Clean Diesel Technologies Reports Fourth-Quarter, Year-End Results

    STAMFORD, Conn.--March 16, 2001--Clean Diesel Technologies Inc. (EEB:CDTI) (CDT) today reported results for the fourth quarter and the fiscal year ended Dec. 31, 2000.
    For the fourth quarter of 2000, CDT reported a net loss attributable to Common Stockholders of $741,000, or $0.28 per share, compared with a net loss of $787,000, or $0.30 per share, for the year-earlier period.
    For the year ended Dec. 31, 2000, CDT reported a net loss of $2,713,000, or $1.03 per share, on revenues of $582,000, compared with a net loss of $4,584,000, or $1.77 per share, on revenues of $142,000, for the prior year.
    Included in the 1999 year results was a one-time imputed non-cash preferred dividend of $1,750,000, or $0.68 per common share. Without the one-time imputed non-cash preferred dividend, CDT's net loss attributable to common stockholders for 1999 would have been $2,834,000, or $1.09 per common share.
    Clean Diesel Technologies President and CEO Jeremy Peter-Hoblyn commented, "The company is completing several successful fleet demonstrations and expects to announce distribution agreements for Platinum Plus(R) and the ARIS(TM) 2000 NOx reduction system in the near term."
    Peter-Hoblyn also noted that recent events in the news are positive signs for Clean Diesel. The U.S. Supreme Court has upheld the tough standards on emissions in the Clean Air Act and the Tokyo government has crafted a new program to reduce emissions on 900,000 existing diesel vehicles.
    "We believe these important events support the need for new technologies such as Platinum Plus and the ARIS 2000 that reduce emissions and pollution," Peter-Hoblyn said.
    The company's strategy is to license the Platinum Plus fuel borne catalyst and the ARIS 2000 NOx reduction system to large established strategic partners in order to gain worldwide distribution. CDT has announced license agreements with Norwalk, Conn.-based RJM Corp. for the ARIS stationary NOx reduction technology in North, Central and South America.
    The company also completed a limited short-term license agreement for the stationary and mobile ARIS system and Platinum Plus in Japan with Tokyo-based Mitsui & Co. Ltd.

                    CLEAN DIESEL TECHNOLOGIES INC.
                       STATEMENTS OF OPERATIONS
                 (In thousands, except per-share data)

                                    Three Months Ended  12 Months Ended
                                         Dec. 31,            Dec. 31,
                                     2000       1999      2000     1999

Revenue:
Product revenue                   $   62     $   42    $  199   $  142
License and royalty revenue           43                  383       --
Total revenue                        105         42       582      142

Costs and expenses:
Cost of sales                         45         24       133       81
General and administrative           433        461     1,799    1,585
Research and development             120        178       534      827
Patent filing and maintenance         55         50       152      134

Loss from operations                 548        671     2,036    2,485
Interest income                       (4)       (15)      (38)     (46)
Interest expense                       1          0         3        2

Net loss before preferred 
 stock dividend                      545        656     2,001    2,441
Preferred stock dividend             196        131       712      393
One-time non-cash preferred 
 dividend                             --         --        --    1,750

Net loss attributed to common
 stockholders                     $  741     $  787   $ 2,713  $ 4,584

Basic and diluted loss per
 common share                     $ 0.28     $ 0.30   $  1.03  $  1.77

Weighted average number of 
 common shares outstanding         2,660      2,594     2,631    2,594