Railpower Announces Amendments of Q2 and Q3 Financial Statements



    TSX Symbol: P

    BROSSARD, QC, Jan. 9 /CNW Telbec/ - Railpower Technologies Corp. (TSX: P)
announced today that it is amending its financial statements initially filed
for the quarters ended June 30 and September 30, 2008 (collectively, the
"Effected Financial Statements"). The amendment relates to the unused portion
of the proceeds raised in connection with a private placement concluded with
Ontario Teachers' Pension Plan Board ("Teachers") by way of a $20 million
convertible debenture on June 27, 2008. $12.0 million of the proceeds were
intended to be used by the Corporation to finance the construction of an
assembly plant in Saint-Jean-sur-Richelieu, Québec. On October 6, 2008, and as
part of its previously announced cash preservation measures, the Corporation
postponed the completion of the assembly plant and does not expect to restart
construction until new significant orders are secured.
    Teachers recently notified the Corporation that, notwithstanding the
postponement of the construction of the assembly plant, the unused portion of
the $12.0 million is not available to the Corporation for general corporate
purposes, unless otherwise expressly permitted by Teachers.
    In light of Teachers' recently stated position, based on the proper
application of Canadian generally accepted accounting principles under the
present circumstances and after consulting with its auditors, the unused
portion of the $12.0 million as at June 30 and September 30, 2008, originally
reported as short term cash and cash equivalents in the Effected Financial
Statements, was reclassified as restricted cash and excluded from current
assets. The balance sheet, statement of cash flows and notes of the Effected
Financial Statements and the Management Discussion and Analysis related
thereto have been amended accordingly. As at June 30 and September 30, 2008,
the unused portion was $10.7 million and $8 million, respectively. As of
today, it amounts to approximately $6.8 million.
    As previously disclosed, the Corporation's continued viability depends on
its ability to rebuild its order backlog and secure new sales with its
customers. In light of the current context, the Corporation continues to re
evaluate its market potential, consider new ways of diversifying its revenue
streams to improve its financial situation and consider other ways of reducing
its cost structure. In addition, the Corporation has commenced reviewing and
evaluating all available alternatives, including obtaining additional sources
of financing in the form of debt or equity and selling the Corporation, which
may take the form of a sale of its shares or assets. Despite undertaking these
and other strategies, there is no certainty that these and other strategies
will be sufficient to permit the Corporation to continue operations.

    About Railpower

    Railpower (TSX: P), (www.railpower.com) is engaged in the development,
construction, marketing and sales of high performance, clean locomotives and
power plants for the transportation and related industries. The Corporation
has designed and is marketing a range of locomotives for the North American
low and medium horsepower locomotive market. It has also designed and is
marketing hybrid power plants for rubber tyred gantry cranes (Eco-Cranes(R)).
Its technologies have broader potential and applications in other markets and
industries.

    Caution regarding forward-looking statements

    Certain statements contained in this release contain forward-looking
statements. When used in this document, the words "may", "would", "could",
"will", "intend", "plan", "anticipate", "believe", "estimate", "expect" and
similar expressions may be used to identify forward-looking statements. Those
statements reflect our current views with respect to future events or
conditions, including prospective results of operations, financial position,
and predictions of future actions, plans or strategies. Certain material
factors and assumptions were applied in drawing our conclusions and making
those forward looking statements. By their nature, those statements reflect
management's current views, beliefs and assumptions and are subject to certain
risks and uncertainties, known and unknown, including, without limitation, the
ability to secure new orders or new financing, our ability to comply with the
covenants and conditions contained in our outstanding convertible debentures
with Ontario Teachers Pension Plan Board, the ability to retain our employees,
product development or manufacturing delays, the ability of our current
manufacturing suppliers to meet our production demands in terms of quantity,
quality and costs, our ability to reach a satisfactory agreement with another
supplier if necessary or, the ability to restart the construction of our
manufacturing facility and if restarted, to construct our manufacturing
facility on time and within the forecasted budget, changing environmental
regulations, the ability to attract and retain business partners, the
acceptance of our existing and new products, future levels of government
funding, the need to obtain and maintain proprietary rights over our
technology, competition from other technologies or new competitors, the
ability to access the capital required for research, product development,
operations and marketing, the need to generate positive cash flow in the
foreseeable future, potential legal liability related to the recall of our
Green Goat(R) locomotives, changes in energy prices and currency levels. Many
factors could cause our actual results, performance or achievements to be
materially different from any future results, performance or achievements that
may be expressed or implied by these forward-looking statements. Should one or
more of these risks or uncertainties materialize, or should the assumptions
underlying our projections or forward-looking statements prove incorrect, our
actual results may vary materially from those described in this report as
intended, planned, anticipated, believed, estimated, or expected. Unless
otherwise required by law, we do not intend or do not assume any obligation to
update these forward-looking statements whether as a result of new
information, plans, events or otherwise.
    %SEDAR: 00016554EF




For further information:

For further information: José Mathieu, President and Chief Executive
Officer, Railpower Technologies Corp., (450) 678-5277, ext.526, Toll Free:
1-866-678-5277, jmathieu@railpower.com; Kamila Wirpszo, Vice-President,
General Counsel and Corporate Secretary, Railpower Technologies Corp., (450)
678-5277, ext.518, Toll Free: 1-866-678-5277, kwirpszo@railpower.com

Organization Profile

RAILPOWER TECHNOLOGIES CORP.

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