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

To: FMK who wrote (6291)	12/26/1998 12:04:00 PM
From: Larry Brubaker	Read Replies (1) \| Respond to of 27311

FMK: If you recall, the lawsuit you refer to was filed after VLNC said they had a large contract ($100+million, I believe) with Motorola that they proved unable to fulfill. Your argument that if the filings said truth they might be sued makes no sense to me. It seems to me the best way to avoid lawsuits is to be as truthful as possible in all statements. They could easily say they are providing production samples to OEMs (as ULBI is saying) with the appropriate disclaimers that production samples does not guarantee a contract. You are also claiming the S-3 financing is for the purpose of purchasing the 3rd line. I don't recall the document saying this is the purpose of the latest $7.5 million. As you recall, VLNC had about negative $2.5 million of working capital at the end of September. Given their $6 million quarterly burn rate, I would guess their working capital was about negative $8 million or so by the time they raised the new $7.5 million. I would submit the $7.5 million raised is more likely to be required just to pay all those 270 employees and manage previous obligations. Its hard to imagine they would have enough money from that $7.5 million to make a new major purchase of capital equipment.