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

To: FMK who wrote (9955)	3/28/1999 2:51:00 AM
From: Larry Brubaker	Read Replies (2) \| Respond to of 27311

History of VLNC statements regarding production status. I've reviewed most of VLNC filings going back to 1997 to compare their statements (not disclaimers) about the status of commercial production. There is a great deal of similarity to the language regarding production status in these filings (e.g., no commercial samples have been provided, customers will require an extensive qualification period). I will try to point out some of the differences when the statements changed. My comments are in italics. 10-K 6/27/97 "The Company expects this line to be qualified in the second half of calendar 1997..." 10-K405 6/29/98 "The Company expects this line to be qualified in the second half of calendar 1998..." S-3 12/21/98 "We expect this line to complete safety testing in the first quarter of calendar 1999..." Note the change from "qualified" to "complete safety testing." Not sure if this is significant. 10-QA 2/24/99 "The major components of construction in progress with their estimated costs and start dates are as follows: mixing, coating, etching, laminating and slitting equipment, $8,732,000, March 1997; assembly equipment, $15,954,000, March 1994; extraction, packaging, and conditioning equipment, $6,667,000, August 1993; and factory improvements and miscellaneous equipment, $2,447,000, June 1997. The estimated completion date for these major categories of CIP is the end of the first quarter of fiscal 2000. Meaning end of June, 99. The above is new language that wasn't included in previous quarterly reports. S-3A 2/25/99 "Our current manufacturing technology must be further developed before we will be able to manufacture our batteries in commercial quantities." Note, I did not find this statement in previous versions of the S-3s or 10-Qs. All of these documents have stated that they have provided no commercial samples to any potential customer, and that customers will require an extensive testing period after receiving commercial samples. Given the very recent (2/25/99, also included in the 3/15/99 S-3) new language about "manufacturing technology must be further developed..." along with the increasing elaboration of the warnings and disclaimers in these documents, I find it difficult to believe a purchase order is imminent. If it was, why would they feel the need to add this statement?