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 March 31, 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
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CLEAN DIESEL TECHNOLOGIES, INC.
(Exact name of registrant as specified in its charter)
Delaware 06-1393453
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(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
--- ---
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of the registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K.
Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Act).
Yes No X
--- ---
As of May 13, 2003, there were outstanding 11,976,903 shares of Common Stock,
par value $0.05 per share, of the registrant.
================================================================================
CLEAN DIESEL TECHNOLOGIES, INC.
Form 10-Q for the Quarter Ended March 31, 2003
INDEX
Page
----
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Balance Sheets as of March 31, 2003, 3
and December 31, 2002
Statements of Operations for the Three 4
Months Ended March 31, 2003 and 2002
Statements of Cash Flows for the Three 5
Months Ended March 31, 2003 and 2002
Note to Financial Statements 6
Item 2. Management's Discussion and Analysis of 11
Financial Condition and Results of Operations
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 13
Item 2. Changes in Securities 13
Item 3. Defaults upon Senior Securities 13
Item 4. Submission of Matters to a Vote of Security Holders 13
Item 5. Other Information 13
Item 6. Exhibits and Reports on Form 8-K 13
SIGNATURES & CERTIFICATIONS 14
- 2 -
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
CLEAN DIESEL TECHNOLOGIES, INC.
BALANCE SHEETS
(in thousands except share data)
March 31, December 31,
2003 2002
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(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 1,409 $ 2,083
Accounts receivable 76 284
Inventories 295 314
Other current assets 125 76
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Total current assets 1,905 2,757
Other assets 285 222
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Total assets $ 2,190 $ 2,979
============ ==============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses $ 328 $ 223
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Total current liabilities 328 223
Deferred compensation and pension benefits 431 418
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Total long term liabilities 431 418
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 15,000,000 shares, issued and
outstanding 11,968,387 shares 598 598
Additional paid-in capital 28,519 28,519
Accumulated deficit (27,686) (26,779)
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Total stockholders' equity 1,431 2,338
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Total liabilities and stockholders' equity $ 2,190 $ 2,979
============ ==============
See note to financial statements.
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CLEAN DIESEL TECHNOLOGIES, INC.
STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands except per share data)
Three Months Ended
March 31,
2003 2002
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Revenue:
Product revenue $ 88 $ 60
License and royalty revenue 8 11
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Total revenue 96 71
Costs and expenses:
Cost of sales 57 44
General and administrative 692 556
Research and development 248 111
Patent filing and maintenance 10 28
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Loss from operations (911) (668)
Interest income (4) (15)
Interest expense -- 9
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Net loss $ (907) $ (662)
======== ========
Basic and diluted loss per common share $ (0.08) $ (0.06)
======== ========
Weighted average number of common shares
Outstanding - basic and diluted 11,968 11,214
======== ========
See note to financial statements.
- 4 -
CLEAN DIESEL TECHNOLOGIES, INC.
STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands)
Three Months Ended
March 31
2003 2002
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OPERATING ACTIVITIES
Net loss $ (907) $ (662)
Adjustments to reconcile net loss to cash used in
operating activities:
Depreciation 16 3
Amortization of deferred financing expense -- 7
Compensatory stock warrants -- 95
Changes in operating assets and liabilities:
Accounts receivable 208 184
Inventories 19 5
Other current assets (49) (9)
Accounts payable and accrued expenses 118 (134)
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Net cash used in operating activities (595) (511)
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INVESTING ACTIVITIES
Patent costs (69) --
Purchase of fixed assets (10) (8)
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Net cash used in investing activities (79) (8)
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FINANCING ACTIVITIES
Repayment of term loan -- (250)
------- -------
Net cash used in financing activities -- (250)
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NET DECREASE IN CASH AND CASH EQUIVALENTS (674) (769)
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Cash and cash equivalents at beginning of period 2,083 4,023
------- -------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $1,409 $3,254
======= =======
See note to financial statements.
- 5 -
CLEAN DIESEL TECHNOLOGIES, INC.
NOTE TO FINANCIAL STATEMENTS
MARCH 31, 2003
(Unaudited)
BASIS OF PRESENTATION
The accompanying unaudited, condensed, consolidated financial statements
have been prepared in accordance with generally accepted accounting principles
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 generally accepted accounting principles
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
three-month period ended March 31, 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") 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 15.2% interest in the Company as
of March 31, 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.
The success of the Company's technologies will depend upon the commercialization
opportunities of the technologies and governmental regulations, and
corresponding foreign and state agencies.
GOING CONCERN
The financial statements have been prepared assuming that the Company will
continue as a going concern and do not include any adjustments to reflect the
possible future effects on the recoverability and classification of assets and
the amount and classification of liabilities that may result from the possible
inability of the Company to continue as a going concern.
As a result of the Company's recurring operating losses ($22,934,000 since
inception excluding non-cash preferred stock dividends), the Company has been
unable to generate a positive cash flow and will require additional capital in
the future in order to fund its operations, as its current cash position will
not be sufficient to fund the Company's cash requirements. The Company is,
however, actively seeking additional financing through a private placement in
order to fund its commercialization efforts. Without any further funding or
significant revenues from sales, demonstration programs, or license fees, the
Company expects to be able to fund operations through the third quarter of 2003.
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 has developed contingency
plans in the event its financing efforts are not successful. Based on such
plans, CDT may be required to delay, scale back or severely curtail its
operations, which could have a material adverse effect on the business,
operating results, financial condition and long-term prospects. Accordingly, at
March 31, 2003, there is substantial doubt as to the Company's ability to
continue as a going concern.
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.
- 6 -
REVENUE RECOGNITION
The Company recognizes revenue from sales of Platinum Plus fuel borne
catalyst and ARIS 2000 systems upon shipment.
In August 2001, the Company completed a license agreement with Mitsui for
CDT's ARIS 2000 NOx control system for all stationary diesel power generators in
Japan. Under the agreement, the Company received a non-refundable upfront
license payment of $495,000, and will receive ongoing standard royalties on each
system sold by Mitsui. The Company recognized the license payment as revenue in
2001, as there is no significant ongoing services to be performed by the
Company. Mitsui also has an option to license the ARIS technology for mobile
applications in Japan for an additional license fee.
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.
Royalty fees are recognized by the Company when earned.
RESEARCH AND DEVELOPMENT COSTS
Costs relating to the research, development and testing of products
including verification expenses for testing 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 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 2001, the Company received proceeds of $3.721 million (net of $0.644
million in expenses and $0.817 million in term loan re-payment) through private
placements of 2,580,664 of its Common Stock on AIM.
In 2001, $1,897,000 of dividends were declared for Series A preferred stock
and converted into the Company's Common Stock. On December 28, 2001, the Company
converted all outstanding Series A Preferred Stock (15,897 shares) including
accrued stock dividends, into Common Stock (5,934,829 shares).
- 7 -
In 2000, the Company received $1.021 million through private placements of
1,362 shares of its Series A Preferred Stock. In addition, in 1999 $1.75 million
was raised through a private placement of 3,500 Series A preferred stock shares
and in 1998, $1.4 million of bridge loans and $0.5 million of term loans were
converted into 2,800 and 1,029 shares of Series A Preferred 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-Transition and Disclosure." SFAS No. 148 amends SFAS No. 123,
"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.
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 three months ended March 31:
2003 2002
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Net loss as reported $ (907) $ (668)
Deduct: Total stock-based employee compensation expense
determined under fair value based method for all awards,
net of related tax effects (134) (174)
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Pro forma net loss $(1,041) $ (842)
Net loss per share:
Basic and diluted loss per common share-as reported $ (0.08) $(0.06)
Basic and diluted per common share-pro forma $ (0.09) $(0.08)
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 earnings (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 2002 grants,
expected dividend yield 0%, risk free interest rate 4.85%, expected volatility
94.2% and expected life of the option 4 years. No options were granted in the
first quarter of 2003.
EARNINGS PER SHARE
Stock options and stock purchase warrants were not included in the
computation of diluted earnings per share because either the Company reported a
- 8 -
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 first quarter of 2003 and 2002,
respectively.
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 March 31, 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. For the
quarters ended March 31, 2003 and 2002, $12,500 for each quarter was expensed in
connection with such plan. At March 31, 2003 and 2002, total obligations were
$295,200 and $245,200 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. The Company's minimum lease payment for 2003 is $58,000. For the
quarters ended March 31, 2003 and 2002, rental expense approximated $27,625 and
$22,792, respectively.
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
March 31, 2003 is $946.
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.
SUBSEQUENT EVENT
- 9 -
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 will recognize the $150,000 license revenue in the second quarter of 2003,
as there are no significant ongoing services required to be performed by CDT.
- 10 -
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
Product sales and cost of sales were $88,000 and $57,000 respectively for
the first quarter of 2003 versus $60,000 and $44,000 for 2002. Platinum Plus
fuel catalyst sales of $41,000 and $13,000 were recorded in the first quarter of
2003 and 2002, respectively. ARIS product sales of $22,000, primarily to Mitsui
& Co., Ltd., were also recorded in the first quarter of 2003.
Included in the 2003 and 2002 first quarter revenue was $8,000 and $11,000,
respectively, of license and royalty income. The 2003 license and royalty
income is from a major European diesel fuel system supplier for a 6 month lease
of an ARIS 2000 system and from continuing royalties from Mitsui, Ltd. and RJM
sales of ARIS 2000 systems.
General and administrative expenses increased $136,000 to $692,000 in the
first quarter 2003 versus $556,000 in the same period of 2002. The rise in
spending is related to increases in salaries and travel related to the marketing
of the Company's products and higher professional fees.
Research and development expenses increased $137,000 to $248,000 in 2003
versus $111,000 in the comparable period in 2002. The increase is attributable
to initial CARB and EPA verification programs for the Company's FBC.
Patent filing expense decreased $18,000 to $10,000 in 2003 versus $28,000
in the comparable 2002 period. The decrease is due to a change in accounting
policy for which the Company will capitalize its patent costs and amortize such
costs over the life of the related patent.
Interest income decreased $11,000 in 2003 to $4,000 from $15,000 in the
comparable period of 2002. This was the result of a decrease in the amount of
cash and cash equivalents on hand in the first quarter of 2003 versus the first
quarter of 2002.
LIQUIDITY AND SOURCES OF CAPITAL
Prior to 2000, the Company was primarily engaged in research and
development and has incurred losses since inception aggregating $22,934,000
(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 three months ended March 31, 2003 and 2002, the Company used cash
of $595,000 and $511,000 respectively, in operating activities.
- 11 -
At March 31, 2003 and December 31, 2002, the Company had cash and cash
equivalents of $1,409,000 and $2,083,000, respectively. The decrease in cash
and cash equivalents in 2003 was the result of the increased verification
programs with EPA and CARB and the on-going marketing and operation costs. The
Company anticipates incurring additional losses through at least 2003 as it
further pursues its commercialization efforts.
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.
In December 2001, the Company received $3.721 million (net of expenses and
term loan repayment) through a private placement of 2,580,664 shares of its
common stock. In conjunction with the private placement, the Company converted
all of its Series A Preferred Stock to Common Stock. All of the Company's
Common Stock shares were registered to trade on the AIM of the London Stock
Exchange.
As a result of the Company's recurring operating losses, the Company has
been unable to generate a positive cash flow. In management's opinion, the
Company's cash balance at March 31, 2003 will be sufficient to fund the
Company's operations through the third quarter 2003. The Company will 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. Accordingly, at
March 31, 2003 there is substantial doubt as to the Company's ability to
continue as a going concern.
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.
ITEM 4. CONTROLS AND PROCEDURES
Within 90 days prior to the filling date of this report, the Company's
certifying officers performed an evaluation of the effectiveness of the
Company's disclosure controls and procedures. The disclosure controls and
procedures were determined to be sufficient to ensure that material information
relating to the Company, including its consolidated subsidiaries, is made known
to the certifying officers within those entities, particularly during the period
in which this quarterly report is being prepared.
There were no significant changes in the registrant's internal controls or
in other factors that could significantly affect these controls subsequent to
the date of their evaluation, including any corrective actions with regard to
significant deficiencies and material weaknesses.
- 12 -
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
None
Item 2. Changes in Securities
None
Item 3. Defaults upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders
Commencing April 15, 2003 to stockholders of record on March 24, 2003,
Clean Diesel Technologies distributed a notice of solicitation of
stockholder consent. The stockholders of Clean Diesel Technologies
were asked to approve an amendment of the Company's certification of
incorporation to increase the authorized numbered shares of common
stock, par value $0.05 from 15,000,000 to 30,000,000 shares. At the
date of this report the solicitation is continuing until May 24, 2003.
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K
a. Exhibits
None
b. Reports on Form 8-K
None
- 13 -
CLEAN DIESEL TECHNOLOGIES, INC.
SIGNATURES & CERTIFICATIONS
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.
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: May 13, 2003 By: /s/Jeremy D. Peter-Hoblyn
---------------------------------
Jeremy D. Peter-Hoblyn
Chairman, Director and
Chief Executive Officer
Date: May 13, 2003 By: /s/David W. Whitwell
---------------------------------
David W. Whitwell
Chief Financial Officer,
Vice President and Treasurer
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 quarterly 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 quarterly
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly 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 quarterly report;
- 14 -
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act 13a-14 and 15d-14) for the registrant and have:
a) Designed such disclosures controls and procedures to ensure that
material information relating to the registrant is made known to us by
others within the registrant, particularly during the period in which
this quarterly report is being prepared; and
b) Evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of
this quarterly report (the "evaluation date"); and
c) Presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the "evaluation date";
5. The registrant's other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit committee
of the registrant's board of directors (or persons performing the equivalent
functions):
a) All significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have
identified for the registrant's auditors any material weakness in
internal controls; and
b) Any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
controls;
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether there were significant changes in internal controls or
in other factors that could significantly affect internal controls subsequent to
the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.
Date: May 13, 2003 By: /s/Jeremy D. Peter-Hoblyn
----------------------------------
Jeremy D. Peter-Hoblyn
Chairman, Director and
Chief Executive Officer
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 quarterly 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 quarterly
report;
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3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly 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 quarterly 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 13a-14 and 15d-14) for the registrant and have:
a) Designed such disclosures controls and procedures to ensure that
material information relating to the registrant is made known to us by
others within the registrant, particularly during the period in which
this quarterly report is being prepared; and
b) Evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of
this quarterly report (the "evaluation date"); and
c) Presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the "evaluation date";
5. The registrant's other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit committee
of the registrant's board of directors (or persons performing the equivalent
functions):
a) All significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have
identified for the registrant's auditors any material weakness in
internal controls; and
b) Any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
controls;
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether there were significant changes in internal controls or
in other factors that could significantly affect internal controls subsequent to
the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.
Date: May 13, 2003 By: /s/David W. Whitwell
--------------------------------
David W. Whitwell
Chief Financial Officer,
Vice President and Treasurer
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