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

To: Larry Brubaker who wrote (6368)	12/29/1998 1:25:00 PM
From: Dennis V.	Read Replies (1) \| Respond to of 27311

Larry, read your thoughts on CC and agree. As far as release of info on material events, I believe the new Valence is very cautious and will err on the side of "no lawsuits".

To: Larry Brubaker who wrote (6368)	12/29/1998 2:27:00 PM
From: HQ	Read Replies (1) \| Respond to of 27311

Meaning of "qualification" Some thoughts on the issue of "qualification" of the batteries: the S-3 filing went into great detail about a particular problem that arose during the qualification tests. From the S-3: " Battery technologies vary in relative safety as a result of their differing chemical compositions. Most battery technologies incorporate a liquid electrolyte that, if leaked, may be dangerous. In addition, in the event of a short circuit or other physical damage to the battery, the liquid electrolyte may be free to flow to the reaction site and produce a continuous chemical reaction. This reaction may result in excess heat or a gas release and, if not properly released, may be explosive. Our lithium polymer battery technology appears to avoid these risks, because the liquid electrolyte in our current research prototypes is held in the solid polymer matrix and should not be free to leak or freely flow to a reaction site. " We have not fully completed safety testing and do not know whether the advantages inherent in our technology will make the battery as safe or safer than other battery technology. As part of our safety testing program, prototype batteries of various sizes, designs and chemical formulations are subject to abuse testing, where the battery is subjected to conditions outside the expected normal operating conditions of the battery. While some prototype batteries have survived these tests, others have vented gases containing vaporized solvents from the electrolyte, which have caught fire. Such results were generally expected and, until the testing is completed, we cannot make a valid determination as to the safety envelope in which the battery must be operated. Additionally, each new battery design requires new safety testing. Therefore, there is a risk that safety problems will develop with respect to the Company's battery technology that would prevent commercial introduction." (end excerpt) Clearly, the remaining issues have to do with clearly defining the "safety envelope," and no doubt the charging circuitry must be designed to ensure that the battery stays within this envelope. Perhaps this also requires temperature sensors, if a particular application's design results in higher than anticipated operating temperatures. The nature of the "abuse" was not clearly specified, either; was it run at high temperature and then punctured by a sharp object? Perhaps a rigid containment vessel will be required for these batteries, as for li-ion (though I doubt it; that's an extreme solution). We just don't know. But if it was fixable for li-ion, I have great confidence that it will be fixed for li-poly. As others have speculated, this does not necessarily mean that an OEM would not engage in contract negotiations while the testing is completed, if they anticipate from current test results that the battery will be able to be maintained within a certain safety envelope that still allows the performance desired, and that the only issue is specifying the envelope precisely, and ensuring the battery use is maintained within it. As an engineer, I don't understand all the fuss. Looks like they're right on track, because they said they expected this result, and they said that it works fine when in the normal operating regime. However, I, too, have issues with Lev about not being forthcoming about the exact status of testing and shipping. Long and in the dark.