13:35:19 EDT Thu 28 Mar 2024
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or Name
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CA



Electrovaya Inc
Symbol EFL
Shares Issued 87,183,642
Close 2016-10-18 C$ 3.23
Market Cap C$ 281,603,164
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Electrovaya firms up battery module supply deal

2016-10-19 08:20 ET - News Release

Dr. Rajshekar DasGupta reports

ELECTROVAYA SIGNS SUPPLY AGREEMENT AND A STRATEGIC SUPPLIER AGREEMENT WITH A GLOBAL OEM FOR RESIDENTIAL ENERGY STORAGE APPLICATIONS

Electrovaya Inc. and its wholly owned subsidiary, Litarion GmbH, have signed a strategic supplier agreement and a supply agreement with a global original equipment manufacturer, which is one of the market leaders for residential energy storage. The agreements follow the press release of Electrovaya dated June 15, 2016, announcing the letter of intent, which letter of intent was further described in Electrovaya's press release dated Aug. 11, 2016, under the second bullet following the heading business highlights.

Electrovaya will supply 48-volt Litastore battery modules to the global OEM if, as and when the global OEM delivers purchase orders under the agreements. Prior to the execution of the agreements, Electrovaya completed, shipped and billed the global OEM for prototypes delivered by Electrovaya.

The supply agreement contains tiered volume and pricing. Should the maximum volume anticipated in the volume pricing schedule be achieved this would result in 199 million euros being the potential value of the agreement over a three-year period. There is no assurance, however, that the global OEM will order nor Electrovaya supply to this extent.

Electrovaya's technology and products are uniquely suited to the fast-growing residential energy storage market as two of the critical performance parameters are highest cycle life and safety, both uniquely available from Electrovaya.

"We are very excited with this contract, as this was achieved against intense global competition and with a fast-growing leader in residential energy storage," said Dr. Rajshekar DasGupta, vice-president of business development at Electrovaya. "Our Litastore line of modules powered by our latest LC-44 cells are an attractive product for residential energy storage due to class leading cycle life, performance and safety."

Company business update

The following is an update on some of the other recent business developments previously announced by Electrovaya.

On May 26, 2016, Electrovaya announced the signing of a master service agreement with a Fortune 1000 New York Stock Exchange-listed company and estimated potential revenues of up to $80-million (U.S.) over a three-year period under such contract (Hyster Yale agreement). On Sept. 15, 2016, Electrovaya issued a press release which identified the customer as Hyster Yale, a leading electric forklift manufacturer. The estimated revenue and volumes disclosed by Electrovaya in its earlier press release were based upon Hyster-Yale's expectations and forecasts for end-customer sales of new lithium-ion forklift products. Electrovaya's estimated revenue from Hyster Yale is dependent on Hyster Yale's ability to generate sales of its lithium-ion-based forklifts and to order products from Electrovaya in connection with such sales. The agreement with Hyster Yale does not provide for a minimum contracted volume nor have firm irrevocable commitments been obtained from Hyster Yale.

On June 14, 2016, Electrovaya announced a non-binding memorandum of understanding with a European original equipment manufacturer, a battery assembler for electric buses which has manufacturing plants in both Europe and China. Electrovaya and the potential customer are engaged in negotiations toward a definitive agreement. The MOU contains certain indicative fundamental terms (price and maximum volume discount) agreed by the parties. The MOU is for a product that is not a standard product of Electrovaya and, accordingly, Electrovaya is currently engaged in the production of prototype products for this potential customer in order to be in a position to execute a definitive agreement once terms are agreed. Electrovaya anticipates the definitive agreement will be consistent with the indicative fundamental terms contained in the MOU; however, there is no assurance a binding agreement will be entered into or if entered into will be on the terms contained in the MOU. The potential estimated revenues of 11 million euros for 2017 previously disclosed by Electrovaya were based upon the customer's expectations regarding end customer sales of the product. Neither the MOU nor any definitive agreement is expected to provide for a minimum contracted volume or firm irrevocable commitment.

On July 6, 2016, Electrovaya/Litarion announced a non-binding MOU with an international original equipment manufacturer. The MOU contains certain indicative fundamental terms (price and maximum volume discount) agreed to by the parties. A working group has been set up with key personnel from both organizations to collaborate on specification, development, prototyping and testing. Electrovaya anticipates that the definitive agreement will be consistent with the MOU; however, there is no assurance a binding agreement will be entered into or, if entered into, will be on the terms contained in the MOU. Development work is being done by both sides and commercialization is expected to start in calendar year 2017. If a definitive agreement is executed, Electrovaya would be a component supplier to the international OEM's electric vehicle and the actual revenues of Electrovaya will be dependent on the success of the international OEM's electric vehicle in the market and the international OEM ordering the products of Electrovaya. Neither the MOU nor is it expected that any definitive agreement will provide for a minimum contracted volume or firm irrevocable commitment. The international OEM has a large internal fleet demand for electric vehicles as well as external demands. Based upon the customer's expectations regarding end customer sales of the product, Electrovaya's potential revenues from this international OEM are estimated to be up to 37 million euros in 2017, with the actual revenues dependent on the international OEM's commercialization of the electric vehicle with Electrovaya's products for both its internal fleet usage and external sales.

Electrovaya designs, develops and manufactures proprietary lithium-ion superpolymer 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 500 megawatt-hours/annum.

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