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

To: kolo55 who wrote (3531)	7/29/1998 2:09:00 PM
From: mooter775	Read Replies (1) \| Respond to of 27311

Paul, I did some checking and my understanding is that the conversion price for both tranches is not fixed as of this point. That is, if the company makes its milestone (probably OEM contract, or contracts, or a revenue number), then the conversion price can be set later within the 12 month time frame from now. Conversely, if the company fails to produce and meet a milestone, then the stock will decline and then within the same year the new conversion price will be set (presumably at Valence's option, but I can't confirm that) also at a 20% premium to the then existing market price. What this does it increase the opportunity (and risk) that the potential dilution could be less than 10% (say at $ 11 for both tranches, which would imply 675 k + 675 k + 740 k + 445 k) or more if the company failed and had to reset the conversion prices based on a lower price. Also understand that the company is quite pleased with the financing and is still on track per the last conference call for Q3 production.