10q10k10q10k.net

What changed in ClearSign Technologies Corp's 10-K — 2023 vs 2024

vs

Paragraph-level year-over-year comparison of ClearSign Technologies Corp's 2023 and 2024 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 2024 report.

+263 added−214 removedSource: 10-K (2025-03-31) vs 10-K (2024-04-01)

Top changes in ClearSign Technologies Corp's 2024 10-K

263 paragraphs added · 214 removed · 174 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

91 edited+25 added−8 removed65 unchanged
Biggest changeIn addition, we have a collaborative agreement with California Boiler to sell and 10 ​ Table of Contents produce both fire tube boiler burner and flare products. We are also pursuing various licensing types of arrangements for other market verticals and ClearSign Core applications. Pricing Strategy .
Biggest changeWe are continuing to negotiate this next phase of our relationship, but we view this announcement as a commitment to solidify our shared marketing and sales efforts of ClearSign Core™ technology going forward. In addition, we have a collaborative agreement with California Boiler to sell and produce both fire tube boiler burner and flare products.
We believe that heaters using the ClearSign Core 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 Process Burner Technology Our ClearSign Core 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. 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 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 process burners for refineries and fuel distributors, some of which are owned by global supermajor companies and Fortune 500 companies.
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.
Our ClearSign Core technology, which is our primary technology, uses either a porous ceramic structure or metal flame holder device held at a distance from the injection planes of a burner to significantly reduce flame length and achieve low emissions without the need for external flue gas recirculation, selective catalytic reduction, or high excess air systems.
Our ClearSign Core TM technology, which is our primary technology, uses either a porous ceramic structure or metal flame holder device held at a distance from the injection planes of a burner to significantly reduce flame length and achieve low emissions without the need for external flue gas recirculation, selective catalytic reduction, or high excess air systems.
Although we have not yet completed the product launch of our sensing products and subsequent commercialization, we have obtained clear and consistent customer feedback guiding its first application. The target market for this technology is potentially every burner with a pilot on which flame sensors are deployed, providing a global and very high-volume opportunity.
Although we have not yet completed the product launch of our sensing products and subsequent commercialization thereof, we have obtained clear and consistent customer feedback guiding its first application. The target market for this technology is potentially every burner with a pilot on which flame sensors are deployed, providing a global and very high-volume opportunity.
Developing operational infrastructure: Again, especially in the refining and petrochemical industries, customers require thorough quality assurance procedures, including demonstration of an item from their order, to prove that it meets performance guarantees. This requires, among other things, having access to a test furnace. Developing such an operation would require significant investment and ongoing costs. 3.
Developing operational infrastructure: Especially in the refining and petrochemical industries, customers require thorough quality assurance procedures, including demonstration of an item from their order, to prove that it meets performance guarantees. This requires, among other things, having access to a test furnace. Developing such an operation would require significant investment and ongoing costs. 3.
We believe this to be the case in the U.S. and worldwide in most major developed and developing countries. As a result, these standards are a significant driver for our development and sales efforts. We believe that our ClearSign Core technology can provide a unique, cost-effective pollution control solution for operators in comparison to known competing products.
We believe this to be the case in the U.S. and worldwide in most major developed and developing countries. As a result, these standards are a significant driver for our development and sales efforts. We believe that our ClearSign Core TM technology can provide a unique, cost-effective pollution control solution for operators in comparison to known competing products.
Although the combustion controlling principles of both the “ClearSign Core” and “Duplex” technologies are the same, ClearSign Core products have standardized technology and we believe they are easier to use and have a different channel to market. ClearSign Core burners currently operate in multiple boilers, heaters and flares and meet new compliance standards enacted by California air authority.
Although the combustion controlling principles of both the “ClearSign Core” and “Duplex” technologies are the same, ClearSign Core TM products have standardized technology and we believe they are easier to use and have a different channel to market. ClearSign Core TM burners currently operate in multiple boilers, heaters and flares and meet new compliance standards enacted by California air authority.
We believe that our ClearSign Core technology is well-suited to address the challenges faced by oil producers and other industries in complying with current and predicted future local air emission standards. There are multiple ClearSign Core flare applications now operational in California with NOx emissions below the levels required by new regulations.
We believe that our ClearSign Core TM technology is well-suited to address the challenges faced by oil producers and other industries in complying with current and predicted future local air emission standards. There are multiple ClearSign Core TM flare applications now operational in California with NOx emissions below the levels required by new regulations.
With a lower volume flame in a ClearSign Core system, surfaces in the heater or boiler experience less touching by the flame and it is anticipated that our systems can virtually eliminate flame impingement. Our technology also enables burners to function better in tightly spaced heaters compared to the flames of traditional low NOx burners.
With a lower volume flame in a ClearSign Core TM system, surfaces in the heater or boiler experience less touching by the flame and it is anticipated that our systems can virtually eliminate flame impingement. Our technology also enables burners to function better in tightly spaced heaters compared to the flames of traditional low NOx burners.
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 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 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.
Boiler burners have a different orientation and internal chamber dimensions, operate with a relatively high combustion air pressure, and, in the case of small fire tube boiler burners, have a lower fuel gas pressure. Our go to market strategy of incorporating the ClearSign Core technology into a typical OEM process burner is the same as for our boiler burners.
Boiler burners have a different orientation and internal chamber dimensions, operate with a relatively high combustion air pressure, and, in the case of small fire tube boiler burners, have a lower fuel gas pressure. Our go to market strategy of incorporating the ClearSign Core TM technology into a typical OEM process burner is the same as for our boiler burners.
For example, we believe our ClearSign Core 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 product can also potentially allow a furnace to operate at a higher capacity.
Based on testing and completed field installations to date, however, we believe that our ClearSign Core technology provides several unique and powerful business solutions for our customers, including, but not limited to: (i) overall cost-effective installation, (ii) energy efficiency, (iii) operational performance and (iv) significantly reduced emissions.
Based on testing and completed field installations to date, however, we believe that our ClearSign Core TM technology provides several unique and powerful business solutions for our customers, including, but not limited to: (i) overall cost-effective installation, (ii) energy efficiency, (iii) operational performance and (iv) significantly reduced emissions.
The primary addressable market is similar to that of our ClearSign Core technology, although not limited to regions requiring emissions reduction. The flame sensing products are applicable to all installed burners that use a pilot for ignition, including in markets and regions beyond those where reducing emissions is a high priority.
The primary addressable market is similar to that of our ClearSign Core TM technology, although not limited to regions requiring emissions reduction. The flame sensing products are applicable to all installed burners that use a pilot for ignition, including in markets and regions beyond those where reducing emissions is a high priority.
Sites include four locations in California and one in Europe. The ClearSign Core 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.
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.
In addition, because the flame volumes in heaters utilizing ClearSign Core technology are typically small, heaters using our technology are expected to operate at a lower cost, have increased productivity, and require less maintenance and downtime compared to heaters that operate with enlarged flames produced by traditional low NOx burners.
In addition, because the flame volumes in heaters utilizing ClearSign Core TM technology are typically small, heaters using our technology are expected to operate at a lower cost, have increased productivity, and require less maintenance and downtime compared to heaters that operate with enlarged flames produced by traditional low NOx burners.
Most importantly, using our technology has the potential to decrease process downtime required during installation compared to retrofits utilizing the legacy technology of SCRs or flue gas recirculation systems. We are also designing and commercializing a range of sensing products called the ClearSign Eye TM for two potential markets.
Most importantly, using our technology has the potential to decrease process downtime required during installation compared to retrofits utilizing the legacy technology of SCRs or flue gas recirculation systems. We are also designing and commercializing a range of sensing products called the ClearSign Eye for two potential markets.
Based on the operating data we have obtained from our installed products, burners utilizing ClearSign Core technology can provide increased heat transfer efficiency as compared to other emission reducing technologies. This is consistent with the physics of heat transfer and the mechanisms by which the technology functions.
Based on the operating data we have obtained from our installed products, burners utilizing ClearSign Core TM technology can provide increased heat transfer efficiency as compared to other emission reducing technologies. This is consistent with the physics of heat transfer and the mechanisms by which the technology functions.
We believe that the simplicity of the actions required to retrofit refinery process heaters with the ClearSign Core technology, and the potential ability to install these burners will potentially contribute to demand for our ClearSign Core process burners. ​ ClearSign Core Boiler Burner Technology Our ClearSign Core 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, 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 the ClearSign Core 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 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 our ClearSign Core technology can provide value to our customers not only by helping them meet current and possible future legislative mandates to reduce pollutant emissions, but also by improving operating efficiency and increasing overall return on investment.
We believe that our ClearSign Core TM technology can provide value to our customers not only by helping them meet current and possible future legislative mandates to reduce pollutant emissions, but also by improving operating efficiency and increasing overall return on investment.
By developing our ClearSign Core technology into a replacement product, we have been able to standardize our designs and simplify supply-chain demands. In addition, we have enabled collaboration with other commercial equipment suppliers with the intent to incorporate our ClearSign Core technology into their standard product lines.
By developing our ClearSign Core TM technology into a replacement product, we have been able to standardize our designs and simplify supply-chain demands. In addition, we have enabled collaboration with other commercial equipment suppliers with the intent to incorporate our ClearSign Core TM technology into their standard product lines.
With the maturation of our ClearSign Core technology, our development process has transitioned from research to commercialization. This has included optimizing the technology to perform in a manner readily adoptable by our prospective customers and easy to incorporate into the burner structures of our collaborative alliance partners.
With the maturation of our ClearSign Core TM technology, our development process has transitioned from research to commercialization. This has included optimizing the technology to perform in a manner readily adoptable by our prospective customers and easy to incorporate into the burner structures of our collaborative alliance partners.
The 8-hour ground-level ozone regulations have been reduced from 80 parts per billion (ppb) in 1997, to 75 ppb in 2008, and 70 ppb in 2015, with the requirement of realizing these levels approximately 20 years following the year of legislation.
The 8-hour ground-level ozone regulations have been reduced from 80 parts per billion (“ppb”) in 1997, to 75 ppb in 2008, and 70 ppb in 2015, with the requirement of realizing these levels approximately 20 years following the year of legislation.
The interest we have received to date, however, suggests that this could potentially be a significant future business opportunity for ClearSign. 8 ​ Table of Contents Our Target Markets Our ClearSign Core products compete in the combustion and emissions control markets.
The interest we have received to date, however, suggests that this could potentially be a significant future business opportunity for ClearSign. 8 ​ Table of Contents Our Target Markets Our ClearSign Core TM products compete in the combustion and emissions control markets.
As we seek to expand the markets into which we can sell our products, we plan to continue extending the range of ClearSign Core 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 shapes and configurations, as well as for use in alternate process applications.
ClearSign Core Flaring Burners Our ClearSign Core flaring technology incorporates the same mechanisms as our burner technology, namely directing the fuel gas (typically waste gas), into an air stream with that air and gas mixture forming a flame stabilized downstream on a flame stabilizing structure.
ClearSign Core TM Flaring Burners Our ClearSign Core TM flaring technology incorporates the same mechanisms as our burner technology, namely directing the fuel gas (typically waste gas), into an air stream with that air and gas mixture forming a flame stabilized downstream on a flame stabilizing structure.
Retrofits often involve engineering around an existing burner architecture that can complicate the ClearSign Core 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 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.
ClearSign Core Technology Product Applications To date, we have deployed our ClearSign Core technology through the retrofit or replacement of existing burners. As noted above, retrofits often involve engineering around an existing burner architecture that can complicate the installation.
ClearSign Core Technology Product Applications To date, we have deployed our ClearSign Core TM technology through the retrofit or replacement of existing burners. As noted above, retrofits often involve engineering around an existing burner architecture that can complicate the installation.
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 regulation.
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.
The ClearSign Core 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 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.
We have also developed the ClearSign Core flare technology into similar repeatable forms to aid its inclusion in standard industry installations on a commercial scale with multiple installations now operational in California.
We have also developed the ClearSign Core TM flare technology into similar repeatable forms to aid its inclusion in standard industry installations on a commercial scale with multiple installations now operational in California.
In this form, we believe that the ClearSign Core 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 burner replacements, including heater and furnaces requiring large quantities of burners.
Development of Our Technology To date, we have deployed our ClearSign Core technology through retrofits and replacements of existing burners and complete replacement units in the case of our process burner and boiler burner products.
Development of Our Technology To date, we have deployed our ClearSign Core TM technology through retrofits and replacements of existing burners and complete replacement units in the case of our process burner and boiler burner products.
We can give no assurance that global supply-chain constraints or geopolitical conflicts will not adversely affect our ability or our subcontractors’ ability to procure raw materials and components necessary to build our products. ​ Research and Development Program The experience and industry contacts of our management team, board of directors, and consultants, along with potential customers in the petroleum, petrochemical, and industrial steam applications industries inform our research and development program.
We can give no assurance that global supply-chain constraints or geopolitical conflicts will not adversely affect our ability or our subcontractors’ ability to procure raw materials and components necessary to build our products. ​ Research and Development Program The experience and industry contacts of our management team and consultants, along with potential customers in the petroleum, petrochemical, and industrial steam applications industries inform our research and development program.
We have initially targeted these markets for various reasons, such as, but not limited to: (i) environmental regulations imposed on these markets, (ii) total available market size, (iii) this technology being the most readily adapted to the needs of these industries and (iv) management experience and expertise. ​ Our initial target markets center on the energy sector, including downstream oil refineries through the use of process heaters and boilers as well as upstream crude oil production through the use of Once Through Steam Generator (OTSGs) and wellhead enclosed flares.
We have initially targeted these markets for various reasons, such as, but not limited to: (i) environmental regulations imposed on these markets, (ii) total available market size, (iii) this technology being the most readily adapted to the needs of these industries and (iv) management experience and expertise. ​ Our initial target markets center on the energy sector, including downstream oil refineries through the use of process heaters and boilers as well as upstream crude oil production through the use of OTSGs and wellhead enclosed flares.
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 result in an increased demand for our services and products.
Such air pollution control systems are widely used in places within our current target markets such as in petroleum refining and petrochemical process heaters, large-scale once through steam generators (OTSGs), enclosed flares, institutional commercial and industrial boilers and other similar equipment.
Such air pollution control systems are widely used in places within our current target markets such as petroleum refining and petrochemical process heaters, large-scale once through steam generators (“OTSGs”), enclosed flares, institutional commercial and industrial boilers and other similar equipment.
We believe that it is in the best interests of the Company and our shareholders 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 seek to collaborate with strategic partners to the extent possible to sell our products and maximize the profitability of those sales.
While use of this fundamental technology in applications intended for transportation markets is proven, the 2 ​ Table of Contents development and refinement of specific products, obtaining the certifications required for commercial deployment and establishing an efficient manufacturing source and channels to market will take some time, and we cannot assure that these goals will be achieved.
While use of this fundamental technology in applications intended for transportation markets is proven, the development and refinement of specific products, obtaining the certifications required for commercial deployment and establishing an efficient manufacturing source and channels to market will take some time, and we cannot assure that these goals will be achieved.
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.
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.
Any new entrant without a differentiating technology will not have this established source of significant and immediate profit. We developed our “go to market” strategy for the ClearSign Core 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. 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.
The process burner installed at this site was used by SCAQMD to set new BACT guidelines (see discussion above under the “Our Industry” section). We also received a purchase order in 2022 from a California refinery for our ClearSign Core process burners.
The process burner installed at this site was used by SCAQMD to set new BACT guidelines (see discussion above under the “Our Industry” section). We also received a purchase order in 2022 from a California refinery for our ClearSign Core TM process burners, amounting to twenty burners.
Field evaluation agreements, research agreements, and memoranda of understanding with potential development partners, customers and research institutions support this process. Our research and development activities make use of employees and consultants who are experts in the areas of industrial combustion, statistical experimental design, fluid mechanics and heat transfer.
Field evaluation agreements, research agreements, and memoranda of understanding with potential development partners, customers and research institutions support this process. Our research and development activities make use of employees and consultants who are experts in the areas of industrial combustion, statistical experimental design, fluid mechanics, computer modeling techniques and heat transfer.
Competition, Barriers to Entry and Go to Market Strategy The industry in which we operate is global in scope and populated by large, established suppliers of burners and post-combustion air pollution control systems. These suppliers possess resources that are substantially greater than ours.
Competition and Barriers to Entry The industry in which we operate is global in scope and populated by large, established suppliers of burners and post-combustion air pollution control systems. These suppliers possess resources that are substantially greater than ours.
According to SCAQMD, BACT is the most stringent 3 ​ Table of Contents 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.
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.
Hydrogen Process Burners We are currently in the research and development phase to design a one-hundred percent 100% hydrogen capable ClearSign Core process burner.
Hydrogen Process Burners We are currently in the research and development phase to design a one-hundred percent hydrogen capable ClearSign Core TM process burner.
We believe that we can extend the capability of our ClearSign Core technology to burn “pure” hydrogen fuel. ​ Our Proprietary Technology ClearSign Core Burner Technology The name “ClearSign Core” was adopted to describe the inclusion of ClearSign’s burner technology in the products of original equipment manufacturers (OEM).
We believe that we can extend the capability of our ClearSign Core TM technology to burn “pure” hydrogen fuel. ​ Our Proprietary Technology ClearSign Core TM Burner Technology The name “ClearSign Core” was adopted to describe the inclusion of ClearSign’s burner technology in the products of original equipment manufacturers (“OEM”).
The reported increased heat transfer efficiency may potentially result in cost savings in the low to mid-single digit percentage range for burners employing our technology. We believe that these potential costs savings could produce an extremely attractive pay-back period for an investment in ClearSign Core technology-based burners.
The reported increased heat transfer efficiency may potentially result in cost savings in the low to mid-single digit percentage range for burners employing our technology. We believe that these potential costs savings could produce a significantly attractive pay-back period for an investment in ClearSign Core TM technology-based burners.
On February 2, 2024, the South Coast Air Quality Management District of California (SCAQMD) as part of its periodic public participation process to enhance existing Best Available Control Technologies (BACT) determinations, assessed the process burner performance of our ClearSign Core ™ burner technology in certain currently operating customer installations.
On February 2, 2024, the South Coast Air Quality Management District of California (“SCAQMD”) as part of its periodic public participation process to enhance existing Best Available Control Technologies (“BACT”) determinations, assessed the process burner performance of our ClearSign Core ™ burner technology in certain currently operating customer installations.
We are targeting the following segments of the combustion market for adoption of our ClearSign Core technology: ● institutional, commercial and industrial boilers; ● refinery, energy infrastructure and petrochemical process heaters; ● enclosed flares; and ● enhanced oil recovery steam generators In each of these segments, we are marketing solutions that include our ClearSign Core 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: ● 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.
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 continuing to pursue “first adopter” installation opportunities for this patented sensing technology.
Details regarding the localized effect of environmental regulation 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 and China.
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.
We believe that our patented ClearSign Core™ technology can enhance the performance of combustion systems in a broad range of markets, including the energy (upstream oil production and down-stream refining), institutional, commercial and industrial boiler, chemical, and petrochemical industries.
We believe that our patented ClearSign Core™ technology can enhance the performance of combustion systems in a broad range of markets, including the energy (upstream oil production, midstream gas processing and transportation, and down-stream refining), institutional, commercial and industrial boiler, chemical, and petrochemical industries.
We also have products in commercial use in Europe and certified for sale in the Chinese boiler market. As noted above, our principal technologies have been developed into standardized designs. Our business development activities are now focused on developing customer acceptance and adoption within what we believe are the most efficient channels to market.
We also have products in commercial use in Europe. As noted above, our principal technologies have been developed into standardized designs. Our business development activities are now focused on developing customer acceptance and adoption within what we believe are the most efficient channels to market.
As a result, we may create additional patent applications from an 11 ​ Table of Contents 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.
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.
While the establishment of a new BACT benchmark does not specifically endorse ClearSign or our 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 ClearSign or our 3 ​ Table of Contents products, it does establish a limit in the industry that favors our products.
In the U.S., emissions standards largely emanate from the Clean Air Act, which is administered by the Environmental Protection Agency (EPA) and regulates six common criteria air pollutants, including ground-level ozone. These regulations are enforced by state and local air quality districts as part of their compliance plans.
In the U.S., emissions standards largely emanate from the Clean Air Act of 1963 (as amended, the “Clean Air Act”), which is administered by the Environmental Protection Agency (“EPA”) and regulates six common criteria air pollutants, including ground-level ozone. These regulations are enforced by state and local air quality districts as part of their compliance plans.
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, 2023, we have 103 active patent grants and another 34 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, 2024, we have 74 active patent grants and another 23 patents pending with Patent Offices in the United States, China, and various European countries.
Industrial Commercial Boilers Boilers are used in many industrial applications, and smaller scale commercial and residential applications, to generate steam and hot water. A large number of boiler manufacturers produce many styles of boiler equipment for these different applications.
Industrial Commercial Boilers Boilers are used in many industrial applications, and smaller scale commercial and residential applications, to generate steam and hot water. Several boiler manufacturers produce many styles of boiler equipment for these different applications.
At this time, we believe that the current U.S. administration supports “green initiatives,” and we are not aware of any current or proposed federal, state or local environmental compliance regulations that would have a material detrimental effect on our business objectives.
At this time, we believe that the current U.S. administration does not support “green initiatives.” Nevertheless, we are not aware of any current or proposed federal, state or local environmental compliance regulations that would have a material detrimental effect on our business objectives or operations.
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 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, and potentially other technologies aligned with our expertise and business focus, into adjacent customer applications and market verticals.
We have received a series of grants from the Department of Energy (DOE) to fund the development of this technology. In total, the two DOE awards approximate $1.9 million with a target end date occurring in 2025. Refer to the financial statement “Note 11 – Government Assistance” for further details about these monies.
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.
NOx is a regulated greenhouse gas pollutant comprised of nitrogen oxide and nitrogen dioxide. These current technologies include selective catalytic reduction devices (SCRs), low- and ultra-low NOx burners, external flue gas recirculation systems and other similar technologies.
NOx is a regulated greenhouse gas pollutant comprised of nitrogen oxide and nitrogen dioxide. These current industry-standard air pollution control technologies include selective catalytic reduction devices (“SCRs”), low- and ultra-low NOx burners, external flue gas recirculation systems and other similar technologies.
Our business has been, and continues to be, developed with the goal of combining our technology with the infrastructure and resources of major OEM equipment manufacturers.
Manufacturing Footprint and Product Quality Strategy Our business has been, and continues to be, developed with the goal of combining our technology with the infrastructure and resources of major OEM equipment manufacturers.
To date, our operations have been funded primarily through sales of our equity securities. We have earned nominal revenue since inception in 2008. Our combustion technology has been successfully deployed in commercial projects such as down-stream refining and upstream oil production. These applications include both our process burner and boiler burner technologies.
To date, our operations have been funded primarily through sales of our equity securities. Our combustion technology has been successfully deployed in commercial projects such as down-stream refining and upstream oil production. These applications include our process burner, flaring and boiler burner technologies.
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.
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.
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. 7 ​ Table of Contents Our “Core” boiler burner technology has been developed to enable it to be used in a series of consistently designed sizes ranging from small fire tube boilers up to large industrial water tube boilers.
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.
At this time, we have demonstrated that our technology has commercial viability by generating interest from OEMs and end users. We expect that developing strategically chosen collaborative partnerships will result in supplying ClearSign Core 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 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.
To date, we have one installation operating in the refinery of a major global oil refiner in Europe. The current environmental impetus to reduce CO2 emissions has created an interest in burner technology that can use hydrogen as a fuel source. Because hydrogen burns at a higher temperature than most other fuel gasses, it tends to create more NOx emissions.
To date, we have one installation operating in the refinery of a major global oil refiner in Europe. The current environmental impetus to reduce carbon dioxide emissions has created an interest in burner technology that can use hydrogen as a fuel source.
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 partner California Boiler into the San Joaquin Valley Air Pollution Control District of California. The NOx emission permits for these boilers vary, with one boiler noted at 5ppm and the other at 2.5ppm.
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.
The flames in a ClearSign Core 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”.
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.
Our strengths include our technology, which has been developed to provide a standard set of “core” components that can be incorporated into any generic OEM burner body. These components enable unique performance that minimizes emissions and controls flame size. Our strengths also include the market opportunity potentially created by new and anticipated environmental emissions control regulations.
We believe that our technology is our main strength, which has been developed to provide a standard set of “core” components that can be incorporated into any generic OEM burner body. These components enable unique performance that minimizes emissions and controls flame size.
ITEM 1. BUSINESS Introduction We design and develop technologies that have been shown to significantly improve key performance characteristics of industrial combustion systems, including emission and operational performance, energy efficiency, safety and overall cost-effectiveness.
ITEM 1. BUSINESS Introduction We design and develop technologies for the purpose of decarbonization and improving key performance characteristics of industrial and commercial combustion systems, including emission and operational performance, energy efficiency, and overall cost-effectiveness.
On May 18, 2023, we received an order for thirteen process burners from an existing California refinery customer. The order covered retrofitting two heaters, one of which we satisfied the contractual obligations for during the fourth quarter of 2023. The process burners installed in this heater passed the customer’s NOx emissions permit level, which was validated by a third-party inspector.
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.
Although the timing of any such regulations is uncertain, the general trend over the last decades continues to be government-mandated reduction for all criteria pollutants. 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 government’s willingness to adopt more stringent environmental regulations.
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. Suppliers and Subcontractors Due to our “asset light” model, we use subcontractors to source, warehouse and manufacture our products.
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.
Our boiler burner technology, which has been proven to achieve ground-breaking low air pollutant emissions, has been deployed in the US and is currently undergoing commercialization in China. ​ We believe that combustion equipment utilizing ClearSign Core technology is more effective and cost-efficient than current industry-standard air pollution control technologies, and can reduce nitrogen oxide (NOx) emissions down to the levels required by new stringent emission regulations.
Both our process burner and boiler burner technology can operate in high-intensity industrial burner applications at sites that are required to meet low air pollutant emissions. ​ We believe that combustion equipment utilizing ClearSign Core TM technology is more effective and cost-efficient than current industry-standard air pollution control technologies and can reduce nitrogen oxide (“NOx”) emissions down to the levels required by new stringent emission regulations.
In addition, we 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 and aid in the adoption of our technology. Our business plan contemplates forming collaborative partnerships with major OEM equipment manufacturers.
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.

… 44 more changes not shown on this page.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

44 edited+37 added−8 removed78 unchanged
Biggest changeOur 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 19 ​ Table of Contents ● any action asserting a claim against us or any current or former director, officer or stockholder that is governed by the internal-affairs doctrine.
Biggest changeOur 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.
In addition, the legal system in China has inherent uncertainties that may limit the legal protections available in the event of any claims or disputes that we may have with third parties, including our ability to protect the intellectual property we use in China.
In addition, the legal system in China has inherent uncertainties that may limit the legal protections available in the event of any claims or disputes that we may have with third parties, including our ability to protect the intellectual property we may use in China.
The market price for the securities may be significantly affected by factors such as progress in the development of our technology, agreements with research facilities or co-development partners, commercialization of our technology, variations in quarterly and yearly operating results, general trends in the alternative energy industry, and changes in state or federal regulations affecting us and our industry.
The market price for the securities may be significantly affected by factors such as progress in the development of our technology, agreements with research facilities or co-development partners, commercialization of our technology, variations in quarterly and yearly operating results, general trends in the alternative energy industry or clean technology industry, and changes in state or federal regulations affecting us and our industry.
Our cash on hand will likely not be sufficient to meet all of our 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 technology, and for working capital and other purposes, the timing and amount of which are difficult to ascertain.
If we raise additional funds by issuing equity securities, the percentage ownership of our then-current shareholders will be reduced. Further, we may have to offer new investors in our equity securities rights that are superior to the holders of common stock, which could adversely affect the market price and the voting power of shares of our common stock.
If we raise additional funds by issuing equity securities, the percentage ownership of our then-current stockholders will be reduced. Further, we may have to offer new investors in our equity securities rights that are superior to the holders of common stock, which could adversely affect the market price and the voting power of shares of our common stock.
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.
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.
If we are unable to effectively demonstrate our technology in a timely fashion, gain recognition in our market segments, and develop a critical level of successful sales and product installations, we may not be able to successfully achieve sales revenue and our results of operations and financial condition would then suffer.
If we are unable to effectively demonstrate our technology in a timely fashion, gain recognition in our market segments, and develop a critical level of successful sales and product installations, we may not be able to successfully generate sales revenue and our results of operations and financial condition would then suffer.
The preferred stock could also be utilized, under certain circumstances, as a method for raising additional capital or discouraging, delaying or preventing a change in control of the Company, to the detriment of our shareholders. We cannot assure you that we will not, under certain circumstances, issue shares of our preferred stock.
The preferred stock could also be utilized, under certain circumstances, as a method for raising additional capital or discouraging, delaying or preventing a change in control of the Company, to the detriment of our stockholders. We cannot assure you that we will not, under certain circumstances, issue shares of our preferred stock.
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.
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.
We also rely on subcontractors to perform substantially all of manufacturing work related to our projects, and we may need to engage subcontractors with whom we have no experience. ​ We currently have a collaboration agreement in place with Zeeco, Inc. (“Zeeco”).
We also rely on subcontractors to perform substantially all of manufacturing work related to our projects, and we may need to engage subcontractors with whom we have no experience. ​ We currently have a collaboration agreement in place with Zeeco.
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 2.0 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.
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”).
We are subject to the reporting requirements of the Securities Exchange Act of 1934 and the Sarbanes-Oxley Act of 2002 (with the exception of the requirement of auditor attestation of internal control over financial reporting from which we are currently excluded as a non-accelerated filer company), as well as rules subsequently implemented by the Commission that impose significant requirements on public companies, including requiring establishment and maintenance of effective disclosure and financial controls and changes in corporate governance practices.
We are subject to the reporting requirements of the Exchange Act and the Sarbanes-Oxley Act of 2002 (with the exception of the requirement of auditor attestation of internal control over financial reporting from which we are currently excluded as a non-accelerated filer company), as well as rules subsequently implemented by the SEC that impose significant requirements on public companies, including requiring establishment and maintenance of effective disclosure and financial controls and changes in corporate governance practices.
If Zeeco, or any of our subcontractors, is unable to provide services that meet or exceed our customers’ expectations or satisfy our contractual commitments, our reputation, business and operating results could be harmed.
If Zeeco or any of our subcontractors are unable to provide services that meet or exceed our customers’ expectations or satisfy our contractual commitments, our reputation, business and operating results could be harmed.
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.
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.
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 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 17 ​ Table of Contents products below the marginal cost of production in an attempt to establish, retain or increase market share.
Because of these circumstances, it may be difficult for us to compete successfully in the combustion market. 15 ​ Table of Contents The loss of the services of our key management and personnel or the failure to attract additional key personnel could adversely affect our ability to operate our business.
Because of these circumstances, it may be difficult for us to compete successfully in the combustion market. The loss of the services of our key management and personnel or the failure to attract additional key personnel could adversely affect our ability to operate our business.
If a court were to find the choice of forum provision contained in our amended and restated certificate of incorporation to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions.
If a court were to find the choice of forum provision contained in our certificate of incorporation to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions.
Our ability to achieve future revenue will depend significantly upon achieving a critical mass of market awareness and sales to potential customers of our products.
Our ability to obtain future revenue will depend significantly upon achieving a critical mass of market awareness and sales to potential customers of our products.
Under the ClearSign Technologies Corporation 2021 Equity Incentive Plan and the ClearSign Technologies Corporation 2013 Consultant Stock Plan (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 (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.
To the extent that 13 ​ Table of Contents environmental regulations in the U.S. and in other industrialized countries are modified in the future, or even relaxed, our technology may not produce the results required, or may even be unnecessary, to comply with the modified regulations.
To the extent that environmental regulations in the U.S. and in other industrialized countries are modified in the future, or even relaxed, our technology may not produce the results required, or may even be unnecessary, to comply with the modified regulations.
As a public company reporting to the Securities and Exchange Commission, 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 $1.3 million in 2023.
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.
Furthermore, in recent years the stock market has experienced extreme price and volume fluctuations that are unrelated or disproportionate to the operating performance of the affected companies, such as the market reactions to internet marketed ‘short squeezes’. Such broad market fluctuations may adversely affect the market price of our securities. We have the right to issue shares of preferred stock.
Furthermore, in recent years the stock market has experienced extreme price and volume fluctuations that are unrelated or disproportionate to the operating performance of the affected companies, such as the market reactions to internet marketed ‘short squeezes’. Such broad market fluctuations may adversely affect the market price of our securities.
Our board of directors is empowered, without shareholder approval, to issue preferred stock in one or more series, and to fix for any series the dividend rights, dissolution or liquidation preferences, redemption prices, conversion rights, voting rights, and other rights, preferences and privileges for the preferred stock.
The Board is empowered, without stockholder approval, to issue preferred stock in one or more series, and to fix for any series the dividend rights, dissolution or liquidation preferences, redemption prices, conversion rights, voting rights, and other rights, preferences and privileges for the preferred stock.
Some of the other risks related to doing business in China include: ● the Chinese government exerts substantial influence over the manner in which we must conduct our business activities; ● restrictions on currency exchange may limit our ability to receive and use our 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 expand our operations in China.
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.
Currently, we do not use financial derivatives to hedge our interest rate exposure. ​ These investments, as well as any cash deposit in bank accounts, are subject to general credit, liquidity, market, inflation and interest rate risks, which may be exacerbated by unusual events, such as the recent hike in interest rates, potential recession and the recent debt-ceiling debate, which affected various sectors of the financial markets and led to global economic slowdown and high inflation.
Currently, we do not use financial derivatives to hedge our interest rate exposure. ​ These investments, as well as any cash deposit in bank accounts, are subject to general credit, liquidity, market, inflation and interest rate risks, which may be exacerbated by unusual events, such as higher interest rates, potential recession and debates on the debt-ceiling, which may affect various sectors of the financial markets and lead to global economic slowdown and high inflation.
Our management and other personnel continually devote a substantial amount of time to these compliance initiatives.
Our management and other personnel continually devote a substantial amount of time to these compliance 23 ​ Table of Contents 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.
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.
Sales of the underlying shares of common stock could adversely affect the market price of our common stock. As of December 31, 2023, we had outstanding options for the purchase of 2,759 thousand shares of common stock and 671 thousand shares of outstanding restricted stock units (“RSUs”).
Sales 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”).
If federal, state or local regulatory agencies relax the clean air regulations our technologies are designed to address, or our customers cannot obtain air emission permits with our products, our business and results of operations could be materially adversely affected.
If federal, state or local regulatory agencies relax the clean air regulations our technologies are designed to address, or do not effectively enforce them, or our customers cannot obtain air emission permits with our products, or permits to proceed with projects in general, our business and results of operations could be materially adversely affected.
As our business develops, we might not be able to attract, hire, train, retain and motivate the highly skilled executives and employees we need to be successful. If we fail to attract and retain the necessary technical and managerial personnel, our business will suffer and might fail. There are many risks we are exposed to by doing business in China.
As our business develops, we might not be able to attract, hire, train, retain and motivate the highly skilled executives and employees we need to be successful. If we fail to attract and retain the necessary technical and managerial personnel, our business will suffer and might fail.
We are exposed to risks of doing business in China. As a result, the economic, political, legal and social conditions in China could have a material adverse effect on our business.
There are many risks we are exposed to relating to our presence and prior business activities in China. We are exposed to risks relating to our presence and prior business activities in China. As a result, the economic, political, legal and social conditions in China could have a material adverse effect on our business.
As a result of our anticipated growing operations in China, these risks could have a material adverse effect on our business, results of operations and financial condition. Finally, the U.S.
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.
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.
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.
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. ​ 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 guarantee that any collaborative business research and development partnership we enter into will be successful. Collaborative arrangements involve risks that participating parties may disagree on business decisions and strategies. These disagreements could result in delays, additional costs, risks of litigation, and failure of the development of our technology within the 14 ​ Table of Contents combustion market segment.
Collaborative arrangements involve risks that participating parties may disagree on business decisions and strategies. These disagreements could result in delays, additional costs, risks of litigation, and failure of the development of our technology within the combustion market segment.
We are a company with a limited operating history and limited revenues to date. 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, 2023, we had a total accumulated deficit of approximately $93.7 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, 2024, we had a total accumulated deficit of approximately $99.0 million.
Due to the nature of our business and products, we may be liable for damages based on product liability and other tort and warranty claims. ​ We face an inherent risk of exposure to claims in the event that the failure, use or misuse of our products results, or is alleged to result, in death, bodily injury, property damage, or economic loss. ​ We cannot provide assurance that global supply-chain constraints will not adversely affect our commercialization efforts. ​ The impact of the global supply-chain constraints has been moderate for our company, reflecting generally modest increases in lead-time commitments from our suppliers and strategic partners.
Due to the nature of our business and products, we may be liable for damages based on product liability and other tort and warranty claims. ​ We face an inherent risk of exposure to claims in the event that the failure, use or misuse of our products results, or is alleged to result, in death, bodily injury, property damage, or economic loss.
In that event, the trading price of our common stock could decline, and you may lose all or part of your investment in our shares.
In that event, the trading price of our common stock could decline, and you may lose all or part of your investment in our shares. The risks discussed below include forward-looking statements, and our actual results may differ substantially from those discussed in these forward-looking statements.
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, 2023, we had zero investments in short-term held-to-maturity debt security investments, 17 ​ Table of Contents consisted primarily of U.S. treasuries; however, in the future we may further invest in long- or short-term U.S. treasuries or other marketable securities with maturities of up to one year.
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.
The risks discussed below include forward-looking statements, and our actual results may differ substantially from those discussed in these forward-looking statements. 12 ​ Table of Contents Risks Related to Our Business We are a company with a limited operating history and our future profitability is uncertain. We anticipate future losses and negative cash flows and we may never be profitable.
Risks Related to Our Business We are a company with a limited operating history and our future profitability is uncertain. We anticipate future losses and negative cash flows and we may never be profitable. We are a company with a limited operating history and limited revenues to date.
We rely on a combination of patents, trade secrets and other intellectual property laws, confidentiality and security procedures and contractual provisions to establish and protect our proprietary rights in our technology, products and processes. If we fail to obtain or maintain these protections, we may not be able to prevent third parties from using our proprietary technologies.
Our long-term success largely depends on our ability to market our technology. We rely on a combination of patents, trade secrets and other intellectual property laws, confidentiality and security procedures and contractual provisions to establish and protect our proprietary rights in our technology, products and processes.
While these constraints have not had a material impact to-date, we can provide no assurance that our business will not be affected by in the future. ​ 16 ​ Table of Contents We are dependent on third-party suppliers.
While these constraints have not had a material impact to-date, we can provide no assurance that our business will not be affected by in the future. Our products utilize components manufactured from materials that are frequently imported, and any increase in the cost of materials may increase costs and may impact our profit margin on goods sold.
Our pending or future patent applications may not result in issued patents.
If we fail to obtain or maintain these protections, we may not be able to prevent third parties from using our proprietary technologies. Our pending or future patent applications may not result in issued patents.
We may fail to adequately protect our proprietary technology, which would allow our competitors to take advantage of our research and development efforts. Our long-term success largely depends on our ability to market our technology.
Our failure to collect receivables from any customer that represents a large percentage of receivables on a timely basis, or at all, could adversely affect our cash flow or results of operations. ​ We may fail to adequately protect our proprietary technology, which would allow our competitors to take advantage of our research and development efforts.
Removed
There can be no assurance that we will be able to comply with the continued listing standards of Nasdaq.
Added
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.
Removed
On November 24, 2023, we received a notice (the “Notice”) from the Listing Qualifications Department of Nasdaq stating 18 ​ Table of Contents that the previously announced resignation of Gary DiElsi from the our board of directors resulted in noncompliance with the board of directors independence requirements set forth in Nasdaq Listing Rule 5605(b)(1) and the requirement in Nasdaq Listing Rule 5605(c)(2)(A) to have an audit committee of at least three independent directors. ​ More specifically, when the Notice was issued, the board of directors did not have a majority of directors who would be considered “independent directors,” as that term is defined in Nasdaq Listing Rule 5605(a)(2) and the audit committee of the board of directors consisted of only two independent directors.
Added
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.
Removed
Consistent with Nasdaq Listing Rules 5605(b)(1)(A) and Rule 5605(c)(4), Nasdaq has provided us a cure period in order to regain compliance until the earlier of (i) our next annual shareholders’ meeting or November 11, 2024, or (ii) if the next annual shareholders’ meeting is held before May 7, 2024, then we must evidence compliance no later than May 7, 2024. ​ There can be no assurances that we will be able to regain compliance with Nasdaq’s listing standards or if we do later regain compliance with Nasdaq’s listing standards, will be able to continue to comply with the applicable listing standards.
Added
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.
Removed
If we are unable to maintain compliance with these Nasdaq requirements, our common stock will be delisted from Nasdaq.
Added
We are subject to sustainability efforts risks that could adversely affect our reputation and our business and results of operations. Views about sustainability- and environmental-related issues are diverse, dynamic, and rapidly changing. For instance, there exists anti-environmental, social and governance (“ESG”) sentiment among certain stakeholders and government institutions, which has gained momentum across the U.S.
Removed
If Nasdaq delists our common stock, we could face significant material adverse consequences, including: ​ ● a limited availability of market quotations for our securities; ● a determination that our common stock is a “ penny stock ” which will require brokers trading in our common stock to adhere to more stringent rules and possibly resulting in a reduced level of trading activity in the secondary trading market for our common stock; ● a limited amount of news and analyst coverage for our company; and ● a decreased ability to issue additional securities or obtain additional financing in the future. ​ We have not paid dividends in the past and have no immediate plans to pay dividends.
Added
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.
Removed
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.
Added
The future impact of any actions by the current administration on existing ESG policies and regulations cannot be predicted at this time, particularly given that such new orders are likely to face legal challenges.
Removed
As a result, it may be more difficult for us to attract and retain qualified people to serve on our board of directors, our board committees or as executive officers. 20 ​ Table of Contents clirSPV LLC has substantial influence in our ability to enter into corporate transactions, and if clirSPV LLC decides to sell or otherwise transfer their shares of common stock, it may put downward pressure on the trading price of our common stock. ​ The interests of clirSPV and its affiliates, which include our director Robert T.
Added
However, in the interim, such anti-ESG-related policies, legislation, initiatives, litigation, legal opinions, and scrutiny could result in less demand for our products and offerings, which can affect our business and results of operations.
Removed
Hoffman, could conflict with or differ from our interests or the interests of our other shareholders. Further, clirSPV may choose to sell or otherwise transfer a large number of shares of our common stock, which may put downward pressure on the trading price of shares of our common stock. ​ ITEM 1B. UNRESOLVED STAFF COMMENTS. None.
Added
Further, we could be exposed to reputational, financial, and legal risk as a result of anti-ESG policies and regulations that may be enacted under the current administration, and our ability to retain and attract customers and employees may be negatively impacted as a result thereof.
Added
Our revenue has been highly concentrated among a small number of customers, and our results of operations could be harmed if we lose a key revenue source and fail to replace it. ​ Our annual revenue has been highly concentrated, with a few customers accounting for a significant percentage of our total revenue.
Added
For the years ended December 31, 2024 and 2023, our two largest customers represented approximately 86% and 87% of total revenue, respectively.
Added
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.
Added
Although we currently maintain product liability coverage, which we believe to be adequate for the continued operation of our business, such insurance may become difficult or impossible to obtain in the future on terms acceptable to us. Moreover, our insurance coverage includes customary exclusions and conditions, may not cover certain specialized applications and generally does not cover warranty.
Added
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.
Added
Furthermore, regardless of the outcome, product liability claims can be expensive to defend, divert the attention of management and other personnel for significant periods of time and cause reputational damage.
Added
We cannot provide assurance that global supply-chain constraints and the threat of, or implementation of tariffs on imported or exported goods and materials will not adversely affect our commercialization efforts and business operations. ​ The impact of the global supply-chain constraints has been moderate for our company, reflecting generally modest increases in lead-time commitments from our suppliers and strategic partners.
Added
Tariffs applied to exported goods may inhibit our ability to develop our business overseas. In addition, the countries from which our products and materials are manufactured or imported may, from time to time, impose additional quotas, duties, tariffs, or other restrictions on their imports or adversely modify existing restrictions.
Added
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.
Added
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.
Added
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.
Added
In case our operating costs increase materially as a result of any implemented tariffs, in order to sustain current operating margins, we may increase the costs of our products to customers and end users, or find alternative, similarly priced sources that are not subject to tariffs, which may delay our operations.
Added
If we are unable to effectively implement countermeasures to any proposed, or implemented, tariffs, our operating margins will be impacted. ​ Our subcontractors ability to import products in a timely and cost-effective manner may also be affected by conditions at ports or issues that otherwise affect transportation and warehousing providers, such as port and shipping capacity, high demand for ocean freight, labor disputes, hostilities or terrorism against ocean vessels or changes in shipping routes to avoid the same, severe weather, or increased homeland security requirements in the U.S. and other countries.
Added
These issues could delay importation of materials, increase our transit costs, or require us to locate alternative ports or warehousing providers to avoid disruption to customers. These alternatives may not be available on short notice or could result in higher transit costs, which could have an adverse impact on our business and financial condition. We are dependent on third-party suppliers.
Added
In the future, we may invest in long- or short-term U.S. treasuries or other marketable securities with maturities of up to one year.
Added
There may be future sales of our common stock, or a perception that these sales could occur, which events could cause the price of our common stock to decline. ​ Sales of a substantial number of shares of our common stock in the public market or the perception that such sales might occur could materially adversely affect the market price of the shares of our common stock.
Added
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.
Added
As a result, a substantial number of shares of common stock may be sold in the public market, subject to certain beneficial ownership restrictions.
Added
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.
Added
We have considerable discretion in the application of such proceeds. You must rely on our judgment regarding the application of the net proceeds from cash exercises of the Warrants, which may be used for corporate purposes that do not improve our profitability or increase the price of our shares of common stock.

… 9 more changes not shown on this page.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

4 edited+0 added−0 removed4 unchanged
Biggest changeITEM 1C. CYBERSECURITY. We 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 committee oversees risks related to cybersecurity, including the security of corporate information and the steps management is taking 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. ​ 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.
This ongoing process, which includes employee training, is aimed at routinely reviewing and, as necessary, enhancing our oversight processes and tools to ensure they remain effective and resilient in their management of cybersecurity risk. ​ Risk Management and Strategy We engage a third-party Managed Service Provider (MSP) to implement technology infrastructure and oversee its tactical operations.
This ongoing process, which includes employee training, is aimed at routinely reviewing and, as necessary, enhancing our oversight processes and tools to ensure they remain effective and resilient in their management of cybersecurity risk. ​ Risk Management and Strategy We engage a third-party Managed Service Provider (“MSP”) to implement technology infrastructure and oversee its tactical operations.
These third-party detection tools provide near real-time alerts, log aggregation, and threat intelligence feeds. ​ In addition, we engage cybersecurity consultants, unaffiliated with our MSP, to advise management, assess our technology tools and review our cybersecurity practices. Our consultants utilize the National Institute of Standards and Technology (NIST) Cybersecurity Framework to assess our cybersecurity risk and governance practices.
These third-party detection tools provide near real-time alerts, log aggregation, and threat intelligence feeds. ​ In addition, we have engaged cybersecurity consultants, unaffiliated with our MSP, to advise management, assess our technology tools and review our cybersecurity practices. Our consultants utilized the National Institute of Standards and Technology (“NIST”) Cybersecurity Framework to assess our cybersecurity risk and governance practices.
See Item 1A, “Risk Factors” under the risks related to our business section for more information. Our incident response practices require incident assessments to be conducted in concert with our CEO, CFO and MSP. This enables faster response and effective communication, including public disclosure if a material cybersecurity event were to occur. ​ ​ 21 ​ Table of Contents
See Item 1A, “Risk Factors” under the risks related to our business section for more information. Our incident response practices require incident assessments to be conducted in concert with our Chief Executive Officer, Chief Financial Officer and MSP. This enables faster response and effective communication, including public disclosure if a material cybersecurity event were to occur. ​

Item 2. Properties

Properties — owned and leased real estate

2 edited+0 added−0 removed1 unchanged
Biggest changeThe term of the Beijing lease began on June 1, 2023 and expires in June 2024. The monthly minimum rent for our Beijing location is approximately $2 thousand (20,000RMB).
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).
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, 2024.
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.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

1 edited+0 added−0 removed1 unchanged
Biggest changeAs of the date of this report, we are not a party to any material pending legal proceedings.
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

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

4 edited+0 added−0 removed2 unchanged
Biggest changeIn addition, the board is not currently contemplating and does not anticipate declaring any stock dividends in the foreseeable future. ​ ITEM 6. [RESERVED] ​
Biggest changeIn 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. ​
We 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.
We 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.
Recent Issuances of Unregistered Securities On December 31, 2023, we issued 3.8 thousand shares of common stock, having a weighted average per share value of $0.76 from our 2013 Consultant Stock Plan to our investor relations firm, Firm IR Group, LLC, for services provided in the three months ended December 31, 2023.
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.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES. Our common stock is listed on the Nasdaq Capital Market under the symbol “CLIR”. According to our transfer agent, as of March 21, 2024 we had 289 shareholders 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 21, 2025, we had 289 stockholders of record.

Item 7. Management's Discussion & Analysis

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

28 edited+27 added−24 removed16 unchanged
Biggest changeInvesting 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, offset by $2,162 thousand of purchases for the same type of investments.
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).
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. ​ 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 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.
The Company periodically assesses the adequacy of our recorded warranty liabilities and adjusts the amounts as necessary, and such adjustments could be material if estimates differ significantly from actual warranty expense.
The Company periodically assesses the adequacy of its recorded warranty liabilities and adjusts the amounts as necessary, and such adjustments could be material if estimates differ significantly from actual warranty expense.
Accruals for product warranties are based on expected warranty experience and current product performance trends which are recorded as a component of cost of sales at the time revenue is recognized. The warranty liabilities are reduced by material and labor costs during the warranty period in the periods in which the costs are incurred.
Accruals for product warranties are based on expected warranty experience and current product performance trends which are recorded as a component of cost of goods sold at the time revenue is recognized. The warranty liabilities are reduced by material and labor costs during the warranty period in the periods in which the costs are incurred.
Furthermore, we have no committed source of financing, and we cannot be assured that we will be able to raise money as and when we need it to continue our operations.
Furthermore, we have no committed source of financing, and we cannot assure that we will be able to raise money as and when we need it to continue our operations.
Our actual results may differ materially from those anticipated in these forward-looking statements due to a number of factors, including but not limited to, the risks described in the section titled “Risk Factors”. ​ Overview ​ We design and develop technologies for the purpose of improving key performance characteristics of combustion systems, including emission and operational performance, energy efficiency and overall cost-effectiveness.
Our actual results may differ materially from those anticipated in these forward-looking statements due to a number of factors, including but not limited to, the risks described in the section titled “Risk Factors.” ​ Overview ​ We design and develop technologies for the purpose of decarbonization and improving key performance characteristics of industrial and commercial combustion systems, including emission and operational performance, energy efficiency and overall cost-effectiveness.
The warranty liabilities are included in accounts payable and accrued liabilities in the audited condensed consolidated balance sheets. ​ Research and Development ​ The cost of research and development is expensed as incurred. Research and development costs consist of salaries, benefits, share based compensation, consumables, and consulting fees, including costs to develop and test prototype equipment and parts.
The warranty liabilities are included in accounts payable and accrued liabilities in the consolidated balance sheets. ​ Research and Development ​ The cost of research and development is expensed as incurred. Research and development costs consist of salaries, benefits, share-based compensation, consumables, computer modeling costs and consulting fees, including costs to develop and test prototype equipment and parts.
We may need to raise additional capital in the future, however, the significant volatility in the capital markets may negatively affect our ability to raise this additional capital. ​ 23 ​ Table of Contents In order to generate meaningful revenues, our technologies must gain market recognition and acceptance to develop sufficient recurring sales.
We may need to raise additional capital in the future, however, the significant volatility in the capital markets may negatively affect our ability to raise this additional capital. ​ In order to generate meaningful revenues, our technologies must gain market recognition and acceptance to develop sufficient recurring sales.
We have generated nominal revenues from operations to date to meet operating expenses. ​ We have incurred losses since inception totaling $93.7 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 $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.
See Note 2 to our audited condensed 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 FASB ASC 606 Revenue from Contracts with Customers (ASC 606).
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 .
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.
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.
The hydrogen burner development project costs are offset by government assistance monies (refer to the “Other Income” note below for further details). ​ General and Administrative ​ During the year ended December 31, 2023, G&A expenses increased by $331 thousand, or 5.8%, when compared to the same period in 2022.
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.
These are addressed separately below. ​ Research and Development ​ R&D expenses for the year ended December 31, 2023 increased by $234 thousand, or 46.4%, when compared to the same period in 2022.
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.
During the year ended December 31, 2022, the Company received no monies from strategic partners. ​ Stock-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, 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.
Revenues for the year ended December 31, 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 $1,193 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.
Since inception, we have raised approximately $91.0 million in gross proceeds through the sale of our equity securities.
As of December 31, 2024, we have raised approximately $105.3 million in gross proceeds through the sale of our equity securities.
Research and development costs are offset by any funds received from strategic partners in cost sharing, collaborative projects. During the year 25 ​ Table of Contents ended December 31, 2023, the Company received $60 thousand from such arrangements.
Research and development costs are offset by any funds received from strategic partners in cost sharing, collaborative projects.
During the years ended December 31, 2023, and 2022, our China operations reported zero revenues. ​ Our costs include employee salaries and benefits, compensation paid to consultants, materials and supplies for prototype development and manufacture, costs associated with development activities including materials, sub-contractors, travel and administration, legal and accounting expenses, sales and marketing costs, general and administrative expenses, and other costs associated with an early stage, publicly traded technology company.
There can be no assurance that we will be successful in achieving our long-term plans, or that such plans, if consummated, will result in profitable operations or enable us to continue in the long-term as a going concern . ​ Our costs include employee salaries and benefits, compensation paid to consultants, materials and supplies for prototype development and manufacture, costs associated with development activities including materials, sub-contractors, travel and administration, legal and accounting expenses, sales and marketing costs, general and administrative expenses, and other costs associated with an early stage, publicly traded technology company.
For the year ended December 31, 2023, gross profit was approximately 34.0% of revenues, resulting in an increase in gross profit margin of approximately 2.9% compared to the same period in 2022.
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.
This is primarily attributed to the short maturities of these instruments. ​ Results of Operations Comparison of the Years Ended December 31, 2023 and 2022 Highlights of our annual financial performance are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended ​ ​ ​ ​ ​ ​ (in thousands, except per share data) ​ December 31, ​ ​ ​ ​ ​ ​ ​ 2023 2022 $ Change % Change Revenues ​ $ 2,403 ​ $ 374 ​ $ 2,029 ​ 542.6 % Cost of goods sold ​ ​ 1,586 ​ ​ 258 ​ $ 1,328 ​ 514.8 % Gross profit ​ ​ 817 ​ ​ 116 ​ $ 701 ​ 604.4 % Research and development ​ ​ 739 ​ ​ 505 ​ $ 234 ​ 46.4 % General and administrative ​ ​ 6,059 ​ ​ 5,728 ​ $ 331 ​ 5.8 % Operating Expenses ​ ​ 6,798 ​ ​ 6,233 ​ $ 565 ​ 9.1 % Other income ​ ​ 787 ​ ​ 359 ​ $ 428 ​ 119.3 % Net loss ​ $ (5,194) ​ $ (5,758) ​ $ 564 ​ 9.8 % Basic and diluted net income per common share ​ $ (0.13) ​ $ (0.16) ​ $ 0.03 ​ 18.8 % ​ Revenues and Gross Profit ​ Consolidated revenues for the year ended December 31, 2023 totaled $2,403 thousand, compared to $374 thousand for the same period in 2022.
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.
At December 31, 2023, our current assets were in excess of current liabilities resulting in working capital of $4,253 thousand as compared to $8,586 thousand at December 31, 2022. We have no contractual debt obligations, and we have historically funded operations predominantly through equity offerings.
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.
To the extent we require additional funds more than 12 months from the date hereof, and customer cash collections cannot fund our needs, we may need to utilize additional equity offerings to raise these funds. As of the date of this report, we do not have sufficient working capital to fund our operating expenses for the next 12 months.
We have no contractual debt obligations and to the extent we may require additional funds beyond twelve months from the date hereof, and customer cash collections cannot fund our needs, we may utilize equity offerings. Historically, we have funded operations predominantly through equity offerings.
Until the growth of revenue increases to a level that covers operating expenses, the Company intends to continue to fund operations in this manner, although the volatility in the capital markets may negatively affect our ability to do so. ​ 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.
Until the growth of revenue increases to a level that covers operating expenses, we intend to continue to fund operations in this manner, although the volatility in the capital markets may negatively affect our ability to do so.
This year-over-year difference in G&A expenses is primarily due to an increase of $172 thousand for a non-cash, non-recurring expense for the vesting of restricted stock units triggered by the departure of a member of our board directors, and $81 thousand for the non-cash, non-recurring impairment of demonstration burners.
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.
Upon completion of the performance obligations and collectability is determined, revenue can be recorded.
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.
We will not make any sales of our shares of common stock pursuant to the Sales Agreement unless and until a new prospectus supplement is filed with the SEC; however, the Sales Agreement remains in full force and effect. ​ 24 ​ Table of Contents ​ Critical Accounting Policies The following discussion and analysis of financial condition and results of operations is based upon our financial statements, which have been prepared in conformity with accounting principles generally accepted in the United States of America.
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.
We also incurred $60 thousand burner development costs during the year ended December 31, 2023, primarily due to our hydrogen burner project.
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.
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 Letter of Intent for Four ClearSign Core TM (Rogue) Boilers ​ On February 21, 2024, we announced that our collaborative partner California Boiler, received a letter of intent for four boilers to be fitted with the ClearSign Core™ (Rogue) burners as well as the purchase order for the first boiler burner of the series, and has in turn placed their order with ClearSign for the first burner.
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.
Removed
There can be no assurance that we will be successful in achieving our long-term plans, or that such plans, if consummated, will result in profitable operations or enable us to continue in the long-term as a going concern . ​ With respect to our China operations, we have a satellite office located in Beijing, China to support our commercialization efforts.
Added
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.
Removed
At this time, these operations in China are immaterial compared to total company operations. As of December 31, 2023, our China asset balance totaled $334 thousand, or approximately 4%, compared to our total asset balance of $7,620 thousand.
Added
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.
Removed
This purchase order relates to an end customer that is a fruit and vegetable multi-juice processing company located in California’s Central Valley.
Added
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”).
Removed
The additional burner orders will be issued concurrent with the construction of additional planned fruit processing lines of the customer. ​ ATM Suspension On March 18, 2024, we filed a prospectus supplement suspending the sales of common stock under our At-the-Market (“ATM”) program pursuant to that certain Sales Agreement between us and Virtu Americas LLC, as sales agent, dated December 23, 2020 (the “Sales Agreement”).
Added
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”).
Removed
Stock-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. ​ Fair Value of Financial Instruments ​ The Company's financial instruments primarily consist of cash equivalents, accounts payable, accrued expenses and short-term investments in government securities.
Added
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.
Removed
As of the balance sheet date, the estimated fair values of the financial instruments were not materially different from their carrying values as presented on the consolidated balance sheets.
Added
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.
Removed
During the three months ended December 31, 2023, we recognized $1,274 thousand of revenues for a shipment of process burners to a California refinery customer. This shipment supplied burners for one of the two heaters associated with such customer order.
Added
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.
Removed
Revenues for the year ended December 31, 2022 were generated predominantly from the closeout of our ExxonMobil technology validation project. ​ Gross profit for the year ended December 31, 2023, increased by $701 thousand compared to gross profit reported for the year ended December 31, 2022.
Added
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.
Removed
The gross profit increase in 2023 was due to increased product shipments and burner performance tests for our customers in California, whereas in 2022 our gross profit was predominately generated by a technology validation project.
Added
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.
Removed
The change in gross profit margin is a result of the lower margin profile for the technology validation project compared to a typical production order due to cost overruns. ​ Operating Expenses ​ 26 ​ Table of Contents Operating expenses consist of research and development (“R&D”) and general and administrative (“G&A”) expenses.
Added
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.
Removed
This year-over-year difference in R&D expenses is primarily due to expenses related to the hiring of our new Chief Technology Officer, which was comprised of a non-cash, non-recurring expense for the vesting of $43 thousand in inducement stock options, and $40 thousand human capital costs.
Added
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.
Removed
These demonstration burners were intended to showcase our burner catalog in operation to potential customers as part of a marketing campaign.
Added
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.
Removed
These specific burners showcased an older design that we have chosen to retire from our demonstration marketing campaign. ​ Other Income ​ During the year ended December 31, 2023, other income increased by $428 thousand or 119.3%, compared to the same time period in 2022.
Added
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.
Removed
During the year ended December 31, 2023, interest income from our money market account and short-term investments increased by $241 thousand compared to same period in 2022 due to rising interest rates and timing of year-over-year cash balances.
Added
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.
Removed
During the year ended December 31, 2023, other income increased by $197 thousand compared to same period in 2022 predominately due to our Seattle office decommission project, which focused on selling used equipment and materials.
Added
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.
Removed
During the year ended December 31, 2023, asset sales decreased by $33 thousand compared to the same period in 2022 strictly due to timing and prioritization of asset sales during our Seattle office decommissioning project. ​ Net Loss ​ Net loss for the year ended December 31, 2023, was $5,194 thousand as compared to $5,758 thousand for the same period in 2022, or an approximate 9.8% decrease.
Added
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.
Removed
The $564 thousand decrease in net loss is primarily attributable to the $701 thousand increase in gross profit referenced in the above explanation. ​ Liquidity and Capital Resources At December 31, 2023, our cash and cash equivalent balance totaled $5,684 thousand compared to $6,451 thousand at December 31, 2022, a decrease of $767 thousand.
Added
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).
Removed
The decrease in cash and cash equivalent balance is primarily attributable to our net loss of $5,194 thousand, which was offset by a decrease in short-term held-to-maturity investments of $2,606 thousand due to working capital needs and an increase in contract liabilities of $869 thousand, representing payments from customers in advance of future project costs.
Added
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.
Removed
However, we are contemplating a capital raise through a public offering pursuant to our Form S-3 shelf registration statement in April 2024, and we expect that, to the extent this public offering is consummated, we will not need additional equity capital for a period of 12 months or more following this public offering.
Added
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.
Removed
During the year ended December 31, 2023, working capital was funded predominately through customer cash collections for payment milestones outlined in our customer contracts. ​ 27 ​ Table of Contents The Form S-3 shelf registration statement filed with the SEC on July 1, 2022 was declared effective on August 12, 2022.The registration statement on Form S-3 allows us to offer common stock, preferred stock, warrants, subscription rights, debt securities and units from time to time, as market conditions permit to fund, to the extent required beyond the 12 months from the date hereof, the ongoing operations of the Company.
Added
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.
Removed
Operating activities for the year ended December 31, 2022 resulted in cash outflows of $4,992 thousand, primarily due to the loss for the period of $5,758 thousand, offset with non-cash expenses of $627 thousand.
Added
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.
Removed
Investing activities for the year ended December 31, 2022 resulted in cash outflows of $2,686 thousand, which is primarily attributable to the redemption $3,337 thousand of short-term held-to-maturity U.S. treasuries, offset by $5,898 thousand of purchases for the same type of investments.
Added
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.
Removed
Financing activities for the year ended December 31, 2022 included $6,539 thousand in net proceeds from the sale of 501 thousand shares of our common stock through our ATM program at an average price of $1.24 per share, sale of 4.2 million shares of our common stock through a public offering at an average price of $1.11 per share, and sales of 1.6 million shares of our common stock at a price of $1.11 per share pursuant to the Participant Right with clirSPV.
Added
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.
Removed
Off-Balance Sheet Transactions We do not have any off-balance sheet transactions.
Added
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.
Added
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.
Added
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
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).

Other CLIR 10-K year-over-year comparisons