NEW CASTLE, Pa., May 15 /PRNewswire-FirstCall/ -- Axion Power International, Inc. (OTC Bulletin Board: AXPW), filed its 10-Q yesterday for the quarter ended March 31, 2009. For the period, the development-stage company reported revenues of $327,093 with a net loss of $2.3 million or $0.09 loss per share, vs revenues of $215,727 for the first quarter of 2008, with a net loss of $3.0 million or $0.17 loss per share.

Subsequent to the end of the quarter, Axion Power announced the signing of an agreement to supply its PbC(R) batteries, its PbC(TM) energy storage technology and certain PbC components to Alpharetta, GA-based Exide Technologies Inc (Nasdaq: XIDE). The companies intend to use the batteries in a 3-phase program beginning with an initial test period with escalating deliveries of batteries by Axion. The goal is to market batteries for electric vehicles, hybrid electric vehicles, plug-in electric vehicles, electric grid applications, military and marine transport applications, automobiles and light trucks and a variety of other applications.

CEO Thomas Granville commented, "During the first quarter we had two major initiatives: to bring our carbon electrode manufacturing to New Castle, install it and begin automated production of our proprietary electrode material - and to bring to fruition negotiations with large potential distributors and eventual users of our proprietary product. The first of those goals has now been accomplished - the automated equipment has been completely installed and is being debugged. The achievement of the second of those goals is evidenced by our agreement with Exide. We will be selling product to them for testing and distribution to their customers. This agreement will not restrict us from marketing directly to the applications that are important to us such as power quality, grid storage, wind, solar and the automotive conversion market.

"An ongoing goal for us has been to reduce expenses, especially SG&A, and our current quarter reflects a sharp reduction in that area. We are also fully cognizant that what distinguishes Axion from other battery companies is our proprietary technology and learned know how. We are always looking for R&D and engineering talent and we have increased our budget and expenditures in this area as we prepare to take the company to a new level of science and manufacturing production."

Granville continued, "We have also maintained production of our own collector-car batteries and race-car batteries. Additionally, we are producing a line of flooded batteries to more profitably fill some of the capacity created from a slow down in the markets serviced by our major customer, a large lead acid battery company. Toll processing has always been viewed as a 'filler' strategy for us and in Q-1 we introduced a line of AGM lead acid batteries - the Sure Energy product, which will eventually fill some of the flooded line production area. This 'superior margin' AGM product line will eventually evolve into our PbC product which will use an identical case, cover and separator material. We have also begun work on our aggregate of $2.38 million in grants from the US DOD, the Commonwealth of Pennsylvania and the Advanced Lead Acid Battery Consortium (ALABC). And finally, but most importantly, we are working through the specifications of the products we will be providing to Exide and we anticipate commencing delivery of the initial test quantities of those PbC batteries during the upcoming quarter.

"There are numerous markets available to us and we are picking our spots. An example is a project to build a renewable-energy electric-car charging station; we are working on that project with a privately held company called Envision Solar, based in San Diego and their partnership includes car manufacturer - Bright Automotive. We are also participating in demonstration projects with NYSERDA for the storage of renewable energy collected from rooftop solar panels at CUNY College in New York City, and on another project with NYSERDA to test our PbC batteries for use with electric grid applications. The utility site demonstration project has repeatedly been delayed by regulatory and other issues having nothing to do with our batteries, but we are optimistic that it will go ahead in the relatively near future," Granville concluded.

At March 31, the Company had cash of $3.2 million, a current ratio of 3.18:1 and no long-term debt. Stockholders' equity stood at $6.1 million.

Conference Call / Webcast

The Company will hold a conference call on Wednesday, May 20 at 11:00 am ET to review AXPW results; interested parties should call 866-804-6922 (domestic) or 857-350-1668 (international), with passcode 10379282 to access the call. You may also access this call via the Internet at:

http://phx.corporate-ir.net/playerlink.zhtml?c=155732&s=wm&e=2222438

For those who are unavailable to listen to the live broadcast, a replay will be available for 30 days and can be accessed by dialing 888 286 8010 (domestic) and 617 801 6888 (international) and using passcode 99344334.

About Axion Power International, Inc.

Axion has developed and patented a next generation energy storage device that won the prestigious Frost & Sullivan Technology Award for North America in the field of lead-acid batteries. According to Frost & Sullivan, Axion's new PbC(R) batteries have "the potential to revitalize the lead-acid battery industry by breathing new life into an established technology that is not well suited to the requirements of important new applications like hybrid electric vehicles and renewable power."

Axion Power International, Inc. is the industry leader in the field of lead-acid-carbon energy storage technologies. Axion believes this new battery technology is the only class of advanced battery that can be assembled on existing lead-acid battery production lines throughout the world without significant changes to production equipment and fabrication processes. It also believes it will be able to manufacture carbon electrode assemblies in volume at low cost using standard automated production methods that are commonly used in other industries. If and when its electrode manufacturing methods are fully developed, Axion believes it will be able to sell carbon electrode assemblies as virtual plug-and-play replacements for lead-based negative electrodes used by all other lead-acid battery manufacturers. Axion's future goal, after filling their plant's lead-carbon battery production, is to become the leading supplier of carbon electrode assemblies for the lead-acid battery industry.

For more information, visit www.axionpower.com.

Forward-looking Statements/Axion Power

Certain statements in this Press Release are "forward-looking statements" within the meaning of the Private Securities Litigation Act of 1995. These statements include, without limitation, statements concerning the Company's ability to expand its manufacturing capabilities and bring its new PbC(R) based battery products to market, the Company's belief that its completed products will be the only class of advance battery of its kind and that it will be a viable replacement for older generation lead-acid batteries. These forward-looking statements are based on our current expectations and beliefs and are subject to a number of risk factors and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. Such risks and uncertainties include the risk for the Company to complete its development work, as well as the risks inherent in commercializing a new product (including technology risks, market risks, financial risks and implementation risks, and other risks and uncertainties affecting the Company), as well as other risks that have been included in filings with the Securities and Exchange Commission, all of which are available at www.sec.gov. We disclaim any intention or obligation to revise any forward-looking statements, including, without limitation, financial estimates, whether as a result of new information, future events, or otherwise.

    Contacts
    Axion Power International
    Kelly Gubish
    kgubish@axionpower.com
    (724) 654 9300
    Allen & Caron Inc
    Rudy Barrio (Investors)
    r.barrio@allencaron.com
    (212) 691-8087
    Brian Kennedy (Media)
    brian@allencaron.com
    (212) 691-8087
                           - FINANCIAL TABLES FOLLOW -

                         AXION POWER INTERNATIONAL, INC
                     CONSOLIDATED STATEMENTS OF OPERATIONS
                         (A Development Stage Company)
                                    UNAUDITED
                                                  Three Months Ended
                                                        March 31,
                                                  2009           2008
    Revenues                                   $327,093       $215,727
    Costs of goods sold                         235,687        105,090
    Gross profit                                 91,406        110,637
    Expenses
    Research & development                    1,233,967        671,163
    Selling, general & administrative           881,543      1,713,165
    Interest expense - related party                  -        419,673
    Impairment of assets                              -              -
    Derivative revaluation                            -         (2,844)
    Mega C Trust Share Augmentation (Return)          -              -
    Interest & other income, net                 (8,600)       (11,328)
    Net loss before income taxes             (2,015,504)    (2,679,192)
    Income Taxes                                      -              -
    Deficit accumulated during
     development stage                       (2,015,504)    (2,679,192)
    Less preferred stock dividends and
     beneficial conversion feature             (281,150)      (287,415)
    Net loss applicable to common
     shareholders                           $(2,296,654)   $(2,966,607)
    Basic and diluted net loss per share         $(0.09)        $(0.17)
    Weighted average common shares
     outstanding                             26,419,404     17,861,987

                        AXION POWER INTERNATIONAL, INC
                          CONSOLIDATED BALANCE SHEETS
                         (A Development Stage Company)
                                                      March 31,  December 31,
                                                        2009          2008
                                                     (Unaudited)
    ASSETS
    Current Assets:
    Cash and cash equivalents                        $3,212,217   $3,124,168
    Short-term investments                                    -    2,193,920
    Accounts receivable                                 250,861      128,035
    Other receivables                                     6,527       64,456
    Prepaid expenses                                    119,505       78,989
    Inventory                                         1,470,624    1,269,515
    Total current assets                              5,059,734    6,859,083
    Property & equipment, net                         3,337,271    3,274,183
    Other receivables, non-current                       64,623       28,388
    TOTAL ASSETS                                     $8,461,628  $10,161,654
    LIABILITIES AND STOCKHOLDERS' EQUITY
    Current Liabilities:
    Accounts payable                                 $1,470,857   $1,324,287
    Other current liabilities                           120,655      162,580
    Total current liabilities                         1,591,512    1,486,867
    Deferred revenue                                    730,082      751,096
    Total liabilities                                 2,321,594    2,237,963
    Stockholders' Equity:
    Convertible preferred stock-12,500,000
     shares authorized
    . Senior preferred - 1,000,000 shares designated
    . 137,500 issued and outstanding
       (137,500 in 2008)                              1,693,851    1,656,735
    . Series A preferred - 2,000,000 shares designated
    . 718,997 shares issued and outstanding
       (718,997 in 2008)                              9,684,392    9,440,359
    Common stock-100,000,000 shares
     authorized $0.0001 par value
     26,420,437 issued & outstanding
     (26,417,437 in 2008)                                 2,641        2,641
    Additional paid in capital                       46,419,195   46,184,287
    Deficit accumulated during development
     stage                                          (51,407,716) (49,111,062)
    Cumulative foreign currency
     translation adjustment                            (252,329)    (249,269)
    Total Stockholders' Equity                        6,140,034    7,923,691
    TOTAL LIABILITIES & STOCKHOLDERS'
     EQUITY                                          $8,461,628  $10,161,654

SOURCE Axion Power International, Inc.