addressed)Cash burn has increased but we expected it to, orders are the key issue at the moment are...as expected. (Read 1997 10K.) Also, I compared "beneficial ownership" from one year to the next and found that management/directors have increased their collective stake in the company from 22.1% to 26.7%, from 5,404,819 to 7,136,287. Individuals: 1997 1998 Berg,C. from 4,069,489 to 4,103,380 Reed,C. from 658,507 to 382,470 Masuda from 171,422 to 256,661 Shugart from 137,224 to 182,996 Perkins from 101,815 to 127,216 Horning from 92,979 to 123,313 Brodd from 80,518 to ? Archibald from ? to 100,316 Kis from ? to 46,875 Dawson from ? to 1,813,020 These numbers are as of June of each respective year, I would expect more selling, particularly by former employees (many of whom are listed). (Beneficial ownership includes exercisable options within sixty days of determination.) As some have noticed I have been most concerned with institutional ownership and insider buying/selling. It appears that both mutual funds and management/directors have increased their holdings over the last year. Investors Business Daily has published the number of mutual funds that own VLNC has increase by 4 to 17 over the last year. The language in all 10k's is generally negatively biased, however I recognize that at some point you (we) all need to reevaluate our investment choices, however, I am waiting and holding VLNC until this one plays out a little longer...

To: Tmoore who wrote (3184)	6/29/1998 9:14:00 PM
From: MGV	Read Replies (1) \| Respond to of 27311

The 10k was released today. It is reasonable to assume that the statements reflect the current state of affairs. The 10k indicates that samples have been delivered. But it also indicates that the delivery of samples is far removed from any readiness to produce, even if a contract were to be won. Regarding contracts, it indicates no buyer is even close to making a buy commitment. It goes further to suggest that at best there will be substantial time required - in the event that a buyer would commit to buying product - to allow design batteries to fit the buyers requirements. It suggests that this will involve a substantial amount of time. I read the statements as much more than "forward statement" caution. There is an explicit suggestion that it is unreasonable to expect that any batteries will be produced for shipment anytime soon or that a contract will be signed. Rather, they are still in testing/R&D stage. They have negative working capital. That means their short term liabilities exceed their short term assets. That means they are facing default on obligations. They dont have enough to pay their debts. Either they renegotiate the term, obtain capital via debt and/or equity markets or do a combination of both. The consequence is default/bankruptcy. The 10k could not be much more clear about the dire circumstances the company faces. In the light of this statement, the departures of high level executives, including the R&D head is much more serious.