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

To: Zeev Hed who wrote (6119)	12/19/1998 4:30:00 PM
From: Larry Brubaker	Read Replies (2) \| Respond to of 27311

Zeev: My reading is the preferred shares can be converted at the lower of the variable or fixed rate come July 27, or the fixed rate before July 27. As far as the warrants go, my reading is the terms of the warrant haven't changed, i.e. the warrants (about 400,000 if I recall correctly) may be purchased at Castle Creek's option at a fixed price (I think the fixed price for warrants is about $5?). Of course, if these warrants are exercised, this will provide more cash to VLNC. So I don't see the floorless scenario applying to the warrants, only the conversion of preferred shares to common, and then not until July 27. I agree that $100 is years away for this stock, if ever. But I also agree a 2-3 bagger from here over the course of the next year is not out of the question.

To: Zeev Hed who wrote (6119)	12/19/1998 5:15:00 PM
From: jcox	Read Replies (2) \| Respond to of 27311

Hi Zeev and All I read this another way. "The terms of the preferred stock to be issued in the second half of the financing are similar to the terms negotiated with Castle Creek for the first half of the financing, with minor technical amendments, including that the variable conversion price for the second half of the financing will not be applicable until the end of July, 1999. To me this says that only the change of date of the variable is being done but all the same "material order" conditions still apply. Why would "minor technical amendments" mean the removal of conditions for a fixed rate conversion. Also I don't think the warrants would be variable but just that they would be numbered by taking the second round of financing 2.5M convertible shares and dividing by the price of 6.03. Does anyone else see it this way or should I take off these rose colored glasses Also would anyone care to post what the best case dilution would be. John