NEW CASTLE, Pa., Nov. 15, 2010 /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 third quarter ended September 30, 2010.

Net sales for the third quarter of 2010 were $0.6 million with a net loss of $0.7 million or $0.01 loss per share compared to the previous year's third quarter net sales of $1.0 million with a net loss of $13.9 million or $0.64 loss per share. The decrease in net product sales for both third quarter and year to date 2010 compared to 2009 was primarily due to the sales of traditional batteries to a large scale buyer group in the third quarter of 2009 that did not reoccur in the third quarter of 2010.

At September 30, 2010, cash, net of debt, was $15.6 million. Total assets were $24.8 million and total stockholders' equity was $21.0 million.

"In the third quarter of 2010, we continued to make progress on several fronts" said Thomas Granville CEO of Axion. "In July, we completed work on an initial $800,000 grant awarded to us in 2009 by the Pennsylvania Alternative Fuels Incentive Grant program, and we recovered a total of $763,000 against this award. We have already begun work on our next two grants awarded to us by Pennsylvania's Department of Economic Development through its PEDA and CFA agencies. These grants will be used in funding our PowerCube™ and solar tree projects which will be constructed at our facilities located in New Castle, PA. The solar tree project is in partnership with Envision Solar. In November, the PowerCube components were delivered to our facility, complete with battery racking and provisions for electronics and for our proprietary battery management system. Separately, work has begun on integrating the necessary electronics into the system. The Norfolk Southern hybrid locomotive project continues to move forward and, as planned, the PowerCube will present us with an opportunity to test strings of batteries and electronics for this hybrid locomotive application, which can literally be characterized as a "PowerCube on wheels".

"We also continue to further explore relationships with several strategic partners, in and out of the lead acid battery industry, that would provide us the best opportunities to bring our PbC products to market. In September, at the European Lead Battery Conference in Istanbul, we made a joint presentation with BMW which detailed some of the joint battery testing we have been doing with them. The sophisticated test protocol that was referenced is focused on the requirements of the emerging stop/start micro hybrid vehicle market. EU legislation requires reduction in CO2 emissions, with an accompanying increase in mpg, beginning in 2012 and evolving to 100% average of the fleet compliance by 2015. The US regulations follow closely behind requiring a more than 60% mpg increase by 2016. The technology primarily chosen by the OE's to meet these targets is the micro hybrid incorporating stop/start. We feel the data produced by testing our PbC battery in a real world test protocol developed by the OE's, clearly shows that our product, with its dramatically higher rate of charge acceptance, provides the most economical, and least disruptive, path to providing a battery system that meets the demands of the micro hybrid market. BMW is of course not the only OE we are working with", Granville concluded.

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 utilizing Axion's proprietary carbon electrodes. 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

Lisa Herrington, (Investor Relations)

(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)



September 30, 2010


December 31, 2009


(Unaudited)



ASSETS




Current Assets:




Cash and cash equivalents

$ 16,283,708


$ 23,279,466

Accounts receivable

427,039


194,315

Other receivables

366,451


208,179

Prepaid expenses

83,872


79,987

Inventory, net

1,626,058


1,008,092

Total current assets

18,787,128


24,770,039





Property & equipment, net

5,926,372


4,216,080

Other receivables

68,000


34,601

TOTAL ASSETS

$ 24,781,500


$ 29,020,720





LIABILITIES AND STOCKHOLDERS' EQUITY




Current Liabilities:




Accounts payable

$ 1,248,722


$ 1,375,292

Other liabilities

204,125


82,326

Notes payable

101,684


101,684

Total current liabilities

1,554,531


1,559,302





Deferred revenue

1,314,135


856,237

Derivative liabilities

313,886


1,616,788

Notes payable

573,383


649,549

Total liabilities

3,755,935


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




85,155,002 issued & outstanding (75,767,818 in 2009)

8,515


7,576

Additional paid in capital

86,152,005


76,372,520

Deficit accumulated during development stage

(64,883,369)


(60,859,150)

Cumulative foreign currency translation adjustment

(251,586)


(251,973)

Total Stockholders' Equity

21,025,565


24,338,844





TOTAL LIABILITIES & STOCKHOLDERS' EQUITY

$ 24,781,500


$ 29,020,720



AXION POWER INTERNATIONAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(A Development Stage Company)






Three Months Ended


Nine Months Ended


September 30


September 30


2010


2009


2010


2009

Product

$ 256,898


$ 962,833


$ 1,084,360


$ 1,567,816

Service

337,056


-


494,433


-

Net sales

593,954


962,833


1,578,793


1,567,816









Costs and expenses








Product Costs

142,203


981,273


677,481


1,380,923

Research & development

1,175,945


869,892


3,762,054


3,327,676

Selling, general & administrative

63,518


873,213


2,284,550


2,887,597

Interest expense - related party

5,170


44,881


16,144


44,881

Derivative revaluations (income)

(67,414)


12,048,203


(1,132,257)


13,592,717

Interest & other income

(2,464)


(1,341)


(4,960)


(14,039)

Loss before income taxes

(723,004)


(13,853,288)


(4,024,219)


(19,651,939)









Income Taxes

-


-


-


-

Accumulated deficit

(723,004)


(13,853,288)


(4,024,219)


(19,651,939)









Less preferred stock dividends and beneficial conversion feature

-


(3,302,428)


-


(3,871,570)

Net loss applicable to common shareholders

$(723,004)


$(17,155,716)


$ (4,024,219)


$ (23,523,509)









Basic and diluted net loss per share

$ (0.01)


$ (0.64)


$ (0.05)


$ (0.89)









Weighted average common shares outstanding

85,050,137


26,676,678


83,180,368


26,508,643











AXION POWER INTERNATIONAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(A Development Stage Company)


UNAUDITED



Nine Months Ended



September 30



2010

2009

Cash Flows from Operating Activities:



Accumulated deficit

$ (4,024,219)

$ (19,651,939)





Adjustments to reconcile deficit accumulated for non cash items




Depreciation

448,690

306,906


Interest expense

-

30,536


Derivative revaluations (income)

(1,132,257)

13,592,717


Share based compensation expense

293,507

747,441





Changes in operating assets & liabilities




Accounts receivable

(232,724)

(635,828)


Other receivables

(158,272)

51,419


Prepaid expenses

(3,885)

25,347


Inventory, net

(617,966)

63,109


Accounts payable

(126,570)

586,263


Other liabilities

121,799

(65,019)


Deferred revenue and other

457,928

(63,043)


Net cash used by operating activities

(4,973,969)

(5,012,091)





Cash Flows from Investing Activities