Clean Diesel Technologies reports 2005 Third-quarter Results

STAMFORD, CT (14 November 2005) … Clean Diesel Technologies, Inc. ("Clean Diesel") (EBB: CDTI & AIM: CDT/CDTS), a developer of chemical and technological solutions to reduce harmful engine emissions, today reported revenues for the third quarter of 2005 and for the nine- month period ended September 30, 2005.

Revenues in the third quarter were lower than in the same period of 2004 but revenues for the nine-month period ended September 30, 2005, increased compared to the same period of 2004. Total revenue for this year's third quarter was $166,000 with a net loss of $1,489,000, or $0.09 loss per share. This compares to total revenue of $241,000 and a net loss of $1,243,000, or $0.08 loss per share, for the same period in 2004. For the nine months ended September 30, 2005, total revenue was $626,000 with a net loss of $3,966,000, or $0.23 loss per share. In the comparable 2004 period, revenue was $528,000, with a net loss of $2,936,000, or $0.19 loss per share.

Revenue increased for the nine-months ended September 30, 2005, in both additive and hardware sales as a result of a successful program completion with the State of Pennsylvania for the EPA-verified Platinum Plus® Purifiers and increased additive sales in the mining and off-road sectors. In the third quarter Clean Diesel committed significant resources to responding to questions posed by the EPA, as well as finalizing agreements with Mitsui for the transfer of the wire mesh filter intellectual property and completing the Fleetguard blending and distribution agreement for Platinum Plus. These programs were all completed and announced in September. The results from testing of the Platinum Plus fuel-borne catalyst over 8 months by EPA approved laboratories confirmed that any potential allergenic platinum emissions from use of the product were hundreds to thousands of times below the lowest published safe exposure level and were consistent with reported platinum emissions from catalyzed emission control devices.

The acquisition of the wire mesh filter technology and the distribution agreement with Fleetguard are expected to support revenue growth in the near term.

General and administrative expenses increased in 2005 versus 2004 as a result of higher personnel and related costs in the US and Europe. In the last 12 months, Clean Diesel hired a new CEO, Vice-President and Chief Technology Officer and a manager in Europe in order to strengthen its commercialization effort. Clean Diesel also incurred increased expenses in 2005 related to the EPA testing.

As previously announced on 7 November 2005, Clean Diesel completed a $6.3 million (£3.6 million) private placement of its common stock with several existing and new shareholders, as well as directors and management.

Full financial information is included in the Company's Form 10-Q filed with the Securities and Exchange Commission (www.SEC.gov).

Statements of Operations (unaudited) (in thousands of US$ except share data)	Three months ended September 30			Nine months ended September 30
	2005	2004		2004	2004
Revenue
Additive Revenue	97	88		283	199
Hardware Revenue	56	135		314	280
License and Royalty Revenue	13	18		29	49
Total Revenue	166	241		626	528
Costs and Expenses
Cost of Revenue	102	149		373	334
General and Administrative	1,260	1,150		3,635	2,761
Research and Development	222	174		369	344
Patent amortization and other expense	61	22		125	61
Loss from operations	(1,479)	(1,254)		(3,876)	(2,972)
Foreign Currency Exchange Gain/(Loss)	(12)	-		(106)	-
Interest Income	2	11		16	36
Net Loss attributable to common stockholders	(1,489)	(1,243)		(3,966)	(2,936)
Basic and Diluted Loss per Common Share	(0.09)	(0.08)		(0.023)	(0.19)
Weighted Average Number of Common Shares Outstanding - Basic and Diluted	17,193	15,757		17,176	15,719

BALANCE SHEETS (in thousands of US$ except per share data)

	September 30, 2005 (unaudited)		December 31, 2004
ASSETS Current Assets
Cash and Cash Equivalents	494		4,265
Accounts receivable, net of allowance of $10 and $3 in 2004 and 2003, respectively	101		145
Inventories	265		387
Other Current Assets	85		71
Total Current Assets	945		4,868
Patents, Net	530		418
Fixed assets, net of accumulated depreciation of $233 in 2005 and $188 in 2004, respectively	193		200
Other Assets	27		27
Total Assets	1,695		5,513
LIABILITIES AND STOCKHOLDERS’ EQUITY CURRENT LIABILITIES:
Accounts Payable and Accrued Expenses	468		391
Total Current Liabilities	468		391
Stockholders' Equity
Preferred Stock, par value 0.05 per share, authorized 100,000 and 80,000 respectively, no shares issued and outstanding	-		-
Common stock, par value $0.05 per share, authorized 30,000,000 shares, issued and outstanding 17,193,047 and 17,165,868 shares, respectively	860		858
Additional Paid-in Capital	38,500		38,431
Accumulated Deficit	(38,133)		(34,167)
Total Stockholders' Equity	1,227		5,122
Total Liabilities and Stockholders' Equity	1,695		5,513

About Clean Diesel Technologies, Inc.

Clean Diesel Technologies, Inc. is a specialty chemical company with patented products that reduce emissions from diesel engines while simultaneously improving fuel economy and power. Products include Platinum Plus® fuel catalysts, the Platinum Plus Purifier System, and the ARIS® 2000 urea injection systems for selective catalytic reduction of NOx. Platinum Plus and ARIS are registered trademarks of Clean Diesel Technologies, Inc. For more information, visit CDT at www.cdti.com or contact the Company directly.

Certain statements in this news release constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known or unknown risks, including those detailed in the Company's filings with the Securities and Exchange Commission, uncertainties and other factors which may cause the actual results, performance or achievements of the Company, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof.