-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Azyjty3oXcQ2OJ3n66X5BltuBEoeum3sx/3cVveu9IdQV6YGnRokze6mW0Pkwp9s Ov+Iki2S+Xe+10vJUWeWxg== 0000901719-03-000004.txt : 20030211 0000901719-03-000004.hdr.sgml : 20030211 20030211160343 ACCESSION NUMBER: 0000901719-03-000004 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 1 FILED AS OF DATE: 20030211 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: VALENCE TECHNOLOGY INC CENTRAL INDEX KEY: 0000885551 STANDARD INDUSTRIAL CLASSIFICATION: MISCELLANEOUS ELECTRICAL MACHINERY, EQUIPMENT & SUPPLIES [3690] IRS NUMBER: 770214673 STATE OF INCORPORATION: DE FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-43562 FILM NUMBER: 03550344 BUSINESS ADDRESS: STREET 1: 301 CONESTOGA WAY CITY: HENDERSON STATE: NV ZIP: 89015 BUSINESS PHONE: 7025581000 MAIL ADDRESS: STREET 1: 301 CONESTOGA WAY CITY: HENDERSON STATE: NV ZIP: 89015 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: BERG CARL E CENTRAL INDEX KEY: 0000901719 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] IRS NUMBER: 525760467 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: BERG & BERG DEVELOPERS STREET 2: 10050 BANDLEY DRIVE CITY: CUPERTINO STATE: CA ZIP: 95014 BUSINESS PHONE: 4087250700 MAIL ADDRESS: STREET 1: C/O BERG & BERG DEVELOPERS STREET 2: 10050 BANDLEY DR CITY: CUPERTINO STATE: CA ZIP: 95014 SC 13D/A 1 valence13d021103.txt VALENCE TECHNOLOGY, INC 13D/A SCHEDULE 13D Under the Securities Exchange Act of 1934 (Amendment No. 2) SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 Valence Technology, Inc. (Name of Issuer) Common Stock, $0.001 par value (Title of Class of Securities) 918914-10-2 (CUSIP Number) Carl E. Berg, 10050 Bandley Drive, Cupertino, California 95014; (408) 725-0700 - -------------------------------------------------------------------------------- (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) February 5, 2003 (Date of Event Which Requires Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box. |X| * The information required in the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act, but shall be subject to all other provisions of the Act. CUSIP No. 918914 10 2 Page 2 of 7 Pages - --------------------- ----------------- - -------------------------------------------------------------------------------- 1) Name of Reporting Person Carl E. Berg - -------------------------------------------------------------------------------- 2) Check the Appropriate Box if a Member of a Group (See Instructions) (a) [X] (b) [ ] - -------------------------------------------------------------------------------- 3) SEC Use Only - -------------------------------------------------------------------------------- 4) Source of Funds Not Applicable - -------------------------------------------------------------------------------- 5) Check if Disclosure of Legal Proceedings is Required Pursuant to Item 2(d) or 2(e) Not Applicable - -------------------------------------------------------------------------------- 6) Citizenship or Place of Organization United States of America - -------------------------------------------------------------------------------- Number of Shares 7) Sole Voting Power 721,518 ---------------------------------------------------- Beneficially Owned 8) Shared Voting Power 19,463,735 ---------------------------------------------------- by Each Reporting 9) Sole Dispositive Power 721,518 ---------------------------------------------------- Person with: 10) Shared Dispositive Power 19,463,735 - -------------------------------------------------------------------------------- 11) Aggregate Amount Beneficially Owned by Each Reporting Person 20,185,253 - -------------------------------------------------------------------------------- 12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares |_| (See Instructions) Not applicable - -------------------------------------------------------------------------------- 13) Percent of Class Represented by Amount in Row (11) 29.36% - -------------------------------------------------------------------------------- 14) Type of Reporting Person (See Instructions) IN - -------------------------------------------------------------------------------- CUSIP No. 918914 10 2 Page 3 of 7 Pages - --------------------- ----------------- - --------- ---------------------------------------------------------------------- 1) Name of Reporting Person Berg & Berg Enterprises, LLC - -------------------------------------------------------------------------------- 2) Check the Appropriate Box if a Member of a Group (See Instructions) (a) [X] (b) [ ] - -------------------------------------------------------------------------------- 3) SEC Use Only - -------------------------------------------------------------------------------- 4) Source of Funds WC - -------------------------------------------------------------------------------- 5) Check if Disclosure of Legal Proceedings is Required Pursuant to Item 2(d) or 2(e) Not applicable - -------------------------------------------------------------------------------- 6) Citizenship or Place of Organization California - -------------------------------------------------------------------------------- Number of Shares 7) Sole Voting Power 0 ---------------------------------------------------- Beneficially Owned 8) Shared Voting Power 19,463,735 ---------------------------------------------------- By Each Reporting 9) Sole Dispositive Power 0 ---------------------------------------------------- Person with: 10) Shared Dispositive Power 19,463,735 - -------------------------------------------------------------------------------- 11) Aggregate Amount Beneficially Owned by Each Reporting Person 19,463,735 - -------------------------------------------------------------------------------- 12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares |_| (See Instructions) Not applicable. - -------------------------------------------------------------------------------- 13) Percent of Class Represented by Amount in Row (11) 28.31% - -------------------------------------------------------------------------------- 14) Type of Reporting Person (See Instructions) PN - -------------------------------------------------------------------------------- ITEM 1. This filing pertains to the acquisition of 3,190,342 shares of Common Stock, $0.001 par value per share, of the issuer Valence Technology, Inc., a Delaware corporation (the "Company") by Berg & Berg Enterprises, LLC ("BBE"). The principal executive offices of the Company are located at 650 Bridge Point Parkway, Suite 415, Austin, Texas 78730. ITEM 2. (a)-(c) The names of the filing persons are Carl E. Berg and Berg & Berg Enterprises, LLC, who are filing as a group. Berg Group, L.P. ("Berg L.P.") previously filed as a member of this group. In December, 2002, Berg L.P. distributed its entire interest in the Company (200,000 shares of Common Stock) to Carl E. Berg and is no longer a record owner of shares of Common Stock of the Company. The business address for Carl E. Berg and BBE is 10050 Bandley Drive, Cupertino, California 95014. Carl Berg is the sole manager of BBE. Mr. Berg's principal occupation is Chairman of the Board of Directors and Chief Executive Officer of Mission West Properties, Inc., a REIT, whose address also is 10050 Bandley Drive, Cupertino, California 95014. All of the filing persons are affiliates. Mr. Berg controls BBE. Each is the record owner of shares of Common Stock of the Company. They have previously filed Schedule 13G as part of a group including additional filing persons. As a result of BBE's acquisition of 9,457,159 shares of Common Stock from the Company on September 30, 2002, their aggregate beneficial ownership of Common Stock exceeded 20% and they filed an initial Schedule 13D. As a result of BBE's acquisition of 4,409,560 shares of Common Stock from the Company on November 27, 2002, they filed an Amendment No. 1 to Schedule 13D. As a result of BBE's acquisition of an additional 3,190,342 shares of Common Stock from the Company on February 5, 2003, they are filing this Amendment No. 2 to Schedule 13D. Based on information available to them the filing persons believe there were 61,149,303 shares of Common Stock of the Company outstanding on November 12, 2002. Neither Carl Berg nor BBE was during the last five years, a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, U.S. federal or state securities laws or finding any violation with respect to such laws. (f) Carl E. Berg is a citizen of the United States of America. BBE is organized under the laws of the state of California. ITEM 3. Source and Amount of Funds or Other Consideration. BBE funded its purchase of the Company's Common Stock on February 5, 2003 with working capital. ITEM 4. Purpose of Transaction. BBE acquired 3,190,342 shares of Common Stock of the Company pursuant to the Company's exercise of its right to sell such shares to BBE for an aggregate purchase price of $5,000,000 under the terms of an equity commitment between the Company and BBE, dated March 20, 2002. See Exhibit 2 to this Schedule 13D. The purposes and certain consequences of the equity commitment and the sale of the shares of Common Stock to BBE by the Company are set forth in the Company's Proxy Statement filed with the Securities and Exchange Commission pursuant to Section 14(a) of the Securities Exchange Act of 1934 on July 29, 2002. Pertinent pages of such Proxy Statement are incorporated by reference in response to this Item 4 and are attached as Exhibit 3 to this Schedule 13D. Mr. Berg is a director of the Company, and has served on the Company's board of directors since September 1991. BBE and the other filing persons may acquire additional shares of Common Stock pursuant to this equity commitment. In addition, and subject to applicable legal requirements and the factors referred to below, any of the filing persons may purchase from time to time in the open market or in privately negotiated transactions additional shares of the Company's Common Stock. In determining whether to purchase additional shares of the Company's Common Stock, Mr. Berg intends to consider various factors, including the Company's financial condition, business and prospects, other developments concerning the Company, price levels of the Company's Common Stock, other opportunities available to any of the filing persons, developments with respect to their business, and general economic, money and stock market conditions. In addition, depending upon, among other things, the matters referred to above, any of the filing persons may determine to dispose of all or a portion of its or his shares of the Company's Common Stock. ITEM 5. Interest in Securities of the Issuer. (a)-(b) Carl E. Berg is the beneficial owner of 20,185,253 shares of the Company's Common Stock, representing approximately 29.36% of the number of shares outstanding. He possesses sole voting and dispositive power with respect to 721,518 of such shares, of which 277,518 constitute options to purchase shares of Common Stock that are exercisable within 60 days of October 2, 2002. The options were granted to Mr. Berg for service as a director of the Company. In his capacity as sole manager of BBE, Mr. Berg shares voting and dispositive power with respect to 19,463,735 shares of Common Stock. BBE is the record owner of 17,466,961 shares of Common Stock and warrants to purchase 1,996,774 shares of Common Stock. BBE's total beneficial ownership is 19,463,735 shares of Common Stock, which represents approximately 28.31% of the number of shares outstanding. BBE shares voting and dispositive powers with respect to such shares with Mr. Berg, who is the sole manager of BBE. Berg Group, L.P. ("Berg L.P.") previously filed as a member of this group. In December, 2002, Berg L.P. distributed its entire interest in the Company (200,000 shares of Common Stock) to Carl E. Berg and is no longer a record owner of shares of Common Stock of the Company. The 200,000 shares of Common Stock distributed by Berg L.P. to Carl E. Berg have been reflected in the shares owned by Mr. Berg. (c) On February 5, 2003, BBE purchased 3,190,342 shares of Common Stock from the Company for $5,000,000 ($1.5672 per share) when the Company exercised its right under the equity commitment with BBE. (d) The 1981 Kara Ann Berg Trust, Clyde J. Berg, Trustee, has the right to receive dividends and sale proceeds with respect to 85% of the shares of Common Stock beneficially owned by BBE. Carl E. Berg has the right to receive dividends and sale proceeds with respect to all of the shares of Common Stock beneficially owned by Berg L.P. and 15% of the shares of Common Stock beneficially owned by BBE. ITEM 6. Contracts, Arrangements, Understandings or Relationships With Respect to Securities of the Issuer. BBE is under the control of Carl E. Berg, and together, they are acting as a group. There is no contract at present among them or otherwise with any other person with respect to their acquisitions of the Company's Common Stock other than the equity commitment between the Company and BBE and a Registration Rights Agreement, dated as of February 13, 2001 between the Company and Clyde J. Berg, Trustee, the 1981 Kara Ann Berg Trust. ITEM 7. Material to be Filed as Exhibits. Exhibit 1 Joint Filing Agreement Exhibit 2 Equity Commitment between the Company and Berg & Berg Enterprises, LLC, dated March 20, 2002 Exhibit 3 Portion of pages 9-11 of Proxy Statement on Schedule 14A filed by the Company with the Securities and Exchange Commission on July 29, 2002 SIGNATURE After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. Date: February 11, 2003 /s/ Carl E. Berg --------------------------------- Carl E. Berg Signing as an individual, and as manager of Berg & Berg Enterprises, LLC EXHIBIT INDEX Exhibit 1 Joint Filing Agreement Exhibit 2 Equity Commitment between the Company and Berg & Berg Enterprises, LLC, dated March 20, 2002 Exhibit 3 Portion of pages 9-11 of Proxy Statement on Schedule 14A filed by the Company with the Securities and Exchange Commission on July 29, 2002 Exhibit 1 Joint Filing Agreement Pursuant to Rule 13d-1(k)(1) of the Securities and Exchange Commission under the Securities Exchange Act of 1934, each of the parties hereto agrees that the statement on Schedule 13D (including all amendments thereto) with respect to the beneficial ownership of Common Stock of Valence Technology, Inc. to which this agreement is attached as an exhibit, is filed by and on behalf of each such person and that any amendments thereto will be filed on behalf of each such person. February 11, 2003 /s/ Carl E. Berg ---------------------------------------- Carl E. Berg Signing as an individual, and as manager of Berg & Berg Enterprises, LLC EXHIBIT 2 Berg & Berg Enterprises, LLC 10050 Bandley Drive Cupertino, CA 95014 March 12, 2002 Stephan B. Godevais Valence Technology, Inc. 6504 Bridgepoint Parkway, Suite 415 Austin, Texas 78730 Re: Equity Line of Credit Financing Commitment Dear Stephan: We are pleased to confirm that we are willing to provide (or cause another person or entity to provide), an equity line of credit financing commitment to Valence Technology, Inc. (the "Company"), on the terms provided on the attached term sheet, subject to the negotiation and execution of definitive investment documentation, which shall be in customary form.. Kindly indicate your acceptance of this commitment by signing and returning the enclosed copy. Sincerely, BERG & BERG ENTERPRISES, LLC /s/ Carl E. Berg ------------------------------- Carl E. Berg, Managing Member ACCEPTED AND AGREED: VALENCE TECHNOLOGY, INC. /s/ Stephan Godevais - ----------------------------------- Stephan Godevais, CEO and President Mr. Carl Berg Valence Technology Inc. March 12, 2002 Equity Line of Credit Term Sheet Company: Valence Technology, Inc. Issue Amount: Up to $30 million of restricted Common Stock Term: The term of the equity line of credit will be for 2 years and will commence upon April 1, 2002 (the "Term"). Stock Purchase Process: 1. The Company, in its sole discretion, shall determine whether Mr. Berg must purchase stock. 2. The Company may direct Mr. Berg to purchase up to $5 million of the Company restricted Common Stock ("Draw Down Amount") each quarter during the Term, commencing April 1, 2002. 3. The Company will issue shares of Common Stock equivalent to the Draw Down Amount divided by the Purchase Price with a restricted legend indicating that the shares may not be sold or transferred unless registered or pursuant to a transaction exempt from the applicable securities laws. Conditions to Funding The commitment to purchase stock on any funding date proposed by the Company will be subject to the satisfaction following conditions: (i) there has been no change in the Chief Executive Officer of the Company since the date of this term sheet; (ii) with respect to any funding date after the end of the Company's second fiscal quarter 2003: - The Company shall have made improvements to its first generation Saphion chemistry resulting in a chemistry that achieves a minimum output of 265 wh/liter in polymer construction; - The Company shall have produced a minimum of 30 r&d samples of a second generation Saphion chemistry in cylindrical construction: (iii) with respect to any funding date after the end of the Company's third fiscal quarter 2003, the Company shall have entered into a license agreement with an unaffiliated party covering the manufacture and/or distribution of Saphion chemistry batteries; (iv) with respect to any funding date after the end of the Company's fourth fiscal quarter 2003, the Company shall have transferred from research and development to manufacturing a second generation Saphion chemistry in cylindrical construction with a minimum output of 420 wh/liter; (v) the amount funded by Carl Berg pursuant to this term sheet shall not exceed the following percentage of the cash used in operations by the Company with respect to each of the following fiscal quarters: Fiscal Quarter 2003 Percentage - ----------------------- -------------- 1st Fiscal Quarter 100% 2nd Fiscal Quarter 100% 3rd Fiscal Quarter 75% 4th Fiscal Quarter and Thereafter 50% (vi) there has been no occurrence of a material adverse change in the Company's business, operations or financial condition since the date of this term sheet (it being acknowledged that the Company currently operates on a negative cash flow basis and the effects of such negative cash flow shall not be deemed to constitute an event that would result in a material adverse change under the agreement). Stock Pricing: The restricted Common Stock shall be priced at 85% of the average closing price of the Company Common Stock for the five trading days prior to the purchase date. Registration Rights: In conjunction with the first draw down, the Company will amend its existing registration rights agreement with Mr. Berg to add the shares issued in any draw down pursuant to the line of credit as registrable securities thereunder. Termination: If at any time during the Term the Company enters into a debt or equity financing arrangement with a third party, Mr. Berg shall have the option to reduce the commitment to provide funding under the agreement by up to the amount of such third party financing, on a dollar-for-dollar basis (to a maximum of the Draw Down Amount remaining un-funded under the agreement). Legal Fees, expenses: The Company shall reimburse all legal fees and expenses related to this transaction upon formal request by Mr. Berg. EXHIBIT 3 ITEM 2: FINANCING COMMITMENT Item 2 is the approval of the financing commitment we entered into with Berg & Berg Enterprises, LLC on March 20, 2002. A copy of the financing commitment agreement is attached to our report on Form 8-K filed with the Commission on March 22, 2002. The managing member of Berg & Berg Enterprises is Carl E. Berg, one of our directors and a principal stockholder. TERMS OF THE FINANCING COMMITMENT We may require Berg & Berg to purchase up to $5.0 million of our restricted common stock each quarter until March 31, 2004, up to a total of $30.0 million. The purchase price of our shares under the commitment is 85% of the average closing price of our common stock over the five trading days prior to the purchase date. The shares of common stock which would be issued to Berg & Berg under the financing commitment do not carry any rights, preferences or privileges different from our outstanding shares of common stock. We have agreed to register the resale of the shares of common stock issued to Berg & Berg. Berg & Berg may reduce the financial commitment remaining unfunded under the financing commitment to the extent that we enter into a debt or equity financing arrangement with a third party at any time during the term of the commitment. We raised $16,529,400 in an offering completed in April 2002, and consequently, Berg & Berg has the option of reducing its commitment to $13,470,600. The financing commitment is subject to the negotiation and execution of definitive investment documentation with Berg & Berg, which we have agreed shall be in customary form. Funding by Berg & Berg is subject to the following conditions: - Stephan B. Godevais remains our Chief Executive Officer; - With respect to any funding date after September 30, 2002: - We improve our first generation SaphionTM chemistry to achieve a minimum output of 265 watt-hours per liter in polymer construction; and - We produce at least 30 research and development samples of a second generation SaphionTM chemistry in cylindrical construction; - With respect to any funding date after December 31, 2003, we enter into a license agreement with an unaffiliated party to manufacture and/or distribute SaphionTM chemistry batteries; - With respect to any funding date after March 31, 2003, we transfer from research and development to manufacturing a second generation SaphionTM chemistry in cylindrical construction with a minimum output of 420 watt-hours per liter; - The amount of cash raised through the financing commitment in the following quarters may not exceed the following percentages of total cash used in operations by us in those quarters, as set forth below: PERCENTAGE OF FISCAL QUARTER 2003 CASH USED IN OPERATIONS ------------------- ----------------------- 1st Fiscal Quarter 100% 2nd Fiscal Quarter 100% 3rd Fiscal Quarter 75% 4th Fiscal Quarter and Thereafter 50% - No material adverse change in our business, operations or financial condition shall occur since March 12, 2002. The Board retains the right, in its sole discretion, to amend or modify any terms of the financing commitment, other than the terms relating to the purchase price of our common stock. EFFECTS OF DRAWING FUNDS UNDER THE FINANCING COMMITMENT The purchase price for the shares of common stock is 85% of the average closing price of our common stock over the five trading days prior to the purchase date. Accordingly, we cannot determine the aggregate number of shares that may be issued under the financing commitment. If we exercise our option to draw $5.0 million under this commitment based on a fair market value of $1.32 (the closing price of our common stock at July 15, 2002), then the purchase price would be $1.l22 per share and we would issue 4,456,328 shares to Berg & Berg. Assuming the entire $30.0 million commitment were to be funded at that purchase price, we would issue 26,737,968 shares in total. The issuance of common stock under the financing commitment will increase the beneficial ownership percentage of Mr. Berg and will be dilutive to our existing stockholders. As of July 15, 2002, Mr. Berg beneficially owned 11.5% of our common stock. An issuance of 26,737,968 shares of our common stock to Berg & Berg would increase Mr. Berg's beneficial ownership to 40.8% of our outstanding common stock (including the shares issued to Berg & Berg). Sales of our common stock under the financing commitment at a discount to the then current market price would cause immediate dilution to our existing stockholders. REASONS FOR ENTERING INTO THE FINANCING COMMITMENT We entered into the financing commitment with Berg & Berg to secure a source of additional financing for us, if needed. Based on our existing cash on hand, anticipated income from operations and available financing under an existing loan agreement, we believe we have adequate sources of cash to meet our capital requirements and execute our business strategy through the end of the September 2002. To continue to execute our business strategy thereafter, unless our licensing or other revenues increase substantially, we will need to secure additional capital. We intend to pursue financing opportunities which are in our best interests and the best interests of our stockholders. However, these efforts can take a significant amount of time of senior management and may delay execution of our business plan. In addition, we may not be able to secure additional capital on terms more favorable than the financing commitment. In that event, assuming we meet the funding conditions of the financing commitment, we believe that the ability to draw funds under the commitment will provide us with needed flexibility in meeting our expected capital requirements. THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR "FOR" THE APPROVAL OF THE FINANCING COMMITMENT ENTERED INTO WITH BERG & BERG ENTERPRISES, LLC. -----END PRIVACY-ENHANCED MESSAGE-----