Valence Technology Provides Revised Revenue Guidance for Third Quarter of Fiscal 2007

  
    
  
  
    
      Valence Technology Inc. (NASDAQ:VLNC), providers of Saphion® 
      energy storage systems, the industry’s first 
      commercially available, safe, large-format lithium-ion rechargeable 
      batteries, today announced that it expects revenue for the third quarter 
      of fiscal 2007 to be between $2.0 million to $3.0 million. This 
      represents a decrease from previously issued guidance of $4.0 million to 
      $6.0 million. The Company attributed the reduction to a revised shipping 
      schedule of batteries to Segway Inc., and a temporary shortage of key 
      components.
    
    
      About Valence Technology Inc.
    
    
      Valence Technology develops and markets intelligent battery systems 
      using its Saphion® 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 relating to 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.
    
  
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, today announced
that it expects revenue for the third quarter of fiscal 2007 to be
between $2.0 million to $3.0 million. This represents a decrease from
previously issued guidance of $4.0 million to $6.0 million. The
Company attributed the reduction to a revised shipping schedule of
batteries to Segway Inc., and a temporary shortage of key components.

   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 relating to 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.