ZENN Motor Company
TSX VENTURE : ZNN

ZENN Motor Company

January 21, 2008 21:37 ET

ZENN Motor Company Reports Fiscal 2007 Year End Results

TORONTO, ONTARIO--(Marketwire - Jan. 21, 2008) - ZENN Motor Company Inc. ("ZMC" or the "Company") (TSX VENTURE:ZNN) and formerly Feel Good Cars Corporation today announced the financial results for the three months and fiscal year ended September 30, 2007. All amounts are expressed in Canadian dollars unless otherwise indicated.

Financial Results

In the three months and year ended September 30, 2007, Company net revenue totaled $378,749 and $2,024,462, respectively. There were no sales in the corresponding periods in the prior year. Revenue for the quarter and the year has been reduced by a provision of $300,000 for anticipated future rebates relating to a marketing incentive program.

All of the Company's sales were to destinations in the United States and were invoiced in US Dollars. As a result of the increase in the value of the Canadian Dollar relative to the US Dollar, there has been a reduction in the effective yield on each US Dollar of sales. At this early stage of ZENN's introduction into the marketplace, price sensitivity prohibits significant changes in the selling price of the Company's current models. The strong Canadian Dollar also resulted in adjustments in the carrying value of inventory in 2007 of $796,968.

Net loss for the three months ended September 30, 2007 was $2,658,409 or $0.09 per share compared to a loss of $1,240,323 or $0.06 per share for 2006. For the year ended September 30, 2007 the net loss was $6,976,141 or $0.27 per share compared to a loss of $3,568,653 or $0.21 per share in 2006.

At September 30, 2007 the Company had cash and cash equivalents of $6,221,257 and working capital of $6,944,190 compared to cash and cash equivalents of $2,216,962 and working capital of $2,907,456 at September 30, 2006. During the year, the Company completed two common share offerings raising net proceeds of $13,598,369.

"2007 was an exciting year for ZENN Motor Company", said Ian Clifford, CEO of the Company. "We launched our first electric vehicle under our new corporate brand as we built a strong management team and corporate culture. At the beginning of the year, the production version of the ZENN was in final development, but not in the retailers' showrooms. In fiscal year 2007, we went from prototype, to commercial launch and sold 160 ZENNs by the end of the year. ZMC has a strong sales momentum going into fiscal 2008. We also saw our strategic partner EEStor make significant progress towards commercialization of its technology with its announcement on powder purity and a technology license agreement with Lockheed Martin."

Market and Product Development

At September 30, 2007, the Company had 35 retailer locations in 20 U.S. States. Further expansion of the retailer network will be focused in key strategic markets, primarily in the southern United States. Revenue growth is expected to be generated from increased sales in the existing markets in addition to market expansion. The Company has also received both the California Air Resources Board (CARB) and the U.S. General Services Administration (GSA) approvals for the ZENN. These approvals should help open up both the California and federal government fleet markets for the ZENN.

In December, the Company announced a next generation power train for the ZENN featuring an alternating current (AC) motor. The new power train is expected to provide increased range, superior hill-climbing ability and operational versatility. The AC powered ZENN will also offer air conditioning as an option and will begin shipping in early calendar 2008.

In anticipation of the EEStor technology being successfully commercialized, the Company is readying its plans to incorporate the technology in its ZENN product offerings. In addition, the Company has begun investigation of options for developing its future generation of longer-range, highway-capable vehicles. Two of the more promising opportunities being examined are retrofit kits and a small to mid-size automobile (curb weight less than 1400 Kg/3087 lbs) with highway capable speeds and range. The retrofit kits would be designed for mass conversion of specific existing automobiles from internal combustion to an electric drive train. On the new car front, while the final specifications have yet to be confirmed, the Company is exploring the development of small and mid-size cars that have a top speed of 65 to 75 MPH (105 to 120 KPH) and a single-charge range of 200 to 400 miles (325 to 650 Km). Subject to satisfying local homologation requirements, these new vehicles would be distributed to major markets globally. The Company estimates that global annual sales units for this size of new car to be in excess of 30 million. Third party discussions have been initiated to assess possible manufacturing and distribution scenarios.

Additional Information

Readers are encouraged to read the Company's audited financial statements for the year ending September 30, 2007, the corresponding Management's Discussion and Analysis and its Annual Information Form, all of which are available at www.sedar.com or the Company's website at www.ZENNcars.com.

ABOUT ZENN Motor Company Inc.

With Head Office in Toronto, Canada, ZENN Motor Company is dedicated to being the global leader in producing zero emission transportation solutions for markets around the world. Our current ZENN™ car is the perfect vehicle for urban commuters, fleets (such as resorts, gated communities, airports, college and business campuses, municipalities, parks and more), the environmentally conscious driver, and consumers who just want to save money. The ZENN™ is sold through a growing network of retailers across the United States.

The ZENN™ is a fully electric low speed vehicle (LSV) with European styling and appointments that offers customers tremendous operational cost savings compared to a vehicle powered by an internal combustion engine. Named "Best Urban Vehicle" at the 2006 Michelin Bibendum Challenge, the ZENN™ performed exceptionally well in all categories including excellent overall design, acceleration, braking, lowest power consumption and lowest noise level.

The potential commercialization of the high power-density ceramic ultra capacitor being developed by the Company's strategic partner, EEStor Inc. for future ZENN™ vehicles will enable them to travel greater speeds and distances like a traditional car at a fraction of the cost. Moreover, ZENN electric vehicles won't emit emissions or noise pollution and will provide their owners a freedom from worrying about escalating gas prices - making widespread concerns about oil dependency a thing of the past.

Forward-looking Statement

Certain statements in this release may contain "forward-looking statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995 and applicable Canadian securities legislation. Generally, these forward-looking statements can be identified by the use of forward-looking terminology such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or state that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved". Forward-looking statements are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of ZENN Motor Company Inc. ("ZMC") to be materially different from those expressed or implied by such forward-looking statements including but not limited to those risk factors discussed in the Company's most recent Annual Information Form. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. ZMC does not undertake to update any forward-looking statements, except in accordance with applicable securities laws.



ZENN Motor Company Inc.
(formerly Feel Good Cars Corporation)
Consolidated Balance Sheets
As at September 30, 2007 and 2006
---------------------------------------------------------------------------
---------------------------------------------------------------------------
2007 2006
---------------------------------------------------------------------------

Assets

Current
Cash and cash equivalents $ 6,221,257 $ 2,216,962
Accounts receivable 272,946 -
Inventory 1,442,862 1,376,365
Prepaid expenses and sundry assets 642,061 524,386

---------------------------------------------------------------------------
8,579,126 4,117,713
Property, plant and equipment 353,047 158,797
Rental deposit 100,535 81,265
EEStor technology rights 1,510,145 866,975
Equity investment in EEStor 2,857,815 -

---------------------------------------------------------------------------
$ 13,400,668 $ 5,224,750
---------------------------------------------------------------------------
---------------------------------------------------------------------------

Liabilities

Current
Accounts payable and accrued liabilities $ 1,634,936 $ 1,210,257
---------------------------------------------------------------------------

Shareholders' Equity

Capital stock 26,081,655 11,812,599

Contributed surplus 584,455 117,715

Warrant capital 575,908 584,324

Deficit (15,476,286) (8,500,145)

---------------------------------------------------------------------------
11,765,732 4,014,493

---------------------------------------------------------------------------
$ 13,400,668 $ 5,224,750
---------------------------------------------------------------------------
---------------------------------------------------------------------------


Approved by the Board "Ian Clifford" Director "Richard D. McGraw" Director
(Signed) (Signed)



ZENN Motor Company Inc.
(formerly Feel Good Cars Corporation)
Consolidated Statements of Operations and Deficit
For the Years Ended September 30, 2007 and 2006

---------------------------------------------------------------------------
---------------------------------------------------------------------------
2007 2006
---------------------------------------------------------------------------

Gross revenue $ 2,324,462 $ -

Provision for rebates (300,000) -

---------------------------------------------------------------------------
Net revenue 2,024,462 -

Cost of sales 2,302,349 -

---------------------------------------------------------------------------
Gross loss (277,887) -
---------------------------------------------------------------------------

Expenses
Marketing and promotion 1,543,988 760,540
Engineering and development 613,071 1,200,909
General and administrative 3,596,661 1,425,124
Write-down of inventory 953,472 135,164
Interest on long-term debt - 32,024
Foreign exchange loss 79,385 71,676
Amortization 92,738 38,648

---------------------------------------------------------------------------
6,879,315 3,664,085

---------------------------------------------------------------------------
Loss before undernoted items (7,157,202) (3,664,085)
---------------------------------------------------------------------------

Gain on settlement of debt - 31,984

Interest income 181,061 63,448

---------------------------------------------------------------------------
181,061 95,432
---------------------------------------------------------------------------

Net loss (6,976,141) (3,568,653)

Deficit at beginning of year (8,500,145) (4,931,492)

---------------------------------------------------------------------------
Deficit at end of year $ (15,476,286) $ (8,500,145)
---------------------------------------------------------------------------
---------------------------------------------------------------------------

Basic and diluted loss per share $(0.27) $(0.21)
---------------------------------------------------------------------------
---------------------------------------------------------------------------

Weighted average number of shares outstanding 25,943,379 16,714,263
---------------------------------------------------------------------------
---------------------------------------------------------------------------



ZENN Motor Company Inc.
(formerly Feel Good Cars Corporation)
Consolidated Statements of Cash Flows
For the Years Ended September 30, 2007 and 2006

---------------------------------------------------------------------------
---------------------------------------------------------------------------
2007 2006
---------------------------------------------------------------------------

Cash flows from operating activities
Net loss for year $ (6,976,141) $ (3,568,653)
Add items not affecting cash
Amortization 92,738 38,648
Stock-based compensation 466,740 117,715

---------------------------------------------------------------------------
(6,416,663) (3,412,290)

Changes in non-cash working capital items
Accounts receivable (272,946) -
Inventory (66,497) (1,224,417)
Prepaid expenses and sundry assets (117,675) (410,407)
Accounts payable and accrued liabilities 424,679 619,167

---------------------------------------------------------------------------
(6,449,102) (4,427,947)
---------------------------------------------------------------------------

Cash flows from investing activities
EEStor technology rights (643,170) (866,975)
Purchase of property, plant and equipment (286,988) (177,105)
Rental deposit (19,270) (81,265)
Equity investment in EEStor (2,857,815) -

---------------------------------------------------------------------------
(3,807,243) (1,125,345)
---------------------------------------------------------------------------

Cash flows from financing activities
Loans payable - (124,657)
Issuance of common shares, net of share
issuance costs 14,260,640 6,841,116
Cash on acquisition - 815,566

---------------------------------------------------------------------------
14,260,640 7,532,025
---------------------------------------------------------------------------

Increase in cash and cash equivalents during
the year 4,004,295 1,978,733

Cash and cash equivalents at beginning of year 2,216,962 238,229

---------------------------------------------------------------------------
Cash and cash equivalents at end of year $ 6,221,257 $ 2,216,962
---------------------------------------------------------------------------
---------------------------------------------------------------------------


Contact Information