Valence Technology Provides Financial Guidance for the Second Quarter of Fiscal Year 2007

Valence Technology Inc. (NASDAQ:VLNC), providers of
Saphion(R) energy storage systems, the industry's first commercially
available, safe, large-format lithium-ion rechargeable batteries,
provides the following financial guidance in adherence with Regulation
Fair Disclosure as promulgated by the United States Securities and
Exchange Commission. Valence Technology forecasts revenue for the
second quarter of fiscal year 2007 to be in the range of $5.0 million
to $6.0 million. The expected increase in revenue for the second
quarter is a result of an increase in sales of large format systems as
well as filling small format N-Charge system orders that were
scheduled to be shipped in the first quarter but which were postponed
until the second quarter of fiscal year 2007 after receiving UL
recertification.

   About Valence Technology Inc.

   Valence Technology develops and markets intelligent battery
systems using its Saphion(R) technology, the industry's first
commercially available, safe, large-format Lithium-ion rechargeable
battery technology. Valence Technology holds an extensive, worldwide
portfolio of issued and pending patents relating to its Saphion
technology and lithium-ion rechargeable batteries. The company has
facilities in Austin, Texas, Las Vegas, Nevada, and Suzhou, China.
Valence Technology is traded on the NASDAQ Capital Market under the
symbol VLNC and can be found on the Internet at www.valence.com.

   Safe Harbor Statement

   This press release contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995,
including our statements that we are positioned to realize better
execution, improve gross margins, continue to reduce production costs
and expenses, realize a strong year in both customer orders and
revenue and our financial Guidance. Actual results may vary
substantially from these forward-looking statements as a result of a
variety of factors. Among the important factors that could cause
actual results to differ are: the impact of our limited financial
resources on our ability to execute on our business plan and the need
to raise additional debt or equity financing to execute on that plan;
our uninterrupted history of quarterly losses; our ability to service
our debt, which is substantial in relationship to our assets and
equity values; the pledge of all of our assets as security for our
existing indebtedness; the rate of customer acceptance and sales of
our products; the continuance of our relationship with a few existing
customers, which account for a substantial portion of our current and
expected sales in the upcoming year; the level and pace of expansion
of our manufacturing capabilities; the level of direct costs and our
ability to grow revenues to a level necessary to achieve profitable
operating margins in order to achieve break-even cash flow; the level
of our selling, general and administrative costs; any impairment in
the carrying value of our intangible or other assets; our execution on
our business strategy of moving our operations to Asia and our ability
to achieve our intended strategic and operating goals; the effects of
competition; and general economic conditions. These and other risk
factors that could affect actual results are discussed in our periodic
reports filed with the Securities and Exchange Commission, including
our Report on Form 10-K for the year ended March 31, 2006, and the
reader is directed to these statements for a further discussion of
important factors that could cause actual results to differ materially
from those in the forward-looking statements.