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

To: Dennis V. who wrote (6364)	12/29/1998 12:42:00 PM
From: Larry Brubaker	Respond to of 27311

Dennis, the way shareholders benefit is by Castle Creek converting at the fixed price of $6.03, which quite possibly was the case with the first tranche. In order for them to convert at $6.03, they will want to see an opportunity to sell at a price enough above $6.03 to earn a sufficient profit for their efforts. This is a win, win scenario for both Castle Creek and VLNC shareholders (Berg and Lev hold plenty of shares), because Castle Creek earns a profit for their efforts and dilution to shareholders is minimized. Thus, I don't think it makes sense they would deliberately paint a gloomier picture than the truth to help Castle Creek, because shareholders are hurt if the next conversion takes place below $6.03 because of the additional dilution this would create. The only reason I can think of for VLNC doing something like this is if Berg and/or Lev had shorted the stock and I don't think this would be likely at all. I would assume such a circumstance would run afoul of securities laws, for one thing. Therefore, I think there are 2 potential explanations for the wording of the recent S-3. 1. They mean exactly what they say. 2. The situation is better than they say as many believe and the wording was confusing either because of ineptitude, a lack of concern for shareholders, whatever. If it is the second situation, it bothers me as a potential shareholder because the filings do not accurately reflect the status of the company. Remember at the August conference call Lev promised to keep shareholders informed about the status of production. Either the filings are accurate and he has kept his promise or the filings are inaccurate as some think and he has done a very poor job of keeping his promise. I don't see what would be gained by a dirty trick, however.

To: Dennis V. who wrote (6364)	12/29/1998 12:56:00 PM
From: lws	Read Replies (1) \| Respond to of 27311

Hi, everyone, I too am having a hard time reconciling the S3 reference to qualifying lasting at least through the first quarter with what we've heard from Lev in the conference calls of the last six months. It seems to me that if the S3 "qualifying" reference was to (all) "lines" instead of a new line like FMK suggests, then it implies something went drastically wrong with the earlier line(s) -- and that would have been material information which should have been announced. I realize he never explicitly announced that the first line had been qualified, but he certainly indicated it could be inspected by outsiders (the Dec. 3 analysts) as a line ready to produce a product the company was satisfied to sell. It seems implausible that he would have shown them something that was not ready because it was not yet qualified. Suppose later it turned out it could never be qualified? It would be to risk a BIG black eye, and Lev seems too cautious for that. So if it was ready (qualified) then, has something gone wrong since? In brief, doesn't reading the S3 as pertaining to all production imply there must have been serious problems with the first line which were material enough to require public announcement? If that's the case, where's the announcement? The absence of an announcement makes me think the S3 is most plausibly read as referring to a new line. Any thoughts? Regards, lws PS Happy and Prosperous New Year to all!!