Ener1 Inc to Receive $5.52 Million in Financing

Majority Shareholder, Ener1 Group, to Exercise Warrants

Feb 08, 2006, 00:00 ET from Ener1, Inc.

    FT. LAUDERDALE, Fla., Feb. 8 /PRNewswire-FirstCall/ -- Ener1, Inc.
 (OTC: ENEI) announced today that its majority shareholder, Ener1 Group, Inc.
 has exercised warrants for 34.5 million shares of the Company's common stock
 to provide $2.76 million in immediate working capital financing to the Company
 to fund operations.  The Company indicated that Ener1 Group intends to
 exercise the warrants for another 34.5 million shares of the Company's common
 stock to provide an additional $2.76 million in funds to the Company once it
 reaches a definitive agreement with Ener1 Group regarding terms and conditions
 for Ener1 Group's early exercise of the warrants.
     The warrants involved, which were issued in connection with the Company's
 purchase from Ener1 Group of its initial battery operations in September 2002,
 are 10 year warrants with an exercise price of $0.08 per share.  The Company
 believes the exercise of the warrants will remove a significant market
 overhang for the Company's stock, which the Company hopes will help to broaden
 market participation in its stock and potentially make future outside
 financing easier.
     The Company expects that the definitive agreement, which the Company hopes
 to consummate in the very near future, will contain, among other provisions,
 milestone requirements that will have to be completed as a condition to Ener1
 Group's exercise of the additional 34.5 million warrants, including, e.g.,
 completion of the Company's 2005 audit and restatement of its 2004 audited
 financial statements, filing of the Company's Form 10-KSB for 2005 and filing
 of restated Company financial statements for the quarters ended March 31 and
 June 30, 2005.  The Company believes that it will be able to meet these
 accounting milestones on a timely basis.
     The current and contemplated financing reflects the increased level of
 attention and support from the Company's majority shareholder that follows a
 recent management reorganization of Ener1 and its majority shareholder.  Among
 the changes were: appointment of veteran financial executive Charles
 Gassenheimer as CEO of Ener1 Group and Chairman and Director of the Company,
 Ronald Stewart as Interim Chief Executive Officer of the Company, Gerard
 Herlihy as Chief Financial Officer of the Company and the election of well
 known Wall Street company builder and financial executive Marshall Cogan as
 Strategic Advisor to Ener1 Group and Director of the Company.  The Company's
 senior management team also includes Ulrik Grape, President of EnerDel and
 Executive Vice President of Ener1, Inc. and newly appointed Rex Hodge
 President of the Company's EnerFuel group and Executive Vice President of
 Ener1, Inc.
     Charles Gassenheimer remarked, "Ener1 Group's willingness to step up at
 this point to finance the Company's continuing operations reflects its
 increased confidence in the Company's future based not only on Ener1, Inc.'s
 recently strengthened management team and new sense of management discipline,
 but also on actual operational progress in the Company's business plan
 development and execution.  Ener1, Inc. is moving ahead on all fronts with an
 increased sense of fiscal responsibility and pragmatic approach to
 commercializing its many useful technologies.  I think this will lead to
 positive results and increased potential for the Company's shareholders."
     About Ener1, Inc.
     Ener1, Inc. (OTC: ENEI) is an alternative energy technology company. The
 company's interests include: 80.5% of EnerDel (www.enerdel.com), a lithium
 battery company in which Delphi Corp. owns 19.5%; 49% of Enerstruct, a
 Japanese lithium battery technology company in which Ener1's strategic
 investor ITOCHU owns 51%; wholly owned subsidiary EnerFuel, a fuel cell
 products and testing services company (www.enerfuel.com); and wholly owned
 subsidiary NanoEner, which develops nanotechnology-based materials and
 manufacturing processes for batteries and other applications
 (www.nanoener.com).  For more information, visit http://www.ener1.com.
     Safe Harbor Statement This release contains forward-looking statements
 within the meaning of the Federal Private Securities Litigation Reform Act of
 1995 conveying management's expectations as to the future based on plans,
 estimates and projections at the time the statements are made.  The forward-
 looking statements contained in this press release involve risks and
 uncertainties, including, but not necessarily limited to, EnerDel's ability to
 succeed as a supplier of batteries to the hybrid electric vehicle and other
 markets; Ener1's ability to successfully develop and market proposed lithium
 battery, fuel cell and nanotechnology-based products and services; Ener1's
 plans to reduce costs and gain a competitive advantage by consolidating
 manufacturing operations and implementing automated production processes;
 charges Ener1 will incur in connection with consolidating manufacturing
 operations; the degree of competition in the markets for lithium battery, fuel
 cell and nanotechnology-based products and services, Ener1's history of
 operating losses, the lack of operating history for the development stage
 Ener1 businesses, the need for additional capital, the dependency upon key
 personnel and other risks detailed in its filings from time to time with the
 Securities and Exchange Commission.  These risks and uncertainties could cause
 actual results or performance to differ materially from any future results or
 performance expressed or implied in the forward-looking statements included in
 this release.  Ener1 undertakes no obligation to publicly update or revise any
 forward-looking statements, whether as a result of new information, future
 events, or otherwise.
     Contact:  Joe Allen (investors)               Alys Daly
               Allen & Caron Inc                   Ener1, Inc.
               212 691 8087                        954 202 4442 or 305 815-0312
               joe@allencaron.com                  adaly@ener1.com

SOURCE Ener1, Inc.