ZENN Motor Company
TSX VENTURE : ZNN

ZENN Motor Company

August 14, 2009 10:13 ET

Zenn Motor Company Reports Third Quarter 2009 Results

TORONTO, ONTARIO--(Marketwire - Aug. 14, 2009) - ZENN Motor Company Inc. ("ZMC" or the "Company") (TSX VENTURE:ZNN) a leading developer of zero emission transportation solutions and technologies, today announced its financial results for the three and nine months ended June 30, 2009. All amounts are expressed in Canadian dollars unless otherwise indicated.

For the three and nine months ended June 30, 2009 gross revenues were $379,916 and $1,316,535, respectively compared with gross revenues of $977,305 and $2,618,477, respectively, for the corresponding periods of 2008.

Net losses for the three and nine month periods were $2,576,021 or $(0.08) per share and $6,335,409 or $(0.19) per share compared with net losses of $1,910,304 or $(0.06) per share and $5,425,895 or $(0.18) per share for the corresponding periods in the prior year.

At June 30, 2009 the Company had working capital of $9,531,326 including cash, cash equivalents and short-term investments totaling $ 8,752,818 compared to $15,068,689 and $14,686,100, respectively, at September 30, 2008. On July 14, 2009 the Company completed a short form prospectus offering of common shares raising gross proceeds of $9.275 million.

Ian Clifford CEO of the Company said, "On July 2, 2009, the Company made an additional investment of US$5,000,00 in the common shares of EEStor, which gives ZMC an approximate 10.7% equity interest. This investment gives our shareholders a stake in the many potential mass applications of EEStor's technology including portable consumer electronics, improving the performance of renewable energy sources such as wind and solar generation, and increasing the efficiency and stability of power grids around the world. The investment transaction was followed by a public offering of common shares that replenished our treasury and extended the reach of our story to investors in Canada, the United States and Europe."

The Company's strong balance sheet allows for its continued progress in a number of key areas such as the development of ZENNergy™ drivetrain solutions and expanded business development activities. These are an integral part of the Company's strategy in taking the EEStor technology to market and capitalizing on its Technology Agreement with EEStor when the EESU is production ready."

Additional Information

Readers are encouraged to read the Company's unaudited consolidated financial statements for the three and nine months ended June 30, 2009 and the corresponding Management's Discussion and Analysis both of which have been filed on SEDAR at www.sedar.com and posted on the Company's website at www.ZENNcars.com.

About ZENN Motor Company Inc.

ZENN Motor Company, Toronto, Canada, is dedicated to being a global leader in zero emission transportation solutions and technologies for markets around the world. Driven by quality, ingenuity and a philosophy of social responsibility, the ZMC team is redefining what is possible in both urban and business fleet transportation.

The ZENN™ (Zero Emission No Noise) provides an excellent alternative transportation solution for environmentally conscious drivers who want to dramatically reduce their operating costs and free themselves from dependence on oil. The current ZENN low speed vehicle is perfect for urban commuters and commercial fleets such as resorts, gated communities, airports, college and business campuses, municipalities, and parks and is sold through a network of retailers across the United States and directly by the Company in Quebec.

The planned commercialization and implementation of the ultra capacitor being developed by ZENN Motor Company's strategic partner EEStor, Inc., is expected to enable future ZMC vehicles and ZENNergy™ drivetrain powered vehicles to travel at speeds and distances similar to internal combustion powered vehicles but at a fraction of the cost and with zero emissions!

Forward-looking Statement

Certain statements in this release, other than statements of historical fact, may include forward-looking information that involves various risks and uncertainties that face the Company; such statements may contain such words as "may", "would", "could", "will", "intend", "plan", "anticipate", "believe", "estimate", "expect" and similar expressions, and may be based on management's current assumptions and expectations related to all aspects of the automotive industry, consumer demand for zero emission transportation solutions and the global economy. Risks and uncertainties that may face the Company include, but are not restricted to: the EEStor energy storage technology may not be successfully commercialized at all, in a manner providing the features and benefits claimed by EEStor while under development, or on a timely basis or the Company may not be able to successfully incorporate this technology into its current or proposed products; the Company could fail in its efforts to develop a viable ZENNergy Drivetrain or cityZENN solution or do so on a timely basis; steps taken by the Company to protect its proprietary rights may not be adequate or third parties may infringe or misappropriate the Company's proprietary rights; the Company has a history of losses from operations and may not be able to obtain financing, if and when required, to fund future expenditures for general administrative activities, including sales and marketing and research and development, expansion, strategic acquisitions or investment opportunities or to respond to competitive pressures; competitors may develop products which offer greater benefits to consumers, have greater market appeal or are more competitively priced than those offered by the Company; the Company may be exposed to product liability claims which exceed insurance policy limits; the Company is dependent on the ability and experience of a relatively small number of key personnel; new products introduced by the Company may not be accepted in the market or to the extent projected; new laws and regulations may be enacted or existing ones may be applied or governmental action may be taken in a manner which could limit or curtail the production or sale of the Company's products; and the Company may be negatively affected by reduced consumer spending due to the uncertainty of economic and geopolitical conditions.
These risks and uncertainties may cause actual results to differ from information contained in this release, when estimates and assumptions have been used to measure and report results. There can be no assurance that any statements of forward-looking information contained in this release will prove to be accurate. Actual results and future events could differ materially from those anticipated in such statements. These and all subsequent written and oral statements containing forward-looking information are based on the estimates and opinions of management on the dates they are made and expressly qualified in their entirety by this notice. Except as required by applicable laws, the Company assumes no obligation to update forward-looking statements should circumstances or management's estimates or opinions change. Readers are cautioned not to place undue reliance on any statements of forward looking information that speak only as of the date of this release. Additional information identifying risks and uncertainties relating to the Company's business are contained under the heading "Risk Factors" in ZMC's current Annual Information Form and its other filings with the various Canadian securities regulators which are available online at www.sedar.com.



ZENN Motor Company Inc.
Consolidated Balance Sheets

----------------------------------------------------------------------------
Jun. 30 2009 Sep. 30 2008
(Unaudited) (Audited)
$ $
----------------------------------------------------------------------------

Assets
Current
Cash and cash equivalents 8,652,818 7,686,100
Short-term investments 100,000 7,000,000
Accounts receivable 83,697 80,069
Inventory 1,870,523 1,958,233
Prepaid expenses and sundry assets 320,595 599,309
------------- -------------
11,027,633 17,323,711
Property and equipment 265,091 362,413
Development costs 639,300 389,207
Rental deposits 96,988 98,552
EEStor Technology Rights 2,303,275 1,510,145
Investment in EEStor, Inc. 2,857,815 2,857,815
------------- -------------

17,190,102 22,541,843
------------- -------------
------------- -------------

Liabilities
Current
Accounts payable and accrued liabilities 1,496,307 2,078,969
Contingent loss on purchase commitments - 176,053
------------- -------------
1,496,307 2,255,022
------------- -------------

Shareholders' Equity
Capital stock 43,402,179 41,863,409
Contributed surplus 1,697,669 1,322,066
Warrant capital 144,265 316,255
Deficit (29,550,318) (23,214,909)
------------- -------------

15,693,795 20,286,821
------------- -------------

17,190,102 22,541,843
------------- -------------
------------- -------------



ZENN Motor Company Inc.
Consolidated Statements of Operations and Deficit
For the three and nine months ended June 30
(unaudited)

----------------------------------------------------------------------------
Three Months Nine Months
------------ -----------
2009 2008 2009 2008
---- ---- ---- ----
$ $ $ $
----------------------------------------------------------------------------
Gross revenue 379,916 977,305 1,316,535 2,618,477
Provision for rebates 79,649 14,980 246,071 314,574
------------ ------------ ------------ ------------
Net revenue 300,267 962,325 1,070,464 2,303,903

Cost of sales 295,427 933,104 1,175,882 2,200,804
------------ ------------ ------------ ------------

Gross profit (loss) 4,840 29,221 (105,418) 103,099

Expenses
Marketing and promotion 455,589 645,307 1,269,305 1,625,274
Engineering and
development 467,942 155,202 953,552 488,894
General and
administrative 1,255,062 1,145,950 3,678,917 3,427,189
Inventory write-down 390,972 - 390,972 59,367
Foreign exchange loss
(gain) 6,759 12,279 10,955 (15,943)
Amortization 44,383 39,331 133,430 106,204
------------ ------------ ------------ ------------
2,620,707 1,998,069 6,437,131 5,690,985
------------ ------------ ------------ ------------

Loss from operations (2,615,867) (1,968,848) (6,542,549) (5,587,886)
Interest income 39,846 58,544 207,141 161,991
------------ ------------ ------------ ------------

Net loss for the period (2,576,021) (1,910,304) (6,335,408) (5,425,895)

Deficit, beginning of
period (26,974,297) (18,991,877) (23,214,909) (15,476,286)
------------ ------------ ------------ ------------

Deficit, end of period (29,550,318) (20,902,181) (29,550,317) (20,902,181)
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------

Loss per share, basic
and diluted (0.08) (0.06) (0.19) (0.18)

Weighted average number
of shares outstanding 34,322,611 30,763,614 34,002,932 29,546,615



ZENN Motor Company Inc.
Consolidated Statements of Cash Flows
For the three and nine months ended June 30
(unaudited)
----------------------------------------------------------------------------
Three Months Nine Months
------------ -----------
2009 2008 2009 2008
---- ---- ---- ----
$ $ $ $
----------------------------------------------------------------------------

Cash flows from (to)
operating activities
Net loss for period (2,576,021) (1,910,304) (6,335,409) (5,425,895)
Add items not affecting
cash flow
Amortization 44,383 39,331 133,430 106,204
Stock based compensation 255,654 211,748 776,284 573,943
----------- ----------- ----------- -----------
(2,275,984) (1,659,225) (5,425,695) (4,745,748)
Changes in non-cash
working capital
Accounts receivable 143,554 67,722 (3,627) (22,362)
Inventory 548,615 (229,796) 87,710 (443,015)
Prepaid expenses and
other assets 294,432 325,659 278,716 345,200
Accounts payable and
accrued liabilities (196,107) 169,665 (758,718) 57,569
----------- ----------- ----------- -----------

(1,485,490) (1,325,975) (5,821,612) (4,808,356)
----------- ----------- ----------- -----------

Cash flow from (to)
investing activities
Short-term investments 4,700,000 (10,000,450) 6,900,000 (10,000,450)
Development costs - (123,336) (250,093) (169,915)
Purchase of property,
plant and equipment (16,589) (53,565) (42,199) (85,464)
Sale of property, plant
and equipment - - 6,090 -
EEStor technology Rights (793,130) (793,130)
Rental deposits - (3,658) 1,563 5,557
----------- ----------- ----------- -----------
3,890,281 (10,181,009) 5,822,231 (10,250,272)
----------- ----------- ----------- -----------

Issue of shares, net of
costs - 14,086,598 - 14,086,598
Exercise of options and
warrants 243,600 - 966,098 931,474
----------- ----------- ----------- -----------
243,600 14,086,598 966,098 15,018,072
----------- ----------- ----------- -----------

Increase (decrease) in
cash during period 2,648,391 2,579,614 966,718 (40,556)
Cash and cash equivalents
at beginning of period 6,004,427 3,601,087 7,686,100 6,221,257
----------- ----------- ----------- -----------
Cash and cash equivalents
at end of period 8,652,818 6,180,701 8,652,818 6,180,701
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------

Consists of:
Cash 7,153,163 6,180,701 7,153,163 6,180,701
Cash equivalents 1,499,655 - 1,499,655 -
----------- ----------- ----------- -----------
8,652,818 6,180,701 8,652,818 6,180,701
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------


Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

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