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

To: Tmoore who wrote (3969)	8/26/1998 5:59:00 PM
From: MGV	Read Replies (1) \| Respond to of 27311

Key Sections of today's filing (with language updated through 8/25 according to the document). No comment is needed. The document speaks for itself. ADDITIONAL FINANCING NEEDS; ACCESS TO CAPITAL The Company has negative working capital and has sustained recurring losses related primarily to the development and marketing of its products. In July 1998, the Company raised $10,000,000 in a debt and equity financing. The Company will need to secure additional financing in order to continue operations through fiscal 1999. Both the investor and the lender involved in the July 1998 financing transaction have made commitments to purchase additional equity securities or make additional loans to the Company, but these commitments are subject to the achievement by the Company of certain milestones including the announcement of a material contract with a battery purchaser. There can be no assurance that the Company can achieve the milestones, or that any alternate debt or equity financings can be completed on satisfactory terms, or at all. <b. Moreover, even if the specified milestones are achieved and the Company obtains another $15 million in combined debt and equity financing, the Company will not be able to continue operations past 1999 unless it begins to generate significant operating revenue, or secures additional financing. Management has implemented certain capital equipment reductions and is actively pursuing capital grant advances from the Northern Ireland Industrial Development Board ("IDB"). IDB financing is contingent on the Company's achieving cumulative revenues from sale of batteries of $4 million. There can be no assurance that the Company can achieve this level of revenue over the short term, or at all. If the Company is unable to achieve the milestones specified under its current financing arrangements, and is unable to secure additional alternative financing on acceptable terms, the Company will be unable to continue to fund its operations. Moreover, the Company will be unable to implement its business strategy and will be required to further delay, scale back or eliminate certain of its research and product development programs, or to license to third parties rights to commercialize products or technologies that the Company would otherwise seek to develop itself. The unavailability of adequate funds in the near future would have a material adverse effect on the Company's business, financial condition and results of operations. The exercise of such warrants and conversion of the Series A Preferred Stock and the sale of such Common Stock could have a significant negative effect on the market price of the Common Stock and could materially impair the Company's ability to raise capital through the future sale of equity securities.