##### 



SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549
 FORM 10-KSB
  (Mark one) x
    
    Annual report under section 13 or 15(d) of the Securities Exchange Act of 1934
 For the fiscal year ended December 31, 2004   o
    
    Transition report under section 13 or 15(d) of the Securities Exchange Act of 1934
 For the transition Period from            to             . 
 O2Diesel Corporation   (Name of small business issuer in its charter) Delaware
    
    91-2023525(State or other jurisdiction of
incorporation or organization)
    
    (I.R.S. Employer
Identification No.)
 100 Commerce Drive Suite 301
                       Newark, Delaware
    
    19713(Address of principal executive offices)
    
    (Zip Code)
 Issuers telephone number: (302) 266-6000 Securities registered under Section 12(b) of the Act: None Securities registered under Section 12(g) of the Act: Common Stock, $0.0001 par value   Check whether the Issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act during the past 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing requirements for the
past 90 days. Yes  o    No  x Check if there is no disclosure of delinquent filers in response to Item 405 of Regulation S-B is
not contained in this form, and no disclosure will be contained, to the best of registrants
knowledge, in definitive proxy or information statements incorporated by reference in Part III of
this Form 10-KSB or any amendment to this Form 10-KSB.  o Issuers revenues for its most recent fiscal year: $127,451  The aggregate market value of
the voting stock held by non-affiliates of the registrant on May 3,
2005, computed by the average bid and asked price as of May 3, 2005, at which the stock was sold,
was $41,956,000, assuming solely for purposes of this calculation that all directors and executive
officers of the issuer are affiliates. This determination of affiliate status is not necessarily a conclusive
determination for other purposes. On May 3, 2005, the registrant had 31,065,966 shares of Common Stock, $0.0001 par value per share,
issued and outstanding. TRANSITIONAL SMALL BUSINESS DISCLOSURE FORMAT: Yes  o    No  x




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##### 



EXPLANATORY NOTE: This Amendment No. 1 to the Form 10-KSB for the fiscal year ended December 31, 2004 for O2Diesel
Corporation (the Company) reflects the addition of the information required by Part III of Form
10-KSB, which was omitted in reliance on General Instruction E(3)
thereto, and certain other updated information. We have made no further
changes to the previously filed Form 10-KSB. Except as otherwise specifically noted, all
information in this Form 10-KSB/A is as of December 31, 2004 and does not reflect any subsequent
information or events. INDEX TO
AMENDMENT NUMBER 1 TO ANNUAL REPORT ON FORM 10-KSB
FOR THE TWELVE MONTH PERIOD ENDED DECEMBER 31, 2004 PART III  Item 9.
    
    Directors, Executive Officers Promoters and Control Persons;Compliance with Section 16(a) of the Exchange Act
    
    
    2Item 10.
    
    Executive Compensation
    
    
    5Item 11.
    
    Security Ownership of Certain Beneficial Owners and Managementand Related Stockholders Matters
    
    
    8Item 12.
    
    Certain Relationships and Related Transactions
    
    
    9Item 13.
    
    Exhibits
    
    
    9Item 14.
    
    Principal Accountant Fees and Services
    
    
    10SIGNATURES
    
    
    
    
    11




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##### 



NOTE REGARDING FORWARD LOOKING STATEMENTS This annual report on Form 10-KSB contains forward-looking statements concerning O2Diesel
Corporation (O2Diesel, the Company or the Registrant) and its future operations, plans and
other matters. Any statements that involve discussions with respect to predictions, expectations,
beliefs, plans, projections, objectives, assumptions or future events or performance (often, but
not always, using phrases such as expects, or does not expect, is expected, anticipates or
does not anticipate, plans, estimates or intends, or stating that certain actions, events
or results may, could, might, or will be taken or occur or be achieved) are not statements
of historical fact and may be forward looking statements which include statements relating to,
among other things, the ability to successfully compete in the fuel additive and fuel distribution
business. O2Diesel cautions readers not to place undue reliance on any such forward-looking statements,
which speak only as of the date made. Such forward-looking statements are based on the beliefs of
O2Diesels management as well as on assumptions made by and information currently available to
O2Diesel at the time such statements were made. Forward-looking statements are subject to a variety
of risks and uncertainties which could cause actual events or results to differ from those
reflected in the forward-looking statements, including, without limitation, the failure to obtain
adequate financing on a timely basis and other risks and uncertainties. Actual results could differ
materially from those projected in the forward-looking statements, as a result of either the
matters set forth or incorporated in this report generally or certain economic and business
factors, some of which may be beyond the control of O2Diesel. These factors include adverse
economic conditions, entry of new and stronger competitors, inadequate capital, unexpected costs,
failure to gain product approval in the United States or foreign countries for the
commercialization and distribution of its products and failure to capitalize upon access to new
markets. O2Diesel disclaims any obligation subsequently to revise any forward-looking statements
to reflect events or circumstances after the date of such statements or to reflect the occurrence
of anticipated or unanticipated events.




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##### 



Item 5.  Market for Common
Equity and Related Stockholder Matters. O2Diesel reported in its
Form 10-KSB filed on March 31, 2005 for the year ended
December 31, 2004 that in Part I, Item 1 and in Part II, Item 5 the Company had
received notice it was not in compliance with the listing standards of the American
Stock Exchange (AMEX or Exchange). As part of the discussion of this
matter, the Company stated that as of June 2006, it must have
shareholders equity of $6.0 million to return to compliance
with the Exchanges listing standards. In addition the Company stated that it also
needed to raise additional funds to be able to execute its business plan for the
remainder of 2005.  Taken together, the Company stated that it needed to raise new
equity of $11.0 million in 2005 both to execute its business plan for 2005 and to
return to compliance with the listing standards of the American Stock Exchange by June 2006.  Lastly,
the Company stated in Part II, Item 5, that if it failed to regain compliance with
the Exchanges listing standards within the required timeframe,
the Exchange would likely initiate delisting procedures for the
Companys common stock. By way of clarification as
to the split between the funds needed to execute its business plan and
the funds required to comply with the listing standards of the AMEX, the Company is
supplementing its prior statements by providing the following information. The Company believes it needs to raise at least
$8.2 million by the end of September 2005 to allow it to execute its business plan for the year
2005.  In addition, the Company believes it will need to raise an additional $2.8 million either
in 2005 or prior to June 2006 to allow it to return to full compliance with the listing standards
of the AMEX.  If the Company were to fail to return to full compliance with the
Exchanges listing standards, the AMEX would
likely initiate procedures to de-list its common stock.  If the
Companys common stock was to be de-listed by the AMEX, its shares would continue to be traded as a bulletin board stock. Item 9. Directors, Executive Officers, Promoters and Control Persons; Compliance With Section
16(a) of the Exchange Act The following sets forth the names and ages, as of April 28, 2005, of the nominees for
election to the Board of Directors, as well as the directors whose terms will continue, their
respective positions and offices with the Company, the period during which each has served as a
director of the Company and their principal occupations or employment during the past five years. Name
    
    
    Age
    
    
    PositionHendrik Rethwilm
    
    
    
    40
    
    
    
    DirectorKarim Jobanputra
    
    
    
    41
    
    
    
    DirectorRichard J. Roger
    
    
    
    45
    
    
    
    DirectorDavid L. Koontz
    
    
    
    62
    
    
    
    Chief Financial Officer, Secretary and
DirectorAnthony Dean Smith
    
    
    
    72
    
    
    
    ChairmanAlan R. Rae
    
    
    
    46
    
    
    
    President, Chief Executive Officer and
DirectorE. Holt Williams
    
    
    
    62
    
    
    
    Nominee for DirectorArthur E. Meyer
    
    
    
    77
    
    
    
    Nominee for Director
 Hendrik Rethwilmhas been a Director since July 15, 2003. From 1993-1999, he worked with
PricewaterhouseCoopers in its corporate finance department focusing on financial and organizational
restructuring of medium-to-large sized companies. Subsequently, from 2000-2001, Mr. Rethwilm
worked with a subsidiary of Ericsson, the Swedish mobile phone producer, as a financial executive
advising on mobile eCommerce. During his tenure with Ericsson, Mr. Rethwilm also developed a
venture capital arm within Ericsson Consulting to invest in companies developing applications for
the mobile eCommerce sector. Currently, Mr. Rethwilm is self-employed and provides consulting
services to various companies in the areas of corporate finance and business development. He
previously served on the board of Directors of Rapidtron, Inc., a company that trades on the OTCBB
under the symbol RPDT, but resigned effective December 31, 2003. Karim Jobanputrahas been a Director since July 15, 2003. Mr. Jobanputra is an entrepreneur and
owns companies that do business mostly in the Middle East and Europe. Mr. Jobanputra has
experience in the areas of corporate finance and international business development, and also works
as a self-employed consultant based in the United Kingdom. For the past 5 years he has provided
consulting services to companies in the areas of corporate finance and business development in the
Asian and Middle East markets, including Indonesia, Qatar, Saudi Arabia, India and China. Richard J. Rogerbecame a Director on April 18, 2004. He is currently the Chief
Executive Officer of Performance Transportation Services, Inc., which is the second largest
transporter of new cars in the United States. Prior to holding this position, Mr. Roger was a -2-




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Director, President and Chief Operating Officer of U. S. Fleet Services, Inc., from May 2002 to
June 2003. U.S. Fleet Services was one of the largest mobile fleet refueling companies in the U.S.
Prior to that, Mr. Roger was a senior vice-president with Ryder Transportation Services, Inc., the
largest full service truck company in the U.S. that specializes in renting and leasing all types of
trucks for use in all transportation sectors. David L. Koontzhas been Chief Financial Officer, Secretary and a Director of the Company since
July 15, 2003. He joined the AAE Group in September 2002, serving first as the Chief Financial
Officer and Secretary of O2Diesel, Inc. Prior to joining the Company, Mr. Koontz had worked
primarily as an independent business consultant, mostly with businesses located in Asia, for the
period January 2000 to September 2002. During 1999, Mr. Koontz acted as a consultant and chief
financial officer for an apparel company in Boulder, Colorado. Mr. Koontz was a partner with
Arthur Andersen & Co. until 1988 and holds a CPA certificate. Anthony Dean Smithhas been a Director of the Company since July 15, 2003, but has served as a
Director and executive of the AAE Technologies group of companies since October 1999. Mr. Dean
Smith is a director and chief executive officer of AAE Technologies International Plc, and a
Director of O2Diesel Inc. He was also a Director of AAE Technologies Holdings Plc and AAE
Technologies Limited until December 31, 2004 at which time these entities ceased operations. Mr.
Anthony Dean-Smith also owns private companies in the United Kingdom that are active in the
development and management of real estate properties. Alan R. Raehas been President, Chief Executive Officer and a Director of the Company since July
15, 2003. Mr. Rae joined the AAE Technologies group of companies in 1997, and has served as a
Director and an executive of several companies within the group. In August 1999, he became a
Director and President of AAE Technologies, Inc. (now O2Diesel Inc.), and in October 2000 became a
Director and Chief Operating Officer of AAE Technologies International PLC and continues to hold
these positions in both companies. Mr. Rae was a Director and the Chief Executive Office Officer
of AAE Holdings plc (UK) from October 1998 until September 2001. He was the Chief Executive
Officer and a Director of AAE Technologies Ltd. from October 1997 until September 2001. E. Holt Williamshas served as the Chairman, CEO and also as the CFO for Coastal Equipment Inc. for
over 27 years. He headed both the domestic and foreign operations of the company, which were
centered in the Gulf States of the US and in Asia. Prior to entering the private sector, Mr.
Williams practiced as a certified public accountant with an international accounting firm. He has
also been active in buying and selling real estate in Houston, Texas. Mr. Williams is a member of
and has served in various capacities on a number of professional, charitable and civic groups such
as U.S. Chamber of Commerce; Singapore American Chamber of Commerce; Houston Foreign Affairs Group;
Georgetown University McDonough School of Business and various other civic, school and church
related organizations. Arthur E. Meyerhas served as the Executive Vice President and Vice Chairman of Board of Mohawk
Oil Company Canada Limited until its sale to Husky Oil Co. Ltd. Mr. Meyer has a long history of
experience in crude oil refining, product development, distribution and marketing. He has a wide
background in all facets of the petroleum industry in Canada, including building the first ethanol
plant in Canada as well as managing the blending and marketing of Gasohol in Canada. Mr. Meyer has
been member of the Board of several oil -3-




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companies in Canada, and has served on the Boards of a number of universities and other
organizations, including the University of Calgary, Northern Alberta Institute of Technology,
Consulting Engineers of Canada, National Biotechnology Committee and the FBC Foundation of Calgary.
Mr. Meyer holds a degree in Mechanical Engineering from the University of Saskatchewan. Audit Committee On May 27, 2004, the Board established and approved an Audit Committee. The Board designated
the initial members of the Audit Committee to be Mr. David L. Koontz (Chair), Mr. Hendrik Rethwilm,
and Mr. Richard Roger. As of January 1, 2005, Mr. Koontz resigned from the Audit Committee. The
primary purpose of the Audit Committee is to oversee (a) managements preparation of the financial
statements and managements conduct of the Companys accounting and financial reporting process,
(b) managements maintenance of the Companys internal control over financial reporting, (c) the
Companys compliance with legal and regulatory requirements, and (d) the qualifications,
independence and performance of the Companys independent auditors. During 2004, the Audit
Committee met 4 times. The Board of Directors has adopted a written charter for the Audit Committee. One of the
members of the Audit Committee, Mr. Roger, is independent as defined in Section 121A of the AMEX
Company Guide. Management has the primary responsibility for the financial statements and the
reporting process including the systems of internal controls. In fulfilling its oversight
responsibilities, the Audit Committee reviewed the interim consolidated financial statements filed
quarterly and the audited consolidated financial statements in the Annual Report on Form 10-KSB
with management including a discussion of the quality, not just the acceptability, of the
accounting principles, the reasonableness of significant judgments, and the clarity of disclosures
in the financial statements. The Board of Directors has determined that the Company does not have an audit committee
financial expert, as defined in SEC rules, serving on its Board. However, the Board of Directors
believes that its members are able to read and understand financial statements of the Company, are
familiar with the Company and its business, and are capable of fulfilling the duties and
responsibilities of an audit committee. The Audit Committee reviewed with the independent auditors, who are responsible for expressing
an opinion on the conformity of those audited consolidated financial statements with generally
accepted accounting principles, their judgments as to the quality, not just the acceptability, of
the Companys accounting principles and such other matters as are required to be discussed with the
Audit Committee under standards of the Public Company Accounting Oversight Board. In addition, the
Board of Directors has discussed with the independent auditors the auditors independence from
management and the Company including the matters in the written disclosures required by the
Independence Standards Board and considered the compatibility of non-audit services (comprised of
tax preparation services) with the auditors independence. The Audit Committees by way of a telephonic conferences discussed with the independent
auditors, with management present, the results of their examinations, their evaluations of the
Companys internal controls, and the overall quality of the Companys
financial reporting. The independent auditors afforded the Board, which they declined, an
opportunity to meet without management present. -4-




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In reliance on the reviews and discussions referred to above, the Board of Directors approved
the audited financial statements included in the Annual Report on Form 10-KSB for the year ended
December 31, 2004 for filing with the SEC. On August 16, 2004, the shareholders voted to ratify
the selection of the Companys independent auditors for the year ended December 31, 2004. Code of Business Conduct and Ethics On June 29, 2004, the Board of Directors adopted a Code of Business Conduct and Ethics that
applies to all of the Companys employees. A copy of the Code of Business Conduct and Ethics is
available on our website http:/www.o2diesel.com. Section 16(a) Beneficial Ownership Reporting Compliance Section 16(a) of the Exchange Act requires the Companys executive officers, directors and
persons who beneficially own more than 10% of a registered class of the Companys equity securities
to file with the SEC initial reports of ownership and reports of changes in ownership of Common
Stock and other equity securities of the Company. Such executive officers, directors, and greater
than 10% beneficial owners are required by SEC regulation to furnish the Company with copies of all
Section 16(a) reports filed by such reporting persons. Based solely on our review of such forms furnished to the Company and written representations
from certain reporting persons, except for one director, we believe that all filing requirements
applicable to our executive officers, directors and greater than 10% beneficial owners were
complied with during fiscal 2004. One director, Karim Jobanputra, did not file a Form 4 within two
business days to report one transaction. Item 10. Executive Compensation Executive Compensation The following summary compensation table sets forth the aggregate compensation paid or accrued
by us to the Chief Executive Officer and to executive officers whose annual compensation exceeded
$100,000 (collectively, the named executive officers) for services during the fiscal years ended
December 31, 2004, 2003, and 2002. -5-




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AnnualCompensationName and Principal
    
    
    
    Year
    
    
    
    Salary ($)
    
    
    
    All Other
    
    
    
    Securities UnderlyingPosition
    
    
    
    
    
    
    
    
    
    
    Compensation
    
    
    
    OptionsAnthony Dean-Smith
    
    
    
    2004
    
    
    
    150,000(d)Chairman1
    
    
    
    2003
    
    
    
    136,9642002
    
    
    
    0(c)
    
    
    
    
    
    
    
    
    2,500,000(c)Alan R. Rae
    
    
    
    2004
    
    
    
    254,000(d)
    
    
    
    28,878(b)President and Chief
    
    
    
    2003
    
    
    
    250,000
    
    
    
    66,320(a)(b)Executive Officer2
    
    
    
    2002
    
    
    
    172,806
    
    
    
    2,767(b)David L. Koontz
    
    
    
    2004
    
    
    
    200,000(d)
    
    
    
    25,357(b)Chief Financial
    
    
    
    2003
    
    
    
    177,500
    
    
    
    13,356(b)Officer
and Secretary3
    
    
    
    2002
    
    
    
    27,500
    
    
    
    1,154(b)
  (a)
    Mr. Rae received a one-time payment of $50,000 to defray relocation costs for his move
from the United Kingdom to the U.S. in 2002. The amount was finalized and payment was made
to Mr. Rae in 2003. The excess of this amount represents health and dental premiums paid
on behalf of Mr. Rae and are more fully explained in footnote (b).  (b)
    The Company pays monthly health and dental premiums for Mr. Rae and monthly health
premiums for Mr. Koontz, as well as an auto allowance for both Mr. Rae and Mr. Koontz.  (c)
    In 2002, Mr. Anthony Dean-Smith was given 2.5 million options on AAE Technologies
International Plc common stock at an exercise price of GBP .04 per share as an incentive
for Mr. Anthony Dean Smith to remain with the Company. In addition, in 2003, the Board
agreed to reduce the exercise price on the 2.5 million previously granted options held by
Mr. Anthony Dean-Smith from GBP .04 to GBP.026.  (d)
    Effective September 2004, Mr. Dean-Smith agreed to defer fifty-percent (50%) and Mr.
Rae and Mr., Koontz agreed to defer one-fourth (25%) of their base salaries and auto
allowances for a period of three months which ended November 30, 2004. Each officer has
agreed, on a voluntary basis, to extend the deferral month to month, and this understanding
is still in effect. As of December 31, Mssrs. Dean-Smith, Rae and Koontz
were owed deferred compensation of $25,000, $22,167 and $17,667, respectively. The
deferred amounts owed to Mr. Dean-Smith are set forth below.   1     During 2003, Anthony Dean-Smith was the Chief
Executive Officer of AAE Technologies International, plc, and since July 15,
2003 is the Chairman of the Company.2     During 2003, Alan R. Rae was the Chief
Operating Officer of AAE Technologies International Plc, and since July 15,
2003 is the President and Chief Executive Officer of the Company.3     Prior to July 15, 2003, David L. Koontz was
the Chief Financial Officer of O2Diesel, Inc., and since July 15, 2003 is the
Chief Financial Officer and Secretary of the Company. 6




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Compensation of Directors The Chairman of the Board, by contract, is to receive $150,000 per year and other
non-executive directors are to receive $30,000 per year for their services as a director. In
addition, Mr. Rethwilm and Mr. Jobanputra also provided financial and business advisory services to
the Company. Under contracts with both Mr. Rethwilm and Mr. Jobanputra, each is to receive $90,000
per year for these services. All directors are reimbursed for ordinary and necessary business
expenses incurred in connection with their service as directors. As part of the Companys
consulting agreements with Mr. Jobanputra and Mr. Rethwilm, each is entitled to receive 750,000
stock options at an exercise price of $1.50, which shall be granted pursuant to the Companys
equity compensation plan. In September 2004, all directors voluntarily agreed to defer for a three month period ending
November 30, 2004 fifty-percent (50%) of their directors fees. Subsequently, all directors agreed
to a month to month deferral of fifty per-cent (50%) of their fees for each month following
November 30, 2004, and such deferral is still in effect. In addition, Mr. Jobanputra and Mr.
Rethwilm have agreed to similar deferrals for the same periods for their consulting fees, and this
understanding remains in effect. For the year ended December 31, 2004, Mssrs. Dean-Smith, Roger, Jobanputra and Rethwilm were
paid $125,000, $17,500, $25,000 and $25,000, respectively. In addition, as of December 31, 2004,
Mssrs. Dan-Smith, Roger, Jobanputra and Rethwilm were owed $25,000, $5,000, $5,000 and $5,000,
respectively for deferred directors fees. Mssrs. Jobanputra and Rethwilm were each owed $15,000
for deferred consulting fees as of December 31, 2004. Options There were no options exercised in the last fiscal year by the named executive officers. The
named executive officers did not receive any options during the year ended December 31, 2004 and
did not own any options as of December 31, 2004. Employment Contracts and Termination of Employment and Change-in-Control Arrangements In July 2003, the Company entered into an Employment Agreement with Alan R. Rae, to serve as
our President and Chief Executive Officer. Pursuant to the Employment Agreement, Mr. Rae is
entitled to an annual base salary of $254,000 per year and is eligible to receive an annual bonus,
at the discretion of the Board, of 100% of his base salary. He is also entitled to reimbursement
for health and dental insurance premiums and a car allowance of $1,000 per month. Pursuant to the
agreement, the Company shall grant Mr. Rae 1,500,000 stock options at an exercise price of $1.50
per share, which will be granted pursuant to the Companys equity compensation plan, once it is
approved by the Companys shareholders. The agreement continues in effect until terminated by
either Mr. Rae or the Company by written notice or upon the death or disability (as defined in the
agreement) of Mr. Rae. If the Agreement is terminated by disability, Mr. Rae is entitled to
receive his salary until he begins to receive disability benefits, to receive a prorated portion of
any bonus he would otherwise have been entitled to and -7-




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to be paid for any accrued but unused vacation. If the agreement is terminated by the Company
without cause (as defined in the agreement), Mr. Rae is entitled to receive his base salary and
reimbursement for health and dental insurance premiums for a period of 15 months, to be paid for
any unused vacation time, and to be reimbursed for expenses in connection with his and his familys
repatriation to the United Kingdom. In addition, Mr. Rae would be entitled to a prorated portion
of any bonus to which he otherwise would have been entitled based on performance through the
calendar quarter in which the termination occurred, and any unvested options will vest immediately. Upon a change of control, as defined in the agreement, all of Mr. Raes outstanding options
will vest immediately. The agreement also provides that any inventions (as defined in the
agreement) discovered by Mr. Rae in the course of his service to the Company shall be the property
of the Company, and contains confidentiality, non-disparagement and non-competition provisions. The Company has also entered into an Employment Agreement with David L. Koontz in July 2003,
to serve as our Chief Financial Officer. The terms of Mr. Koontz Employment Agreement are
substantially similar to the terms of Mr. Raes Employment Agreement, as described above, except
that Mr. Koontz is entitled to an annual base salary of $200,000 per year and 600,000 stock
options. Item 11. Security Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters The
following table sets forth certain information as of May 3, 2005, regarding the
beneficial ownership of the Companys common stock by (i) those persons known to the Company to be
the beneficial owners of more than 5% of the outstanding shares of Common Stock, (ii) each of the
named executive officers, (iii) each director of the Company, and (iv) all current directors and
executive officers as a group. Beneficial ownership is determined in accordance with SEC rules computing the number of shares
of common stock beneficially owned by a person and the percentage ownership of that person. Except as indicated in the footnotes to this table, each stockholder named in the table below
has sole voting and investment power for the shares shown as beneficially owned by them.
Percentage of ownership is based on 31,065,966 shares of common stock
outstanding on May 3, 2005.
In computing the number of shares beneficially owned by a person and the percentage of ownership
held by that person, shares of common stock subject to options held by that person that are
currently exercisable or will become exercisable within 60 days after April 28, 2005 are deemed
exercised and outstanding, while these shares are not deemed exercised and outstanding for
computing percentage ownership of any other person. -8-




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Directors, Officers and
    
    Shares Directly and5%
Shareholders
    
    Beneficially
Owned
    
    
    PercentAnthony Dean Smith
    
    
    4,337,451
    (a)
    
    
    13.96100 Commerce Drive Suite 301Newark, Delaware 19713Alan R. Rae
    
    
    1,519,022
    (b)
    
    
    4.89100 Commerce Drive Suite 301Newark, Delaware 19713David L. Koontz
    
    
    90,512
    
    
    
    *100 Commerce Drive Suite 301Newark, Delaware 19713Karim Jobanputra
    
    
    4,000
    
    
    
    *100 Commerce Drive Suite 301Newark, Delaware 19713All directors and officers as a group.
    
    
    5,950,985
    
    
    
    18.85* Less than 1%.
  (a)
    Mr. Anthony Dean-Smith owns directly 2,809,524 shares of the Companys common
stock. Mrs. Dean-Smith (spouse) directly owns 342,323 shares and Mr. Dean-Smiths two
adult sons each own 592,802 shares. Mr. Dean-Smith disclaims beneficial ownership of
the shares held by his spouse and two adult sons. Mr. Dean-Smith holds fully vested
options to acquire 500,000 shares of the Companys common stock at an exercise price of
$1.50.  (b)
    A trust of which Mr. Rae is the beneficiary holds 819,787 shares, and Mrs.
Victoria Rae (spouse), owns 699,235 shares of the Companys common stock. Mr. Rae
disclaims beneficial ownership of the shares held by the trust to the extent that they
are not attributable to his proportionate interest in the trust. Mr. Rae also
disclaims beneficial ownership of the shares held by Victoria Rae. Item 12. Certain Relationships and Related Transactions None. Item 13. Exhibits Exhibits included in this document are set forth in the Exhibit Index below. Ex. No.     EXHIBIT INDEX  31.1
    Certification of the Chief Executive Officer pursuant to
Rule 13a-14(a) or Rule 15d-14 (a).  31.2
    Certification of the Chief Financial Officer pursuant to
Rule 13a-14(a) or Rule 15d-14 (a).   -9-




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##### 



Item 14. Principal Accountant Fees and Services During our fiscal year ended December 31, 2004, Ernst & Young served as the Companys
auditors. Prior to retaining Ernst & Young, Cremin McCarthy & Company served as the Companys
auditors. Following are the fees billed by Ernst & Young for the fiscal year ended December 31,
2004 and December 31, 2003 and by Cremin McCarthy & Company for the fiscal year ended December 31,
2003: Description
    
    2004
    
    
    2003Audit Fees
    
    $
    222,079
    
    
    $
    163,000Audit-Related Fees
    
    $
    0
    
    
    $
    12,140Tax Fees
    
    $
    20,000
    
    
    $
    16,670All Other Fees
    
    $
    0
    
    
    $
    95,475Total Fees
    
    $
    242,079
    
    
    $
    287,285
 In the above table, in accordance with SEC definitions and rules:  
    Audit fees are fees paid for professional services for the audit of our
consolidated financial statements.  
    Audit related fees are for services by Cremin McCarthy & Company for assurance and
related services that are reasonably related to the performance of the audit or review
of our financial statements, including the preparation of a GAAP footnote reconciling
UK/Irish GAAP to US GAAP.  
    Tax fees are fees primarily for tax compliance in connection with filing
US income tax returns in 2004 and Irish income tax returns in 2003.  
    All other fees are fees billed by Cremin McCarthy & Company to us for any services
not included in the first three categories, including performing audits on the
Companys subsidiary in local jurisdictions as well as rendering of a competent person
opinion in connection with the July 15, 2003 transaction and for services in preparing
a long-form and short form report intended to be used as part of the Companys plan to
obtain a listing on the Alternative Investment Market of the London Stock Exchange. We did not pay any fees to Ernst & Young during the year ended December 31, 2003. We accrued
$83,300 for audit-related and tax fees to Ernst & Young for the year-ended 2004. Non-Audit Services The Audit Committee has considered the compatibility of non-audit services with the auditors
independence. The Audit Committee pre-approves all audit and permissible non-audit services
provided by our independent auditors. -10-




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##### 



SIGNATURES In accordance with Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. O2Diesel CorporationBy:
    
    /s/ Alan RaeAlan RaePresident, Chief Executive Officer and DirectorDate:
    
    May 9, 2005
 -11-