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Press Release

ZENN Motor Company Reports First Quarter 2012 Results and Small Additional Investment in EEStor

TORONTO, ONTARIO--(Marketwire - March 26, 2012) - ZENN Motor Company Inc. (TSX VENTURE:ZNN) (the "Company") today announced its unaudited financial results for the three months ended December 31, 2011, in accordance with the newly adopted International Financial Reporting Standards. All amounts are expressed in Canadian dollars.
Financial Results
For the three months ended December 31, 2011, net losses from continuing operations were $365,790 or $0.01 per share. For the corresponding period in the prior year, net losses from continuing operations were $722,645 or $0.02 per share.
The 49% decrease in the loss from continuing operations in the current quarter compared to the same quarter of the prior year, is reflective of the cost cutting measures implemented as a result of a strategic review and refocus of the business initiated by the Board of Directors in May 2011.
At December 31, 2011 the Company had working capital of $862,494 and cash, including cash, cash equivalents and short-term investments, totaling $1,264,279, compared to working capital of $1,095,105 and cash of $1,680,165, respectively, at September 30, 2011.
Attached are the Company's first quarter results for the period ending December 31, 2011. Details regarding the attached financial results can be found in the notes of the unaudited condensed interim financial statements filed on SEDAR (www.sedar.com).
EEStor Investment
The Company recently participated as a minority investor in an equity financing completed by EEStor, Inc. While the Company's investment was small, the investment was part of a financing that provided EEStor with additional working capital to further the development of its power storage technology. Importantly, as part of the investment the Company was able to review certain aspects of the technology and obtain a covenant from EEStor regarding a timeline for near term public disclosure of the status of its technological development certified by an independent third party.
/T/
ZENN Motor Company Inc.
Unaudited Condensed Interim Consolidated Statements of Financial Position
As at December 31, 2011, September 30, 2011 and October 1, 2010
(in Canadian dollars)
December 31, September 30, October 1,
Notes 2011 2011 (1) 2010 (1)
--------------------------------------------------------------------------
Assets
Current
Cash $ 1,249,279 $ 915,165 $ 474,452
Short-term investments 15,000 765,000 4,600,200
Prepaid expenses and
sundry assets 93,945 108,455 171,814
Current assets of
discontinued
operations 5 156,878 158,402 175,326
--------------------------------------------------------------------------
1,515,102 1,947,022 5,421,792
Property and equipment 6 8,164 10,742 106,639
EEStor technology
rights 7 2,303,275 2,303,275 2,303,275
Investment in EEStor,
Inc. 8 8,674,771 8,674,771 8,674,771
Long lived assets of
discontinued
operations 5 74,153 81,900 114,490
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$ 12,575,465 $ 13,017,710 $ 16,620,967
--------------------------------------------------------------------------
--------------------------------------------------------------------------
Liabilities
Current
Accounts payable and
accrued liabilities $ 322,105 $ 513,816 $ 455,432
Current liabilities of
discontinued
operations 5 330,503 338,101 385,984
--------------------------------------------------------------------------
652,608 851,917 841,416
--------------------------------------------------------------------------
Shareholders' Equity
Share capital 11 52,398,685 52,398,685 52,239,586
Contributed surplus 12 4,295,050 4,134,763 3,238,394
Warrant capital 13 - - 170,524
Deficit (44,770,878) (44,367,655) (39,868,953)
--------------------------------------------------------------------------
11,922,857 12,165,793 15,779,551
--------------------------------------------------------------------------
$ 12,575,465 $ 13,017,710 $ 16,620,967
--------------------------------------------------------------------------
--------------------------------------------------------------------------
(1) In preparing its 2011 comparative information, the Company has adjusted
amounts reported previously in financial statements prepared in
accordance with Canadian Generally Accepted Accounting Principles
("Canadian GAAP"). See Note 18 to these unaudited condensed interim
consolidated financial statements for an explanation of the transition
to IFRS.
ZENN Motor Company Inc.
Unaudited Condensed Interim Consolidated Statements of Comprehensive Loss
For the three months ended December 31
(in Canadian dollars)
Notes 2011 2010(1)
----------------------------------------------------------------------------
Expenses
General and administrative 15,16,17 $ 365,873 $ 560,033
Engineering and development 9,15,16,17 3,330 87,727
Marketing and business development 15,16,17 285 85,971
----------------------------------------------------------------------------
369,488 733,731
Interest Income 3,698 11,086
----------------------------------------------------------------------------
Loss from continuing operations (365,790) (722,645)
Loss from discontinued operations 5,15 (37,433) (73,266)
----------------------------------------------------------------------------
Net Loss (403,223) (795,911)
Other Comprehensive Income - -
----------------------------------------------------------------------------
Total Comprehensive Loss $(403,223) $(795,911)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Loss per share, basic and diluted
----------------------------------------------------------------------------
----------------------------------------------------------------------------
From continuing operations $(0.01) $(0.02)
From discontinued operations $(0.00) $(0.00)
----------------------------------------------------------------------------
Loss per share, basic and diluted $(0.01) $(0.02)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Weighted average number of common
shares outstanding
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Basic and diluted 37,332,913 37,215,263
----------------------------------------------------------------------------
(1) In preparing its 2011 comparative information, the Company has adjusted
amounts reported previously in financial statements prepared in
accordance with Canadian GAAP. See Note 18 to these unaudited condensed
interim consolidated financial statements for an explanation of the
transition to IFRS.
ZENN Motor Company Inc.
Unaudited Condensed Interim Consolidated Statements of Changes in
Shareholders' Equity
For the three months ended December 31
(in Canadian dollars)
No. of Share Contributed
Notes Shares Capital Surplus
----------------------------------------------------------------------------
Balances, September 30,
2011(1) 37,332,913 $52,398,685 $4,134,763
Net loss for the period - - -
Other comprehensive loss - - -
----------------------------------------------------------------------------
Total other comprehensive
loss - - -
----------------------------------------------------------------------------
Comprehensive loss for
the period - - -
Transactions with
shareholders
Exercise of Options - - -
Issuance of shares - - -
Grant of Options in
Period - - -
Forfeited Options in
Period - - -
Expired/Cancelled
Options in Period 14 - - -
Stock based
compensation in period 15 - - 160,287
----------------------------------------------------------------------------
Total contributions by
and distributions to
shareholders - - 160,287
----------------------------------------------------------------------------
Balances, December 31,
2011 37,332,913 $52,398,685 $4,295,050
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Total
Warrant Shareholders'
Notes Capital Deficit Equity
----------------------------------------------------------------------------
Balances, September 30,
2011(1) $- $(44,367,655) $12,165,793
Net loss for the period - (403,223) (403,223)
Other comprehensive loss - - -
----------------------------------------------------------------------------
Total other comprehensive
loss - (403,223) (403,223)
----------------------------------------------------------------------------
Comprehensive loss for
the period - (403,223) (403,223)
Transactions with
shareholders
Exercise of Options - - -
Issuance of shares - - -
Grant of Options in
Period - - -
Forfeited Options in
Period - - -
Expired/Cancelled
Options in Period 14 - - -
Stock based
compensation in period 15 - - 160,287
----------------------------------------------------------------------------
Total contributions by
and distributions to
shareholders - - 160,287
----------------------------------------------------------------------------
Balances, December 31,
2011 $- $(44,770,878) $11,922,857
----------------------------------------------------------------------------
----------------------------------------------------------------------------
No. of Share Contributed
Notes Shares Capital Surplus
----------------------------------------------------------------------------
Balances, October 1, 2010 37,215,263 $52,239,586 $3,238,394
Net loss for the period
Other comprehensive loss - - -
----------------------------------------------------------------------------
Total other comprehensive
loss - - -
----------------------------------------------------------------------------
Comprehensive loss for
the period - - -
Transactions with
shareholders
Exercise of Options - - -
Issuance of shares - - -
Grant of Options in
Period - - -
Forfeited Options in
Period - - -
Expired/Cancelled
Options in Period - - -
Stock based
compensation in period - - 112,023
----------------------------------------------------------------------------
Total contributions by
and distributions to
shareholders - - 112,023
----------------------------------------------------------------------------
Balances, December 31,
2010(1) 37,215,263 $52,239,586 $3,350,417
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Total
Warrant Shareholders'
Capital Deficit Equity
---------------------------------------------------------------------
Balances, October 1, 2010 $170,524 $(39,868,953) $15,779,551
Net loss for the period (795,911) (795,911)
Other comprehensive loss - - -
---------------------------------------------------------------------
Total other comprehensive
loss - (795,911) (795,911)
---------------------------------------------------------------------
Comprehensive loss for
the period - (795,911) (795,911)
Transactions with
shareholders
Exercise of Options - - -
Issuance of shares - - -
Grant of Options in
Period - - -
Forfeited Options in
Period - - -
Expired/Cancelled
Options in Period - - -
Stock based
compensation in period - - 112,023
---------------------------------------------------------------------
Total contributions by
and distributions to
shareholders - - 112,023
---------------------------------------------------------------------
Balances, December 31,
2010(1) $170,524 $(40,664,864) $15,095,663
---------------------------------------------------------------------
---------------------------------------------------------------------
(1) In preparing its 2011 comparative information, the Company has adjusted
amounts reported previously in financial statements prepared in
accordance with Canadian GAAP. See Note 18 to these unaudited condensed
interim consolidated financial statements for an explanation of the
transition to IFRS.
ZENN Motor Company Inc.
Unaudited Condensed Interim Consolidated Statements of Cash Flows
For the three months ended December 31
(in Canadian dollars)
Note 2011 2010(1)
----------------------------------------------------------------------------
Cash flows provided by (used in) operations
Net loss from continuing operations for
period $(365,790) $(722,645)
Items not affecting cash
Amortization 6 2,578 22,008
Gain on sale of property and equipment 6 - (2,559)
Stock based compensation 15 158,073 110,877
----------------------------------------------------------------------------
(205,139) (592,319)
Net changes in non-cash working capital
Prepaid expenses and sundry assets 14,510 (2,667)
Accounts payable and accrued liabilities (191,711) 183,995
----------------------------------------------------------------------------
(382,340) (410,991)
----------------------------------------------------------------------------
Investing
Short-term investments 750,000 3,000,000
Acquisition of property and equipment - (1,393)
----------------------------------------------------------------------------
750,000 2,998,607
----------------------------------------------------------------------------
Cash used in discontinued operations (33,546) (160,523)
----------------------------------------------------------------------------
Net change in cash 334,114 2,427,093
Cash, beginning of period 915,165 474,452
----------------------------------------------------------------------------
Cash, end of period $ 1,249,279 $ 2,901,545
----------------------------------------------------------------------------
(1) In preparing its 2011 comparative information, the Company has adjusted
amounts reported previously in financial statements prepared in
accordance with Canadian GAAP. See Note 18 to these unaudited condensed
interim consolidated financial statements for an explanation of the
transition to IFRS.
/T/
Additional Information
Readers are encouraged to read the Company's audited consolidated financial statements for the year ended September 30, 2011, the corresponding Management's Discussion and Analysis and the Company's Annual Information Form dated January 27, 2012. 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.
The Company's goal is to be the provider of leading edge power storage solutions and related technologies to the automotive industry.
Technologies and solutions, powered by EEStor's electrical energy storage units (EESU) have the potential to enable OEM and Tier 1 partners to deliver advanced electric transportation solutions to their customers. The Company's Technology Agreement with EEStor provides certain exclusive and non-exclusive 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; 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 the Company'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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