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

To: Zeev Hed who wrote (11536)	5/29/1999 2:05:00 PM
From: William Epstein	Read Replies (1) \| Respond to of 27311

Zeev; If we accept the scenario I have laid out. The laptop manufacturers are not willing to place orders until the technology is proven out and the process is proven to be reliable. Their attitude is let someone else take the risk. You made that point several times yourself. VLNC may have no choice, at this point, but to go to the Far East. How are you going to get even a small order from a laptop manufacturer? If they convert to these batteries then they must convert their whole line, at once. They can't ship some laptops with poly-lith. and some with the current nic-cads. I don't think there can be any small orders from a laptop OEM, only large ones. Bill

To: Zeev Hed who wrote (11536)	5/30/1999 12:53:00 PM
From: Gordon Quickstad	Respond to of 27311

Why have we been having such lengthy delays for contracts? There are >150 employees in NI for many months now. I don't think that they have been laboring by standing 4 or 5 deep watching some engineer tweek a machine. I can easily think that there is a large stockpile of generic size batteries (and they would have to have good shelf-life characteristics, and similar chemistry lithium "reserve" cells offer one of the best specifications in this area) that have/are being produced. Why do I believe they would use this strategy? VLNC needs to protect its IP and so has limited it's joint collaborations to Alliant, Delphi, and Hanil. It's important that customers have a reliable source for their batteries, but the technology is so new and VLNC needs to protect it's IP, so a means of sidestepping the usual second-sourcing of a supply is to have a very large stockpile available. The company is known to have purchased raw materials to build a mountain of batteries, and I believe the margins on the whole operation and the shelf-life of the product would support this boot-strap scenario of getting VLNC into the battery business with a large customer(s).