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What changed in ClearSign Technologies Corp's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of ClearSign Technologies Corp's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+264 added−204 removedSource: 10-K (2026-03-31) vs 10-K (2025-03-31)

Top changes in ClearSign Technologies Corp's 2025 10-K

264 paragraphs added · 204 removed · 167 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

97 edited+34 added−7 removed77 unchanged
Biggest changeWe believe our new standardized boiler burner range of products is also well suited to this application. Sensing Products We are currently engaged with a prominent refining customer as a first adopter to install our flame sensors on burners in one of their heaters facilitating our first field demonstration.
Biggest changeSensing Products We are currently engaged with two refining customers to install our flame sensors on burners in their heaters, which will facilitate our first field demonstrations with certain first adopter customers. Although we have not yet completed commercialization of these products, we have obtained clear and consistent customer feedback guiding this product application.
For example, we believe our ClearSign Core TM products, without any external fans or associated power, can significantly reduce the harmful emission of NOx to levels of 5 ppm or below, depending on the application. The shorter flame in a ClearSign Core product can also potentially allow a furnace to operate at a higher capacity.
For example, we believe our ClearSign Core TM products, without any external fans or associated power, can significantly reduce the harmful emission of NOx to levels of 5 ppm or below, depending on the application. The shorter flame in a ClearSign Core TM product can also potentially allow a furnace to operate at a higher capacity.
California Boiler created a wholly owned subsidiary Rogue Combustion for the purpose of marketing boiler burner systems solution using our ClearSign Core TM technology, which are branded as Near Zero NOx (“NZN”) and Sub 5ppm NOx (“S5”) and Sub 9ppm NOx (“S9”) solutions. Typically, boiler burner customers rely on integrated service providers to design, install and service boiler burner systems.
California Boiler created a wholly owned subsidiary Rogue Combustion for the purpose of marketing boiler burner systems solution using our ClearSign Core TM technology, which are branded as Near Zero NOx (“NZN”), Sub 5ppm NOx (“S5”) and Sub 9ppm NOx (“S9”) solutions. Typically, boiler burner customers rely on integrated service providers to design, install and service boiler burner systems.
Worldwide, suppliers of burners and air pollution control equipment include but are not limited to companies such as Callidus, Eclipse and Maxon (all three are subsidiaries of Honeywell), John Zink Hamworthy Combustion (a subsidiary of Koch Industries and including Coen), General Electric, Haldor Topsøe, Hitachi, Linde, Zeeco, Fives Group, Cleaver Brooks, Power Flame (a subsidiary of Aztec Inc.), and others.
Worldwide, suppliers of burners and air pollution control equipment include but are not limited to companies such as Callidus, Eclipse and Maxon (all three are subsidiaries of Honeywell), John Zink Hamworthy Combustion (a subsidiary of Koch Industries and including Coen), General Electric, Haldor Topsøe, Hitachi, Linde, Zeeco, Fives Group, Cleaver Brooks, Power Flame (a subsidiary of Aztec Inc.), among others.
As a result of the relatively slow pace of developing and adopting innovation, we believe the technology and products currently being offered by our large competitors have become commoditized with differentiation between suppliers most often based on price. These industry characteristics provide both an opportunity and a barrier to more nimble, disruptive companies.
As a result of the relatively slow pace of developing and adopting innovation, we believe the technology and products currently being offered by our large competitors have become commoditized with differentiation between suppliers most often based on price. We believe that these industry characteristics provide both an opportunity and a barrier to more nimble, disruptive companies.
The flames in a ClearSign Core TM system are established from a predominantly premixed stream of fuel, combustion air and flue gasses stabilized on a downstream structure that promotes turbulence and ignition with minimal “bulking up.” In comparison, flames resulting from the traditional legacy process of slow mixing of the fuel and air, and dilutive inert flue gasses have a much larger size.
The flames in a ClearSign Core TM system are established from a predominantly premixed stream of fuel, combustion air and/or flue gasses stabilized on a downstream structure that promotes turbulence and ignition with minimal “bulking up.” In comparison, flames resulting from the traditional legacy process of slow mixing of the fuel and air, and dilutive inert flue gasses have a much larger size.
We are a small company with limited financial resources and do not have the infrastructure to meet the requirements of our sophisticated target global customers without significant investment and increase in operational costs. Although we have highly skilled and experienced employees, we do not have the manpower to provide comprehensive service and customer support ourselves.
We are a small company with limited financial resources and do not have the infrastructure to meet the requirements of our sophisticated target global customers without significant investment and increase in operational costs. Further, although we have highly skilled and experienced employees, we do not have the manpower to provide comprehensive service and customer support ourselves.
ICF a global advisory and technology service company, released its independent report on October 2, 2024, detailing the results of this study. In summary, our technology reported fuel savings at 3.3% when operating at sub-2.5 ppm NOx and 4.7% at sub-9 ppm NOx; electricity savings reported 7% at sub-2.5 ppm NOx and 25% at sub-9 ppm NOx.
ICF International, a global advisory and technology service company, released its independent report on October 2, 2024, detailing the results of this study. In summary, our technology reported fuel savings at 3.3% when operating at sub-2.5 ppm NOx and 4.7% at sub-9 ppm NOx; and electricity savings of 7% at sub-2.5 ppm NOx and 25% at sub-9 ppm NOx.
In 2023, we received two purchase orders for our ClearSign Core boiler burner technology. Both boiler burner purchase orders were sold as a package with our collaborative partner, California Boiler, and its subsidiary, Rogue Combustion, into the San Joaquin Valley Air Pollution Control District of California.
In 2023, we received two purchase orders for our ClearSign Core TM boiler burner technology. Both boiler burner purchase orders were sold as a package with our collaborative partner, California Boiler, and its subsidiary, Rogue Combustion, into the San Joaquin Valley Air Pollution Control District of California.
We believe the ClearSign Core TM suite of products are further differentiated from its competitors because they give prospective customers the opportunity to greatly reduce capital investment and, in certain cases, realize a return on investment through increased efficiency and/or increased productivity.
We believe that the ClearSign Core TM suite of products are further differentiated from its competitors because they give prospective customers the opportunity to greatly reduce capital investment and, in certain cases, realize a return on investment through increased efficiency and/or increased productivity.
As announced in June 2019, we already have an agreement in place with Zeeco, who is one of the world’s largest burner manufacturers, to globally manufacture ClearSign Core TM process burners. In December 2024, Zeeco and ClearSign announced the launch of a co-branded ClearSign Core process burner product line.
As announced in June 2019, we already have an agreement in place with Zeeco, who is one of the world’s largest burner manufacturers, to globally manufacture ClearSign Core TM process burners. In December 2024, Zeeco and us announced the launch of a co-branded ClearSign Core TM process burner product line.
We expect that these end users, as first adopters of our technology, will also play a vital role in future sales efforts by providing references to prospective customers, as, based on our experience, prospective customers frequently request a reference from an existing customer.
We expect that these end users, as first adopters of our technology, will also play a vital role in future sales efforts by providing references to prospective customers, given that, based on our experience, prospective customers frequently request a reference from an existing customer.
We believe that heaters using the ClearSign Core TM will be able to remain in operation for an extended time before the need for maintenance as its flame structure and heat transfer profile minimize the possibility of flame impingement, reduce the likelihood of carbon deposits forming on the inside surfaces of the process tubes (coking) and reduce the likelihood of process tube failure all while operating with enhanced thermal efficiency. 4 ​ Table of Contents ​ Refinery and Petrochemical Heater Technology ​ ​ ​ Boiler Technology ​ ClearSign Core TM Process Burner Technology Our ClearSign Core TM burners provide a simplified, pre-engineered and standardized direct burner replacement for traditional refinery process heaters.
We believe that heaters using the ClearSign Core TM will be able to remain in operation for an extended time before the need for maintenance as its flame structure and heat transfer profile minimize the possibility of flame impingement, reduce the likelihood of carbon deposits forming on the inside surfaces of the process tubes (coking) and reduce the likelihood of process tube failure all while operating with enhanced thermal efficiency. 5 Table of Contents ​ Refinery and Petrochemical Heater Technology ​ ​ ​ Boiler Technology ​ ClearSign Core TM Process Burner Technology Our ClearSign Core TM burners provide a simplified, pre-engineered and standardized direct burner replacement for traditional refinery process heaters.
We believe that it is in the best interests of the Company and our stockholders to develop our business utilizing an “asset light” model. Accordingly, we seek to collaborate with strategic partners to the extent possible to sell our products and maximize the profitability of those sales.
We believe that it is in the best interests of the Company and our stockholders to develop our business utilizing an “asset light” model. Accordingly, we continuously seek to collaborate with strategic partners to the extent possible to sell our products and maximize the profitability of those sales.
Retrofits often involve engineering around an existing burner architecture that can complicate the ClearSign Core TM burner installation, whereas replacements are more straightforward and more amenable to being sold and installed by third parties, enabling more expansive channels to market.
Retrofits often involve engineering around an existing burner and heater architecture that can complicate the ClearSign Core TM burner installation, whereas replacements are more straightforward and more amenable to being sold and installed by third parties, enabling more expansive channels to market.
Our collaborative relationship with California Boiler and Rogue Combustion aligns with our “asset light” philosophy by providing us with a low-cost path to market, by limiting human capital investment in maintenance and installation technicians.
Further, our collaborative relationship with California Boiler and Rogue Combustion aligns with our “asset light” philosophy by providing us with a low-cost path to market, by limiting human capital investment in maintenance and installation technicians.
The presentation of financial results as one reportable segment is consistent with the way that we operate our business and the manner in which our chief operating decision maker, currently our Chief Executive Officer, manages our operations for purposes of allocating resources and assessing financial results. ​ Our operating activities are substantially all located within the United States, and our customers located in the United States accounted for 100% of revenues in the fiscal years ended December 31, 2024 and 2023.
The presentation of financial results as one reportable segment is consistent with the way that we operate our business and the manner in which our chief operating decision maker, currently our Chief Executive Officer, manages our operations for purposes of allocating resources and assessing financial results. ​ Our operating activities are substantially all located within the United States, and our customers located in the United States accounted for 100% of revenues in the fiscal years ended December 31, 2025 and 2024.
We are currently continuing to develop our flame sensing and hydrogen burner technology, which is discussed in detail under the “ClearSign Core™ Technology Product Applications” section above in addition to the expansion of our burner technologies, and potentially other technologies aligned with our expertise and business focus, into adjacent customer applications and market verticals.
We are currently continuing to develop our flame sensing and hydrogen burner technology, which is discussed in detail under the “ClearSign Core™ Technology Product Applications” section above in addition to the expansion of our burner technologies, as well as potentially other technologies aligned with our expertise and business focus, into adjacent customer applications and market verticals.
While we continuously assess, for any improvements in productivity and supply chain efficiency, there can be no assurance that our subcontractors will not experience supply interruptions, production capacity constraints or working capital limitations, which could adversely affect our business. ​ Raw steel and fabricated steel parts are a major component of our product cost, purchases of which are subject to the needs and specifications of our customers or subcontractors.
While we continuously assess possible improvements in productivity and supply chain efficiency, there can be no assurance that our subcontractors will not experience supply interruptions, production capacity constraints or working capital limitations, which could adversely affect our business. ​ Raw steel and fabricated steel parts are a major component of our product cost, purchases of which are subject to the needs and specifications of our customers or subcontractors.
Any new entrant without a differentiating technology will not have this established source of significant and immediate profit. Go to Market Strategy We developed our “go to market” strategy for the ClearSign Core TM combustion business considering our strengths and weaknesses. The most important weaknesses are related to the barriers to entry identified above.
Any new entrant without a differentiating technology will not have this established source of significant and immediate profit. 11 Table of Contents Go to Market Strategy We developed our “go to market” strategy for the ClearSign Core TM combustion business considering our strengths and weaknesses. The most important weaknesses are related to the barriers to entry identified above.
This later phase of development is influenced by customer feedback, product and component standardization, design for manufacture and inventory management simplification, both with respect to the manufacture of and lifetime support for our products. 12 ​ Table of Contents We will continue to assess research and development opportunities to develop new product offerings where appropriate based on customer feedback and market trends.
This later phase of development is influenced by customer feedback, product and component standardization, design for manufacture and inventory management simplification, both with respect to the manufacture of and lifetime support for our products. We will continue to assess research and development opportunities to develop new product offerings where appropriate based on customer feedback and market trends.
These boiler burners have achieved performance levels meeting the most stringent new California NOx regulations, in a typical commercial fire tube boiler produced by one of the industry’s largest suppliers in the U.S.
These boiler burners have achieved performance levels meeting the most stringent California NOx-related regulations in a typical commercial fire tube boiler produced by one of the industry’s largest suppliers in the U.S.
In our target markets, boilers exist in two different industry-standard forms: water tube, which tend to be larger and in which the water or steam 7 ​ Table of Contents flows through a series of tubes that surround the space in which the flame forms; or fire tube in which the flame is formed inside a large tube that passes through the outer vessel holding the water.
In our target markets, boilers exist in two different industry-standard forms: water tube, which tend to be larger and in which the water or steam flows through a series of tubes that surround the space in which the flame forms; or fire tube in which the flame is formed inside a large tube that passes through the outer vessel holding the water.
We are targeting the following segments of the combustion market for adoption of our ClearSign Core TM technology: ● institutional, commercial and industrial boilers; ● refining, energy infrastructure and petrochemical process heaters; ● enclosed flares and thermal oxidizers; and ● enhanced oil recovery steam generators In each of these segments, we are marketing solutions that include our ClearSign Core TM technology which we believe could simultaneously improve productivity, operational efficiency and pollution control.
We are targeting the following segments of the combustion market for adoption of our ClearSign Core TM technology: ● refining, energy infrastructure and petrochemical process heaters; ● enclosed flares and thermal oxidizers; ● midstream gas processing and transportation; ● enhanced oil recovery steam generators; and ● institutional, commercial and industrial boilers. ​ In each of these segments, we are marketing solutions that include our ClearSign Core TM technology which we believe could simultaneously improve productivity, operational efficiency and pollution control.
We have noted that local air quality districts designated by the EPA as “severe non-attainment zones” in California and Texas have undertaken a review of their air pollutant emissions regulations. These reviews are ongoing, in most regions, but two important regions have recently amended their local regulations to improve air quality.
Local air quality districts in California and Texas designated as “severe non-attainment zones” by the EPA have undertaken a review of their air pollutant emissions regulations. These reviews are ongoing, in most regions, but two important regions have recently amended their local regulations to improve air quality.
Like our burner technology, our burner sensing technology is being developed to provide convenient replacement and retrofit solutions for existing equipment as well as for inclusion in newly built equipment. The secondary potential market for our sensing technology is outside of the typical combustion industry and includes transportation industries.
Like our burner technology, our burner sensing technology is being developed to provide convenient replacement and retrofit solutions for existing equipment as well as for inclusion in newly built equipment. 3 Table of Contents The secondary potential market for our sensing technology is outside of the typical combustion industry and includes transportation industries.
As a result of this assessment, SCAQMD approved new BACT performance guidelines for both single and multi-burner configurations. BACT guidelines are periodically updated by SCAQMD to reflect advancements in technology and to ensure affected equipment utilize the most efficient technologies.
As a result of this 4 Table of Contents assessment, SCAQMD approved new BACT performance guidelines for both single and multi-burner configurations. BACT guidelines are periodically updated by SCAQMD to reflect advancements in technology and to ensure affected equipment utilize the most efficient technologies.
As a result, we expect that products containing ClearSign Core™ technology will sell at prices based on the value they offer rather than pursuant to standard competitive pricing that our competitors are forced to use in these mature markets. 11 ​ Table of Contents Our Business Segment and Major Customers We conduct our business activities and report financial results as one business segment.
As a result, we expect that products containing ClearSign Core™ technology will sell at prices based on the value they offer rather than pursuant to standard competitive pricing that our competitors are forced to use in these mature markets. Our Business Segment and Major Customers We conduct our business activities and report financial results as one business segment.
Our business development strategy seeks to obtain recognition of our technology’s value while minimizing the challenges inherent in this market including the strengths of the other market participants. 9 ​ Table of Contents Major barriers faced by a new equipment manufacturer seeking to enter this market include: 1.
Our business development strategy seeks to obtain recognition of our technology’s value while minimizing the challenges inherent in this market including the strengths of the other market participants. Major barriers faced by a new equipment manufacturer seeking to enter this market include: 1.
Our target markets are greatly affected by air emission regulations and economic conditions. Accordingly, we prioritize our activities in target market segments geographically based on the needs of the local industries and the current and anticipated future requirements imposed by local environmental regulations.
Our target markets are greatly affected by air emission regulations and economic conditions. Accordingly, we prioritize our activities in target market segments geographically based on the needs of the local industries and the current and anticipated future 10 Table of Contents requirements imposed by local environmental regulations.
In this form, we believe that the ClearSign Core TM burner technology is ideally suited for installation into new heaters and burner replacements, including heater and furnaces requiring large quantities of burners.
In this form, we believe that the ClearSign Core TM burner technology is ideally suited for installation into new heaters and as burner replacements into existing heaters, including heaters and furnaces requiring large quantities of burners.
Ultimately, it may be possible for our technology to achieve BARCT and/or MACT designation. We believe that the availability of our technology alone may accelerate the government’s willingness to adopt more stringent environmental regulations.
Ultimately, it may be possible for our technology to achieve BARCT and/or MACT designation. We believe that the availability of our technology alone may accelerate the regulatory authorities’ willingness to adopt more stringent environmental regulations.
We believe that this announcement marked the next stage of 10 ​ Table of Contents evolution in our relationship with Zeeco, where we will work together to market and sell ClearSign Core TM technology.
We believe that this announcement marked the next stage of evolution in our relationship with Zeeco, where we will work together to market and sell ClearSign Core TM technology.
These revised regulations substantially reduced target emissions for process heaters, boilers and other similar equipment pursuant to a new and comprehensive Best Available Retrofit Control Technology (“BARCT”) analysis, which we believe will result in an increased demand for our services and products.
These revised regulations substantially reduced target emissions for process heaters, boilers and other similar equipment pursuant to a new and comprehensive Best Available Retrofit Control Technology (“BARCT”) analysis, which we believe will continue to generate an increased demand for our services and products.
Two of these orders are in the state of Texas, and are believed to be a response to anticipated changes to Texas air emissions regulations, which we expect will ultimately lead to additional demand for our technology.
Two of these orders are in the state of Texas, and are believed to be associated with anticipated changes to Texas air emissions regulations, which we expect will ultimately lead to additional demand for our technology.
We believe that the simplicity of the actions required to retrofit refinery process heaters with the ClearSign Core TM technology, and the potential ability to install these burners will potentially contribute to demand for our ClearSign Core TM process burners. ​ ClearSign Core TM Boiler Burner Technology Our ClearSign Core TM technology for boiler burners is essentially the same as our technology for process burners, but with different component details.
We believe that the simplicity of the actions required to retrofit refinery process heaters with the ClearSign Core TM technology will potentially contribute to demand for our ClearSign Core TM process burners. ​ ClearSign Core TM Boiler Burner Technology Our ClearSign Core TM technology for boiler burners is essentially the same as our technology for process burners, but with different component details.
This model allows us to maximize the value of our limited resources while minimizing capital investment. Our subcontractor, for the process burner product line, is intentionally single sourced through a collaborative agreement with a well-known and established industry leader, Zeeco. Our boiler burner product line is not dependent upon a single-sourced subcontractor.
This model allows us to maximize the value of our limited resources while minimizing capital investment. Our subcontractor for the process burner product line is intentionally single sourced through a collaborative agreement with a well-known and established industry leader, 13 Table of Contents Zeeco, as described above. Our boiler burner product line is not dependent upon a single-sourced subcontractor.
Intellectual Property Protection We have generated inventions that we believe to be patentable subject matter and for which we have been seeking protection through patent application filings. As of December 31, 2024, we have 74 active patent grants and another 23 patents pending with Patent Offices in the United States, China, and various European countries.
Intellectual Property Protection We have generated inventions that we believe to be patentable subject matter and for which we have been seeking protection through patent application filings. As of December 31, 2025, we have 75 active patent grants and another 20 patents pending with Patent Offices in the United States, China, and various European countries.
As a result, we may create additional patent applications from an existing application, consolidate existing patent applications, abandon applications, or otherwise modify applications based upon our judgment in order to protect our intellectual property in a reasonably cost-efficient manner.
Further, we may modify a patent application in the future as we develop additional information. As a result, we may create additional patent applications from an existing application, consolidate existing patent applications, abandon applications, or otherwise modify applications based upon our judgment in order to protect our intellectual property in a reasonably cost-efficient manner.
We also believe that having orders fulfilled by a well-known and trusted supplier will reduce the risk, as perceived by prospective customers, of dealing with a small company.
We also believe that having orders fulfilled by well-known and trusted suppliers will reduce the risk, as perceived by prospective customers, of dealing with a smaller company.
The ClearSign Core TM design (including the boiler burner version) is our most developed burner product. It operates essentially in the same way as a standard burner, including fitting into a heater and integrating with existing control systems.
The ClearSign Core TM design (including our “M-Series” burner line) is our most developed burner product. It operates essentially in the same way as a standard burner, including fitting into a heater and integrating with existing control systems.
Through such collaborative arrangements, OEM burner manufacturers can reap the benefits of adding truly differentiated and unique product lines to their offerings and ClearSign can overcome the barrier to market of needing to build capital and operating expense-intensive infrastructure and hiring a large specialist staff.
Through such business relationships, OEM burner manufacturers can reap the benefits of adding truly differentiated and unique product lines to their offerings and we can overcome the barrier to market of needing to build capital and operating expense-intensive infrastructure and hiring a large specialist staff.
We also believe that our collaborative partnerships will enable our OEM partners to offer a unique product in the marketplace and provide both parties with a potentially significant commercial opportunity. Forming such alliances is expected to dramatically accelerate the global sales and market adoption of our technology.
We also believe that our collaborative business arrangements will enable our OEM relationships to offer a unique product in the marketplace and provide both parties with a potentially significant commercial opportunity. Forming such collaborations and relationships is expected to dramatically accelerate the global sales and market adoption of our technology.
We expect that developing strategically chosen collaborative partnerships will result in supplying ClearSign Core TM technology to major global customers in large quantities together with the attendant engineering, quality control, customer support and project management services required by these sophisticated customers.
We expect that developing strategically chosen collaborative business arrangements will result in our ability to supply ClearSign Core TM technology to major global customers in large quantities together with the attendant engineering, quality control, customer support and project management services required by these sophisticated customers.
We are collaborating with Narion Corporation to further develop our technology for this industry, which 2 ​ Table of Contents allows us to incur minimal costs while pursuing this market opportunity.
We are collaborating with Narion Corporation (“Narion”) to further develop our technology for this industry, which allows us to incur minimal costs while pursuing this market opportunity.
While the establishment of a new BACT benchmark does not specifically endorse ClearSign or our 3 ​ Table of Contents products, it does establish a limit in the industry that favors our products.
While the establishment of a new BACT benchmark does not specifically endorse us or our products, it does establish a limit in the industry that favors our products.
We believe that we offer major advances in emissions reductions and efficiency improvements. We also believe that emissions regulations could require a reduction in pollutants such as NOx thereby potentially enhancing market demand for our technology upon implementation of any such regulations.
We also believe that emissions regulations could require a reduction in pollutants such as NOx thereby potentially enhancing market demand for our technology upon implementation of any such regulations.
We believe our sensing technology is valuable because it potentially provides a very reliable alternative or replacement technology for critical industrial burner safety equipment. The currently available flame sensors are unreliable and require frequent maintenance. Our flame sensors can potentially be used with other combustion equipment such as flares, thermal oxidizer burners and boiler burners.
As a result, we believe that our sensing technology is valuable because it potentially provides a very reliable alternative or replacement technology for critical industrial burner safety equipment. Our flame sensors can also potentially be used with other combustion equipment such as flares, thermal oxidizer burners and boiler burners.
We believe that our strengths also include the market opportunity potentially created by new and anticipated environmental emissions control regulations. These regulations will potentially require combustion performance that either exceeds the technology available from the incumbent equipment manufacturers or requires retrofitting existing equipment with a post-combustion clean up apparatus.
We believe that our strengths also include the market opportunity potentially created by new and anticipated environmental emissions control regulations. These regulations will potentially require combustion performance that either exceeds the technology available from the incumbent equipment manufacturers or require retrofitting existing equipment with a post-combustion clean up apparatus, which is very expensive, especially for small to mid-sized heaters.
We have multiple options open to us as channels to market, one of which includes manufacturing the sensors ourselves as an OEM and selling them to customers either directly or indirectly through intermediaries, and another being licensing.
We have multiple options open to us as channels to market, one of which includes manufacturing the sensors ourselves as an OEM and selling them to customers either directly or indirectly through intermediaries, and another being licensing. We believe that the current available flame sensors are unreliable and require frequent maintenance.
No other customer represented greater than ten percent of annual revenues for the years ended December 31, 2024, and 2023. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended ​ ​ December 31, ​ ​ 2024 2023 Customer A ​ 59 % ​ 28 % Customer B ​ 27 ​ ​ 59 ​ ​ ​ 86 % ​ 87 % ​ Suppliers and Subcontractors Due to our “asset light” model, we use subcontractors to source, warehouse and manufacture our products.
No other customer represented greater than ten percent of annual revenues for the years ended December 31, 2025 and 2024. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended ​ ​ December 31, ​ ​ 2025 ​ ​ ​ 2024 Birwelco ​ 66 % ​ 4 % Customer A ​ 3 ​ ​ 59 ​ Customer B ​ 12 ​ ​ 27 ​ ​ ​ 81 % ​ 90 % ​ Suppliers and Subcontractors Due to our “asset light” model, we use subcontractors to source, warehouse and manufacture our products.
Since that first order in 2023, we have received three more orders for this same type of application. We believe these orders are representative of an underserved and growing market opportunity in low emissions burners for horizontally fired process heaters.
Since that first order in 2023, we have received five more orders for this same type of application and several requests from customers seeking bids for future project work. We believe these orders are representative of an underserved and growing market opportunity in low emissions burners for horizontally fired process heaters.
Current burners and previous efforts to decarbonize industrial combustion processes through the utilization of hydrogen fuel are inhibited by the lack of industrial hydrogen burners capable of burning pure hydrogen while controlling emissions of NOx emissions to the most stringent levels required in the industry.
Current burners and previous efforts to decarbonize industrial combustion processes through the utilization of hydrogen fuel are inhibited by the lack of industrial hydrogen burners capable of burning pure hydrogen while controlling emissions of NOx emissions to the most stringent levels required in the industry. We have received two grants from the DOE to fund the development of this technology.
In addition, the mixing and combustion propagating from the flame-stabilizing structure results in a dramatically shorter flame. The ability to modify the flame stabilizing structure enables a high level of control over the flame shape for optimization in a wide range of different applications.
The ability to modify the flame stabilizing structure enables a high level of control over the flame shape for optimization in a wide range of different applications.
On May 18, 2023, we received an order for thirteen process burners from an existing California refinery customer. The order covered retrofitting two heaters, both of which have been installed and are currently operating. The process burners installed in both heaters have passed the customer’s NOx emissions permit level, which were validated by third-party inspectors.
The order covered retrofitting two heaters, both of which have been installed and are currently operating. The process burners installed in both heaters have passed the customer’s NOx emissions permit level, which were validated by third-party inspectors. On November 27, 2024 we received an order from Birwelco USA Inc.
Further, we believe efficiency improvements, combined with the elimination of flame impingement, could generate market demand regardless of the existing regulatory framework because the potential efficiency, productivity and savings gains from our products could result in the adoption of our technology.
Further, we believe that efficiency improvements, combined with the elimination of flame impingement, could generate market demand regardless of the existing regulatory framework because the potential efficiency, productivity and savings gains from our products could result in the adoption of our technology. Human Capital As of December 31, 2025, we had 15 full-time employees, and no part-time employees.
By focusing on this sales channel, we believe we can quickly gain repeat sales given these customers act as a conduit to multiple end users, which also allows us to maximize the reach of our limited selling and marketing resources. In 2024, as a result of adopting such go-to-market strategy, we received multiple orders originating from a single heater OEM.
By focusing on this sales channel, we believe we can quickly gain repeat sales given that these customers act as a conduit to multiple end users, which also allows us to maximize the reach of our limited selling and marketing resources.
Details regarding the localized effect of environmental regulations in the United States are described in the section of this report titled “Our Industry.” In general, our immediate regional opportunities are in the West and Gulf Coasts of the United States.
See the sections titled “Our Industry” and “Government Regulations” in this report for more details regarding the localized effect of environmental regulations in the United States. In general, our immediate regional opportunities are in the West and Gulf Coasts of the United States.
OTSGs for the Enhanced Oil Recovery Industry We have successfully installed our Duplex technology in three OTSG projects in the enhanced oil recovery industry in California. Field data reported by our customers indicates significant efficiency improvements resulting from the installation of the ClearSign technology.
OTSGs for the Enhanced Oil Recovery Industry We have successfully installed our Duplex technology in three OTSG projects in the enhanced oil recovery industry in California. Field data reported by our customers indicates significant efficiency improvements resulting from the installation of the ClearSign technology. We believe our new standardized “M-Series" burner range of products is also well-suited to this application.
Installing clean-up apparatus is very expensive especially for small to mid-sized heaters. We believe that the incumbent burner OEM product development approaches are, and will continue to be, incremental in nature, and are unlikely to pose a significant threat to the value provided by ClearSign Core technology in the foreseeable future.
We believe that the incumbent burner OEM product development approaches are, and will continue to be, incremental in nature, and are unlikely to pose a significant threat to the value provided by our ClearSign Core TM technology in the foreseeable future.
Our two California refinery customers accounted for 86% and 87% of our annual revenue for the years ended December 31, 2024 and 2023, respectively.
Our two California refinery customers accounted for 15% and 86% of our annual revenue for the years ended December 31, 2025 and 2024, respectively, with Birwelco accounting for 66% and 0% of our annual revenue for years ended December 31, 2025 and 2024, respectively.
Due to project delays, which were outside of our control, the process burners for this order were shipped to the jobsite during the third quarter of 2024 but the installation into the customer’s heater is now expected to occur during the third quarter of 2025.
Due to project delays, which were outside of our control, the process burners for this order were shipped to the jobsite during the third quarter of 2024 and were installed during the third quarter of 2025.
These industries are highly competitive and currently dominated by companies that have comparatively more established products and substantially greater infrastructure, customer support networks, and financial resources.
Our Target Markets Our ClearSign Core TM products compete in the combustion and emissions control markets. These industries are highly competitive and currently dominated by companies that have comparatively more established products and substantially greater infrastructure, customer support networks, and financial resources.
As we seek to expand the markets into which we can sell our products, we plan to continue extending the range of ClearSign Core TM process burners to enable the replacement of other burner shapes and configurations, as well as for use in alternate process applications.
As we seek to expand the markets into which we can sell our products, we plan to continue extending the range of ClearSign Core TM process burners to enable the replacement of other burner types and configurations, as well as for use in alternate process applications. 8 Table of Contents Hydrogen Process Burners We have recently completed the technical research and development phase of the one-hundred percent hydrogen capable ClearSign Core TM process burner project.
Corporate History We were incorporated in the State of Washington on January 23, 2008. Effective June 14, 2023, we changed our domicile from the State of Washington to the State of Delaware by means of a plan of conversion.
Our employees are not covered by collective bargaining agreements, and we believe our relationship with our employees is good. Corporate Information We were incorporated in the State of Washington on January 23, 2008. Effective June 14, 2023, we changed our domicile from the State of Washington to the State of Delaware by means of a plan of conversion.
We are assessing the possibility of manufacturing the sensing products ourselves as well as partnering with one or more established OEM suppliers. Demonstration units have been manufactured and we currently have the ability to manufacture the sensor ourselves for the foreseeable future. We are also exploring alternative paths to monetize the technology, including opportunities to license our technology.
Demonstration units have been manufactured and we currently have the ability to manufacture the sensor ourselves for the foreseeable future. We are also exploring alternative paths to monetize the technology, including opportunities to license our technology.
Including our technology in OEM burner products enables us to leverage our technology by providing OEMs with the ability to offer a new product range with our technologies’ unique capabilities and differentiated product performance. Our ClearSign Core TM burner technology consists of an industrial burner body and a downstream flame stabilizing structure made of either porous ceramic or metal.
Including our technology in OEM products enables us to deliver technology efficiently to our customers, and our collaborative partners by providing the ability to offer differentiated products while utilizing their established production methods. Our ClearSign Core TM burner technology consists of an industrial burner body and a downstream flame stabilizing structure made of either porous ceramic or metal.
Our collaboration agreement with the field engineering and servicing company California Boiler includes flare sales and installation. To date, we have four flare units installed and operating in California resulting from this California Boiler collaboration agreement.
Our collaboration agreement with the field engineering and servicing company California Boiler includes flare sales and installation. To date, we have four flare units installed and operating in California resulting from our collaboration with California Boiler. During 2025, we received purchase orders from an existing California energy company for the major components of two retrofit flare systems.
We further believe that fostering these relationships will help us drive demand for our products downstream to OEM heater manufacturers and engineering service companies.
Further, by maintaining and growing such relationships, we were able to successfully enter the market and generate the first adopters of our technology. We further believe that fostering these relationships will help us drive demand for our products downstream to OEM heater manufacturers and engineering service companies.
Sites include four locations in California and one in Europe. The ClearSign Core TM design provides a more simplified, pre-engineered and standardized direct burner replacement for traditional refinery process heaters that we believe can be mass produced and reduce the need for the customized engineering associated with typical retrofits.
The ClearSign Core TM design provides a more simplified and standardized direct burner replacement for traditional midstream and refinery process heaters. We believe that significant portions of these burners have the potential to be mass produced and provide the potential to reduce the need for the customized engineering associated with typical retrofits.
In 2023, we received a purchase order from a heater manufacturer to install a modified ClearSign Core TM boiler burner into a horizontally fired process heater. The end customer was a chemical company located in Texas. This project was a significant achievement for us, since it gave us the ability to demonstrate a new product offering.
In 2023, we received a purchase order from a heater manufacturer to install a forced air ClearSign Core TM burner into a horizontally fired process heater. The end customer was a chemical company located in Texas.
The U.S. environmental regulation that supports the adoption of our technology originates from the Clean Air Act, which had several subsequent amendments specifically targeting NOx emissions, including the 1990 amendments to the Clean Air Act, or the Acid Rain Program, which contained requirements to reduce NOx emissions through the use of available combustion controls.
The Clean Air Act had several subsequent amendments specifically targeting NOx emissions, including the 1990 amendments to the Clean Air Act, or the Acid Rain Program, which contained requirements to reduce NOx emissions through the use of available combustion controls, which remains unchanged after the rescission of the 2009 greenhouse gas endangerment finding.
We maintain an active review process to monitor for new inventions across the globe that threaten our intellectual property protection. We cannot predict when our patent applications may result in issued patents, if at all. Further, we may modify a patent application in the future as we develop additional information.
We maintain an active review process to monitor for new inventions across the globe that threaten our intellectual property protection. Our active patents range in age of duration from 8 years to 18 years, with the majority approximating 11 years of life remaining. We cannot predict when our patent applications may result in issued patents, if at all.
We have received two grants from the Department of Energy (“DOE”) to fund the development of this technology. In total, the DOE awards approximate $1.9 million in the aggregate, with a target end date occurring in 2025. See “Note 12 – Government Assistance” for further details about these monies.
In total, the DOE awards approximate $1.9 million in the aggregate, with a target end date for the project occurring in the first quarter of 2026. See “Note 13 – Government Assistance” for further details about these monies.
When the unreacted mixture of gaseous fuel and air is directed at the flame stabilizing structure, the mixture ignites and the flame forms either within or immediately downstream from the structure itself. Because the fuel and air have more time to become a homogeneous mixture, NOx-forming hot spots and chemistry typically produced by such hot spots is reduced.
Because the fuel and air have more time to become a homogeneous mixture, NOx-forming hot spots and chemistry typically produced by such hot spots is reduced. In addition, the mixing and combustion propagating from the flame-stabilizing structure results in a dramatically shorter flame.
We have received notable interest in this product from a major global customer giving us the confidence that there is a potential market for this technology, which is therefore worthy of future investment. This sensor product is in the very early stages of development and would be deployed in a highly regulated environment requiring a thorough product development process.
We have received notable interest in this product from a major global customer giving us the confidence that there is a potential market for this technology, which is therefore worthy of future investment. As a result, we believe that the interest we have received to date suggests that this could potentially be a significant future business opportunity for us.
Unlike the traditional technology, called “flame rods,” the ClearSign Eye sensing electrodes do not need to make contact with the flame. We are continuing to pursue “first adopter” installation opportunities for this patented sensing technology.
Unlike the traditional technology, called “flame rods,” the ClearSign Eye sensing electrodes do not need to make contact with the flame. We are in the process of commissioning some “first adopter” installations of this patented sensing technology through a pilot program to assess the sensor’s capabilities in industrial scale heaters.
According to SCAQMD, BACT is the most stringent emission limitation or control technique for a class and category of equipment that is “Achieved in Practice,” or “Contained in a State Implementation Plan” (“SIP”), or “Technologically Feasible.” In addition, new regulations are starting to be adopted with respect to the NOx emissions of enclosed ground flares, which historically have not been viewed as a source of NOx emissions or subject to the same level of regulation.
In addition, new regulations are starting to be adopted with respect to the NOx emissions of enclosed ground flares, which historically have not been viewed as a source of NOx emissions or subject to the same level of regulation.
This international order was installed in 2021 and successfully placed it into full operation by the customer in January 2022. In addition, we fulfilled a multi-burner order for a Fortune 500 infrastructure company that continues to consistently meet all performance requirements including compliance with the California site’s air quality permit.
In addition, we fulfilled a multi-burner order for a Fortune 500 infrastructure company that continues to consistently meet all performance requirements including compliance with the California site’s air quality permit. The process burner installed at this site was used by SCAQMD to set new BACT guidelines (see discussion above under the “Our Industry” section above).
We believe that this further development of our products has greatly increased our ability to collaborate with partners to extend our potential market reach and the resources we make available to our prospective customers. 6 ​ Table of Contents Process Heaters in the Oil Refining, Petrochemical and Gas Processing Industries To date, we have retrofitted six process heaters with our new ClearSign Core TM process burners for refineries and fuel distributors, some of which are owned by global supermajor companies and Fortune 500 companies.
Process Heaters in the Oil Refining, Petrochemical and Gas Processing Industries To date, we have retrofitted fourteen process heaters with our new ClearSign Core TM process burners for refineries and fuel distributors, some of which are owned by global supermajor companies and Fortune 500 companies. Sites include five locations in California and one in Europe.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeSales of the underlying shares of common stock could adversely affect the market price of our common stock. As of December 31, 2024, we had outstanding options for the purchase of 2,943 thousand shares of common stock and 864 thousand shares of outstanding restricted stock units (“RSUs”).
Biggest changeAs of December 31, 2025, we had outstanding options for the purchase of approximately 287 thousand shares of common stock (or 2,871 thousand shares on a pre-reverse stock split basis) and 53 thousand shares underlying outstanding restricted stock units 24 Table of Contents (“RSUs”) (or 526 thousand shares on a pre-reverse stock split basis).
The U.S. tariffs on steel and other imported goods may increase the costs of our foreign sourced materials, and any escalation in the tariffs may increase the impact, including without limitation recent tariffs against goods imported from China, Mexico, and Canada recently enacted by the current administration, as modified from time to time, and any retaliatory tariffs issued in response thereto.
The U.S. tariffs on steel and other imported goods may increase the costs of our foreign sourced materials, and any escalation in the tariffs may increase the impact, including without limitation recent tariffs against goods imported from China, Mexico, and Canada enacted by the current administration, as modified from time to time, and any retaliatory tariffs issued in response thereto.
The theft, destruction, loss, misappropriation, or release of sensitive and/or confidential information or intellectual property, or interference with our information technology systems, could result in business disruption, negative publicity, brand damage, violation of privacy laws, loss of customers, potential liability and competitive disadvantage all of which could have a material adverse effect on our business, financial condition or results of operations. 16 ​ Table of Contents We cannot guarantee that any collaborative business research and development partnership we enter into will be successful.
The theft, destruction, loss, misappropriation, or release of sensitive and/or confidential information or intellectual property, or interference with our information technology systems, could result in business disruption, negative publicity, brand damage, violation of privacy laws, loss of customers, potential liability and competitive disadvantage all of which could have a material adverse effect on our business, financial condition or results of operations. 19 Table of Contents We cannot guarantee that any collaborative business research and development partnership we enter into will be successful.
Our certificate of incorporation (as amended, the “certificate of incorporation”) provides that the Court of Chancery of the State of Delaware is the exclusive forum for certain disputes between us and our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or employees. ​ Our certificate of incorporation provides that, with certain limited exceptions, the Court of Chancery of the State of Delaware is the exclusive forum for: ​ ● any derivative action or proceeding brought on our behalf; ● any action asserting a claim of breach of fiduciary duty owed by any director, officer or stockholder; 22 ​ Table of Contents ● any action asserting a claim against us arising under the Delaware General Corporation Law (“DGCL”), or as to which the DGCL confers jurisdiction on the Court of Chancery of the State of Delaware; ● any action arising pursuant to any provision of our bylaws or certificate of incorporation; and ● any action asserting a claim against us or any current or former director, officer or stockholder that is governed by the internal-affairs doctrine. ​ This provision does not apply to suits brought to enforce a duty or liability created by the Securities Act, the Exchange Act or any other claim for which the U.S. federal courts have exclusive jurisdiction.
Our certificate of incorporation (as amended, the “certificate of incorporation”) provides that the Court of Chancery of the State of Delaware is the exclusive forum for certain disputes between us and our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or employees. ​ Our certificate of incorporation provides that, with certain limited exceptions, the Court of Chancery of the State of Delaware is the exclusive forum for: ​ ● any derivative action or proceeding brought on our behalf; ● any action asserting a claim of breach of fiduciary duty owed by any director, officer or stockholder; ● any action asserting a claim against us arising under the Delaware General Corporation Law (“DGCL”), or as to which the DGCL confers jurisdiction on the Court of Chancery of the State of Delaware; ● any action arising pursuant to any provision of our bylaws or certificate of incorporation; and ● any action asserting a claim against us or any current or former director, officer or stockholder that is governed by the internal-affairs doctrine. ​ This provision does not apply to suits brought to enforce a duty or liability created by the Securities Act, the Exchange Act or any other claim for which the U.S. federal courts have exclusive jurisdiction.
For example, domestic customers for some of our product lines may choose to reduce discretionary spending on goods and services such as ours until this volatility subsides. ​ We are exposed to fluctuations in the market values of our investments and in interest rates, either of which could impair the market value of our investments and harm our financial results. ​ As of December 31, 2024, we had investments in short-term (i.e., less than three months) U.S. treasuries and money market accounts backed by U.S. treasuries.
For example, domestic customers for some of our product lines may choose to reduce discretionary spending on goods and services such as ours until this volatility subsides. ​ We are exposed to fluctuations in the market values of our investments and in interest rates, either of which could impair the market value of our investments and harm our financial results. ​ As of December 31, 2025, we had investments in short-term (i.e., less than three months) U.S. treasuries and money market accounts backed by U.S. treasuries.
We will have broad discretion as to the proceeds that we receive from the cash exercise by any holder of our Warrants, and we may not use the proceeds effectively. ​ We may receive up to approximately $22.5 million in aggregate gross proceeds from cash exercises of our outstanding Warrants based on the per share exercise price of such Warrants, and to the extent that we receive such proceeds, we intend to use the net proceeds from cash exercises of the Warrants for working capital, research and development, marketing and sales, and general corporate purposes.
We will have broad discretion as to the proceeds that we receive from the cash exercise by any holder of our outstanding warrants, and we may not use the proceeds effectively. ​ We may receive up to approximately $22.4 million in aggregate gross proceeds from cash exercises of our outstanding warrants based on the per share exercise price of such warrants, and to the extent that we receive such proceeds, we intend to use the net proceeds from cash exercises of the warrants for working capital, research and development, marketing and sales, and general corporate purposes.
We expect that a relatively small number of customers will continue to account for a substantial portion of our revenue for the foreseeable future. ​ As a result of this revenue concentration, our results of operations could be adversely affected by the decision of a single key customer to cease using our technology or products or by a decline in the number of customers that are seeking to adopt our technology. ​ 15 ​ Table of Contents Our revenue concentration may also pose credit risks which could negatively affect our cash flow and financial condition. ​ We might also face credit risks associated with the concentration of our revenue among a small number of customers.
We expect that a relatively small number of customers will continue to account for a substantial portion of our revenue for the foreseeable future. ​ As a result of this revenue concentration, our results of operations could be adversely affected by the decision of a single key customer to cease using our technology or products or by a decline in the number of customers that are seeking to adopt our technology. ​ Our revenue concentration may also pose credit risks which could negatively affect our cash flow and financial condition. ​ We might also face credit risks associated with the concentration of our revenue among a small number of customers.
Additionally, our third-party suppliers may provide us with raw materials or component parts that fail to meet our expectations or the expectations of our customers, which could subject us to product liability claims, other claims and litigation. ​ 19 ​ Table of Contents Failure of third parties to manufacture quality products or provide reliable services in a timely manner could cause delays in developing, constructing, and operating our projects, which could damage our reputation, adversely affect our partner relationships or adversely affect our growth. ​ Our success depends on our ability to develop, construct, and operate projects in a timely manner, which depends in part on the ability of third parties to provide us with timely and reliable products and services.
Additionally, our third-party suppliers may provide us with raw materials or component parts that fail to meet our expectations or the expectations of our customers, which could subject us to product liability claims, other claims and litigation. ​ Failure of third parties to manufacture quality products or provide reliable services in a timely manner could cause delays in developing, constructing, and operating our projects, which could damage our reputation, adversely affect our partner relationships or adversely affect our growth. ​ Our success depends on our ability to develop, construct, and operate projects in a timely manner, which depends in part on the ability of third parties to provide us with timely and reliable products and services.
If we were to issue preferred stock, it is likely to have rights, preferences and privileges that may adversely affect our common stock or other securities. We are authorized to issue 2 million shares of “blank check” preferred stock, with such rights, preferences and privileges as may be determined from time-to-time by our board of directors (the “Board”).
If we were to issue preferred stock, it is likely to have rights, preferences and privileges that may adversely affect our common stock or other securities. We are authorized to issue 2 million shares of “blank check” preferred stock, with such rights, preferences and privileges as may be determined from time-to-time by the Board.
Many firms in the combustion industry have made and continue to make substantial investments in improving their technologies and manufacturing processes. In addition, they may be able to price their 17 ​ Table of Contents products below the marginal cost of production in an attempt to establish, retain or increase market share.
Many firms in the combustion industry have made and continue to make substantial investments in improving their technologies and manufacturing processes. In addition, they may be able to price their 20 Table of Contents products below the marginal cost of production in an attempt to establish, retain or increase market share.
For example, the ultimate impact of the conflict in Ukraine, Israel and Strait of Hormuz on fuel prices, inflation, the global supply chain and other macroeconomic conditions is unknown and could materially adversely affect global economic growth, disrupting discretionary spending habits and generally decreasing demand for our products and services.
For example, the ultimate impact of the conflict in Ukraine, Israel, Venezuela, Iran and Strait of Hormuz on fuel prices, inflation, the global supply chain and other macroeconomic conditions is unknown and could materially adversely affect global economic growth, disrupting discretionary spending habits and generally decreasing demand for our products and services.
Our cash on hand will likely not be sufficient to meet all of our long-term future needs because our target customers are, in general, slow to adopt new technologies, and we anticipate that we will require substantial additional funds in excess of our current financial resources for research, development and commercialization of our technology, to obtain and maintain patents and other intellectual property rights in our technology, and for working capital and other purposes, the timing and amount of which are difficult to ascertain.
Our cash on hand will likely not be sufficient to meet all of our long-term future needs because our target customers are, in general, slow to adopt new technologies, and we anticipate that we will require substantial additional funds in excess of our current financial resources for research, development and commercialization of our technology, to obtain and maintain patents and other intellectual property rights in our 16 Table of Contents technology, and for working capital and other purposes, the timing and amount of which are difficult to ascertain.
If the global credit and capital market continues to experience volatility or deteriorates, and to the extent we make future investments, our investment portfolio may be impacted, and we could determine that some or all of our investments experienced an other-than-temporary decline in fair value, requiring impairment, which could adversely impact our financial position and operating results. ​ 20 ​ Table of Contents Risks Related to Owning Our Securities The public market for our securities is volatile.
If the global credit and capital market continues to experience volatility or deteriorates, and to the extent we make future investments, our investment portfolio may be impacted, and we could determine that some or all of our investments experienced an other-than-temporary decline in fair value, requiring impairment, which could adversely impact our financial position and operating results. ​ Risks Related to Owning Our Securities The public market for our securities is volatile.
Further, these choice of forum provisions may increase the costs for a stockholder to bring such a claim and may discourage them from doing so. ​ While the Delaware courts have determined that such choice of forum provisions are facially valid, a stockholder may nevertheless seek to bring a claim in a venue other than those designated in the exclusive forum provisions, and there can be no assurance that such provisions will be enforced by a court in those other jurisdictions.
Further, these choice of forum provisions may increase the costs for a stockholder to bring such a claim and may discourage them from doing so. 26 Table of Contents ​ While the Delaware courts have determined that such choice of forum provisions are facially valid, a stockholder may nevertheless seek to bring a claim in a venue other than those designated in the exclusive forum provisions, and there can be no assurance that such provisions will be enforced by a court in those other jurisdictions.
A successful product liability claim or series of claims against us, including one or more consumer claims purporting to constitute class actions or claims resulting from extraordinary loss events, in excess of or outside our insurance 18 ​ Table of Contents coverage, or a significant warranty claim or series of claims against us, could materially decrease our liquidity, impair our financial condition and adversely affect our results of operations.
A successful product liability claim or series of claims against us, including one or more consumer claims purporting to constitute class actions or claims resulting from extraordinary loss events, in excess of or outside our insurance coverage, or a significant warranty claim or series of claims against us, could materially decrease our liquidity, impair our financial condition and adversely affect our results of operations.
We cannot predict the effect, if any, that market sales of those shares of common stock or the availability of those shares for sale will have on the market price of our common stock. ​ We may be required to raise additional capital by issuing new securities, which may have terms or rights superior to those of our shares of common stock, which could adversely affect the market price of our shares of common stock and our business.
We cannot predict the effect, if any, that market sales of those shares of common stock or the availability of those shares for sale will have on the market price of our common stock. 23 Table of Contents ​ We may be required to raise additional capital by issuing new securities, which may have terms or rights superior to those of our shares of common stock, which could adversely affect the market price of our shares of common stock and our business.
If we do not prevail in this type of litigation, we may be required to pay monetary damages and/or expenses; stop commercial activities relating to our products; obtain one or more licenses in order to secure the rights to continue the manufacturing or marketing of our products; or attempt to compete in the market with substantially similar products.
If we do not prevail in this type of litigation, we may be required to pay monetary damages and/or expenses; stop commercial activities relating to our products; obtain one or more licenses 18 Table of Contents in order to secure the rights to continue the manufacturing or marketing of our products; or attempt to compete in the market with substantially similar products.
Any subcontractor delays in fulfilling our contracts may result in delay of revenue recognition by the Company, which in turn can affect our financial condition and results of operations. ​ Macroeconomic pressures in the markets in which we operate may adversely affect our financial results. ​ Geopolitical issues around the world can impact macroeconomic conditions and could have a material adverse impact on our financial results.
Any subcontractor delays in fulfilling our 22 Table of Contents contracts may result in delay of revenue recognition by the Company, which in turn can affect our financial condition and results of operations. ​ Macroeconomic pressures in the markets in which we operate may adversely affect our financial results. ​ Geopolitical issues around the world can impact macroeconomic conditions and could have a material adverse impact on our financial results.
If our technology is not widely adopted in the industrial 14 ​ Table of Contents combustion market, we may not earn enough by selling or licensing our technology to support our operations, recover our research and development costs or become profitable and our business could fail. Our efforts may never demonstrate the feasibility of our product.
If our technology is not widely adopted in the industrial combustion market, we may not earn enough by selling or licensing our technology to support our operations, recover our research and development costs or become profitable and our business could fail. Our efforts may never demonstrate the feasibility of our product.
While many companies and investors continue to focus on ESG matters, there has been an increase in anti-ESG initiatives and sentiment which may serve as a concern in the future, particularly in light of recent executive orders by President Trump.
While many companies and investors continue to focus on ESG matters, there has been an 17 Table of Contents increase in anti-ESG initiatives and sentiment which may serve as a concern in the future, particularly in light of recent executive orders by President Trump.
The failure to use such funds by us effectively could have a material adverse effect on our business, financial condition, operating results and cash flow. ​ You may experience future dilution as a result of issuance of the Warrant Shares, future equity offerings by us and other issuances of our common stock or other securities.
The failure to use such funds by us effectively could have a material adverse effect on our business, financial condition, operating results and cash flow. ​ You may experience future dilution as a result of issuance of the shares of common stock underlying our outstanding warrants, future equity offerings by us and other issuances of our common stock or other securities.
Changes to environmental regulations could make our technology less desirable. The negative environmental impacts of industrial activity have given rise to significant environmental regulation in industrialized countries. These regulations are important incentives in the adoption of technologies like ours.
Changes to environmental regulations or future legislation could make our technology less desirable. The negative environmental impacts of industrial activity have given rise to significant environmental regulation in industrialized countries. These regulations are important incentives in the adoption of technologies like ours.
In addition, the exercise price of the Warrants may be equal to or greater than the price per share previously paid by certain investors.
In addition, the exercise price of our outstanding warrants may be equal to or greater than the price per share previously paid by certain investors.
Under the ClearSign Technologies Corporation 2021 Equity Incentive Plan (the “2021 Plan”) and the ClearSign Technologies Corporation 2013 Consultant Stock Plan (the “2013 Consultant Plan,” and collectively, the “Plans”), we have the ability to grant awards of shares, RSU’s or options to purchase shares of our common stock to employees, officers, directors, independent contractors and agents.
Under the ClearSign Technologies Corporation 2021 Equity Incentive Plan (as it may be amended from time to time, the “2021 Plan”) and the ClearSign Technologies Corporation 2013 Consultant Stock Plan (the “2013 Consultant Plan,” and collectively, the “Plans”), we have the ability to grant awards of shares, RSU’s or options to purchase shares of our common stock to employees, officers, directors, independent contractors and agents.
In addition, the issuance of the Warrant Shares, to the extent the Warrants are exercisable, and future equity offerings and other issuances of our common stock or other securities may adversely affect our common stock price. ​ 21 ​ Table of Contents You may experience future dilution as a result of the issuance of the Warrant Shares and other issuances of our common stock or other securities.
In addition, the issuance of the shares of common stock underlying our outstanding warrants, to the extent our outstanding warrants are exercisable, and future equity offerings and other issuances of our common stock or other securities may adversely affect our common stock price. ​ You may experience future dilution as a result of the issuance of the shares of common stock underlying our outstanding warrants and other issuances of our common stock or other securities.
Our management and other personnel continually devote a substantial amount of time to these compliance 23 ​ Table of Contents initiatives.
Our management and other personnel continually devote a substantial amount of time to these compliance initiatives.
If our stock price rises, the holders may exercise their options and RSUs and sell a large number of shares. This could cause the market price of our common stock to decline. We have the right to issue shares of preferred stock.
If our stock price rises, the holders may exercise their options and RSUs and sell a large number of shares. This could cause the market price of our common stock to decline.
We have incurred losses since our inception and expect to experience operating losses and negative cash flows for the foreseeable future. As of December 31, 2024, we had a total accumulated deficit of approximately $99.0 million.
We have incurred losses since our inception and expect to experience operating losses and negative cash flows for the foreseeable future. As of December 31, 2025, we had a total accumulated deficit of approximately $104.5 million.
For instance, the securities issued in our recent equity offerings (see “Note 8 – Equity” for additional information), as well as the Warrant Shares, have been registered for resale and are freely tradable without restriction or further registration under the Securities Act.
For instance, the securities issued in our recent equity offerings (see “Note 9 – Equity” for additional information), as well as the shares of common stock underlying our outstanding warrants, have been registered for resale and are freely tradable without restriction or further registration under the Securities Act.
For the years ended December 31, 2024 and 2023, our two largest customers represented approximately 86% and 87% of total revenue, respectively.
For the years ended December 31, 2025 and 2024, our three largest customers represented approximately 81% and 86% of total revenue, respectively.
As a public company reporting to the Securities and Exchange Commission (the “SEC”), we incur significant legal, accounting, investor relations, printing, board compensation, and other expenses that we did not incur as a private company. These costs totaled $1.6 million in 2024.
As a public company reporting to the SEC, we incur significant legal, accounting, investor relations, printing, board compensation, and other expenses that we did not incur as a private company. These costs totaled $3.0 million in 2025.
Since that time, our common stock (NASDAQ: CLIR) has traded as low as $0.35 per share and as high as $11.75 per share based upon daily closing prices, and day-to-day trading has been volatile at times. This volatility may continue or increase in the future.
Since that time, our common stock (Nasdaq: CLIR) has traded as low as $3.50 per share (or $0.35 per share on a pre-reverse stock split basis) and as high as $117.50 per share (or $11.75 per share on a pre-reverse stock split basis) based upon daily closing prices, and day-to-day trading has been volatile at times.
Further, the materials that our subcontractors may import from time to time are generally at prices that support our current operating margins. These imports may be subject to custom requirements, tariffs, and quotas set by governments through mutual agreements or unilateral actions.
These imports may be subject to custom requirements, tariffs, and quotas set by governments through mutual agreements or unilateral actions.
Adverse changes in these import costs and restrictions, or our strategic partners’ and suppliers’ failure to comply with customs regulations or similar laws, could harm our business. However, it is not always possible to replace a supplier on short notice without disruption in our operations, and replacement of a supplier is often at higher prices.
Adverse changes in these import costs and restrictions, or our strategic partners’ and suppliers’ failure to comply with customs regulations or similar laws, could harm our business.
Uncertainties resulting from the initiation and continuation of any litigation could limit our ability to continue some of our operations. A cybersecurity incident or other technology disruptions could negatively impact our business and our relationships with customers. We use computers in substantially all aspects of our business operations.
Our current financial status may increase our default and litigation risks and may make us more financially vulnerable in the face of threatened litigation. A cybersecurity incident or other technology disruptions could negatively impact our business and our relationships with customers. We use computers in substantially all aspects of our business operations.
To the extent we resume our operations in China, these risks could have a material adverse effect on our business, results of operations and financial condition. Finally, the U.S.
Unexpected outcomes in such legal proceedings, or changes in management’s evaluation or predictions of the likely outcomes of such proceedings, could have a material adverse effect on our business, financial condition, results of operations and cash flows.
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Further, in January 2025, President Trump signed executive orders that, among other things, directed federal executive departments and agencies to initiate a regulatory freeze for certain rules that have not taken effect, pending review by the newly appointed agency head, and called upon the EPA to submit a report on the continuing applicability of its endangerment finding for greenhouse gas emissions under the Clean Air Act and issue guidance on the “social cost of carbon” to consider whether such metric should be eliminated.
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Further, these disclosures reflect our beliefs and opinions as to factors that could materially and adversely affect the Company and its securities in the future.
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Moreover, in January 2025, President Trump signed an executive order calling to terminate all environmental justice offices and positions in the federal government, as well as any environmental justice initiatives, programs or other activities.
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References to past events, if any, are provided by way of example only and are not intended to be a complete listing or a representation as to whether or not such factors have occurred in the past or their likelihood of occurring in the future.
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It is unclear the impact the Trump administration or these new executive orders will have on the laws, rules and regulations applicable to us or on our business, financial condition and results of operations, and we cannot predict future developments related hereto.
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Further, on February 18, 2026, the EPA published a final rule to rescind the 2009 greenhouse gas endangerment finding (which had concluded that greenhouse gases endanger public health and welfare).
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Some of the other risks we may be exposed to include, but is not limited to: ● the Chinese government exerts substantial influence over the manner in which we can conduct business activities; ● restrictions on currency exchange may limit the ability to receive and use cash effectively; ● the Chinese government may favor local businesses and make it more difficult for foreign businesses to operate in China on an equal footing, or in general; ● there are uncertainties related to the enforcement of contracts with certain parties; and ● more restrictive rules on foreign investment could adversely affect our ability to resume our operations in China.
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While we currently do not expect this rule to materially impact our business, financial condition and results of operations, and although it is not possible at this time to predict how legislation or new regulations that may be adopted to address greenhouse or toxic gas emissions would impact our business, the impact of the results of further proceedings and rules and potential future greenhouse or toxic gas emission regulations remains uncertain, but it could be material to the extent that these developments make our technology less desirable.
Removed
Foreign Corrupt Practices Act and similar foreign anti-corruption laws generally prohibit companies and their intermediaries from making improper payments or providing anything of value to improperly influence foreign government officials for the purpose of obtaining or retaining business or obtaining an unfair advantage.
Added
Uncertainties resulting from the initiation and continuation of any litigation could limit our ability to continue some of our operations. Adverse judgments or settlements in legal proceedings could materially harm our business, financial condition, operating results and cash flows.
Removed
While we make every attempt to comply with these laws, our operations outside the United States may increase the risk of violating such laws. Violations of these laws may result in severe criminal or civil sanctions, could disrupt our business and result in a material adverse effect on our reputation, business and results of operations or financial condition.
Added
We may be a party to claims that arise from time to time in the ordinary course of our business, which may include those related to, for example, our securities offerings, contracts, sub-contracts, protection of confidential information or trade secrets, adversary proceedings arising from customer bankruptcies, stockholder engagement, employment of our workforce and immigration requirements, indemnification and/or advancement obligations or compliance with any of a wide array of state and federal statutes, rules and regulations that pertain to different aspects of our business.
Added
Regardless of the merits of any particular claim, responding to such actions could divert time, resources and management’s attention away from our business operations, and we may incur significant expenses in defending these lawsuits or other similar lawsuits.
Added
The results of litigation and other legal proceedings are inherently uncertain, and adverse judgments or settlements in some of these legal disputes may result in adverse monetary damages, penalties or injunctive relief against us, which could have a material adverse effect on our financial condition, operating results and cash flows.
Added
Any claims or litigation, even if fully indemnified or insured, could damage our reputation and make it more difficult to compete effectively or to obtain adequate insurance in the future.
Added
Furthermore, while we maintain insurance for certain potential liabilities, such insurance does not cover all types and amounts of potential liabilities and is subject to various exclusions as well as deductibles and caps on amounts of coverage.
Added
Even if we believe a claim is covered by insurance, insurers may dispute our entitlement to coverage for a variety of potential reasons, which may affect the timing and, if the insurers prevail, the amount of our available insurance coverage for a particular claim.
Added
Further, whether or not we are named as a party to a particular proceeding or threatened proceeding, we may be subject to indemnification and/or advancement obligations to our current directors and executive officers as well as other third parties, which may include former directors, that could subject us to fees and expenses incurred in connection with any threatened proceedings, or proceedings, and possibly liability for damages or other amounts that may be payable as a result of any judgments or settlements.
Added
We may also be required to initiate expensive litigation or other proceedings to protect our business interests. There is a risk that we will not be successful or otherwise be able to satisfactorily resolve such claims or litigation. Litigation and other legal claims are subject to inherent uncertainties.
Added
Those uncertainties include, but are not limited to, litigation costs and attorneys’ fees, unpredictable judicial or jury decisions and the differing laws and judicial proclivities regarding damage awards among the states in which we operate.
Added
However, it is not always possible to replace a supplier on short notice without disruption in our operations, and replacement of a supplier is often at higher prices. 21 Table of Contents Further, the materials that our subcontractors may import from time to time are generally at prices that support our current operating margins.
Added
This volatility may continue or increase in the future.
Added
Sales of the underlying shares of common stock could adversely affect the market price of our common stock.
Added
The effective increase in the number of shares of our common stock available for issuance as a result of our reverse stock split could result in further dilution to our existing stockholders and have antitakeover implications. ​ The reverse stock split alone had no effect on our authorized capital stock, and the total number of authorized shares remains the same as before the reverse stock split.
Added
The reverse stock split of our issued and outstanding shares increased the number of shares of our common stock (or securities convertible or exchangeable for our common stock) available for issuance by decreasing the number of shares of our common stock issued and outstanding.
Added
The additional available shares are available for issuance from time to time at the discretion of the Board when opportunities arise, without further stockholder action or the related delays and expenses, except as may be required for a particular transaction by law, the rules of any exchange on which our securities may then be listed, or other agreements or restrictions.
Added
Any issuance of additional shares of our common stock would increase the number of outstanding shares of our common stock and (unless such issuance was pro-rata among existing stockholders) the percentage ownership of existing stockholders would be diluted accordingly.
Added
In addition, any such issuance of additional shares of our common stock could have the effect of diluting the earnings per share and book value per share of outstanding shares of our common stock. Additionally, the effective increase in the number of shares available for issuance could, under certain circumstances, have anti-takeover implications.
Added
For example, the additional shares of common stock that have become available for issuance could be used by us to oppose a hostile takeover attempt or to delay or prevent changes in control or our management.
Added
Although our reverse stock split is prompted by other considerations and not by the threat of any hostile takeover attempt, stockholders should be aware that our reverse stock split could facilitate future efforts by us to deter or prevent changes in control, including transactions in which our stockholders might otherwise receive a premium for their shares over then-current market prices. ​ If we are unable to satisfy the continued listing requirements of the Nasdaq, our common stock could be delisted and the price and liquidity of our common stock may be adversely affected. ​ Our common stock may lose value and could be delisted from Nasdaq due to several factors or a combination of such factors.
Added
While our common stock is currently listed on Nasdaq, we can give no assurance that we will be able to satisfy the continued listing requirements of Nasdaq in the future, including, but not limited to, the corporate governance requirements and the minimum closing bid price requirement or the minimum equity requirement.
Added
On April 1, 2025, we received a deficiency letter from the Nasdaq Listing Qualifications Department of Nasdaq notifying us that, for 30 consecutive business days, the closing bid price of our common stock was below the minimum $1.00 per share required for continued listing pursuant to Nasdaq Listing Rule 5550(a)(2).
Added
The Nasdaq deficiency letter had no immediate effect on the listing of our common stock, and we were initially given 180 calendar days, or until September 29, 2025, to regain compliance with Nasdaq Listing Rule 5550(a)(2), which was extended by an additional 180 calendar days, or March 30, 2026.
Added
On March 16, 2026, we effected a reverse stock split of our issued and outstanding shares of common stock at a ratio of one post-split share for every 10 pre-split shares.
Added
We received written confirmation from Nasdaq notifying us that we have regained compliance with Nasdaq Listing Rule 5550(a)(2) on March 30, 2026. ​ There can be no assurance that we will be able to maintain compliance with the continued listing requirements for Nasdaq.
Added
If we fail to maintain compliance with any such continued listing requirement, there can also be no assurance that we will be able to regain compliance with any such continued listing requirement in the future or that our common stock will not be delisted in the future. ​ If we were to be delisted, we would expect our common stock to be traded in the over-the-counter market which could adversely affect the liquidity of our common stock.
Added
Additionally, we could face significant material adverse consequences, including: ​ ● a limited availability of market quotations for our common stock; 25 Table of Contents ● a decreased ability to issue additional securities or obtain additional financing in the future; ● reduced liquidity for our stockholders; ● potential loss of confidence by customers, collaboration partners and employees; and ● loss of institutional investor interest. ​ In the event of a delisting, we can provide no assurance that any action taken by us to restore compliance with listing requirements would allow our common stock to become listed again, stabilize the market price or improve the liquidity of our common stock, prevent our common stock from dropping below the Nasdaq minimum bid price requirement, or prevent future non-compliance with Nasdaq’s listing requirements. ​ We have the right to issue shares of preferred stock.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

1 edited+0 added−0 removed7 unchanged
Biggest changeWe recognize the critical importance of developing, implementing, and maintaining robust cybersecurity measures to safeguard our information systems and protect the confidentiality, integrity, and availability of our data. ​ Governance The audit and risk committee of our Board (the “Audit Committee”) oversees risks related to cybersecurity, including the security of corporate information and the steps management takes to monitor and control these risks.
Biggest changeWe recognize the critical importance of developing, implementing, and maintaining robust cybersecurity measures to safeguard our information systems and protect the confidentiality, integrity, and availability of our data. ​ 27 Table of Contents Governance The audit and risk committee of our Board (the “Audit Committee”) oversees risks related to cybersecurity, including the security of corporate information and the steps management takes to monitor and control these risks.

Item 2. Properties

Properties — owned and leased real estate

2 edited+1 added−0 removed1 unchanged
Biggest changeThe term of the Beijing lease began 24 ​ Table of Contents on June 1, 2024 and expires in June 2025. The monthly minimum rent for our Beijing location is approximately $3 thousand (20,000 RMB).
Biggest changeThe term of the Beijing lease began on June 1, 2024 and expires in June 2027. The monthly minimum rent for our Beijing location is approximately $3 thousand (20,000 RMB).
Monthly minimum rent is approximately $5 thousand with an annual 2.0% increase. The Company also sub-leases 940 square feet of office space located in Seattle, Washington and 656 square feet in Beijing, China. The minimum monthly rent for our Seattle location is approximately $2 thousand with a termination date of September 30, 2025.
Monthly minimum rent is approximately $5 thousand with an annual 2.0% increase. The Company also sub-leases 940 square feet of office space located in Seattle, Washington and 656 square feet in Beijing, China. The minimum monthly rent for our Seattle location is approximately $2 thousand with a termination date of September 30, 2026.
Added
We believe that the facilities we currently lease are adequate to meet our needs for the immediate future, and that, should it be needed, additional space can be acquired or leased to accommodate future growth. ​

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

1 edited+4 added−0 removed1 unchanged
Biggest changeAs of the date of this report, we are not a party to any material pending legal proceedings. ITEM 4. MINE SAFETY DISCLOSURES. Not applicable. ​ PART II
Biggest changeAs of the date of this report, we are not a party to any material pending legal proceedings, except as set forth below. 28 Table of Contents Catharine M. de Lacy, David Maley, and Judith Schrecker v.
Added
ClearSign Technologies Corporation , Case No. 2026-0082-CDW (Delaware Court of Chancery) On January 16, 2026, Judith Schrecker, David Maley, and Catharine M. de Lacy (“Former Directors”), filed a petition for advancement in the Delaware court of Chancery for an advancement of legal fees relating to a request, by us, for the Former Directors to return material generated by the Special Committee.
Added
The advancement proceedings will effectuate an advancement of monies to the Former Directors counsel for monies incurred to represent the Former Directors in this matter. The advancement proceeding will follow a prescribed court process where the legal fees will be reviewed with the goal of concluding reasonable amount payable to the Former Directors’ counsel for representation in this matter.
Added
At the date of this report, we do not believe this proceeding will have a material adverse effect on the future operations of the Company. To account for this matter, we have accrued $180 thousand as an estimate for legal services rendered during 2025. Subsequent to December 31, 2025, the total advancement request amounted to $319 thousand. ​ ITEM 4.
Added
MINE SAFETY DISCLOSURES. Not applicable. ​ PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

5 edited+0 added−0 removed1 unchanged
Biggest changeWe relied on Section 4(a)(2) of the Securities Act of 1933, as amended, and Regulation D promulgated thereunder to issue the stock. Equity Compensation Plan Information See “Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters,” for information about our equity compensation plans.
Biggest changeThese shares were issued in reliance upon the exemption from registration provided by Section 4(a)(2) of the Securities Act, for a transaction by an issuer not involving a public offering. Equity Compensation Plan Information See “Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters,” for information about our equity compensation plans.
This number does not include an indeterminate number of holders whose shares are held by brokers in street name. Our stock transfer agent is VStock Transfer, LLC, 18 Lafayette Place, Woodmere, NY 11598.
This number does not include an indeterminate number of holders whose shares are held by brokers in street name. Our common stock transfer agent is VStock Transfer, LLC, 18 Lafayette Place, Woodmere, NY 11598.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES. Market Information for Common Stock Our common stock is listed on the Nasdaq Capital Market under the symbol “CLIR”. Holders of Record According to our transfer agent, as of March 21, 2025, we had 289 stockholders of record.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES. Market Information for Common Stock Our common stock is listed on the Nasdaq Capital Market under the symbol “CLIR”. Holders of Record According to our transfer agent, as of March 24, 2026, we had 293 stockholders of record.
In addition, the board is not currently contemplating and does not anticipate declaring any stock dividends in the foreseeable future. ​ Purchases of Equity Securities by the Issuer and Affiliated Purchasers ​ We had no share repurchase activity for the three months ended December 31, 2024. ​
In addition, the Board is not currently contemplating and does not anticipate declaring any stock dividends in the foreseeable future. ​ Purchases of Equity Securities by the Issuer and Affiliated Purchasers ​ We had no share repurchase activity for the three months ended December 31, 2025. ​ 29 Table of Contents ITEM 6. [RESERVED] ​
Recent Issuances of Unregistered Securities On December 31, 2024, we issued 3.8 thousand shares of common stock, having a weighted average per share value of $0.90 from our 2013 Consultant Plan to our investor relations firm, Firm IR Group LLC, for services provided in the three months ended December 31, 2024.
Recent Issuances of Unregistered Securities On December 31, 2025, we issued 375 shares of common stock (or 3,750 shares on a pre-reverse stock split basis), having a weighted average per share value of $8.90 (or $0.89 per share on a pre-reverse stock split basis) from our 2013 Consultant Plan to our investor relations firm, Firm IR Group LLC, for services provided in the three months ended December 31, 2025.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

25 edited+27 added−24 removed22 unchanged
Biggest changeThe change in contract liabilities during the year ended December 31, 2024, was predominantly impacted by our shipment of process burners during the year ended December 31, 2024 (see “Note 5 – Revenue, Contract Assets and Contract Liabilities” below for additional information). ​ Operating activities for the year ended December 31, 2023 resulted in cash outflows of $3,233 thousand, primarily due to the loss for the period of $5,194 thousand, offset with non-cash expenses of $1,045 thousand, and an increase of $869 thousand of contract liabilities, which represents payments from customers in advance of future project costs. ​ Investing activities for the year ended December 31, 2024, resulted in cash outflows of $218 thousand, which is primarily attributable to $179 thousand of disbursements for patents and other intangible assets. 31 ​ Table of Contents Investing activities for the year ended December 31, 2023 resulted in cash inflows of $2,490 thousand, which is primarily attributable to the redemption $4,847 thousand of short-term held-to-maturity U.S. treasuries, partially offset by $2,162 thousand of purchases for the same type of investments. ​ Financing activities for the year ended December 31, 2024, resulted in cash inflows of $12,946 thousand, which is primarily attributable to the net proceeds received of $12,967 thousand from the issuance of securities in connection with the recent equity offerings (see “Note 8 – Equity” for additional information).
Biggest changeThe change in contract liabilities during the year ended December 31, 2024, was predominantly impacted by our shipment of process burners during the year ended December 31, 2024 (see “Note 5 – Revenue, Contract Assets and Contract Liabilities” and “Note 6 – Deferred Costs” below for additional information). ​ Investing activities for the year ended December 31, 2025, resulted in cash outflows of $101 thousand, which is primarily attributable to $97 thousand of disbursements for patents and other intangible assets.
If the net proceeds from these offerings are insufficient for this purpose, we will consider other options to continue our path to commercialization, including, but not limited to, additional financing through follow-on equity offerings, debt financing, co-development agreements, sale or licensing of developed intellectual or other property, or other alternatives. ​ We cannot assure that our technologies will be accepted, that we will ever earn revenues sufficient to support our operations, or that we will ever be profitable.
If the net proceeds from these offerings are insufficient for this purpose, we will consider other options to continue our path to commercialization, including, but not limited to, additional financing through follow-on equity offerings, debt financing, co-development agreements, sale or licensing of developed intellectual or other property, or other alternatives. ​ 30 Table of Contents We cannot assure that our technologies will be accepted, that we will ever earn revenues sufficient to support our operations, or that we will ever be profitable.
See “Note 2 – Summary of Significant Accounting Policies” to our consolidated financial statements included elsewhere in this report for a more complete description of our significant accounting policies. ​ Revenue Recognition and Cost of Goods Sold. ​ The Company recognizes revenue and related cost of goods sold in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers .
See “Note 2 – Summary of Significant Accounting Policies” to our consolidated financial statements included elsewhere in this report for a more complete description of our significant accounting policies. ​ 31 Table of Contents Revenue Recognition and Cost of Goods Sold. ​ The Company recognizes revenue and related cost of goods sold in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers .
As of December 31, 2024, we have raised approximately $105.3 million in gross proceeds through the sale of our equity securities.
As of December 31, 2025, we have raised approximately $105.3 million in gross proceeds through the sale of our equity securities.
Our revenues to date have not been sufficient enough to meet operating expenses. ​ We have incurred losses since inception totaling $99.0 million and we expect to experience operating losses and negative cash flow for the foreseeable future. We have historically financed our operations primarily through issuances of equity securities.
Our revenues to date have not been sufficient enough to meet operating expenses. ​ We have incurred losses since inception totaling $104.5 million and we expect to experience operating losses and negative cash flow for the foreseeable future. We have historically financed our operations primarily through issuances of equity securities.
During the years ended December 31, 2024 and 2023, the Company received $145 thousand and $60 thousand, respectively, from such arrangements. ​ Share-Based Compensation ​ The costs of all employee stock options, as well as other equity-based compensation arrangements, are reflected in the audited, condensed consolidated financial statements based on the estimated fair value of the awards on the grant date.
During the years ended December 31, 2025 and 2024, the Company received zero and $145 thousand, respectively, from such arrangements. ​ 32 Table of Contents Share-Based Compensation ​ The costs of all employee stock options, as well as other equity-based compensation arrangements, are reflected in the audited, condensed consolidated financial statements based on the estimated fair value of the awards on the grant date.
At December 31, 2024, our current assets were in excess of current liabilities resulting in working capital of $12,809 thousand as compared to $4,253 thousand at December 31, 2023. We believe we have sufficient cash and expected cash collections to fund current operating expenses for over twelve months.
At December 31, 2025, our current assets were in excess of current liabilities resulting in working capital of $8,642 thousand as compared to $12,809 thousand at December 31, 2024. We believe we have sufficient cash and expected cash collections to fund current operating expenses for over twelve months.
In addition to historical information, this discussion and analysis here and throughout this Form 10-K contains forward-looking statements that involve risks, uncertainties and assumptions.
In addition to historical information, this discussion and analysis here and throughout this report contains forward-looking statements that involve risks, uncertainties and assumptions.
As of December 31, 2024, approximately 21.3 million shares of our common stock are issuable upon exercise of our outstanding warrants, which number excludes the shares of common stock issuable upon exercise of the Pre-Funded Warrants, and we may receive up to $22.5 million in aggregate gross proceeds from the cash exercises thereof, subject to certain beneficial ownership limitations set forth therein.
As of December 31, 2025, approximately 2.1 million shares (or 21.3 million on a pre-reverse stock split basis) of our common stock are issuable upon exercise of our outstanding warrants, which number excludes the shares of common stock issuable upon exercise of our outstanding pre-funded warrants, and we may receive up to $22.4 million in aggregate gross proceeds from the cash exercises thereof, subject to certain beneficial ownership limitations set forth therein.
For any contract in connection with which the Company is expected to incur costs in excess of the contact price, the Company accrues the estimated loss in full in the period such determination is made. ​ 28 ​ Table of Contents Impairment of Long-Lived Assets ​ The Company tests long-lived assets, consisting of fixed assets, patents, and other intangible assets, for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable through the estimated undiscounted cash flows expected from the use and eventual disposition of the assets.
For any contract expected to incur costs in excess of the total contractual value, we accrue the estimated loss in full in the period such determination is made. ​ Impairment of Long-Lived Assets ​ The Company tests long-lived assets, consisting of fixed assets, patents, and other intangible assets, for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable through the estimated undiscounted cash flows expected from the use and eventual disposition of the assets.
Upon completion of the performance obligations and collectability is determined, revenue can be recorded. The Company records cost of goods sold based on allocated costs assigned to performance obligations. Allocations can occur based on overall estimated contract profit or readily identifiable cost assignments.
The Company records cost of goods sold based on allocated costs assigned to performance obligations. Allocations can occur based on overall estimated contract profit or readily identifiable cost assignments.
Revenue related to the contracts is recognized following the completion of non-refundable performance obligations as defined in the contract. ​ The Company’s contracts generally include progress payments from customers upon completion of defined milestones. As these payments are received, they are offset against accumulated project costs and recorded as either contract assets or contract liabilities.
Revenue related to the contracts is recognized following the completion of non-refundable performance obligations as defined in the contract. ​ The Company’s contracts generally include progress payments from customers upon completion of defined milestones. As these payments are received, they are recorded as a contract liability. Upon completion of the performance obligations and collectability is determined, revenue can be recorded.
Share-based compensation for stock grants to non-employees is determined as the fair value of the consideration received or the fair value of equity instruments issued, whichever is more reliably measured. ​ Results of Operations Comparison of the Years Ended December 31, 2024 and 2023 Highlights of our annual financial performance are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended ​ ​ ​ ​ ​ ​ (in thousands, except per share data) ​ December 31, ​ ​ ​ ​ ​ ​ ​ 2024 2023 $ Change % Change Revenues ​ $ 3,596 ​ $ 2,403 ​ $ 1,193 ​ 49.6 % Cost of goods sold ​ ​ 2,478 ​ ​ 1,586 ​ $ 892 ​ 56.2 % Gross profit ​ ​ 1,118 ​ ​ 817 ​ $ 301 ​ 36.8 % Research and development ​ ​ 1,471 ​ ​ 739 ​ $ 732 ​ 99.1 % General and administrative ​ ​ 6,135 ​ ​ 6,059 ​ $ 76 ​ 1.3 % Operating Expenses ​ ​ 7,606 ​ ​ 6,798 ​ $ 808 ​ 11.9 % Other income, net ​ ​ 1,189 ​ ​ 787 ​ $ 402 ​ 51.1 % Net loss ​ $ (5,299) ​ $ (5,194) ​ $ (105) ​ (2.0) % Basic and diluted net income per common share ​ $ (0.11) ​ $ (0.13) ​ $ 0.02 ​ 15.4 % ​ 29 ​ Table of Contents Revenues and Gross Profit ​ Consolidated revenues for the years ended December 31, 2024 and 2023 were $3,596 thousand and $2,403 thousand, respectively.
Share-based compensation for stock grants to non-employees is determined as the fair value of the consideration received or the fair value of equity instruments issued, whichever is more reliably measured. ​ Results of Operations Comparison of the Years Ended December 31, 2025 and 2024 Highlights of our annual financial performance are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended ​ ​ ​ ​ ​ ​ (in thousands, except per share data) ​ December 31, ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2025 ​ ​ ​ 2024 ​ ​ ​ $ Change ​ ​ ​ % Change Revenues ​ $ 5,234 ​ $ 3,596 ​ $ 1,638 ​ 45.6 % Cost of goods sold ​ ​ 3,810 ​ ​ 2,478 ​ $ 1,332 ​ 53.8 % Gross profit ​ ​ 1,424 ​ ​ 1,118 ​ $ 306 ​ 27.4 % Research and development ​ ​ 1,422 ​ ​ 1,471 ​ $ (49) ​ (3.3) % General and administrative ​ ​ 6,673 ​ ​ 6,135 ​ $ 538 ​ 8.8 % Operating expenses ​ ​ 8,095 ​ ​ 7,606 ​ $ 489 ​ 6.5 % Other income, net ​ ​ 1,175 ​ ​ 1,189 ​ $ (14) ​ (1.2) % Net loss ​ $ (5,496) ​ $ (5,299) ​ $ (197) ​ (3.8) % Basic and diluted net loss per common share ​ $ (0.99) ​ $ (1.08) ​ $ 0.09 ​ 8.3 % ​ Revenues and Gross Profit ​ Consolidated revenues for the years ended December 31, 2025 and 2024 were $5,234 thousand and $3,596 thousand, respectively.
The decision to suspend our China operations during the third quarter of 2024 continues to impact our accounts payable and accrued liabilities by an increase of $239 thousand during the year ended December 31, 2024.
The increase in accounts payable, accrued liabilities and lease liabilities was predominately driven by our decision to suspend our China operations during the year ended December 31, 2024.
That cost is recognized over the period during which an employee is required to provide service in exchange for the award, or in the case of performance options, expense is recognized upon completion of a milestone as defined in the grant agreement.
That cost is recognized over the period during which an employee is required to provide service in exchange for the award, or in the case of performance options, expense is recognized over the remaining service period when the Company has determined it is probable that the performance condition will be achieved.
Revenues increased by $1,193 thousand, or 49.6%, during the year ended December 31, 2024 as compared to the same period in 2023. Revenues for the years ended December 31, 2024 and 2023 were generated from orders related to both our product lines, process burners and boiler burners, with the predominate amount of revenues generated from our process burner product line.
Revenues increased by $1,638 thousand, or 45.6%, during the year ended December 31, 2025, compared to the same period in 2024. Revenues for the year ended December 31, 2025 were generated from orders related to our process burners, midstream burners, flares, engineering services and spare part offerings.
These are addressed separately below. ​ Research and Development ​ R&D expenses increased $732 thousand, or 99.1%, for the year ended December 31, 2024, as compared to the same period in 2023.
These are addressed separately below. ​ Research and Development ​ R&D expenses for the year ended December 31, 2025 remained relatively consistent year-over-year compared to the same period in 2024, and the decreases and increases in this expense category were not unexpected.
Typically, our process burner contracts include three different performance obligations by which we can recognize revenue, which include design engineering, customer witness tests and burner shipment. We allocate process burner contractual revenue to each of these performance obligations with weighting allocations assigned in the following order of importance: burner shipment, customer witness test and engineering design.
We allocate revenue to these performance obligations in the following order of importance: burner shipment, customer witness test, CFD study and engineering design.
These equity financial instruments may from time-to-time fund future cash needs, but the volatility of our common stock price and the risk tolerance of warrant holders will determine the extent in which we will be able to raise funds in this manner. ​ Operating activities for the year ended December 31, 2024, resulted in cash outflows of $4,373 thousand, primarily due to the net loss of $5,299 thousand and a decrease in contract liabilities of $1,043 thousand during such period, which was partially offset by net non-cash expenses of $846 thousand, and an increase in accounts payable, accrued liabilities and lease liabilities of $816 thousand.
The increase in accounts receivables was predominately driven by a shipment of twenty-six process burners and completion of multiple CFD studies during the month of December 2025. ​ Operating activities for the year ended December 31, 2024, resulted in cash outflows of $4,373 thousand, primarily due to the net loss of $5,299 thousand and a decrease in contract liabilities of $1,408 thousand during such period, which was partially offset by net non-cash expenses of $846 thousand, and an increase in accounts payable, accrued liabilities and lease liabilities of $816 thousand.
The favorable increase in gross profit for the year ended December 31, 2024, was predominantly due to higher revenues. Profit margin decreased by 2.9% from 34.0% for the year ended December 31, 2023, to 31.1% for the year ended December 31, 2024, which impacted our gross profit for such period by $104 thousand.
The favorable increase in gross profit for the year ended December 31, 2025, was predominantly due to higher revenues, which was offset by an additional warranty accrual recognized during the year ended December 31, 2025.
The hydrogen burner development project costs are offset by government assistance monies (see the “Other Income” discussion below for further details). ​ General and Administrative ​ G&A expenses increased $76 thousand, or 1.3%, for the year ended December 31, 2024, as compared to the same period in 2023.
See “Note 2 – Summary of Significant Accounting Policies - Research and Development, and Government Assistance” for more information about the type of costs included within R&D expenses. ​ General and Administrative ​ G&A expenses for the year ended December 31, 2025 increased by $538 thousand, or 8.8%, compared to the same period in 2024.
The increase in cash and cash equivalents is primarily attributable to our public offering and the concurrent private placement and the related SPV’s exercise of its participation right during 2024 (see “Note 8 – Equity” for additional information), which was partially offset by our net loss of $5,299 thousand.
The decrease in cash and cash equivalents is primarily attributable to our net loss of $5,496 thousand and an increase in our accounts receivables of $1,195 thousand, which was partially offset by our non-cash expenses of $1,238 thousand.
Financing activities for the year ended December 31, 2023 included $15 thousand in disbursements for taxes paid related to vesting of employee restricted stock units. ​ Off-Balance Sheet Transactions We do not have any off-balance sheet transactions.
Financing activities for the year ended December 31, 2024, resulted in cash inflows of $12,946 thousand, which is primarily attributable to the net proceeds received of $12,967 thousand from the issuance of securities in connection with our equity offerings during 2024. Off-Balance Sheet Transactions We do not have any off-balance sheet transactions.
If we cannot raise funds as and when we need them, we may be required to scale back our development by reducing expenditures for employees, consultants, business development and marketing efforts or to otherwise severely curtail, or even to cease, our operations. ​ 26 ​ Table of Contents Recent Developments Public Offering and Concurrent Private Placement ​ On April 23, 2024, we completed an underwritten public offering, whereby we sold 4,620,760 shares of common stock and 5-year redeemable warrants to purchase up to 4,620,760 shares of common stock (the “Public Warrants”) (plus a 45-day option to purchase up to an additional 693,114 shares of common stock and Public Warrants to purchase up to 693,114 shares of common stock, or up to 693,114 shares of common stock only) at a price of $0.92 per set of one share of common stock and one Public Warrant.
If we cannot raise funds as and when we need them, we may be required to scale back our development by reducing expenditures for employees, consultants, business development and marketing efforts or to otherwise severely curtail, or even to cease, our operations. ​ Recent Developments Board Compensation Change On December 22, 2025, the Board, upon recommendation of the Human Capital and Compensation Committee of the Board, approved an updated director compensation policy, effective as of January 1, 2026 (the “Director Compensation Policy”).
As a result of the termination of the SPV Purchase Agreement, the related Voting Agreement entered into with the SPV, pursuant to which the SPV had a right to nominate one director to our Board at each of our annual meeting of stockholders, or any other meeting of stockholders at which members of our Board were to be elected, was also terminated, effective immediately. ​ ​ Critical Accounting Policies ​ The following discussion and analysis of financial condition and results of operations is based upon our consolidated financial statements, which have been prepared in conformity with accounting principles generally accepted in the United States of America.
Compliance with Nasdaq Minimum Bid Price Requirement ​ We received written confirmation from Nasdaq notifying us that we have regained compliance with Nasdaq Listing Rule 5550(a)(2) on March 30, 2026. ​ Critical Accounting Policies ​ The following discussion and analysis of financial condition and results of operations is based upon our consolidated financial statements, which have been prepared in conformity with accounting principles generally accepted in the United States of America.
Removed
Concurrently, we completed a private placement, whereby we sold 2,249,763 shares of common stock, pre-funded warrants (the “Pre-Funded Warrants”) to purchase up to 3,155,642 shares of common stock and redeemable warrants (the “Private Warrants”) to purchase up to 8,108,106 shares of common stock.
Added
The Director Compensation Policy provides for an annual cash compensation of $60 thousand will be payable to the Company’s non-employee directors in equal quarterly installments, payable in arrears on the last day of each fiscal quarter in which the service occurred, with the amount pro-rated if a non-employee director started during a quarter.
Removed
The offering prices in the private placement were $0.91 per share and $0.01 per Private Warrant, or $0.9099 per Pre-Funded Warrant and $0.01 per Private Warrant, as applicable.
Added
Additionally, each non-employee director may elect to receive all or a portion of his or her cash compensation in the form of RSUs, which RSUs’ fair market value will be based on the closing price of our common stock as reported on Nasdaq on the date of grant.
Removed
The redeemable warrants issued in both offerings have an exercise price equal to $1.05 per share. ​ In connection with this offering, we issued Public Ventures, LLC (“Public Ventures”) 5-year warrants to purchase up to 369,660 shares of common stock at an exercise price of $1.1375 per share as part of their underwriter compensation, which underwriter warrants became exercisable on October 16, 2024 (the “Underwriter Warrants”).
Added
Further, our non-employee directors will be eligible to receive non-statutory stock options grants with an aggregate fair market value of $40 thousand annually. The non-statutory stock option grants will be issued in quarterly installments, in arrears, on the last day of each fiscal quarter in which the service occurred.
Removed
We also issued Public Ventures 5-year warrants to purchase up to 432,432 shares of common stock at an exercise price of $1.1375 per share as part of their placement agent compensation in connection with the private placement, which warrants became exercisable on October 16, 2024 (the “Placement Agent Warrants,” and together with the Public Warrants, Private Warrants, Pre-Funded Warrants and Underwriter Warrants, the “Warrants,” and the shares issuable upon exercise of the Warrants, the “Warrant Shares”).
Added
The RSUs and non-statutory stock options each non-employee director may receive under this Director Compensation Policy will be issued under our 2021 Plan.
Removed
Both sets of warrants may be exercised on a cashless basis based on a formula set forth in the respective warrants. ​ Subsequently, on May 15, 2024, Public Ventures exercised its option in full to purchase an additional 693,114 shares of common stock and Public Warrants to purchase up to 693,114 shares of common stock at a price of $0.92 per set of one share of common stock and one Public Warrant, in connection with which we issued Public Ventures additional Underwriter Warrants to purchase up to 55,449 shares of common stock. ​ The public offering and the concurrent private placement resulted in combined gross proceeds of approximately $9,300 thousand, and net proceeds of approximately $8,100 thousand.
Added
Reverse Stock Split ​ On February 26, 2026, at our special meeting of stockholders, our stockholders approved a certificate of amendment to our certificate of incorporation (the “Charter Amendment”) to effect a reverse stock split of our outstanding shares of common stock at a ratio to be determined by the Board.
Removed
The exercise of Public Ventures’ option to purchase additional shares of common stock and Public Warrants resulted in additional gross proceeds of approximately $638 thousand. ​ Participation Right Exercise ​ On June 24, 2024, following clirSPV LLC’s (the “SPV”) notice to exercise its participation right in connection with the underwritten public offering and concurrent private placement discussed above (see “Note 8 – Equity” for additional information), we entered into a securities purchase agreement (the “Securities Purchase Agreement”) with the SPV whereby we issued an aggregate of (i) 3,907,000 shares of common stock, (ii) Pre-Funded Warrants to purchase up to 786,000 shares of common stock, and (iii) Private Warrants to purchase up to 7,039,500 shares of common stock. ​ Subsequently, on June 26, 2024, the SPV and we entered into an Amendment to the Securities Purchase Agreement (the “Amendment”) to provide for a revised allocation of the SPV’s subscription between shares of common stock and Pre-Funded Warrants in lieu thereof.
Added
On March 6, 2026, we filed the Charter Amendment with the Secretary of State of Delaware which effected a 1-for-10 reverse stock split of our outstanding shares of common stock as of 12:01 a.m. Eastern Time on March 16, 2026.
Removed
Pursuant to the Amendment, the SPV subscribed for: (i) 3,350,000 shares of common stock, (ii) Pre-Funded Warrants to purchase up to 1,343,000 shares of common stock and (iii) Private Warrants to purchase up to 7,039,500 shares of common stock, for aggregate gross proceeds of approximately $4.3 million. ​ Amendment to Certificate of Incorporation ​ On June 25, 2024, we held our 2024 annual meeting of stockholders, at which our stockholders approved, among other items, an increase in the number of authorized shares of common stock available for issuance under our certificate of incorporation to 87,500,000 shares from 62,500,000 shares previously authorized. ​ Accordingly, on June 25, 2024, we filed an amendment to our certificate of incorporation with the Secretary of State of the State of Delaware, reflecting the increase of our authorized shares of common stock to 87,500,000 shares, which became effective upon filing. ​ 27 ​ Table of Contents Suspension of Activities in China ​ On October 1, 2024, we informed our employees that we were suspending our operations in China as a result of delayed progress in the commercialization of our products in that geographic market and as part of our efforts to align strategic priorities and to reduce operating costs.
Added
As a result of the reverse stock split, every ten shares of common stock were combined into one issued and outstanding share of common stock, with no change in the $0.0001 par value per share.
Removed
The suspension of our operations in China involved declaring our Beijing, China wholly-owned subsidiary dormant, a legal entity status available under current China law, which became effective on March 12, 2025. Under this legal entity status, operational activities will cease for a time period not to exceed three years.
Added
Holders of fractional shares received, in lieu of any fractional share, the number of shares rounded up to the next whole number at the participant level with the Depository Trust Company.
Removed
By pursuing this entity status, we initiated a project to suspend current operational activities. Suspension activities include disposal and shipment of certain equipment in China, the termination of 2 employees and related benefit costs, and legal entity filing fees.
Added
All equity awards outstanding and common stock reserved for issuance under our equity incentive plans and warrants outstanding immediately prior to the reverse stock split were proportionately adjusted, and any exercise prices were proportionately increased, to reflect the reverse stock split.
Removed
In connection with this action, we estimated that we would incur certain one-time costs, primarily consisting of employee termination payments, as well as equipment disposal and shipment and legal filing fees.
Added
For any contract in connection with which the Company is expected to incur costs in excess of the contract price, the Company accrues the estimated loss in the period such determination is made. ​ Deferred Costs and Cost of Sales ​ We recognize an asset for deferred costs incurred to fulfill a contract when those costs meet all of the following criteria: (a) the costs relate directly to a contract or to an anticipated contract that we can specifically identify; (b) the costs generate or enhance our resources that will be used in satisfying performance obligations in the future; and, (c) the costs are expected to be recovered.
Removed
See “Note 2 – Summary of Significant Accounting Policies – Foreign Operations” below for additional information . ​ Termination of clirSPV LLC Agreement ​ Effective as of February 19, 2025, that certain Stock Purchase Agreement, dated as of July 12, 2018, between us and the SPV (the “SPV Purchase Agreement”) was terminated as a result of the SPV’s beneficial ownership percentage declining to less than 10% of our issued and outstanding shares of common stock, as reported on a SPV filing with the SEC dated February 19, 2025.
Added
We capitalize contractual costs incurred for direct labor, overhead allocations, supplier costs and subcontractor costs. Costs capitalized are amortized to costs of goods sold at a point in time upon completion of contractual performance obligations based on allocated costs assigned to such performance obligations.
Removed
The difference in revenue from the year ended December 31, 2024, to the same period in 2023, is mainly due to the higher number of process burners shipped.
Added
During the year ended 2025, our revenues were predominantly generated from our process burner offerings. Typically, our process burner contracts include three to four different performance obligations by which we can recognize revenue, which include design engineering, customer witness tests and burner shipment, with a CFD study as an optional fourth performance obligation.
Removed
During the year ended December 31, 2024, we shipped twenty-five process burners to two separate California refineries operated by two different customers, compared to eight process burners to a California refinery and three separate customer witness tests during the same period in 2023. ​ Gross profit increased by $301 thousand, or 36.8%, for the year ended December 31, 2024 compared to the same period in 2023.
Added
The difference in revenues from the year ended December 31, 2025, to the same period in 2024, is primarily due to an increase in performance obligations related to CFD studies, customer witness tests, flare shipments and spare part deliveries, which was slightly offset by a decrease in boiler burner deliveries.
Removed
The unfavorable impact to profit margin was due to higher than expected start-up costs from our 1,200 HP boiler burner project during the fourth quarter of 2024, which caused us to incur an overall loss on the project. ​ Operating Expenses ​ Operating expenses consist of research and development (“R&D”) and general and administrative (“G&A”) expenses.
Added
During the year ended December 31, 2024, our revenues were predominantly generated from orders related to our process burner, boiler burner, and spare part offerings. ​ Gross profit increased by $306 thousand, or 27.4%, for the year ended December 31, 2025, compared to the same period in 2024.
Removed
This unfavorable year-over-year increase in R&D expenses was mainly driven by additional head count and related benefit costs of $269 thousand that did not exist in the same period in 2023.
Added
Specifically, during the three months ended December 31, 2025, gross profit was impacted by $447 thousand for the additional warranty accrual recorded as part of our year-end financial reporting processes (see “Note 7 – Product Warranties” for more information).
Removed
In addition, we incurred an unfavorable additional year-over-year expense related to product development costs for our process burner product line for a total of $367 thousand for the year ended December 31, 2024. ​ During the year ended December 31, 2023, we experienced a year-over-year unfavorable increase of $234 thousand primarily attributable to $83 thousand related to the hiring of our new Chief Technology Officer, and $60 thousand related to our hydrogen burner project.
Added
We assessed the adequacy of our accrued warranty balance and determined an adjustment was necessary for potential in-field burner modifications related to certain completed jobs.
Removed
This unfavorable increase in G&A expenses is primarily comprised of $394 thousand for a one-time non-recurring accrual estimate related to the decision to suspend our operations in China (see “Recent Developments – Suspension of Activities in China” above for more details).
Added
The year-over-year gross profit decreased due to additional warranty expenses, which was partially offset by a year-over-year increase in spare parts and engineering service orders, which typically contain a favorable profit margin profile compared to our other service and product offerings. ​ 33 Table of Contents Operating Expenses ​ Operating expenses consist of research and development (“R&D”) and general and administrative (“G&A”) expenses.
Removed
This suspension involved declaring our Beijing, China wholly-owned subsidiary dormant, which is a legal entity status available under China law. Under this legal entity status, operational activities cease for a period not to exceed three years.
Added
This unfavorable increase in G&A expenses was primarily due to an increase of approximately $746 thousand in legal fees, including (i) approximately $131 thousand in legal fees pertaining to work performed in connection with a regulatory inquiry by the SEC into the trading of our securities in 2020; (ii) approximately $435 thousand in legal fees pertaining to work performed for the former Special Committee; and (iii) an accrual of approximately $180 thousand related to an advancement claim filed by three former directors (refer to “Item 3.
Removed
The unfavorable increase in G&A expenses was partially offset by a decrease of $248 thousand in human capital costs primarily driven by the timing of employee departures and subsequent onboarding. ​ During the year ended December 31, 2023, we experienced a year-over-year unfavorable increase of $331 thousand primarily attributable to a $172 thousand difference for a non-cash, non-recurring expense related to the vesting of restricted stock units triggered by the departure of a director on our board, and a $81 thousand non-cash, non-recurring impairment of demonstration burners. ​ 30 ​ Table of Contents Other Income ​ Other income increased by $402 thousand, or 51.1%, for the year ended December 31, 2024, as compared to the same period in 2023.
Added
Legal Proceedings” for further details). We also incurred an increase in legal and audit costs of approximately $205 thousand related to services provided for the preparation and filing of our “shelf” registration statement on Form S-3 (the “Form S-3”) and work performed in connection with our At-the-Market (“ATM”) program with H.C. Wainwright & Co., LLC (“Wainwright”).
Removed
The favorable increase is primarily attributable to $442 thousand increase in government assistance from our DOE hydrogen burner development grant, and $192 thousand increase in interest income from a higher cash balance during 2024, as compared to the same period in 2023.
Added
In addition, non-cash expenses increased approximately $469 thousand year-over-year related to the vesting of RSUs in connection with the departure of three directors from the Board.
Removed
The favorable increase was partially offset by an unfavorable decrease of $197 thousand related to the decommissioning project of our Seattle office whereby we sold used equipment and materials during the year ended December 31, 2023. ​ During the year ended December 31, 2023, we experienced a favorable year-over-year increase of $428 thousand primarily attributable to an increase of $241 thousand in interest income and an increase of $197 thousand from our Seattle office decommissioning project. ​ Liquidity and Capital Resources At December 31, 2024, our cash and cash equivalents balance totaled $14,035 thousand compared to $5,684 thousand at December 31, 2023, an increase of $8,351 thousand.
Added
Increases in G&A expenses for the year ended December 31, 2025 were partially offset by an expense decrease of approximately $394 thousand related to our China dormancy cost accrual that occurred during the year ended December 31, 2024, which did not occur during the same period in 2025.
Removed
The Warrants require the warrant holder to tender cash upon exercise, with the exception of the Underwriter Warrants (as defined above) which allow the holder to exercise cashless if they so desire.
Added
G&A expense increases were further partially offset by a decrease of $154 thousand in costs related to certain incentive compensation to our employees and executive officers for which the performance target metrics were not achieved, and year-over-year increase in deferred costs due to labor and overhead cost capitalizations of $268 thousand during the year ended December 31, 2025. ​ Other Income ​ Other income for the year ended December 31, 2025 remained relatively consistent year-over-year compared to the same period in 2024, and the decreases and increases in other income were not unexpected.
Removed
During the third quarter of 2024, we recorded a one-time accrual estimate of $394 thousand for the costs to prepare and place our Beijing, China subsidiary into a dormant state. As of December 31, 2024, we have incurred $155 thousand in cash outflows with the remaining $239 thousand in accrued liabilities predominantly related to severance costs.
Added
See “Consolidated Statements of Operations and Comprehensive Loss” for more information about the various types of income and expense included within this line item. ​ Liquidity and Capital Resources At December 31, 2025, our cash and cash equivalents balance totaled $9,178 thousand compared to $14,035 thousand at December 31, 2024, a decrease of $4,857 thousand.
Removed
Our warranty reserve naturally increased due to increased product shipments during the year ended December 31, 2024, which impacted accounts payable and accrued liabilities (see “Note 6 – Product Warranties” below for additional information).
Added
Our outstanding warrants require the warrant holder to tender cash upon exercise, with the exception of the outstanding underwriter’s warrants and placement agent warrants, which allows the holder of such warrants to exercise cashless if they so desire. 34 Table of Contents These equity financial instruments may from time-to-time fund future cash needs, but the volatility of our common stock price and the risk tolerance of warrant holders will determine the extent in which we will be able to raise funds in this manner.
Added
Additionally, under our ATM program with Wainwright, acting as sales agent, we are able to offer and sell shares of our common stock from time to time for an aggregate offering price of up to $10.39 million pursuant to our Form S-3 (see “Note 9 – Equity” for more information). ​ Operating activities for the year ended December 31, 2025, resulted in cash outflows of $4,736 thousand, primarily due to the net loss of $5,496 thousand and an increase in our accounts receivables of $1,195 thousand during such period, which was partially offset by net non-cash expenses of $1,238 thousand.
Added
Investing activities for the year ended December 31, 2024, resulted in cash outflows of $218 thousand, which is primarily attributable to $179 thousand of disbursements for patents and other intangible assets.
Added
Financing activities for the year ended December 31, 2025, resulted in cash outflows of $21 thousand, which is primarily attributable to $45 thousand of disbursements related to taxes paid for the vesting of certain employee RSUs and stock awards, partially offset by $24 thousand in net proceeds received from the exercise of our outstanding warrants.

Other CLIR 10-K year-over-year comparisons