ZENN Motor Company Inc.
Consolidated Balance Sheets
(audited)

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Sep. 30 2008 Sep. 30 2007
$ $
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Assets
Current
Cash and cash equivalents 7,686,100 6,221,257
Temporary investments 7,000,000 -
Accounts receivable 80,069 272,946
Inventory 1,958,233 1,442,862
Prepaid expenses and other assets 599,309 642,061
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17,323,711 8,579,126
Property, plant and equipment 362,413 353,047
Development costs 389,207 -
Rental deposits 98,552 100,535
EEStor technology rights 1,510,145 1,510,145
Investment in EEStor, Inc. 2,857,815 2,857,815
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22,541,843 13,400,668
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Liabilities
Current
Accounts payable and accrued liabilities 2,078,969 1,634,936
Contingent loss on purchase commitment 176,053 -
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2,255,022 1,634,936

Shareholders' Equity
Capital stock 41,863,409 26,081,655
Contributed surplus 1,322,066 584,455
Warrant capital 316,255 575,908
Deficit (23,214,909) (15,476,286)
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20,286,821 11,765,732
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22,541,843 13,400,668
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ZENN Motor Company Inc.
Consolidated Statements of Operations and Deficit
For the three months and year ended September 30

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Three Months 12 Months
(unaudited) (audited)
2008 2007 2008 2007
$ $ $ $
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Gross revenue 915,003 678,749 3,533,480 2,324,462
Provision for rebates (175,000) (300,000) (489,574) (300,000)
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Net revenue 740,003 378,749 3,043,906 2,024,462

Cost of sales 871,812 678,024 3,072,616 2,302,349
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Gross profit (131,809) (299,275) (28,710) (277,887)

Expenses
Marketing and promotion 641,837 530,103 2,267,111 1,543,988
Engineering and
development 281,841 221,901 770,735 613,071
General and
administrative 956,122 886,330 4,383,311 3,596,661
Write-down of inventory 275,986 725,972 335,353 953,472
Foreign exchange loss
(gain) (58,121) 42,880 (74,064) 79,385
Contingent loss on
purchase commitments 176,053 - 176,053 -
Amortization 36,610 29,221 142,814 92,738
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2,310,328 2,436,407 8,001,313 6,879,315
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Loss before undernoted (2,442,137) (2,735,682) (8,030,023) (7,157,202)
Interest income 129,409 77,273 291,400 181,061
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Net loss for the period (2,312,728) (2,658,409) (7,738,623) (6,976,141)

Deficit, beginning of
period (20,902,181) (12,817,877) (15,476,286) (8,500,145)
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Deficit, end of period (23,214,909) (15,476,286) (23,214,909) (15,476,286)
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Loss per share, basic
and diluted (0.07) (0.09) (0.25) (0.27)

Weighted average number
of shares outstanding 33,561,072 28,735,031 30,555,711 25,943,379


ZENN Motor Company Inc.
Consolidated Statements of Cash Flows
For the year ended September 30
(audited)

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2008 2007
$ $
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Cash flows from operating activities
Net loss for period (7,738,623) (6,976,141)
Add items not affecting cash flow
Amortization 142,814 92,738
Stock based compensation 738,841 466,740
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(6,856,968) (6,416,663)
Changes in non-cash working capital
Accounts receivable 192,877 (272,946)
Inventory (515,371) (66,497)
Prepaid expenses and other assets 42,752 (117,675)
Accounts payable and accrued liabilities 444,033 424,679
Contingent loss on purchase commitment 176,053 -
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(6,516,624) (6,449,102)
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Cash flows from investing activities
EEStor technology rights - (643,170)
Purchase of property and equipment (152,180) (286,988)
Rental deposits (70,977) (19,270)
Repayment of rental deposit 72,960 -
Development costs (389,207) -
Investment in EEStor, Inc. - (2,857,815)
Purchase of short term investments (7,000,000) -
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(7,539,404) (3,807,243)
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Cash flow from financing activities
Issue of shares, net of costs 15,520,871 14,260,640
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Increase (decrease) in cash and cash
equivalents during period 1,464,843 4,004,295

Cash and cash equivalents at beginning of
period 6,221,257 2,216,962
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Cash and cash equivalents at end of period 7,686,100 6,221,257
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Consisting of:
Cash 1,602,576 2,221,447
Short term investments 6,083,524 3,999,810
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7,686,100 6,221,257
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