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

To: Larry Brubaker who wrote (9896)	3/26/1999 9:48:00 PM
From: stock leader	Read Replies (1) \| Respond to of 27311

1.5 million shares short...thats over 10% of the total shares outstanding!!!!!

To: Larry Brubaker who wrote (9896)	3/29/1999 12:03:00 PM
From: Ray	Respond to of 27311

Larry: >My question to you (Ray) is do you have evidence they are (shipping commercial samples)? If so, please post it. I am not aware of any statement that says "we are shipping commercial samples" made by the company via PR, conference call, SEC filing, or any other official source. I don't buy the premise they are afraid of being sued if they say they are shipping commercial samples and then they don't get a contract right away. They certainly could couch the statement with the appropriate disclaimers (extensive testing required, no guarantee that the samples will meet the requirements of OEMs) to avoid legal difficulties. Their filings demonstrate that they are very familiar with the use of disclaimers. And I don't confuse a dislcaimer (no guarantees) with a statement of fact (we have no products for sale, we have not shipped any commercial samples to any customers).< I can not recall them saying that they are shipping "commercial samples". Further, I can only speculate as to what they mean by "commercial samples" in the SEC filings. Do you know for certain? Further yet, I think the SEC filing's statements on this issue do not matter much. I decry the practice of taking SEC filing statements at face value. They are partly or mainly, depending on the situation, aimed at legal protection rather than being truly and wholly informative. Such statements are often essentially worthless or even misleading (in the legally safe direction); and the present case is a good example, IMO. The company has repeatedly stated that potential customers are evaluating VLNC's batteries and are pleased with their performance. VLNC has indicated that production-run samples were sent more than two months before the last SH meeting. * (see below) So, why does the company not state this important claim in the filings? Well, IMO, it is usual for companies to fill SEC filings with CYA statements rather than being fully informative. It seems to me VLNC is using the word "commercial" in the filings for the specific purpose of making a "disclaim". And, what possible purpose other than fear of lawsuit could be the reason for making such a disclaim? Don't companies vary a lot in how much they claim or disclaim in SEC filings? Would VLNC be "beyond the pale" in being so conservative? I think not. They have, in fact, emphasized that they are generally being very conservative. I believe VLNC is making a technically correct statement by saying they have not shipped "commercial samples". To me, "commercial" implies some sort of "off-the-shelf" availability of products, directly available from VLNC (rather than through re-packagers), and that need no special evaluation. I think they want to make certain that no one can say they are claiming true, ordinary commercial availability. This precaution is needed, IMO, since many people, if not most, are (a) unable to fully comprehend the difficult and reiterative process of acceptance testing of highly technical products and (b) unfamiliar with products not sold to end users. So, there is real danger of people misconstruing the product status - and blaming VLNC, however unfair that might be. It appears to me that VLNC has made a legally handy distinction between the two types of product samples. This distinction allows them to make simple and correct CYA disclaimers in terms of "commercial samples" in the filings while allowing some also-correct, less formal claims about the production status of their batteries in terms of "evaluation samples". We may well see the same "no commercial samples shipped" disclaim in the company's filings even after they have POs. This is because their customers are re-packagers, who will always want to evaluate the particular battery configuration supplied to them by VLNC. It is inherent in VLNC's business that the samples they ship will always be evaluation samples - as opposed to fully commercial samples as would be supplied by a company that offers identical, long-established items to end consumers. * (Of course - as you imply, at least - the company is perhaps being untruthful about production-ready samples being shipped, but I have difficulty accepting this suggestion. There has been substantial recent insider share buying, VLNC has a high quality board, many workers have been hired at the Ireland production facility, large quantities of materials have been purchased, blatant claims of volume production have been made, and bold statements of unconcern about not getting additional financing have been made. While anything is possible, I suppose, my belief is that these things would indicate insanity for Lev, the board, and the whole management unless there is a high probability of purchase orders in the near future.)