Dallas, Texas 06/04/2015 (Financialstrend) – Just days after Clean Diesel Technologies, Inc. (NASDAQ:CDTI) released test results for a proprietary clean emission exhaust technology, things seemed not to be okay on the financial front. News of a secondary offering was not received well by the street. Its seems the company does not have enough cash to cater for general corporate expenses
Plans To raise $5.1 million
The company was tanking on Wednesday by double margins as the street remained skeptical of the company’s financial state. Clean Diesel Technologies, Inc. (NASDAQ:CDTI) plans to raise approximately $5.1 million in gross proceeds from the issuance of 2,500,000 common stock units.
Net proceeds from the offering should amount to $4.5 million on the deduction of discount commissions and expense reimbursements. Cowen and Company will act as the sole book-running manager for the offering set to close on the 8th of June 2015.
The news on capital raising comes on the heels of Clean Diesel Technologies, Inc. (NASDAQ:CDTI) unveiling a technology that could help auto manufacturer’s cut costs in their push to meet stringent clean air standards. Tests carried out on the proprietary spinel technology showed it could be relied upon for achieving emissions control performance.
Stock Rated As Sell
Spinel is poised to help original equipment manufacturers in their push to develop fuel-efficient engines that meet tighter regulatory emission requirements. Further enhancement of the technology according to the CEO could see Spinel being used to eliminate PGMs altogether.
TheStreet currently rates the stock as a sell. The research firm raises concerns about the company’s deteriorating net income as well as the high debt management risk. Poor profit margins as well as weak operating cash flow is another point of concern for the stock. Clean Diesel Technologies, Inc. (NASDAQ:CDTI) return on equity currently trails that of the auto components industry.