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

To: MGV who wrote (3490)	7/27/1998 11:35:00 AM
From: John Curtis	Read Replies (2) \| Respond to of 27311

Mark: You state, "Where's the query." See your post #3395 where you state, "rebuttal to follow." You never did. Guess you forgot, eh? Meanwhile, to all, here's an interesting aside regarding MM's: exchange2000.com Regards! John~

To: MGV who wrote (3490)	7/28/1998 7:57:00 PM
From: kolo55	Read Replies (5) \| Respond to of 27311

My take on the financing announcement. Castle Creek LLP provides $7.5M now, and Valence has the option to get $7.5M more at the same terms provided certain milestones are hit. (It would be interesting to know what these milestones are.) Convertible at a 20% premium to common shares. OK, assuming Valence takes the second round of $7.5M, then there is $15M convertible at $5 x 1.20= $6 per share. This means 2.5M new shares. Plus Castle Creek gets warrants to purchase 30% of $15M =$4.5M worth of stock, using warrants exercisable at 35% premium, or $6.75 per share. Dividing $4.5M by $6.75 is 0.67M shares. So total eventual new shares, if both rounds of the Castle Creek financing is completed, is 3.17M shares; this is in return for $15M plus $4.5M when the warrants are exercised. Carl Berg provides $10M in debt financing (at probably 8.5% according to the 10K) plus warrants on 30% convertible at a 35% premium. So he gets warrants to purchase $3M worth of shares at $6.75 per share. This is 0.44M shares; this in return for $10M plus $3M when the warrants are exercised. Total worst case dilution is 3.61M shares, and using a conservative estimate of 25M shares out now, I get total worst case dilution of 14.4%. For that the company will get $25M plus another $7.5M when the warrants are exercised. I estimated 10-20% dilution, and you estimated 35-100% dilution. I think you missed it on this one, Mark. To the thread, I think this is great news. Now before August 14, we get the JunQ SEC filing, and probably another conference call. And somewhere in here, we finally get an analyst trip to NI ??? Paul