ZBB Energy Enters New Phase of Strategic Partnership with Lotte Chemical

ZBB Energy Corporation has entered into a new product development partnership and expanded license agreement with Lotte Chemical Company (formerly Honam Petrochemical). Under the terms of the strategic partnership, Lotte will acquire an expanded non-exclusive license to sell the ZBB's zinc-bromide continuous flow battery globally with the exception of the United States and China. In addition, ZBB Energy and Lotte entered into a new research development agreement. The next generation 500kWh battery represents a tenfold increase in storage capabilities relative to the current ZBB EnerStore® 50kWh product.

With the signing of these agreements, ZBB realizes a substantial improvement in their cash position, as well as longer term opportunities for additional revenues and cash flow. With the additional cash flow resulting from these agreements, ZBB expects sufficient capital to fund operations through at least fiscal year 2014, and ongoing contributions to the Company's operating capital throughout most of fiscal year 2015.

"The need for distributed, renewable energy and energy storage systems are becoming a greater global priority," said a senior Lotte representative. "With its first-to-market zinc-bromide battery technology, ZBB Energy is the leader within the energy storage space and a great partner to work with in further developing grid applications."

"Since 2011, Lotte Chemical has been a supportive partner in the development of our zinc-bromide battery system, and we are very pleased to extend our relationship," said Eric C. Apfelbach, President and CEO. "We believe Lotte's research has the ability to achieve lower costs and greater performance from current batteries. In addition, we expect that their sales channels provide an excellent platform to accelerate the broad-scale commercialization of the batteries. Multi-Megawatt grid scale deployment plans are currently being proposed or mandated in California, New York State, Europe, and China. In addition, the South Korean Ministry of Trade, Industry, and Energy recently made a proposal that could mandate the purchase of energy storage systems and provide financial support up to 50% of the system cost for small and medium-sized firms affected by the plan. With this strategic partnership in place, ZBB is very well-positioned to scale quickly to meet this rapidly growing list of opportunities.”