VRB Power reports second quarter 2008 financial results



    RICHMOND, BC, Aug. 22 /CNW/ - VRB Power Systems Inc. (TSX-V: VRB) today
reported its financial results for the six month period ended June 30, 2008.
The following is a summary of the key points for the period, updated to August
22, 2008:

    
    Financial Highlights (Note - all dollars Canadian):
    -   Sales revenue and other income was $299,393 for the period compared
        to $201,913 for the same period in 2007;
    -   Operating expenses were $8,001,277 for the period, compared to
        $6,497,681 for the same period in 2007;
    -   Net loss of $7,701,884 ($0.05 per share) for the quarter compared to
        a net loss of $6,295,768 ($0.05 per share) for the same period in
        2007.

    Sales Highlights
    -   VRB Power Systems Inc. announced the sale of two additional 5kW x 4hr
        VRB Energy Storage Systems (VRB-ESS(TM)) to customers in Europe and
        the Middle East.

    Summary of Q2 2008 Announcements
    -   Progress Energy and University of South Florida's Power Center for
        Utility Explorations unveil two 5kW x 4hr VRB Energy Storage Systems
        as part of SEEDS project; this received good TV coverage.
    -   Ben Gurion University of Negev in Israel purchased a 5kW x 4 hour
        VRB-ESS to assess the benefits associated with solar energy
        integration at the University's Blaustein Institute for Solar Energy;
    -   A large, multinational engineering organization in Germany purchased
        a 5kW x 4 hour VRB-ESS to evaluate the system and determine which in-
        house application it can best be used (e.g. off-grid solutions, power
        quality);
    -   VRB Power completed the commissioning of multiple 5kW x 4 hour
        VRB-ESS's, including two systems for Winafrique Technologies Ltd., of
        Kenya and one for Edison SpA of Italy;
    -   Mr. Kieran O'Brien (ex MD of ESB) joined VRB as a consultant to
        assist in developing the Irish market.
    

    Summary consolidated financial statements of the Company for the period
ended June 30, 2008 are set out below. The full consolidated financial
statements and MD&A have been filed on SEDAR (www.sedar.com).

    About VRB Power

    Headquartered in Richmond, Canada, VRB Power Systems Inc. is an energy
storage technology developer which is marketing, selling and manufacturing
products utilizing the patented VRB Energy Storage System ("VRB-ESS(TM)"). The
VRB-ESS can economically store and supply large amounts of electricity on
demand and is focused on stationary applications. It is a long life, cost
effective, low maintenance, efficient technology that allows for the
scalability of power and storage capacity independently. The VRB-ESS is
particularly beneficial to renewable energy providers, utilities and end users
through its ability to "inventory" electricity, allowing for the optimal match
of supply and demand.
    The VRB-ESS is well suited for a variety of applications. Enabling the
provision of "firm" capacity from intermittent renewable generation such as
wind and solar; more cost effective and efficient generation of electricity in
remote areas; capital deferral for utilities; and load levelling (peak
shaving) applications. The VRB-ESS is also capable of providing backup power
solutions including applications for utility sub-stations and
telecommunication sites. The VRB-ESS is characterized by having the lowest
ecological impact of all energy storage technologies and is unlike most other
conventional energy storage systems that rely on substances such as lead or
cadmium.

    Caution regarding forward-looking statements: VRB Power's press releases
may contain forward-looking statements. These statements are based on
management's current expectations and beliefs which are subject to a number of
known and unknown risks and uncertainties (including, but not limited to, the
risk factors described in VRB Power's Annual Information Form filed with the
British Columbia Securities Commission and available at www.sedar.com) that
could cause actual results to differ materially from those expressed or
implied in our forward-looking statements. The Company does not assume any
obligation to update any forward-looking statements contained in this press
release.

    
    The TSX Venture Exchange does not accept responsibility for the adequacy
    or accuracy of this release.

    Vince Sorace
    President


    See accompanying notes to the consolidated financial statements.



    VRB Power Systems Inc.
    Consolidated statements of operations and deficit
    six months ended June 30, 2008 and 2007
    Unaudited


                        Three months ended June 30  Six months ended June 30
                                 2008         2007         2008         2007
    -------------------------------------------------------------------------
                                    $            $            $            $

    Revenue
      Sales                    90,211       57,263      150,462       57,263
    -------------------------------------------------------------------------

    Expenses
      General and
       administrative       2,411,136    2,200,572    4,875,659    3,952,625
      Research and
       development            808,072      675,559    1,735,499    1,261,162
      Amortization of
       intangible assets      507,245      507,243    1,014,492    1,014,488
      Amortization of
       plant and
       equipment              193,163      154,599      375,627      269,406
    -------------------------------------------------------------------------
                            3,919,616    3,537,973    8,001,277    6,497,681
    -------------------------------------------------------------------------

    Operating loss         (3,829,405)  (3,480,710)  (7,850,815)  (6,440,418)
    -------------------------------------------------------------------------

    Other items
      Interest and
       other income            54,983       59,494      148,931      144,650
    -------------------------------------------------------------------------
    Net loss and
     comprehensive loss    (3,774,422)  (3,421,216)  (7,701,884)  (6,295,768)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Loss per share -
     basic and diluted          (0.03)       (0.03)       (0.05)       (0.05)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Weighted average
     number of shares
     outstanding -
     basic and diluted    163,582,785  124,835,532  163,269,873  124,835,532
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



    VRB Power Systems Inc.
    Consolidated statements of shareholders' equity
    six months ended June 30, 2008 and year ended December 31,2007
    Unaudited

                                                  Common shares  Contributed
                                      --------------------------
                                            Shares       Amount      surplus
    -------------------------------------------------------------------------
                                                              $            $
    Balance at
     Dec. 31, 2006                     124,835,532   74,400,898    3,154,380
    Net loss for the year                        -            -            -
    Issued on private
     placement                          37,950,000   13,122,488      197,247
    Stock-based
     compensation                                -            -    1,097,666
    Exercise of stock
     options                               100,000       10,000
    -------------------------------------------------------------------------
    Balance at
     December 31, 2007                 162,885,532   87,533,386    4,449,293
    Net loss for
     the period                                  -            -            -
    Stock-based
     compensation                                -            -      574,830
    Exercise of stock
     options                               800,000      116,441      (36,440)
    -------------------------------------------------------------------------
    Balance at
     June 30, 2008                     163,685,532   87,649,827    4,987,683
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    VRB Power Systems Inc.
    Consolidated statements of shareholders' equity
    six months ended June 30, 2008 and year ended December 31,2007
    Unaudited

                                                   Shareholders'
                                           Deficit       equity
    ------------------------------------------------------------
                                                 $            $
    Balance at
     Dec. 31, 2006                     (58,511,844)  19,043,434
    Net loss for the year              (14,281,192) (14,281,192)
    Issued on private
     placement                                   -   13,319,735
    Stock-based
     compensation                                -    1,097,666
    Exercise of stock
     options                                     -       10,000
    ------------------------------------------------------------
    Balance at
     December 31, 2007                 (72,793,036)  19,189,643
    Net loss for
     the period                         (7,701,884)  (7,701,884)
    Stock-based
     compensation                                -      574,830
    Exercise of stock
     options                                     -       80,001
    ------------------------------------------------------------
    Balance at
     June 30, 2008                     (80,494,920)  12,142,590
    ------------------------------------------------------------
    ------------------------------------------------------------



    VRB Power Systems Inc.
    Consolidated balance sheets
    as at June 30, 2008 and December 31, 2007
    Unaudited

                                                        June 30, December 31,
                                                           2008         2007
    -------------------------------------------------------------------------
                                                              $            $
    Assets
    Current assets
      Cash and cash equivalents                       3,865,298    1,544,426
      Short-term investments                             46,336    9,131,252
      Accounts receivable                               150,129      163,452
      Deposits and other receivables                    127,859      328,415
      Inventory                                       1,770,274    1,542,740
    -------------------------------------------------------------------------
                                                      5,959,896   12,710,285

    Raw material inventory                              730,599      768,292
    Plant and equipment                               2,403,170    2,427,078
    Intangible assets                                 3,640,974    4,655,466
    Restricted cash                                      28,984      102,502
    -------------------------------------------------------------------------
                                                     12,763,623   20,663,623
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Liabilities
    Current liabilities
      Accounts payable and accrued liabilities          621,033    1,473,980
    -------------------------------------------------------------------------

    Shareholders' equity
    Share capital                                    87,649,827   87,533,386
    Contributed surplus                               4,987,683    4,449,293
    Deficit                                         (80,494,920) (72,793,036)
    -------------------------------------------------------------------------
                                                     12,142,590   19,189,643
    -------------------------------------------------------------------------
                                                     12,763,623   20,663,623
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



    Approved on behalf of the Board

    Signed - Vincent Sorace                 Signed - Timothy Hennessy
    ------------------------------          --------------------------------
    Vincent Sorace, Director                Timothy Hennessy, Director



    VRB Power Systems Inc.
    Consolidated statements of cash flows
    six months ended June 30, 2008 and 2007
    Unaudited

                        Three months ended June 30  Six months ended June 30
                                 2008         2007         2008         2007
    -------------------------------------------------------------------------
                                    $            $            $            $

    Operating activities
      Net loss             (3,774,422)  (3,421,216)  (7,701,884)  (6,295,768)
      Items not
       affecting cash
        Amortization          700,408      661,842    1,390,119    1,283,894
        Stock-based
         compensation         193,081      301,049      574,830      517,857
      Change in non-cash
       working capital
        (Increase)/decrease
          in accounts
          receivable           (1,127)      24,313       13,324       81,601
        (Increase)/decrease
         in deposits and
         other receivables     (8,363)     (46,973)     200,556        5,634
        Increase in
         inventory           (127,616)    (301,804)    (189,841)    (471,159)
        (Increase)/decrease
         in accounts
         payable               45,022      139,973     (852,947)      55,940
    -------------------------------------------------------------------------
                           (2,973,017)  (2,642,816)  (6,565,843)  (4,822,001)
    -------------------------------------------------------------------------

    Investing activities
      Decrease in
       short-term
       investments          5,409,609    2,553,488    9,084,916    2,501,562
      Purchase of plant
       and equipment         (226,028)    (546,332)    (351,719)    (687,538)
      Decrease in
       restricted cash         26,938       61,236       73,518      132,084
    -------------------------------------------------------------------------
                            5,210,519    2,068,392    8,806,715    1,946,108
    -------------------------------------------------------------------------

    Financing activity
      Issuance of
       common shares           55,000            -       80,000            -
    -------------------------------------------------------------------------

    Net cash outflow        2,292,502     (574,424)   2,320,872   (2,875,893)
    Cash and cash
     equivalents,
     beginning of
     period                 1,572,796    4,583,401    1,544,426    6,884,870
    -------------------------------------------------------------------------
    Cash and cash
     equivalents,
     end of period          3,865,298    4,008,977    3,865,298    4,008,977
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Cash and cash
     equivalents
     consist of:
      Cash                    595,841      406,702      595,841      406,702
      Short-term money
       market
       investments          3,269,457    3,602,275    3,269,457    3,602,275
    -------------------------------------------------------------------------
                            3,865,298    4,008,977    3,865,298    4,008,977
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    





For further information:

For further information: VRB Power Systems Inc. at (604) 247-3300;
Investor Relations at (604) 247-5001; Or visit the company's web site at:
www.vrbpower.com

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VRB POWER SYSTEMS INC.

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