ferrets stock to watch Ferret's stock to Watch: ZBB ENERGY...

ferrets stock to watch Ferret's stock to Watch: ZBB ENERGY CORPORATION

LOCAL COMPANY DEVELOPS HIGH GRADE BATTERY STORAGE CAPACITY

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OVERVIEW
********

ZBB Energy Corporation (ZBB) yesterday reported what it calls a
leap into the future with a planned $US5 million capital injection and
strategic investment in new battery technology.
It believes the economic entity expects to continue to
commercialise its energy storage products and increase the present status
and level of operations over the course of the next few years.
Since the end of the 2004/05 financial year, a proposal for the
introduction of a China-based joint venture partner has been submitted to
interested parties in that country.
Following such technology might well prove worthwhile in light of
the company's confidence about its future developments, prospects and
strategies.
ZBB told the Australian Stock Exchange that it had entered into a
letter of understanding agreement with Wharton Equity Partners LLC and
Wharton Energy Partners 1 LLC for the acquisition by ZBB of Wharton's
existing energy storage investment and the investment into ZBB of new
capital of not less than $US5 million from Wharton sources.
The LOU is subject to a formal purchase agreement being entered
into within 30 days.
Both the payment to Wharton for the acquisition of its existing
energy storage investment and the cash investment into ZBB will be
satisfied by the issue of new ZBB shares and options based on an issue
price of 50c a share.
The shares issued to Wharton for the purchase of its energy
storage investment will also be subject to a voluntary escrow agreement.
Wharton's energy storage investment is 12 per cent of Idea One
Inc (IO).
IO is engaged in the development of alternative energy products
through its Israeli-based subsidiary, Advanced Technology Upgrading Ltd,
which has developed a rechargeable magnesium battery that is
environmentally friendly.

SHARE PRICE MOVEMENT
********************

Shares of ZBB yesterday traded steady at 38c. Rolling high for
the year of its short life was 48c and low 21c. The company has 74.4
million shares on issue with a market cap of $29 million.
The most significant event for the company during the year was
the company's successful initial public offering and its subsequent
listing in March.
Its principal activities during the financial year was the
development, manufacture and sale of energy storage systems based upon
the company's proprietary zinc-bromine battery technology.
Upon listing on the ASX the company appointed Trevor Flugge as a
non-executive director, lifting the number of non-executive directors to
three.
Mr Flugge is an experienced company director who sits on the
boards of a number of prominent Australian public companies.
Initial presentations have been made in China during the year and
specific proposals are currently being reviewed.
The commercial intent for the company this year is to secure a
contract for the sale of an initial system similar in size and
application to the California Energy Commission system.
Other commercial opportunities are also now under discussion and
evaluation.
In the United States recent legislative changes in Texas have
been enacted to include "energy storage" technologies in the definition
of energy efficiency products and thereby allow for systems such as ZBB's
to qualify for cost rebates under that state's energy efficiency program.
Subsequently, ZBB is considering a proposal from a Texas-based
consortium seeking marketing and distribution opportunities for the
company's products.
To date no final agreement has been made on this proposal.
Continued focus on renewable energies also focuses on the role
for energy storage as a facilitator for the greater uptake of these
generating technologies.
ZBB is firmly committed to tailoring its products to meet
this market sector.
The company says rising fuel costs are also having the effect of
focusing attention on alternative energy management solutions.
Financial results for the year saw an improvement in revenues,
primarily driven by the effect of the current contract with the
California Energy Commission.
However, this was balanced out by the board's decisions to
directly write off or significantly adjust the carrying value of certain
intangible items from the previous year in accordance with new accounting
standards.
The consolidated loss for the financial year ended June 30 was
$2,298,699 (2004: $2,699,423).
Cash on hand at June 30 was $1,096,752 ($392,190).

EXPANSION PROGRAM
*****************

The company has begun the expansion program outlined in its
prospectus issued earlier this year.
New manufacturing equipment has been ordered, new marketing
initiatives have commenced, increases have occurred with staffing levels
including certain new key hirings.
Subsequent to the close of the financial year the company
participated in an international battery convention in China as a first
step in marketing its products into that region.

BACKGROUND
**********

ZBB Energy Corp is a leading developer of advanced energy storage
technologies for utility and commercial customer applications.
The company's patented flowing electrolyte battery can be
packaged in customised systems for:
* Voltage regulation and system stability
* Power quality/UPS
* Peak shaving/plant deferral
* Renewables support
The ZBB battery is a clean, quiet, reliable alternative to
gensets and other power generation technologies.
There are no fuel handling, fuel scheduling, or air permitting
issues.
Since the battery is housed and shipped in standard modular
containers, it is easily installed on-site and connected to the
electrical grid.
The main business activity during the year was focused on a major
contract to design and deliver four 500kWh energy storage systems for the
California Energy Commission.
This contract was barely a month or so old at the start of the
year and provided a full twelve months for the design and manufacturing
stage to be undertaken prior to the first system being ready for in-house
testing towards the end of 2005.
The result to date is a radical new configuration for ZBB's
storage modules and a 25 per cent increase in rated energy from standard
containerised system, from 400kWh to 500kWh.
Focus is also presently on the processes for implementing quality
control procedures and achieving international product certifications.
ENDS

Copyright © 2006 RWE Australian Business News. All rights reserved.

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