ZENN Motor Company
TSX VENTURE : ZNN

ZENN Motor Company

May 29, 2011 22:50 ET

ZENN Motor Company Reports Second Quarter 2011 Results

TORONTO, ONTARIO--(Marketwire - May 29, 2011) - ZENN Motor Company Inc. ("ZMC" or the "Company") (TSX VENTURE:ZNN) today announced its unaudited financial results for the three and six months ended March 31, 2011. All amounts are expressed in Canadian dollars.

Financial Results

For the three and six months ended March 31, 2011, net loss from continuing operations were $1,532,784 or $0.04 per share and $2,276,272, or $0.06 per share, respectively, after unusual items. For the corresponding periods in the prior year, net losses from continuing operations were $1,051,660 or $0.03 per share and $2,124,512 or $0.06 per share, respectively.

In the current period, the Company expended $370, 486 in legal, professional and advisory fees related to shareholder matters surrounding the Company's Annual and Special Meeting on March 22, 2011. As well, the Company wrote off previous investments in the amount of $201,760. Excluding these items, the loss from continuing operations in the three months ended March 31, 2011 decreased by approximately 9% as compared to the same period in the prior year and fell by 19.8% in the six months ended March 31, 2011, compared the same period in the prior year.

At March 31, 2011 the Company had cash, cash equivalents and short-term investments totaling $3,005,934 compared to cash, cash equivalents and short-term investments of $5,074,652, at September 30, 2010.

Company Update

As a result of its review of the Company's infrastructure and business strategies, the Board of Directors has begun to actively implement strategic decisions to simplify the organization, reduce costs and focus the Company's resources on its investment in EEStor, Inc. In connection with the implementation, the Company is pleased to announce that Mr. James Kofman, Chair of the Board, has been appointed Interim CEO to oversee the refocus of the Company's business activities. In addition, the Company's Chief Financial Officer, Vice-President Business Development and Vice-President Engineering have agreed to reduce their full time activities as part of a plan to transition out of the Company at various times over the next six months. Mr. Kofman commented, "The Board truly appreciates the assistance the Company's senior executives have given in enabling the Company to reduce its efforts in operations and product development so that it can put a greater emphasis on an enhanced business relationship with EEStor."

Additional Information

Readers are encouraged to read the Company's unaudited consolidated financial statements for the quarter ended March 31, 2011, the corresponding Management's Discussion and Analysis and the Company's Annual Information Form dated January 20, 2011. All of these documents have been filed and are available for viewing 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 enabling emission-free, energy-efficient transportation. Working with EEStor's electrical energy storage units (EESU) under development, ZMC aims to enable OEM and Tier 1 partners to deliver advanced electric transportation solutions to their customers. The Company has a Technology Agreement with EEStor that provides certain exclusive and nonexclusive rights to purchase and deploy EEStor's EESU technology, which rights are detailed in the Company's AIF.

Forward-looking Statements

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 expected 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 viable ZENNergy technologies and solutions 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.

Information contained in this release relating to EEStor, Inc. or the energy storage technology being developed by EEStor has not been reviewed by EEStor and EEStor does not assume any responsibility for the accuracy or completeness of such information.

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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