Electrovaya Inc.
TSX : EFL
OTCQX : EFLVF

Electrovaya Inc.

December 20, 2017 19:36 ET

Electrovaya Enters into Commitment for an $8 million Equity Facility and Announces a $2 million Private Placement

TORONTO, ONTARIO--(Marketwired - Dec. 20, 2017) -

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Electrovaya Inc. (TSX:EFL)(OTCQX:EFLVF) ("Electrovaya", or the "Company") is pleased to announce that it has entered into a binding term sheet for a drawdown equity facility (the "Facility") with MMCAP International Inc. SPC (the "Investor") of up to $8,000,0000 for a term of twelve months. Under the Facility, the Company may, in one or more drawdowns, sell to the Investor, and the Investor shall purchase from the Company, on a private placement basis, and in accordance with the terms of the definitive agreements to be entered into in respect of the Facility, that number of common shares in the capital of the Company ("Common Shares") specified in a drawdown notice at a purchase price equal to the volume-weighted average trading price ("VWAP") of the Common Shares on the Toronto Stock Exchange ("TSX") for the five trading days after the applicable drawdown notice date, provided that aggregate drawdowns in any calendar month shall not exceed $2,000,000.

The Company may only initiate a drawdown under the Facility provided that, among other things: (i) the VWAP of the Common Shares on the TSX for the five trading days preceding the applicable drawdown date exceeds $0.50 per Common Share; (ii) the market capitalization of the Company exceeds $50,000,000; and (iii) the terms to any drawdown in the definitive agreements in respect of the Facility are satisfied. A minimum of ten trading days must pass between the completion of one drawdown and the initiation of another, subject to waiver by the Investor. The Facility is subject to the entering into of definitive agreements between the Investor and the Company.

As consideration for the Investor's commitment under the Facility, Electrovaya shall issue the Investor 4,000,000 common share purchase warrants (the "Commitment Warrants"), with each Commitment Warrant being exercisable to purchase one Common Share at a price of $0.74 for a period of 60 months from the date the definitive agreements governing the Facility are entered into.

In addition, the Investor has agreed to purchase, on a private placement basis, 3,333,333 units (the "Units") from the Company at a price of $0.60 per Unit, with each Unit consisting of one Common Share and one Common Share purchase warrant (each, a "Unit Warrant"). Each Unit Warrant entitles the holder thereof to acquire one Common Share at a price of $0.73 for a period of 60 months from the date of issuance. The private placement is expected to close on or about December 21, 2017.

The Common Shares and Unit Warrants will be subject to a hold period of four months plus a day from the date of issuance pursuant to applicable securities laws. The proceeds of the private placement and any drawdown under the Facility will be used for general working capital purposes.

Each of the private placement and the Facility, and any drawdowns under the Facility, are subject to the approval of the Toronto Stock Exchange.

Each of the private placement and the entering into of the Facility constitute a "related party transaction" for Electrovaya within the meaning of that term pursuant to Multilateral Instrument 61-101 of the Canadian Securities Administrators - Protection of Minority Security Holders in Special Transactions ("MI 61-101"), as MMCAP "beneficially owns" (within the meaning of that term under MI 61-101) greater than 10% of the outstanding Common Shares. MI 61-101 provides that related party transactions are, in the absence of an exemption therefrom, subject to the requirement to obtain a formal valuation for the subject matter of the related party transaction and minority shareholder approval of the related party transaction (which approval shall exclude any votes attached to Common Shares held by the participating related party). The Company is relying on the exemptions from the formal valuation and minority approval requirements of MI 61-101 in respect of the transactions provided for in sections 5.5(a) and 5.7(1)(a) of MI 61-101 - Fair Market Value Not More than 25% of Market Capitalization.

Also pursuant to MI 61-101, the private placement and the Facility are subject to enhanced disclosure, to be included in a material change report filed in connection therewith. The material change report will be filed less than 21 days prior to the expected closing of the private placement and the entering into of the Facility. Management of the Company believes this was reasonable and necessary in the circumstances, as it will allow the Company to take advantage of time-sensitive financing opportunities.

About Electrovaya Inc.

Electrovaya Inc. (TSX:EFL)(OTCQX:EFLVF) designs, develops and manufactures proprietary Lithium Ion Super Polymer® batteries, battery systems, and battery-related products for energy storage, clean electric transportation and other specialized applications. Electrovaya, through its fully owned subsidiary, Litarion GmbH, also produces cells, electrodes and SEPARION™ ceramic separators and has manufacturing capacity of about 500MWh/annum. Electrovaya is a technology focused company with extensive patents and other Intellectual Property. Headquartered in Ontario, Canada, Electrovaya has production facilities in Canada and Germany with customers around the globe.

To learn more about how Electrovaya and Litarion is powering mobility and energy storage, please explore www.electrovaya.com, www.litarion.com and www.separion.com.

This press release contains forward‐looking statements, including statements that relate to, among other things, the use of proceeds of the private placement and Facility, revenue forecasts, technology development progress, plans for shipment using the Company's technology, production plans, the Company's markets, objectives, goals, strategies, intentions, beliefs, expectations and estimates, and can generally be identified by the use of words such as "may", "will", "could", "should", "would", "likely", "possible", "expect", "intend", "estimate", "anticipate", "believe", "plan", "objective" and "continue" (or the negative thereof) and words and expressions of similar import. Although the Company believes that the expectations reflected in such forward‐looking statements are reasonable, such statements involve risks and uncertainties, and undue reliance should not be placed on such statements. Certain material factors or assumptions are applied in making forward‐looking statements, and actual results may differ materially from those expressed or implied in such statements. Important factors that could cause actual results to differ materially from expectations include but are not limited to: market conditions and demand for the Company's securities; general business and economic conditions (including but not limited to currency rates and creditworthiness of customers); Company liquidity and capital resources, including the availability of additional capital resources to fund its activities; level of competition; changes in laws and regulations; legal and regulatory proceedings; the ability to adapt products and services to the changing market; the ability to attract and retain key executives; and the ability to execute strategic plans. Additional information about material factors that could cause actual results to differ materially from expectations and about material factors or assumptions applied in making forward‐looking statements may be found in the Company's most recent annual and interim Management's Discussion and Analysis under "Risk and Uncertainties" as well as in other public disclosure documents filed with Canadian securities regulatory authorities. The Company does not undertake any obligation to update publicly or to revise any of the forward‐looking statements contained in this document, whether as a result of new information, future events or otherwise, except as required by law.

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