x
|
QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF
1934
|
¨
|
TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF
1934
|
Delaware
|
06-1393453
|
|
(State
or other jurisdiction of incorporation or organization)
|
(I.R.S.
Employer Identification No.)
|
|
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)
|
Large
Accelerated Filer ¨
|
Accelerated
Filer ¨
|
Non-Accelerated
Filer x
|
Page
|
||
PART
I.
|
FINANCIAL
INFORMATION
|
|
Item
1.
|
||
2
|
||
|
3
|
|
|
||
4
|
||
|
||
5
|
||
|
||
Item
2.
|
13
|
|
|
||
Item
3.
|
18
|
|
|
||
Item
4.
|
18
|
|
|
||
PART
II.
|
OTHER
INFORMATION
|
|
|
||
Item
2.
|
19
|
|
|
||
Item
4.
|
19
|
|
|
||
Item
6.
|
20
|
|
|
||
21
|
June
30,
|
December
31,
|
|||||||
2007
|
2006
|
|||||||
(Unaudited)
|
||||||||
Assets
|
||||||||
Current
assets:
|
||||||||
Cash
and cash equivalents
|
$ |
10,778
|
$ |
5,314
|
||||
Accounts
receivable, net of allowance of $63 and $34, respectively
|
1,031
|
100
|
||||||
Inventories,
net
|
609
|
365
|
||||||
Other
current assets
|
103
|
96
|
||||||
Subscription
receivable, net
|
─
|
2,412
|
||||||
Total
current assets
|
12,521
|
8,287
|
||||||
Patents,
net
|
638
|
603
|
||||||
Fixed
assets, net of accumulated depreciation of $385 and $350,
respectively
|
74
|
91
|
||||||
Other
assets
|
37
|
37
|
||||||
Total
assets
|
$ |
13,270
|
$ |
9,018
|
||||
Liabilities
and stockholders’ equity
|
||||||||
Current
liabilities:
|
||||||||
Accounts
payable
|
$ |
174
|
$ |
330
|
||||
Accrued
expenses
|
457
|
740
|
||||||
Total
current liabilities
|
631
|
1,070
|
||||||
Stockholders’
equity:
|
||||||||
Preferred
Stock, par value $0.01 per share; authorized 100,000 shares; no shares
issued and outstanding
|
─
|
─
|
||||||
Common
Stock, par value $0.01 per share: authorized 12,000,000 shares; issued
7,115,232 and 5,964,493 shares, respectively
|
71
|
60
|
||||||
subscribed
and to be issued 0 and 667,998 shares, respectively
|
─
|
7
|
||||||
Additional
paid-in capital, net of subscriptions receivable of $0 and $1,901,
respectively
|
59,875
|
52,854
|
||||||
Treasury
stock, 86 and 0 shares, respectively, of common stock, at
cost
|
(1 | ) |
─
|
|||||
Accumulated
other comprehensive income
|
5
|
4
|
||||||
Accumulated
deficit
|
(47,311 | ) | (44,977 | ) | ||||
Total
stockholders’ equity
|
12,639
|
7,948
|
||||||
Total
liabilities and stockholders’ equity
|
$ |
13,270
|
$ |
9,018
|
Three
Months Ended
June
30,
|
Six
Months Ended
June
30,
|
|||||||||||||||
2007
|
2006
|
2007
|
2006
|
|||||||||||||
Revenue:
|
||||||||||||||||
Product
sales
|
$ |
139
|
$ |
218
|
$ |
344
|
$ |
413
|
||||||||
Technology
licensing fees and royalties
|
1,104
|
1
|
1,115
|
2
|
||||||||||||
Consulting
and other
|
─
|
60
|
─
|
133
|
||||||||||||
Total
revenue
|
1,243
|
279
|
1,459
|
548
|
||||||||||||
Costs
and expenses:
|
||||||||||||||||
Cost
of revenue
|
105
|
156
|
221
|
272
|
||||||||||||
Selling,
general and administrative
|
1,495
|
1,186
|
3,298
|
2,715
|
||||||||||||
Research
and development
|
150
|
177
|
192
|
395
|
||||||||||||
Patent
amortization and other expense
|
79
|
50
|
176
|
93
|
||||||||||||
Operating
costs and expenses
|
1,829
|
1,569
|
3,887
|
3,475
|
||||||||||||
Loss
from operations
|
(586 | ) | (1,290 | ) | (2,428 | ) | (2,927 | ) | ||||||||
Other
income (expense):
|
||||||||||||||||
Interest
income
|
67
|
21
|
94
|
48
|
||||||||||||
Other
income (expense)
|
─
|
79
|
─
|
105
|
||||||||||||
Net
loss
|
$ | (519 | ) | $ | (1,190 | ) | $ | (2,334 | ) | $ | (2,774 | ) | ||||
Basic
and diluted loss per common share
|
$ | (0.08 | ) | $ | (0.23 | ) | $ | (0.37 | ) | $ | (0.54 | ) | ||||
Basic
and diluted weighted-average number of common shares
outstanding
|
6,550
|
5,222
|
6,333
|
5,179
|
Six
Months Ended
June
30,
|
||||||||
2007
|
2006
|
|||||||
Operating
activities
|
||||||||
Net
loss
|
$ | (2,334 | ) | $ | (2,774 | ) | ||
Adjustments
to reconcile net loss to cash used in operating
activities:
|
||||||||
Depreciation
and amortization
|
68
|
79
|
||||||
Provision
for doubtful accounts, net
|
30
|
18
|
||||||
Compensation
expense for stock options
|
642
|
106
|
||||||
Changes
in operating assets and liabilities:
|
||||||||
Accounts
receivable
|
(961 | ) | (57 | ) | ||||
Inventories
|
(244 | ) | (161 | ) | ||||
Other
current assets and other assets
|
(7 | ) | (44 | ) | ||||
Accounts
payable and accrued expenses
|
(298 | ) |
381
|
|||||
Net
cash used for operating activities
|
(3,104 | ) | (2,452 | ) | ||||
Investing
activities
|
||||||||
Patent
costs
|
(68 | ) | (62 | ) | ||||
Purchase
of fixed assets
|
(18 | ) |
─
|
|||||
Net
cash used for investing activities
|
(86 | ) | (62 | ) | ||||
Financing
activities
|
||||||||
Proceeds
from issuance of common stock, net
|
4,313
|
488
|
||||||
Proceeds
from exercise of warrants, net
|
4,346
|
─
|
||||||
Proceeds
from exercise of stock options
|
40
|
14
|
||||||
Stockholder-related
charges
|
(45 | ) |
─
|
|||||
Net
cash provided by financing activities
|
8,654
|
502
|
||||||
Net
increase (decrease) in cash and cash equivalents
|
$ |
5,464
|
$ | (2,012 | ) | |||
Cash
and cash equivalents at beginning of the period
|
5,314
|
4,513
|
||||||
Cash
and cash equivalents at end of the period
|
$ |
10,778
|
$ |
2,501
|
||||
Supplemental
non-cash activities:
|
||||||||
Payment
of accrued directors’ fees in common stock
|
$ |
140
|
$ |
94
|
(in
thousands)
|
||||||||||||||||
Three
Months Ended
|
Six
Months Ended
|
|||||||||||||||
June
30,
|
June
30,
|
|||||||||||||||
2007
|
2006
|
2007
|
2006
|
|||||||||||||
Non-cash
stock-based compensation
|
$ |
91
|
$ |
53
|
$ |
642
|
$ |
106
|
||||||||
Severance
|
─
|
─
|
─
|
357
|
||||||||||||
Compensation
and benefits
|
653
|
582
|
1,254
|
1,174
|
||||||||||||
Total
compensation and benefits
|
$ |
744
|
$ |
635
|
$ |
1,896
|
$ |
1,637
|
||||||||
Professional
|
365
|
231
|
588
|
432
|
||||||||||||
Travel
|
158
|
135
|
296
|
259
|
||||||||||||
Occupancy
|
123
|
95
|
235
|
196
|
||||||||||||
Sales
and marketing expenses
|
72
|
42
|
160
|
89
|
||||||||||||
Depreciation
and all other
|
33
|
48
|
123
|
102
|
||||||||||||
Total
selling, general and administrative expense
|
$ |
1,495
|
$ |
1,186
|
$ |
3,298
|
$ |
2,715
|
(in
thousands)
|
||||||||
June
30,
|
December
31,
|
|||||||
2007
|
2006
|
|||||||
Finished
Platinum Plus
|
$ |
151
|
$ |
144
|
||||
Platinum
concentrate/metal
|
312
|
103
|
||||||
Hardware
|
122
|
119
|
||||||
Other
|
39
|
26
|
||||||
$ |
624
|
$ |
392
|
|||||
Less: inventory
reserves
|
(15 | ) | (27 | ) | ||||
Inventories,
net
|
$ |
609
|
$ |
365
|
|
Number
of Shares
|
Weighted
Average Exercise Price
|
Weighted
Average Remaining Contractual Term in Years
|
Aggregate
Intrinsic
Value
|
||||||||||||
Options
outstanding as of December 31, 2006
|
648,087
|
$ |
10.082
|
|
|
|||||||||||
Granted
|
125,000
|
$ |
9.100
|
|
|
|||||||||||
Exercised
|
(21,785 | ) | $ |
6.776
|
|
|
||||||||||
Forfeited/cancelled
|
(13,550 | ) | $ |
5.075
|
||||||||||||
Expired
|
(20,333 | ) | $ |
23.018
|
|
|
||||||||||
Options
outstanding as of June 30, 2007
|
717,419
|
$ |
9.717
|
6.36
|
$ |
3,250,407
|
||||||||||
Options
exercisable as of June 30, 2007
|
610,620
|
$ |
10.017
|
5.88
|
$ |
2,599,366
|
Expected
term in years
|
8.64
|
Risk-free
interest rate
|
4.67%
|
Expected
volatility
|
104.7%
|
Dividend
yield
|
0%
|
Forfeiture
rate
|
5.0%
|
Number
of Shares
|
Weighted
Average Exercise Price
|
|||||||
Warrants
outstanding and to be issued as of December 31, 2006
|
1,557,424
|
$ |
10.98
|
|||||
Issued
|
74,142
|
8.44
|
||||||
Exercised
|
(447,134 | ) |
10.00
|
|||||
Forfeited
|
(27 | ) |
11.49
|
|||||
Expired
|
─
|
─
|
||||||
Warrants
outstanding and exercisable as of June 30, 2007
|
1,184,405
|
$ |
11.20
|
|||||
Weighted-average
remaining contractual term in years
|
1.17
|
|||||||
Aggregate
intrinsic value
|
$ |
3,443,412
|
Three
Months Ended
June
30,
|
Six
Months Ended
June
30,
|
|||||||||||||||
2007
|
2006
|
2007
|
2006
|
|||||||||||||
Customer
A
|
*
|
17.9%
|
*
|
*
|
||||||||||||
Customer
B
|
*
|
21.1%
|
*
|
21.4%
|
||||||||||||
Customer
C
|
*
|
16.5%
|
*
|
14.6%
|
||||||||||||
Customer
D
|
80.4%
|
*
|
68.5
|
*
|
|
*
|
Represents
less than 10% revenue for that customer in the applicable
period. There were no other customers that represented 10% or
more of revenue for the periods
indicated.
|
(in
thousands)
|
||||||||||||||||
Three
Months Ended
|
Six
Months Ended
|
|||||||||||||||
June
30,
|
June
30,
|
|||||||||||||||
2007
|
2006
|
2007
|
2006
|
|||||||||||||
Net
loss
|
$ | (519 | ) | $ | (1,190 | ) | $ | (2,334 | ) | $ | (2,774 | ) | ||||
Other
comprehensive income:
|
||||||||||||||||
Foreign
currency translation adjustment
|
1
|
|
1
|
|
||||||||||||
Comprehensive
loss
|
$ | (518 | ) | $ | (1,190 | ) | $ | (2,333 | ) | $ | (2,774 | ) |
(in
thousands)
|
||||||||||||||||
Three
Months Ended
June
30,
|
Six
Months Ended
June
30,
|
|||||||||||||||
2007
|
2006
|
2007
|
2006
|
|||||||||||||
Revenue:
|
||||||||||||||||
U.S.
|
$ |
710
|
$ |
166
|
$ |
869
|
$ |
344
|
||||||||
U.K./Europe
|
533
|
54
|
569
|
72
|
||||||||||||
Asia
|
─
|
59
|
21
|
132
|
||||||||||||
Total
|
$ |
1,243
|
$ |
279
|
$ |
1,459
|
$ |
548
|
Item
2.
|
Management’s
Discussion and Analysis of Financial Condition and Results of
Operations
|
(in
thousands)
|
||||||||
Three
Months Ended
|
||||||||
June
30,
|
||||||||
2007
|
2006
|
|||||||
Non-cash
stock-based compensation
|
$ |
91
|
$ |
53
|
||||
Compensation
and benefits
|
653
|
582
|
||||||
Total
compensation and benefits
|
$ |
744
|
$ |
635
|
||||
Professional
|
365
|
231
|
||||||
Travel
|
158
|
135
|
||||||
Occupancy
|
123
|
95
|
||||||
Sales
and marketing expenses
|
72
|
42
|
||||||
Depreciation
and all other
|
33
|
48
|
||||||
Total
selling, general and administrative expense
|
$ |
1,495
|
$ |
1,186
|
(in
thousands)
|
||||||||
Six
Months Ended
|
||||||||
June
30,
|
||||||||
2007
|
2006
|
|||||||
Non-cash
stock-based compensation
|
$ |
642
|
$ |
106
|
||||
Severance
|
|
357
|
||||||
Compensation
and benefits
|
1,254
|
1,174
|
||||||
Total
compensation and benefits
|
$ |
1,896
|
$ |
1,637
|
||||
Professional
|
588
|
432
|
||||||
Travel
|
296
|
259
|
||||||
Occupancy
|
235
|
196
|
||||||
Sales
and marketing expenses
|
160
|
89
|
||||||
Depreciation
and all other
|
123
|
102
|
||||||
Total
selling, general and administrative expense
|
$ |
3,298
|
$ |
2,715
|
Item
3.
|
Quantitative
and Qualitative Disclosures about Market
Risk
|
Item
4.
|
Controls
and Procedures
|
PART
II.
|
OTHER
INFORMATION
|
Item
2.
|
Unregistered
Sales of Equity Securities and Use of
Proceeds
|
Item
4.
|
Submission
of Matters to a Vote of Security
Holders
|
Shares
|
Shares
|
|||
Name
|
For
|
Withheld
|
||
John
A. de Havilland
|
4,211,830
|
22,116
|
||
Derek
R. Gray
|
4,229,689
|
4,306
|
||
Charles
W. Grinnell
|
4,232,530
|
1,466
|
||
John
J. McCloy II
|
4,229,689
|
4,306
|
||
David
F. Merrion
|
4,232,530
|
1,466
|
||
Bernhard
Steiner
|
4,229,689
|
4,306
|
Item
6.
|
Exhibits
|
(a)
|
Exhibits
|
||
|
|||
Exhibit
Number
|
Description
|
||
#3(i)(b)
|
Certificate
of Amendment to Restated Certificate of Incorporation dated as of
June 15,
2007 (incorporated by reference to Exhibit 3(i)(b) to Registration
Statement on Form S-1 filed on June 29, 2007 [File No.
333-144201]).
|
||
|
|||
Certification
of Chief Executive Officer Pursuant to Rule 13a-14(a) under the Exchange
Act
|
|||
|
|||
Certification
of Chief Financial Officer Pursuant to Rule 13a-14(a) under the Exchange
Act
|
|||
|
|||
Certification
Pursuant to 18 U.S.C. Section
1350
|
CLEAN
DIESEL TECHNOLOGIES, INC.
|
||||
(Registrant)
|
||||
Date: August
14, 2007
|
By:
|
/s/
Bernhard Steiner
|
||
Bernhard
Steiner
|
||||
Director,
President and Chief Executive Officer
|
||||
Date: August
14, 2007
|
By:
|
/s/
Ann B. Ruple
|
||
Ann
B. Ruple
|
||||
Chief
Financial Officer, Vice President and Treasurer
|