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

To: Zeev Hed who wrote (6475)	12/30/1998 1:19:00 PM
From: FMK	Respond to of 27311

Zeev, It's very likely that Valence has already discussed and turned down OEM's offers based on testing and design already completed. IMO you should revise your best case scenereo to Jan 4, 1999 for a PO announcement. It should be fair to assume that an announcement is not likely over the holidays. As you are probably aware, the company may have several cards they have not played yet, and a contract announcement will most likely occur without us knowing in advance. Considering the upward move that would occur after going from zero contracts for 8 years to a first major contract. Considering also that chances of failure are very low, it would be prudent to own some shares in advance because they are likely to get expensive very fast after a contract is announced.

To: Zeev Hed who wrote (6475)	12/30/1998 1:32:00 PM
From: Dennis V.	Respond to of 27311

Zeev, doesn't your more conservative schedule assume that there are no risk takers out there? Some of those OEM's could field an entirely new product in 6 mos. I'm looking at CC statements from Oct to the effect that Valence had been involved in design(retrofit) consultation with some OEM's for weeks, if not months. Yes, the initial order size may not be huge. The larger, more bureaucratic companies, while having more production capacity, may be slower to change over. Some of these however, have incorporated flexible designs in anticipation of lith poly batteries.

To: Zeev Hed who wrote (6475)	12/30/1998 3:42:00 PM
From: Larry Brubaker	Read Replies (3) \| Respond to of 27311

Zeev, There is no doubt that cash will be tight for a while but I am encouraged by the consistent statements now out of IR that samples will be shipped in earnest beginning in January. Presuming this information is correct (unlike statements from IR posted here a year ago regarding VLNC being ready for production), it seems that a great deal of risk is removed from the stock. The wording of the S-3 suggested to me they were still peeling the onion (to use a Zeevism). If so, the risk of having to resort to more toxic financing seemed high. If the onion has been peeled and it is simply a matter of ramping up production and working out the expected bugs, the financing risk seems to be at a much lower level. Even if, as you suggest, it takes a few months to get orders and a few months after that to be shipping in large volumes, and even if cash flow is a major concern for a while, it would seem more likely they could raise whatever money they need for cash flow purposes from more conventional sources than the toxic route. As you pointed out, the new provisions give Castle Creek "most favored nation" status, but that may simply help Castle Creek "cover their cash" in case Mr. Murphy dumps further unforseen problems on VLNC. Regarding this new sort of floorless which is apparently becoming a specialty of Castle Creek. A term for it might be "produce or else" floorless. It seems to give the recipients a window of opportunity to get the job done before exacting a floorless penalty. As such, I see it as a less toxic version of a straight floorless.