An anonymous director reports

ELECTROVAYA ANNOUNCES PROPOSED PRIVATE PLACEMENT OF CONVERTIBLE DEBENTURES

Electrovaya Inc. intends to complete a non-brokered private placement of convertible unsecured subordinated debentures for gross proceeds of up to $25-million. The offering may close in one or more tranches, but, in any event, no later than March 31, 2017. The company has already entered into a binding subscription agreement with a lead investor with respect to $15-million principal amount of debentures.

The debentures will have a term to maturity of 36 months and bear interest at a rate of 9 per cent per annum, payable semi-annually. The company may elect, from time to time, subject to applicable regulatory approval, to satisfy its obligation to pay interest on the debentures: (i) in cash or (ii) by issuing the equivalent value in common shares at a price per interest share equal to the 20-trading-day volume-weighted average trading price (VWAP) of the common shares on the Toronto Stock Exchange ending five trading days preceding the applicable interest payment date.

Holders of debentures may, at their option, at any time, and from time to time, up to and including the business day immediately preceding the maturity date, convert all or any part of the outstanding principal amount of the debentures into common shares at a price of $2.15 per common share for no additional consideration, subject to a minimum conversion amount of $50,000.

If at any time the VWAP on the TSX for 30 consecutive trading days equals or exceeds a price per common share which is at least a 50-per-cent premium to the conversion price, the company may force conversion of all of the principal amount of the debentures at the conversion price upon 30 days advance written notice, provided that the common shares issuable upon such conversion will not be subject to restrictions on resale in Canada.

If the date of any conversion is following the date of the public filing by the company of its financial statements for the quarter ended June 30, 2018, and the aggregate gross revenue from operations of the company (on a consolidated basis) from June 30, 2017, to June 30, 2018, does not exceed $23-million in the aggregate, the conversion price will be discounted to $1.92 per common share.

Subscribers for debentures will also be issued warrants to purchase common shares of the company on the basis of 116 warrants per each $1,000 principal amount of debentures. Each warrant will be exercisable at an exercise price of $2.80 per warrant share for a period of 36 months from the respective closing date of any tranche of the offering.

The net proceeds of the sale of debentures will be used for working capital to fulfill purchase orders and for general corporate purposes.

The company has retained Origin Merchant Securities Inc. as its exclusive financial adviser on the offering.

The offering is subject to a number of conditions precedent, including, without limitation, receipt of TSX approval.

The debentures, and any common shares issuable upon conversion of the debentures, will be subject to a hold period of four months and one day from any respective closing date.

About Electrovaya Inc.

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 per annum. Electrovaya is a technology focused company with extensive patents and other intellectual property. Electrovaya has production facilities in Canada and Germany, with customers around the globe.

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