NEW CASTLE, Pa., Aug. 16 /PRNewswire-FirstCall/ -- Axion Power International, Inc. (OTC Bulletin Board: AXPW), the developer of advanced PbC® batteries and energy storage systems, today announced results for its second quarter ended June 30, 2010.

Sales for the second quarter of 2010 were $0.5 million with a net loss of $1.9 million or $0.02 loss per share, an overall improvement from the previous year's second quarter results, which were sales of $0.3 million with a net loss of $5.2 million or $0.20 loss per share. The increase in sales was evenly split between traditional lead acid and PbC products.

At June 30, 2010 cash, net of debt, was $17.6 million. Total assets were $25.6 million and total stockholders' equity was $21.5 million.

"The second quarter of 2010 was notable for progress with real-world applications such as the new co-development project with Norfolk Southern to outfit battery systems for electric locomotives, and the ongoing work with Envision Solar on EV charging stations. Inside Axion Power, significant progress was made in the design of the second-generation manufacturing line for automated carbon electrode production. Several key management positions were filled including Chief Financial Officer, Chief Operating Officer and Vice President of Manufacturing Engineering," said Axion Power CEO Thomas Granville.

"Our core technology is the heart of our value proposition. We feel our PbC batteries offer superior performance and long-life characteristics when compared to even the most advanced lead-acid batteries. PbC batteries will be a low-cost alternative when compared to batteries in the headlines such as the costly Li-ion and NiMH, both of which have unproven recyclability as well. We will be presenting at an international conference in Turkey next month, and as we get closer to that date, we will be announcing our co-presentation with one of the largest automobile manufacturers in the world. We continue to work with our strategic partners, and to engage new partners, as we move to commercialize our products in hybrid automotive vehicles, hybrid trains, military applications and storage applications using our Power Cube," Granville concluded.

In July, the Company resolved long-standing litigation related to the Mercatus transaction that, among other positives for the Company, resulted in the recovery of all legal costs associated with the three year litigation. July also saw the Company complete the final phase of an $800,000 grant project funded by the Commonwealth of Pennsylvania. Subsequent to the end of the second quarter, we had the formal kickoff of our $1,000,000 Office of Naval Research project and are currently engaged in this work for the United States military.

Conference Call / Webcast

Today at 11:00 am ET (8 a.m. Pacific) a conference call will be held to review the AXPW results. Interested parties should call 877-485-3104 (domestic) or 201-689-8579 (international), to access the call. You may also access this call via the Internet by visiting the company's website at www.axionpower.com and clicking on the Investors link. Access to the webcast will be available for 90 days.

For those who are unavailable to listen to the live broadcast, a replay will be available for 7 days and can be accessed by dialing 877-660-6853 (domestic) and 201-612-7415 (international) and using passcode 354903 and account number #356.

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® 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 capacity, is to become the leading supplier of carbon electrode assemblies for the global lead-acid battery industry.

For more information, visit www.axionpower.com

Forward-looking Statements

Certain statements in this Press Release are "forward-looking statements" within the meaning of the Private Securities Litigation Act of 1995. 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 Inc

Thomas Granville, CEO

(724) 654 9300


Allen & Caron Inc

Rudy Barrio (Investors)

r.barrio@allencaron.com

(212) 691-8087


Len Hall (Media)

len@allencaron.com

(949) 474-4300



FINANCIAL TABLES FOLLOW



AXION POWER INTERNATIONAL, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(A Development Stage Company)




June 30, 2010


December 31, 2009



(Unaudited)



ASSETS





Current Assets:





Cash and cash equivalents


$ 18,301,900


$ 23,279,466

Accounts receivable


262,747


194,315

Other receivables


373,424


208,179

Prepaid expenses


288,858


79,987

Inventory, net


1,256,799


1,008,092

Total current assets


20,483,728


24,770,039






Property & equipment, net


5,075,531


4,216,080

Other receivables


71,000


34,601

TOTAL ASSETS


$ 25,630,259


$ 29,020,720






LIABILITIES AND STOCKHOLDERS' EQUITY





Current Liabilities:





Accounts payable


$ 1,512,590


$ 1,375,292

Other liabilities


514,622


82,326

Notes payable


101,684


101,684

Total current liabilities


2,128,896


1,559,302






Deferred revenue


1,024,398


856,237

Derivative liabilities


407,679


1,616,788

Notes payable


598,983


649,549

Total liabilities


4,159,956


4,681,876






Stockholders' Equity:





Convertible preferred stock-12,500,000 shares authorized





Series A preferred � 2,000,000 shares designated 0 shares issued and outstanding (630,897 in 2009)


-


9,069,871

Common stock-125,000,000 shares authorized $0.0001 par value





84,753,302 issued & outstanding (75,767,818 in 2009)


8,475


7,576

Additional paid in capital


85,873,790


76,372,520

Deficit accumulated during development stage


(64,160,365)


(60,859,150)

Cumulative foreign currency translation adjustment


(251,597)


(251,973)

Total Stockholders' Equity


21,470,303


24,338,844






TOTAL LIABILITIES & STOCKHOLDERS' EQUITY


$ 25,630,259


$ 29,020,720








AXION POWER INTERNATIONAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(A Development Stage Company)

UNAUDITED



Three Months Ended


Six Months Ended




June 30


June 30




2010


2009


2010


2009


Product


$ 455,045


$ 277,890


$ 827,462


$ 604,983


Service


17,367


-


157,377


-


Net sales


472,412


277,890


984,839


604,983












Costs and expenses










Product Costs


240,436


163,963


535,278


399,650


Research & development


1,391,721


1,223,817


2,586,109


2,457,784


Selling, general & administrative


1,275,271


1,132,841


2,221,032


2,014,384


Interest expense - related party


5,403


-


10,974


-


Derivative revaluations (income)


(496,411)


2,723,203


(1,064,843)


1,544,514


Interest & other income


(403)


(4,098)


(2,496)


(12,698)


Loss before income taxes


(1,943,605)


(4,961,836)


(3,301,215)


(5,798,651)












Income Taxes


-


-


-


-


Accumulated deficit


(1,943,605)


(4,961,836)


(3,301,215)


(5,798,651)












Less preferred stock dividends and beneficial conversion feature


-


(287,992)


-


(569,142)


Net loss applicable to common shareholders


$(1,943,605)


$(5,249,828)


$ (3,301,215)


$ (6,367,793)












Basic and diluted net loss per share


$ (0.02)


$ (0.20)


$ (0.04)


$ (0.24)












Weighted average common shares outstanding


84,732,423


26,427,019


82,229,988


26,423,233





AXION POWER INTERNATIONAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(A Development Stage Company)


UNAUDITED







Six Months Ended



June 30



2010

2009





Cash Flows from Operating Activities:



Accumulated deficit

$ (3,301,215)

$ (5,798,651)





Adjustments required to reconcile deficit accumulated



for non cash items




Depreciation

263,423

196,685


Derivative revaluations (income)

(1,064,843)

1,544,514


Share based compensation expense

229,927

470,926





Changes in operating assets & liabilities




Accounts receivable

(68,432)

(125,871)


Other receivables

(165,245)

51,419


Prepaid expenses

(208,871)

43,856


Inventory, net

(248,707)

(456,027)


Accounts payable

137,298

376,305


Other liabilities

432,296

12,066


Deferred revenue and other

168,161

(42,028)






Net cash used by operating activities

(3,826,208)

(3,726,806)





Cash Flows from Investing Activities




Escrow deposits for foreign patent applications

-

(68,160)


Short term investments

-

2,193,920