<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OR THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended December 24, 1995
Or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OR THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ____________ to ____________
Commission file number 0-20028
VALENCE TECHNOLOGY, INC.
(Exact name of registrant as specified in its charter)
Delaware 77-0214673
- -------------------------------------- ---------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
301 Conestoga Way, Henderson, Nevada 89015
---------------------------------------------------------------------
(Address of principal executive offices including zip code)
(702) 558-1000
---------------------------------------------------------------------
(Registrant's telephone number, including area code)
---------------------------------------------------------------------
Former name, former address and former fiscal year, if changed since last report
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
(1) Yes X No (2) Yes X No
----- ----- ----- -----
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Common Stock $0.001 par value 21,664,993 shares
--------------------------------------- ---------------------------------
(Class) (Outstanding at February 1, 1996)
Page 1 of 12
<PAGE>
VALENCE TECHNOLOGY, INC. AND SUBSIDIARIES
(companies in the development stage)
FORM 10-Q
FOR THE QUARTER ENDED DECEMBER 24, 1995
INDEX
PAGES
-----
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements:
Condensed Consolidated Balance Sheets as of
December 24 and March 26, 1995 . . . . . . . . . . . . . . . . 3
Condensed Consolidated Statements of Operations
for the period from March 3, 1989 (date of inception)
to December 24, 1995 and for each of the three months and nine
months ended December 24, 1995 and December 25, 1994 . . . . . 4
Condensed Consolidated Statements of Cash Flows
for the period from March 3, 1989 (date of inception)
to December 24, 1995 and for each of the nine months
ended December 24, 1995 and December 25, 1994 . . . . . . . . 5
Notes to Consolidated Financial Statements . . . . . . . . . . 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations . . . . . . . . . . . . . 8
PART II. OTHER INFORMATION
Item 1. Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . 11
Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . . . . . . 11
SIGNATURES
2
<PAGE>
VALENCE TECHNOLOGY, INC. AND SUBSIDIARIES
(COMPANIES IN THE DEVELOPMENT STAGE)
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except per share amounts)
(unaudited)
_____
<TABLE>
<CAPTION>
December 24, March 26,
1995 1995
------------------ ------------------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 13,269 $ 16,602
Short-term investments 37,989 42,989
Accounts receivable 1,369 1,089
Interest receivable 224 226
Prepaids and other current assets 427 517
------------------ ------------------
Total current assets 53,278 61,423
Investments 9,668 14,880
Property, plant and equipment, net 13,484 15,491
Other assets 359 213
------------------ ------------------
Total assets $ 76,789 $ 92,007
------------------ ------------------
------------------ ------------------
LIABILITIES
Current liabilities:
Current portion of long-term debt $ 2,262 $ 3,150
Accounts payable 986 2,417
Accrued expenses 8,247 7,828
Accrued compensation 1,328 1,222
Related party - leases payable 484 1,795
------------------ ------------------
Total current liabilities 13,307 16,412
Long-term debt, less current portion 6,712 8,811
------------------ ------------------
Total liabilities 20,019 25,223
Contingencies (Note 3).
STOCKHOLDERS' EQUITY
Preferred stock, $0.001 par value:
Authorized: 10,000 shares;
Issued and outstanding: none
Common stock, $0.001 par value:
Authorized: 50,000 shares;
Issued and outstanding: 20,164 and 20,107
shares at December 24, 1995 and
March 26, 1995, respectively 140,308 136,065
Deficit accumulated during the development stage (84,019) (70,045)
Cumulative translation adjustment 481 764
------------------ ------------------
Total stockholders' equity 56,770 66,784
------------------ ------------------
Total liabilities and stockholders'
equity $ 76,789 $ 92,007
------------------ ------------------
------------------ ------------------
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
3
<PAGE>
VALENCE TECHNOLOGY, INC. AND SUBSIDIARIES
(COMPANIES IN THE DEVELOPMENT STAGE)
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
(unaudited)
_____
<TABLE>
<CAPTION>
Period from
March 3, 1989
(date of inception) Three Months Ended Nine Months Ended
through ------------------------------------ -----------------------------------
December 24, December 24, December 25, December 24, December 25,
1995 1995 1994 1995 1994
-------------------- ---------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C> <C>
Revenue:
Research and
development
contracts $ 21,605 $ 450 $ 3,700
------------- ------------- -----------
Costs and expenses:
Research and development 55,708 $ 1,363 2,971 $ 5,531 11,797
Marketing 2,369 90 142 383 539
General and
administrative 24,502 1,439 1,876 3,921 4,820
Write-off of in-
process
technology 8,212 - - 6,064 -
Investment in
Danish
subsidiary 3,489 - - - -
Special charges 18,872 - - - 18,652
------------- ------------- ------------- ------------- -----------
Total costs and
expenses 113,152 2,892 4,989 15,899 35,808
------------- ------------- ------------- ------------- -----------
Operating loss (91,547) (2,892) (4,539) (15,899) (32,108)
Interest income 10,261 912 703 2,642 2,627
Interest expenses (2,733) (172) (183) (716) (557)
------------- ------------- ------------- ------------- -----------
Net loss $ (84,019) $ (2,152) $ (4,019) $ (13,973) $ (30,038)
------------- ------------- ------------- ------------- -----------
------------- ------------- ------------- ------------- -----------
Net loss per share $ - $ (0.11) $ (0.20) $ (0.69) $ (1.50)
------------- ------------- ------------- ------------- -----------
------------- ------------- ------------- ------------- -----------
Shares used in
computing net loss per
share - 20,134 20,081 20,160 20,046
------------- ------------- ------------- ------------- -----------
------------- ------------- ------------- ------------- -----------
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
4
<PAGE>
VALENCE TECHNOLOGY, INC. AND SUBSIDIARIES
(COMPANIES IN THE DEVELOPMENT STAGE)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands, except per share amounts)
(unaudited)
_____
<TABLE>
<CAPTION>
Period from
March 3, 1989 Nine Months Nine Months
(date of inception) Ended Ended
through December 24, December 25,
December 24, 1995 1995 1994
------------------- ------------------- -------------------
<S> <C> <C> <C>
Cash flows from operating activities:
Net loss $ (84,019) $ (13,973) $ (30,038)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation and amortization 14,010 2,900 3,447
Write-off of equipment 13,682 (1,085) 18,652
Write-off of in-process technology 8,212 6,064 -
Compensation related to stock options 1,148 - 209
Noncash charge related to acquisition
of Danish subsidiary 2,245 - -
Changes in assets and liabilities:
Accounts receivable (280) (280) (2,495)
Interest receivable (217) 1 180
Notes receivable (146) (146) -
Prepaid expenses and other current assets (1,385) 85 303
Accounts payable 885 (1,431) (6,048)
Accrued liabilities 1,288 (1,270) (4,784)
Deferred revenue - - (46)
---------------- ---------------- ----------------
Net cash used in operating activities (44,577) (9,135) (20,620)
---------------- ---------------- ----------------
Cash flows from investing activities:
Purchase of long-term investments (376,800) (126,082) (30,198)
Proceeds from long-term investments 327,145 134,296 37,786
Capital expenditures (34,008) (441) (4,553)
Other (222) - 12
---------------- ---------------- ----------------
Net cash provided by (used in)
investing activities (83,885) 7,773 3,047
---------------- ---------------- ----------------
Cash flows from financing activities:
Property and equipment grants 4,613 675 2,531
Borrowings of long-term debt 15,502 - 4,942
Payments of long-term debt:
Product development loan (482) - -
Shareholder and director (6,173) - -
Other long-term debt (8,028) (2,503) (2,248)
Proceeds from issuance of common stock,
net of costs 136,511 179 28
---------------- ---------------- ----------------
Net cash provided by (used in)
financing activities 141,943 (1,649) 5,253
---------------- ---------------- ----------------
Effect of foreign exchange rates on cash and cash
equivalents (212) (321) 133
Increase (decrease) in cash and cash equivalents 13,269 (3,333) (12,187)
Cash and cash equivalents, beginning of period - 16,602 26,188
---------------- ---------------- ----------------
Cash and cash equivalents, end of period $ 13,269 $ 13,269 $ 14,001
---------------- ---------------- ----------------
---------------- ---------------- ----------------
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
5
<PAGE>
VALENCE TECHNOLOGY, INC. AND SUBSIDIARIES
(COMPANIES IN THE DEVELOPMENT STAGE)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except per share amounts)
(unaudited)
_____
1. INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
These interim condensed consolidated financial statements are unaudited but
reflect, in the opinion of management all normal recurring adjustments necessary
to present fairly the financial position of Valence Technology, Inc. and
Subsidiaries (the Company) as of December 24, 1995 and March 26, 1995, its
consolidated results of operations and cash flows for the period from March 3,
1989 (date of inception) to December 24, 1995 and for each of the three-month
and nine-month periods ended December 24, 1995 and December 25, 1994. Because
all the disclosures required by generally accepted accounting principles are not
included, these interim condensed consolidated financial statements should be
read in conjunction with the audited financial statements and notes thereto in
the Company's Annual Report on Form 10-K as of and for the year ended March 26,
1995. The year end condensed consolidated balance sheet data as of March 26,
1995 was derived from audited financial statements, but does not include all
disclosures required by generally accepted accounting principles.
The results of operations for the three-month and nine-month periods and the
cash flows for the nine-months ended December 24, 1995 are not necessarily
indicative of results of operations and cash flows for any future period.
2. NET LOSS PER SHARE
The computation of net loss per share is based on the weighted average number of
common shares outstanding during the period. Common stock options and warrants
have not been included in the computation since their inclusion would be
antidilutive.
3. CONTINGENCIES
LITIGATION
In May 1994, a series of class action lawsuits were filed in the United States
District Court for the Northern District of California against the Company and
certain of its present and former officers and directors. These lawsuits were
consolidated, and in September 1994 the plaintiffs filed a consolidated and
amended class action complaint. Following the Court's Orders on motions to
dismiss the complaint, which were granted in part and denied in part, the
plaintiffs filed an amended complaint in October 1995. ("Complaint"). The
Complaint alleges violations of the federal securities laws against the Company,
certain of its present and former officers and directors, and the underwriters
of the Company's public stock offerings, claiming that the defendants issued a
series of false and misleading statements, including filings with the Securities
and Exchange Commission, with regard to the Company's business and future
prospects. The plaintiffs seek to represent a class of persons who purchased
the Company's common stock between May 7, 1992 and August 10, 1994. The
Complaint seeks unspecified compensatory and punitive damages, attorney's fees
and costs. On January 23, 1996, the Court dismissed, with prejudice, all claims
against the underwriters of the Company's public stock offerings, and one claim
against the Company and its present and former officers and directors. The
Company believes it has meritorious defenses and intends to defend the lawsuit
vigorously.
The ultimate outcome of these actions cannot presently be determined.
Accordingly, no provision for any liability or loss that may result from
adjudication or settlement thereof has been made in the accompanying
consolidated financial statements.
6
<PAGE>
4. WRITE-OFF OF IN-PROCESS TECHNOLOGY
The Company incurred a one-time charge to operations of $6,064,000 for the
write-off of in-process technology related to the Technology Transfer Agreement
with Bell Communications Research, Inc. ("Bellcore") in the second quarter of
fiscal year 1996. Technological feasibility of the in-process technology
acquired had not been established and there was no alternative future use.
5. RECENT ACCOUNTING PRONOUNCEMENTS
During March 1995, the Financial Accounting Standards Board issued Statement No.
121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to Be Disposed Of," which requires the Company to review for impairment
of long-lived assets, certain identifiable intangibles, and goodwill related to
those assets whenever events or changes in circumstances indicate that the
carrying amount of an asset may not be recoverable. In certain situations, an
impairment loss would be recognized. It will be effective for the Company's
fiscal year 1996. The Company has studied the implications of the statement,
and based on its initial evaluation, does not expect it to have a material
impact on the Company's financial condition or results of operations.
During October 1995, the Financial Accounting Standards Board issued Statement
No. 123 (SFAS No. 123). "Accounting for Stock-Based Compensation," which
establishes a fair value based method of accounting for stock-based compensation
plans. The Company is currently following the requirements of APB Opinion No.
25, "Accounting for Stock Issued to Employees" while it studies the implications
of SFAS No. 123 and evaluates the effect, if any, on the financial conditions
and results of operations of the Company. SFAS No. 123 will be effective for
the Company's fiscal year 1996.
7
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
OVERVIEW
The Company was founded in 1989 to develop and commercialize advanced
rechargeable batteries based on lithium and polymer technologies. Since its
inception, the Company has been a development stage company primarily engaged in
acquiring and developing its initial technology, manufacturing limited
quantities of prototype batteries recruiting personnel, and acquiring capital.
To date, other than insubstantial revenues from limited sales of prototype
batteries, the Company has not received any significant revenues from the sale
of products. Substantially all revenues to date have been derived from a
research and development contract with the Delphi Automotive Systems Group
("Delphi," formerly the Delco Remy Division), and operating group of the General
Motors Corporation. The Company has incurred cumulative losses of $84,019,000
from its inception to December 24, 1995.
This Management's Discussion and Analysis of Financial Condition and Results of
Operations should be read in conjunction with the accompanying condensed
consolidated financial statements and notes thereto contained herein and the
Company's consolidated financial statements and notes thereto contained in the
Company's Annual Report on Form 10-K as of and for the year ended March 26,
1995.
RESULTS OF OPERATIONS
THREE AND NINE MONTHS ENDED DECEMBER 24, 1995 AND DECEMBER 25, 1994.
During the three and nine months ended December 24, 1995, the Company continued
development activities under a research and development agreement with Delphi.
That phase of a multi-year agreement, which provided for the aggregate funding
of up to $20,000,000, was completed during the quarter ending September 25,
1994. Payments were generally made in accordance with the achievement of
certain milestones. No revenues were recognized during the third quarter and
first nine months of fiscal 1996. Revenues of $450,000 and $3,700,000 were
recognized during the third quarter and nine months of fiscal 1995,
respectively, under that phase of the Delphi agreement.
In September, 1994 the Company and Delphi signed a new five year agreement to
combine efforts in developing the Company's rechargeable solid state lithium
polymer battery technology. Under the agreement, Delphi and the Company
combined their research and development activities in a new facility in
Henderson, Nevada. The new facility is owned by the Company, with Delphi paying
a fee of $50,000 per month over the five year term of the new agreement for
access to the Company's research and development (of which $150,000 and $500,000
were recognized during the third quarter and nine months of fiscal 1996,
respectively, as an offset to research and product development expenses). In
addition, Delphi is paying a majority of the facility's operating costs over the
term of the new five year agreement. The Company is treating both of these
payments as an offset to research and development expense.
In the first quarter of fiscal year 1995, the Company announced its intent to
refocus its efforts on research and development and to slowdown completion of
its volume manufacturing capacities. In the second quarter of fiscal year 1995,
the Company also announced its intent to reduce its efforts related to
commercialization of a battery containing a lithium metal anode and instead
concentrate on the development of a lithium polymer battery containing an
alternate lithium anode. The Company produced significant cost savings as a
result of these activities.
Research and development expenses were $1,363,000 and $5,531,000 during the
three and nine months ended December 24, 1995 as compared to $2,971,000 and
$11,797,000 during the same periods of fiscal 1995. The decrease between
comparable periods was primarily due to cost sharing with Delphi, reductions in
personnel and related costs concurrent with the Company's decision to slow
completion of its volume manufacturing capacities and refocus on other aspects
of research and development.
Marketing expenses were $90,000 and $383,000 for the third quarter and nine
months of fiscal year 1996, respectively, as compared to $142,000 and $539,000
during similar periods of fiscal year 1995. The comparative decrease is the
result of a decrease in headcount.
8
<PAGE>
General and administrative expenses decreased to $1,439,000 and $3,921,000
during the third quarter and nine months of fiscal year 1996, respectively, down
from $1,876,000 and $4,820,000 during fiscal year 1995 comparable periods. The
decrease primarily reflects a reduction in spending as well as cost sharing with
Delphi.
Consistent with the fiscal year 1995 refocus on research and development,
special charges in the first nine months of fiscal year 1995 were $18,652,000
for which no tax benefit is currently available. Such charges were made
primarily to write-down equipment the Company had acquired, or is contractually
committed to acquire, and which was originally intended for use in manufacturing
batteries utilizing a lithium metal anode. An additional component of the
special charges was for facilities consolidation costs.
Interest income increased to $912,000 and $2,642,000 during the third quarter
and nine months of fiscal year 1996, respectively, as compared to $703,000 and
$2,627,000 during the prior fiscal year's same periods. The third quarter
difference is a result of accounting treatment of interest income during fiscal
1995.
Interest expense was $172,000 and $716,000 during the third quarter and nine
months of fiscal year 1996, respectively, as compared to $183,000 and $557,000
during the prior fiscal year's comparable periods. This increase is a result of
additional long-term debt outstanding during the subsequent periods.
LIQUIDITY AND CAPITAL RESOURCES
The Company used $9,135,000 net cash for operating activities during fiscal year
1996's first nine months whereas it used $20,620,000 during the first nine
months of fiscal year 1995, a decrease between comparable periods of
$11,485,000. This net decrease primarily resulted from a reduction in losses
(before special charge) partially offset by acquisition of the Bellcore
technology.
During the nine months ended December 24, 1995, the Company provided $7,773,000
net cash from investing activities compared to $3,047,000 provided during the
first nine months of fiscal year 1995, an increase of $4,726,000 between
comparable periods. The increase primarily was a result of capital expenditures
decreasing to $441,000 during the first nine months of this fiscal year as
compared to $4,553,000 during last fiscal year's first nine months.
The Company used $1,649,000 net cash from financing activities during fiscal
year 1996's first nine months versus providing $5,253,000 during the first nine
months of fiscal year 1996. This decrease resulted from lower borrowing levels.
As a result of the above, the Company had a net decrease in cash and cash
equivalents of $3,333,000 during the fiscal year 1996's first nine months,
whereas it had a net decrease of $12,187,000 during the same period of fiscal
year 1995.
The Company's $2,000,000 working capital line of credit is available through
February 15, 1996. The working capital line collateralizes outstanding letters
of credit, which reduce borrowings otherwise available under the line. As of
December 24, 1995, there are no outstanding letters of credit.
During fiscal year 1994, the Company through its Dutch subsidiary, signed an
agreement with the Northern Ireland Industrial Development Board (IDB) to open
an automated manufacturing plant in Northern Ireland in exchange for capital and
revenue grants from the IDB. The Company has also received offers from the IDB
to receive additional grants. The grants available under the agreement and
offers, for an aggregate of up to L27,555,000, generally become available over a
five year period through October 31, 1998. As of December 24, 1995, the Company
had received grants aggregating L3,978,050 reducing remaining grants available
to L23,576,950 (US. $36,756,000 as of December 24, 1995).
As a condition to receiving funding from the IDB, the subsidiary must maintain a
minimum of L12,000,000 in debt or equity financing from the Company. Aggregate
funding under the grants is limited to L4,035,000 until the Company has
recognized $4,000,000 in aggregate revenue from the sale of its batteries
produced in Northern Ireland. Given that the Company has no agreements to
supply batteries using its current technology, there are no assurances that the
Company will be able to meet the agreement's revenue test.
9
<PAGE>
The amount of the grants available under the agreement and offers is primarily
dependent on the level of capital expenditures made by the Company.
Substantially all of the funding received under the grants is repayable to the
IDB if the subsidiary is in default under the agreement and offers, which
includes the permanent cessation of business in Northern Ireland. Funding
received under the grants to offset capital expenditures is repayable if related
equipment is sold, transferred or otherwise disposed of during a four year
period after the date of grant. In addition, a portion of funding received
under the grants may also be repayable if the subsidiary fails to maintain
specified employment levels for the two year period immediately after the end of
the five year grant period. The Company has guaranteed the subsidiary's
obligations to the IDB under the agreement.
There can be no assurance that the Company will be able to meet the requirements
necessary for it to receive and retain grants under the IDB agreement and
offers.
The Company expects that its existing funds as of December 24, 1995, together
with the interest earned thereon, will be sufficient to fund the Company's
operations through the end of fiscal year 1997. The Company anticipates that it
may need substantial additional funds in the future for capital expenditures,
research and product development, marketing and general and administrative
expenses and to pursue joint venture opportunities. The Company's cash
requirements, however, may vary materially from those now planned because of
changes in the Company's operations, including changes in OEM relationships or
market conditions. There can be no assurance that funds for these purposes,
whether from equity or debt financing agreements with strategic partners or
other sources, will be available on favorable terms, if at all.
RECENT ACCOUNTING PRONOUNCEMENTS
During March 1995, the Financial Accounting Standards Board issued Statement No.
121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to Be Disposed Of," which requires the Company to review for impairment
of long-lived assets, certain identifiable intangibles, and goodwill related to
those assets whenever events or changes in circumstances indicate that the
carrying amount of an asset may not be recoverable. In certain situations, an
impairment loss would be recognized. It will be effective for the Company's
fiscal year 1996. The Company has studied the implications of the statement,
and based on its initial evaluation, does not expect it to have a material
impact on the Company's financial condition or results of operations.
During October 1995, the Financial Accounting Standards Board issued Statement
No. 123 (SFAS No. 123). "Accounting for Stock-Based Compensation," which
establishes a fair value based method of accounting for stock-based compensation
plans. The Company is currently following the requirements of APB Opinion No.
25, "Accounting for Stock Issued to Employees" while it studies the implications
of SFAS No. 123 and evaluates the effect, if any, on the financial conditions
and results of operations of the Company. SFAS No. 123 will be effective for
the Company's fiscal year 1996.
10
<PAGE>
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
In May 1994, a series of class action lawsuits were filed in the United States
District Court for the Northern District of California against the Company and
certain of its present and former officers and directors. These lawsuits were
consolidated, and in September 1994 the plaintiffs filed a consolidated and
amended class action complaint. Following the Court's Orders on motions to
dismiss the complaint, which were granted in part and denied in part, the
plaintiffs filed an amended complaint in October 1995. ("Complaint"). The
Complaint alleges violations of the federal securities laws against the Company,
certain of its present and former officers and directors, and the underwriters
of the Company's public stock offerings, claiming that the defendants issued a
series of false and misleading statements, including filings with the Securities
and Exchange Commission, with regard to the Company's business and future
prospects. The plaintiffs seek to represent a class of persons who purchased
the Company's common stock between May 7, 1992 and August 10, 1994. The
Complaint seeks unspecified compensatory and punitive damages, attorney's fees
and costs. On January 23, 1996, the Court dismissed, with prejudice, all claims
against the underwriters of the Company's public stock offerings, and one claim
against the Company and its present and former officers and directors. The
Company believes it has meritorious defenses and intends to defend the lawsuit
vigorously.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
b. REPORTS ON FORM 8-K
The Company filed no reports on Form 8-K during the quarter ended
December 24, 1995.
11
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereto duly authorized.
VALENCE TECHNOLOGY, INC.
(Registrant)
Date: February 6, 1996 By: /s/ David Archibald
--------------------
David Archibald
Director of Finance
(Principal Financial and
Accounting Officer)
12
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<CURRENCY> US DOLLARS
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> MAR-31-1996
<PERIOD-START> SEP-25-1995
<PERIOD-END> DEC-24-1995
<EXCHANGE-RATE> 1
<CASH> 13,269
<SECURITIES> 37,989
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 53,278
<PP&E> 25,260
<DEPRECIATION> (11,776)
<TOTAL-ASSETS> 76,789
<CURRENT-LIABILITIES> 13,307
<BONDS> 6,712
0
0
<COMMON> 140,308
<OTHER-SE> (83,538)
<TOTAL-LIABILITY-AND-EQUITY> 76,789
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 2,892
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 172
<INCOME-PRETAX> (2,152)
<INCOME-TAX> 0
<INCOME-CONTINUING> (2,152)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (2,152)
<EPS-PRIMARY> (0.11)
<EPS-DILUTED> (0.11)
</TABLE>
