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.