Item 9A. Controls and Procedures
ITEM 9A: CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
We maintain disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act that are designed to reasonably ensure that information required to be disclosed in our reports filed under the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal accounting and financial officer, as appropriate, to allow timely decisions regarding required disclosure.
We carried out an evaluation under the supervision and with the participation of management, including our Chief Executive Officer (principal executive officer) and our Vice President and Controller (principal accounting and financial officer), of the effectiveness of the design and operation of our disclosure controls and procedures as of December 31, 2021, the end of the period covered by this Annual Report on Form 10-K. Based upon the evaluation of our disclosure controls and procedures as of December 31, 2021, our Chief Executive Officer (principal executive officer) and our Vice President and Controller (principal accounting and financial officer) concluded that, as of such date, our disclosure controls and procedures were effective at the reasonable assurance level.
Management’s Report on Internal Control over Financial Reporting
Our Chief Executive Officer (principal executive officer) and our Vice President and Controller (principal accounting and financial officer) are responsible for establishing and maintaining internal control over financial reporting. Internal control over financial reporting is defined in Rule 13a-15(f) and 15d-15(f) promulgated under the Act as a process designed by, or under the supervision of, our principal executive and principal financial officers and effected by our board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that:
·
pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets;
·
provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of management and our directors; and
·
provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.
Because of its inherent limitations, our internal control over financial reporting may not prevent or detect misstatements. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Our management assessed the effectiveness of our internal control over financial reporting as of December 31, 2021. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control – Integrated Framework (2013 Framework). Based on this assessment, our management, with the participation of our Chief Executive Officer (principal executive officer) and our Vice President and Controller (principal accounting and financial officer), has concluded that, as of December 31, 2021, our internal control over financial reporting was effective based on those criteria.
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Changes in Internal Control over Financial Reporting
During the fourth quarter of 2021, we implemented balance sheet reconciliation control procedures which address a previously identified material weakness related to our ability to record transactions in the accounting records and preparation of financial statements that are in compliance with accounting principles generally accepted in the United States of America, which resulted in numerous adjustments that were recorded after the close of the Company’s books of record and preparation of the financial statements for the purposes of the Company’s Quarterly Report for the period ended June 30, 2021. During the fourth quarter of fiscal year 2021, we successfully completed the testing necessary to conclude that the material weakness has been remediated.
Except as noted above, there have been no changes in the Company’s internal control over financial reporting that have materially affected, or that are reasonably likely to materially affect, the Company’s internal control over financial reporting.
ITEM 9B: OTHER INFORMATION
None.
ITEM 9C: DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
Not applicable
PART III
ITEM 10: DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Incorporated by reference from our Proxy Statement for our 2022 Annual Meeting of Stockholders to be filed with the SEC within 120 days after the end of the year ended December 31, 2021.
Code of Business Conduct and Ethics
The Company has adopted a Code of Business Conduct and Ethics that applies to all ClearSign employees and directors. The Code of Business Conduct and Ethics is posted on the Company’s website at www.clearsign.com . We will post any amendments to or waivers from the Code of Business Conduct and Ethics at that location. We have also adopted Governance Guidelines for the Board of Directors and a written committee charter for each of our Audit Committee and Compensation Committee.
ITEM 11: EXECUTIVE COMPENSATION
Incorporated by reference from our Proxy Statement for our 2022 Annual Meeting of Stockholders to be filed with the SEC within 120 days after the end of the year ended December 31, 2021.
ITEM 12: SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED SHAREHOLDER MATTERS
Incorporated by reference from our Proxy Statement for our 2022 Annual Meeting of Stockholders to be filed with the SEC within 120 days after the end of the year ended December 31, 2021.
ITEM 13: CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
Incorporated by reference from our Proxy Statement for our 2022 Annual Meeting of Stockholders to be filed with the SEC within 120 days after the end of the year ended December 31, 2021.
ITEM 14: PRINCIPAL ACCOUNTANT FEES AND SERVICES
Incorporated by reference from our Proxy Statement for our 2022 Annual Meeting of Stockholders to be filed with the SEC within 120 days after the end of the year ended December 31, 2021.
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PART IV
ITEM 15: EXHIBITS, FINANCIAL STATEMENT SCHEDULES
15(a) (1) Consolidated Financial Statements
The financial statements filed as part of this report are listed and indexed in the Index to Consolidated Financial Statements included at Item 8. Financial statement schedules have been omitted because they are not applicable, or the required information has been included elsewhere in this report.
15(a) (2) Financial Statement Schedules
Not applicable.
15 (a) (3) Exhibits
The exhibits filed as part of this Annual Report on Form 10-K are listed in the Exhibit Table below. The Company has identified in the Exhibit Table each management contract and compensation plan filed as an exhibit to this Annual Report on Form 10-K in response to Item 15(a) (3) of Form 10-K.
Exhibit
No.
Description of Document
3.1
Articles of Incorporation of ClearSign Technologies Corporation (1)
3.2
Bylaws of ClearSign Technologies Corporation (2)
3.2.1
Amendment to Bylaws (3)
4.1
Form of Common Stock Certificate (4)
4.2
Description of the Registrant’s Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934 (12)
10.1
Office Lease Agreement (2)
10.2
Form of Confidentiality and Proprietary Rights Agreement (2)
10.3
ClearSign Technologies Corporation 2011 Equity Incentive Plan (2)+
10.4
Form of Director and Officer Indemnification Agreement (2)+
10.5
ClearSign Combustion Corporation 2013 Consultant Stock Plan (5)
10.6
First Amendment to Office Lease Agreement dated December 17, 2013 (6)
10.7
Second Amendment to Office Lease Agreement dated September 29, 2016 (7)
10.8
Third Amendment to Office Lease Agreement dated July 18, 2019 (9)
10.9
Employment Agreement dated January 28, 2019 between the registrant and Colin James Deller (10)+
10.10
Stock Purchase Agreement dated July 12, 2018 between the registrant and CLIRSPV, LLC (11)
10.11
At-the-Market Sales Agreement, dated December 23, 2020, by and between ClearSign Technologies Corporation and Virtu Americas LLC (13)
10.12
ClearSign Technologies Corporation 2021 Equity Incentive Plan (14)
10.13
2021 Equity Incentive Plan Form of Stock Option Award Agreement*
10.14
2021 Equity Incentive Plan Form of Restricted Stock Unit Award Agreement*
10.15
2021 Equity Incentive Plan Form of Restricted Stock Award Agreement*
10.16
Letter Agreement dated April 20, 2021 by and between the Company and Brian G. Fike (15)
10.17
Offer Letter dated October 18, 2021 by and between the Company and Brent Hinds (16)
10.18
Lease Agreement, entered into as of June 20, 2016, between Paradigm Realty Advisors, L.L.C. and ClearSign Technologies Corporation*
10.19
First Amendment to Lease, entered into as of July 29, 2019, between Tulsa Portfolio Oklahoma Realty LP and ClearSign Technologies Corporation*
10.20
Second Amendment to Lease, entered into as of January 14, 2020, between Tulsa Portfolio Oklahoma Realty LP and ClearSign Technologies Corporation*
21
Subsidiaries of the registrant (7)
23.1
Consent of BPM LLP, Independent Registered Public Accounting Firm*
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23.2
Consent of Gumbiner Savett Inc., Independent Registered Public Accounting Firm*
31.1
Certification of the Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002*
31.2
Certification of the Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002*
32.1
Certification of the Principal Executive Officer and Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002**
101INS
Inline XBRL Instance Document*
101.SCH
Inline XBRL Taxonomy Extension Schema*
101.CAL
Inline XBRL Taxonomy Extension Calculation Linkbase*
101.DEF
Inline XBRL Taxonomy Extension Definition Linkbase*
101.LAB
Inline XBRL Taxonomy Extension Label Linkbase*
101.PRE
Inline XBRL Taxonomy Extension Presentation Linkbase*
104
Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)*
*Filed herewith.
**Furnished herewith.
+Agreement with management or compensatory plan or arrangement
(1)
Incorporated by reference from the registrant’s Form 10-Q for the quarter ended September 30, 2019 filed with the Securities and Exchange Commission on November 13, 2019.
(2)
Incorporated by reference from the registrant’s registration statement on Form S-1, as amended, file number 333-177946, originally filed with the Securities and Exchange Commission on November 14, 2011.
(3)
Incorporated by reference from the registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on June 12, 2019.
(4)
Incorporated by reference from the registrant’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 26, 2015.
(5)
Incorporated by reference from the registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2013, filed with the Securities and Exchange Commission on May 6, 2013.
(6)
Incorporated by reference from the registrant’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 11, 2014.
(7)
Incorporated by reference from the registrant’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 12, 2019.
(8)
Incorporated by reference from the registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on January 10, 2019.
(9)
Incorporated by reference from the registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on August 28, 2019.
(10)
Incorporated by reference from the registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on January 30, 2019.
(11)
Incorporated by reference from the registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on July 17, 2018.
(12)
Incorporated by by reference from the registrant’s Annual Report on Form 10-K for the year ended December 31, 2019, filed with the Securities and Exchange Commission on March 30, 2020
(13) Incorporated by reference from the registrant’s Current Report on Form 8-K filed with the Securities and Exchange
Commission on December 23, 2020.
(14) Incorporated herein by reference from Appendix A to the registrant’s Proxy Statement on Schedule 14A, filed with the
Securities and Exchange Commission on May 7, 2021.
(15)
Incorporated by reference from the registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2020, filed with the Securities and Exchange Commission on August 20, 2021.
(16) Incorporated by by reference from the registrant’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2021,
filed with the Securities and Exchange Commission on November 12, 2021.
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ITEM 16: FORM 10-K SUMMARY
None
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SIGNATURES
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.
CLEARSIGN TECHNOLOGIES CORPORATION
Date: March 31, 2022
By:
/s/ Colin J. Deller
Colin J. Deller
Chief Executive Officer
Date: March 31, 2022
By:
/s/ Brent Hinds
Brent Hinds
Vice President and Controller
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
Date: March 31, 2022
/s/ Colin J. Deller
Colin J. Deller
Chief Executive Officer and Director
(Principal Executive Officer)
Date: March 31, 2022
/s/ Brent Hinds
Brent Hinds
Vice President and Controller
(Principal Financial and Accounting Officer)
Date: March 31, 2022
/s/ Robert T. Hoffman Sr.
Robert T. Hoffman Sr., Director
Date: March 31, 2022
/s/ Judith S. Schrecker
Judith S. Schrecker, Director
Date: March 31, 2022
/s/ Susanne L. Meline
Susanne L. Meline, Director
Date: March 31, 2022
/s/ Bruce A. Pate
Bruce A. Pate, Director
31
Text extracted from the filing as submitted to EDGAR. Formatting, tables and exhibits are simplified for reading; the original document is authoritative for anything you rely on.