What changed in this filing

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Item 1A. Risk Factors

2024-04-01 compared with 2023-03-31 · 85 added, 50 removed, 206 unchanged (40% of the section changed)

27 unchanged sentences

While we have demonstrated our technology, this does not guarantee the industrial combustion market will accept it, nor can we control the rate at which such acceptance may be achieved.

In certain of our market segments, there is a well-established channel with a limited number of companies engaged in reselling to our target customers.

In certain market segments of ours, there is a well-established channel with a limited number of companies engaged in reselling to our target customers.

Failure to achieve productive relations with a sufficient number of these prospective partners may impede adoption of our technology.

8 unchanged sentences

These regulations are important incentives in the adoption of technologies like ours.

To the extent that environmental regulations in the U.S.

To the extent that

environmental regulations in the U.S.

and in other industrialized countries are modified in the future, or even relaxed, our technology may not produce the results required, or may even be unnecessary, to comply with the modified regulations.

29 unchanged sentences

Additionally, while we have implemented measures to prevent security breaches and cyber incidents, our preventative measures and incident response efforts may not be entirely effective.

disruption, negative publicity, brand damage, violation of privacy laws, loss of customers, potential liability and competitive disadvantage all of which could have a material adverse effect on our business, financial condition or results of operations.

The theft, destruction, loss, misappropriation, or release of sensitive and/or confidential information or intellectual property, or interference with our information technology systems, could result in business disruption, negative publicity, brand damage, violation of privacy laws, loss of customers, potential liability and competitive disadvantage all of which could have a material adverse effect on our business, financial condition or results of operations.

We cannot guarantee that any collaborative business research and development partnership we enter into will be successful.

Collaborative arrangements involve risks that participating parties may disagree on business decisions and strategies.

These disagreements could result in delays, additional costs, risks of litigation, and failure of the development of our technology within the combustion market segment.

These disagreements could result in delays, additional costs, risks of litigation, and failure of the development of our technology within the

combustion market segment.

Success of any collaborative arrangements we enter into will depend, in part, on whether those with whom we collaborate fulfill their contractual obligations satisfactorily.

48 unchanged sentences

As a result of our anticipated growing operations in China, these risks could have a material adverse effect on our business, results of operations and financial condition.

Furthermore, our operations in China have been impacted by COVID-19, which has resulted in the limitation of flights in and out of China, quarantines, and travel restrictions on the local work force and personnel from our U.S.

As a result, the Company has experienced delays in the completion of boiler burner demonstration projects during 2020, 2021 and 2022.

In addition to our own work, the work of our partners and suppliers in China have been, and continue to be affected.

The resulting delays to the delivery of materials and services, has resulted in delays to our projects.

As a result of such delays, our business relationships and results of operations have been and may continue to be adversely affected.

Finally, the U.S.

25 unchanged sentences

This could cause us to experience interruption in our production and distribution of our products, difficulty retaining current relationships and attracting new relationships, or harm our brand, reputation or growth.

Additionally, because the Company’s contracts generally include progress payments from customers upon the completion of certain defined milestones, the revenue recognition of

such project will depend on our subcontractor’s services in order for us to be able to achieve such milestones timely.

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

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

1 unchanged sentence

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

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

While we do not purchase any of significant raw materials directly from Russia, it is a significant global producer of fuel, nickel, and copper.

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

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

Disruptions in the markets for those inputs could negatively impact the world and domestic economy.

We cannot predict the extent or duration of sanctions in response to the conflict in Ukraine, nor can we predict the effects of legislative or other governmental actions or regulatory scrutiny of Russia, Russia's other allies or other countries with which Russia has significant trade or financial ties, including China.

The conflict in Ukraine may also exacerbate geopolitical tensions globally.

Also, these conflicts have exacerbated geopolitical tensions globally.

While the demand of our services in the U.S.

has not yet been affected by this conflict in Ukraine and fuel prices, we cannot predict the impact that the conflict may have on future financial results.

For example, domestic customers for some of our product lines may choose to reduce discretionary spending on goods and services such as ours until fuel and oil price volatility subsides.

have not yet been affected by these conflicts, we cannot predict the impact that the conflicts may have on future financial results.

For example, domestic customers for some of our product lines may choose to reduce discretionary spending on goods and services such as ours until this volatility subsides.

We are exposed to fluctuations in the market values of our investments and in interest rates, either of which could impair the

market value of our investments and harm our financial results.

As of December 31, 2022, we had $2,606 thousand of investments in short-term held-to-maturity debt security investments,

As of December 31, 2023, we had zero investments in short-term held-to-maturity debt security investments,

consisted primarily of U.S.

In the future, we may further invest in long- or short-term U.S.

treasuries or other marketable

securities with maturities of up to one year.

however, in the future we may further invest in long- or short-term U.S.

treasuries or other marketable securities with maturities of up to one year.

Currently, we do not use financial derivatives to hedge our interest rate exposure.

9 unchanged sentences

We completed the initial public offering of our common stock in April 2012.

Since that time, our common stock (CLIR:

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

Since that time, our common stock (NASDAQ:

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

This volatility may continue or increase in the future.

The market price for the securities may be significantly affected by factors such as progress in the development of our technology, agreements with research facilities or co-development partners, commercialization of our technology, variations in quarterly and yearly operating results, general trends in the alternative energy industry, and changes in state or federal regulations affecting us and our industry.

Furthermore, in recent years the stock market has experienced extreme price and volume fluctuations that are unrelated or disproportionate to the operating performance of the affected companies, such as the market reactions to internet marketed ‘short squeezes’ or the coronavirus outbreak.

Such broad market fluctuations may adversely affect the market price of our securities.

2 unchanged sentences

We are authorized to issue 2.0 million shares of “blank check” preferred stock, with such rights, preferences and privileges as may be determined from time-to-time by our board of directors.

Our board of directors is empowered, without shareholder approval,

to issue preferred stock in one or more series, and to fix for any series the dividend rights, dissolution or liquidation preferences, redemption prices, conversion rights, voting rights, and other rights, preferences and privileges for the preferred stock.

Our board of directors is empowered, without shareholder approval, to issue preferred stock in one or more series, and to fix for any series the dividend rights, dissolution or liquidation preferences, redemption prices, conversion rights, voting rights, and other rights, preferences and privileges for the preferred stock.

No shares of preferred stock are presently issued and outstanding and we have no immediate plans to issue shares of preferred stock.

8 unchanged sentences

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

There can be no assurance that we will be able to comply with the continued listing standards of Nasdaq.

On November 24, 2023, we received a notice (the “Notice”) from the Listing Qualifications Department of Nasdaq stating

that the previously announced resignation of Gary DiElsi from the our board of directors resulted in noncompliance with the board of

directors independence requirements set forth in Nasdaq Listing Rule 5605(b)(1) and the requirement in Nasdaq Listing Rule

5605(c)(2)(A) to have an audit committee of at least three independent directors.

More specifically, when the Notice was issued, the board of directors did not have a majority of directors who would be

considered “independent directors,” as that term is defined in Nasdaq Listing Rule 5605(a)(2) and the audit committee of the board of

directors consisted of only two independent directors.

Consistent with Nasdaq Listing Rules 5605(b)(1)(A) and Rule 5605(c)(4),

Nasdaq has provided us a cure period in order to regain compliance until the earlier of (i) our next annual shareholders’ meeting or

November 11, 2024, or (ii) if the next annual shareholders’ meeting is held before May 7, 2024, then we must evidence compliance

no later than May 7, 2024.

There can be no assurances that we will be able to regain compliance with Nasdaq’s listing standards or if we do later regain

compliance with Nasdaq’s listing standards, will be able to continue to comply with the applicable listing standards.

If we are unable

to maintain compliance with these Nasdaq requirements, our common stock will be delisted from Nasdaq.

If Nasdaq delists our

common stock, we could face significant material adverse consequences, including:

● a limited availability of market quotations for our securities;

● a determination that our common stock is a “ penny stock ” which will require brokers trading in our common stock to

adhere to more stringent rules and possibly resulting in a reduced level of trading activity in the secondary trading market for our common stock;

● a limited amount of news and analyst coverage for our company;

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

We have not paid dividends in the past and have no immediate plans to pay dividends.

10 unchanged sentences

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

Our certificate of incorporation provides that the Court of Chancery of the State of Delaware is the exclusive forum for certain

disputes between us and our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or employees.

Our certificate of incorporation provides that, with certain limited exceptions, the Court of Chancery of the State of Delaware is the exclusive forum for:

● any derivative action or proceeding brought on our behalf;

● any action asserting a claim of breach of fiduciary duty owed by any director, officer or stockholder;

● any action asserting a claim against us arising under the Delaware General Corporation Law ( “ DGCL ” ), or as to which the DGCL confers jurisdiction on the Court of Chancery of the State of Delaware;

● any action arising pursuant to any provision of our bylaws or certificate of incorporation;

● any action asserting a claim against us or any current or former director, officer or stockholder that is governed by the internal-affairs doctrine.

This provision does not apply to suits brought to enforce a duty or liability created by the Securities Act, the Exchange Act

or any other claim for which the U.S.

federal courts have exclusive jurisdiction.

In addition, unless we consent in writing to the

selection of an alternative forum, to the fullest extent permitted by law, the federal district courts of the United States of America shall

be the exclusive forum for the resolution of any complaint asserting a cause or causes of action arising under the Securities Act,

including all causes of action asserted against any defendant to such complaint.

For the avoidance of doubt, this provision is intended to benefit and may be enforced by us, our officers and directors, the

underwriters to any offering giving rise to such complaint, and any other professional entity whose profession gives authority to a

statement made by that person or entity and who has prepared or certified any part of the documents underlying the offering.

However, these choice of forum provisions may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers, or other employees.

Further, these choice of forum provisions may increase the costs for a stockholder to bring such a claim and may discourage them from doing so.

While the Delaware courts have determined that such choice of forum provisions are facially valid, a stockholder may

nevertheless seek to bring a claim in a venue other than those designated in the exclusive forum provisions, and there can be no

assurance that such provisions will be enforced by a court in those other jurisdictions.

If a court were to find the choice of forum

provision contained in our amended and restated certificate of incorporation to be inapplicable or unenforceable in an action, we may

incur additional costs associated with resolving such action in other jurisdictions.

For example, the Court of Chancery of the State of

Delaware recently determined that the exclusive forum provisions of federal district courts of the United States of America for

resolving any complaint asserting a cause of action arising under the Securities Act is not enforceable.

We note that investors cannot waive compliance with the federal securities laws and the rules and regulations thereunder.

The rights of our stockholders to take action against our directors and officers are limited.

Our certificate of incorporation provides for indemnification of our directors and officers to the fullest extent authorized or

permitted under Delaware law, except to the extent such exemption from liability or limitation thereof is not permitted under the

DGCL as the same exists or hereafter may be amended.

Our bylaws obligates us to indemnify each of our directors or officers who is or is threatened to be made a party to or

witness in a proceeding by reason of his or her service in those or certain other capacities, to the maximum extent permitted by

Delaware law, from and against any claim or liability to which such person may become subject or which such person may incur by

reason of his or her status as a present or former director or officer of us or serving in such other capacities.

In addition, we may be

obligated to reimburse the expenses reasonably incurred by our present and former directors and officers in connection with such

As a result, we and our stockholders may have more limited rights to recover money damages from our directors and

officers than might otherwise exist absent these provisions in our bylaws or that might exist with other companies, which could limit your recourse in the event of actions that are not in our best interests.

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

2 unchanged sentences

We are subject to the reporting requirements of the Securities Exchange Act of 1934 and the Sarbanes-Oxley Act of 2002 (with the exception of the requirement of auditor attestation of internal control over financial reporting from which we are currently excluded as a non-accelerated filer company), as well as rules subsequently implemented by the Commission that impose significant requirements on public companies, including requiring establishment and maintenance of effective disclosure and financial controls and changes in corporate governance practices.

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

personnel, systems and resources.

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

1 unchanged sentence

As a result, it may be more difficult for us to attract and retain qualified people to serve on our board of directors, our board committees or as executive officers.

Our charter documents and Washington State law may inhibit a takeover that shareholders consider favorable.

Provisions of our articles of Incorporation and bylaws and applicable provisions of the state of Washington law may delay or discourage transactions involving an actual or potential change in our control or change in our management, including transactions in which shareholders might otherwise receive a premium for their shares, or transactions that our shareholders might otherwise deem to be in their best interests.

The provisions in our articles of incorporation and bylaws:

● authorize our board of directors to issue preferred stock without shareholder approval and to designate the rights, preferences and privileges of each class;

if issued, such preferred stock would increase the number of outstanding shares of our capital stock and could include terms that may deter an acquisition of us;

● limit who may call shareholder meetings;

● do not provide for cumulative voting rights;

● provide that all vacancies may be filled by the affirmative vote of a majority of directors then in office, even if less than a quorum, unless the vacant office is to be held by a director elected by the holders of one or more classes or series of shares entitled to vote thereon, in which case the vacancy can be filled only by the vote of the holders of such class or series.

In addition, Chapter 23B.19 of the state of Washington Revised Code generally limits our ability to engage in any business combination with a person who beneficially owns 10% or more of our outstanding voting stock unless certain conditions are satisfied.

This restriction lasts for a period of five years following the share acquisition.

These provisions may have the effect of entrenching our management team and may deprive you of the opportunity to sell your shares to potential acquirers at a premium over prevailing prices.

This potential inability to obtain a control premium could reduce the price of our common stock or other securities.

clirSPV LLC has substantial influence in our ability to enter into corporate transactions, and if clirSPV LLC decides to sell or otherwise transfer their shares of common stock, it may put downward pressure on the trading price of our common stock.

2 unchanged sentences

Further, clirSPV may choose to sell or otherwise transfer a large number of shares of our common stock, which may put downward pressure on the trading price of shares of our common stock.

If we fail to comply with the continued minimum closing bid requirements of The Nasdaq Capital Market LLC (“Nasdaq”) by May 1, 2023 or other requirements for continued listing, including stockholder equity requirements, our common stock may be delisted and the price of our common stock and our ability to access the capital markets could be negatively impacted.

Our common stock is listed for trading on Nasdaq, therefore, we must satisfy Nasdaq’s continued listing requirements, including, among other things, a minimum closing bid price requirement of $1.00 per share for 30 consecutive business days.

On November 1, 2022, the Nasdaq staff notified us that we did not comply with the minimum $1.00 per share bid price requirement for continued listing, as set forth in Nasdaq Listing Rule 5550(a)(2).

We have been granted 180 calendar days, through May 1, 2023, to regain compliance.

In the event that we do not regain compliance within this 180 day period, we may be eligible to seek an additional compliance period of 180 calendar days if we meet certain requirements.

There can be no assurance that we will be able to regain compliance with Nasdaq’s listing rules.

If we are unable to regain compliance with the minimum closing bid price requirement or if we fail to meet any of the other continued listing requirements, including stockholder equity requirements, our securities may be delisted from Nasdaq, which could reduce the liquidity of our common stock materially and result in a corresponding material reduction in the price of our common stock.

In addition, delisting could harm our ability to raise capital on terms acceptable to us, or at all, and may result in the potential loss of confidence by investors, employees and business development opportunities.

UNRESOLVED STAFF COMMENTS.

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

What changed 10-K

Item 1A. Risk Factors