NEW YORK (TheStreet) -- Highpower International (HPJ) is sinking after announcing it had entered into definitive purchase agreements with several institutional investors for the sale of stock in a registered direct offering.
By midday, shares had tumbled 16.4% to $4.81.
The company said it would sell 1 million shares of common stock at $5.05 a share, plus warrants to purchase an additional 500,000 shares with an exercise price of $6.33 a share. The offering is expected to generate total gross proceeds of around $5.05 million.
In a statement, Highpower said it plans to use proceeds for general corporate purposes, including "research and development, sales and marketing, general and administrative, manufacturing, and capital expenditures."
The offering is expected to close on April 17.
Ardour Capital Investments acted as the exclusive placement agent for the offering.
TheStreet Ratings team rates HIGHPOWER INTERNATIONAL INC as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate HIGHPOWER INTERNATIONAL INC (HPJ) a HOLD. The primary factors that have impacted our rating are mixed -- some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its robust revenue growth, good cash flow from operations and solid stock price performance. However, as a counter to these strengths, we also find weaknesses including generally higher debt management risk, disappointing return on equity and poor profit margins."