Ener1 Raises $14.2 Million in Private Placement

Funding for Commercialization of Technologies

Mar 14, 2005, 00:00 ET from Ener1, Inc.

    FT. LAUDERDALE, Fla., March 14 /PRNewswire-FirstCall/ -- Ener1, Inc.
 (OTC Bulletin Board:   ENEI) announced today that it has signed definitive
 agreements for a private placement of convertible debentures and warrants for
 gross proceeds of $14,225,000.  The debentures are being purchased by select
 institutional investors, led by New York City-based Satellite Strategic
 Finance Associates LLC and Satellite Strategic Finance Partners Ltd.
 Satellite and other investors in this financing also participated in Ener1's
 convertible debenture financing in January 2004.  The proceeds of the
 financing will be used to fund corporate operations and commercialization of
 the Company's key technologies.
     (Logo:  http://www.newscom.com/cgi-bin/prnh/20040825/FLW010LOGO )
     Kevin Fitzgerald, Chairman and Chief Executive Officer, commented, "This
 financing will help us accelerate Ener1's progress, which has already been
 substantial. We have strategic alliances in place with major companies, such
 as Delphi Corporation, that are leading suppliers to the markets that we are
 targeting. These strategic relationships will help us speed commercialization
 of our technologies. We anticipate shipping batteries in production quantities
 before the end of 2005."
     Mr. Fitzgerald added, "It is an important ongoing vote of confidence that
 investors from our 2004 debenture financing are participating in this private
     The debentures have a four-year term, carry interest of 7.5 percent
 (subject to adjustment), are convertible into Ener1 common stock at an initial
 price of $1.00 per share and are subject to conversion at Ener1's option upon
 Ener1's achievement of certain milestones. The warrants, which have a five-
 year term, are for a total of 4,267,500 shares of Ener1 common stock at an
 exercise price of $1.15 per share and 2,845,000 shares of Ener1 common stock
 at an exercise price of $1.25 per share. The debentures and warrants are being
 sold to accredited investors in reliance on Regulation D under the Securities
 Act of 1933, as amended. The transaction is subject to customary closing
     Since Ener1's 2004 debenture financing, the Company has made significant
 strides in achieving its business plan, including the formation with Delphi
 Corporation, in October 2004, of EnerDel, its lithium battery company. That
 acquisition bolstered Ener1's battery business by providing EnerDel with the
 lithium-battery technologies, equipment and engineering resources from one of
 the world's largest automotive components suppliers. In addition, Pankaj
 Dhingra, former head of Delphi's Energy Management Systems business, joined
 the Company as President of its Energy Group in December 2004.
     Ener1 recently announced its plan to acquire Giner Electrochemical
 Systems, a leading fuel-cell company with a backlog of contracts and customers
 that include major companies such as General Motors and Boeing.
     S.G. Cowen & Co. acted as the sole placement agent for this transaction.
     This announcement is neither an offer to sell nor a solicitation of an
 offer to buy any of these securities. The debentures and warrants have not
 been registered under the Securities Act of 1933 and may not be offered or
 sold in the United States absent registration or an applicable exemption from
 registration requirements.  Ener1 has agreed to file a registration statement
 with the Securities and Exchange Commission, following the closing of the sale
 of the debentures and warrants, registering the resale of the shares to be
 issued upon conversion of the debentures and exercise of the warrants.
     About Ener1, Inc.
     Ener1, Inc. (OTC Bulletin Board:   ENEI) develops and markets new
 technologies and products for clean, efficient energy sources. These include
 lithium batteries and battery packs through EnerDel, Inc., its majority-owned
 venture with Delphi Corp., fuel cell components and testing services through
 its EnerFuel, Inc. subsidiary, and nanotechnology-based materials and
 manufacturing processes and components through its NanoEner, Inc. subsidiary.
 Ener1's products have applications for a broad range of markets that include
 power tools and industrial equipment, medical devices, hybrid vehicle
 propulsion, personal mobility, and applications for Homeland Security and
 National Defense. For more information on Ener1's products, please visit its
 Web site at http://www.ener1.com or call (954) 556-4020.
     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, the closing of the
 private placement of Ener1's 7.5% Senior Secured Convertible Debentures due
 2009 and the use of the proceeds of such financing, the ability of Ener1 to
 successfully develop and market proposed lithium battery, fuel cell and
 nanotechnology-based products and services, 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, the possibility that the Giner
 Electrochemical Systems ("GES") acquisition will not be completed, that the
 results of the GES acquisition will be unfavorable or that GES will not
 perform as anticipated, and other risks detailed in Ener1's annual report on
 Form 10-KSB for the year ended December 31, 2003, as well as in its other
 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.
      Investors, Michael Mason, 212-691-8087, michaelm@allencaron.com or
 Media, Len Hall, 949-474-4300, len@allencaron.com, both of Allen & Caron for
 ENER1, Inc.

SOURCE Ener1, Inc.