Azure Dynamics Announces Closing of Offering of Common Shares

Not for Distribution to United States Newswire Services or for Dissemination in the United States

OAK PARK, Michigan, December 22 - Azure Dynamics Corporation (TSX: AZD) - ("Azure" or the "Company"), an
industry leader in the development of hybrid electric and electric
technologies for commercial vehicles, is pleased to announce that it has
closed its previously announced offering (the "Offering") of common shares
of the Company ("Common Shares").

The maximum number of 166,666,667 Common Shares offered pursuant to the
Offering were sold at the offering price of $0.18 per Common Share for total
gross proceeds to the Company of approximately $30,000,000.

The Offering was conducted through a syndicate of agents led by Raymond
James Ltd., and including Cormark Securities Inc., Stonegate Securities, Inc.
and Paradigm Capital Inc.

The Company plans to use the net proceeds of the Offering to fund its
engineering, research, development and related costs, selling and marketing
expenditures, general and administration expenditures, as well as general
working capital requirements.

This news release does not constitute an offer to sell or a solicitation
of an offer to buy any of the securities of Azure in the United States. The
securities have not been and will not be registered under the United States
Securities Act of 1933, as amended or any state securities laws and may not
be offered or sold within the United States or to U.S. persons unless
registered under the U.S. Securities Act and applicable state securities
laws or unless an exemption from such registration is available.

About Azure Dynamics

Azure Dynamics Corporation (TSX: AZD) is a world leader in the
development and production of hybrid electric and electric components and
powertrain systems for commercial vehicles. Azure is strategically targeting
the commercial delivery vehicle and shuttle bus markets and is currently
working internationally with various partners and customers. The Company is
committed to providing customers and partners with innovative, cost-
efficient, and environmentally friendly energy management solutions.

For more information, please visit www.azuredynamics.com.

The TSX does not accept responsibility for the adequacy or accuracy of
this release.

Forward-looking Statements

This press release contains forward-looking statements. More
particularly, this press release contains statements concerning the
anticipated use of the net proceeds from the Offering, Azure's business
development strategy, projected commercial revenues and product deliveries.

The forward-looking statements are based on certain key expectations and
assumptions made by Azure, including expectations and assumptions concerning
achievement of current timetables for development programs, target market
acceptance of Azure's products, current and new product performance,
availability and cost of labour and expertise, and evolving markets for power
for transportation vehicles. Although Azure believes that the expectations
and assumptions on which the forward-looking statements are based are
reasonable, undue reliance should not be placed on the forward-looking
statements because Azure can give no assurance that they will prove to be
correct. Actual results could differ materially from those currently
anticipated due to a number of factors and risks. These include, but are not
limited to, the risks associated with Azure's early stage of development,
lack of product revenues and history of losses, requirements for additional
financing, uncertainty as to commercial viability, uncertainty as to product
development and commercialization milestones being met, uncertainty as to the
market for Azure's products and unproven acceptance of Azure's technology,
competition for capital, product market and personnel, uncertainty as to
target markets, dependence upon third parties, changes in environmental laws
or policies, uncertainty as to patent and proprietary rights, availability of
management and key personnel, and acquisition integration risk. These risks
are set out in more detail in Azure's annual information form which can be
accessed at www.sedar.com.

The forward-looking statements contained in this press release are made
as of the date hereof and Azure undertakes no obligation to update publicly
or revise any forward-looking statements or information, whether as a result
of new information, future events or otherwise, unless so required by
applicable securities laws.

For further information: Ryan Carr, Chief Financial Officer,
+1-248-298-2403 ext 1206, Email: rcarr@azuredynamics.com; Pat Liebler,
Liebler Group, +1-313-832-4376, Email: pat@lieblergroup.com

For further information: Ryan Carr, Chief Financial Officer, +1-248-298-2403 ext 1206, Email: rcarr at azuredynamics.com; Pat Liebler, Liebler Group, +1-313-832-4376, Email: pat at lieblergroup.com