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

To: Paul Dubsky who wrote (6894)	1/8/1999 8:55:00 AM
From: Pronichev	Read Replies (1) \| Respond to of 27311

Paul WELL SAID!

To: Paul Dubsky who wrote (6894)	1/8/1999 11:18:00 AM
From: Larry Brubaker	Respond to of 27311

Paul, there is more than one way to look at the revised terms of the Castle Creek financing. Your suggestion could be correct. Another possibility is Castle Creek had already earned their profit on the first tranche by shorting anywhere from $9 - $11. This would allowed them to take their first $7.5 million plus substantial profits off the table while continuing to earn interest on the preferred shares. Now they plow the original $7.5 million back into the 2nd tranche, but still with very little risk as they still have the floorless option on the 2nd tranche if things don't work out for VLNC. If this theory is correct, the revised financing terms are not necessarily an indicator that Castle Creek now considers VLNC a sure bet. Had Castle Creek removed the floorless terms of the 2nd tranche as well, or VLNC acquired alternative funds from another source with no floorless provisions, this would be another story entirely. The way I see it, of course Castle Creek wanted to give VLNC another $7.5 million under these terms and conditions. They can't lose.