SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------
Form 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): December 21, 1999
VALENCE TECHNOLOGY, INC.
(Exact Name of Registrant as Specified in Charter)
Delaware 0-20028 77-0214673
(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
301 CONESTOGA WAY
HENDERSON, NEVADA 89015
(Address of Principal Executive Offices)
(702) 558-1000
(Registrant's Telephone Number)
Not Applicable
(Former name or former address, if changed since last report)
Item 5. OTHER EVENTS
On December 21, 1999, Valence Technology, Inc. (the "Company") entered into
an agreement (the "Stock Purchase Agreement") with Capital Guardian Trust
Company (the "Purchaser"), on behalf of certain client accounts of the
Purchaser, for the sale of 2,133,333 shares (the "Shares") of the Company's
common stock (the "Common Stock"), $.001 par value, at a negotiated price of
$15.00 per share, for a total purchase price of $32,000,000.00. The closing of
the transaction took place on December 28, 1999. The purchase price of the
Shares was determined based on the average closing sales price of the Common
Stock for the 20 calendar days prior to the execution of the Stock Purchase
Agreement. In connection with the Stock Purchase Agreement and the sale of the
Shares, the Company entered into a Placement Agency Agreement dated as of
December 21, 1999 (the "Placement Agency Agreement"), pursuant to which the
Company engaged CIBC World Markets Corp. as its exclusive placement agent (the
"Placement Agent") and agreed to pay the Placement Agent a fee of $1,600,000 in
consideration of its services. In addition, the Company agreed to reimburse the
Placement Agent for its expenses, in an amount not to exceed $40,000. The
Company estimates that the total expenses it will incur in connection with the
sale of the Shares, including the above finder's fee and legal and accounting
fees, will be approximately $1,670,000.
<PAGE>
The executed Stock Purchase Agreement along with the press release announcing
the sale of the shares are filed herewith as Exhibits 10.1 and 99.1,
respectively, and are incorporated herein by reference.
Item 7. EXHIBITS.
<TABLE>
<CAPTION>
EXHIBIT NUMBER DESCRIPTION
<S> <C>
10.1 Stock Purchase Agreement dated
December 21, 1999
99.1 News Release dated December 23, 1999
</TABLE>
Page 2
<PAGE>
SIGNATURES
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 hereunto duly authorized.
January 7, 2000 VALENCE TECHNOLOGY, INC.
By:
--------------------------------------
Jay L. King
Vice President and Chief Financial Officer
Page 3
<PAGE>
EXHIBIT INDEX
EXHIBITS
10.1 Stock Purchase Agreement dated December 21, 1999
99.1 News Release dated December 23, 1999
Page 4
December 21, 1999
Capital Guardian Trust Company
333 South Hope Street
Los Angeles, California 90071
Dear Mr. Solomon:
This letter sets forth the agreement of Capital Guardian Trust Company, on
behalf of certain client accounts (the "PURCHASER") and Valence Technology, Inc.
(the "COMPANY") regarding the purchase by the Purchaser from the Company of the
Company's common stock (the "COMMON STOCK") on the date hereof. The parties
agree as follows:
1. This agreement relates to the purchase by the Purchaser of 2,133,333
shares (the "SHARES") of the Company's Common Stock for an aggregate purchase
price of $32,000,000.00 (thirty two million dollars and 00/100 US dollars),
which purchase is being settled by the parties on or before December 23, 1999.
2. The Company represents and warrants that (a) the shares of Common Stock
issued by the Company to the Purchaser have been registered under the Securities
Act of 1933, as amended (the "SECURITIES ACT"), pursuant to a registration
statement on Form S-3, Commission File Number 333-76589 (the "REGISTRATION
STATEMENT"); and (b) the Company will file a prospectus supplement to the
Registration Statement in connection with the transaction in accordance with the
provisions of Rule 424(b) under the Securities Act of 1933, as amended.
3. The Purchaser represents that it has received a copy of the prospectus
supplement in the form to be filed with the Securities and Exchange Commission.
4. The Company covenants that it will not use the proceeds from the
issuance and sale of the Shares voluntarily to fund, in part or in whole, a
settlement of the class action litigation filed in the United States District
Court for the Northern District of California and which is currently pending
against the Company.
5. The Purchaser represents and warrants that it has conducted due
diligence to its sole satisfaction in connection with the purchase of the
Shares. The Purchaser has relied upon an independent investigation made by it
and has, prior to the date hereof, been given access to and the opportunity to
examine all books and records of the Company, all material contracts and
documents of the Company and to ask all questions it deemed appropriate of
officers and directors of the Company. In making its investment decision to
purchase the Shares, the Purchaser is not relying on any oral or written
representations or assurances from the Company or any other person or any
representation of the Company or any other person other than as set forth in
this Agreement.
6. The Company shall file with NASDAQ National Market an application for
the listing of the shares of Common Stock to be purchased hereby.
<PAGE>
7. The Company will promptly notify the Purchaser of (a) any stop order or
other suspension of the effectiveness of the Registration Statement and (b) the
happening of any event as a result of which the prospectus included in the
Registration Statement includes an untrue statement of a material fact or omits
to state a material fact required to be stated therein, or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading.
8. This agreement and the legal relations between the parties hereto with
respect to any purchase of Common Stock by the Purchaser hereunder shall be
governed and construed in accordance with the substantive laws of the State of
New York without giving effect to the conflicts of law principles thereunder.
9. Delivery of an executed copy of a signature page to this agreement by
facsimile transmission shall be effective as delivery of a manually executed
copy of this agreement and shall be effective and enforceable as the original.
10. The effectiveness of this Agreement is conditioned upon the execution
and delivery of the Placement Agency Agreement between CIBC World Markets Corp.
and the Company.
Page 2
<PAGE>
Please execute a copy of this letter which, when executed by the Purchaser,
will constitute an agreement between the Company and the Purchaser.
Very truly yours,
COMPANY:
VALENCE TECHNOLOGY, INC.
By:
-----------------------------------
Name:
Title:
AGREED TO:
PURCHASER:
CAPITAL GUARDIAN TRUST COMPANY
By:
-----------------------------------
Name:
Title:
Page 3
EX-99.1 Press Release
Valence Technology Signs Agreement for $32.0 Million Common Stock Placement
PR Newswire - December 23, 1999 08:15
Funds to be Used to Build Inventory, Finance Capital Expenditures And for
Working Capital
HENDERSON, Nev., Dec. 23 /PRNewswire/ -- Valence Technology Inc. (Nasdaq: VLNC),
a leader in the development of lithium polymer batteries, today announced that
it has signed an agreement to raise $32.0 million through a sale of Valence
common stock to a major institutional investor. The sale, which is pursuant to
Valence's existing S-3 shelf registration, provides the company with funds
necessary for the continued commercialization and distribution of its advanced
technology, lithium polymer rechargeable batteries. The funds will also be used
to purchase raw materials, build finished goods inventory, and finance expansion
of the company's production capability. Closing of the transaction is expected
to occur today.
Capital Guardian Trust Company, on behalf of its clients, is purchasing
approximately 2.1 million shares of registered Valence common stock at a price
of $15 per share as determined by an average of the closing stock price for the
20 calendar days prior to the execution of the agreement. Capital Guardian Trust
was founded in 1968 and provides investment management services to large
institutional investors, corporations and high net worth individual clients.
CIBC World Markets acted as the placement agent for this transaction.
About Valence Technology Inc.
With more than 400 battery patents awarded and pending, Valence is a leader in
the development of lithium polymer batteries. The company operates facilities in
Henderson, Nev.; Seattle, Wash.; and Mallusk, Northern Ireland. It also has a
50% owned subsidiary, Hanil Valence, in South Korea. Valence is traded on the
Nasdaq National Market under the symbol VLNC. Valence can be found on the
Internet at http://www.Valence-Tech.com .
The information contained herein includes forward-looking statements that
involve risks and uncertainties. In particular, the establishment, development
and potential success of product development and production outcomes are subject
to risks and uncertainties both within and outside Valence's control. These risk
factors are described from time to time in Valence's SEC reports, including on
Form 10-K for the year ending March 29, 1999, to which readers are referred.
SOURCE Valence Technology, Inc.
/CONTACT: Lev Dawson, Chairman and Chief Executive Officer of Valence
Technology, 702-558-1000; or General Information, Laurie Berman, Analyst
Inquiries, Edward McNally, or Media Inquiries, Mary Tokita, all of The Financial
Relations Board, 310-442-0599, for Valence Technology/
/Web site: http://www.Valence-Tech.com /
(VLNC)
