Keeping It Simple

[eastunder]

CLNE Notes:

https://www.sec.gov/Archives/edgar/data/1368265/000119312518168530/d570831ddefr14a.htm

The Purchase Agreement

On May 9, 2018, we entered into the Purchase Agreement with Total, pursuant to which we agreed to sell and issue, and Total agreed to purchase, in a private placement, up to 50,856,296 shares of our common stock at a purchase price of $1.64 per share, which was determined based on the volume-weighted average price for our common stock between March 23, 2018 (the day on which discussions began between us and Total) and May 3, 2018 (the day on which we agreed in principal with Total regarding the structure and basic terms of its investment). If all of the shares to be sold under the Purchase Agreement are issued, then we would receive gross proceeds from such sale of $83.4 million and, immediately after such issuance (and based on the number of shares of our common stock outstanding as of April 10, 2018, which was 152,514,550 shares), Total would hold 25.0% of the outstanding shares of our common stock and the largest ownership position of our Company. As of the date of the Purchase Agreement, Total did not hold or otherwise beneficially own any shares of our common stock, and Total has agreed, until the later of May 9, 2020 or such date when it ceases to hold more than 5% of our common stock then outstanding, among other similar undertakings and subject to customary conditions and exceptions, to not purchase shares of our common stock or otherwise pursue transactions that would result in Total beneficially owning more than 30% of our equity securities without the approval of the Board

Reason behind this partnership? From same link

First and most critically, the Board believes Total is a valuable strategic investor and partner for our Company. Total and its affiliates are a major global natural gas and energy organization. In particular, Total is actively pursuing clean energy initiatives and has enthusiastically embraced natural gas as a vehicle fuel. We believe a partnership with Total could enhance our strategies, initiatives and efforts to achieve our goals to grow fleet and other consumer support for the use of natural gas as a vehicle fuel in our target customer and geographic markets, through Total’s input of crucial insight and experience, its considerable influence in the global energy markets, and other contributions and factors. The Board also believes the proceeds from the sale of our common stock to Total under the Purchase Agreement would enhance our liquidity in support of our operations, our ability to execute our business plans and pursue opportunities for further growth, and our satisfaction of our commitments (including repayments on our outstanding debt). Further, the Board believes the potential truck leasing program and credit support arrangement with Total could play a critical role in generating increased adoption of natural gas as a vehicle fuel in the U.S. heavy-duty truck market, which, if this expectation materializes, could have a direct and positive impact on our financial condition and performance, and the Board believes Total’s purchase of our common stock under the Purchase Agreement would align Total’s interests with the interests of our other stockholders and the success of our Company, both in general and in connection with any truck leasing program and credit support arrangement that may be finalized.

Total update: SC 13D/A

NTS: This shows 33% not 25% ownership

June 13, 2018, the Issuer sold and issued, and Purchaser purchased, 50,856,296 shares of Common Stock for an aggregate purchase price of $83,404,325.44. The funds for the payment of the purchase price for such shares of Common Stock were obtained from Purchaser’s general working capital.

Note: Percentage calculated based on 152,568,887 shares of Common Stock outstanding as of June 10, 2018 plus 50,856,296 shares of Common Stock, which is the number of shares that Purchaser purchased pursuant to the Purchase Agreement.

https://www.sec.gov/Archives/edgar/data/879764/000119312518192618/d606663dsc13da.htm


Potential reverse split

APPROVAL OF AMENDMENT TO OUR RESTATED CERTIFICATE OF INCORPORATION

TO EFFECT A REVERSE STOCK SPLIT

Our Board is proposing for approval by our stockholders an amendment to our Restated Certificate to effect a reverse split of our authorized, issued and outstanding common stock, at such ratio and at such time as determined by the Board (or an authorized committee thereof) and as described in this Proposal 6 below. For purposes of this Proposal 6, “Reverse Stock Split” refers to such a reverse split of our common stock effected at the ratio and time as the Board may determine. Our preferred stock, 1,000,000 shares of which are authorized and none of which are issued, outstanding or reserved for issuance, would remain unchanged by the amendment to our Restated Certificate contemplated by this Proposal 6.

Background

In May 2018, our Board determined to seek the approval of our stockholders of a proposal to authorize the Board, in its discretion, to amend the Restated Certificate to effect a Reverse Stock Split of our issued and outstanding common stock at a ratio of 1-for-5, 1-for-6, 1-for-7, 1-for-8, 1-for-9 or 1-for-10, such ratio to be determined by the Board in its discretion. As a result, if the Board determines to effect a Reverse Stock Split, each outstanding five, six, seven, eight, nine or ten shares of common stock would, at the effective time of the Reverse Stock Split, be combined, converted and changed into one share of our common stock. As part of the Reverse Stock Split, the number of authorized shares of our common stock (as it may be increased pursuant to the amendment to our Restated Certificate contemplated by Proposal 5) would be reduced by the same ratio as the issued and outstanding shares of our common stock.

This Proposal 6, if approved, would not immediately cause a Reverse Stock Split to be effected, but rather would grant the Board, or an authorized committee thereof, the authority to effect a Reverse Stock Split, if and when determined by the Board or such committee, at any time on or before May 31, 2019. As a result, the Board or any such committee would have the sole discretion, until May 31, 2019, to elect whether to effect a Reverse Stock Split and, if so, the number of shares, whether five, six, seven, eight, nine or ten, of our common stock that would be combined into one share of our common stock upon implementing the Reverse Stock Split. Accordingly, approval of this Proposal 6 would authorize the Board or any such committee, in its discretion, to effectuate the Reverse Stock Split at any of the ratios described above and at any time until the date set forth above, or not to effect the Reverse Stock Split at all.

If the Board elects to effect a Reverse Stock Split, the number of shares of our common stock that are authorized but unissued, issued and outstanding, and reserved for future issuance, as well as certain other aspects of or factors related to our common stock, would undergo a variety of changes. Please see “Effects of the Reverse Stock Split on Our Common Stock” below for more information.

Reasons for the Reverse Stock Split

https://www.sec.gov/Archives/edgar/data/1368265/000119312518168530/d570831ddefr14a.htm

The Board has determined, in its business judgment, that a Reverse Stock Split of our authorized, issued and outstanding common stock at one of the proposed ratios is in the best interests of the Company and our stockholders, and as a result the Board has unanimously approved such a Reverse Stock Split, subject to stockholder approval, and has unanimously recommended that our stockholders approve such a Reverse Stock Split by voting in favor of this Proposal 6. In addition, the Board has determined that obtaining the approval of our stockholders of the six proposed ratios for a Reverse Stock Split (as opposed to approval of a single ratio) provides the Board with appropriate flexibility to better achieve the purposes of a Reverse Stock Split, and as a consequence, is in the best interests of our Company and our stockholders. In making this determination and approval, the Board considered, among other things: the historical market price and trading volume of our

common stock; prevailing market and economic conditions and trends; input of our significant stockholders; recent practices at other public companies; guidelines and potential voting recommendations of third-party proxy advisory services, including ISS; a recommendation from our management; and our agreement to issue and sell shares of our common stock to Total under the Purchase Agreement, as described in Proposal 4 above.

The Board is requesting that our stockholders approve, and grant the authority to the Board to determine whether to effect, a Reverse Stock Split primarily because it could improve the marketability and liquidity of our common stock by increasing its prevailing market price. We believe the current low per share market price of our common stock has had a negative effect on the marketability of the outstanding shares of our common stock, and we believe there are several reasons for these effects. First, certain institutional and other investors have internal policies that prohibit purchases of lower-priced stocks, and a variety of policies and practices of broker-dealers also discourage individual brokers within these firms from dealing in lower-priced stocks. Second, because the brokers’ commissions on lower-priced stocks generally represent a higher percentage of the stock price than commissions on higher-priced stocks, the current market price of our common stock could result in individual stockholders paying transaction costs (commissions, markups or markdowns) that are a higher percentage of the total share value than would be the case if the market price of the shares was higher. This factor is also believed to limit the willingness of some institutions and other investors to purchase shares of our common stock at all. We expect a Reverse Stock Split could result in a higher prevailing market price for our common stock, which could help to alleviate some of these negative effects, and we believe the other transactions discussed in this Supplement (and in some cases for which we are also seeking stockholder approval), including our transactions and proposed relationships with Total discussed in Proposal 4 above, could add momentum to any such increase. In addition, the Board believes the decrease in the number of shares of our common stock outstanding as a consequence of the Reverse Stock Split, as well as the anticipated increase in the prevailing market price of our common stock, could attract new long-term investors and generate new interest in our common stock, which could potentially promote greater liquidity for our existing stockholders, and could also reduce holdings by speculative investors, which could help to reduce volatility in the trading volume and market price of our common stock. We note, however, that if the Board elects to implement the Reverse Stock Split, an increase in the market price of our common stock after the Reverse Stock Split, if any, may be proportionately less than the decrease in the number of outstanding shares, and any such increase may not be sustained and may subsequently decrease to current or lower market prices, any of which would effectively reduce our Company’s market capitalization. See “Possible Effects of the Reverse Stock Split on Our Common Stock” below for more information.

This transaction is not, and the Board does not intend for it to be, the first step in a series of plans or proposals of a “going private” transaction within the meaning of Rule 13e-3 under the Exchange Act.

Board Discretion to Implement the Reverse Stock Split

If this Proposal 6 is approved by our stockholders, a Reverse Stock Split would be effected, if at all, only upon a determination by the Board or an authorized committee thereof to effect the Reverse Stock Split, with a ratio among those set forth in this Proposal 6 as determined by the Board or such committee and as of an effective time on or before May 31, 2019. Such determination would be based on many factors, including the factors described above that were considered by the Board in determining to approve the solicitation of stockholder approval for this Proposal 6. Notwithstanding any approval of this Proposal 6 by our stockholders, the Board may, in its sole discretion, determine to abandon the Reverse Stock Split for a period of time or in its entirety. If, however, the Board does not implement the Reverse Stock Split before May 31, 2019, further stockholder approval would be required in order to implement any reverse stock split.

Effects of the Reverse Stock Split on Our Common Stock

After a Reverse Stock Split, if implemented, each of our stockholders would own a reduced number of shares of our common stock; however, the Reverse Stock Split would affect all of our stockholders uniformly,

and thus would not, in itself, affect any stockholder’s percentage ownership in our Company, except to the extent the Reverse Stock Split results in a stockholder receiving cash in lieu of an interest in a fractional share, as described below. Similarly, the number of our stockholders would not be affected by the Reverse Stock Split, except to the extent any stockholder holds only an interest in a fractional share after the Reverse Stock Split and receives cash for such interest rather than any shares of our common stock, as described below. As of April 10, 2018, there were approximately 59,444 holders of our common stock, including an estimated 59,390 beneficial owners whose shares are held on their behalf by brokers, banks or other nominees.

In addition, proportionate voting rights and other rights of the holders of our common stock would not be affected by the Reverse Stock Split, except as a result of the payment of cash in lieu of fractional shares, as described below. For example, a holder of 2% of the voting power of the outstanding shares of our common stock immediately before the Reverse Stock Split would continue to hold 2% of the voting power of the outstanding shares of our common stock immediately after the Reverse Stock Split.

Also, the number of outstanding shares of our common stock and the number of authorized shares of our common stock would be reduced in accordance with the ratio for the Reverse Stock Split selected by the Board (or an authorized committee thereof) from among those set forth in this Proposal 6, but the percentage of the authorized shares of our common stock that are issued and outstanding would remain the same before and after the Reverse Stock Split is implemented (unless Proposal 5 as described in this Supplement is also approved and implemented, as described above and as shown in the tables below). For example, based on the 152,514,550 shares of our common stock outstanding on April 10, 2018 and the 224,000,000 shares of our common stock currently authorized under the Restated Certificate, a Reverse Stock Split at a ratio of 1-for-10 would have the effect of reducing the number of outstanding shares of our common stock to approximately 15,251,455 and reducing the number of authorized shares of our common stock to 22,400,000, thereby reducing the number of authorized but unissued shares of common stock from 71,485,450 to approximately 7,148,545; however, the number of shares of outstanding common stock would remain approximately 68% of the number of shares of authorized common stock both before and after the Reverse Stock Split.

Further, the Reverse Stock Split would reduce the number of shares of our common stock issuable upon conversion, exercise or vesting and settlement of outstanding convertible notes, options and restricted stock units (and, if applicable, would increase the conversion, exchange or exercise price per share under such convertible notes, options and restricted stock units), as well as the number of shares of our common stock reserved for issuance pursuant to our employee stock purchase plan and equity awards we may grant in the future under our equity incentive plans. In each such case, the number of shares of our common stock would be reduced by the ratio at which the Reverse Stock Split is implemented, and any applicable conversion, exchange or exercise price per share would be increased by the same ratio.