Electrovaya Announces First Quarter Fiscal 2006 Financial Results.

TORONTO -- Electrovaya Inc. (TSX:EFL) today announced financial results for the first quarter of fiscal 2006. All figures are in US dollars.

Highlights

For the quarter ending December 31, 2005:

- Revenue decreased by 60.4% or $900,000 to $588,000 from $1,488,000 for

- Loss from operations, before interest, taxes, foreign exchange and amortization decreased by 40,000 or 3.8% to $1,016,000 compared to $1,056,000 in the same quarter in the prior year.

- Cash & investments were $11.4 million as at December 31, 2005, compared to $12.2 million as at September 30, 2005 and $13.5 million as at December 31, 2004.

Summary of Financial Results

--------------------------------------------------
In thousands of US$               3 months ended
except per share                     December 31
amounts                          2005       2004
--------------------------------------------------
Revenue                         $ 588    $ 1,488
--------------------------------------------------
Loss from operations
 before interest, taxes,
 foreign exchange and
 amortization(1)             $ (1,016)  $ (1,056)
--------------------------------------------------
Loss for the quarter(1)      $ (1,193)  $ (1,952)
--------------------------------------------------
Loss per share               $  (0.02)  $  (0.03)
--------------------------------------------------
Cash & investments           $ 11,405   $ 13,478
--------------------------------------------------
(1)Net of TPC repayable contribution of $219 and $312
for the quarters ending December 31, 2005 and 2004
respectively.

Three Months Ending December 31, 2005

For the three month period ended December 31, 2005, total revenue decreased by 60.5% to $0.6 million from $1.5 million for the quarter ended December 31, 2004. The decrease in total revenue primarily resulted from a reduction in aerospace revenue.

Revenue less Direct Manufacturing Costs was a loss of $39,000 for the three months ended December 31, 2005, compared to a profit of $24,000 or 1.61% of revenue for the three months ended December 31, 2004.

Research and development expenses, net of investment tax credits, increased by $27,000 or 5.9% to $488,000 for the quarter ended December 31, 2005 from $461,000 for the same three month period in 2004 due primarily to an increase in material utilization and consulting fees. During the three month period ended December 31, 2005, the Company received $219,000 of cash contributions from Technology Partnerships Canada (TPC), compared to $312,000 received during the three months ended December 31, 2004.