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

To: kolo55 who wrote (3571)	8/3/1998 9:00:00 AM
From: John Curtis	Read Replies (2) \| Respond to of 27311

Regarding lithium and the IDB financing. The IDB's grant is a strong positive statement of VLNC's overall direction, but may, or may not be tied to direct viewing of the N.I. facility. Why do I say this? Simple, the 10K(via Edgar Online) states: During fiscal 1994, the Company, through its Dutch subsidiary, signed an agreement with the Northern Ireland Industrial Development Board(IDB) to open an automated manufacturing plant in N.I. in exchange for capital and revenue grants from the IDB. The Company has also received offers from the IDB to receive additional grants. The grants available under the agreement and offers, for an aggregate of up to L27,555,000, generally become available over a five-year period through October 31, 2001. As of March 29, 1998, the Company had received grants aggregating L4,035,000 reducing remaining grants available to L23,520,000(US$39,572,400 as of March 29, 1998). Therefore, just on this alone is it any wonder L.D. stated financing wasn't a problem? (I should have reviewed the 10K more closely) Additionally, a portion of funding received under the grants may also be repayable if the subsidiary fails to maintain specified employment levels for the two year period immediately after the end of the five year grant period. So VLNC's locked into employment levels. The question is, what are those levels, eh? More questions for the conference call me thinks. Regarding Palisades lithium concern. Also in the 10K(page 4, 2nd paragraph), The Company's current research design contains NO METALLIC LITHIUM, unlike earlier Company designs, but reather moves lithium ions from an anode to a cathode on discharge, and from the cathode to the anode on recharge. The lithium ions are stored in either the cathode or anode, and do not form metallic lithium. This type of system is often referred to as "rocking chair battery," because the lithium ions are "rocked" back and forth between the cathode and anode, and "lithium ion" because the lithium in the batteries is always in an ionic form rather than a metallic form. So much for the lithium metal concerns, although if I'm not mistaken the reason why this technology has been so difficult to harness is the tendency of the lithium ions, while "rocking" to plate out as lithium metal, makinig for a very dangerous battery situation, hence the need for special charging circuitry to control the situation. Finally, regarding the concern about Bellcore. I, too, am interested in knowing the specifics. If you look at the Delphi arrangement(page 7 of that 10K), you find that Delphi agreed to pay royalties to VLNC on each battery manufactured under Delphi's license until 2008. However, in procuring the right to sublicense Bellcore technology to Delphi, the company agreed to pass on to Bellcore substantially all royalties received from Delphi. VLNC hopes its greatest benefit will be the cost leverage from Delphi's materials purchase(read here the "goo" and laminated cells). I would hope the direct Bellcore licensing agreement is more favorable than the above for VLNC. Perhaps it is, ie. from page 9 of the 10K, "As part of the agreement, which includes license fees and royalty payments, Bellcore received a minority equity position in the Company of 1.5 Million shares of common stock." Another question for the call. Regards! John~