Electrovaya Announces Proposed Private Placement of Convertible Debentures

TORONTO, ONTARIO--(Marketwired - March 15, 2017) -

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Electrovaya Inc. (TSX:EFL)(OTCQX:EFLVF) ("Electrovaya", or the "Company") is pleased to announce that it intends to complete a non-brokered private placement of convertible unsecured subordinated debentures (the "Debentures") for gross proceeds of up to $25 million (the "Offering"). 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 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 (the "Interest Shares") at a price per Interest Share equal to the 20 trading day volume-weighted average trading price ("VWAP") of the common shares (the "Common Shares") on the TSX 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 (the "Conversion Price") 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% 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.