EXHIBIT 99.2
THE HISTORY OF VALENCE TECHNOLOGY
Valence was founded in 1989 to develop and commercialize advanced rechargeable
batteries based on lithium-ion polymer technologies. Since inception, Valence
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. Valence is no longer
classified as a development stage company in fiscal 2001.
To date, Valence has focused on the acquisition and development of its battery
technology, including the implementation of a production line, the manufacture
of prototype batteries for evaluation by potential customers, and the
development of an operating infrastructure.
Valence received its first purchase order for commercial grade lithium-ion
polymer batteries in November 1999 and had purchase orders for approximately $17
million of batteries. The Company completed the installation and qualification
of its first automated, high volume production line in 1999 and began commercial
shipments of its batteries in February 2000.
Valence's strategy is to become the leading developer of core technology and
manufacturer of lithium-ion polymer rechargeable batteries to service the
growing mobile communications market. To achieve this objective, the Company has
spent $55 million on R&D between 1998 and 2000. The Company conducts research
and development and pilot production at its Henderson, Nevada headquarters.
Valence continuously improves its technology, and its research and development
group is currently focusing on improving the energy density of its products.
In February 2000, Valence began commercial production in its Northern Ireland
facility, which employs a newly engineered automated high volume production
line. Production capacity is projected to increase significantly by the end of
calendar 2001
The Company has mainly focused its efforts on the high growth markets, such as
the portable rechargeable battery market that has been driven by the
proliferation of portable communication devices, including cellular telephones,
notebook computers, HPCs and PDAs.
Valence has developed five standard "footprints" or battery product designs.
These products are designed for use in a number of applications, including as a
rechargeable power source for portable communication devices.
KEY MESSAGES
CORE MESSAGE
o Valence Technology's success will be fueled by very unique competitive
advantages of Bellcore technology following the completion of the
acquisition.
o License and control of significant intellectual property on lithium-ion
battery technology
o Extensive third-party relationships
o Battery technology for the mobile telecommunications and mobile computing
markets
o Increasing number of high-growth applications for lithium-ion polymer
batteries
o Vertically integrated manufacturing
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o With over 790 patents either issued or pending, Valence will be a leader in
development of the lithium-ion polymer battery
o Valence will focus mainly on consumer market segments,
MESSAGE ABOUT COMPETITION
o Valence has significant technical advantages in lithium-ion polymer
batteries for the mobile telecommunications and mobile computing
industries.
o Valence has extensive technology patents, which may serve as a barrier for
new market entrants.
o Valence's plan to license technology may cause competitors to become
customers.
MESSAGE ABOUT CURRENT MARKET CONDITIONS
o According to IIT 2000, the market is shifting toward lithium-ion polymer
batteries due to improvements in size, weight and cost compared with
traditional lithium-ion battery designs. Market demand for lithium-ion
polymer batteries in the mobile communications markets is expected to
expand.
MESSAGE FOR CONSUMERS
o Valence Technology is currently working to develop the next generation of
rechargeable batteries, lithium polymer batteries, which would have a very
high available energy density, and a very light and thin form factor.
o Valence Technology manufactures polymer cells that are meet the needs of
today's high-growth mobile communications market.
o Valence Technology is positioned to capitalize on the anticipated
significant market shift from the traditional lithium-ion technology to
lithium-ion polymer.
o Valence Technology's products have been engineered and designed to exceed
the stringent demands of today's mobile communications market.
MESSAGE FOR INVESTORS
o Following the acquisition of Bellcore technology, Valence Technology's core
advantage will lie in its superior breadth of technology and solid patent
portfolio Valence's extensive knowledge, coupled with secured technology
patents will provide Valence the opportunity to develop a balanced revenue
structure of technology and product initiatives.
o According to IIT 2000, the world market estimate for total lithium-ion
polymer cells by 2003 is 200 million units.
o Valence believes the market for lithium-ion polymer batteries is on the
cusp of significant growth.
o The total lithium-ion market is expected to grow from 295 million units
shipped in 1998 to 1.09 billion units by 2005, according to Frost &
Sullivan. The transition to lithium-ion polymer from traditional
lithium-ion is expected to occur rapidly in the mobile communications
applications.
o More than 1 billion web enabled mobile devices are projected by 2003,
according to the Yankee Group.
o 219 million people are expected to use mobile phones to access the Internet
by 2004, according to Forrester Research.
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LEV M. DAWSON
CHAIRMAN OF THE BOARD, CHIEF EXECUTIVE OFFICER, AND PRESIDENT
Lev. M Dawson, 62, is a veteran electronics executive, and a pioneer in
developing and manufacturing rechargeable lithium polymer batteries.
Mr. Dawson currently serves as Chairman of the Board, Chief Executive Officer,
and President of Valence Technology, Inc.
Following the Bellcore acquisition, Valence will have more than 790 battery
patents awarded and pending. Valence is a leader in the development and
commercial production of lithium-ion polymer batteries for portable electronics
products including laptop computers, handheld PCs and mobile handsets. Valence
operates facilities in Henderson, Nevada and Mallusk, Northern Ireland.
Mr. Dawson rejoined Valence in January 1998, as Chairman of the Board, Chief
Executive Officer, and President. Mr. Dawson, a founder of the Valence, served
as either Chairman of the Board, Chief Executive Officer from its founding in
March 1989 until 1993, and as President from March 1989 until June 1991. Under
Mr. Dawson's guidance, Valence has effectively developed a lithium-ion polymer
battery system which is being commercialized.
Mr. Dawson was involved with private family companies between May 1993 and
December 1997. From January 1988 to March 1989, Mr. Dawson devoted significant
time to the development of Valence.
From May 1978 to January 1988, Mr. Dawson was President, Chairman, and Chief
Executive Officer of Robinton Products, Inc., a company, which manufactured
solid-state meters and data retrieval systems for the electric utility industry.
Mr. Dawson holds a B.S.E.E in Electrical Engineering from the University of
Southwestern Louisiana.
UNDERSTANDING LITHIUM ION POLYMER TECHNOLOGY
o Lithium-ion polymer technology is an extension of the base lithium ion
technology commonly in use today. "Lithium-ion" is a phrase for
electrochemical cells with voltage derived from the electropotential
difference of lithium in the anode and cathode. The electrolyte contains
lithium ions that are transferred between the anode and cathode on charge
and discharge. Unlike earlier systems, lithium-ion does not use unstable
lithium metal as the anode material.
o Demand for lithium-ion polymer battery technology for portable electronic
devices is forecasted by Kline & Company to reach at least $1 billion a
year by 2007. This represents a significant growth opportunity for
companies that can participate in this industry.
o Because of its design flexibility lithium-ion polymer may become a popular
battery technology. The major end-use applications for this technology are
expected to be mobile communication devices, including mobile computers.
Cellular communication devices are anticipated to account for approximately
fifty percent, and mobile computers are expected to account for one third
of total lithium-ion polymer use in portable devices.
o Lithium-ion polymer technology changes the form of the battery to
essentially that of a plastic film. This enables the battery to be designed
for the available space in the electronic device, rather than the device
being designed to accommodate the size and shape of the battery.
o According to Frost & Sullivan, the total lithium-ion market is projected to
grow from 295 million units shipped in 1998 to 1.09 billion units by 2005.
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o The lithium-ion polymer market is expected to be global with almost 50% of
lithium-ion polymer demand coming from the United States and Western
Europe. Demand will initially track the design and production of products
from the leading OEMs of portable electronic devices, who are likely to be
some of the first companies to implement this technology.
FACT SHEET
OVERVIEW
Valence Technology designs, develops, manufactures and markets rechargeable
lithium polymer batteries for portable communications devices, including
notebook computers, personal digital assistants or PDAs, handheld personal
computers, or HPCs, and cellular telephones.
Valence Technology is a leader in the development and commercialization of
lithium-ion polymer rechargeable batteries.
COMPETITIVE ADVANTAGE
Following the acquisition of Bellcore technology, Valence Technology's success
will be fueled by distinct competitive advantages:
o License and control of significant intellectual property on lithium-ion
polymer battery technology
o Extensive third-party relationships
o State-of-the-art battery technology for the mobile telecommunications and
mobile computing markets
o Vertically integrated manufacturing
PATENTED TECHNOLOGY
While numerous companies have experimented with rechargeable batteries that use
Lithiated Manganese Oxide, Valence is the market leader in development of this
technology and holds extensive patents on the process for making stable, wide
temperature operating lithium polymer batteries. The combination of the Bellcore
patents and the existing Valence patents is exciting. Valence plans to license
its technology together with the Bellcore technology will place its former
competition in a potentially new role as customer or partner .
LI-ION POLYMER MARKET
According to IIT 2000, the world market estimate for total lithium-ion polymer
cells by 2003 is 200 million units. The total lithium ion market is expected to
grow from 295 million units shipped in 1998 to 1.09 billion units by 2005.
It is expected that the demand in the lithium-ion polymer market will be driven
by the need for smaller, lighter-weight batteries that can be produced in almost
any shape .
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