What changed in this filing

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Item 1A. Risk Factors

2026-03-31 compared with 2025-03-31 · 71 added, 38 removed, 258 unchanged (30% of the section changed)

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The risks described below are not the only risks we face.

Further, these disclosures reflect our beliefs and opinions as to factors that could materially and adversely affect the Company and its securities in the future.

References to past events, if any, are provided by way of example only and are not intended to be a complete listing or a representation as to whether or not such factors have occurred in the past or their likelihood of occurring in the future.

If any of the events described in the following risk factors actually occurs, or if additional risks and uncertainties later materialize that are not presently known to us or that we currently deem immaterial, then our business, prospects, results of operations and financial condition could be materially adversely affected.

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Our business is capital-intensive and requires capital investments in order for it to develop.

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.

technology, and for working capital and other purposes, the timing and amount of which are difficult to ascertain.

Until our technology generates revenues sufficient to support our operations, we plan to obtain the necessary working capital for operations through the sale of our securities, but we may not be able to obtain financing in amounts sufficient to fund our business plans.

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Additionally, some potential customers in our target industries are historically risk-averse and have been slow to adopt new technologies.

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.

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.

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If we cannot complete, or if we experience significant delays in completing, research and development of our technology for use in potential commercial applications, particularly after incurring significant expenditures, our business may fail.

Changes to environmental regulations could make our technology less desirable.

Changes to environmental regulations or future legislation could make our technology less desirable.

The negative environmental impacts of industrial activity have given rise to significant environmental regulation in industrialized countries.

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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.

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.

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.

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.

Further, on February 18, 2026, the EPA published a final rule to rescind the 2009 greenhouse gas endangerment finding (which had concluded that greenhouse gases endanger public health and welfare).

While we currently do not expect this rule to materially impact our business, financial condition and results of operations, and although it is not possible at this time to predict how legislation or new regulations that may be adopted to address greenhouse or toxic gas emissions would impact our business, the impact of the results of further proceedings and rules and potential future greenhouse or toxic gas emission regulations remains uncertain, but it could be material to the extent that these developments make our technology less desirable.

We are subject to sustainability efforts risks that could adversely affect our reputation and our business and results of operations.

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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.

While many companies and investors continue to focus on ESG matters, there has been an increase in anti-ESG initiatives and sentiment which may serve as a concern in the future, particularly in light of recent executive orders by President Trump.

While many companies and investors continue to focus on ESG matters, there has been an

increase in anti-ESG initiatives and sentiment which may serve as a concern in the future, particularly in light of recent executive orders by President Trump.

The 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.

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Our annual revenue has been highly concentrated, with a few customers accounting for a significant percentage of our total revenue.

For the years ended December 31, 2024 and 2023, our two largest customers represented approximately 86% and 87% of total revenue, respectively.

For the years ended December 31, 2025 and 2024, our three largest customers represented approximately 81% and 86% of total revenue, respectively.

We expect that a relatively small number of customers will continue to account for a substantial portion of our revenue for the foreseeable future.

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stop commercial activities relating to our products;

obtain one or more licenses in order to secure the rights to continue the manufacturing or marketing of our products;

obtain one or more licenses

in order to secure the rights to continue the manufacturing or marketing of our products;

or attempt to compete in the market with substantially similar products.

Uncertainties resulting from the initiation and continuation of any litigation could limit our ability to continue some of our operations.

Adverse judgments or settlements in legal proceedings could materially harm our business, financial condition, operating results and cash flows.

We may be a party to claims that arise from time to time in the ordinary course of our business, which may include those related to, for example, our securities offerings, contracts, sub-contracts, protection of confidential information or trade secrets, adversary proceedings arising from customer bankruptcies, stockholder engagement, employment of our workforce and immigration requirements, indemnification and/or advancement obligations or compliance with any of a wide array of state and federal statutes, rules and regulations that pertain to different aspects of our business.

Regardless of the merits of any particular claim, responding to such actions could divert time, resources and management’s attention away from our business operations, and we may incur significant expenses in defending these lawsuits or other similar lawsuits.

The results of litigation and other legal proceedings are inherently uncertain, and adverse judgments or settlements in some of these legal disputes may result in adverse monetary damages, penalties or injunctive relief against us, which could have a material adverse effect on our financial condition, operating results and cash flows.

Any claims or litigation, even if fully indemnified or insured, could damage our reputation and make it more difficult to compete effectively or to obtain adequate insurance in the future.

Furthermore, while we maintain insurance for certain potential liabilities, such insurance does not cover all types and amounts of potential liabilities and is subject to various exclusions as well as deductibles and caps on amounts of coverage.

Even if we believe a claim is covered by insurance, insurers may dispute our entitlement to coverage for a variety of potential reasons, which may affect the timing and, if the insurers prevail, the amount of our available insurance coverage for a particular claim.

Further, whether or not we are named as a party to a particular proceeding or threatened proceeding, we may be subject to indemnification and/or advancement obligations to our current directors and executive officers as well as other third parties, which may include former directors, that could subject us to fees and expenses incurred in connection with any threatened proceedings, or proceedings, and possibly liability for damages or other amounts that may be payable as a result of any judgments or settlements.

We may also be required to initiate expensive litigation or other proceedings to protect our business interests.

There is a risk that we will not be successful or otherwise be able to satisfactorily resolve such claims or litigation.

Litigation and other legal claims are subject to inherent uncertainties.

Those uncertainties include, but are not limited to, litigation costs and attorneys’ fees, unpredictable judicial or jury decisions and the differing laws and judicial proclivities regarding damage awards among the states in which we operate.

Unexpected outcomes in such legal proceedings, or changes in management’s evaluation or predictions of the likely outcomes of such proceedings, could have a material adverse effect on our business, financial condition, results of operations and cash flows.

Our current financial status may increase our default and litigation risks and may make us more financially vulnerable in the face of threatened litigation.

A cybersecurity incident or other technology disruptions could negatively impact our business and our relationships with customers.

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As China’s legal system is still evolving, the interpretation of many laws, regulations and rules is not always uniform and enforcement of these laws, regulations and rules involve uncertainties, which may limit the remedies available in the event of any claims or disputes with third parties.

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;

● more restrictive rules on foreign investment could adversely affect our ability to resume our operations in China.

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.

Foreign Corrupt Practices Act and similar foreign anti-corruption laws generally prohibit companies and their intermediaries from making improper payments or providing anything of value to improperly influence foreign government officials for the purpose of obtaining or retaining business or obtaining an unfair advantage.

While we make every attempt to comply with these laws, our operations outside the United States may increase the risk of violating such laws.

Violations of these laws may result in severe criminal or civil sanctions, could disrupt our business and result in a material adverse effect on our reputation, business and results of operations or financial condition.

We cannot provide assurance that rising inflation will not adversely affect our operations.

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Moreover, our insurance coverage includes customary exclusions and conditions, may not cover certain specialized applications and generally does not cover warranty.

coverage, or a significant warranty claim or series of claims against us, could materially decrease our liquidity, impair our financial condition and adversely affect our results of operations.

A successful product liability claim or series of claims against us, including one or more consumer claims purporting to constitute class actions or claims resulting from extraordinary loss events, in excess of or outside our insurance coverage, or a significant warranty claim or series of claims against us, could materially decrease our liquidity, impair our financial condition and adversely affect our results of operations.

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.

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These imports may be subject to custom requirements, tariffs, and quotas set by governments through mutual agreements or unilateral actions.

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.

tariffs on steel and other imported goods may increase the costs of our foreign sourced materials, and any escalation in the tariffs may increase the impact, including without limitation recent tariffs against goods imported from China, Mexico, and Canada enacted by the current administration, as modified from time to time, and any retaliatory tariffs issued in response thereto.

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.

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Additionally, because the Company’s contracts generally include progress payments from customers upon the completion of certain defined milestones, the revenue recognition of such project will depend on our subcontractor’s services in order for us to be able to achieve such milestones timely.

Any subcontractor delays in fulfilling our contracts may result in delay of revenue recognition by the Company, which in turn can affect our financial condition and results of operations.

Any subcontractor delays in fulfilling our

contracts may result in delay of revenue recognition by the Company, which in turn can affect our financial condition and results of operations.

Macroeconomic pressures in the markets in which we operate may adversely affect our financial results.

Geopolitical issues around the world can impact macroeconomic conditions and could have a material adverse impact on our financial results.

For example, the ultimate impact of the conflict in Ukraine, Israel and Strait of Hormuz on fuel prices, inflation, the global supply chain and other macroeconomic conditions is unknown and could materially adversely affect global economic growth, disrupting discretionary spending habits and generally decreasing demand for our products and services.

For example, the ultimate impact of the conflict in Ukraine, Israel, Venezuela, Iran and Strait of Hormuz on fuel prices, inflation, the global supply chain and other macroeconomic conditions is unknown and could materially adversely affect global economic growth, disrupting discretionary spending habits and generally decreasing demand for our products and services.

While we do not purchase any of significant raw materials directly from these regions, they have significant global reach on commodity prices.

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Since that time, our common stock (Nasdaq:

CLIR) has traded as low as $0.35 per share and as high as $11.75 per share based upon daily closing prices, and day-to-day trading has been volatile at times.

CLIR) has traded as low as $3.50 per share (or $0.35 per share on a pre-reverse stock split basis) and as high as $117.50 per share (or $11.75 per share on a pre-reverse stock split basis) based upon daily closing prices, and day-to-day trading has been volatile at times.

This volatility may continue or increase in the future.

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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.

For instance, the securities issued in our recent equity offerings (see “Note 8 – Equity” for additional information), as well as the Warrant Shares, have been registered for resale and are freely tradable without restriction or further registration under the Securities Act.

For instance, the securities issued in our recent equity offerings (see “Note 9 – Equity” for additional information), as well as the shares of common stock underlying our outstanding warrants, have been registered for resale and are freely tradable without restriction or further registration under the Securities Act.

As a result, a substantial number of shares of common stock may be sold in the public market, subject to certain beneficial ownership restrictions.

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If we raise additional funds by issuing debt securities, the holders of these debt securities would similarly have some rights senior to those of the holders of shares of common stock, and the terms of these debt securities could impose restrictions on operations and create a significant interest expense for us which could have a materially adverse effect on our business and results of operations.

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 will have broad discretion as to the proceeds that we receive from the cash exercise by any holder of our outstanding warrants, and we may not use the proceeds effectively.

We may receive up to approximately $22.4 million in aggregate gross proceeds from cash exercises of our outstanding warrants based on the per share exercise price of such warrants, and to the extent that we receive such proceeds, we intend to use the net proceeds from cash exercises of the warrants for working capital, research and development, marketing and sales, and general corporate purposes.

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The failure to use such funds by us effectively could have a material adverse effect on our business, financial condition, operating results and cash flow.

You may experience future dilution as a result of issuance of the Warrant Shares, future equity offerings by us and other issuances of our common stock or other securities.

In addition, the issuance of the Warrant Shares, to the extent the Warrants are exercisable, and future equity offerings and other issuances of our common stock or other securities may adversely affect our common stock price.

You may experience future dilution as a result of the issuance of the Warrant Shares and other issuances of our common stock or other securities.

You may experience future dilution as a result of issuance of the shares of common stock underlying our outstanding warrants, future equity offerings by us and other issuances of our common stock or other securities.

In addition, the issuance of the shares of common stock underlying our outstanding warrants, to the extent our outstanding warrants are exercisable, and future equity offerings and other issuances of our common stock or other securities may adversely affect our common stock price.

You may experience future dilution as a result of the issuance of the shares of common stock underlying our outstanding warrants and other issuances of our common stock or other securities.

In order to raise additional capital, if needed, we may in the future offer additional shares of our common stock or other securities convertible into or exchangeable for our common stock at prices that may not be the same as the price per share as prior issuances of common stock.

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The price per share at which we sell additional shares of our common stock or securities convertible into common stock in future transactions may be higher or lower than the prices per share for previous issuances of common stock or securities convertible into common stock paid by certain investors.

In addition, the exercise price of the Warrants may be equal to or greater than the price per share previously paid by certain investors.

In addition, the exercise price of our outstanding warrants may be equal to or greater than the price per share previously paid by certain investors.

You will incur dilution upon exercise of any outstanding stock options, warrants or upon the issuance of shares of common stock under our equity incentive programs.

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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”).

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.

As of December 31, 2025, we had outstanding options for the purchase of approximately 287 thousand shares of common stock (or 2,871 thousand shares on a pre-reverse stock split basis) and 53 thousand shares underlying outstanding restricted stock units

(“RSUs”) (or 526 thousand shares on a pre-reverse stock split basis).

Under the ClearSign Technologies Corporation 2021 Equity Incentive Plan (as it may be amended from time to time, the “2021 Plan”) and the ClearSign Technologies Corporation 2013 Consultant Stock Plan (the “2013 Consultant Plan,” and collectively, the “Plans”), we have the ability to grant awards of shares, RSU’s or options to purchase shares of our common stock to employees, officers, directors, independent contractors and agents.

Furthermore, the Plan provides for increases in the number of shares available for awards based on the terms outlined in such Plan.

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This could cause the market price of our common stock to decline.

The effective increase in the number of shares of our common stock available for issuance as a result of our reverse stock split could result in further dilution to our existing stockholders and have antitakeover implications.

The reverse stock split alone had no effect on our authorized capital stock, and the total number of authorized shares remains the same as before the reverse stock split.

The reverse stock split of our issued and outstanding shares increased the number of shares of our common stock (or securities convertible or exchangeable for our common stock) available for issuance by decreasing the number of shares of our common stock issued and outstanding.

The additional available shares are available for issuance from time to time at the discretion of the Board when opportunities arise, without further stockholder action or the related delays and expenses, except as may be required for a particular transaction by law, the rules of any exchange on which our securities may then be listed, or other agreements or restrictions.

Any issuance of additional shares of our common stock would increase the number of outstanding shares of our common stock and (unless such issuance was pro-rata among existing stockholders) the percentage ownership of existing stockholders would be diluted accordingly.

In addition, any such issuance of additional shares of our common stock could have the effect of diluting the earnings per share and book value per share of outstanding shares of our common stock.

Additionally, the effective increase in the number of shares available for issuance could, under certain circumstances, have anti-takeover implications.

For example, the additional shares of common stock that have become available for issuance could be used by us to oppose a hostile takeover attempt or to delay or prevent changes in control or our management.

Although our reverse stock split is prompted by other considerations and not by the threat of any hostile takeover attempt, stockholders should be aware that our reverse stock split could facilitate future efforts by us to deter or prevent changes in control, including transactions in which our stockholders might otherwise receive a premium for their shares over then-current market prices.

If we are unable to satisfy the continued listing requirements of the Nasdaq, our common stock could be delisted and the price and liquidity of our common stock may be adversely affected.

Our common stock may lose value and could be delisted from Nasdaq due to several factors or a combination of such factors.

While our common stock is currently listed on Nasdaq, we can give no assurance that we will be able to satisfy the continued listing requirements of Nasdaq in the future, including, but not limited to, the corporate governance requirements and the minimum closing bid price requirement or the minimum equity requirement.

On April 1, 2025, we received a deficiency letter from the Nasdaq Listing Qualifications Department of Nasdaq notifying us that, for 30 consecutive business days, the closing bid price of our common stock was below the minimum $1.00 per share required for continued listing pursuant to Nasdaq Listing Rule 5550(a)(2).

The Nasdaq deficiency letter had no immediate effect on the listing of our common stock, and we were initially given 180 calendar days, or until September 29, 2025, to regain compliance with Nasdaq Listing Rule 5550(a)(2), which was extended by an additional 180 calendar days, or March 30, 2026.

On March 16, 2026, we effected a reverse stock split of our issued and outstanding shares of common stock at a ratio of one post-split share for every 10 pre-split shares.

We received written confirmation from Nasdaq notifying us that we have regained compliance with Nasdaq Listing Rule 5550(a)(2) on March 30, 2026.

There can be no assurance that we will be able to maintain compliance with the continued listing requirements for Nasdaq.

If we fail to maintain compliance with any such continued listing requirement, there can also be no assurance that we will be able to regain compliance with any such continued listing requirement in the future or that our common stock will not be delisted in the future.

If we were to be delisted, we would expect our common stock to be traded in the over-the-counter market which could adversely affect the liquidity of our common stock.

Additionally, we could face significant material adverse consequences, including:

● a limited availability of market quotations for our common stock;

● a decreased ability to issue additional securities or obtain additional financing in the future;

● reduced liquidity for our stockholders;

● potential loss of confidence by customers, collaboration partners and employees;

● loss of institutional investor interest.

In the event of a delisting, we can provide no assurance that any action taken by us to restore compliance with listing requirements would allow our common stock to become listed again, stabilize the market price or improve the liquidity of our common stock, prevent our common stock from dropping below the Nasdaq minimum bid price requirement, or prevent future non-compliance with Nasdaq’s listing requirements.

We have the right to issue shares of preferred stock.

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 authorized to issue 2 million shares of “blank check” preferred stock, with such rights, preferences and privileges as may be determined from time-to-time by the Board.

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.

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We have incurred and will incur significant costs as a result of being a public company that reports to the Securities and Exchange Commission and our management is required to devote substantial time to meet compliance obligations.

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.

As a public company reporting to the SEC, we incur significant legal, accounting, investor relations, printing, board compensation, and other expenses that we did not incur as a private company.

These costs totaled $3.0 million in 2025.

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In addition, there are significant corporate governance and executive compensation-related provisions in the Dodd-Frank Wall Street Reform and Protection Act that as we grow could increase our legal and financial compliance costs, make some activities more difficult, time-consuming or costly and may also place undue strain on our personnel, systems and resources.

Our management and other personnel continually devote a substantial amount of time to these compliance

Our management and other personnel continually devote a substantial amount of time to these compliance initiatives.

Furthermore, these rules and regulations may make it more difficult and more expensive for us to obtain director and officer liability insurance, and we may be required to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors