ClearSign Technologies Corp 10-Q

ITEM 1. FINANCIAL STATEMENTS ClearSign Technologies Corporation and Subsidiary Condensed Consolidated Balance Sheets (Unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ (in thousands, except share and per share data) ​ September 30, ​ December 31, ​ ​ 2025 2024 ASSETS ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Current Assets: ​ ​ Cash and cash equivalents ​ $ 10,488 ​ $ 14,035 ​ Accounts receivable ​ ​ 324 ​ ​ 165 ​ Contract assets ​ 514 ​ 194 ​ Prepaid expenses and other assets ​ 420 ​ 454 ​ Total current assets ​ 11,746 ​ 14,848 ​ ​ ​ ​ ​ ​ ​ ​ ​ Fixed assets, net ​ 223 ​ 238 ​ Patents and other intangible assets, net ​ 778 ​ 830 ​ Total Assets ​ $ 12,747 ​ $ 15,916 ​ ​ ​ ​ ​ ​ ​ ​ ​ LIABILITIES AND STOCKHOLDERS' EQUITY ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Current Liabilities: ​ ​ ​ ​ Accounts payable and accrued liabilities ​ $ 1,983 ​ $ 1,220 ​ Current portion of lease liabilities ​ 94 ​ 75 ​ Accrued compensation and related taxes ​ 353 ​ 671 ​ Contract liabilities ​ ​ 1,148 ​ ​ 73 ​ Total current liabilities ​ 3,578 ​ 2,039 ​ Long Term Liabilities: ​ ​ ​ ​ ​ Long term lease liabilities ​ 91 ​ ​ 113 ​ Total liabilities ​ 3,669 ​ 2,152 ​ ​ ​ ​ ​ ​ ​ ​ ​ Commitments and contingencies (Note 9) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Stockholders’ Equity: ​ ​ ​ Preferred stock, $ 0.0001 par value, 2,000,000 shares authorized, no shares issued or outstanding ​ — ​ — ​ Common stock, $ 0.0001 par value, 87,500,000 shares authorized, 52,517,048 and 50,285,509 shares issued and outstanding at September 30, 2025 and December 31, 2024, respectively. ​ 5 ​ ​ 5 ​ Additional paid-in capital ​ 113,294 ​ ​ 112,796 ​ Accumulated other comprehensive loss ​ ​ ( 20 ) ​ ​ ( 21 ) ​ Accumulated deficit ​ ( 104,201 ) ​ ​ ( 99,016 ) ​ Total stockholders' equity ​ 9,078 ​ 13,764 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ 12,747 ​ $ 15,916 ​ ​ The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. ​ ​ 1 ​ Table of Contents ClearSign Technologies Corporation and Subsidiary Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (in thousands, except share and per share data) ​ For the Three Months Ended ​ For the Nine Months Ended ​ ​ ​ September 30, ​ September 30, ​ ​ 2025 2024 2025 2024 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Revenues ​ $ 1,029 ​ $ 1,859 ​ $ 1,563 ​ $ 3,006 ​ Cost of goods sold ​ 661 ​ 1,308 ​ 944 ​ 1,976 ​ Gross profit ​ 368 ​ 551 ​ 619 ​ 1,030 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating expenses: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Research and development ​ 310 ​ 329 ​ 1,004 ​ 1,012 ​ General and administrative ​ 1,808 ​ 1,655 ​ 5,460 ​ 4,840 ​ Total operating expenses ​ 2,118 ​ 1,984 ​ 6,464 ​ 5,852 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Loss from operations ​ ( 1,750 ) ​ ( 1,433 ) ​ ( 5,845 ) ​ ( 4,822 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other income, net: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest income ​ ​ 105 ​ ​ 146 ​ ​ 353 ​ ​ 284 ​ Government assistance ​ ​ 216 ​ ​ 131 ​ ​ 307 ​ ​ 395 ​ Other income, net ​ ​ — ​ ​ 1 ​ ​ — ​ ​ 8 ​ Total other income, net ​ 321 ​ 278 ​ 660 ​ 687 ​ Net loss ​ $ ( 1,429 ) ​ $ ( 1,155 ) ​ $ ( 5,185 ) ​ $ ( 4,135 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net loss per share - basic and fully diluted ​ $ ( 0.03 ) ​ $ ( 0.02 ) ​ $ ( 0.09 ) ​ $ ( 0.09 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted average number of shares outstanding - basic and fully diluted ​ 55,744,062 ​ 54,714,910 ​ 55,322,077 ​ 46,986,914 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Comprehensive loss: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net loss ​ $ ( 1,429 ) ​ $ ( 1,155 ) ​ $ ( 5,185 ) ​ $ ( 4,135 ) ​ Foreign-exchange translation adjustments ​ ​ 1 ​ ​ 5 ​ ​ 1 ​ ​ 1 ​ Comprehensive loss ​ $ ( 1,428 ) ​ $ ( 1,150 ) ​ $ ( 5,184 ) ​ $ ( 4,134 ) ​ ​ The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. ​ 2 ​ Table of Contents ClearSign Technologies Corporation and Subsidiary Condensed Consolidated Statements of Stockholders’ Equity For the Three Month Periods During the Nine Months Ended September 30, 2025 and 2024 (Unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accumulated Other ​ ​ ​ ​ Total (in thousands, except per share data) ​ Common Stock ​ Additional ​ Comprehensive ​ Accumulated ​ Stockholders’ ​ ​ Shares Amount Paid-In Capital ​ Loss Deficit Equity Balances at December 31, 2024 50,286 ​ $ 5 ​ $ 112,796 ​ $ ( 21 ) ​ $ ( 99,016 ) ​ $ 13,764 Share-based compensation, net of tax withholdings ​ 81 ​ ​ — ​ ​ 45 ​ ​ — ​ ​ — ​ ​ 45 Fair value of stock issued in payment of accrued compensation ​ 326 ​ ​ — ​ ​ 279 ​ ​ — ​ ​ — ​ ​ 279 Shares issued for services ​ 4 ​ ​ — ​ ​ 4 ​ ​ — ​ ​ — ​ ​ 4 Exercise of warrants ​ 23 ​ ​ — ​ ​ 24 ​ ​ — ​ ​ — ​ ​ 24 Exercise of prefunded warrants ​ 1,703 ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — Net loss ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 2,076 ) ​ ​ ( 2,076 ) Balances at March 31, 2025 ​ 52,423 ​ ​ 5 ​ ​ 113,148 ​ ​ ( 21 ) ​ ​ ( 101,092 ) ​ ​ 12,040 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Share-based compensation, net of tax withholdings ​ — ​ ​ — ​ ​ 51 ​ ​ — ​ ​ — ​ ​ 51 Shares issued for services ​ 3 ​ ​ — ​ ​ 3 ​ ​ — ​ ​ — ​ ​ 3 Net loss ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 1,680 ) ​ ​ ( 1,680 ) Balances at June 30, 2025 ​ 52,426 ​ ​ 5 ​ ​ 113,202 ​ ​ ( 21 ) ​ ​ ( 102,772 ) ​ ​ 10,414 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Share-based compensation, net of tax withholdings ​ — ​ ​ — ​ ​ 38 ​ ​ — ​ ​ — ​ ​ 38 Shares issued for services ​ 91 ​ ​ — ​ ​ 54 ​ ​ — ​ ​ — ​ ​ 54 Foreign-exchange translation adjustment ​ — ​ ​ — ​ ​ — ​ ​ 1 ​ ​ — ​ ​ 1 Net loss ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 1,429 ) ​ ​ ( 1,429 ) Balances at September 30, 2025 ​ 52,517 ​ $ 5 ​ $ 113,294 ​ $ ( 20 ) ​ $ ( 104,201 ) ​ $ 9,078 ​ 3 ​ Table of Contents ​ ClearSign Technologies Corporation and Subsidiary Condensed Consolidated Statements of Stockholders’ Equity For the Three Month Periods During the Nine Months Ended September 30, 2025 and 2024 (Unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accumulated Other ​ ​ Total (in thousands, except per share data) ​ Common Stock ​ Additional ​ Comprehensive ​ Accumulated ​ Stockholders' ​ ​ Shares ​ Amount ​ Paid-In Capital ​ ​ Loss ​ Deficit ​ Equity Balances at December 31, 2023 ​ 38,687 ​ $ 4 ​ $ 98,922 ​ $ ( 17 ) ​ $ ( 93,717 ) ​ $ 5,192 Share-based compensation ​ 67 ​ ​ — ​ ​ 67 ​ ​ — ​ ​ — ​ ​ 67 Tax withholdings related to share-based compensation ( 22 ) ​ ​ — ​ ​ ( 16 ) ​ ​ — ​ ​ — ​ ​ ( 16 ) Fair value of stock issued in payment of accrued compensation ​ 307 ​ ​ — ​ ​ 326 ​ ​ — ​ ​ — ​ ​ 326 Shares issued for services ​ 4 ​ ​ — ​ ​ 3 ​ ​ — ​ ​ — ​ ​ 3 Foreign-exchange translation adjustment ​ — ​ ​ — ​ ​ — ​ ​ ( 3 ) ​ ​ — ​ ​ ( 3 ) Net loss ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 1,108 ) ​ ​ ( 1,108 ) Balances at March 31, 2024 ​ 39,043 ​ ​ 4 ​ ​ 99,302 ​ ​ ( 20 ) ​ ​ ( 94,825 ) ​ ​ 4,461 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Share-based compensation ​ 256 ​ ​ — ​ ​ 344 ​ ​ — ​ ​ — ​ ​ 344 Tax withholdings related to share-based compensation ​ ( 11 ) ​ ​ — ​ ​ ( 13 ) ​ ​ — ​ ​ — ​ ​ ( 13 ) Shares issued for services ​ 4 ​ ​ — ​ ​ 3 ​ ​ — ​ ​ — ​ ​ 3 Issuance of common stock in public offering, net of expenses ​ 5,314 ​ ​ 1 ​ ​ 2,390 ​ ​ — ​ ​ — ​ ​ 2,391 Issuance of warrants in public offering, net of expenses ​ — ​ ​ — ​ ​ 1,831 ​ ​ — ​ ​ — ​ ​ 1,831 Issuance of common stock in private placement, net of expenses ​ 2,250 ​ ​ — ​ ​ 865 ​ ​ — ​ ​ — ​ ​ 865 Issuance of prefunded warrants in private placement, net of expenses ​ — ​ ​ — ​ ​ 1,214 ​ ​ — ​ ​ — ​ ​ 1,214 Issuance of warrants in private placement, net of expenses ​ — ​ ​ — ​ ​ 2,389 ​ ​ — ​ ​ — ​ ​ 2,389 Issuance of common stock for participation right exercise, net of expenses ​ 3,350 ​ ​ — ​ ​ 1,447 ​ ​ — ​ ​ — ​ ​ 1,447 Issuance of prefunded warrants for participation right exercise, net of expenses ​ — ​ ​ — ​ ​ 580 ​ ​ — ​ ​ — ​ ​ 580 Issuance of warrants for participation right exercise, net of expenses ​ — ​ ​ — ​ ​ 2,250 ​ ​ — ​ ​ — ​ ​ 2,250 Foreign-exchange translation adjustment ​ — ​ ​ — ​ ​ — ​ ​ ( 1 ) ​ ​ — ​ ​ ( 1 ) Net loss ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 1,872 ) ​ ​ ( 1,872 ) Balances at June 30, 2024 ​ 50,206 ​ ​ 5 ​ ​ 112,602 ​ ​ ( 21 ) ​ ​ ( 96,697 ) ​ ​ 15,889 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Share-based compensation ​ — ​ ​ — ​ ​ 73 ​ ​ — ​ ​ — ​ ​ 73 Tax withholdings related to share-based compensation ​ — ​ ​ — ​ ​ ( 9 ) ​ ​ — ​ ​ — ​ ​ ( 9 ) Shares issued for services ​ 29 ​ ​ — ​ ​ 20 ​ ​ — ​ ​ — ​ ​ 20 Foreign-exchange translation adjustment ​ — ​ ​ — ​ ​ — ​ ​ 5 ​ ​ — ​ ​ 5 Net loss ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 1,155 ) ​ ​ ( 1,155 ) Balances at September 30, 2024 ​ 50,235 ​ $ 5 ​ $ 112,686 ​ $ ( 16 ) ​ $ ( 97,852 ) ​ $ 14,823 ​ The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. ​ 4 ​ Table of Contents ClearSign Technologies Corporation and Subsidiary Condensed Consolidated Statements of Cash Flows (Unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ (in thousands) ​ For the Nine Months Ended September 30, ​ ​ 2025 2024 Cash flows from operating activities: ​ ​ ​ ​ ​ ​ ​ Net loss ​ $ ( 5,185 ) ​ $ ( 4,135 ) ​ Adjustments to reconcile net loss to net cash used in operating activities: ​ ​ ​ ​ ​ ​ Common stock issued for services ​ 61 ​ ​ 26 ​ Share-based compensation, net of tax withholdings ​ 863 ​ ​ 446 ​ Depreciation and amortization ​ 145 ​ ​ 138 ​ Impairment of intangible assets ​ ​ — ​ ​ 17 ​ Right-of-use asset amortization ​ 66 ​ ​ 64 ​ Lease amendments ​ ​ — ​ ​ ( 3 ) ​ Change in operating assets and liabilities: ​ ​ ​ ​ ​ ​ Contract assets ​ ( 320 ) ​ ​ 39 ​ Accounts receivable ​ ( 159 ) ​ ​ ( 462 ) ​ Prepaid expenses and other assets ​ 34 ​ ​ ( 260 ) ​ Accounts payable, accrued liabilities, and lease liabilities ​ 6 ​ ​ 1,091 ​ Accrued compensation and related taxes ​ ( 39 ) ​ ​ 23 ​ Contract liabilities ​ ​ 1,075 ​ ​ ( 942 ) ​ Net cash used in operating activities ​ ( 3,453 ) ​ ( 3,958 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash flows from investing activities: ​ ​ ​ Acquisition of fixed assets ​ ( 4 ) ​ ​ ( 18 ) ​ Disbursements for patents and other intangible assets ​ ( 74 ) ​ ​ ( 159 ) ​ Net cash used in investing activities ​ ( 78 ) ​ ( 177 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash flows from financing activities: ​ ​ ​ Proceeds from issuance of common stock, net of offering costs ​ — ​ 12,967 ​ Proceeds from exercise of warrants ​ ​ 24 ​ ​ — ​ Taxes paid related to vesting of restricted stock units ​ ​ ( 41 ) ​ ​ ( 31 ) ​ Net cash provided by (used in) financing activities ​ ( 17 ) ​ 12,936 ​ Effect of exchange rate changes on cash and cash equivalents ​ ​ 1 ​ ​ 1 ​ ​ ​ ​ ​ ​ ​ ​ ​ Net change in cash and cash equivalents ​ ( 3,547 ) ​ ​ 8,802 ​ Cash and cash equivalents, beginning of period ​ 14,035 ​ ​ 5,684 ​ Cash and cash equivalents, end of period ​ $ 10,488 ​ $ 14,486 ​ ​ ​ ​ ​ ​ ​ ​ ​ Supplemental disclosure of cash flow information: ​ ​ ​ ​ ​ ​ ​ Officer and employee equity awards for prior year accrued compensation ​ $ 279 ​ $ 326 ​ Non-cash impact of new lease ​ $ 68 ​ $ 32 ​ ​ The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. ​ 5 ​ Table of Contents ClearSign Technologies Corporation Notes to Unaudited Condensed Consolidated Financial Statements Note 1 – Organization and Description of Business ClearSign Technologies Corporation (“ClearSign” or the “Company”) designs and develops products and technologies for the purpose of decarbonization and improving key performance characteristics of industrial and commercial systems, including operational performance, energy efficiency, emission reduction, safety, and overall cost-effectiveness. The Company’s patented technologies are designed to be embedded in established original equipment manufacturers (“OEM”) products as ClearSign Core™ and ClearSign Eye and other sensing configurations in order to enhance the performance of combustion systems and fuel safety systems in a broad range of markets. These markets include energy (upstream oil production and down-stream refining), commercial/industrial boiler, chemical, petrochemical, transport and power industries. The Company’s primary technology is its ClearSign Core™ technology, which achieves very low emissions without the need of selective catalytic reduction. The Company was originally incorporated in the State of Washington in 2008. During January 2022, the Company relocated its headquarters from Seattle, Washington to Tulsa, Oklahoma. Effective June 15, 2023, the Company changed its state of incorporation to Delaware. On July 28, 2017, the Company incorporated a subsidiary, ClearSign Asia Limited, in Hong Kong to represent the Company’s business and technological interests throughout Asia. Through ClearSign Asia Limited, the Company has established a wholly foreign owned enterprise in China – ClearSign Combustion (Beijing) Environmental Technologies Co., LTD. On August 22, 2024, the Company’s Board of Directors (the “Board”) authorized management to move forward with filing for dormancy with Chinese regulators to suspend the Company’s Beijing, China operations. A dormancy filing allows the Company to keep its China legal entity in a suspended status for up to three years . The Company can revive its China operations at any time during those three years with minimal cost impact. The effective date of our dormancy filing was March 12, 2025. Unless otherwise stated or the context otherwise requires, the terms “we,” “us,” “our,” “ClearSign” and the “Company” refer to ClearSign Technologies Corporation and its subsidiary, ClearSign Asia Limited. Business Segments The Company operates in one operating and reportable segment engaged in the design, development and sale of combustion technologies that improve the performance and cost-effectiveness of industrial combustion systems, referred to herein as the “Combustion” segment. The Company manages its business activities on a consolidated basis. Since the operations comprise a single reportable segment, amounts reported in the consolidated balance sheets, statements of operations and comprehensive loss, stockholders’ equity, and cash flows represent the activities of the Combustion segment. ​ The Combustion segment derives revenues by delivering products and technology solutions to OEM’s and end-users. Our products and solutions can be incorporated into a new or existing customer infrastructure or equipment. Customer contracts can include multiple billing milestones and performance obligations. The Company can typically satisfy its performance obligations within a twelve month period, but customer project delays, some of which can be beyond the Company’s control, can impact timing of performance and there is no assurance we will satisfy all performance obligations in such period of time. ​ The Company’s Chief Executive Officer, who is the chief operating decision maker (“CODM”), reviews quarterly financial information on a consolidated basis for making operating decisions, allocating resources and evaluating financial performance. The CODM consistently reviews the consolidated statements of operations and comprehensive loss to manage operations and monitor performance against management expectations. Factors considered by the CODM when assessing a reportable segment include factors such as, but not limited to, human capital, intellectual property, customer relationships and business model design. ​ 6 ​ Table of Contents Substantially all the Company’s operating activities, including its long-lived assets, are located within the United States. Customers in the United States accounted for 100 % of revenues during the three and nine months ended September 30, 2025 and 2024. The Company disaggregates geographical revenues by selling location, since many of our target customers are global entities, and it would be more likely than not, that these customers would negotiate sales within our current territory in the United States. ​ Note 2 – Summary of Significant Accounting Policies Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (the “SEC”) for reporting on Form 10-Q. Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations. The condensed consolidated balance sheet at December 31, 2024 has been derived from the Company’s audited consolidated financial statements as of that date. In the opinion of management, these condensed consolidated financial statements reflect all normal recurring and other adjustments necessary for a fair presentation. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024. Operating results for interim periods are not necessarily indicative of operating results for an entire fiscal year or any other future periods. The accompanying unaudited condensed consolidated financial statements include the accounts of ClearSign and its subsidiary. Intercompany balances and transactions have been eliminated in consolidation. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. 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. Research and development costs have been offset by funds received, if any, from strategic partners in cost sharing and/or collaborative projects. During the three and nine months ended September 30, 2025, the Company received no funds from these types of arrangements. During the three and nine months ended September 30, 2024, the Company received $ 28 thousand and $ 135 thousand, respectively, from these types of arrangements. ​ Foreign Operations The accompanying unaudited condensed consolidated balance sheets as of September 30, 2025 and December 31, 2024 include assets amounting to approximately $ 145 thousand and $ 145 thousand, respectively, relating to the operations of ClearSign Asia Limited. The Beijing registered capital requirement is $ 350 thousand, which is required to be paid by June 30, 2032, $ 211 thousand of which has been paid as of September 30, 2025. On August 22, 2024, the Board authorized management to move forward with filing for dormancy with Chinese regulators to suspend the Company’s Beijing, China operations. A dormancy filing allows the Company to keep its China legal entity in a suspended status for up to three years . The Company can revive its China operations at any time during those three years with minimal cost impact. The dormancy filing became effective as of March 12, 2025. 7 ​ Table of Contents Recently Issued Accounting Pronouncements In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”) to enhance the transparency and decision-making usefulness of income tax disclosures by requiring additional information on an entity's tax rate reconciliation, as well as income taxes paid. ASU 2023-09 is effective for our reporting period beginning January 1, 2025. We are currently assessing the impact that the adoption of ASU 2023-09 will have on the disclosures in our annual consolidated financial statements. In November 2024, FASB issued ASU No. 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40) (“ASU 2024-03”). ASU 2024-03 requires enhanced disclosures about types of expenses, including purchases of inventory, employee compensation, depreciation, and amortization, in commonly presented expense captions. The amendments are effective for fiscal years beginning after December 15, 2026, and interim periods beginning after December 15, 2027, with early adoption permitted. Entities may apply the amendments prospectively or retrospectively to any or all prior periods presented in the financial statements. We are currently evaluating the impact that this guidance will have on the disclosures within our consolidated financial statements. While ASU 2024-03 will impact only our disclosures and not our financial condition and results of operations, we are assessing when we will adopt the ASU 2024-03. In May 2025, FASB issued ASU No. 2025-04, Compensation—Stock Compensation (Topic 718) and Revenue from Contracts with Customers (Topic 606): Clarifications to Share-Based Consideration Payable to a Customer (“ASU 2025-04”), which clarifies the guidance on the accounting for share-based payment awards that are granted by an entity as consideration payable to its customer, with the intent to reduce diversity in practice and improve existing guidance by revising the definition of a “performance condition” and eliminating a forfeiture policy election for service conditions associated with share-based consideration payable to a customer. ASU 2025-04 also clarifies the guidance in Topic 606 on the variable consideration constraint does not apply to share-based consideration payable to a customer “regardless of whether an award’s grant date has occurred.” ASU 2025-04 is effective for our reporting period beginning January 1, 2027, with early adoption permitted. We are currently assessing the impact that the adoption of ASU 2025-04 will have on the disclosures in our annual consolidated financial statements. ​ In July 2025, the FASB issued ASU 2025-05, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets ("ASU 2025-05"), which amends ASC 326-20 to provide a practical expedient (for all entities) and an accounting policy election (for all entities, other than public business entities, that elect the practical expedient) related to the estimation of expected credit losses for current accounts receivable and current contract assets that arise from transactions accounted for under Revenue from Contracts with Customers (“ASC 606”). The standard is effective for annual reporting periods beginning after December 15, 2025, including interim periods, and allows for early adoption. The Company is currently evaluating the impacts of the adoption of ASU 2025-05 on the consolidated financial statements and related disclosures. ​ ​ 8 ​ Table of Contents Note 3 – Fixed Assets, Net Fixed Assets, Net Fixed assets, net are summarized as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, ​ December 31, ​ (in thousands) 2025 2024 Office furniture and equipment ​ $ 103 ​ $ 99 ​ Leasehold improvements ​ 43 ​ 43 ​ ​ ​ ​ 146 ​ ​ 142 ​ Accumulated depreciation and amortization ​ ( 103 ) ​ ( 85 ) ​ ​ ​ ​ 43 ​ ​ 57 ​ Operating lease ROU assets, net ​ ​ 180 ​ ​ 181 ​ Total ​ $ 223 ​ $ 238 ​ ​ Depreciation expense for the three and nine months ended September 30, 2025 was $ 7 thousand and $ 19 thousand, respectively. Depreciation expense for the three and nine months ended September 30, 2024 was $ 4 thousand and $ 15 thousand, respectively. Leases The Company leases office space in Tulsa, Oklahoma, Seattle, Washington, and Beijing, China. During May 2025, the Company renewed its Beijing, China lease for 24 months with monthly rent at approximately $ 3 thousand. As a result of this renewal, the Company increased the right-of-use (“ROU”) asset and lease liability by $ 68 thousand during the nine months ended September 30, 2025. ​ During October 2024, the Company entered into a sub-lease agreement to re nt office space in Seattle for approximately $ 2 thousand per month for twelve months . The Seattle lease is considered a short-term lease, as the lease term is 12 months or less from the commencement date. The Seattle lease was renewed in October 2025 with similar terms. The short-term lease expense for the three and nine months ended September 30, 2025 was approximately $ 6 thousand and $ 17 thousand, respectively. The short-term lease expense for the three and nine months ended September 30, 2024 was approximately $ 5 thousand and $ 16 thousand, respectively. The Tulsa and Beijing leases are classified as operating leases, each with remaining terms of approximately two years ; contractual language requires renewal negotiations to occur at or near termination. These leases are normal and customary for office space, in that, contractual guarantees exist requiring the lessee return the premises to its original functional state. ​ The Tulsa lease contains fixed annual lease payments that increase annually by 2 %. The Seattle, Tulsa, and Beijing total monthly minimum rent is approximately $ 10 thousand, in the aggregate. Operating lease costs for the three and nine months ended September 30, 2025 were $ 24 thousand and $ 73 thousand, respectively. Operating lease costs for the three and nine months ended September 30, 2024 were $ 25 thousand and $ 73 thousand, respectively. 9 ​ Table of Contents Supplemental balance sheet information related to operating leases is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, ​ ​ December 31, ​ (in thousands) ​ ​ 2025 ​ ​ 2024 ​ Operating lease ROU assets, net ​ $ 180 ​ $ 181 ​ Lease Liabilities: ​ ​ ​ ​ ​ ​ ​ Current lease liabilities ​ $ 94 ​ $ 75 ​ Long term lease liabilities ​ ​ 91 ​ ​ 113 ​ Total lease liabilities ​ $ 185 ​ $ 188 ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted average remaining lease term (in years): ​ 1.9 ​ ​ 2.6 ​ Weighted average discount rate: ​ 4.4 % ​ 5.3 % ​ ​ Supplemental cash flow information related to operating leases is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Nine Months Ended ​ ​ September 30, (in thousands) ​ ​ 2025 ​ ​ 2024 Cash paid for amounts included in the measurement of lease liabilities: ​ ​ ​ ​ ​ ​ Operating cash flows used in operating leases ​ $ 74 ​ $ 73 Non-cash impact of new leases and lease modifications ​ ​ ​ ​ ​ ​ Change in operating lease liabilities ​ $ 68 ​ $ 29 Change in operating lease ROU assets ​ $ 68 ​ $ 32 ​ Minimum future payments under the Company’s operating lease liabilities as of September 30, 2025 are as follows: ​ ​ ​ ​ ​ (in thousands) ​ ​ ​ ​ ​ 2025 (remaining) $ 25 2026 ​ 101 2027 ​ ​ 68 Total future lease payments ​ ​ 194 Less: imputed interest ​ ​ ( 9 ) ​ ​ $ 185 ​ ​ ​ ​ 10 ​ Table of Contents Note 4 – Patents and Other Intangible Assets Patents and other intangible assets are summarized as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, ​ December 31, ​ (in thousands) 2025 2024 Patents ​ ​ ​ ​ ​ ​ ​ Patents pending ​ $ 378 ​ $ 346 ​ Issued patents ​ 1,076 ​ 1,034 ​ ​ ​ 1,454 ​ 1,380 ​ Trademarks ​ ​ ​ ​ ​ Registered trademarks ​ 86 ​ 86 ​ ​ ​ 86 ​ 86 ​ Other ​ 8 ​ 8 ​ ​ ​ 1,548 ​ 1,474 ​ Accumulated amortization ​ ( 770 ) ​ ( 644 ) ​ ​ ​ $ 778 ​ $ 830 ​ ​ Amortization expense for three and nine months ended September 30, 2025 was $ 41 thousand and $ 126 thousand, respectively. ​ Amortization expense for three and nine months ended September 30, 2024 was $ 43 thousand and $ 123 thousand, respectively. ​ ​ Future amortization expense associated with issued patents and registered trademarks as of September 30, 2025 is as follows: ​ ​ ​ ​ ​ (in thousands) ​ ​ ​ 2025 (remaining) $ 36 2026 ​ 134 2027 ​ 110 2028 ​ 74 2029 ​ 34 Thereafter ​ 4 ​ ​ $ 392 ​ The amortization life for patents ranges between three to five years and trademark lives are set at ten years . The Company does not amortize patents or trademarks classified as pending. ​ During the three and nine months ended September 30, 2025 and 2024, the Company assessed its patent and trademark assets. The Company also evaluated its strategic approach to the pursuit and protection of its intellectual property. It is the intent of the Company to continue to pursue intellectual property protection. If the Company identifies certain assets where the intellectual property does not directly align with its core technology, the Company will impair the intangible asset and write-off the asset as an expense. ​ ​ Note 5 – Revenue, Contract Assets and Contract Liabilities The Company’s contracts with customers generally have performance obligations and a schedule of non-refundable cancellation obligations. Performance obligations typically fall into one of three categories, product shipment, burner performance tests and engineering design. Customer payment milestones are unique to individual contracts and may occur prior to completion of performance obligations. Customer payment terms typically range between thirty and sixty 11 ​ Table of Contents days from the date of billing. Our customer contracts typically have a duration of less than twelve months. Delays in contract performance, if any, typically occur as a result of customer onsite project delays outside of our control. ​ The Company recognized $ 1,029 thousand of revenues and $ 661 thousand of cost of goods sold during the three months ended September 30, 2025. The revenue and cost of goods sold were related to delivering spare parts to multiple customers, delivering a flare order, delivering a mid-stream order, completing a customer witness test, finalizing a Computational Fluid Dynamic (“CFD”) analysis, and providing engineering services. These products and services constitute performance obligations. ​ The Company recognized $ 1,563 thousand of revenues and $ 944 thousand of cost of goods sold during the nine months ended September 30, 2025. The revenue and cost of goods sold relate to spare parts orders for multiple customers, a performance burner test, flare order, engineering services, sales of boiler burners, and the successful completion of CFD analysis. These products and services constitute performance obligations. ​ The Company recognized $ 1,859 thousand of revenues and $ 1,308 thousand of cost of goods sold during the three months ended September 30, 2024. The revenue and cost of goods sold predominantly relate to the delivery of multiple process burners to a single customer. The delivery of products constitutes performance obligations. ​ The Company recognized $ 3,006 thousand of revenues and $ 1,976 thousand of cost of goods sold during the nine months ended September 30, 2024. The revenue and cost of goods sold predominantly relate to the Company’s process burner product line. The Company delivered multiple burners for different customers, successfully completed engineering feasibility studies, including CFD analysis, and fulfilled multiple spare parts orders. These products and services constitute performance obligations. ​ The Company had contract assets of $ 514 thousand and $ 194 thousand at September 30, 2025 and December 31, 2024, respectively. The Company had contract liabilities of $ 1,148 thousand and $ 73 thousand at September 30, 2025 and December 31, 2024, respectively. Of the $ 73 thousand contract liabilities balance at December 31, 2024, the Company recognized revenue of $ 39 thousand and $ 73 thousand during the three and nine months ended September 30, 2025, respectively. ​ Note 6 – Product Warranties ​ A summary of the Company’s warranty liability activity, which is included in accounts payable and accrued liabilities in the accompanying condensed consolidated balance sheets as of September 30, 2025 and December 31, 2024, is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, ​ December 31, ​ (in thousands) ​ 2025 2024 Warranty liability at beginning of year ​ $ 471 ​ $ 110 ​ Accruals ​ 100 ​ 478 ​ Payments ​ ( 176 ) ​ ( 114 ) ​ Changes related to expirations and settlements ​ ​ ( 31 ) ​ ​ ( 3 ) ​ Warranty liability at end of period ​ $ 364 ​ $ 471 ​ ​ ​ Note 7 – Equity Common Stock and Preferred Stock The Company is authorized to issue 87.5 million shares of common stock and 2.0 million shares of preferred stock. Preferences, limitations, voting powers and relative rights of any preferred stock to be issued may be determined by the Board. The Company has not issued any shares of preferred stock. 12 ​ Table of Contents The Company has an At-The-Market (“ATM”) program pursuant to an ATM Offering Agreement with H.C. Wainwright & Co., LLC (“Wainwright”) as sales agent, dated July 17, 2025 (the “Sales Agreement”), pursuant to which the Company may sell shares of common stock with an aggregate offering price of up to $ 10.39 million. As of the date of this report, no shares have been sold pursuant to the Sales Agreement. We previously had an ATM program with Virtu Americas LLC (the “Virtu ATM”), which was terminated effective as of July 12, 2025. ​ The Company is currently subject to the SEC’s “baby shelf rules,” which prohibit companies with a public float of less than $75 million from issuing securities under a “shelf” registration statement in excess of one-third of such company’s public float in a 12-month period. These rules may limit future issuances of shares by the Company under our “shelf” registration statement on Form S-3, including through the ATM program with Wainwright or other securities offerings. ​ Warrants and Pre-Funded Warrants ​ The following table summarizes the activity and outstanding balance of our outstanding warrants and pre-funded warrants as of September 30, 2025, along with the associated weighted average exercise price and weighted average remaining life for such warrants and pre-funded warrants. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Warrants ​ Pre-Funded Warrants (1) ( in thousands, except per share data ) ​ Number ​ Wtd. Avg. Exercise Price ​ Wtd. Avg. Remaining Life (in years) ​ Aggregate Intrinsic Value ​ Number ​ Wtd. Avg. Exercise Price ​ Aggregate Intrinsic Value Outstanding at Beginning of Year ​ 21,295 $ 1.0535 ​ 4.74 $ 8,230 ​ 4,499 $ 0.0001 $ 6,478 Granted ​ — ​ — ​ ​ ​ ​ ​ — ​ — ​ ​ Exercised ​ ( 23 ) ​ 1.0500 ​ ​ ​ ​ ​ ( 1,703 ) ​ 0.0001 ​ ​ Forfeited/Expired ​ — ​ — ​ ​ ​ ​ ​ — ​ — ​ ​ Outstanding at Period End ​ 21,272 $ 1.0535 ​ 3.99 $ — ​ 2,796 $ 0.0001 $ 2,156 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (1) Pre-funded warrants have no expiration date and only expire when exercised in full. ​ ​ ​ Refer to the Company’s Annual Report on Form 10-K for the year ended December 31, 2024 for additional details related to our outstanding warrants and pre-funded warrants. Equity Incentive Plan On June 17, 2021, the Company's stockholders approved and the Company adopted the ClearSign Technologies Corporation 2021 Equity Incentive Plan (the “2021 Plan”) which permits the Company to grant incentive stock options, non-statutory stock options, stock appreciation rights, restricted stock, restricted stock units, performance units, and performance shares, to eligible participants, which includes employees, directors and consultants. The Board’s Human Capital and Compensation Committee (the “Compensation Committee”) is authorized to administer the 2021 Plan. ​ The 2021 Plan provides for an annual increase in available shares equal to the lesser of (i) 10 % of the aggregate number of shares of common stock issued by the Company in the prior fiscal year; or (ii) such number provided by the Compensation Committee; provided, however, that the total cumulative increase in the number of shares available for issuance pursuant to this automatic share increase shall not exceed 400 thousand shares of common stock. In 2025, the Board did not exercise its right to limit the automatic increase. Accordingly, the 2021 Plan share reserve increased by 400 thousand shares. 13 ​ Table of Contents ​ Ending balances for the 2021 Plan is as follows: ​ ​ ​ ​ ​ ​ ​ ​ September 30, ​ December 31, ( in thousands ) 2025 2024 Outstanding options and restricted stock units 2,874 3,316 Reserved but unissued shares under the Plan ​ 2,292 ​ 1,858 Reserved but unissued shares at end of period 5,166 5,174 ​ Stock Options ​ Under the terms of the 2021 Plan, incentive stock options and nonstatutory stock options must have an exercise price at or above the fair market value on the date of the grant. At the time of grant, the Company will determine the period within which the option may be exercised and will specify any conditions that must be satisfied before the option vests and may be exercised. The Company estimates the fair value of stock options on the date of grant using the Black-Scholes option pricing model. ​ As permitted by SEC Staff Accounting Bulletin 107, management utilized the simplified approach to estimate the expected term of the options, which represents the period of time that options granted are expected to be outstanding. Expected volatility has been determined through the Company’s historical stock price volatility. The Company has not made an estimate of forfeitures at the time of the grant, but rather accounts for forfeitures at the time they occur. The risk-free rate for periods within the expected life of the option is based on the U.S. Treasury yield in effect at the time of grant. The Company has never declared or paid dividends and has no plans to do so in the foreseeable future. ​ Equity Incentive Plan Options ​ Compensation expense associated with stock option awards for the three and nine months ended September 30, 2025 totaled $ 4 thousand and $ 42 thousand, respectively. Compensation expense associated with stock option awards for the three and nine months ended September 30, 2024 totaled $ 37 thousand and $ 87 thousand, respectively. ​ A summary of the Company’s 2011 Equity Incentive Plan and the 2021 Plan stock option activity and changes are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, ​ ​ 2025 ( in thousands, except per share data ) ​ Options to Purchase Common Stock ​ Weighted Average Exercise Price ​ Weighted Average Remaining Contractual Life (in years) ​ Aggregate Intrinsic Value Outstanding at beginning of year 2,452 ​ $ 2.04 4.92 $ 496 Granted — ​ $ — ​ ​ ​ Exercised — ​ $ — ​ ​ ​ Forfeited/Expired ( 55 ) ​ $ 2.56 ​ ​ ​ Outstanding at end of period 2,397 ​ $ 2.03 3.89 $ 13 Exercisable at end of period 1,872 ​ $ 1.70 3.49 $ 13 ​ The intrinsic value is the difference between the Company’s common stock price and the option exercise prices multiplied by the number of in-the-money options. This amount changes based on the fair value of the Company’s common stock. ​ At September 30, 2025, there was $ 244 thousand of total unrecognized compensation cost related to non-vested stock option-based compensation arrangements. Vesting criteria ranges from time-based to performance-based. The Company records costs for time-based arrangements ratably across the timeframe, whereas performance-based arrangements require management to continually evaluate predetermined goals against actual circumstances. The maximum contractual term for these options are ten years from the grant date. 14 ​ Table of Contents ​ Inducement Options ​ During the year ended December 31, 2023, the Company granted non-qualified stock options to its Chief Technology Officer to purchase an aggregate of 150 thousand shares of common stock with an exercise price of $ 0.91 per share as a material inducement to accept employment with the Company. These inducement options vest in three equal installments, with one third of the option vesting on the grant date, and each remaining third vesting on the second and third anniversaries of the grant date, subject to continued employment with the Company. The fair value of these inducement options was $ 112 thousand, which was estimated on the grant date using the Black-Scholes valuation model. The compensation expense recognized for these inducement options for the three and nine months ended September 30, 2025 was $ 10 thousand and $ 28 thousand, respectively. The compensation expense recognized for these inducement options for the three and nine months ended September 30, 2024 was $ 9 thousand and $ 28 thousand, respectively. Total unrecognized compensation expense for these inducement options as of September 30, 2025 was $ 4 thousand. ​ These inducement options were granted outside of the 2021 Plan and in accordance with the employment inducement exemption provided under Nasdaq Listing Rule 5635(c)(4). ​ A summary of the Company’s inducement option activity and changes are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, ​ ​ 2025 ( in thousands, except per share data ) ​ Options to Purchase Common Stock ​ Weighted Average Exercise Price ​ Weighted Average Remaining Contractual Life (in years) ​ Aggregate Intrinsic Value Outstanding at beginning of year 491 ​ $ 1.53 3.04 $ 119 Granted — ​ $ — ​ ​ ​ Exercised — ​ $ — ​ ​ ​ Forfeited/Expired — ​ $ — ​ ​ ​ Outstanding at end of period 491 ​ $ 1.53 2.29 $ — Exercisable at end of period 441 ​ $ 1.60 2.54 $ — ​ Restricted Stock Units The Company awards its directors and certain employees restricted stock units (“RSUs”) in lieu of cash payment for compensation. These awards are granted pursuant to the 2021 Plan. Employee vesting criteria is time based, and compensation expense is recognized ratably across the timeframe. The Company pays payroll withholding taxes on behalf of the employee at vesting by withholding shares from the employee’s award to cover the taxes payable in connection with such vesting. The Company accrued taxes for RSU share-based compensation of $ 38 thousand and $ 38 thousand for the nine months ended September 30, 2025 and 2024, respectively. Total unrecognized compensation expense for employee RSUs as of September 30, 2025 was $ 214 thousand. Director vesting criteria is contingent upon the occurrence of one of four future events, which the Company cannot predict or control. Therefore, compensation expense for director RSUs is not recognized until one of these four future events occur in accordance with FASB ASC Topic 718 , Compensation – Stock Compensation . Total unrecognized compensation expense for director services as of September 30, 2025 was $ 98 thousand. Director compensation is earned on a quarterly basis with the target value of compensation set at approximately $ 75 thousand per quarter, assuming five directors, one chairperson for each committee and two committee members for each of the three committees. As of September 30, 2025, we had four directors. On May 27, 2025, David M. Maley notified the Company that he would not stand for re-election as a director of the Company upon the expiration of his current term, which expired at the Company’s 2025 annual meeting of stockholders held on July 25, 2025. In addition, Judith S. Schrecker and Catharine M. de Lacy both resigned from the Board and its committees effective as of August 4, 2025. 15 ​ Table of Contents A summary of the Company’s RSUs activity is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, ​ ​ 2025 ( in thousands, except per share data ) ​ Number of Shares ​ Weighted Average Grant Date Fair Value ​ Weighted Average Contractual Life (in years) (1) Nonvested at beginning of year 865 ​ $ 0.99 ​ 0.88 Granted 549 ​ $ 0.80 ​ ​ Vested ( 877 ) ​ $ 0.96 ​ ​ Forfeited ​ ( 60 ) ​ $ 0.92 ​ ​ Nonvested at end of period 477 ​ $ 0.84 ​ 1.11 ​ 1) The weighted average contractual life calculation excludes the number of director RSUs that vest upon one of four performance events (refer to discussion above for details). A summary of the Company’s RSU compensation expense is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Three Months Ended ​ For the Nine Months Ended ​ September 30, ​ September 30, ( in thousands, except per share data ) 2025 2024 ​ 2025 2024 Share-based compensation expense $ 765 $ 27 ​ $ 831 $ 369 ​ Weighted average value per share $ 0.93 $ 0.93 ​ $ 0.93 $ 1.29 ​ ​ During the three months ended September 30, 2025, 756 thousand RSUs vested but remained unissued as of September 30, 2025, which impacted share-based compensation expense and accrued liabilities by $ 729 thousand. The 756 thousand RSUs vested as a result of two directors resigning from the Board and another director that chose to not stand for re-election at the Company’s 2025 annual meeting of stockholders. ​ Stock Awards ​ The Company awards employees stock in lieu of cash payment for compensation, typically to satisfy accrued bonus compensation. The awards are granted from the 2021 Plan. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2025 ​ 2024 ( in thousands, except per share data ) ​ Number of Shares Fair Value ​ Weighted Average per Share ​ Number of Shares Fair Value ​ Weighted Average per Share Fair value of stock payments in accrued compensation ​ 326 ​ $ 279 ​ $ 0.85 ​ 307 ​ $ 326 ​ $ 1.06 ​ ​ Consultant Stock Plan ​ The Company’s 2013 Consultant Stock Plan (the “Consultant Plan”) provides for the granting of shares of common stock to consultants who provide services related to capital raising, investor relations, and making a market in or promoting the Company’s securities. The Company’s officers, employees, and Board members are not entitled to receive grants from the Consultant Plan. The Compensation Committee is authorized to administer the Consultant Plan and establish the grant terms. The Consultant Plan provides for quarterly increases in the available number of authorized shares equal to the lesser of 1 % of any new shares issued by the Company during the quarter immediately prior to the adjustment date or such lesser amount as the Board shall determine. 16 ​ Table of Contents ​ The Consultant Plan activity is as follows: ​ ​ ​ ​ ​ ​ ​ ​ September 30, ​ ( in thousands ) 2025 Reserved but unissued shares at beginning of period ​ ​ 264 ​ Increases in the number of authorized shares ​ ​ 30 ​ Grants ​ ​ ( 98 ) ​ Reserved but unissued shares at end of period ​ 196 ​ ​ The Consultant Plan compensation expense is summarized as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Three Months Ended ​ For the Nine Months Ended ​ September 30, ​ September 30, ( in thousands, except per share data ) 2025 2024 2025 2024 Share-based compensation expense $ 54 ​ $ 20 ​ $ 61 ​ $ 26 Weighted average value per share $ 0.59 ​ $ 0.72 ​ $ 0.62 ​ $ 0.74 ​ ​ ​ ​ ​ Note 8 – Net Loss per Common Share The Company calculates net loss per common stock in accordance with ASC Topic 260, “Earnings Per Share” (“ASC 260”). Basic and diluted net loss per common stock was determined by dividing net loss applicable to common stockholders by the weighted average number of shares of common stock outstanding during the period. Under ASC 260, shares issuable for little or no cash consideration are considered outstanding common stock and included in the computation of basic net loss per share. As such, for the three and nine months ended September 30, 2025 and 2024, the Company included its outstanding pre-funded warrants in its computation of net loss per share. The pre-funded warrants were issued in April and June 2024 and are each exercisable into one share of common stock at an exercise price of $ 0.0001 per share. In addition, 756 thousand shares were included in the weighted average number of shares outstanding for RSUs that vested but were unissued as of September 30, 2025. ​ The following potentially dilutive securities have not been included in the computation of diluted net loss per share for the three and nine months ended September 30, 2025 and 2024, as the result would be anti-dilutive: ​ ​ ​ ​ ​ ​ ​ ​ September 30, ​ September 30, ( in thousands ) ​ 2025 ​ 2024 Stock Options ​ 2,888 ​ 3,148 Restricted Stock Units ​ 477 ​ 768 Warrants ​ 21,272 ​ 21,319 Total shares excluded from calculation ​ 24,637 ​ 25,235 ​ 17 ​ Table of Contents ​ N ote 9 – Commitments and Contingencies Litigation From time to time the Company may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. Litigation is subject to inherent uncertainties and an adverse result in any such matter may harm the Company’s business. As of the date of this report, the Company is not a party to any material pending legal proceedings or claims that the Company believes will have a material adverse effect on the business, financial condition or operating results. Indemnification Agreements The Company maintains indemnification agreements with our directors and officers that may require the Company to indemnify these individuals against liabilities that arise by reason of their status or service as directors or officers, except as prohibited by law. ​ Note 10 – Government Assistance ​ During 2022, the Company was awarded a research grant from the Department of Energy (“DOE”) for approximately $ 250 thousand with the completion of such grant occurring in March 2023. The purpose of the grant was to produce a research paper for a flexible fuel ultra-low NOx process burner capable of burning 100% hydrogen fuel. During 2023, the Company was awarded a Phase 2 grant from the DOE to continue developing this ultra-low NOx hydrogen burner. The Phase 2 grant amount totaled approximately $ 1.6 million over a two-year period. These awards allow the Company to request reimbursements for expenditures such as labor, material, and administrative costs. During the three and nine months ended September 30, 2025, the Company recognized $ 216 thousand and $ 307 thousand in reimbursements from the DOE, respectively. During the three and nine months ended September 30, 2024, the Company recognized $ 116 thousand and $ 332 thousand in reimbursements from the DOE, respectively. ​ Beginning in 2021, the Company received funds relating to the Oklahoma 21 st Century Quality Jobs Act. The estimated duration of the program is up to 10 years and is designed to attract growth industries to Oklahoma. By reporting quarterly salary statistics and meeting agreed upon employment thresholds, the state remits benefit monies to the Company. During three and nine months ended September 30, 2025, the Company did not receive any funds from this program. During three and nine months ended September 30, 2024, the Company recognized $ 17 thousand and $ 64 thousand in government assistance from this program, respectively. ​ Note 11 – Subsequent Events On October 27, 2025, 756 thousand shares of common stock were issued to three former directors to satisfy our outstanding RSU liability recorded as of September 30, 2025 (see “Note 7 – Equity Restricted Stock Units” above for additional information). ​ 18 ​ Table of Contents SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS AND OTHER INFORMATION CONTAINED IN THIS REPORT This Quarterly Report on Form 10-Q (this “Form 10-Q” or “report”) contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and the provisions of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements give our current expectations or forecasts of future events. You can identify these statements by the fact that they do not relate strictly to historical or current facts. You can find many (but not all) of these statements by looking for words such as “approximates,” “believes,” “hopes,” “expects,” “anticipates,” “estimates,” “projects,” “intends,” “plans,” “would,” “should,” “could,” “may,” “will” or other similar expressions in this report. In particular, these include statements relating to future actions; prospective products, applications, customers, and technologies; future performance or results of any products; anticipated expenses; and future financial results. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from our historical experience and our present expectations or projections. Factors that could cause actual results to differ materially from those discussed in the forward-looking statements include, but are not limited to: ● our limited cash, history of losses, and our expectation that we will continue to experience operating losses and negative cash flows in the near future; ● our ability to successfully develop and implement our technologies and achieve profitability; ● our limited operating history; ● our ability to maintain the listing of our common stock on the Nasdaq Capital Market (“Nasdaq”); ● changes in government regulations that could substantially reduce, or even eliminate, the need for our technology; ● emerging competition and rapidly advancing technology in our industry that may outpace our technology; ● customer demand for the products and services we develop; ● the impact of competitive or alternative products, technologies, and pricing; ● our ability to manufacture any products we design; ● general economic conditions and events and the impact they may have on us and our potential customers; ● the impact of global supply-chain constraints and the threat of, or implementation of, tariffs on imported or exported goods and materials may adversely affect our commercialization efforts and business operations; ● our revenue has been highly concentrated among a small number or customers, and our results of operations could be harmed if we lose a key revenue source and fail to replace it; ● the impact of a cybersecurity incident or other technology disruption; ● our ability to protect our intellectual property; ● our ability to obtain adequate financing in the future; ● lawsuits and other claims by third parties or investigations by various regulatory agencies that we may be subjected to; ● our ability to retain and hire personnel with the experience and talent to develop our products and business; ● our success at managing the risks involved in the foregoing items; and ● other factors discussed in this report and in the section titled “Risk Factors” in our most recent Annual Report on Form 10-K. ​ Forward-looking statements may appear throughout this report, including, without limitation, Item 2 “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” The forward-looking statements are based upon management’s beliefs and assumptions and are made as of the date of this report. We undertake no obligation to publicly update or revise any forward-looking statements included in this report. You should not place undue reliance on these forward-looking statements. Unless otherwise stated or the context otherwise requires, the terms “ClearSign,” “we,” “us,” “our” and the “Company” refer to ClearSign Technologies Corporation and its subsidiary, ClearSign Asia Limited. ​ 19 ​ Table of Contents