Valence Technology Reports Second-Quarter 2001 Financial Results

November 14, 2000 by Jeff Shepard

Valence Technology Inc. (Henderson, NV) reported financial results for the second quarter of fiscal year 2001 ended September 30, 2000.

For the second quarter of 2001, the company reported a net loss of $9.3 million, or $0.25 per share, on 37.8 million weighted average shares outstanding, compared with a net loss of $9.5 million, or $0.34 per share, on 27.9 million weighted average shares outstanding for the second quarter of fiscal 2000. For the quarter, Valence had revenues of $2.1 million, compared with revenues of $389,000 in the second quarter of fiscal 2000.

Research and development expenses were $1.6 million for the second quarter of fiscal 2001, compared with $4.9 million for the second quarter of fiscal 2000. General and administrative expenses were $1.84 million in the second quarter of fiscal 2001,

compared with $1.77 million in the year-ago period.

At September 30, 2000, Valence had cash and cash equivalents of $8.9 million, total assets of $48.4 million, and stockholders' equity of $19.1 million.

“Valence continued to make significant progress during the second quarter of fiscal 2001. During the quarter, Valence received initial orders for lithium-ion polymer cells for use in automotive telematics and received an additional order for our model 25A satellite phone batteries," said Lev Dawson, chairman and CEO of Valence. He continued, “The most significant milestone, however, was our agreement to acquire all of the Telcordia Bellcore rights in the battery field, as they relate to lithium-ion, solid-state polymer battery technology, from Telcordia Technologies Inc. (Morristown, NJ). Valence will become the licensor under Telcordia's license agreements, and we expect to generate substantial licensing revenues following this pivotal acquisition."

The Telcordia transaction will provide Valence with all of Telcordia's 'Bellcore' intellectual property covering lithium-ion, solid-state, polymer batteries. The purchase

includes the acquisition of over 40 US patents, 14 US pending patents, and more than 200 foreign patents issued and pending. In addition, Valence will also acquire 15 Bellcore licenses with battery manufacturers throughout the world.

“Valence expects to become one of the largest licensors and suppliers of proprietary battery materials of lithium-ion polymer technology. The transaction will further entrench our position in this high-growth market," remarked Dawson. He added, “This is a very exciting time for Valence, as we enter into worldwide technology transfer and licensing of our intellectual property. We will restructure the company into three separate business units, which will allow us to cultivate licensing and consulting relationships. In addition, Valence plans to market specialized battery materials and components to licensees and battery manufacturers globally."

Dawson concluded, “We expect to enhance our position as the lithium-ion polymer market grows and the technology continues to gain acceptance. With a projected market of 1.89-billion rechargeable batteries required worldwide in the mobile communications market through 2005, Valence will be a formidable player. Benefiting from a solid patent portfolio, Valence will be positioned to drive performance and leverage our technology relationships."