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

To: FMK who wrote (6938)	1/9/1999 8:51:00 PM
From: kolo55	Read Replies (1) \| Respond to of 27311

Essentially the share price has recovered back to pre-S3 level. I think the market has responded to the over-reaction to the S-3. As to some recent points made on the thread: 1. The first round of financing completed in late July ended up being roughly the same as selling the equity at the then-current market price of 5 dollars a share. The preferred will convert at $6.03 fixed, since the 'floorless conversion' is gone on this first tranche. And for every three shares of common due to the preferred conversion, Castle Creek received a warrant exercisable at $6.7838. The warrants had a time value of about $3 when they were issued. The result of the financing is roughly equivalent to selling straight equity at $5.00, given the market expectations of volatility and time value at the time. In short, the financing wasn't a good deal, but it wasn't a bad deal either. It ended up simply being a deal made at market expected prices at the time the deal was made. 2. I don't understand why some posters insist the company will be forced to go to a 'positive working capital' status in the next month or two. The company has been in a negative working capital state for some time now, and depending on the exact timing of actual current liabilities, expected equity infusions, borrowings, or grants, could exist in a negative working capital state for the forseeable future. There is nothing that says a company must have positive working capital at any specific point in time, simply that they have the cash available to meet current liabilities as they come due. I must say I am confused why Larry B. believes they must get to positive working capital shortly. We don't know the timing of the current liabilities, or potential cash infusions due to grants etc, so we don't know when it will be necessary that the company goes to a positive working capital situation. I don't think that investing in a start-up company based solely on a balance sheet analysis is smart. Especially if the analysis is done just after the company has begun production. 3. From my careful reading of the patents and Bellcore technology, it is clear there is far more technology required to produce these batteries than simply licensing the Bellcore patents. Based on a review of the technology, expenditures on R&D, patent infringement settlements, along with recent public statements by managements, I have come to the opposite conclusion of Darkgreen. I conclude that Valence has a significant technological advantages over the competitors we know are currently gearing up production. I find his statement: The fact is that VLNC's technical starting point is the same as the other 10 Bellcore licensees. There are points of distinction between the licensees. They are not favorable to VLNC. as not only unsubstantiated, but out and out wrong. Even the SEC documents for Valence and others indicate some substantial differences. Too bad he doesn't read these parts of the SEC docs. Well, thats all for now. Paul