SECURITIES AND EXCHANGE COMMISSION
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Washington, D.C. 20549
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_______________
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SCHEDULE 13D*
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(Rule 13d-101) | |
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT
TO RULE 13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO
RULE 13d-2(a)
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COMVERGE, INC.
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(Name of Issuer)
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Common Stock, par value $0.001 per share
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(Title of Class of Securities)
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205859101
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(CUSIP Number)
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Ardsley Advisory Partners
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262 Harbor Drive, 4th Floor
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Stamford, CT 06902
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Attention: Steven Napoli
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(203) 564-4230
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(Name, Address and Telephone Number of Person
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Authorized to Receive Notices and Communications)
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August 2, 2011
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(Date of Event which Requires
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Filing of this Schedule)
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CUSIP No. 205859101
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SCHEDULE 13D
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Page 2 of 18 Pages
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1
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NAME OF REPORTING PERSON
Ardsley Partners Fund II, L.P.
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2
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CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
|
(a) x
(b) ¨
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3
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SEC USE ONLY
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|||
4
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SOURCE OF FUNDS
WC (see Item 3)
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5
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CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)
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¨
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6
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CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
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|||
NUMBER OF
SHARES
BENEFICIALLY
OWNED BY
EACH
REPORTING
PERSON WITH
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7
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SOLE VOTING POWER
-0-
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8
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SHARED VOTING POWER
477,500 shares of common stock
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9
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SOLE DISPOSITIVE POWER
-0-
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|||
10
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SHARED DISPOSITIVE POWER
477,500 shares of common stock
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|||
11
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AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
477,500 shares of common stock
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12
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CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
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¨
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13
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PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) (see Item 5)
1.9%
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|||
14
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TYPE OF REPORTING PERSON
PN
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CUSIP No. 205859101
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SCHEDULE 13D
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Page 3 of 18 Pages
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1
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NAME OF REPORTING PERSON
Ardsley Partners Institutional Fund, L.P.
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2
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CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
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(a) x
(b) ¨
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3
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SEC USE ONLY
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|||
4
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SOURCE OF FUNDS
WC (see Item 3)
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|||
5
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CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)
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¨
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6
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CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
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|||
NUMBER OF
SHARES
BENEFICIALLY
OWNED BY
EACH
REPORTING
PERSON WITH
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7
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SOLE VOTING POWER
-0-
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8
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SHARED VOTING POWER
364,400 shares of common stock
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9
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SOLE DISPOSITIVE POWER
-0-
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|||
10
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SHARED DISPOSITIVE POWER
364,400 shares of common stock
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|||
11
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AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
364,400 shares of common stock
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12
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CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
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¨
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13
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PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) (see Item 5)
1.4%
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|||
14
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TYPE OF REPORTING PERSON
PN
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CUSIP No. 205859101
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SCHEDULE 13D
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Page 4 of 18 Pages
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1
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NAME OF REPORTING PERSON
Ardsley Offshore Fund, Ltd.
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2
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CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
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(a) x
(b) ¨
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3
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SEC USE ONLY
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|||
4
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SOURCE OF FUNDS
WC (see Item 3)
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5
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CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)
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¨
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6
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CITIZENSHIP OR PLACE OF ORGANIZATION
British Virgin Islands
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NUMBER OF
SHARES
BENEFICIALLY
OWNED BY
EACH
REPORTING
PERSON WITH
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7
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SOLE VOTING POWER
-0-
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8
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SHARED VOTING POWER
33,100 shares of common stock
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9
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SOLE DISPOSITIVE POWER
-0-
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|||
10
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SHARED DISPOSITIVE POWER
33,100 shares of common stock
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11
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AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
33,100 shares of common stock
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|||
12
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CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
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¨
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13
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PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) (see Item 5)
0.1%
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14
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TYPE OF REPORTING PERSON
CO
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CUSIP No. 205859101
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SCHEDULE 13D
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Page 5 of 18 Pages
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1
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NAME OF REPORTING PERSON
Ardsley Partners Renewable Energy Fund, L.P.
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2
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CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
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(a) x
(b) ¨
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3
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SEC USE ONLY
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|||
4
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SOURCE OF FUNDS
WC (see Item 3)
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|||
5
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CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)
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¨
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6
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CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
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|||
NUMBER OF
SHARES
BENEFICIALLY
OWNED BY
EACH
REPORTING
PERSON WITH
|
7
|
SOLE VOTING POWER
-0-
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||
8
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SHARED VOTING POWER
523,900 shares of common stock
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|||
9
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SOLE DISPOSITIVE POWER
-0-
|
|||
10
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SHARED DISPOSITIVE POWER
523,900 shares of common stock
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|||
11
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AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
523,900 shares of common stock
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12
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CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
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¨
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13
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PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) (see Item 5)
2.1%
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|||
14
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TYPE OF REPORTING PERSON
PN
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CUSIP No. 205859101
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SCHEDULE 13D
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Page 6 of 18 Pages
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1
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NAME OF REPORTING PERSON
Ardsley Renewable Energy Offshore Fund, Ltd.
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2
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CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
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(a) x
(b) ¨
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3
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SEC USE ONLY
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|||
4
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SOURCE OF FUNDS
WC (see Item 3)
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5
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CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)
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¨
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6
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CITIZENSHIP OR PLACE OF ORGANIZATION
British Virgin Islands
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|||
NUMBER OF
SHARES
BENEFICIALLY
OWNED BY
EACH
REPORTING
PERSON WITH
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7
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SOLE VOTING POWER
-0-
|
||
8
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SHARED VOTING POWER
126,000 shares of common stock
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9
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SOLE DISPOSITIVE POWER
-0-
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|||
10
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SHARED DISPOSITIVE POWER
126,000 shares of common stock
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|||
11
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AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
126,000 shares of common stock
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12
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CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
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¨
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13
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PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) (see Item 5)
0.5%
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14
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TYPE OF REPORTING PERSON
CO
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CUSIP No. 205859101
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SCHEDULE 13D
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Page 7 of 18 Pages
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1
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NAME OF REPORTING PERSON
Ardsley Advisory Partners
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2
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CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
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(a) x
(b) ¨
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3
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SEC USE ONLY
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|||
4
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SOURCE OF FUNDS
AF
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5
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CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)
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¨
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6
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CITIZENSHIP OR PLACE OF ORGANIZATION
New York
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|||
NUMBER OF
SHARES
BENEFICIALLY
OWNED BY
EACH
REPORTING
PERSON WITH
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7
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SOLE VOTING POWER
-0-
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||
8
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SHARED VOTING POWER
1,750,000 shares of common stock
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|||
9
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SOLE DISPOSITIVE POWER
-0-
|
|||
10
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SHARED DISPOSITIVE POWER
1,750,000 shares of common stock
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|||
11
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AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,750,000 shares of common stock
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|||
12
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CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
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¨
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13
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PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) (see Item 5)
6.9%
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14
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TYPE OF REPORTING PERSON
PN; IA
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CUSIP No. 205859101
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SCHEDULE 13D
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Page 8 of 18 Pages
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1
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NAME OF REPORTING PERSON
Ardsley Partners I
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2
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CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
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(a) x
(b) ¨
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3
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SEC USE ONLY
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|||
4
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SOURCE OF FUNDS
AF
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5
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CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)
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¨
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6
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CITIZENSHIP OR PLACE OF ORGANIZATION
New York
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|||
NUMBER OF
SHARES
BENEFICIALLY
OWNED BY
EACH
REPORTING
PERSON WITH
|
7
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SOLE VOTING POWER
-0-
|
||
8
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SHARED VOTING POWER
1,365,800 shares of common stock
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|||
9
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SOLE DISPOSITIVE POWER
-0-
|
|||
10
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SHARED DISPOSITIVE POWER
1,365,800 shares of common stock
|
|||
11
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AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,365,800 shares of common stock
|
|||
12
|
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
|
¨
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||
13
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PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) (see Item 5)
5.4%
|
|||
14
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TYPE OF REPORTING PERSON
PN
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CUSIP No. 205859101
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SCHEDULE 13D
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Page 9 of 18 Pages
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1
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NAME OF REPORTING PERSON
Philip J. Hempleman
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2
|
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
|
(a) x
(b) ¨
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||
3
|
SEC USE ONLY
|
|||
4
|
SOURCE OF FUNDS
AF
|
|||
5
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CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)
|
¨
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||
6
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CITIZENSHIP OR PLACE OF ORGANIZATION
United States of America
|
|||
NUMBER OF
SHARES
BENEFICIALLY
OWNED BY
EACH
REPORTING
PERSON WITH
|
7
|
SOLE VOTING POWER
-0-
|
||
8
|
SHARED VOTING POWER
1,750,000 shares of common stock
|
|||
9
|
SOLE DISPOSITIVE POWER
-0-
|
|||
10
|
SHARED DISPOSITIVE POWER
1,750,000 shares of common stock
|
|||
11
|
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,750,000 shares of common stock
|
|||
12
|
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
|
¨
|
||
13
|
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) (see Item 5)
6.9%
|
|||
14
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TYPE OF REPORTING PERSON
IN
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CUSIP No. 205859101
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SCHEDULE 13D
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Page 10 of 18 Pages
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Item 1.
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SECURITY AND ISSUER
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Item 2.
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IDENTITY AND BACKGROUND.
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(i)
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Ardsley Partners Fund II, L.P., a Delaware limited partnership ("AP II"), with respect to the shares of Common Stock, par value $0.001 per share ("Common Stock") directly held by it;
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(ii)
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Ardsley Partners Institutional Fund, L.P., a Delaware limited partnership ("Ardsley Institutional"), with respect to the shares of Common Stock directly held by it;
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(iii)
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Ardsley Offshore Fund, Ltd., a British Virgin Islands corporation ("Ardsley Offshore"), with respect to the shares of Common Stock directly held by it;
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(iv)
|
Ardsley Partners Renewable Energy Fund, L.P., a Delaware limited partnership ("Ardsley Energy"), with respect to the shares of Common Stock directly held by it;
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(v)
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Ardsley Renewable Energy Offshore Fund, Ltd., a British Virgin Islands Corporation ("Ardsley Energy Offshore"), with respect to the shares of Common Stock directly held by it;
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(vi)
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Ardsley Advisory Partners, a New York general partnership ("Ardsley") which serves as Investment Manager of Ardsley Offshore and Ardsley Energy Offshore and as Investment Adviser of AP II, Ardsley Institutional, Ardsley Energy and certain managed accounts, with respect to the shares of Common Stock directly held by Ardsley Offshore, Ardsley Energy Offshore, AP II, Ardsley Institutional, Ardsley Energy and certain managed accounts;
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(vii)
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Ardsley Partners I, a New York general partnership ("Ardsley Partners") which serves as General Partner of AP II, Ardsley Institutional and Ardsley Energy with respect to the shares of Common Stock directly held by AP II, Ardsley Institutional and Ardsley Energy; and
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(viii)
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Philip J. Hempleman ("Mr. Hempleman"), the Managing Partner of Ardsley and Ardsley Partners, with respect to the shares of Common Stock directly held by AP II, Ardsley Institutional, Ardsley Energy, Ardsley Offshore, Ardsley Energy Offshore and the managed accounts and with respect to the shares of Common Stock directly held by certain accounts managed by him directly.
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CUSIP No. 205859101
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SCHEDULE 13D
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Page 11 of 18 Pages
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Item 3.
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SOURCE AND AMOUNT OF FUNDS AND OTHER CONSIDERATION.
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CUSIP No. 205859101
|
SCHEDULE 13D
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Page 12 of 18 Pages
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Item 4.
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PURPOSE OF THE TRANSACTION.
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Item 5.
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INTEREST IN SECURITIES OF THE ISSUER.
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(a)
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As of the date hereof, APII may be deemed the beneficial owner of 477,500 Shares.
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CUSIP No. 205859101
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SCHEDULE 13D
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Page 13 of 18 Pages
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(c)
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The transactions in the Shares within the last sixty days by APII, which were all in the open market, are set forth in Schedule B, and are incorporated herein by reference.
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(d)
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No person other than the Reporting Persons is known to have the right to receive, or the power to direct the receipt of dividends from, or proceeds from the sale of, such Shares.
|
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(e)
|
Not applicable.
|
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(a)
|
As of the date hereof, Ardsley Institutional may be deemed the beneficial owner of 364,400 Shares.
|
|
(c)
|
The transactions in the Shares within the last sixty days by Ardsley Institutional, which were all in the open market, are set forth in Schedule B, and are incorporated herein by reference.
|
|
(d)
|
No person other than the Reporting Persons is known to have the right to receive, or the power to direct the receipt of dividends from, or proceeds from the sale of, such Shares.
|
|
(e)
|
Not applicable.
|
|
(a)
|
As of the date hereof, Ardsley Offshore may be deemed the beneficial owner of 33,100 Shares.
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CUSIP No. 205859101
|
SCHEDULE 13D
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Page 14 of 18 Pages
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(c)
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The transactions in the Shares within the last sixty days by Ardsley Offshore, which were all in the open market, are set forth in Schedule B, and are incorporated herein by reference.
|
|
(d)
|
No person other than the Reporting Persons is known to have the right to receive, or the power to direct the receipt of dividends from, or proceeds from the sale of, such Shares.
|
|
(e)
|
Not applicable.
|
|
(a)
|
As of the date hereof, Ardsley Energy may be deemed the beneficial owner of 523,900 Shares.
|
|
(c)
|
The transactions in the Shares within the last sixty days by Ardsley Energy, which were all in the open market, are set forth in Schedule B, and are incorporated herein by reference.
|
|
(d)
|
No person other than the Reporting Persons is known to have the right to receive, or the power to direct the receipt of dividends from, or proceeds from the sale of, such Shares.
|
|
(e)
|
Not applicable.
|
|
(a)
|
As of the date hereof, Ardsley Energy Offshore may be deemed the beneficial owner of 126,000 Shares.
|
|
(c)
|
The transactions in the Shares within the last sixty days by Ardsley Energy Offshore, which were all in the open market, are set forth in Schedule B, and are incorporated herein by reference.
|
CUSIP No. 205859101
|
SCHEDULE 13D
|
Page 15 of 18 Pages
|
|
(d)
|
No person other than the Reporting Persons is known to have the right to receive, or the power to direct the receipt of dividends from, or proceeds from the sale of, such Shares.
|
|
(e)
|
Not applicable.
|
|
(a)
|
As of the date hereof, Ardsley, as the investment manager of APII, Ardsley Institutional, Ardsley Offshore, Ardsley Energy and Ardsley Energy Offshore may be deemed the beneficial owner of the 1,750,000 Shares held by APII, Ardsley Institutional, Ardsley Offshore, Ardsley Energy and Ardsley Energy Offshore.
|
|
(c)
|
See Schedule B.
|
|
(d)
|
No person other than the Reporting Persons is known to have the right to receive, or the power to direct the receipt of dividends from, or proceeds from the sale of, such Shares.
|
|
(e)
|
Not applicable.
|
|
(a)
|
As of the date hereof, API as the general partner of APII, Ardsley Institutional and Ardsley Energy may be deemed the beneficial owner of the 1,365,800 Shares held by APII, Ardsley Institutional and Ardsley Energy.
|
|
(c)
|
See Schedule B.
|
|
(d)
|
No person other than the Reporting Persons is known to have the right to receive, or the power to direct the receipt of dividends from, or proceeds from the sale of, such Shares.
|
|
(e)
|
Not applicable.
|
CUSIP No. 205859101
|
SCHEDULE 13D
|
Page 16 of 18 Pages
|
|
(a)
|
As of the date hereof, Mr. Hempleman, (i) as the managing partner of Ardsley and Ardsley Partners and may be deemed the beneficial owner of the 1,750,000 Shares held by APII, Ardsley Institutional, Ardsley Offshore, Ardsley Energy and Ardsley Energy Offshore.
|
|
(b)
|
1.
|
Sole power to vote or direct vote: 0
|
|
(c)
|
See Schedule B.
|
|
(d)
|
No person other than the Reporting Persons is known to have the right to receive, or the power to direct the receipt of dividends from, or proceeds from the sale of, such Shares.
|
|
(e)
|
Not applicable.
|
Item 6.
|
CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER.
|
Item 7.
|
MATERIAL TO BE FILED AS EXHIBITS.
|
CUSIP No. 205859101
|
SCHEDULE 13D
|
Page 17 of 18 Pages
|
ARDSLEY PARTNERS FUND II, L.P.
|
||||
BY:
|
ARDSLEY PARTNERS I,
|
|||
GENERAL PARTNER
|
||||
BY:
|
/s/ Steve Napoli
|
|||
Steve Napoli
|
||||
General Partner
|
||||
ARDSLEY PARTNERS INSTITUTIONAL FUND, L.P.
|
||||
BY:
|
ARDSLEY PARTNERS I,
|
|||
GENERAL PARTNER
|
||||
BY:
|
/s/ Steve Napoli
|
|||
Steve Napoli
|
||||
General Partner
|
||||
ARDSLEY OFFSHORE FUND, LTD.
|
||||
BY:
|
/s/ Steve Napoli
|
|||
Steve Napoli
|
||||
Director
|
||||
ARDSLEY PARTNERS RENEWABLE ENERGY FUND, L.P.
|
||||
BY:
|
ARDSLEY PARTNERS I,
|
|||
GENERAL PARTNER
|
||||
BY:
|
/s/ Steve Napoli
|
|||
Steve Napoli
|
||||
General Partner
|
||||
ARDSLEY RENEWABLE ENERGY OFFSHORE FUND, LTD.
|
||||
BY:
|
/s/ Steve Napoli
|
|||
Steve Napoli
|
||||
Director
|
||||
ARDSLEY ADVISORY PARTNERS
|
||||
BY:
|
/s/ Steve Napoli
|
|||
Steve Napoli
|
||||
Partner
|
CUSIP No. 205859101
|
SCHEDULE 13D
|
Page 18 of 18 Pages
|
ARDSLEY PARTNERS I
|
||||
BY:
|
/s/ Steve Napoli
|
|||
Steve Napoli
|
||||
General Partner
|
||||
PHILIP J. HEMPLEMAN, INDIVIDUALLY
|
||||
BY:
|
/s/ Steve Napoli*
|
|||
Steve Napoli | ||||
As Attorney-in-fact for Philip J. Hempleman
|
||||
*Evidence of Power of Attorney was filed with the Schedule 13G/A filed on February 15, 2006 (Acc-no: 0000902664-06-000895) and is incorporated by reference into this filing.
|
||||
Trade Date
|
Shared Purchased (Sold)
|
Price ($)*
|
|
6/15/2011
|
32,500
|
$2.7638
|
|
7/26/2011
|
13,600
|
$3.4367
|
Trade Date
|
Shared Purchased (Sold)
|
Price ($)*
|
|
6/15/2011
|
17,500
|
$2.7638
|
|
7/26/2011
|
10,500
|
$3.4367
|
Trade Date
|
Shared Purchased (Sold)
|
Price ($)*
|
|
7/26/2011
|
900
|
$3.4367
|
Trade Date
|
Shared Purchased (Sold)
|
Price ($)*
|
|
6/1/2011
|
10,255
|
$3.5702
|
|
6/3/2011
|
14,900
|
$3.1000
|
|
6/13/2011
|
15,000
|
$2.9779
|
|
7/11/2011
|
17,400
|
$3.1500
|
|
7/12/2011
|
26,900
|
$3.2844
|
Trade Date
|
Shared Purchased (Sold)
|
Price ($)*
|
|
6/1/2011
|
2,500
|
$3.5702
|
|
6/3/2011
|
2,900
|
$3.1000
|
|
6/13/2011
|
3,600
|
$2.9779
|
|
7/11/2011
|
3,900
|
$3.1500
|
|
7/12/2011
|
6,500
|
$3.2844
|
Trade Date
|
Shared Purchased (Sold)
|
Price ($)*
|
|
6/1/2011
|
500
|
$3.5700
|
|
6/3/2011
|
7,200
|
$3.1000
|
|
6/13/2011
|
6,400
|
$2.9800
|
|
7/11/2011
|
8,700
|
$3.1500
|
|
7/12/2011
|
11,600
|
$3.2800
|
|
* Excluding commissions. |
ARDSLEY PARTNERS II, L.P.
|
||||
BY:
|
ARDSLEY PARTNERS I,
|
|||
GENERAL PARTNER
|
||||
BY:
|
/s/ Steve Napoli
|
|||
Steve Napoli
|
||||
General Partner
|
||||
ARDSLEY PARTNERS INSTITUTIONAL FUND, L.P.
|
||||
BY:
|
ARDSLEY PARTNERS I,
|
|||
GENERAL PARTNER
|
||||
BY:
|
/s/ Steve Napoli
|
|||
Steve Napoli
|
||||
General Partner
|
||||
ARDSLEY OFFSHORE FUND, LTD.
|
||||
BY:
|
/s/ Steve Napoli
|
|||
Steve Napoli
|
||||
Director
|
||||
ARDSLEY PARTNERS RENEWABLE ENERGY FUND, L.P.
|
||||
BY:
|
ARDSLEY PARTNERS I,
|
|||
GENERAL PARTNER
|
||||
BY:
|
/s/ Steve Napoli
|
|||
Steve Napoli
|
||||
General Partner
|
||||
ARDSLEY RENEWABLE ENERGY OFFSHORE FUND, LTD.
|
||||
BY:
|
/s/ Steve Napoli
|
|||
Steve Napoli
|
||||
Director
|
||||
ARDSLEY ADVISORY PARTNERS
|
||||
BY:
|
/s/ Steve Napoli
|
|||
Steve Napoli
|
||||
Partner
|
||||
ARDSLEY PARTNERS I
|
||||
BY:
|
/s/ Steve Napoli
|
|||
Steve Napoli
|
||||
General Partner
|
||||
PHILIP J. HEMPLEMAN, INDIVIDUALLY
|
||||
BY:
|
/s/ Steve Napoli*
|
|||
As attorney in fact for Philip J. Hempleman
|
||||
*Evidence of Power of Attorney was filed with the Schedule 13G/A filed on February 15, 2006 (Acc-no: 0000902664-06-000895) and is incorporated by reference into this filing.
|
||||
1.
|
The Board should hire a banker to explore the sale of the company.
|
|
2.
|
The Board should instruct management to drastically reduce its corporate overhead to bring it in line with that of its peers. This should include significant salary cuts to both senior management and the board of directors, reflecting that Comverge is now a company with a $75m market cap.
|
|
3.
|
After changes to the cost structure are finalized, Management must make its revised financial objectives public in the form of guidance and a path to profitability.
|
FY10 Sales
|
FY2010 G&A
|
FY2010 OpEx
|
G&A (% of Sales)
|
OpEx (% of Sales)
|
|||||||||||||||
EnerNOC
|
$ | 280.16 | $ | 53.58 | $ | 109.11 | 19.1 | % | 38.9 | % | |||||||||
Echelon
|
$ | 111.04 | $ | 17.65 | $ | 77.47 | 15.9 | % | 69.8 | % | |||||||||
RuggedCom
|
$ | 93.97 | $ | 10.22 | $ | 38.87 | 10.9 | % | 41.4 | % | |||||||||
LIME Energy*
|
$ | 95.72 | $ | 25.88 | $ | 26.47 | 27.0 | % | 27.7 | % | |||||||||
Active Power
|
$ | 64.96 | $ | 5.32 | $ | 21.82 | 8.2 | % | 33.6 | % | |||||||||
Power Secure
|
$ | 97.51 | $ | 29.34 | $ | 37.25 | 30.1 | % | 38.2 | % | |||||||||
Orion Energy
|
$ | 92.46 | $ | 11.43 | $ | 27.50 | 12.4 | % | 29.7 | % | |||||||||
Group Average
|
17.7 | % | 39.9 | % | |||||||||||||||
Top Quartile
|
10.3 | % | 28.7 | % | |||||||||||||||
Comverge**
|
$ | 119.39 | $ | 39.36 | $ | 63.67 | 33.0 | % | 53.3 | % |
|
1.
|
The Board of Directors is paid too much. Their annual retainer is $63k with $108k in recurring option grants. In a 2010 report prepared for the board of another Ardsley holding (of a similar size/sector as Comverge), the base board retainer was recommended at $35k/year with annual option grants of $5k. This recommendation was immediately adopted by the chair of the compensation committee, who had previously been the CFO of two Fortune 100 companies. Adopting this more reasonable compensation recommendation to Comverge’s eight person board would result in annual cost savings of over $1m per year, or $0.04/share. It would also send an important cultural signal to Comverge’s managers – that operational leanness is the new norm.
|
|
2.
|
Management is also paid too much. The top seven most senior managers are under contract to make $2.0m in base salary alone. In addition, their contracts set forth cash and option bonus based off of three levels of performance: “Threshold,” “Target,” and “Maximum.” In academic parlance, this might be akin to ‘C’, ‘B’, and ‘A’ test scores. The chart below shows these contractual terms:
|
($000s) | 2011 | Cash Bonus (% of Base) |
Cash Bonus ($) | Option Bonus (% of Base) |
Option Bonus ($) | Total Comp ($) | |||||||||||||||||||||||||||||||||
Executive | Title | Salary | Threshold | Target | Max | Threshold | Target | Max | Threshold | Target | Max | Threshold | Target | Max | Threshold | Target | Max | ||||||||||||||||||||||
Young | CEO | $ | 450 | 37.5% | 50% | 100% | $ | 225 | $ | 450 | $ | 1,013 | 2.25x | 300x | 3.75x | $ | 1.013 | $ | 1,350 | $ | 1,688 | $ | 1,1688 | $ | 2,250 | $ | 3,150 | ||||||||||||
Mathieson | CFO | $ | 325 | 25% | 50% | 100% | $ | 163 | $ | 325 | $ | 367 | 1.13x | 1.50x | 1.90x | $ | 367 | $ | 488 | $ | 618 | $ | 855 | $ | 1,138 | $ | 1,130 | ||||||||||||
Camino | CMO | $ | 300 | 25% | 50% | 100% | $ | 150 | $ | 300 | $ | 339 | 1.13x | 1.50x | 1.90x | $ | 339 | $ | 450 | $ | 570 | $ | 789 | $ | 1,050 | $ | 1,209 | ||||||||||||
Moffitt | VP Eng | $ | 300 | 25% | 50% | 100% | $ | 150 | $ | 300 | $ | 339 | 1.13x | 1.50x | 1.90x | $ | 339 | $ | 450 | $ | 570 | $ | 789 | $ | 1,050 | $ | 1,209 | ||||||||||||
Myszka
|
VP Prog | $ | 250 | 25% | 50% | 100% | $ | 125 | $ | 250 | $ | 283 | 1.13x | 1.50x | 1.90x | $ | 283 | $ | 375 | $ | 475 | $ | 658 | $ | 875 | $ | 1,008 | ||||||||||||
Vos | VP Prod | $ | 210 | 25% | 50% | 100% | $ | 105 | $ | 210 | $ | 237 | 1.13x | 1.50x | 1.90x | $ | 237 | $ | 315 | $ | 399 | $ | 552 | $ | 735 | $ | 846 | ||||||||||||
Smith | Gen Csl | $ | 210 | 25% | 50% | 100% | $ | 105 | $ | 210 | $ | 237 | 1.13x | 1.50x | 1.90x | $ | 237 | $ | 315 | $ | 399 | $ | 552 | $ | 735 | $ | 846 | ||||||||||||
Total | $ | 2,045 | $ | 1,023 | $ | 2,045 | $ | 2,815 | $ | 2,815 | $ | 3,743 | $ | 4,718 | $ | 5,882 | $ | 7,883 | $ | 9,578 | |||||||||||||||||||
Average | $ | 292 | $ | 840 | $ | 1,119 | $ | 1,368 | |||||||||||||||||||||||||||||||
% of 2011 Revenue | 1.5% | 4.2% | 5.6% | 6.8% |
|
3.
|
Comverge portrays to investors a culture of extravagancies. In a recent management meeting, the CEO, Blake Young, handed me a business card made of metal. I do not know how much these metal cards cost, but I can assume that it is orders of magnitude higher than the simple paper cards that we use at our (profitable) firm. More importantly, metal cards add no shareholder value and are a bad signal to investors. Comverge must immediately cut all non-essential expenditures. I would suggest the formation of an operating committee by the Board that would proactively seek out these cuts. This committee, of course, should not pay committee fees.
|
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