An after tax loss of $4.2 million, or $0.15 per share, was incurred in the Company's investment portfolio, primarily reflecting the market declines in the value of its high-yield fund investment and holdings of energy company shares.

The Asset/Wealth Management division's pretax earnings climbed to $8.2 million for the third quarter of 2008 from $6.7 million in the prior year quarter, a 23% increase. Asset/Wealth Management revenue was essentially flat at $26.6 million. Assets under management at the end of the quarter were $10.3 billion, down 6% from the end of June, adjusted for the Salient sale, reflecting the effects of the market decline during the quarter.

The Capital Markets division recorded pretax profits of $1.1 million during the third quarter of 2008, down from $2.4 million during the third quarter of 2007, impacted by difficult industry-wide conditions.

The Company had earlier announced the sale of its interests in Salient Partners, L.P. and Endowment Advisers, L.P., and its affiliates for $95 million in future payments. Sanders Morris Harris Group paid $16 million in 2003 for its ownership in Salient and Endowment Advisers. The after tax gain of $30.1 million realized in the third quarter is based on the net present value of the expected payments from Salient Partners and Endowment Advisers.

The Company has no funded debt. Its tangible net worth at the end of the third quarter was $147.3 million.

Revenue for the first nine months of 2008 was $141.7 million compared to $137.8 million in 2007. Net income totaled $33.0 million, or $1.23 per diluted share, during the first nine months of 2008 compared to $5.7 million, or $0.23 per diluted share, in 2007.

Conference Call

The Company will host a conference call on Tuesday, November 11th to discuss third quarter 2008 financial and operational results. The call will begin at 9:00 a.m. Central Time, and is open to the public. To listen to the conference call, use U.S. dial-in number (877) 748-8103 or International dial-in number (706) 634-7604 and enter pass code 72990676. It is recommended that listeners phone in at least 10 minutes before the call is scheduled to begin to avoid delay. For those unable to listen to the live call, a replay of the conference call in its entirety will be available approximately two hours after its completion for 30 days by dialing (800) 642-1687 (U.S.) or (973) 200-3966 (International) and entering the pass code 72990676.

About Sanders Morris Harris Group

Sanders Morris Harris Group is a financial services company that manages $10.3 billion in client assets. It has two primary businesses. Asset/Wealth Management, the largest, provides highly regarded wealth advisory and asset management services to individuals and institutions. The other, Capital Markets, offers investment banking, institutional brokerage, trading, and research to a variety of institutions and middle market companies. Its corporate philosophy of investment in common aligns its interests with those of its clients. Sanders Morris Harris has over 600 employees in 21 states. Additional information is available at http://www.smhgroup.com.

In addition to the historical information, this press release contains certain forward-looking statements under federal securities laws, including statements regarding Sanders Morris Harris Group's expected future business prospects, revenue and income. These forward-looking statements are based upon current expectations and involve certain risks and uncertainties that could cause actual results to differ materially from any such statement. These risks and uncertainties, many of which are beyond the Company's control, include, but are not limited to (1) trading volume in the securities markets; (2) volatility of the securities markets and interest rates; (3) changes in regulatory requirements that could affect the demand for the Company's services or the cost of doing business; (4) general economic conditions, both domestic and foreign, especially in the regions where the Company does business; (5) changes in the rate of inflation and related impact on securities markets; (6) competition from existing financial institutions and other new participants in the securities markets; (7) legal developments affecting the litigation experience of the securities industry; (8) successful implementation of technology solutions; (9) changes in valuations of the Company's trading and warrant portfolios resulting from mark-to-market adjustments; (10) dependence on key personnel; (11) demand for the Company's services; and (12) litigation and securities law liabilities. The Company does not undertake any obligation to publicly update or revise any forward-looking statements.

                   Selected Condensed Operating Information
                   (in thousands, except per share amounts)
                                 (unaudited)

                                      Three Months Ended    Nine Months Ended
                                         September 30,         September 30,
                                        2008       2007       2008      2007

    Revenue                          $ 46,960   $ 46,150   $141,686  $137,830
    Expenses                           44,491     39,350    127,597   122,122
      Net                               2,469      6,800     14,089    15,708
    Equity in income of
     limited partnerships              43,285        711     46,556     4,298
    Minority interests                    941     (4,586)    (7,011)  (10,946)
      Income before income taxes       46,695      2,925     53,634     9,060
    Provision for income taxes        (17,735)    (1,082)   (20,589)   (3,371)
    Net income                       $ 28,960   $  1,843   $ 33,045  $  5,689

    Earnings per common share:
      Basic                          $   1.03   $   0.07   $   1.24  $   0.23
      Diluted                        $   1.03   $   0.07   $   1.23  $   0.23

    Weighted average shares
     outstanding:
      Basic                            28,033     24,801     26,583    24,715
      Diluted                          28,192     25,095     26,764    25,038



                                         September 30,
                                        2008       2007
    Balance sheet data:
    Cash and cash equivalents        $ 26,025   $ 38,973
    Other tangible net assets         121,226     92,022
      Tangible net assets            $147,251   $130,995
    Shareholders' equity             $279,780   $225,955



                   Selected Condensed Operating Information
                                (in thousands)
                                 (unaudited)

                                      Three Months Ended    Nine Months Ended
                                         September 30,         September 30,
                                        2008       2007       2008      2007
    Revenue:
      Asset/Wealth Management        $ 26,624   $ 26,878   $ 82,360  $ 76,583
      Capital Markets:
        Investment banking              3,373      5,994      8,771    19,798
        Institutional brokerage         5,039      3,936     13,777    12,301
        Prime brokerage services       14,116      8,701     35,300    26,372
          Capital Markets Total        22,528     18,631     57,848    58,471
      Corporate Support and Other      (2,192)       641      1,478     2,776
                             Total   $ 46,960   $ 46,150   $141,686  $137,830

    Income (loss) before equity in
     income (loss) of limited
     partnerships, minority
     interests and income taxes:
      Asset/Wealth Management        $  8,891   $  8,414   $ 26,627  $ 21,619
      Capital Markets:
        Investment banking             (1,033)     1,327     (3,663)    4,532
        Institutional brokerage           828        306      1,201     1,117
        Prime brokerage services        1,303        739      2,750     2,748
          Capital Markets Total         1,098      2,372        288     8,397
      Corporate Support and Other      (7,520)    (3,986)   (12,826)  (14,308)
                             Total   $  2,469   $  6,800   $ 14,089  $ 15,708

    Equity in income (loss) of
     limited partnerships:
      Asset/Wealth Management        $ (1,661)  $  2,827   $  3,716  $  6,146
      Capital Markets:
        Investment banking                  -          -          -         -
        Institutional brokerage             -          -          -         -
        Prime brokerage services            -          -          -         -
          Capital Markets Total             -          -          -         -
      Corporate Support and Other      44,946     (2,116)    42,840    (1,848)
                             Total   $ 43,285   $    711   $ 46,556  $  4,298

    Minority interests in net
     (income) loss of consolidated
     companies:
      Asset/Wealth Management        $    941   $ (4,586)  $ (7,011) $(10,946)
      Capital Markets:
        Investment banking                  -          -          -         -
        Institutional brokerage             -          -          -         -
        Prime brokerage services            -          -          -         -
          Capital Markets Total             -          -          -         -
      Corporate Support and Other           -          -          -         -
                             Total   $    941   $ (4,586)  $ (7,011) $(10,946)

    Income (loss) before income
     taxes:
      Asset/Wealth Management        $  8,171   $  6,655   $ 23,332  $ 16,819
      Capital Markets:
        Investment banking             (1,033)     1,327     (3,663)    4,532
        Institutional brokerage           828        306      1,201     1,117
        Prime brokerage services        1,303        739      2,750     2,748
          Capital Markets Total         1,098      2,372        288     8,397
      Corporate Support and Other      37,426     (6,102)    30,014   (16,156)
                             Total   $ 46,695   $  2,925   $ 53,634  $  9,060

SOURCE Sanders Morris Harris Group Inc.

http://www.smhgroup.com

The report will be available on the ZBB Energy website at http://www.zbbenergy.com/investorrelations/investoroverview.htm, in addition to the SMH Market & Liquidity website at http://www.smhmls.com.

About ZBB Energy

ZBB Energy Corporation (AMEX: ZBB) provides clean energy storage solutions based on proprietary zinc rechargeable energy storage technology that addresses requirements in multiple markets such as alternative energy applications, large electrical utilities and green residential and commercial architecture. A developer and manufacturer of its modular, transportable and environmentally friendly Zinc Energy Storage Solutions ("ZESS"), ZBB was founded in 1981 as an R&D company and is headquartered in Wisconsin with offices located in Perth, Australia.

Safe Harbor

Except for the historical information contained herein, the matters set forth in this press release, including the description of the company and its product offering, are forward-looking statements within the "safe harbor" provision of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to risk and uncertainties that may cause actual results to differ materially, including historical volatility and low trading volume of our stock, the risk and uncertainties inherent in the early stages of growth companies, the company's need to raise substantial additional capital to proceed with its business, risks associated with competitors, and other risks detailed from time to time in the company's most recent filings with the Securities and Exchange Commission. These forward-looking statements speak only as of the date hereof. The company disclaims any intent or obligation to update these forward-looking statements.

     Contact Information:

     Robert Parry
     Chief Executive Officer
     ZBB Energy Corporation
     T: 262-253-9800
     Email: rparry@zbbenergy.com

     Joanne Verkuilen
     SMH Capital Inc.
     Market & Liquidity Services
     T: 212-893-1122
     Email: joanne.verkuilen@smhcapital.com

About SMH Market & Liquidity Services

SMH Market & Liquidity Services is an affiliate of SMH Capital Inc., a registered broker-dealer and a member of FINRA and SIPC, and a subsidiary of Sanders Morris Harris Group. SMH Market & Liquidity Services helps small cap companies seeking to expand their investor exposure and market depth and breadth through a broad spectrum of services that include comprehensive perspective reports, strategic shareholder communications, and trading analysis. SMH Market & Liquidity Services receives compensation from its company clients for all communications and publications prepared on its behalf (http://www.smhmls.com). In addition, SMH Capital may provide, or may have provided, any of its services to the subject company, including market making, specialized and other proprietary trading, fund management, investment services and investment banking. This is not a solicitation to buy or offer to sell the subject company's securities.

SOURCE ZBB Energy Corporation

http://www.zbbenergy.com

In January, 2003 Mr. Marotta became the secretary of the Department of Administration for the state of Wisconsin under Governor Jim Doyle. As secretary of the DOA, Mr. Marotta oversaw state government operations, prepared and implemented the state's $54 billion biennial budget and acted as the Governor's chief cabinet adviser. During his tenure, Mr. Marotta served on the State of Wisconsin Investment Board, the Board of University Hospitals and Clinics and the Wisconsin Center District Board.

Mr. Marotta currently serves on the boards of the Bradley Center, Summerfest (Milwaukee World Festival), Boys and Girls Club of Greater Milwaukee, Milwaukee Symphony, Marcus Center for the Performing Arts, and the Greater Milwaukee Committee.

Mr. Marotta is a 1987 graduate of Harvard Law School and a 1984 graduate of Marquette University, where he studied economics, political science and English, and was a three-time academic All-American basketball player.

About ZBB Energy Corporation

ZBB Energy Corporation develops and manufactures distributed energy storage solutions based on the Company's proprietary environmentally friendly, zinc rechargeable electrical energy storage technology. The unique modular construction of the Company's core 50 kWh product enables ZBB's fuel cell type energy storage system to be sized and packaged as products (ZESS 50(TM), ZESS 500(TM)) as well as a fully customized, large format, energy storage system. This scalable, mobile system is ideally suited for large market applications.

Safe Harbor

Except for the historical information contained herein, the matters set forth in this press release, including the description of the company and its product offerings, are forward-looking statements within the meaning of the "safe harbor" provision of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially, including the historical volatility and low trading volume of our stock, the risk and uncertainties inherent in the early stages of growth companies, the company's need to raise substantial additional capital to proceed with its business, risks associated with competitors, and other risks detailed from time to time in the company's most recent filings with the Securities and Exchange Commission. These forward-looking statements speak only as of the date hereof. The company disclaims any intent or obligation to update these forward-looking statements.

     Contact Information:

     Robert Parry
     Chief Executive Officer
     ZBB Energy Corporation
     T: 262.253.9800
     Email: rparry@zbbenergy.com

     Joanne Verkuilen
     SMH Market & Liquidity Services, SMH MLS LLC
     T: 212-893-1122
     joanne.verkuilen@smhmls.com

About SMH Market & Liquidity Services

SMH MLS LLC is an affiliate of SMH Capital Inc., a registered broker-dealer and a member of FINRA and SIPC, and a subsidiary of Sanders Morris Harris Group. SMH Market & Liquidity Services assists small cap companies seeking to expand their investor exposure and market depth and breadth through a broad spectrum of services that include comprehensive perspective reports, strategic shareholder communications, and trading analysis. SMH Market & Liquidity Services receives compensation from its company clients for all communications and publications prepared on its behalf. SMH MLS may engage SMH Capital to provide research coverage for one of its client. In addition, SMH Capital may provide, or may have provided, any of its services to the subject company, including market making, specialized and other proprietary trading, fund management, investment services and investment banking. This is not a solicitation to buy or offer to sell or the subject company's securities.

SOURCE ZBB Energy Corporation

http://www.zbbenergy.com

Expected next dividend:
Dividend Announcement Date: 9/8/2008
Dividend Record Date: 10/1/2008
Dividend Pay Date: 10/15/2008
Dividend Amount: 0.045