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Item 9A. Controls and Procedures

2026-03-31 compared with 2025-03-31 · 260 added, 662 removed, 689 unchanged (57% of the section changed)

23 unchanged sentences

DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.

The following table sets forth the names and ages of the directors and executive officers serving as of the date hereof.

Our officers are appointed by, and serve at the pleasure of, the Board.

Colin James Deller

Chief Executive Officer and Director

Chief Financial Officer

Director and Lead Independent Director

Our business, property and affairs are managed by, or under the direction of, our Board, in accordance with the DGCL and our bylaws.

Members of the Board are kept informed of our business through discussions with the Chief Executive Officer, Chief Financial Officer and other key members of management, by reviewing materials provided to them by management, and by participating in meetings of the Board and its committees.

Stockholders may communicate with the members of the Board, either individually or collectively, or with any independent directors, individually or as a group, by writing to the Board at 8023 East 63 rd Place, Suite 101, Tulsa, Oklahoma 74133.

These communications will be reviewed by the Company’s Secretary who, depending on the subject matter, will (i) forward the communication to the director or directors to whom it is addressed or who is responsible for the topic matter, (ii) attempt to address the inquiry directly (for example, where it is a request for publicly available information or a stock related matter that does not require the attention of a director), or (iii) not forward the communication if it is primarily commercial in nature or if it relates to an improper or irrelevant topic.

At each meeting of the Nominating and Corporate Governance Committee (the “Governance Committee”), the Company’s Secretary presents a summary of communications received, if any, and will make those communications available to any director upon request.

Executive Officers

Colin James Deller, Chief Executive Officer and Director

Deller joined us as our President in February 2019, transitioned to the office of Chief Executive Officer on April 1, 2019 and was appointed as a director on February 13, 2020.

Deller began his career at Hamworthy Combustion while also completing his Ph.D.

Deller joined Callidus, where he was employed in Project Engineering and Sales, and over the course of ten years advanced to serve as Chief Combustion Engineer and Manager of Burner Order Execution before being promoted to oversee Callidus’ entire burner business.

From 2010 until he left Callidus, following the acquisition of Callidus by Honeywell, Dr.

Deller served as General Manager with full profit and loss accountability for the Honeywell UOP Callidus burner business worldwide.

During that time, he led his team in developing new international markets, including developing a leading market position in China.

From May 2018 until he joined the Company, Dr.

Deller served as the interim Global Operations Director for the entire Honeywell International UOP Callidus business, which includes flares and thermal oxidizers in addition to burners.

Deller has a Bachelor of Engineering in mechanical engineering from Portsmouth Polytechnic, U.K., a doctorate in flame chemistry from the University of Portsmouth, U.K., and an MBA from The University of London.

Brent Hinds, Chief Financial Officer

Hinds was appointed as our Vice President of Finance, Controller, Treasurer, principal financial officer, and principal accounting officer on October 18, 2021.

Hinds was promoted to Chief Financial Officer effective August 8, 2023.

Prior to joining the Company, from July 2014 to September 2021, Mr.

Hinds was employed by Enovation Controls, Inc.

(“Enovation Controls”).

Enovation Controls is a stand-alone subsidiary of Helios Technologies (NASDAQ:

HLIO), focused on global sales, manufacturing, and application engineering operations, working directly with original equipment manufacturers.

Hinds successively held the positions of Assistant Controller, Controller and Vice President of Finance.

In his capacity, Mr.

Hinds was responsible for overseeing accounting and finance department activities to ensure accuracy and timely dissemination of reports, including income statement, balance sheet, and cash flow.

Prior to joining Enovation Controls, Mr.

Hinds worked for Stinnett & Associates, LLC, a professional

advisory firm for public and private companies, where he established risk-based audit programs to determine the adequacy and effectiveness internal control environments.

Additionally, Mr.

Hinds served as a compliance analyst at Baker Hughes Company.

Hinds earned his Bachelor of Science in Accounting from Oklahoma State University and is a certified public accountant.

Non-Employee Directors of the Board

We believe that the finance and investment experience that Mr.

Maley and Mr.

Silva bring to our Board includes experience in analyzing the operations of businesses, and particularly smaller capitalized companies, to determine the likelihood of success.

Schrecker has significant financial, business, operational and industrial experience.

de Lacy and Mr.

Maley have significant experience in the areas of corporate governance and risk management.

In addition, Ms.

de Lacy has experience in the areas of environmental policy and cybersecurity.

We believe that their experience, together with the expertise brought to our operations by Dr.

Deller, will help us achieve our goals of proving commercial viability of our products, generating interest from end users and original equipment manufacturers and licensing our technology.

For these reasons, we concluded that each of these individuals below should serve as a director.

Schrecker, Director and Lead Independent Director

Schrecker became a director in February 2021.

Schrecker brings more than 40 years of financial and operating leadership and board participation with broad international experience.

From May 2016 until June 2020, Ms.

Schrecker was VP of Finance of Flat Rolled Products at ATI, Inc .

, a global manufacturer of technically advanced specialty materials and complex components, overseeing revenues of over $1 billion.

Prior to that, Ms .

Schrecker was Chief Financial Officer of Alcoa’s Global Rolled Products business and a member of the executive council of the company.

Under her leadership, the Global Rolled Products business achieved historically high profitability.

Schrecker previously served on the board of directors of Finacity Corporation and Dress for Success Worldwide.

She attended the University of Pittsburg Graduate School of Public and International Affairs along with a B.A.

in History, Economics, and Latin American Studies from Temple University.

Additionally, Ms.

Schrecker is a 2020 Exceptional Women Awardees Foundation (EWA) recipient.

de Lacy, Director

de Lacy became a director in February 2023.

She is a widely recognized expert in ESG/Sustainability initiatives, public affairs, corporate governance, and risk management.

de Lacy has worked for both public and privately held companies including Albemarle Corporation, the Clorox Corp., Sun Products, Cabot Corp, AlliedSignal, and Occidental Petroleum Corp.

de Lacy is the co-founder and Managing Director of Riar Associates, LLC, a management consultancy where she continues to work as a business advisor and subject matter expert on climate, sustainability, business strategy, public policy and advocacy, communications, and risk management matters for public and private companies.

She is a former board member of TORC Oil & Gas, Ltd.

(TSX:TOG), the Environmental Law Institute’s Leadership Council and the Executive Advisory Council of the Responsible Battery Coalition.

She also currently serves as a board member of privately-held NTES LLC, which provides strategic, financial, and operations management expertise in evolving energy markets and real estate investment, and the U.S.A.

Bobsled/Skeleton Foundation, and she has been a member of the advisory board for Lithium Technologies, a private company focused on developing innovative technologies to extract lithium from waste rock since June 2024.

de Lacy holds a Board Certificate in ESG from UC Berkeley's Law School, is a Certified Director through the Harvard Business School , and is a Qualified Risk Director® and holds a certificate in Cyber Risk Governance®.

de Lacy received a B.A.

from Merrimack College , and an M.S.

from Tufts University .

Maley, Director

Maley became a director in April 2024.

Maley brings forty years of broad investment experience with more than half of that period focused on micro-cap equity research and portfolio management.

Maley currently serves as the Chief Investment Officer and Chief Compliance Officer of 1102 Partners, LLC, a family office, and investment advisory firm founded by Mr.

Maley in 2021.

Prior to his current role, Mr.

Maley served as a Senior Vice President at Ariel Investments, where he was Lead Portfolio Manager for the Ariel Micro-Cap Value Product fund and the Ariel Small-Cap Deep Value Product fund.

During that time, he was named a “Micro-Cap Superstar” in a 2014 Red Chip Review publication.

Maley also took on management of the domestic trading team at Ariel Investments and chaired the Trade Oversight Committee during his tenure at Ariel Investments.

Prior to Ariel Investments, Mr.

Maley founded and ran Maple Hill Capital Management and served as a Vice President and Senior Portfolio Manager for ultra-high net worth clients at Harris Bank.

Maley began his career in institutional equity sales at Goldman Sachs.

He received an M.B.A from the University Of Chicago Booth School of Business and a B.B.A in finance from the University Of Notre Dame.

Todd Silva, Director

Silva became a director in August 2024.

Silva brings over 30 years of leadership and finance experience in industries spanning industrials, financial services, technology, media, health care and others.

Silva is the Chief Financial Officer of Radiance Therapeutics, Inc., an ophthalmic medical device company.

Prior to his current role, Mr.

Silva served as the Chief Financial Officer of Point Pickup Technologies, Inc., a logistics platform service where he worked to consummate and integrate acquisitions, raise capital through various private transactions and assist with corporate governance tasks for their board of directors.

Additionally, Mr.

Silva was the founder and director of Silva Partnership & Co., a firm providing corporate advisory services to early-stage technology businesses.

Prior to Silva Partnership & Co., Mr.

Silva was the executive director of corporate advisory services at Las Olas Capital Partners, a registered investment advisor firm where he advised a variety of companies on mergers and acquisitions, capital raises, recapitalizations and the launch of special purpose vehicles to invest in corporate and real estate transactions.

Silva spent the earlier part of his career as a founder, portfolio manager, and research analyst in the institutional investment management industry in New York.

Silva holds an MBA from Columbia University and a BS in economics and finance from Lehigh University.

Independence of Directors

In determining the independence of our directors, we apply the definition of “independent director” provided under the listing rules of The Nasdaq Stock Market LLC (“Nasdaq”).

On an annual basis, the Board reviews the independence of all directors under guidelines established by Nasdaq and in light of each director’s background, employment and affiliations with the Company and members of management, as well as significant holdings of Company securities.

This review considers all known relevant facts and circumstances in making an independence determination.

The Board concluded its annual review of director independence in March 2025.

After considering all relevant facts and circumstances, the Board affirmatively determined that all of the directors serving on the Board, including those nominated for election at the Annual Meeting, are independent within the meaning of Nasdaq Listing Rule 5605(a)(2) and Rule 10A-3(b) promulgated under the Exchange Act, with the exception of Colin James Deller.

Board of Directors and Committees

The Board has three standing committees:

the Audit Committee, human capital and compensation committee (the “Compensation committee”) and the nominating and governance committee (collectively, the “Board Committees”).

All member of the Board Committees are non-employee directors who are deemed independent.

None of our directors or executive officers have been involved in a legal proceeding that requires disclosure pursuant to Item 401(f) of Regulation S-K promulgated under the Exchange Act.

None of our directors or executive officers were selected as a result of an arrangement or understanding between him/her and any other person, except for Mr.

Silva, who was appointed as a director to our Board in connection with that certain Voting Agreement, dated July 12, 2018, between us and the SPV, which has been terminated as of February 19, 2025 (see “Recent Developments – Termination of clirSPV LLC Agreement” above for more information).

Audit and Risk Committee

As of the date hereof, the Audit Committee was comprised of Judith S.

Schrecker (Chairperson), Catharine M.

de Lacy, and David M.

Each member of the Audit Committee is financially literate and our Board has determined that Judith S.

Schrecker qualifies as an “audit committee financial expert,” as defined in applicable SEC rules.

The role of the Audit Committee includes, but is not limited to, the following:

● overseeing management’s preparation of our financial statements and management’s conduct of the accounting and financial reporting processes;

● appointing, compensating, retaining, and overseeing the work of the independent registered public accounting firm engaged for the purpose of preparing or issuing an audit report or performing other audit, review or attest services for the Company;

● overseeing management’s maintenance of internal controls and procedures for financial reporting at least annually;

● overseeing risks related to cybersecurity, including the security of corporate information and the steps management takes to monitor and control cybersecurity risks;

● overseeing our compliance with applicable legal and regulatory requirements, including without limitation, those requirements relating to financial controls and reporting;

● overseeing the independent registered public accounting firm’s qualifications and independence;

● preparing the report required by the rules of the Securities and Exchange Commission to be included in our proxy statement;

● discharging such duties and responsibilities as may be required of the Audit Committee by the provisions of applicable laws, rules or regulations.

The Audit Committee is authorized (without seeking Board approval) to retain or terminate special legal, accounting or other advisors and may request any officer or employee of the Company or the Company’s outside counsel or independent registered public accounting firm to meet with any members of, or advisors to, the Audit Committee.

A copy of the charter of the Audit Committee is available on our website at www.clearsign.com (under “Investors - Corporate Governance”).

Human Capital and Compensation Committee

As of the date hereof, the Compensation Committee was comprised of Judith S.

Schrecker (Chairperson), Catharine M.

de Lacy, and David M.

The role of the Compensation Committee is to:

● review, approve, and recommend to the Board our compensation and benefit s policies generally and the annual compensation (base salary, bonus and other benefits) for all of our executives, including our Chief Executive Officer;

● administer the 2021 Plan, the 2013 Consultant Plan and the ClearSign Technologies Corporation 2011 Equity Incentive Plan (the “2011 Plan,” and collectively, the “Equity Incentive Plans”);

● annually review and make recommendations to the Board with respect to the compensation of non-executive directors , including any incentive plan compensation.

A copy of the charter of the Compensation Committee is available on our website at www.clearsign.com (under “Investors – Corporate Governance”).

The Compensation Committee may engage outside advisers, including outside auditors, attorneys, and consultants, as it deems necessary to discharge its responsibilities.

The Compensation Committee has sole authority to retain and terminate any compensation expert or consultant used to provide advice on compensation levels or assist in the evaluation of director, Chief Executive Officer or senior executive compensation, including sole authority to approve the fees of any expert or consultant and other retention terms.

In addition, the Compensation Committee considers, but is not bound by, the recommendations of our Chief Executive Officer with respect to the compensation packages of our other executive officers.

Pursuant to the terms of the 2021 Plan, the Compensation Committee may delegate to one or more officers of the Company the authority to grant awards under the 2021 Plan to participants who are not insiders of the Company.

Nominating and Corporate Governance Committee

As of the date hereof, the Governance Committee was comprised of Catharine M.

de Lacy (Chairperson), Judith S.

Schrecker, and David M.

The role of the Governance Committee is to:

● evaluate from time to time the appropriate size (number of members) of the Board and recommend any increase or decrease;

● determine the desired skills and attributes of members of the Board, taking into account the needs of the business and listing standards;

● establish criteria for prospective members, conduct candidate searches, interview prospective candidates, and oversee programs to introduce the candidate to us, our management, and operations;

● review planning for succession to the position of Chief Executive Officer and other senior management positions;

● annually recommend to the Board persons to be nominated for election as directors;

● annually recommend to the Board the members and leadership of all standing committees, as well as leadership of the Board and to fill vacancies as needed;

● adopt or develop for Board consideration corporate governance principles and policies;

● periodically review and report to the Board on the effectiveness of corporate governance procedures and the Board as a governing body, including conducting an annual self-assessment of the Board and its standing committees.

A copy of the charter of the Governance Committee is available on our website at www.clearsign.com (under “Investors - Corporate Governance”).

Director Qualifications and Diversity

The Board seeks independent directors who represent a diversity of backgrounds, ages and experiences that will enhance the quality of the Board’s deliberations and decisions.

Candidates should preferably have board experience with one or more companies or should have achieved a high level of distinction in their chosen fields.

The Board is particularly interested in maintaining a mix that includes individuals who are active or retired executive officers and senior executives, particularly those with experience in combustion, technology, air pollution control and air emission regulation, intellectual property, start-up companies, research and development, strategic planning, business development, upstream, midstream and downstream oil and gas, energy, finance, accounting and banking, as well as impact investing and environmental, social and governance investing, reporting and/or compliance.

In evaluating nominations to the Board, the Governance Committee also looks for certain personal attributes, such as integrity, ability and willingness to apply sound and independent business judgment, comprehensive understanding of a director’s role as a fiduciary to stockholders and with respect to corporate governance, availability for meetings and consultation on Company matters, and the willingness to assume and carry out such fiduciary responsibilities.

Risk Oversight by the Board of Directors

It is the management’s responsibility to assess and manage the various risks we face.

It is the Board’s responsibility to oversee management in this effort, in order to ensure that risks and uncertainties that may relate to our ongoing operations and to our plans for the future are considered and sought to be managed appropriately.

In exercising its oversight, the Board has allocated some areas of focus to the Board Committees and has retained areas of focus for itself, as more fully described below.

Risks and exposures focused on by the full Board include risk management as a whole as well as strategic, financial and execution risks including safety risks, risks associated with intellectual property, and other current matters that may present material risk to our operations, plans, prospects or reputation.

Throughout the year, the Chief Executive Officer discusses these risks with the Board during meetings that focus on a particular function or aspect of our business.

Audit Committee.

Risks and exposures focused on by the Audit Committee are those associated with financial matters, particularly financial reporting, tax, accounting, disclosure, internal control over financial reporting, cyber, the Foreign Corrupt Practices Act, financial policies, investment guidelines, and credit and liquidity matters.

Governance Committee.

Risks and exposures focused on by the Governance Committee are those relating to corporate governance and management and director succession planning.

Compensation Committee.

Risks and exposures focused on by the Compensation Committee are those associated with leadership assessment and compensation programs and arrangements, including incentive plans, to ensure that compensation incentives are aligned with our risk management objectives.

Board Leadership Structure

Pursuant to our bylaws, the chairman of each Board and stockholder meeting is the Chairman of the Board (the “Chairman of the Board”).

In the absence of a Chairman of the Board, or upon his/her inability or refusal to act as the chairman of a meeting, the Chief Executive Officer serves as the chairman of the meeting, or upon his/her inability or refusal to act as such, the President serves as chairman of the meeting.

Additionally, pursuant to our lead independent director charter, in the absence of a Chairman of the Board, Chief Executive Officer and President, or upon their inability or refusal to act as chairman of a meeting, the lead independent director acts as chairman of a meeting.

The lead independent director charter also provides that the lead independent director acts as chairman of any meeting of the independent and/or non-employee directors of the Board, as applicable.

Schrecker is currently serving as our lead independent director.

The responsibilities of our lead independent director set forth in the lead independent director charter include:

● to act as a liaison between the independent and non-independent directors;

● to develop, maintain and revise the annual Board calendar;

● to review and approve Board meeting agendas;

● to preside and act as chairman of all meetings of the independent and/or non-employee directors of the Board, as applicable;

● to preside and act as chairman of all Board meetings at which the Chairman of the Board, if any, Chief Executive Officer and President are not present;

● other duties as may be assigned to the lead independent director by the Board.

The lead independent director charter provides that the lead independent director must be a member of the Board and be considered independent.

Further, the lead independent director may be elected annually by at least a majority of the independent directors of the Board.

Compensation Committee Interlocks and Insider Participation

None of our prior or current executive officers serves as a member of the Board or Compensation Committee of any entity that has one or more executive officers serving as a member of our Board or the Compensation Committee.

Code of Business Conduct and Ethics

We adopted a Code of Business Conduct and Ethics (the “Code of Ethics”) that applies to our principal executive officer and principal financial and accounting officer and any persons performing similar functions, as well as to our employees, officers, directors, agents and representatives.

The Code of Ethics requires, among other things, that all of the foregoing people avoid conflicts of interest, comply with all laws and other legal requirements, conduct business in an honest and ethical manner, and otherwise act with integrity and in our best interests.

The Code of Ethics is posted on our website at www.clearsign.com.

We will promptly disclose any amendment to, or a waiver from, a provision of our Code of Ethics that applies to members of our board of directors, our principal executive officer, principal financial officer, or persons performing similar functions by posting the information on our website, www.clearsign.com.

We also have a written committee charter for each of our Board Committees that are also posted on our website.

Insider Trading Policy

We maintain an insider trading policy that governs the purchase, sale and/or other dispositions of our securities by our directors, officers and employees, which we believe is reasonably designed to promote compliance with insider trading laws, rules, regulations and any applicable listing standards.

Our insider trading policy also prohibits all directors, officers and employees from engaging in any short sales of our securities, hold our securities in a margin account, or pledge our securities as collateral for a loan.

Family Relationships

There are no family relationships among any of our executive officers of directors.

Delinquent Section 16(a) Reports

Section 16(a) of the Exchange Act requires that our directors, executive officers, and greater than 10% stockholders to file with the SEC initial reports of ownership and reports of changes in ownership of common stock and other equity securities of the Company.

To our knowledge, all Section 16(a) filing requirements applicable to its officers, directors, and greater than 10% stockholders for the years ended December 31, 2024 and 2023, were complied with, except for the following inadvertent delinquent reports:

Deller inadvertently failed to timely disclose one transaction in a Form 4, and Mr.

Hinds inadvertently failed to timely disclose two transactions in a Form 4, both of which were related to their one-time bonus grant from February 2, 2023, in the form of shares of common stock and restricted stock units, as applicable, which was disclosed on a Form 4 filed for each of Dr.

Deller and Mr.

Hinds on February 14, 2023.

Deller and Mr.

Hinds inadvertently failed to timely disclose one transaction relating to the tax withholding disposition in connection with their one-time bonus grants from February 2, 2023.

These transactions were disclosed on an amendment to each of their respective Form 4 filed on February 14, 2023, which amendments were filed on February 26, 2024.

The information required by this item is incorporated by reference to our Proxy Statement for the 2026 Annual Meeting of Stockholders to be filed with the SEC within 120 days of the fiscal year ended December 31, 2025.

EXECUTIVE COMPENSATION.

Executive Officers Compensation

The table below summarizes the total compensation paid to or earned by our Chief Executive Officer and Chief Financial Officer in the years ended December 31, 2024 and 2023, in accordance with Item 402(m)(2) of Regulation S-K.

These officers are referred to herein as the “named executive officers.” The amounts represented in the “Bonus” and “Restricted Stock Awards” column reflects the stock compensation expense recorded by the Company pursuant to ASC 718, “ Compensation-Stock Compensation ” (“ASC 718”), and does not necessarily equate to the income that will ultimately be realized by the named executive officers for such awards.

Summary Compensation Table

Restricted Stock

Name and Principal

Compensation (2)

Chief Executive Officer

Chief Financial Officer

(1) The amounts included in this column are the aggregate dollar amounts of compensation expense recognized by us for financial statement reporting purposes in accordance with ASC 718, and includes amounts from restricted stock awards granted.

For information on the valuation assumptions used in calculating these dollar amounts, see “Note 2 – Summary of Significant Accounting Policies,” and “Note 8 – Equity” to our consolidated financial statements included in this report.

These amounts reflect our accounting expense for these awards and do not reflect the actual economic value that may be realized by the individuals upon vesting of such awards.

(2) Relates to healthcare benefits and employer matching in a defined contribution retirement plan available to all employees.

(3) Bonuses for the year ended December 31, 2024, were accrued in the fiscal year ended December 31, 2024.

The bonuses for the fiscal year ended December 31, 2024, were approved by the Compensation Committee on February 20, 2025, and were paid in shares of common stock during the first quarter of 2025.

Share amounts are calculated by dividing the fixed monetary accrual amount by the closing price of our stock on the day the Compensation Committee approves the bonus payout.

(4) Bonuses for the year ended December 31, 2023, were accrued in the fiscal year ended December 31, 2023.

The bonuses for the fiscal year ended December 31, 2023, were approved by the Compensation Committee on February 22, 2024, and were paid in shares of common stock during the first quarter of 2024.

Share amounts are calculated by dividing the fixed monetary accrual amount by the closing price of our stock on the day the Compensation Committee approves the bonus payout.

(5) Relates to time-based restricted stock awards from our 2021 Plan granted to Mr.

Hinds in the years ended December 31, 2024 and 2023.

These are expensed over the service period when the service conditions associated with the restricted stock award are satisfied in accordance with ASC 718.

Outstanding Equity Awards

The following table sets forth information concerning outstanding equity awards held by our named executive officers at December 31, 2024.

Equity Incentive

Number of Securities

Underlying Unexercised

Number of Restricted

Unearned Options

Option Exercise

Option Expiration

Unexercisable

(1) As of December 31, 2024, these options have fully vested.

(2) Unearned options vest upon completion of performance milestones as outlined in the option award agreement.

The Compensation Committee regularly monitors performance milestones to determine option vesting eligibility.

(3) Restricted stock units vest upon completion of time-based requirements.

Employment Contracts and Change-in-Control Arrangements

Employment Agreement with Colin James Deller

On January 28, 2019 (the “Effective Date”), the Company and Colin James Deller entered into an employment agreement pursuant to which the Company employed Dr.

Deller as its President until April 1, 2019, at which time Dr.

Deller became the Company’s Chief Executive Officer.

Pursuant to the agreement, the Company pays Dr.

Deller an annual salary of $350,000.

As an inducement to accept employment with the Company, Dr.

Deller was also granted an option to purchase 400,000 shares of the Company’s common stock at an exercise price of $1.16 per share and an option to purchase 200,000 shares of the Company’s common stock at an exercise price of $2.25 per share.

Each option has a term of 10 years and has vested as follows:

one-third of the options vested on the Effective Date;

one-third of the options vested on the first anniversary of the Effective Date;

and one-third of the options vested on the second anniversary of the Effective Date.

Deller is also eligible to participate in such healthcare and other benefit programs made available to employees of the Company.

Deller was eligible for annual bonuses with a value of up to 60% of his annual salary during the year ended December 31, 2024, which percentage was subsequently modified by the Compensation Committee on November 13, 2024, to 80% of his annual base salary, effective as of January 1, 2025.

Deller and the Compensation Committee meet annually to establish (i) performance standards and goals (“Standards and Goals”) to be met by him and (ii) bonus targets based on the Standards and Goals that are achieved.

Any bonuses will be paid at the Compensation Committee’s discretion in cash and/or via equity awards made under our 2021 Plan, or any successor plan thereto, of the type of equity award as authorized by the Compensation Committee, which may include options to purchase Company’s common stock to be valued using the Black-Scholes option valuation model, and/or common stock, restricted stock, restricted stock units,

performance stock or performance stock units.

Deller is terminated without cause, if he resigns for any reason, dies, or becomes disabled, he is entitled to certain severance benefits.

Deller may voluntarily resign for any reason by providing us with 30 days’ prior notice.

If the Company terminates Dr.

Deller without cause or he is terminated within 12 months of a change in control, then Dr.

Deller will be entitled to severance benefits, including 12 months of his annual salary.

Offer Letter with Brent Hinds

Brent Hinds received an offer letter from the Company, dated as of September 30, 2021 and effective as of October 18, 2021 (the “Offer Letter”), setting forth the terms of his employment and compensation arrangement, which he accepted.

Pursuant to the Offer Letter, Mr.

Hinds is paid an annual base salary of $200,000 in addition to equity compensation and other benefits set forth in the Offer Letter.

On November 13, 2024, the Compensation Committee approved a raise to Mr.

Hinds’ annual base salary from $200,000 to $220,000, effective as of January 1, 2025.

Hinds is eligible for annual bonuses with a value up to 40% of his annual salary, and comprised of long- and short-term incentives awards.

Hinds is also eligible to participate in such healthcare and other benefit programs made available to employees of the Company.

His employment has no specified term and is on an at-will basis.

On August 8, 2023, we promoted Mr.

Hinds to Chief Financial Officer of the Company.

In connection with the promotion, the Company amended the Offer Letter to provide for severance payments in certain instances (the “Amendment”).

Specifically, the Amendment provides for severance payments in an amount equal to one (1) year salary plus any accrued but unpaid salary, vacation, and bonus amounts upon termination of Mr.

Hinds’ employment without “Cause” or upon a “Change in Control,” as such terms are defined in the Amendment.

Additionally, if Mr.

Hinds’ employment is terminated for Cause, he will not be eligible for any severance payments.

No other changes were made to the Offer Letter.

Change of Control Arrangements

All of the option awards and stock awards granted to the Company’s executive officers pursuant to our 2021 Plan include change-in-control arrangements whereby, in the event that a successor corporation does not assume or substitute the outstanding executive officers’ awards, any unvested award will be fully vested, including awards contingent on performance-based goals.

Upon a change-in-control, these vested awards will be exercisable for a period of time determined by the administrator of the 2021 Plan, and any award that becomes fully vested as a result of a change-in-control will terminate upon expiration of such period.

Compensation Discussion

The Compensation Committee administers our executive compensation and benefit programs.

The Compensation Committee is comprised exclusively of independent directors and oversees all compensation and benefit programs and actions that affect our executive officers.

Compensation Process and Role of Management

The Compensation Committee is responsible for determining and approving all compensation for our executive officers.

Pursuant to its charter, the Compensation Committee reviews and approves, subject to applicable Board ratification, the salary, annual incentive compensation or bonus, long-term incentive compensation in the form of stock options, restricted stock units, or stock grants, all other employment, severance and change-in-control agreements and any other compensation applicable to executive officers.

As discussed below, our Chief Executive Officer assists the Compensation Committee in its deliberations with respect to the compensation payable to our other executive officers.

At the end of or immediately following each fiscal year, our Chief Executive Officer evaluates executive officer performance for the prior fiscal year, other than his own performance, and discusses the results of such evaluations with the Compensation Committee.

The Chief Executive Officer assesses each executive officer’s performance during the year based upon subjective factors concerning such officer’s individual business goals and objectives, and the contributions made by the executive officer to our overall results.

The Chief Executive Officer then makes specific recommendations to the Compensation Committee for adjustments to base salary and the grant of a target bonus and/or equity award, if appropriate, as part of the compensation package for each executive officer, other than himself, for the next fiscal year.

The Compensation Committee reviews the performance of the Chief Executive Officer and determines all compensation for the Chief Executive Officer.

The Chief Executive Officer is not present at the time the Compensation Committee reviews his performance and discusses his compensation.

Evaluation of Compensation Practices

In developing our director compensation program and as basis for establishing such compensation, the Compensation Committee gathers and reviews data from the National Association of Corporate Directors as well as for various publicly traded companies that the Compensation Committee believes to be similar to the Company in some respect, taking into consideration market capitalization, number of employees, amount of revenue, net cash used or generated in operations and the industries in which such companies operate.

The goal is to attract qualified candidates and motivate director behavior by adequately compensating for the time, effort, and commitment required.

Establishing a transparent process that includes industry standards and comparisons, while factoring in the unique circumstances of the Company, is critical.

Compensation may be in the form of cash, options, restricted stock units, or stock with consideration given to the Company’s overall resources during any given period when making a determination regarding the appropriate mix of each component of director compensation.

As a result of such review, starting in 2023, our non-executive director’s annual compensation has been paid in restricted stock units.

Equity compensation for directors is designed to build an ownership stake in the Company while conveying incentives relative to the returns recognized by our stockholders.

Corporate Incentive Program

In order to enable us to attract, retain and reward our employees for their superior work, and to motivate such employees to achieve our specific corporate and individual objectives, the Compensation Committee provide incentives based upon or exceeding specified targets that are challenging but achievable.

At the beginning of each fiscal year, the Compensation Committee reviews and recommends to the Board the Corporate Incentive Plan (the “CIP”) and the performance target metric and internal milestones thereunder, which provides bonus awards to certain employees, including our named executive officers, subject to the review and approval by the Compensation Committee of the achieved metrics under the CIP.

The annual CIP is broken into three target categories:

company based goals, employee specific goals and time-based goals.

Bonuses are calculated based on the Compensation Committee’s determination of target achievement and category apportionment percentages.

The Compensation Committee may, from time to time, recommend changing target categories and apportionment percentages based on their annual review of the CIP.

Grants under the CIP are generally made in the form of equity, including common stock and restricted stock units.

Director Compensation Plan

Our non-executive directors are entitled to an annual compensation of $60,000, plus reimbursement for ordinary and reasonable expenses incurred in exercising their responsibilities in accordance with our expense reimbursement procedure applicable to all of our employees.

Our lead independent director is also entitled to receive additional annual compensation of $15,000.

Our non-executive directors received the following additional annual compensation for service on the committees of the Board, as applicable, during the year ended December 31, 2024:

Audit and Risk Committee

Human Capital and Compensation Committee

Nominating and Corporate Governance Committee

In the year ended December 31, 2024, each non-executive director’s annual compensation was paid in restricted stock units.

This component of our director compensation program is designed to build an ownership stake in the Company while providing an incentive to directors that corresponds with the returns recognized by our stockholders.

Restricted stock unit awards to non-executive directors are anticipated to continue in future years as a means to increase alignment of directors with the Company’s stockholders.

Other than the 2021 Plan, the independent directors are not eligible to participate in our employee benefit plans, including the retirement plan.

Director Compensation

The following table sets forth information concerning compensation for services rendered by our non-executive directors for the year ended December 31, 2024.

The amounts represented in the “Restricted Stock Units” column reflects the grant date fair value of the restricted stock units computed in accordance with ASC 718 and do not necessarily equate to the income that will ultimately be realized by the director for such awards.

Incentive Plan

Catharine de Lacy

(1) Since his appointment as a director and as of December 31, 2024, Mr.

Hoffman received grants of 13,153 shares of common stock, 224,311 shares of restricted stock units, and options for the purchase of 186,500 shares of common stock for his services.

Hoffman resigned as a director, effective as of June 16, 2024, and, as a result, the amounts for Mr.

Hoffman represent the pro-rated amounts for the period in which he served on the Board during the year ended December 31, 2024.

(2) Since her appointment as a director and as of December 31, 2024, Ms.

Schrecker has received 333,132 shares of restricted stock units, and options for the purchase of 17,000 shares of common stock for her services.

(3) Since her appointment as a director and as of December 31, 2024, Ms.

de Lacy has received 148,077 shares of restricted stock units as compensation for her services.

(4) Since his appointment as a director and as of December 31, 2024, Mr.

Maley has received 59,044 shares of restricted stock units as compensation for his services.

(5) Since his appointment as a director and as of December 31, 2024, Mr.

Silva has received 30,841 shares of restricted stock units as compensation for his services.

Clawback Policy

We have adopted a compensation recovery policy designed to comply with the mandatory compensation “clawback” requirements under Nasdaq rules (the “Clawback Policy”).

Under the Clawback Policy, in the event of certain accounting restatements, we will be required to recover erroneously received incentive-based compensation from our executive officers representing the excess of the amount actually received over the amount that would have been received had the financial statements been correct in the first instance.

The Compensation Committee has discretion to make certain exceptions to the clawback requirements (when permitted by Nasdaq rules) and ultimately determine whether any adjustment will be made under the Clawback Policy.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED SHAREHOLDER MATTERS.

The following table shows information known to us about beneficial ownership of our common stock by:

● each of our directors;

● each individual identified as a named executive officer in the section of this report titled “Executive Compensation”;

● all of our directors and executive officers as a group;

● each stockholder known by us to beneficially own 5% or more of our common stock.

Beneficial ownership and percentage ownership are determined in accordance with the rules of the SEC.

Under these rules, beneficial ownership generally includes any shares as to which the individual or entity has sole or shared voting power or investment power and includes any shares that an individual or entity has the right to acquire ownership of on or before May 25, 2025, which is 60 days from March 26, 2025, through the exercise of any option, warrant, conversion privilege or similar right.

In computing the number of shares beneficially owned by a person and the percentage ownership of that person, shares of our common stock that could be issued upon the exercise of outstanding options, restricted stock units, and warrants that are exercisable on or before May 25, 2025 are considered to be outstanding.

These shares, however, are not considered outstanding as of March 26, 2025 when computing the percentage ownership of each other person.

To our knowledge, except as indicated in the footnotes to the following table and subject to state community property laws where applicable, all beneficial owners named in this table have sole voting and investment power with respect to all shares shown as beneficially owned by them.

Applicable percentage of ownership is based on 52,418,782 shares of our common stock outstanding as of March 26, 2025.

Name and Address of Beneficial Owner (1)

Directors and Officers:

Colin James Deller

All Directors and Executive Officers as a Group (6 persons)

5% Stockholders:

Otter Capital LLC

* Less than one percent

(1) Except as set forth below, the address of each executive officer and director is 8023 East 63rd Place, Suite 101, Tulsa, Oklahoma 74133.

(2) Beneficial ownership is determined in accordance with Rule 13d-3 under the Exchange Act, and is generally assigned to the person holding voting power and/or investment power with respect to securities.

With the exception of the securities beneficially owned by our officers and directors and their affiliates, the ownership of the shares of common stock listed above were determined using public records.

These amounts are based upon information available to us as of the date of this filing.

(3) Includes 171,853 shares of common stock, and options to purchase 978,161 shares of common stock that may be exercised on or before May 25, 2025.

Excludes options to purchase 390,000 shares of common stock, none of which will vest on or before May 25, 2025.

(4) Includes 117,840 shares of common stock, and options to purchase 112,788 shares of common stock that may be exercised on or before May 25, 2025.

Excludes 53,167 shares of restricted stock units, none of which will vest on or before May 25, 2025.

(5) Includes options to purchase 17,000 shares of common stock that may be exercised on or before May 25, 2025.

Excludes 351,926 shares of restricted stock units, none of which are expected to vest on or before May 25, 2025.

(6) Excludes 161,925 shares of restricted stock units, none of which are expected to vest on or before May 25, 2025.

(7) Excludes 72,263 shares of restricted stock units, none of which are expected to vest on or before May 25, 2025.

(8) Excludes 41,632 shares of restricted stock units, none of which are expected to vest on or before May 25, 2025.

(9) Consists of (i) 8,434,774 shares of common stock, and (ii) 2,557,000 shares of common stock issuable upon the exercise of the Private Warrants (as defined above), which were assigned by the SPV (as defined above) to Otter Capital LLC on February 27,

2025, and are exercisable until June 16, 2029.

The number of shares beneficially owned by Otter Capital LLC excludes (i) 4,076,315 shares of our common stock issuable upon the exercise of the Private Warrants because such Private Warrants include a beneficial ownership limitation of 19.99%, which provides that Otter Capital LLC will not have the right to exercise any portion of its Private Warrants if it, together with its affiliates, would beneficially own in excess of 19.99%, or 4.99% or 9.99% if subsequently elected by the holder in accordance and subject to the conditions of the Private Warrants, as applicable, of the number of shares of common stock outstanding immediately after giving effect to such exercise.

The business address of Otter Capital LLC is PO Box 620067, Woodside, CA 94062.

Securities Authorized for Issuance under Equity Compensation Plans

The following table provides information as of December 31, 2024, regarding the equity compensation plans approved by our stockholders and inducement option awards granted to certain employees at the time of their hiring pursuant to individual compensation arrangements that were granted without stockholder approval in accordance with Nasdaq Listing Rule 5635(c)(4).

Our equity compensation plans include the 2021 Plan and the 2013 Consultant Plan, which are currently active, and the 2011 Plan, which is currently inactive but has awards outstanding thereunder (as defined above, the “Equity Incentive Plans”).

As of December 31, 2024, we had no awards outstanding under equity compensation plans that have not been approved by our stockholders, except for the aforementioned inducement option awards.

Plan Category

Number of securities to be issued upon exercise of outstanding options, warrants and rights

Weighted average exercise price of outstanding options, warrants and rights

Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))

Equity compensation plans approved by stockholders (2)(3)(4)

Equity compensation plan not approved by stockholders (6)

(1) T he weighted average exercise price does not take into account outstanding restricted stock units, which have no exercise price.

(2) Consists of shares of common stock available for issuance under the Equity Incentive Plans.

(3) The Board has adopted, and our stockholders approved, the 2021 Plan.

The 2021 Plan provides that the number of shares issuable under the plan increase annually by an amount equal the lesser of:

(i) 10% of the aggregate number of shares of common stock issued in the prior fiscal year or (ii) such number of shares of common stock as determined by the administrator of the 2021 Plan no later than the last day of the immediately preceding fiscal year;

provided, that, in no event will the total cumulative increase in the number of shares available for issuance under the 2021 Plan exceed 400,000 shares of common stock in any given year.

Effective as of January 1, 2025, the number of shares available for issuance under the 2021 Plan automatically increased by 400,000 shares pursuant to this feature.

(4) The Board has adopted, and our stockholders approved, the 2013 Consultant Plan.

The 2013 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 us during the quarter immediately prior to the adjustment date or such lesser amount as the Board and Compensation Committee shall determine.

(5) Represents the number of shares of common stock underlying outstanding restricted stock units under the 2021 Plan, and the shares of common stock underlying the stock options under the 2011 Plan.

(6) Consists of (i) an inducement option to acquire 150,000 shares of common stock at an exercise price of $0.91 per share, (ii) an inducement option to acquire 141,382 shares of common stock at an exercise price of $1.16 per share, and (iii) an inducement option to acquire 200,000 shares of common stock at an exercise price of $2.25 per share.

(7) We may from time-to-time issue additional inducement option awards to prospective employees as a material inducement to such prospective employee’s entering into employment with us in accordance with Nasdaq Listing Rule 5635(c)(4).

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.

Except as disclosed herein, no director, executive officer, stockholder holding at least 5% of shares of our common stock, or any family member thereof, had any material interest, direct or indirect, in any transaction, or proposed transaction since January 1, 2022, in which the amount involved in the transaction exceeds the lesser of $120,000 or one percent (1%) of the average of our total assets at the year-end for the last two completed fiscal years.

Review, Approval or Ratification of Transactions with Related Persons

The Board reviews issues involving potential conflicts of interest, and reviews and approves all related party transactions, including those required to be disclosed as a “related party” transaction under applicable federal securities laws.

The Board has not adopted any specific procedures for conducting reviews of potential conflicts of interest and considers each transaction in light of the specific facts and circumstances presented.

However, to the extent a potential related party transaction is presented to the Board, the Company expects that the Board would become fully informed regarding the potential transaction and the interests of the related party, and would have the opportunity to deliberate outside of the presence of the related party.

The Company expects that the Board would only approve a related party transaction that was in the best interests of, and fair to, the Company and our stockholders, and further would seek to ensure that any completed related party transaction was on terms no less favorable to the Company than could be obtained in a transaction with an unaffiliated third party.

Investments by clirSPV LLC

In connection with a private placement of shares of our common stock pursuant to the SPV Purchase Agreement, we granted the SPV a right to purchase certain new equity securities that we sold for the purpose of raising capital on terms and conditions no different from those offered to other purchasers (the “Participation Right”) so that it could maintain a 19.99% percentage ownership (the Percentage Ownership“) of our outstanding common stock.

The Participation Right expired on December 31, 2024.

Further, in conjunction with this investment made by the SPV, we entered into a Voting Agreement with the SPV pursuant to which Robert T.

was originally appointed to the Board as the director designee of the SPV in connection with the Voting Agreement.

Following Mr.

Hoffman’s resignation from the Board on June 16, 2024, Mr.

Silva was appointed to the Board as the SPV’s director designee on August 1, 2024.

The purpose of the Participation Right was to allow the SPV to keep its Percentage Ownership.

The Participation Right could not be exercised to the extent it would cause the SPV to own 20% or more of our then outstanding shares of common stock or hold shares with 20% or more of our voting power.

Additionally, because certain elements of the Participation Right, such as the notice provisions and closing period, were not compatible with raising capital in a public offering, on May 26, 2022 (the “Waiver Date”), the SPV agreed to waive the notice requirements and other related closing mechanics for such Participation Right (the “Waiver”).

In exchange for such Waiver, we and the SPV agreed that, following the Waiver Date, the SPV may purchase from us, at the price sold to the investors in an offering, unregistered shares of our common stock in a number that will allow it to maintain the Percentage Ownership our outstanding common stock, provided that the SPV notifies us that it will exercise such right within 30 days following the final closing of such offering (the “Offering Response Date”) and the completion of such purchase must occur within six (6) business days of the Offering Response Date.

Following the completion of an underwritten offering in June 2022, on July 8, 2022, the SPV exercised its Participation Right and purchased 1,591,594 shares of common stock at $1.11 per share.

In addition, the SPV agreed that effective upon the Investor Holder Consent (as defined below), the Participation Right, subject to the Waiver and modification contained therein, would be extended from December 31, 2023 to such date that the holders of two-thirds of the outstanding units of the SPV agree (the “Investor Holder Consent”) to extend such holder’s existing agreement that he/she/it will have no right to force a redemption of his/her/its interests in the SPV (the “Redemption Right”);

provided, however, that the SPV provided written notice to us of the Investor Holder Consent prior to December 31, 2023 and the Participation Right would in no event extend beyond June 30, 2027.

On December 30, 2023, we received notice from the SPV that the holders of at least two-thirds of the outstanding units of the SPV agreed to extend the waiver of the Redemption Right until December 31, 2024.

Accordingly, the Participation Right expired on December 31, 2024.

In June 2024, following the completion of our underwritten offering and concurrent private placement in April 2024 and the SPV’s notice to exercise its Participation Right in connection with such equity offerings discussed above (See “Note 8 – Equity” for additional information), we entered into the Securities Purchase Agreement with the SPV whereby we issued an aggregate of (i)

3,907,000 shares of common stock at $0.91 per share, (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 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.

Pursuant to the Amendment, the SPV subscribed for:

(i) 3,350,000 shares of common stock at $0.91 per share, (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.

For more details on these equity offerings and subsequent Participation Right exercise, see “Recent Developments” above.

Effective as of February 19, 2025, 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.

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.

Independence of Directors

In determining the independence of our directors, we apply the definition of “independent director” provided under the Nasdaq listing rules.

This review considers all known relevant facts and circumstances in making an independence determination.

The Board concluded its annual review of director independence in March 2025.

After considering all relevant facts and circumstances, the Board affirmatively determined that all of the directors serving on the Board, including those nominated for election at the Annual Meeting, are independent within the meaning of Nasdaq Listing Rule 5605(a)(2) and Rule 10A-3(b) promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), with the exception of Colin James Deller.

PRINCIPAL ACCOUNTANT FEES AND SERVICES.

The following table presents aggregate fees for professional audit services rendered BPM CPA LLP (“BPM”) for the audit of our consolidated financial statements for the years ended December 31, 2024 and 2023, respectively, and fees billed for other services rendered by BPM during those periods.

All Other Fees

“Audit Fees” are the aggregate fees of BPM attributable to professional services rendered in 2024 and 2023 for the audit of our annual consolidated financial statements and for review of condensed consolidated financial statements included in our quarterly reports on Form 10-Q, and for services that are normally provided by BPM in connection with statutory and regulatory filings or engagements for those fiscal years.

All Other Fees.

“All Other Fees” are attributable to customary agreed upon professional services in connection with our public offering and concurrent private placement in April 2024, “at the market” offering sales agreement executed in December 2020, filing our shelf registration statement on Form S-3 in August 2023, and review of our annual proxy statement.

Pre-approval Policies and Procedures

The Audit Committee is required to review and approve in advance the retention of the independent registered public accounting firm for the performance of all audit and lawfully permitted non-audit services and the fees for such services.

The required pre-approval policies and procedures were complied with during the years ended December 31, 2024 and 2023.

EXHIBITS, FINANCIAL STATEMENT SCHEDULES.

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Certificate of Amendment, as filed with the Secretary of the State of Delaware on June 26, 2024 (incorporated by reference to Exhibit 3.1 of the Company’s Form 8-K filed with the Securities and Exchange Commission on June 26, 2024).

Bylaws of ClearSign Technologies Corporation, a Delaware corporation (incorporated by reference to Exhibit 3.4 to the Company’s Form 8-K filed with the Securities and Exchange Commission on June 15, 2023).

Certificate of Amendment, as filed with the Secretary of the State of Delaware on March 6, 2026 (incorporated by reference to Exhibit 3.1 of the Company’s Form 8-K filed with the Securities and Exchange Commission on March 10, 2026).

Amended and Restated Bylaws of ClearSign Technologies Corporation, a Delaware corporation (incorporated by reference to Exhibit 3.1 to the Company’s Form 8-K filed with the Securities and Exchange Commission on November 17, 2025).

Certificate of Conversion, as filed with the Secretary of State of the State of Delaware on June 14, 2023 (incorporated by reference to Exhibit 3.1 to the Company’s Form 8-K filed with the Securities and Exchange Commission on June 15, 2023).

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Employment Agreement dated January 28, 2019 between the registrant and Colin James Deller (incorporated by reference to Exhibit 10.1 to the Company ’ s Form 8-K filed with the Securities and Exchange Commission on January 30, 2019).

Stock Purchase Agreement dated July 12, 2018 between the registrant and clirSPV LLC (incorporated by reference to Exhibit 10.1 to the Company ’ s Form 8-K filed with the Securities and Exchange Commission on July 17, 2018).

At-the-Market Sales Agreement, dated December 23, 2020, by and between ClearSign Technologies Corporation and Virtu Americas LLC (incorporated by reference to Exhibit 1.1 to the Company ’ s Form 8-K filed with the Securities and Exchange Commission on December 23, 2020).

ClearSign Technologies Corporation 2021 Equity Incentive Plan (incorporated by reference to Appendix A from the Company’s Proxy Statement on Schedule 14A filed with the Securities and Exchange Commission on May 7, 2021).

2021 Equity Incentive Plan Form of Stock Option Award Agreement (incorporated by reference to Exhibit 10.13 to the Company ’ s Form 10-K filed with the Securities and Exchange Commission on March 31, 2022).

2021 Equity Incentive Plan Form of Restricted Stock Unit Award Agreement (incorporated by reference to Exhibit 10.14 to the Company ’ s Form 10-K filed with the Securities and Exchange Commission on March 31, 2022).

2021 Equity Incentive Plan Form of Restricted Stock Award Agreement (incorporated by reference to Exhibit 10.15 to the Company ’ s Form 10-K filed with the Securities and Exchange Commission on March 31, 2022).

2021 Equity Incentive Plan Form of Stock Option Award Agreement (incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K filed with the Securities and Exchange Commission on November 17, 2025).

2021 Equity Incentive Plan Form of Restricted Stock Unit Award Agreement (incorporated by reference to Exhibit 10.2 to the Company’s Form 8-K filed with the Securities and Exchange Commission on November 17, 2025).

2021 Equity Incentive Plan Form of Restricted Stock Award Agreement (incorporated by reference to Exhibit 10.3 to the Company’s Form 8-K filed with the Securities and Exchange Commission on November 17, 2025).

Offer Letter dated October 18, 2021 by and between the Company and Brent Hinds (incorporated by reference to Exhibit 10.1 to the Company ’ s Form 10-Q filed with the Securities and Exchange Commission on November 12, 2021).

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Second Amendment to Lease, entered into as of January 14, 2020, between Tulsa Portfolio Oklahoma Realty LP and ClearSign Technologies Corporation (incorporated by reference to Exhibit 10.20 to the Company ’ s Form 10-K filed with the Securities and Exchange Commission on March 31, 2022).

Purchase Right Waiver of clirSPV LLC (incorporated by reference to Exhibit 10.1 to the Company ’ s Form 8-K filed with the Securities and Exchange Commission on May 31, 2022).

Amendment to Employment Agreement between the Company and Colin James Deller (incorporated by reference to Exhibit 10.1 to the Company ’ s Form 10-Q filed with the Securities and Exchange Commission on August 15, 2022).

Catharine de Lacy ’ s Offer Letter, dated February 20, 2023 (incorporated by reference to Exhibit 10.1 to the Company ’ s Form 8-K filed with the Securities and Exchange Commission on February 24, 2023).

Amendment to Offer Letter between the Company and Brent Hinds, dated August 8, 2023 (incorporated by reference to the Company’s Form 10-Q filed with the Securities and Exchange Commission on August 14, 2023).

2 unchanged sentences

Amendment to Securities Purchase Agreement, dated as of April 22, 2024 (incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K filed with the Securities and Exchange Commission on April 23, 2024).

Maley’s Offer Letter, dated April 23, 2024 (incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K filed with the Securities and Exchange Commission on April 24, 2024).

Amendment to Warrant Agency Agreement, dated as of May 15, 2024, by and between ClearSign Technologies Corporation and VStock Transfer, LLC (incorporated by reference to Exhibit 10.25 of the Company’s Form S-1 filed with the Securities and Exchange Commission on May 20, 2024) .

2 unchanged sentences

Todd Silva’s Offer Letter, effective as of August 1, 2024 (incorporated by reference to Exhibit 10.1 of the Company’s Form 8-K filed with the Securities and Exchange Commission on August 6, 2024).

Insider Trading Policy

Cooperation Agreement, dated May 22, 2025, by and between ClearSign Technologies Corporation and Richard D.

Clarkson (incorporated by reference to Exhibit 10.1 of the Company’s Form 8-K filed with the Securities and Exchange Commission on May 27, 2025).

Cooperation Agreement, dated May 22, 2025, by and between ClearSign Technologies Corporation and Anthony DiGiandomenico (incorporated by reference to Exhibit 10.2 of the Company’s Form 8-K filed with the Securities and Exchange Commission on May 27, 2025).

Basenese’s Offer Letter, effective as of May 22, 2025 (incorporated by reference to Exhibit 10.3 of the Company’s Form 8-K filed with the Securities and Exchange Commission on May 27, 2025).

Anthony DiGiandomenico’s Offer Letter, effective as of May 22, 2025 (incorporated by reference to Exhibit 10.4 of the Company’s Form 8-K filed with the Securities and Exchange Commission on May 27, 2025).

At The Market Offering Agreement by and between ClearSign Technologies Corporation and H.C.

Wainwright & Co., LLC, dated July 17, 2025 (incorporated by reference to Exhibit 1.2 to the Company’s Form S-3 filed with the Securities and Exchange Commission on July 17, 2025).

Insider Trading Policy (incorporated by reference to Exhibit 19 to the Company’s Form 10-K filed with the Securities and Exchange Commission on March 31, 2025).

Subsidiaries of the registrant (incorporated by reference to Exhibit 21 to the Company ’ s Form 10-K filed with the Securities and Exchange Commission on March 31, 2022).

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ANNUAL FINANCIAL INFORMATION

Report of Independent Registered Public Accounting Firm (PCAOB:

Report of Independent Registered Public Accounting Firm (PCAOB ID:

Consolidated Balance Sheets as of December 31, 2025 and 2024

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Accounts receivable

Contract assets

Deferred costs

Prepaid expenses and other assets

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Contract liabilities

Other current liabilities

Total current liabilities

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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, 50,285,509 and 38,687,061 shares issued and outstanding

Common stock, $ 0.0001 par value, 87,500,000 shares authorized, 5,328,730 and 5,028,585 shares issued and outstanding at December 31, 2025 and 2024, respectively.*

Additional paid-in capital*

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Total Liabilities and Stockholders' Equity

* Share, additional paid-in capital, and per share amounts for the years ended December 31, 2025 and 2024 have been adjusted to reflect the impact of a 1 -for-10 reverse stock split effected on March 16, 2026.

The accompanying notes are an integral part of these consolidated financial statements.

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Comprehensive loss

* Share and per share amounts for the years ended December 31, 2025 and 2024 have been adjusted to reflect the impact of a 1 -for-10 reverse stock split effected on March 16, 2026.

The accompanying notes are an integral part of these consolidated financial statements.

8 unchanged sentences

Balances at December 31, 2024

Share-based compensation

Share-based compensation, net of tax withholdings

Fair value of stock issued in payment of accrued compensation

Shares issued for services

Issuance of common stock in public offering, net of expenses

Issuance of warrants in public offering, net of expenses

Issuance of common stock in private placement, net of expenses

Issuance of prefunded warrants in private placement, net of expenses

Issuance of warrants in private placement, net of expenses

Issuance of common stock for participation right exercise, net of expenses

Issuance of prefunded warrants for participation right exercise, net of expenses

Issuance of warrants for participation right exercise, net of expenses

Exercise of warrants

Exercise of prefunded warrants

Foreign-exchange translation adjustment

Balances at December 31, 2025

ClearSign Technologies Corporation

9 unchanged sentences

Fair value of stock issued in payment of accrued compensation

Shares issued for services ($ 0.66 per share)

Shares issued upon exercise of options ($ 0.54 per share)

Shares issued for services ($ 0.81 per share)

Shares issued upon exercise of options ($ 1.31 per share)

Shares issued for services

Issuance of common stock in public offering, net of expenses

Issuance of warrants in public offering, net of expenses

Issuance of common stock in private placement, net of expenses

Issuance of prefunded warrants in private placement, net of expenses

Issuance of warrants in private placement, net of expenses

Issuance of common stock for participation right exercise, net of expenses

Issuance of prefunded warrants for participation right exercise, net of expenses

Issuance of warrants for participation right exercise, net of expenses

Exercise of warrants

Foreign-exchange translation adjustment

Balances at December 31, 2024

The accompanying notes are an integral part of these consolidated financial statements.

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Common stock issued for services

Share-based compensation

Share-based compensation, net of tax withholdings

Depreciation and amortization

Impairment of fixed assets

Impairment of intangible assets

Gain from sale of fixed assets

Right-of-use asset amortization

Realized gain from marketable securities

Lease amendments

Change in operating assets and liabilities:

Contract assets

Deferred costs

Accounts receivable

Prepaid expenses and other assets

Other long term assets

Accounts payable, accrued liabilities, and lease liabilities

Other current liabilities

Accrued compensation and related taxes

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Disbursements for patents and other intangible assets

Proceeds from sale of fixed assets

Purchases of held-to-maturity short-term U.S.

Redemption of held-to-maturity short-term U.S.

Net cash provided by (used in) investing activities

Net cash used in investing activities

Cash flows from financing activities:

1 unchanged sentence

Proceeds from exercise of warrants

Taxes paid related to share-based compensation

Taxes paid related to employee stock awards

Net cash provided by (used in) financing activities

5 unchanged sentences

Officer and employee equity awards for prior year accrued compensation

Prepaid expenses repurposed to fixed assets as demonstration equipment

Non-cash impact of new lease

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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 (“WFOE”) in China – ClearSign Combustion (Beijing) Environmental Technologies Co., LTD.

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.

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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 Company’s Chief Executive Officer, who is the chief operating decisionmaker (“CODM”), reviews quarterly and annual 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.

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Our two California refinery customers accounted for 15 % and 86 % of our annual revenues for the years ended December 31, 2025 and 2024, respectively.

Birwelco USA Inc.

(a BIH Group company) accounted for 66 % and 4 % of our annual revenue for the years ended December 31, 2025 and 2024, respectively.

No other customer represented greater than ten percent of annual revenues for the years ended December 31, 2025 and 2024.

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Since inception, the Company has raised approximately $ 105.3 million in gross proceeds through the sale of its equity securities.

During the year ended December 31, 2024, the Company sold equity securities on April 23, 2024, May 15, 2024, and June 24, 2024, which resulted in aggregate gross proceeds of approximately $ 14.2 million and net proceeds of approximately $ 13.0 million, after broker discounts and related fees.

Refer to “Note 8 – Equity” for further details about the offerings effectuated during the year ended December 31, 2024.

During the year ended December 31, 2024, the Company sold equity securities, which resulted in aggregate gross proceeds of approximately $ 14.2 million and net proceeds of approximately $ 13.0 million, after broker discounts and related fees.

The Company has incurred losses since its inception totaling $ 104.5 million and expects to experience operating losses and negative cash flows for the foreseeable future.

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Intercompany balances and transactions have been eliminated in consolidation.

Reverse Stock Split

On March 6, 2026, the Company filed a certificate of amendment to its certificate of incorporation, as amended, with the Secretary of State of the State of Delaware to effect a 1 -for-10 reverse stock split of the Company’s shares of common stock, which became effective at 12:01 a.m.

Eastern Time on March 16, 2026.

Such amendment and reverse stock split ratio were previously approved by the Company’s stockholders and Board.

As a result of the reverse stock split, which was effective for trading purposes on March 16, 2026, every 10 shares of the Company’s pre-reverse split outstanding common stock were combined and reclassified into one share of common stock.

Proportionate voting rights and other rights of holders of common stock, par value and shares authorized were not affected by the reverse stock split.

fractional shares of common stock resulting from the reverse stock split were rounded up to the nearest whole share at the participant level with the Depository Trust Company.

All stock options and restricted stock units outstanding and common stock reserved for issuance under the Company’s equity incentive plans and warrants outstanding immediately prior to the reverse stock split were proportionately adjusted, and the exercise prices were proportionately increased, as a result of the reverse stock split.

All share and per-share amounts in these consolidated financial statements have been restated to reflect the reverse stock split as if it had occurred at the beginning of the earliest period presented.

Use of Estimates

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and (v) recognize revenue when (or as) the performance obligations are satisfied.

Revenues and cost of

goods sold are recognized once the goods or services are delivered to the customer’s control or non-refundable performance obligations are satisfied.

Revenues and cost of goods sold are recognized once the goods or services are delivered to the customer’s control or non-refundable performance obligations are satisfied.

The Company’s contracts with customers generally have a schedule of performance obligations that are used to allocate transaction prices, as well as a schedule of non-refundable cancellation obligations.

The contracts generally will be fully performed upon delivery of certain drawings or equipment.

The contracts generally will be fully performed upon delivery of certain drawings, services, reports, or equipment.

Revenue related to the contracts is recognized following the completion of non-refundable performance obligations as defined in the contract.

The Company’s contracts generally include progress payments from the customer upon completion of defined milestones.

As these payments are received, they are offset against accumulated project costs and recorded as either contract assets or contract liabilities.

As these payments are received, they are recorded as either contract assets or contract liabilities.

Upon completion of the performance obligations and collectibility is determined, revenue is recorded at a point in time.

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For any contract that is expected to incur costs in excess of the contract price, the Company accrues the estimated loss in full in the period such determination is made.

Deferred Costs and Cost of Sales

We recognize an asset for deferred costs incurred to fulfill a contract when those costs meet all of the following criteria:

(a) the costs relate directly to a contract or to an anticipated contract that we can specifically identify;

(b) the costs generate or enhance our resources that will be used in satisfying performance obligations in the future;

and, (c) the costs are expected to be recovered.

We capitalize contractual costs incurred for direct labor, overhead allocations, supplier costs and subcontractor costs.

Costs capitalized are expensed to costs of goods sold at a point in time upon completion of contractual performance obligations based on allocated costs assigned to such performance obligations.

For any contract expected to incur costs in excess of the total contractual value, we accrue the estimated loss in full in the period such determination is made.

The Company expenses selling and marketing expenses when incurred within the statements of operations and comprehensive loss in general and administrative expenses.

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The warranty liabilities are reduced by material and labor costs used to replace parts over the warranty period in the periods in which the costs are incurred.

The Company periodically assesses the adequacy of its recorded warranty liabilities and adjusts the amounts as necessary, and such adjustments could be material in the future if estimates differ significantly from actual warranty expense.

Company periodically assesses the adequacy of its recorded warranty liabilities and adjusts the amounts as necessary, and such adjustments could be material in the future if estimates differ significantly from actual warranty expense.

Product warranties are included in accounts payable and accrued liabilities in the consolidated balance sheets.

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treasury bills with an original maturity of three months or less.

All of our U.S.

treasuries are classified as held-to-maturity based on the Company’s positive intent and ability to hold these securities to maturity and are recorded on an amortized cost basis.

The net carrying amount and amortized cost basis of our treasuries as of December 31, 2025, and 2024 was $ 5,523 thousand and $ 10,790 thousand, respectively.

The fair value of our treasuries as of December 31, 2025, and 2024 was $ 5,523 thousand and $ 10,792 thousand, respectively.

We experienced no unrecognized holding gains from our treasuries as of December 31, 2025.

We experienced $ 2 thousand in unrecognized holding gains from our treasuries as of December 31, 2024.

The Company evaluates whether the decline in fair value of its investments is other-than temporary at each quarter-end.

The Company has not experienced any other-than-temporary impairment of its treasuries as of December 31, 2025 and 2024, respectively.

A decline in the market value of any held-to-maturity security below cost that is deemed other than temporary results in a reduction in carrying amount to fair value, with the impairment charged to earnings and the establishment of a new cost basis.

Accounts Receivable and Allowance for Credit Losses

Trade accounts receivable are stated at the cost less an allowance for expected credit losses.

Trade accounts receivable are stated at the invoiced amount less an allowance for expected credit losses.

The Company performs ongoing credit evaluations of its customers’ financial condition and generally requires no collateral from its customers or interest on past due amounts.

Management estimates the allowance for credit losses based on review and analysis of specific customer balances that may not be collectible and how recently payments have been received in addition to an expected credit loss model based on aging analysis as per the invoice date as re-imbursement risks could exist.

Though an exception exists, the vast majority of the outstanding accounts receivable share the same expected credit risk due to the re-imbursement risk is same for the current customer pool.

The vast majority of the outstanding accounts receivable share the same expected credit risk due to the re-imbursement risk and same current customer pool.

Accounts are considered for write-off when they become past due and when it is determined that the probability of collection is remote.

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If the Company determines the option to extend or terminate is reasonably certain, it is included in the determination of lease assets and liabilities.

The Company reassesses the lease term if and when a significant event or change in circumstances occurs within the control of the Company, such as construction of significant leasehold improvements that are expected to have economic value when the option becomes exercisable.

The Company reassesses the lease term if and when a significant event or change in circumstances occurs within the control of the Company, such as construction

of significant leasehold improvements that are expected to have economic value when the option becomes exercisable.

The Company recognizes a single lease cost on a straight-line basis over the term of the lease, and the Company classifies all cash payments within operating activities in the consolidated statements of cash flows.

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The Company’s financial instruments primarily consist of cash equivalents, accounts receivable, accounts payable, and accrued expenses.

The fair value of the Company’s cash equivalents was determined based on Level 1 inputs.

Our cash equivalents consist of cash, money market and short-term U.S.

As of December 31, 2024 and 2023, we had $ 1,354 thousand and $ 4,228 thousand in our money market account, and $ 10,792 thousand and zero in short-term U.S.

treasuries, respectively.

Our cash equivalents include money market funds, which are measured at fair value using Level 1 inputs.

As of December 31, 2025 and 2024, we had $ 2,288 thousand and $ 1,354 thousand in our money market account, respectively.

As of the balance sheet dates, the estimated fair values of the financial instruments were not materially different from their carrying values as presented on the consolidated balance sheets.

This is primarily attributable to the short-term nature of these instruments.

There were no transfers between levels of the fair value hierarchy during the period.

The Company did not identify any other recurring or non-recurring assets and liabilities that are required to be presented in the consolidated balance sheets at fair value.

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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, collaborative projects.

During the years ended December 31, 2024 and 2023, the Company received $ 145 thousand and $ 60 thousand, respectively, from these types of arrangements.

and development costs have been offset by funds received, if any, from strategic partners in cost sharing, collaborative projects.

During the year ended December 31, 2025, the Company received no funds from these types of arrangements.

During the year ended December 31, 2024, the Company received $ 145 thousand from these types of arrangements.

Additionally, from time to time, the Company may receive government grants to fund research and development projects.

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The costs of all employee stock options, as well as other equity-based compensation arrangements, are reflected in the consolidated financial statements based on the estimated fair value of the awards on the grant date.

That cost is recognized over the period during which an employee is required to provide service in exchange for the award, or in the case of performance options, expense is recognized upon completion of a milestone as defined in the grant agreement.

That cost is recognized over the period during which an employee is required to provide service in exchange for the award, or in the case of performance options, expense is recognized over the remaining service period when the Company has determined it is probable that the performance condition will be achieved.

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.

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The Company can revive its China operations at any time during those three years with minimal cost impact.

The Company completed the dormancy filings as of March 12, 2025.

We estimated that we will incur a total of $ 394 thousand in one-time non-recurring costs related to this project for severance and related benefit costs, equipment disposal and shipment costs, and legal filing fees, which was recorded in the third quarter of 2024.

As of December 31, 2024, we had $ 239 thousand remaining in the accrual related to these costs, which is included in accounts payable and accrued liabilities on the consolidated balance sheets.

The dormancy filing became effective as of March 12, 2025.

Foreign Currency

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Diluted loss per share is computed similar to basic net loss per share except that the denominator is increased to include additional common shares available upon exercise of stock options and warrants using the treasury stock method, except for periods for which no common share equivalents are included because their effect would be anti-dilutive.

As of December 31, 2024 and 2023, potentially dilutive shares outstanding amounted to 25.1 million and 3.9 million, respectively.

Recently Issued Accounting Pronouncements

In November 2023, the FASB issued ASU No.

2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures (“ASU 2023-07”).

ASU 2023-07 requires expanded disclosures about reportable segments including additional information on segment expenses, expanded interim period disclosures, and an explanation of how the CODM utilizes segment information in evaluating segment performance.

The Company adopted ASU 2023-07 as of December 31, 2024.

In December 2023, the FASB issued ASU No.

As of December 31, 2025 and 2024, potentially dilutive shares outstanding amounted to 2.5 million (or 24.7 million on a pre-reverse stock split basis) and 2.5 million (or 25.1 million on a pre-reverse stock split basis), respectively.

Recently Adopted Accounting Pronouncements

In December 2023, the 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 consolidated financial statements.

Effective January 1, 2025, we adopted ASU 2023-09 on a prospective basis.

The impact of adoption on this standard to our accounting policies, processes, and systems was not material.

Refer to “Note 8 – Income Taxes” of these 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 deferred costs that arise from transactions accounted for under ASC 606.

We elected to early adopt ASU 2025-05 on December 31, 2025, which did not have a material impact on our consolidated financial statements.

Recently Issued Accounting Pronouncements

In November 2024, the FASB issued ASU No.

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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.

Note 3 – Fixed Assets, Net

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Operating lease ROU assets, net

Depreciation expense for the years ended 2024 and 2023 totaled $ 21 thousand and $ 152 thousand, respectively.

In the year ended December 31, 2023, we recorded an impairment of $ 81 thousand for machinery and equipment, specifically demonstration burners.

These burners were capitalized at $ 209 thousand and, at the time of impairment, the associated accumulated depreciation amounted to $ 128 thousand.

There were no similar impairments in the year ended December 31, 2024.

Depreciation expense related to office furniture, equipment and leasehold improvements for the years ended December 31, 2025 and 2024 totaled $ 25 thousand and $ 21 thousand, respectively.

The Company leases office space in Tulsa, Oklahoma, Seattle, Washington and Beijing, China.

During years ended December 31, 2024 and 2023, the Company renewed its Beijing, China lease for 13 months with monthly rent at approximately $ 3 thousand.

result of these renewals, the Company increased the right of use (“ROU”) asset and lease liability by $ 32 thousand and $ 34 thousand during the years ended December 31, 2024 and 2023, respectively.

The Company exited our long term Seattle operating lease on September 30, 2023.

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 ROU asset and lease liability by $ 68 thousand during the year ended December 31, 2025.

During October 2024, the Company entered into a sub-lease agreement to rent office space in Seattle for approximately $ 2 thousand per month for twelve months .

We renewed the twelve month Seattle sub-lease during October 2024 with substantially the same terms.

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 was $ 23 thousand and $ 22 thousand for the years ended December 31, 2025 and 2024, respectively.

The Tulsa and Beijing leases are classified as operating leases, with remaining terms ranging from less than twelve months to approximately three years ;

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.

During the years ended December 31, 2024 and 2023, the Company incurred restoration expenses of zero and $ 33 thousand, respectively.

The Tulsa lease contains fixed annual lease payments that increase annually by 2 %.

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Issued patents

Trademarks pending

Registered trademarks

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The Company does not amortize patents or trademarks classified as pending.

During the years ended December 31, 2024 and 2023, the Company assessed its patent and trademark assets, and recorded impairments of $ 20 thousand and $ 14 thousand, respectively.

During the years ended December 31, 2025 and 2024, the Company assessed its patent and trademark assets.

During the years ended December 31, 2025 and 2024, we recorded impairments of $ 3 thousand and $ 20 thousand, respectively.

These impairment costs are included within research and development in the consolidated statements of operations and comprehensive loss.

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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

Note 5 – Revenue 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.

Performance obligations typically fall into one of four categories, product shipment, customer witness tests, and engineering services, such as delivery of CFD studies, engineering documents, and engineering consultation.

Customer payment milestones are unique to individual contracts and may occur prior to completion of performance obligations.

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The Company recognized $ 5,234 thousand of revenues and $ 3,810 thousand of cost of goods sold during the year ended December 31, 2025.

The revenue and cost of goods sold predominantly related to the Company’s process burner product line.

The Company delivered multiple burners for different customers, successfully completed engineering studies including the computational fluid dynamic analysis, and fulfilled multiple spare parts orders.

The revenue and cost of goods sold relate to the Company’s fulfillment of product orders for process burners, mid-stream burners, flares, spare parts, burner performance tests, and engineering services including CFD studies, engineering design documents, and engineering consultation.

These products and services constitute performance obligations.

The Company recognized $ 3,596 thousand of revenues and $ 2,478 thousand of cost of goods sold during the year ended December 31, 2024.

Revenues and cost of goods sold relate predominantly to the Company’s process burner product line.

During the year ended December 31, 2023, the Company delivered multiple burners in connection with a single customer order.

Prior to delivery, we successfully completed multiple customer witness tests at a burner test facility for three separate customer orders.

Both the witness tests and burner shipment constitute contractual performance obligations.

The Company had contract assets of $ 194 thousand and $ 188 thousand and contract liabilities of $ 73 thousand and $ 1,116 thousand at December 31, 2024 and 2023, respectively.

The revenue and cost of goods sold predominantly related to the Company’s process burner product line.

The Company delivered multiple burners for different customers, successfully completed engineering studies including the CFD analysis, and fulfilled multiple spare parts orders.

These products and services constitute performance obligations.

The Company had contract liabilities of $ 100 thousand and $ 441 thousand at December 31, 2025 and 2024, respectively.

Of the $ 441 thousand contract liability balance as of December 31, 2024, the Company recognized revenue of $ 421 thousand during the year ended December 31, 2025.

Note 6 – Deferred Costs

A summary of the Company’s deferred costs activity in the accompanying consolidated balance sheets as of December 31, 2025 and 2024 is as follows:

(in thousands)

Deferred costs at beginning of year

Capitalization

Labor and overhead allocations

Supplier and subcontractor costs

Amortization of deferred costs

Impairment of costs in excess of contractual value

Deferred costs at end of period

During our year-end financial reporting process, management identified that our deferred costs were incorrectly classified in the prior period financial statements.

In the prior period, the net financial position of our customer contracts were assessed on a contract-by-contract basis and we incorrectly offset our contract liabilities with deferred costs, which were previously labeled as contract assets.

The correction has been reflected in the current period consolidated financial statements and prior period amounts have been revised, by adjusting deferred costs and contract liabilities by an increase of $ 368 thousand.

Management assessed this error and determined that it had no material adverse effect on prior filings, since it had no effect on our overall financial position, specifically our net loss, stockholder’s equity and working capital (as defined in “Item 7 - Management’s Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources”).

Note 7 – Product Warranties

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Warranty liability at beginning of year

Changes in accrual related to expirations

Changes related to expirations and settlements

Warranty liability at end of period

Note 8 - Income Taxes

For the years ended December 31, 2024 and 2023 the Company's loss before provision for income taxes were as follows:

Effective January 1, 2025, the Company adopted ASU 2023-09.

The implementation of this standard establishes a requirement to disclose differences between the statutory tax rate and the effective tax rate by jurisdiction and disaggregated information about income taxes paid, income (loss) from continuing operations before income tax expense (or benefit) and income tax expense (or benefit) from continuing operations.

Management has determined that this standard is preferable in that the reporting will provide users with more useful information and greater transparency about how the Company's operations and related tax risks affect its tax rate and cash flows.

The amendments related to the ASU 2023-09 were applied retrospectively to the beginning of the earliest year presented.

For the years ended December 31, 2025 and 2024, the Company's loss from continuing operations before provision for income taxes were as follows:

For the Year Ended

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Tax benefit at state rate

China tax at statutory rate

China valuation allowance

Hong Kong tax at statutory rate

Hong Kong valuation allowance

Meals and entertainment

Deferred rate change

Change in valuation allowance

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ASC 842 lease standard

Warranty Liability

Net operating loss carryforwards

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Net deferred tax assets

The Company did not pay any federal, state, or foreign income taxes during the year ended December 31, 2025 and 2024.

Accordingly, no disaggregation of cash income taxes paid is presented.

For the year ended December 31, 2025, based on all available objective evidence, including the existence of cumulative losses, the Company determined that it was not more likely than not that the net deferred tax assets were fully realizable as of December 31, 2025.

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As of December 31, 2025, the Company had $ 94.4 million of federal and $ 61.4 million of state net operating loss carryforwards available to reduce future taxable income, of which federal net operating loss carryforwards of $ 47.6 million have an indefinite life.

The remaining federal net operating losses begin to expire in 2028, while state net operating losses begin to expire in 2025.

The federal net operating losses begin to expire in 2028, while state net operating losses begin to expire in 2035.

The Company experienced an “ownership change” within the meaning of Section 382 of the Internal Revenue Code in April 2012, subjecting net operating loss carryforwards (incurred prior to the ownership change) to an annual limitation, which may restrict the ability to use these losses to offset taxable income in periods following the ownership change.

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Accordingly, the Participation Right has expired as of December 31, 2024.

The Company has an At-The-Market (“ATM”) program pursuant to a Sales Agreement with Virtu Americas LLC, as sales agent, dated December 23, 2020 (the “Sales Agreement”), pursuant to which the Company may sell shares of common stock with an aggregate offering price of up to $ 8.7 million.

On March 18, 2024, the Company filed a prospectus supplement suspending the ATM program.

The Company will not make any sales of its 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.

During the year ended December 31, 2024, the Company issued zero shares of its common stock from the ATM program.

As of December 31, 2024, the Company has cumulatively issued approximately 1.6 million shares of common stock under the ATM program, at an average price of $ 3.84 per share.

Gross proceeds totaled approximately $ 6.1 million and net cash proceeds was approximately $ 5.9 million.

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 offer and 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, the ATM program or other securities offerings.

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.

Equity Offerings

Equity Offering Terms

During the year ended December 31, 2024 we completed three equity offerings referred to herein as “Public Offering,” “Private Placement” and “Participation Right Exercise.”

The Public Offering and Private Placement were completed concurrently on April 23, 2024.

The Public Offering included an over-allotment option, which was exercised in full on May 15, 2024.

As noted above, clirSPV maintained a contractual Redemption Right to participate in this offering and exercised its right in full and thus completed the Participation Right Exercise on June 24, 2024.

Pursuant to these equity offerings we sold common stock, redeemable warrants to purchase shares of common stock and pre-funded warrants to purchase shares of common stock.

The warrants and pre-funded warrants issued in the Public Offering, Private Placement and Participation Right Exercise are referred to herein as “Public Warrants,” “Private Warrants,” “Participation Right Warrants,” “Private Pre-Funded Warrants” and “Participation Right Pre-Funded Warrants,” as applicable.

The Public Warrants, Private Warrants and Participation Right Warrants are collectively referred to herein as the “Warrants,” and the Private Pre-Funded Warrants and Participation Right Pre-Funded Warrants are collectively referred to herein as the “Pre-Funded Warrants.” In connection with the Public Offering and Private Placement, we issued warrants to purchase shares of common stock to Public Ventures, LLC as consideration for services provided as the underwriter and placement agent for the Public Offering and Private Placement,

respectively, which are hereinafter referred to as the “Underwriter Warrants” and “Placement Agent Warrants,” respectively.

The quantities, prices and terms of these equity offerings are noted in the table below.

Shares* (in thousands)

Purchase Price Per Share

Public Offering

On April 23, 2024, we completed an underwritten public offering (the “Public Offering”), pursuant to which we sold approximately 4,621 thousand shares of our common stock and 4,621 thousand redeemable warrants (the “Public Warrants”) at a price of $ 0.91 per share of common stock and $ 0.01 for the accompanying Public Warrant.

On May 15, 2024, Public Ventures, LLC (“Public Ventures”), the underwriter of the Public Offering, exercised its over-allotment option in full to purchase an additional 693 thousand shares of common stock and 693 thousand Public Warrants.

After deducting customary professional service fees, the net proceeds from the Public Offering amounted to approximately $ 4,222 thousand.

Each Public Warrant has an exercise price of $ 1.05 per share and is exercisable for a period of five years starting from the date of its issuance.

Holders of the Public Warrants are not able to exercise their warrants on a cashless basis.

Private Placement

Participation Right Exercise

Public Offering

Private Placement

Participation Right Exercise

Pre-Funded warrants 1

Underwriter Warrants 3

Placement Agent Warrants 3

* Retroactively reflects 1 -for-10 reverse split effective on March 13, 2026

** Not Applicable

(1) Each Pre-Funded Warrant has an exercise price of $ 0.001 (or $ 0.0001 per share on a pre-reverse stock split basis) per share and expire when exercised in full.

In accordance with the terms of the Pre-Funded Warrants, the Company is prohibited from effecting an exercise of any of these warrants to the extent that such exercise would result in the number of shares of common stock beneficially owned by the holder and its affiliates exceeding 4.99 % (or 9.99 % at election of the holder) of the total number of shares of common stock outstanding immediately after giving effect to the exercise, which percentage may be increased or decreased at the holder’s election not to exceed 9.99 %.

(2) Each Warrant has an exercise price of $ 10.50 per share (or $ 1.05 per share on a pre-reverse stock split basis) and is exercisable for a period of five years starting from the date of its issuance.

The exercise price and number of shares of common stock issuable upon exercise is subject to appropriate adjustment in the event of stock dividends, stock splits, reorganizations or similar events affecting the Company’s common stock.

We have the option, but not the obligation, to redeem the Public Warrants anytime between issuance and expiration, at a price of $ 0.01 per Public Warrant, provided that the closing price of the common stock reported equals or exceeds $ 2.275 (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) per share for any 20 business days within a 30 consecutive business-day period.

In connection with the Public Offering, we also issued approximately 425 thousand warrants to Public Ventures (the “Underwriter Warrants”), as consideration for the services provided as underwriter for the Public Offering.

The Underwriter’s Warrants are exercisable at a per share exercise price of $ 1.1375 commencing 180 days from April 19, 2024, and expire on their fifth year anniversary.

The Underwriter’s Warrants can be exercised on a cashless basis based on a formula set forth therein and are non-redeemable.

The shares of common stock and Public Warrants issued in the Public Offering have been classified and recorded as part of stockholders’ equity.

We have the option, but not the obligation, to redeem these warrants anytime between issuance and expiration, at a price of $ 0.10 per warrant, provided that the closing price of the common stock reported equals or exceeds $ 22.75 (or $ 2.275 on a pre-reverse stock split basis) (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) per share for any 20 business days within a 30 consecutive business-day period.

(3) Each Underwriter Warrant and Placement Agent Warrant has an exercise price of $ 11.375 per share (or $ 1.1375 per share on a pre-reverse stock split basis) commencing 180 days from April 19, 2024, and expire on their fifth year anniversary.

The Underwriter Warrants can be exercised on a cashless basis based on a formula set forth therein and are non-redeemable.

After deducting customary professional service fees, the net proceeds from the Public Offering, Private Placement and Participation Right Exercise amounted to an aggregate of approximately $ 12,967 thousand.

The shares of common stock, Warrants, and Pre-Funded Warrants issued in the Public Offering, Private Placement and Participation Right Exercise have been classified and recorded as part of stockholders’ equity.

The amount allocated to such instruments were based on their relative fair value, resulting in an initial carrying value for each of those instruments to be as follows:

(in thousands)

Allocated Amount

Public Warrants

In determining the fair values of the Public Warrants and Underwriter Warrants, we used a Black-Scholes option pricing model with the following assumptions:

Expected volatility

Contractual/expected term (in years)

Risk-free interest rate

Expected dividend yield

The Underwriter Warrants issued in connection with the Public Offering have been accounted for as a direct cost of the Public Offering, resulting in no net effect to the overall stockholders’ equity.

The fair value of the shares of common stock issued in the Public Offering was determined using the closing price of our common stock immediately preceding the closing date of the Public Offering.

Private Placement

On April 23, 2024, we completed a private placement (the “Private Placement”) concurrent with the Public Offering noted above.

As part of the Private Placement, we sold (i) approximately 2,250 thousand shares of common stock at a price of $ 0.91 per share of common stock;

(ii) redeemable warrants to purchase up to approximately 8,108 thousand shares of our common stock (the “Private Warrants”) at a price of $ 0.01 per accompanying Private Warrant;

and (iii) pre-funded warrants to purchase up to approximately 3,156 thousand shares of common stock (the “Private Pre-Funded Warrants”) at a price of $ 0.9099 per accompanying Private Pre-Funded Warrant.

After deducting customary professional service fees, the net proceeds from the Private Placement amounted to approximately $ 4,468 thousand.

The Private Warrants have the same terms as the Public Warrants noted above, except that they are only exercisable six months after their issuance.

Each Private Pre-Funded Warrant has an exercise price of $ 0.0001 per share and expire when exercised in full.

In accordance with the terms of the Private Pre-Funded Warrants, the Company is prohibited from effecting an exercise of any Private Pre-Funded Warrants to the extent that such exercise would result in the number of shares of common stock beneficially owned by the holder and its affiliates exceeding 4.99 % (or 9.99 % at election of the holder) of the total number of shares of common stock outstanding immediately after giving effect to the exercise, which percentage may be increased or decreased at the holder’s election not to exceed 9.99 %.

In connection with the Private Placement, we issued approximately 432 thousand warrants to Public Ventures, as compensation for their services as our exclusive placement agent in the Private Placement (the “Placement Agent Warrants”).

The terms of the Placement Agent Warrants are the same as the Underwriter Warrants noted above.

The shares of common stock, Private Pre-Funded Warrants and Private Warrants issued in the Private Placement have been classified and recorded as part of stockholders’ equity.

The amount allocated to such instruments were based on their relative fair value, resulting in an initial carrying value for each of those instruments to be as follows:

(in thousands)

Allocated Amount

Private Pre-Funded Warrants

Private Warrants

In determining the fair values of the Private Warrants, Private Pre-Funded Warrants, and Placement Agent Warrants, we used a Black-Scholes option pricing model with the following assumptions:

Expected volatility

Contractual/expected term (in years)

Risk-free interest rate

Expected dividend yield

The Placement Agent Warrants issued in the Private Placement have been accounted for as a direct cost of the Private Placement resulting in no net effect to the overall stockholders’ equity.

The fair value of the shares of common stock issued in the Private Placement was determined using the closing price of our common stock immediately preceding the closing date of the Private Placement.

Public Offering

Private Placement

Participation Right Exercise

On June 24, 2024, in connection with the Public Offering and concurrent Private Placement noted above, clirSPV exercised its Participation Right (the “Participation Right Exercise”) and purchased (i) 3,350 thousand shares of our common stock at a price of $ 0.91 per share;

(ii) redeemable warrants to purchase up to approximately 7,040 thousand shares of our common stock (the “Participation Right Warrants,” and together with the Public Warrants, Private Warrants, Underwriter Warrants, Placement Agent Warrants, the “Warrants”) at a price of $ 0.01 per accompanying Participation Right Warrant;

and (iii) pre-funded warrants to purchase up to approximately 1,343 thousand shares of common stock (the “Participation Right Pre-Funded Warrants,” and together with the Private Pre-Funded Warrants, the “Pre-Funded Warrants”) at a price of $ 0.9099 per accompanying Participation Right Pre-Funded Warrant.

After deducting customary professional service fees, the net proceeds from the Participation Right Exercise amounted to approximately $ 4,277 thousand.

The Participation Right Warrants have the same terms as the Private Warrants noted above.

The Participation Right Pre-Funded Warrants have the same terms as the Private Pre-Funded Warrants noted above, except that, in accordance with the terms of the Participation Right Pre-Funded Warrants, the Company is prohibited from effecting an exercise that would result in beneficial ownership exceeding 19.99 %.

The shares of common stock, Participation Right Pre-Funded Warrants, and Participation Right Warrants issued in the Participation Right have been classified and recorded as part of stockholders’ equity.

The amount allocated to such instruments were based on their relative fair value, resulting in an initial carrying value for each of those instruments to be as follows:

(in thousands)

Allocated Amount

Participation Right Pre-Funded Warrants

Participation Right Private Warrants

In determining the fair values of the Participation Right Warrants and Participation Right Pre-Funded Warrants, the Company used a Black-Scholes option pricing model with the following assumptions:

Pre-Funded Warrants

In determining the fair values of the Warrants and Pre-Funded Warrants from the Public Offering, Private Placement and Participation Right Exercise, we used a Black-Scholes option pricing model with the following assumptions:

Public Offering

Private Placement

Participation Right Exercise

Expected volatility

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Expected dividend yield

The fair value of the shares of common stock issued in connection with the Participation Right Exercise was determined using the closing price of the Company’s common stock immediately preceding the closing date of the Participation Right Exercise.

(1) The fair value of the shares of common stock issued in connection with the offerings was determined using the closing price of the Company’s common stock immediately preceding the closing date of the particular offering.

The Underwriter Warrants and Placement Agent Warrants issued in the Public Offering and Private Placement were accounted for as a direct cost of such offerings resulting in no net effect to the overall stockholders’ equity.

Warrants and Pre-Funded Warrants

The following table summarizes the Warrants (as defined above) and Pre-Funded Warrants (as defined above) activity and outstanding balance as of December 31, 2024, along with the associated weighted average exercise price and weighted average remaining life.

The following tables summarize activity and outstanding balances as of December 31, 2025 and 2024 for the Warrants and Pre-Funded Warrants from the Public Offering, Private Placement, and Participation Right Exercise, along with the associated weighted average exercise price and weighted average remaining life.

December 31, 2025

Pre-Funded Warrants (1)

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Remaining Life (in years)

Aggregate Intrinsic Value

Exercise Price

Beginning Balance

Aggregate Intrinsic Value

Outstanding at beginning of year

Forfeited/Expired

Outstanding at Period End

(1) Pre-Funded warrants have no expiration date and only expire when exercised in full.

Outstanding at end of year

* retroactively reflects 1 -for-10 reverse split effective on March 13, 2026

(1) The Pre-Funded Warrants have no expiration date and only expire when exercised in full.

December 31, 2024

Pre-Funded Warrants(1)

(in thousands, except per share data)

Exercise Price

Remaining Life (in years)

Aggregate Intrinsic Value

Exercise Price

Aggregate Intrinsic Value

Outstanding at beginning of year

Forfeited/Expired

Outstanding at end of year

* retroactively reflects 1 -for-10 reverse split effective on March 13, 2026

(1) The Pre-Funded Warrants have no expiration date and only expire when exercised in full.

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.

On June 17, 2021, the Company's stockholders approved and the Company adopted the ClearSign Technologies Corporation 2021 Equity Incentive Plan (as may be amended from time to time, 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.

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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.

provided, however, that the total cumulative increase in the number of shares available for issuance pursuant to this automatic share increase shall not exceed 40 thousand shares of common stock (or 400 thousand on a pre-reverse stock split basis).

In 2025, the Board did not exercise their right to limit the automatic increase.

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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.

Under the terms of the 2021 Plan, incentive stock options and non-statutory 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.

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Exercisable at end of period

* retroactively reflects 1 -for-10 reverse split effective on March 13, 2026

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.

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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 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 options were estimated on the grant date using the Black Scholes valuation model, which resulted in $ 112 thousand.

The compensation expense recognized for these awards for the years ended December 31, 2024 and 2023 was $ 37 thousand and $ 43 thousand, respectively.

Total unrecognized compensation expense for these inducement options as of December 31, 2024 was $ 32 thousand.

During the year ended December 31, 2023, the Company granted non-qualified stock options to its Director of Customer Relationships and Business Development to purchase an aggregate of 150 thousand shares of common stock with an exercise price of $ 1.31 as a material inducement to accept employment with the Company.

During the year ended December 31, 2023, the Company granted non-qualified stock options to its Chief Technology Officer to purchase an aggregate of 15 thousand shares of common stock (or 150 thousand on a pre-reverse stock split basis) with an exercise price of $ 9.10 per share (or $ 0.91 per share on a pre-reverse stock split basis) as a material inducement to accept employment with the Company.

The fair value of these options were estimated on the grant date using the Black Scholes valuation model, which resulted in $ 160 thousand.

The compensation expense recognized for these awards for the year ended December 31, 2023 was $ 74 thousand.

Two -thirds of these inducement options were forfeited in 2023 upon the departure of the Director of Customer Relationships and Business Development.

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).

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 years ended December 31, 2025 and 2024 was $ 32 thousand and $ 37 thousand, respectively.

These options are now fully vested as of December 31, 2025.

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 is as follows:

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Forfeited/Expired

Outstanding at end of period

Exercisable at end of period

Outstanding at end of year

Exercisable at end of year

* retroactively reflects 1 -for-10 reverse split effective on March 13, 2026

Restricted Stock Units

The Company awards employees and directors restricted stock units (“RSUs”) in lieu of cash payment for compensation.

These awards are granted from the 2021 Plan.

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, and withholds shares from the employee’s award to cover the taxes payable.

The Company pays payroll withholding taxes on behalf of the employee at vesting by withholding shares from the employee’s award to cover taxes payable in connection with such vesting.

The Company accrued taxes for RSU share-based compensation of $ 50 thousand and $ 32 thousand for the years ended December 31, 2025 and 2024, respectively.

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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, which is in accordance with FASB ASC Topic 718 , “ Compensation – Stock Compensation .” Total unrecognized compensation expense for director services as of December 31, 2024 was $ 579 thousand.

Director compensation is earned on a quarterly basis with the target value of compensation set at $ 79 thousand per quarter, assuming four directors, one lead independent director, one chairperson for each committee and two committee members for each of the three committees.

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 December 31, 2025 was $ 139 thousand.

During the year ended December 31, 2025, director compensation was earned on a quarterly basis with the target value of compensation set at approximately $ 75 thousand per quarter, assuming four compensated directors, one chairperson for each of the three committees and two committee members for each of the three committees.

A summary of the Company’s RSUs activity is as follows:

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Weighted Average Remaining Contractual Life (in years) (1)

Nonvested at beginning of period

Nonvested at beginning of year

Nonvested at end of period

* retroactively reflects 1 -for-10 reverse split effective on March 13, 2026

1) 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).

4 unchanged sentences

Weighted average value per share*

The Company awards employees stock in lieu of cash payment for compensation, typically to satisfy accrued bonus compensation.

* retroactively reflects 1 -for-10 reverse split effective on March 13, 2026

The Company awards employees stock in lieu of cash payment for compensation, typically to satisfy accrued bonus compensation and for ad-hoc bonuses for exemplary performance.

The awards are granted from the 2021 Plan.

6 unchanged sentences

Fair value of stock payments in accrued compensation

* retroactively reflects 1 -for-10 reverse split effective on March 13, 2026

Consultant Stock Plan

The 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 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.

6 unchanged sentences

Reserved but unissued shares at end of period

* retroactively reflects 1 -for-10 reverse split effective on March 13, 2026

The Consultant Plan compensation expense is summarized as follows:

3 unchanged sentences

Weighted average value per share*

* retroactively reflects 1 -for-10 reverse split effective on March 13, 2026

Note 10 – Net Loss per Common Share

The Company calculates net loss per common share in accordance with ASC 260 Earnings Per Share (“ASC 260”).

Basic and diluted net loss per common share 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 shares and included in the computation of basic net loss per share.

As such, for the years ended December 31, 2024 and 2023, the Company included the Pre-Funded Warrants in its computation of net loss per share.

The Pre-Funded Warrants were issued in April and June 2024 with an exercise price of $ 0.0001 per Pre-Funded Warrant (See “Note 8 – Equity” for additional information).

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 years ended December 31, 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, as described above in Note 9, and are each exercisable into one share of common stock at an exercise price of $ 0.001 per share (or $ 0.0001 per share on a pre-reverse stock split basis).

The following potentially dilutive securities have not been included in the computation of diluted net loss per share for the years ended December 31, 2025 and 2024, as the result would be anti-dilutive:

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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.

On January 16, 2026, Judith Schrecker, David Maley, and Catharine M.

de Lacy (collectively, the “Former Directors”), filed a petition for advancement in the Delaware Court of Chancery for an advancement of legal fees relating to a request by the Company for the Former Directors to return material of the Board and the former Special Committee of the Board.

The advancement proceedings will effectuate an advancement of monies to the Former Directors counsel for monies incurred to represent the Former Directors in this matter.

The advancement proceeding will follow a prescribed court process where the legal fees will be reviewed with the goal of concluding reasonable amount payable to the Former Directors’ counsel for representation in this matter.

At the date of this report, we do not believe this proceeding will have a material adverse effect on the future operations of the Company.

To account for this matter, we have accrued $ 180 thousand as an estimate for legal services rendered during 2025.

Subsequent to December 31, 2025, the total advancement request amounted to $ 319 thousand, which includes expenses for legal services rendered during 2026.

Indemnification Agreements

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The Phase 2 grant amount totaled approximately $ 1.6 million over a two-year period.

On December 9, 2025, we received a deadline extension from the DOE allowing us to continue to work until February 27, 2026.

These awards allow the Company to request reimbursements for expenditures such as labor, material, and administrative costs.

3 unchanged sentences

By reporting quarterly salary statistics and meeting agreed upon employment thresholds, the state remits benefit monies to the Company.

During the years ended December 31, 2024 and 2023, the Company recognized $ 31 thousand and $ 64 thousand in government assistance from this program, respectively.

During the year ended December 31, 2025, the Company did no t receive any funds from this program.

During the year ended December 31, 2024, the Company recognized $ 31 thousand in government assistance from this program.

Note 14 – Quarterly Results (unaudited)

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Note 15 – Subsequent Events

On February 6, 2025, clirSPV exercised 1,343,000 of the Participation Right Pre-Funded Warrants at an exercise price of $ 0.0001 , resulting in the issuance of 1,343,000 shares of common stock.

On March 21, 2025, the accredited investor from our Private Placement exercised 360,247 of his Private Pre-Funded Warrants at an exercise price of $ 0.0001 , which exercise price per share was paid upon issuance of the Private Pre-Funded Warrants, resulting in the issuance of 360,247 shares of common stock.

See Note 2 – Summary of Significant Accounting Policies – Reverse Stock Split for more information.

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

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March 31, 2026

/s/ Judith S.

Schrecker, Lead Independent Director

March 31, 2025

/s/ Catharine Marie de Lacy

Catharine Marie de Lacy, Director

Todd Silva, Director

March 31, 2026

/s/ David Maley

David Maley, Director

/s/ Anthony DiGiandomenico

Anthony DiGiandomenico, Director

March 31, 2026

Todd Silva, Director

Basenese, Director

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 9A. Controls and Procedures