Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: add who wrote (9750)	3/23/1999 5:45:00 PM
From: add	Read Replies (2) \| Respond to of 27311

Ok this is the (my) last word of the financing. Basically, the cash received for the warrants are marked using option pricing, the remainder of the cash received is allocated to the Pref. shares. For the $15M gross received, here is how its accounted for in the cash flow statement: The warrants( to CC and Gemini) are worth $3.2M , subtract the $800K transaction cash costs( $425 K for A and $375K for the B) and you get $2.4M for the cash received from the warrants. Of the $800K, Gemini received $750K,someone else, probably some lawyers received the other $50K. The $2.4M is embedded in the $7.34M line for the cash from stock and warrants, thus you never see it but its there. Thus, the CFO(Lev) said there must be $11.8 million left to allocate to the A and the B. The A series is tricky because Valence restated it. The original filing did not account for the value of the warrants and put the cash received for the Pref A shares at $7.075M (7.5M - 425K). It also said the warrants were worth $1.1M. Then in Feburary it was restated to account for the warrants. The warrants were also restated to be worth $1.35M. A mistake the first time ? The cash received for the A should have been $6.15M , but it says $6.04M. The only thing I can assume is that Lev can't add or is compensating himself to the tune of $110K for the additional responsibility as CFO to figure all this out. The series B is then worth $11.8M(gross - warrants) - $6.15M( Pref A) = $5.65M. This is the same as $7.5M - the value of the warrants issued in series B, which is $1.85M ($3.2M - $1.35M). The actual statement says $5.8M, not $5.65M. If you bring the $110K mistake from the Pref A here then, you end up having $40K extra cash received. Ok, maybe Lev hit the jackpot at the local casino and contributed it to Valence or maybe they just made a mistake and there is $40K less in the cash received from stocks and warrants line than should be. In any case, my conclusion is: We need a CFO !