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| Share Name | Share Symbol | Market | Stock Type |
|---|---|---|---|
| Clean Diesel | CDT | London | Ordinary Share |
| Price Change | Price Change % | Share Price | Last Trade
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|---|---|---|---|---|
| 0.00 | 0.00% | 117.50 | 01:00:00 |
| Open Price | Low Price | High Price | Close Price | Previous Close |
|---|---|---|---|---|
| 117.50 | 117.50 |
| Top Posts |
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Posted at 14/5/2009 17:46 by stu31 who was ill-informed David?stu31 - 29 Sep'06 - 19:56 - 360 of 458 edit I wish you luck with this David, but I believe you are going to be sorely disappointed..MC £16m turnover £0.5m hmm, based on jam tomorrow..hmm, seen that before..turnover about to explode blah blah, usual story of every AIM stock that ever floated..until the profit warning..yes this might be the 1 in a 1000 stock we all dream of..but the graveyard is littered with the bones of companies like this..look at RPP, TRK, TDM, AVT, SEO, SYM, DGP, SCE, and the list goes on and on..as for MC of £500m within 4 years..I'll go for £10m max, if the prospects were as bright as that there would be 10 companies with a diesel filter/additive in the marketplace by lunchtime on monday. You reckon they could get 10% of the market in China..I'll go for 0.001%, 30 vehicles worth $7500. I see they will be running out of cash before the end of this calendar year, lets see at what level they manage to raise funds to gauge market confidence. I hope you have only invested money you can afford to lose. stu31 - 2 Oct'06 - 01:18 - 362 of 457 edit Atlantic, IMO having a fantastic product is only 5% of the story (for early shareholders to make money anyway). Management with the ability to market and sell is 95%. RPP was a typical AIM story wasn't it. You can make a lot of money on these stocks, but only using the 'greater fool' method of investment, hardly any of these 'start ups' produce the goods in the long run. David15 - 3 Oct'06 - 15:43 - 363 of 457 How can you possibly suggest the CDT does not now have a top marketing team in place. The CEO was appointed to commercialise the technologies after the technical people had developed and patented the technologies in the vehicle emission field including the use of platinum with cerium in fuel/combustion additives; the airless Advanced Reagent Injection System (ARIS)which is being adopted by the industry to meet the in-coming NOx reduction requirements and EGR/SCR (Exhaust Gas Recirculation/Select stu31 - 3 Oct'06 - 19:06 - 364 of 457 edit LOL, you are right, "one cannot let such ill-informed and un-researched comment pass"..market cap £500m within 4 years..LOL. |
Posted at 17/3/2009 16:26 by atlantic1953 Well results out today more hope and tomorrow we will make it.The Competition is hotting up and i suspect cdt are running out of time. Sound alert , etc |
Posted at 26/3/2008 16:49 by atlantic1953 The progress made in finanical terms has probably not met investors expectations.Markets are jittery and any shares trading on hope are likley to be hammered.The market will only rerate upwards when profitability is acheived. If the markets were generally going up then they would give the benefit of the doubt to cdt but not in these markets. |
Posted at 01/3/2008 11:13 by atlantic1953 Sidewinder this does seem to be an emerging giant.I think one or two have very substantial stakes eg Simon Cawkwell and I think D Hunter.Yet the share price now if you allow for the consolidation is less than it was 3 years ago when i think it hit the equivalent of £12.50 when it just had potential and no orders.Im tempted to increase my stake lets see if frr hit the black stuff TO Free up some funds. It would be good to hear Simon's views on cdt today.If you still read this bb please contribute Simon. |
Posted at 19/2/2008 19:29 by atlantic1953 sidewinde i imagine that 3rd quarter results are imminent.have you a vlaution for cdt shares on say a 2year view... |
Posted at 19/2/2008 13:54 by sidewinder2 Another important development for CDT announced in the US on February 14 has not yet been appreciated by the market. "Lake Champlain Transportation Company Chooses Clean Diesel Platinum Plus to Reduce Environmental Impact and Improve Fuel Economy". Some 5 billion (5,000,000,000) gallons of diesel fuel is used each year by US inland waterway and inshore marine vessels. Lake Champlain Transportation Company operate a fleet of 11 vessels including a tug; nine ferries including two car ferries and a cruise boat. The Marine Superintendent of LCT is quoted "---- implementing (these) solutions that are clearly beneficial to the bottom line of our business. Fuel costs are quite significant ----------we are keenly aware for the need for a greener and cleaner environment. ------- The combination of benefits that Clean Diesel delivers made the decision to deploy their solution throughout our fleet very appealing". Whilst LCT is a relatively small company these trials are being looked at as a showcase for the industry. CDTs COO for the US and Chief Technical Officer added "The progressive approach to protecting the environment while directly benefitting LCTs business, will certainly have implications throughout the water transport industry". It is clear that the implications for CDTs business are huge from this source alone.This follows on licensing agreements for CDTs other patented ARIS (Advanced Reagent Injection System) technology with Robert Bosch GmBH and Tenneco Inc (NYSE:TEN) (a leading international Tier 1 supplier to the motor manufacturing industry) which will undoubtedly come to be used in the majority of the 14+ million diesel engines manufactured each year, over 8 million diesel passenger cars a year in Europe. Add to that the leading role now being played by CDT in the London LEZ (Low Emission Zone) implementation to be followed by other cities across the UK, Europe and Asia and the current showcase demonstrations in California for diesel off-road equipment which causes high levels of regulated emissions and it is clear that we have a great business in the making, albeit that we have had a longer than anticipated wait for mandatory action to be enforced by government agencies but which is now happening on an accelerating scale. |
Posted at 11/6/2007 15:38 by afternine Atlantic1953.I have been in this since before Mr C I actually bought at 37p and have contract notes to prove it. However there are at least 5 different quotes and on occasion there has been a 30% dealable arb profit. US quote Two AIM quotes which are bizarre because the stocks CDT and CDTI are identical and two quotes on Frankfurt and another German market. Its all a nonsense in my opinion But the CDT story is UNBELIEVABLE. Please let in be true because this is a 10 bagger for sure if potntial fulfilled. Mr Steiner is not a prune Mr C is correct. Mr Steiner is one VERY smart cookie I believe. So are the rest of his team. No ramp intended do your own research etc. AfterNine |
Posted at 10/6/2007 10:23 by atlantic53 Simon Thanks for your update.I share your optimism for the long term future of cdt. However in the short term ie now: 1) If there is a market shakeout expected , do you not think that stocks without asset backing will suffer. 2) Surely in the short term cdt must start ramping up sales and thus generating cash.Merely signing up new franchisees is not the same. Markets look over cooked and ripe for a sell off how will cdt fare in these condition i guess if you are just buying and holding it makes no odds. |
Posted at 21/5/2007 14:36 by sidewinder2 Today's announcement of agreement with Bosch licencing the ARIS NOx control system represents a huge breakthrough for CDT. In the European diesel car market alone 8 million vehicles a year will have to be fitted with NOx control by the end of 2009. CDTs ARIS system, now licenced to Bosch on a non-exclusive basis, is the only system that does not require a seperate compressed air system and is cheaper to manufacture, maintain and install than any compressed air system and is fully covered as a airless system by European and US patents. The revenue from this one technology, and CDT has several other equally important technologies, will certainly exceed the current market capitalization of the company within the next three years. Other technologies include the Pt+ PM reduction usingf 70% less platinum than alternative DPFs as previously discussed above, and the CWMF, also discussed above, which will have huge advantage in the Asian markets. |
Posted at 15/11/2003 00:39 by soysoy CLEAN DIESEL TECHNOLOGIES INC Filing Type: 10-Q Description: N/A Filing Date: 09/30/03 Ticker: CDTI Cusip: 18449C State: CT Country: US Primary SIC: 2819 Primary Exchange: OTH Billing Cross Reference: Date Printed: 11/14/03 Table of Contents Filing Sections To jump to section, click on hypertexted page number Document 1 Base 1 Cover Page 1 Table of Contents 2 Part I 3 Financial Statement Item 3 Financial Statements 3 Balance Sheet 3 Income Statement 4 Cashflow Statement 4 Financial Footnotes 5 Management Discussion 10 Part II 12 Legal Proceedings 12 Changes in Securities 12 Defaults Upon Securities 13 Submission to a Vote 13 Other Information 13 Exhibits and Reports 13 Signatures 13 Exhibits Exhibits 13 Additional Exhibits 13 Additional Exhibits 14 Additional Exhibits 15 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) {X} QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2003 or { } TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ______ to ______ Commission file number: 0-27432 ------------ CLEAN DIESEL TECHNOLOGIES, INC. (Exact name of registrant as specified in its charter) Delaware 06-1393453 -------- ---------- (State of Incorporation) (I.R.S. Employer Identification No.) Clean Diesel Technologies, Inc. 300 Atlantic Street - Suite 702 Stamford, CT 06901-3522 (Address of principal executive offices) (Zip Code) (203) 327-7050 (Registrant's telephone number, including area code) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months and (2) has been subject to such filing requirements for the past 90 days. Yes X No --- --- As of November 7, 2003, there were outstanding 14,394,292 shares of Common Stock, par value $0.05 per share, of the registrant. ==================== CLEAN DIESEL TECHNOLOGIES, INC. Form 10-Q for the Quarter Ended September 30, 2003 INDEX Page ---- PART I. FINANCIAL INFORMATION Item 1. Financial Statements (Unaudited) Balance Sheets as of September 30, 2003, 3 and December 31, 2002 Statements of Operations for the Three and Nine 4 Months Ended September 30, 2003 and 2002 Statements of Cash Flows for the Nine 5 Months Ended September 30, 2003 and 2002 Notes to Financial Statements 6 Item 2. Management's Discussion and Analysis of 10 Financial Condition and Results of Operations Item 3. Quantitative and Qualitative Disclosures about 11 Market Risk Item 4. Controls and Procedures 12 PART II. OTHER INFORMATION Item 1. Legal Proceedings 12 Item 2. Changes in Securities 12 Item 3. Defaults upon Senior Securities 12 Item 4. Submission of Matters to a Vote of Security Holders 12 Item 5. Other Information 12 Item 6. Exhibits and Reports on Form 8-K 12 SIGNATURES 13 -2- PART I. FINANCIAL INFORMATION Item 1. Financial Statements CLEAN DIESEL TECHNOLOGIES, INC. PART I. FINANCIAL INFORMATIONItem 1. Financial Statements CLEAN DIESEL TECHNOLOGIES, INC. PART I. FINANCIAL INFORMATION Item 1. Financial Statements CLEAN DIESEL TECHNOLOGIES, INC. PART I. FINANCIAL INFORMATION Item 1. Financial Statements CLEAN DIESEL TECHNOLOGIES, INC. BALANCE SHEETS (in thousands except share data) September 30, December 31, 2003 2002 --------------- -------------- (Unaudited) ASSETS Current assets: Cash and cash equivalents $ 3,994 $ 2,083 Accounts receivable 151 284 Inventories 299 314 Other current assets 63 76 --------------- -------------- Total current assets 4,507 2,757 Patents, net 230 114 Other assets 114 108 --------------- -------------- Total assets $ 4,851 $ 2,979 =============== ============== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable and accrued expenses $ 363 $ 223 --------------- -------------- Total current liabilities 363 223 Deferred compensation and pension benefits 441 418 --------------- -------------- Total long term liabilities 441 418 Stockholders' equity: Preferred stock, par value $.05 per share, authorized 80,000 shares, no shares issued and outstanding -- -- Series A convertible preferred stock, par value $.05 per share, $500 per share liquidation preference, authorized 20,000 shares, no shares issued and outstanding -- -- Common stock, par value $0.05 per share, authorized 30,000,000 and 15,000,000 shares, issued and outstanding 14,381,016 and 11,968,387 shares, respectively. 719 598 Additional paid-in capital 32,263 28,519 Accumulated deficit (28,935) (26,779) --------------- -------------- Total stockholders' equity 4,047 2,338 --------------- -------------- Total liabilities and stockholders' equity $ 4,851 $ 2,979 =============== ============== See notes to financial statements. -3- CLEAN DIESEL TECHNOLOGIES, INC. PART I. FINANCIAL INFORMATION Item 1. Financial Statements CLEAN DIESEL TECHNOLOGIES, INC. STATEMENTS OF OPERATIONS (Unaudited) (in thousands except per share data) Three Months Ended Nine Months Ended September 30, September 30, 2003 2002 2003 2002 ------------ ------------ ---------- ----------- Revenue: Product revenue $ 81 $ 39 $ 291 $ 115 License and royalty revenue 18 12 187 26 ------------ ------------ ---------- ----------- Total revenue 99 51 478 141 Costs and expenses: Cost of sales 47 17 167 72 General and administrative 517 569 1,855 1,704 Research and development 171 185 590 597 Patent filing and maintenance 29 4 29 31 ------------ ------------ ---------- ----------- Loss from operations (665) (724) (2,163) (2,263) Interest income 1 7 7 32 Interest expense -- -- -- (9) ------------ ------------ ---------- ----------- Net loss $ (664) $ (717) $ (2,156) $ (2,240) ============ ============ ========== =========== Basic and diluted loss per common share $ (0.05) $ (0.06) $ (0.18) $ (0.20) ============ ============ ========== =========== Weighted average number of common shares outstanding - basic and diluted 12,119 11,241 12,021 11,232 ============ ============ ========== =========== See notes to financial statements. -4- CLEAN DIESEL TECHNOLOGIES, INC. PART I. FINANCIAL INFORMATION Item 1. Financial Statements CLEAN DIESEL TECHNOLOGIES, INC. STATEMENTS OF CASH FLOWS (Unaudited) (in thousands) Nine Months Ended September 30 2003 2002 -------- -------- OPERATING ACTIVITIES Net loss before preferred stock dividend $(2,156) $(2,240) Adjustments to reconcile net loss to cash used in operating activities: Depreciation and amortization 59 17 Amortization of deferred financing cost -- 8 Compensatory stock warrants -- 95 Changes in operating assets and liabilities: Accounts receivable 133 170 Inventories 15 (27) Other current assets 13 35 Accounts payable and accrued expenses 163 (234) -------- -------- Net cash used in operating activities (1,773) (2,176) -------- -------- INVESTING ACTIVITIES Patent costs (142) (49) Purchase of fixed assets (39) (86) -------- -------- Net cash used in investing activities (181) (135) -------- -------- FINANCING ACTIVITIES Proceeds from issuance of common stock, net 3,865 -- Repayment of term loan -- (250) -------- -------- Net cash (used in) provided by financing activities 3,865 (250) -------- -------- Net increase(decrease) in cash and cash equivalents 1,911 (2,561) -------- -------- Cash and cash equivalents at beginning of period 2,083 4,023 -------- -------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 3,994 $ 1,462 ======== ======== See note to financial statements. -5- CLEAN DIESEL TECHNOLOGIES, INC. PART I. FINANCIAL INFORMATION Item 1. Financial Statements CLEAN DIESEL TECHNOLOGIES, INC. NOTES TO FINANCIAL STATEMENTS September 30, 2003 (Unaudited) BASIS OF PRESENTATION The accompanying unaudited, consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation have been included. All such adjustments are of a normal recurring nature. Operating results for the nine-month period ended September 30, 2003, are not necessarily indicative of the results that may be expected for the year ending December 31, 2003. For further information, refer to the Financial Statements and footnotes thereto included in the Company's Form 10-K for the year ended December 31, 2002. Clean Diesel Technologies, Inc. (the "Company" or "CDT") was incorporated in the State of Delaware on January 19, 1994, as a wholly owned subsidiary of Fuel-Tech N.V. ("Fuel Tech"). Effective December 12, 1995, Fuel Tech completed a Rights Offering of the Company's Common Stock that reduced its ownership in the Company to 27.6%. Fuel Tech currently holds a 12.7% interest in the Company as of September 30, 2003. The Company is a specialty chemical and energy technology company supplying fuel additives and proprietary systems that reduce harmful emissions from internal combustion engines while improving fuel economy. During December 1999, the Company received its EPA registration for its platinum - cerium product and recorded its first commercial sales. The success of the Company's technologies will depend upon the market acceptance of the technologies and governmental regulations including corresponding foreign and state agencies. As a result of the Company's recurring operating losses ($24,183,000 since inception excluding non-cash preferred stock dividends), the Company has been unable to generate positive cash flow. In management's opinion, the Company's cash balance at September 30, 2003 will be sufficient to fund the Company's operations through at least 2004. The Company may require additional capital to fund its future operations and working capital needs. Although the Company believes that it would be successful in raising additional capital, there is no guarantee that it will be able to raise such funds on terms that will be satisfactory to the Company. The Company will develop contingency plans in the event future financing efforts are not successful. Such plans may include reducing expenses and selling or licensing some of the Company's technologies, which could have a material adverse effect on the business, operating results, financial condition and long-term prospects. INVENTORIES Inventories are stated at the lower of cost or market and consist of finished product. Cost is determined using the first-in, first-out (FIFO) method. REVENUE RECOGNITION The Company recognizes revenue from sales of Platinum Plus fuel borne catalyst and ARIS systems upon shipment. In December 2002, Clean Diesel Technologies completed an additional exclusive license agreement with Mitsui for the mobile ARIS technology for Japan. Under terms of the agreement Mitsui agreed to pay CDT a $250,000 license fee and Mitsui committed to spend an additional $200,000 in developing, testing and demonstrating ARIS mobile prototypes. CDT recognized the $250,000 license revenue in the fourth quarter of 2002, as there are no significant ongoing services required to be performed by CDT. The Company will also receive ongoing royalty payments on a per unit basis. -6- In April 2003, Clean Diesel Technologies completed a non-exclusive license agreement with Combustion Component Associates Inc. (CCA) of Monroe, Connecticut, for the mobile ARIS technology in the US. Under terms of the agreement CCA agreed to pay CDT a $150,000 license fee and committed to spend an additional $100,000 in developing, testing and demonstrating ARIS mobile prototypes. CDT will also receive ongoing royalty payments on a per unit basis. CDT recognized the $150,000 license revenue in the second quarter of 2003, as there are no significant ongoing services required to be performed by CDT. Royalty fees are recognized by the Company when earned. RESEARCH AND DEVELOPMENT COSTS Costs relating to the research, development and testing of products including testing to support verification programs with the California Air Resources Board (CARB) and the Environmental Protection Agency (EPA) are charged to operations as they are incurred. These costs include test programs, salary and benefits, consultancy fees, materials and certain testing equipment. PATENT EXPENSE Patent costs are capitalized and amortized over the remaining life of each patent. NOTES PAYABLE In November 2000, the Company arranged a $1,000,000 term loan with three private lenders. The term loan had a 10% interest rate and was payable in full on May 14, 2002. The Company drew down $500,000 in November 2000 and the remaining $500,000 in March of 2001. As part of the private placement stock transaction in December 2001, $750,000 of the outstanding term loan plus accrued interest was converted to common stock. The remaining $250,000 portion of the term loan plus accrued interest was paid in cash on January 18, 2002. STOCKHOLDERS' EQUITY In September 2003, Clean Diesel Technologies received $3.865 million (net of $39,000 in expenses) through a private placement of 2,395,597 shares of its Common Stock on the AIM (Alternative Investment Market) of the London Stock Exchange under the ticker symbol CDT. The new shares were issued in reliance on Regulation S under the US Securities Act and because they are subject to transfer restrictions for a period of time, they may not be resold to persons in the US or US persons but may otherwise be traded in the UK without other restrictions. In conjunction with the private placement, 230,240 ten year warrants with an exercise price of $1.63 per share were issued. In October 2002, Clean Diesel Technologies received $1.356 million (net of $69,000 in expenses) through a private placement of 704,349 shares of its Common Stock. STOCK-BASED COMPENSATION Clean Diesel Technologies accounts for stock option grants in accordance with Accounting Principles Board (APB) Opinion No. 25, Accounting for Stock Issued to Employees. Under CDT's current plan, options may be granted at not less than the fair market value on the date of grant and therefore no compensation expense is recognized for the stock options granted to employees. In December 2002, the FASB issued SFAS No. 148, "Accounting for Stock-Based Compensation-Transit "Accounting for Stock-Based Compensation," to provide alternative methods of transition for a voluntary change to the fair value based method of accounting for stock-based employee compensation. In addition, the Statement amends the disclosure requirements of SFAS No. 123 to require prominent disclosures in both annual and interim financial statements about the method of accounting for stock-based employee compensation and the effect of the method used on reported results. The Company has adopted the disclosure requirements of this Statement as of December 31, 2002. -7- If compensation expense for CDT's plan had been determined based on the fair value at the grant dates for awards under its plan, consistent with the method described in SFAS No. 123, CDT's net loss and basic and diluted loss per common share would have been increased to the pro forma amounts indicated below for the nine months ended September 30: 2003 2002 -------- -------- Net loss as reported $(2,156) $(2,240) Deduct: Total stock-based employee compensation expense determined under fair value based method for all awards, net of related tax effects (406) (451) -------- -------- Pro forma net loss $(2,562) $(2,691) Net loss per share: Basic and diluted loss per common share-as reported $ (0.18) $ (0.20) Basic and diluted per common share-pro forma $ (0.21) $ (0.24) In accordance with the provisions of SFAS No. 123, for purposes of the pro forma disclosures the estimated fair value of the options is amortized over the option vesting period. The application of the pro forma disclosures presented above are not representative of the effects SFAS No. 123 may have on operating results and loss per share in future years due to the timing of stock option grants and considering that options vest over a period of three years. The Black-Scholes option-pricing model was developed for use in estimating the fair value of traded options that have no vesting restrictions and are fully transferable. In addition, option-pricing models require the input of highly subjective assumptions including the expected stock price volatility. Because CDT's employee stock options have characteristics significantly different from those of traded options and because changes in the subjective input assumptions can materially affect the fair value estimate, in management's opinion, the existing models do not necessarily provide a reliable single measure of the fair value of its stock options. The fair value of each option grant, for pro forma disclosure purposes, was estimated on the date of grant using the modified Black-Scholes option-pricing model with the following weighted-average assumptions for the second quarter 2003 grants, expected dividend yield 0%, risk free interest rate 1.23%, expected volatility 95.7% and expected life of the option 4 years. The weighted-average assumptions for the third quarter 2003 grants were: expected dividend yield 0%, risk free interest rate 2.48%, expected volatility 99.41% and expected life of the option 4 years. LOSS PER SHARE Employee stock options and stock purchase warrants were not included in the computation of diluted earnings per share for 2003, because either the Company reported a loss for the period or their exercise prices were greater than the average market price of the common stock and therefore would be antidilutive. RELATED PARTY TRANSACTIONS In November 2000, the Company secured a $1,000,000 term loan facility at a 10% interest rate from several preferred shareholders, including Fuel Tech Inc. which pledged $250,000. In 2000 and 2001 the Company drew down the entire $1,000,000 term loan. In December 2001, $750,000 of term loan and accrued interest was repaid as part of the December 2001 private placement of common stock discussed in the stock holders equity note. In January 2002, the Company repaid the remaining $250,000 term loan payable to Fuel Tech plus accrued interest. The Company has a Management and Services Agreement with Fuel Tech. Under the agreement, the Company pays Fuel Tech a fee equal to an additional 3 - 10% of the costs paid on the Company's behalf, dependent upon the nature of the costs incurred. Currently, a fee of 3% is assessed on all costs billed to the Company from Fuel Tech. Charges to the Company, inclusive of the administrative fee, were approximately $17,300 in both the third quarter of 2003 and 2002, respectively. -8- The Company had a deferred salary plan with its Chief Executive Officer in which he deferred $62,500 of his annual salary until the Company reaches $5 million in revenue. This agreement was terminated in March 2001 and the executive's salary was returned to full pay. At September 30, 2003 total obligations were $135,400 pertaining to this plan. The Company makes annual pension payments or accruals pursuant to a deferred compensation plan on behalf of its Chief Executive Officer. This agreement was suspended as of June 15, 2003 and the company does not plan to make any additional accruals in the future. At September 30, 2003 total obligations were $305,616 pertaining to this plan. COMMITMENTS The Company is obligated under a sublease agreement for its principal office. The Company has agreed to a 12 month extension with a three month notice for termination of the lease through December 2003, at an annual rate of $116,000. For the quarters ended September 30, 2003 and 2002, rental expense approximated $27,625 for each quarter. Effective October 28, 1994, Fuel Tech granted two licenses to the Company for all patents and rights associated with its platinum fuel catalyst technology. Effective November 24, 1997, the licenses were canceled and Fuel Tech assigned to the Company all such patents and rights on terms substantially similar to the licenses. In exchange for the assignment, the Company will pay Fuel Tech a royalty of 2.5% of its annual gross revenue from sales of the platinum fuel catalysts commencing in 1998. The royalty obligation expires in 2008. The Company may terminate the royalty obligation to Fuel Tech by payment of $6,545,455 in 2003 and declining annually to $1,090,910 in 2008. The Company as assignee and owner will maintain the technology at its own expense. Minimum royalties were paid to Fuel Tech in 2002 and royalties payable to Fuel Tech at September 30, 2003 are $3,600. MARKETING AND LICENSE AGREEMENTS In December 2002, Clean Diesel Technologies completed an additional exclusive license agreement with Mitsui for the mobile ARIS technology for Japan. Under terms of the agreement Mitsui agreed to pay CDT a $250,000 license fee and Mitsui committed to spend an additional $200,000 in developing, testing and demonstrating ARIS mobile prototypes. CDT recognized the $250,000 license revenue in the fourth quarter of 2002. Clean Diesel has previously completed an exclusive ARIS license for the ARIS NOx reduction technology for stationary applications in Japan. CDT receives royalties on each system sold by Mitsui. In April 2003, Clean Diesel Technologies completed a non-exclusive license agreement with Combustion Component Associates Inc. (CCA) of Monroe, Connecticut, for the mobile ARIS technology in the US. Under terms of the agreement CCA agreed to pay CDT a $150,000 license fee and committed to spend an additional $100,000 in developing, testing and demonstrating ARIS mobile prototypes. CDT will also receive ongoing royalty payments on a per unit basis. CDT recognized the $150,000 license revenue in the second quarter of 2003, as there are no significant ongoing services required to be performed by CDT. SUBSEQUENT EVENTS On October 13, 2003, the Company announced that it had received notification from the US Environmental Protection Agency of verification of emissions reduction performance of its Platinum Plus(R) Purifier system to retrofit to 1988-1993 diesel engines. The EPA verification will allow end-users to receive emission reduction credit, as well as access to federal, state and local funds to pay for the verified system. The Company intends to supply the verified systems directly to end-users and through a planned network of licensed distributors. -9- CLEAN DIESEL TECHNOLOGIES, INC. Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations FORWARD-LOOKING STATEMENTS Statements in this Form 10-Q that are not historical facts, so-called "forward-looking statements," are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that all forward-looking statements involve risks and uncertainties, including those detailed in the Company's filings with the Securities and Exchange Commission. See "Risk Factors of the Business" in Item 1, "Business," and also Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the Company's Form 10-K for the year ended December 31, 2002. RESULTS OF OPERATIONS Prior to 2000, the Company was a development stage enterprise and its efforts were devoted to the research, development and commercialization of platinum fuel catalysts and nitrogen oxide reduction technologies to reduce emissions from diesel engines. During December 1999, the Company received its US EPA registration for its platinum-cerium fuel catalyst product and completed its first commercial sales. Product sales and cost of sales were $81,000 and $47,000 respectively for the third quarter of 2003 versus $39,000 and $17,000 for 2002. Platinum Plus fuel catalyst sales of $58,000 and $11,000 were recorded in the third quarter of 2003 and 2002, respectively. ARIS product sales of $12,000, primarily to Mitsui & Co., Ltd., were recorded in the third quarter of 2003. The remainder of product revenue in 2003 consists of additive dispensing equipment. Included in the 2003 and 2002 third quarter revenue is $18,000 and $12,000, respectively, of license and royalty income. The 2003 license and royalty income is from continuing ARIS system royalties from Mitsui & Co., Ltd. Year-to-date sales and cost of sales were $478,000 and $167,000 in 2003 versus $141,000 and $72,000 in 2002. Included in the total year revenue is $187,000 and $26,000 of ARIS license and royalty revenue for 2003 and 2002 respectively. Year-to-date ARIS 2000 system sales for 2003 were $87,000 versus $87,000 in 2002. Year-to-date Platinum Plus FBC sales for 2003 were $138,000 versus $28,000 in 2002. General and administrative expenses decreased $52,000 to $517,000 in the third quarter 2003 versus $569,000 in the same period of 2002. For the first nine months of 2003 general and administrative expenses increased $151,000 to $1,855,000 versus $1,704,000 in 2002. The year-to-date 2003 increase in general and administrative expenses is related to increases in marketing and sales activities and higher professional fees including insurance and advisory services. Research and development expenses decreased $14,000 to $171,000 in the third quarter 2003 versus $185,000 in the comparable period in 2002. For the year research and development costs are down $7,000 to $590,000 versus $597,000 in the same period in 2002. The decrease is attributable to the timing of expenses related to several verification and certification programs for the Platinum Plus FBC. Patent filing costs increased $25,000 to $29,000 in the third quarter of 2003 versus $4,000 in the comparable 2002 period. The increase is related to increased amortization of patent expenses as the patents near retirement and the addition of new patents. For the year, patent cost has decreased $2,000 to $29,000 versus a $31,000 in the same nine month period in 2002. Third quarter interest income decreased $6,000 in 2003 to $1,000 versus $7,000 in the comparable period in 2002. For the year interest income decreased $25,000 to $7,000 versus $32,000 in the same -10- period in 2002. This was a result of a decrease in the amount of cash and cash equivalents on hand in 2003. LIQUIDITY AND SOURCES OF CAPITAL Prior to 2000, the Company was primarily engaged in research and development and has incurred losses since inception aggregating $ 24,183,000 (excluding the effect of the non-cash preferred stock dividends). The Company expects to incur losses through the foreseeable future as it further pursues its commercialization efforts. Although the Company started selling limited quantities of product in 1999 and licensing revenue in 2000 and 2001, sales and revenue to date have been insufficient to cover operating expenses, and the Company continues to be dependent upon sources other than operations to finance its working capital requirements. For the six months ended September 30, 2003 and 2002, the Company used cash of $1,773,000 and $2,176,000 respectively, in operating activities. At September 30, 2003 and December 31, 2002, the Company had cash and cash equivalents of $3,994,000 and $2,083,000, respectively. The increase in cash and cash equivalents in 2003 was the result of the issue of Common Stock as discussed in the next paragraph. Offsetting some of this increase are expenses relating the verification programs with EPA and CARB and the on-going marketing and operation costs. The Company anticipates incurring additional losses through at least the next 12 months as it further pursues its commercialization efforts. In September 2003, Clean Diesel Technologies received $3.865 million (net of $39,000 in expenses) through a private placement of 2,395,597 shares of its Common Stock. In conjunction with the private placement, 230,240 ten year warrants with an exercise price of $1.63 per share were issued. In October 2002, Clean Diesel Technologies received $1.356 million (net of $69,000 in expenses) through a private placement of 704,349 shares of its Common Stock on the AIM (Alternative Investment Market) London Stock Exchange. In November 2000, the Company secured a $1,000,000 privately financed term loan facility. In December 2000, the Company drew down $500,000 of the term loan facility and in March 2001 the remaining $500,000 of the term loan was drawn down. As part of the private placement stock transaction in December 2001, $750,000 of the outstanding term loan plus accrued interest was converted to common stock. The remaining $250,000 plus accrued interest was paid in cash in January 2002. As a result of the Company's recurring operating losses, the Company has been unable to generate positive cash flow. In management's opinion, the Company's cash balance at September 30, 2003 will be sufficient to fund the Company's operations through at least 2004. The Company may require additional capital to fund its future operations. Although the Company believes that it will be successful in its capital-raising efforts, there is no guarantee that it will be able to raise such funds on terms that will be satisfactory to the Company. The Company will develop contingency plans in the event future financing efforts are not successful. Such plans may include reducing expenses and selling or licensing some of the Company's technologies. ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK In the opinion of management, with the exception of exposure to fluctuations in the cost of platinum, the Company is not subject to any significant market risk exposure. The Company generally receives all income in United States dollars. The Company typically makes several small payments monthly in various foreign currencies for patent expenses, product tests and registration, local marketing and promotion and consultants. -11- ITEM 4. CONTROLS AND PROCEDURES The Company maintains disclosure controls and procedures and internal controls designed to ensure that information required to be disclosed in the Company's filings under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms. The Company's management, with the participation of its principal executive and financial officers, has evaluated the effectiveness of the Company's disclosure controls and procedures as of the end of the period covered by this Quarterly Report on form 10Q. The Company's principal executive and financial officers have concluded, based on such evaluation, that such disclosure controls and procedures were effective for the purpose for which they were designed as of the end of such period. There was no change in the Company's internal control over financial reporting that was identified in connection with such evaluation that occurred during the period covered by this Quarterly Report on form 10Q that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting. PART II. OTHER INFORMATION Item 1. Legal Proceedings None Item 2. Changes in Securities Effective September 26, 2003, the Company sold at $1.63 per share pursuant to the Regulation S exemption from registration under the Securities Act, 2,395,597 shares of Common Stock, par $0.05 (the "Stock"), to twenty non-U.S. investors certain of whom are stockholders of the Company, including D. R. Gray a director (the "Investors). Such sale also included delivery to the Investors and one financial advisor to the Company of warrants to purchase also at $1.63 per share for 10 years, 230,240 shares of the Stock. The proceeds of this private placement are to be applied toward the Company's general corporate purposes, including the costs of development and testing for verification by governmental authorities in the U.S. of a catalyzed wire mesh filter as used with the Registrant's fuel borne catalyst. Item 3. Defaults upon Senior Securities None Item 4. Submission of Matters to a Vote of Security Holders None Item 5. Other Information None Item 6. Exhibits and Reports on Form 8-K a. Exhibits None b. Reports on Form 8-K A report on form 8-K was filed September 8, 2003 to announce signed commitments from a strategic partner and several current UK based shareholders to invest $3.8M into CDT. The closing was expected to be September 26, 2003. -12- CLEAN DIESEL TECHNOLOGIES, INC. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. Date: November 7, 2003 By: /s/Jeremy D. Peter-Hoblyn -------------------- Jeremy D. Peter-Hoblyn Chief Executive Officer and Director Date: November 7, 2003 By: /s/David W. Whitwell -------------------- David W. Whitwell Chief Financial Officer, Vice President and Treasurer -13- EXHIBIT 31.1 I, Jeremy D. Peter-Hoblyn, certify that: 1. I have reviewed this quarterly report on Form 10-Q of Clean Diesel Technologies Inc.: 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e) for the registrant) and have: a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and c) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions): a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: November 7, 2003 By: /s/Jeremy D. Peter-Hoblyn -------------------- Jeremy D. Peter-Hoblyn Chief Executive Officer and Director EXHIBIT 31.2 I, David W. Whitwell, certify that: 1. I have reviewed this quarterly report on Form 10-Q of Clean Diesel Technologies Inc.: 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e) for the registrant) and have: a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and c) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions): a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: November 7, 2003 By: /s/David W. Whitwell -------------------- David W. Whitwell Chief Financial Officer, Vice President and Treasurer EXHIBIT 32 The undersigned in their capacities as Chief Executive Officer and Chief Financial Officer of the Registrant do hereby certify that: (i) this report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (ii) information contained in the report fairly presents, in all material respects, the financial condition and results of operations of the Registrant as of, and for, the periods presented in the report. Date: November 7, 2003 By: /s/Jeremy D. Peter-Hoblyn -------------------- Jeremy D. Peter-Hoblyn Chief Executive Officer and Director Date: November 7, 2003 By: /s/David W. Whitwell -------------------- David W. Whitwell Chief Financial Officer, Vice President and Treasurer A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request. |
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