Zenn Motor loses $2.57-million in Q3 2009

2009-08-14 11:11 ET - News Release

Mr. Ian Clifford reports

ZENN MOTOR COMPANY REPORTS THIRD QUARTER 2009 RESULTS

Zenn Motor Company Inc. has released 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 negative eight cents per share and $6,335,409 or negative 19 cents per share compared with net losses of $1,910,304 or negative six cents per share and $5,425,895 or negative 18 cents 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 totalling $8,752,818 compared with $15,068,689 and $14,686,100, respectively, at Sept. 30, 2008. On July 14, 2009, the company completed a short-form prospectus offering of common shares raising gross proceeds of $9,275,000.

Ian Clifford, chief executive officer of the company, said: "On July 2, 2009, the company made an additional investment of $5-million in the common shares of EEStor, which gives ZMC an approximate 10.7-per-cent 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.

            CONSOLIDATED STATEMENT OF OPERATIONS AND DEFICIT

                                 Three months                 Nine months
                                ended June 30,              ended June 30,
                           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 admin     1,255,062     1,145,950     3,678,917     3,427,189
Inventory writedown     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)

We seek Safe Harbor.