What changed in this filing

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Item 9A. Controls and Procedures

2024-04-01 compared with 2023-03-31 · 239 added, 229 removed, 545 unchanged (46% of the section changed)

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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, 2022, 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, 2022, 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.

We carried out an evaluation under the supervision and with the participation of management, including our Chief Executive Officer (principal executive officer) and our Chief Financial Officer (principal accounting and financial officer), of the effectiveness of the design and operation of our disclosure controls and procedures as of December 31, 2023, 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, 2023, our Chief Executive Officer (principal executive officer) and our Chief Financial Officer (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.

Our Chief Executive Officer (principal executive officer) and our Chief Financial Officer (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:

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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, 2022, our internal control over financial reporting was effective based on those criteria.

Based on this assessment, our management, with the participation of our Chief Executive Officer (principal executive officer) and our Chief Financial Officer (principal accounting and financial officer), has concluded that, as of December 31, 2023, our internal control over financial reporting was effective based on those criteria.

Changes in Internal Control over Financial Reporting

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OTHER INFORMATION.

None of the Company’s directors or officers adopted , modified or terminated a Rule 10b5-1 trading arrangement or a non-

Rule 10b5-1 trading arrangement during the Company’s fiscal quarter ended December 31, 2023, as such terms are defined under

Item 408(a) of Regulation S-K.

DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS.

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Description of Document

Articles of Incorporation of ClearSign Technologies Corporation (1)

Bylaws of ClearSign Technologies Corporation (2)

Amendment to Bylaws (3)

Form of Common Stock Certificate (4)

Description of the Registrant’s Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934 (12)

Office Lease Agreement (2)

Form of Confidentiality and Proprietary Rights Agreement (2)

ClearSign Technologies Corporation 2011 Equity Incentive Plan (2)+

Form of Director and Officer Indemnification Agreement (2)+

ClearSign Combustion Corporation 2013 Consultant Stock Plan (5)

First Amendment to Office Lease Agreement dated December 17, 2013 (6)

Second Amendment to Office Lease Agreement dated September 29, 2016 (7)

Third Amendment to Office Lease Agreement dated July 18, 2019 (9)

Employment Agreement dated January 28, 2019 between the registrant and Colin James Deller (10)+

Stock Purchase Agreement dated July 12, 2018 between the registrant and CLIRSPV, LLC (11)

At-the-Market Sales Agreement, dated December 23, 2020, by and between ClearSign Technologies Corporation and Virtu Americas LLC (13)

ClearSign Technologies Corporation 2021 Equity Incentive Plan (14)

2021 Equity Incentive Plan Form of Stock Option Award Agreement (15)

2021 Equity Incentive Plan Form of Restricted Stock Unit Award Agreement (15)

2021 Equity Incentive Plan Form of Restricted Stock Award Agreement (15)

Letter Agreement dated April 20, 2021 by and between the Company and Brian G.

Offer Letter dated October 18, 2021 by and between the Company and Brent Hinds (17)

Plan of Conversion, dated June 14, 2023 (incorporated by reference to Exhibit 2.1 to the Company ’ s Form 8-K

filed with the Securities and Exchange Commission on June 15, 2023).

Certificate of Incorporation of ClearSign Technologies Corporation, a Delaware corporation

(incorporated by reference to Exhibit 3.3 to the Company ’ s Form 8-K filed with the Securities and Exchange

Commission on June 15, 2023).

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 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).

Articles of Conversion, as filed with the Secretary of State of the State of Washington on June 14, 2023 (incorporated by reference to Exhibit 3.2 to the Company’s Form 8-K filed with the Securities and Exchange Commission on June 15, 2023).

Description of Securities of the Company.

Form of Confidentiality and Proprietary Rights Agreement (incorporated by reference to Exhibit 10.6 to the

Company ’ s Form 10-K filed with the Securities and Exchange Commission on February 26, 2015).

Form of Director and Officer Indemnification Agreement (incorporated by reference to Exhibit 10.1 to the

Company ’ s Form 10-Q filed with the Securities and Exchange Commission on August 14, 2023).

ClearSign Combustion Corporation 2013 Consultant Stock Plan (incorporated by reference to Exhibit 10.1 to

the Company ’ s Form 10-Q filed with the Securities and Exchange Commission on May 6, 2013).

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) .

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).

Lease Agreement, entered into as of June 20, 2016, between Paradigm Realty Advisors, L.L.C.

and ClearSign Technologies Corporation (15)

First Amendment to Lease, entered into as of July 29, 2019, between Tulsa Portfolio Oklahoma Realty LP and ClearSign Technologies Corporation (15)

Second Amendment to Lease, entered into as of January 14, 2020, between Tulsa Portfolio Oklahoma Realty LP and ClearSign Technologies Corporation (15)

Purchase Right Waiver of clirSPV LLC (18)

Gary DiElsi’s Offer Letter (19)

Amendment to Employment Agreement between the Company and Colin James Deller (20)+

Subsidiaries of the registrant (7)

and ClearSign Technologies Corporation (incorporated by reference to Exhibit 10.18 to the Company ’ s Form 10-K filed

with the Securities and Exchange Commission on March 31, 2022).

First Amendment to Lease, entered into as of July 29, 2019, between Tulsa Portfolio Oklahoma Realty LP and ClearSign Technologies Corporation (incorporated by reference to Exhibit 10.19 to the Company ’ s Form 10-

K filed with the Securities and Exchange Commission on March 31, 2022).

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).

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).

Consent of BPM CPA LLP, Independent Registered Public Accounting Firm

Power of Attorney (included on the signature page of this report)

Certification of the Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

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Certification of the Principal Executive Officer and Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

Clawback Policy.

Inline XBRL Instance Document

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*Filed herewith.

**Previously filed.

***Furnished herewith.

+Agreement with management or compensatory plan or arrangement

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.

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.

Incorporated by reference from the registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on June 12, 2019.

Incorporated by reference from the registrant’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 26, 2015.

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.

Incorporated by reference from the registrant’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 11, 2014.

Incorporated by reference from the registrant’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 12, 2019.

Incorporated by reference from the registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on January 10, 2019.

Incorporated by reference from the registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on August 28, 2019.

Incorporated by reference from the registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on January 30, 2019.

Incorporated by reference from the registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on July 17, 2018.

Incorporated 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 Annual Report on Form 10-K for the year ended December 31, 2021, filed with the Securities and Exchange Commission on March 31, 2022

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.

(17) Incorporated 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.

(18) Incorporated by reference from the registrant’s Current Report on Form 8-K, filed with the Securities and Exchange

Commission on May 31, 2022.

(19) Incorporated by reference from the registrant’s Current Report on Form 8-K, filed with the Securities and Exchange

Commission on August 2, 2022.

(20) Incorporated by reference from the registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2022, filed

with the Securities and Exchange Commission on August 15, 2022.

FORM 10-K SUMMARY.

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ANNUAL FINANCIAL INFORMATION

Report of Independent Registered Public Accounting Firm (PCAOB ID 207 )

Report of Independent Registered Public Accounting Firm (PCAOB:

Consolidated Balance Sheets at December 31, 2023 and 2022

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Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of ClearSign Technologies Corporation and subsidiary (the "Company") as of December 31, 2022 and 2021, and the related consolidated statements of operations and comprehensive loss, stockholders’ equity, and cash flows, for each of the two years in the period ended December 31, 2022, and the related notes (collectively referred to as the "consolidated financial statements").

We have audited the accompanying consolidated balance sheets of ClearSign Technologies Corporation and subsidiary (the "Company") as of December 31, 2023 and 2022, and the related consolidated statements of operations and comprehensive loss, stockholders’ equity, and cash flows, for each of the two years in the period ended December 31, 2023, and the related notes (collectively referred to as the "consolidated financial statements").

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2023, in conformity with accounting principles generally accepted in the United States of America.

Going Concern

The accompanying financial statements have been prepared assuming that the entity will continue as a going concern.

As discussed in Note 1 to the financial statements, the entity has suffered recurring losses from operations and has a net capital deficiency that raise substantial doubt about its ability to continue as a going concern.

Management's plans in regard to these matters are also described in Note 1.

The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

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Our responsibility is to express an opinion on the Company's consolidated financial statements based on our audit.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

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The communication of this critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the account or disclosures to which it relates.

Carrying Value of Patents and Other Intangible Assets

Carrying Cost of Patents and Other Intangible Assets

As described in Notes 2 and 4 to the consolidated financial statements, the Company’s patents and other intangible assets, net balance was $0.8 million as of December 31, 2023.

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Additional paid-in capital

Accumulated other comprehensive income (loss)

Accumulated other comprehensive loss

Accumulated deficit

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Cost of goods sold

Gross profit (loss)

Operating expenses:

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Loss from operations

Interest, net

Government assistance

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Total other income

Net loss attributed to non-controlling interest

Net loss attributed to common stockholders

Net loss per share - basic and fully diluted

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ClearSign Technologies Corporation

Consolidated Statements of Stockholders’ Equity

Consolidated Statement of Stockholders’ Equity

For the Year Ended December 31, 2023

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Stockholders’

Noncontrolling

Paid-In Capital

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Balances at December 31, 2022

Shares issued upon exercise of options ($ 0.89 per share)

Shares issued upon exercise of options ($ 2.93 per share)

Share-based compensation, net of taxes paid

Fair value of stock issued in payment of accrued compensation

Fair value of stock options granted in payment of accrued compensation

Share based compensation

Shares issued through the use of At-The Market issuance ($ 1.24 average per share)

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 in stock offering ($ 1.11 per share)

Shares issued pursuant to purchase right ($ 1.11 per share)

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

Foreign-exchange translation adjustment

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ClearSign Technologies Corporation

Consolidated Statements of Stockholders’ Equity

Consolidated Statement of Stockholders’ Equity

For the Year Ended December 31, 2022

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Technologies Corp.

(in thousands, except per share data)

Comprehensive

Stockholders'

Noncontrolling

Paid-In Capital

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Balances at December 31, 2021

Shares issued through the use of At-The Market issuance ($ 5.03 average per share)

Shares issued upon exercise of options ($ 0.89 per share)

Shares issued upon exercise of options ($ 2.93 per share)

Shares issued upon exercise of options ($ 1.90 per share)

Shares issued upon exercise of options ($ 1.85 per share)

Shares issued upon exercise of options ($ 1.21 per share)

Shares issued upon exercise of options ($ 0.98 per share)

Shares issued upon exercise of options ($ 0.89 per share)

Shares issued upon exercise of options ($ 1.80 per share)

Shares issued for services ($ 2.33 per share)

Shares issued for services ($ 1.93 per share)

Fair value of stock issued in payment of accrued compensation

Fair value of stock options issued for board service

Fair value of stock options granted in payment of accrued compensation

Share based compensation

Shares issued through the use of At-The Market issuance ($ 1.24 average per share)

Shares issued for services ($ 1.93 per share)

Shares issued for services ($ 0.66 per share)

Shares issued in stock offering ($ 1.11 per share)

Shares issued pursuant to purchase right ($ 1.11 per share)

Foreign-exchange translation adjustment

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(in thousands)

For the Year Ended December 31,

For the Years Ended December 31,

Cash flows from operating activities:

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Depreciation and amortization

Impairment of intangible assets

Gain from sale of fixed assets

Right of use asset amortization

Realized gain from market securities

Gain on forgiveness of Payroll Protection Program Loan and interest

Realized gain from marketable securities

Lease amendments

Impairment of fixed assets

Impairment of intangible assets

Change in operating assets and liabilities:

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Prepaid expenses and other assets

Other long term assets

Accounts payable and accrued liabilities

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Proceeds from sale of fixed assets

Purchases of held-to-maturity short-term US treasuries

Redemption of held-to-maturity US treasuries

Net cash used in investing activities

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

Cash flows from financing activities:

Proceeds from issuance of common stock, net of offering costs

Proceeds from exercise of stock options and warrants

Net cash provided by financing activities

Taxes paid related to vesting of restricted stock units

Net cash (used in) provided by financing activities

Effect of exchange rate changes on cash and cash equivalents

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Net change in cash and cash equivalents

Cash and cash equivalents, beginning of period

Cash and cash equivalents, end of period

Cash and cash equivalents, beginning of year

Cash and cash equivalents, end of year

Supplemental disclosure of cash flow information:

Officer and employee equity awards for prior year accrued compensation

Prior year prepaid expenses repurposed to fixed assets as demonstration equipment

Non-cash impact of new lease

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

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These markets include energy (upstream oil production and down-stream refining), commercial/industrial boiler, chemical, petrochemical, transport and power industries.

The Company’s primary technology is its ClearSign Core technology, which achieves very low emissions without the need of external flue gas recirculation or selective catalytic reduction.

The Company was incorporated in the State of Washington in 2008.

The Company’s primary technology is its ClearSign Core technology, which achieves very low emissions without the need of selective catalytic reduction.

The Company was originally incorporated in the State of Washington in 2008.

During January 2022, the Company relocated its headquarters from Seattle, Washington to Tulsa, Oklahoma.

Effective June 15, 2023, the Company changed its state of incorporation to Delaware.

On July 28, 2017, the Company incorporated a subsidiary, ClearSign Asia Limited, in Hong Kong to represent the Company’s business and technological interests throughout Asia.

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The Company's consolidated financial statements have been presented on the basis that it is a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business.

As of December 31, 2022, the Company’s cash and cash equivalents totaled $ 6,451 thousand, and short-term held-to-maturity investments totaled $ 2,606 thousand, which is sufficient to fund current operating expenses beyond twelve months from the date hereof.

As of December 31, 2023, the Company’s cash and cash equivalents totaled $ 5,684 thousand, which is not sufficient to fund current operating expenses beyond twelve months from the date hereof.

The Company’s technologies are currently in field development, but with nominal fully operational commercial installations, and have generated nominal revenues from operations to date to meet operating expenses.

In order to generate meaningful revenues, the technologies must be fully developed, gain market recognition and acceptance, and develop a critical level of successful sales and product installations.

These factors raise substantial doubt about the Company’s ability to continue as a going concern for the twelve months from the date of this report.

Historically, the Company has financed operations primarily through issuances of equity securities.

Since inception, the Company has raised approximately $ 91.0 million in gross proceeds through the sale of its equity securities.

During the year ended December 31, 2022, the Company raised approximately $ 6.5 million in net proceeds by issuing approximately 6.3 million shares of common stock.

During the year ended December 31, 2023, the Company did not raise proceeds through the issuance of common stock.

The Company has incurred losses since its inception totaling $ 93.7 million and expects to experience operating losses and negative cash flows for the foreseeable future.

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There can be no assurance that the Company will be successful in achieving its long-term plans as set forth above, or that such plans, if consummated, will result in profitable operations or enable the Company to continue in the long-term as a going concern.

As a result, the substantial doubt the Company’s ability to continue as a going concern had not been alleviated.

The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

Note 2 – Summary of Significant Accounting Policies

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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.

Contract Acquisition Costs and Practical Expedients

Contract Costs

The Company capitalizes project costs until performance obligations related to the contract are completed.

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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.

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

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

Cash and Cash Equivalents

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

The cost basis for our short-term investments totaled approximately $ 2,606 thousand and zero for the periods December 31, 2022, and 2021, respectively.

The unrealized holding gains for our short-term investments totaled approximately $ 4 thousand and zero for the periods December 31, 2022, and 2021, respectively.

The cost basis for our short-term investments totaled approximately zero and $ 2,606 thousand for the years ended December 31, 2023 and 2022, respectively.

The unrealized holding gains for our short-term investments totaled approximately zero and $ 4 thousand for

the years ended December 31, 2023 and 2022, respectively.

We have not experienced any continuous unrealized holding losses on these investments.

The fair value for our short-term investments totaled approximately $ 2,610 thousand and zero for the periods December 31, 2022, and 2021, respectively.

The fair value for our short-term investments totaled approximately zero and $ 2,610 thousand for the years ended December 31, 2023 and 2022, respectively.

Accounts Receivable and Allowance for Doubtful Accounts

Accounts receivables are recorded at the contractual invoiced amount.

An allowance for doubtful accounts is established, as necessary, based on past experience and management’s judgment.

The determination of the collectability of amounts due from customers require the Company to make judgments regarding future events and trends.

Allowances for doubtful accounts are determined based on assessing the Company’s portfolio on an individual customer and on an overall basis.

This process consists of a review of historical collection experience, current aging status of the customer accounts, and the financial condition of the Company’s customers.

Based on a review of these factors, the Company may establish or adjust the allowance for specific customers and the accounts receivable portfolio as a whole.

Trade accounts receivable is stated at the cost less a reserve 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 loss 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.

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

In accordance with Company policy and based on the Company’s historical experience, the Company estimates a reserve due to the nature of uncertainty for collectability of reimbursement.

The allowance for collectability reserve as of December 31, 2023, and 2022 was zero , respectively.

Fixed Assets and Leases

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Research 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, 2022, the Company did not receive funds from these arrangements.

During December 31, 2021, the Company received $ 44 thousand from these arrangements.

During the year ended December 31, 2023, the Company received $ 60 thousand from these arrangements.

During the year ended December 31, 2022, the Company did no t receive funds from these arrangements.

Government Assistance

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The accompanying consolidated balance sheets as of December 31, 2023 and 2022 include assets amounting to approximately $ 334 thousand and $ 172 thousand, respectively, relating to operations of ClearSign Asia Limited.

The Beijing registered capital requirement is $ 350 thousand, which is required to be paid by 2027, and of which the Company has not paid any as of December 31, 2022.

It is always possible that unanticipated events in foreign countries could disrupt the Company’s operations, and since the first quarter of 2020 this has been and currently continues to be the case with the effects of the COVID-19 pandemic.

The Beijing registered capital requirement is $ 350 thousand, which is required to be paid by 2027, and of which $ 111 thousand has been paid as of December 31, 2023.

It is always possible that unanticipated events in foreign countries could disrupt the Company’s operations, and since the first quarter of 2020, this has been the case with the effects of the COVID-19 pandemic.

Foreign Currency

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Dollars using rates that approximate those in effect during the period.

The resulting translation adjustments are included in the Company’s consolidated balance sheets in the stockholders’ equity section as a component of accumulated other comprehensive income (loss).

Noncontrolling Interest

The subsidiary of the Company has a minority shareholder agreement representing an ownership interest of 1.00 % of ClearSign Asia Limited.

The Company accounts for this noncontrolling interest pursuant to FASB Topic ASC 810, Consolidation, whereby gains and losses in a subsidiary with a noncontrolling interest are allocated to the noncontrolling interest based on the ownership percentage of the noncontrolling interest, even if that allocation results in a deficit noncontrolling interest balance.

As of December 31, 2022, the noncontrolling interest balance was de minimus.

The resulting translation adjustments are included in the Company’s consolidated balance sheets in the stockholders’ equity section as a component of accumulated other comprehensive (loss).

Net Loss per Common Share

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ASU 2016-13, and related amendments, are effective for fiscal years beginning after December 15, 2022.

The Company does not expect the adoption of this standard to have a material impact on its accounts receivable or short-term investment balances.

The Company adopted ASU 2016-13 as of January 1, 2023, and this adoption did not have a material impact on our accounts receivable or short-term investment balances.

Note 3 – Fixed Assets

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Depreciation and amortization expense for the years ended 2023 and 2022 totaled $ 152 thousand and $ 24 thousand, respectively.

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

During June 2022, the Company entered into a new lease agreement for its Beijing office space for a period of one year with monthly rent at approximately $ 2

We classified this lease as an operating lease since it is more likely than not the lease will be renewed at the end of its term.

Prior to entering into this new lease agreement, the monthly rent for the old Beijing office space was approximately $ 5 thousand, equating to an annual total short term lease expense of $ 23 thousand prior to termination in June 2022.

The Seattle, Tulsa, and Beijing leases are classified as operating leases, with remaining terms ranging from five months to six 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 to return the premises to its original functional state.

The Company accrued an estimated cost of $ 55 thousand and $ 32 thousand in 2022 and 2021, respectively, for a total of approximately $ 87 thousand, to prepare for the restoration of the Seattle office.

The Company plans to exit the Seattle lease on or before contract termination as part of our headquarters move from Seattle to Tulsa.

In preparation for this move, the Company entered into the Tulsa operating lease agreement in April 2021.

The Seattle and Tulsa leases contain fixed annual lease payments that increase annually by factors that range between 2 % to 3 %.

In the year ended December 31, 2023, we impaired $ 81 thousand of 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.

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

During June 2023, the Company renewed its Beijing, China lease agreement for 13 months with monthly rent at approximately $ 3 thousand.

The Company increased the right of use asset and lease liability by $ 34 thousand.

During March 2023, the Company amended its Seattle lease to extend the lease term to September 2023.

The amended lease reduced the square footage and lowered the monthly payment to approximately $ 4 thousand.

The Company increased the right of use asset by $ 5 thousand and decreased the lease liability by $ 9 thousand.

During October 2023, the Company entered into a sub-lease agreement to rent office space in Seattle for approximately $ 2 thousand per month for twelve months .

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

contractual language requires renewal

negotiations to occur at or near termination.

These leases are normal and customary for office space, in that, contractual guarantees exist requiring the lessee return the premises to its original functional state.

The Company incurred restoration expenses of $ 33 thousand and $ 55 thousand for the years ended December 31, 2023 and 2022, respectively.

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

The Seattle, Tulsa, and Beijing total monthly minimum rent is approximately $ 10 thousand.

11 unchanged sentences

For the Year Ended

(in thousands)

Cash paid for amounts included in the measurement of lease liabilities:

1 unchanged sentence

Non-cash impact of new leases and lease modifications

New operating lease liabilities

Impairment of operating lease ROU assets

Change in operating lease liabilities

Change in operating lease ROU assets

Minimum future payments under the Company’s lease liabilities as of December 31, 2023 are as follows:

9 unchanged sentences

Accumulated amortization

Amortization expense for the years ended December 31, 2023 and 2022 totaled $ 147 thousand and $ 136 thousand, respectively.

Future amortization expense associated with issued patents and registered trademarks as of December 31, 2023 is as follows:

2 unchanged sentences

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

During the years ended December 31, 2022, and 2021, the Company assessed its patent and trademark assets.

During the years ended December 31, 2023 and 2022, the Company assessed its patent and trademark assets, and determined $ 14 thousand and $ 19 thousand impairment costs were incurred, respectively.

The Company also evaluated its strategic approach to the pursuit and protection of its intellectual property.

1 unchanged sentence

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.

During the years ended December 31, 2022 and 2021, the Company impaired $ 5 thousand and $ 385 thousand, respectively, of assets classified as pending patent costs.

During the years ended December 31, 2022 and 2021, the Company impaired $ 14 thousand and zero , respectively, of assets classified as issued patents.

During the years ended December 31, 2022 and 2021, the Company impaired zero and $ 36 thousand, respectively, of assets previously classified as pending trademark costs.

These non-cash expenses for patents and trademarks are reflected in the operating results as Research and Development and General and Administrative expenses, respectively.

During the year ended December 31, 2021, for certain issued patents where the protected intellectual property was not directly aligned with current products, the Company accelerated the amortization by $ 50 thousand to reduce the financial net carrying value of capitalized patent costs and an additional $ 40 thousand in accelerated amortization to align trademark net capitalized costs with trademark registration dates.

Note 5 – Revenue, Contract Assets and Contract Liabilities

The Company’s contracts with customers generally have performance obligations and a schedule of non-refundable cancellation obligations.

Performance obligations typically fall into one of three categories, product shipment, burner performance tests and engineering feasibility studies.

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

Customer payment terms typically range between thirty and sixty days from the date of billing.

Our customer contracts typically have a duration of less than twelve months .

Delays in contract performance, if any, typically occur as a result of customer onsite project delays outside of our control.

The Company recognized $ 2,403 thousand of revenues and $ 1,586 thousand of cost of goods sold during the year ended December 31, 2023.

The revenue and cost of goods sold are mostly in connection with the completion of a technology validation project.

Cost of goods sold also includes $ 41 thousand in anticipated contract losses upon completion of a contract.

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

During 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 two separate customer orders.

Both the witness tests and burner shipment constitute contractual performance obligations per ASC 606.

The Company recognized $ 374 thousand of revenues and $ 258 thousand of cost of goods sold during the year ended December 31, 2022.

Revenues were generated from the completion and delivery of our process burner products to a global supermajor oil company and domestic infrastructure company.

Cost of goods sold consisted of $ 433 thousand recorded upon completion of process burner contracts and $ 712 thousand in anticipated contract losses upon completion of related contracts.

These amounts were offset by adjustments totaling $ 86 thousand related to the reversals of accruals for product warranties that expired.

The revenue and cost of goods sold are mostly in connection with the completion of a technology validation project.

The Company had contract assets of $ 188 thousand and $ 20 thousand and contract liabilities of $ 1,116 thousand and $ 247 thousand at December 31, 2023 and 2022, respectively.

Of the $ 247 thousand contract liability balance at December 31, 2022, the Company recognized revenue $ 247 thousand during the year ended December 31, 2023.

In addition, the net accounts receivable balance at December 31, 2021, was $ 33 thousand.

Note 6 – Product Warranties

1 unchanged sentence

(in thousands)

Warranty liability, beginning of year

Adjustments and other

Warranty liability, end of year

Warranty liability at beginning of year

Warranty liability at end of year

Note 7 - Income Taxes

3 unchanged sentences

Loss before provision for income taxes

There was no provision for income taxes for the years ended December 31, 2022 and 2021 due to the Company's taxable losses.

There was no provision for income taxes for the years ended December 31, 2023 and 2022.

Income tax benefit attributable to loss from continuing operations differed from the amounts computed by applying the statutory U.S federal income tax rate of 21 % to pretax loss from continuing operations as a result of the following:

24 unchanged sentences

As of December 31, 2023, the Company had $ 85.3 million of federal and $ 48.5 million of state net operating loss carryforwards available to reduce future taxable income, of which federal net operating loss carryforwards of $ 39.1 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 2025.

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.

14 unchanged sentences

In no event may the Participation Right be exercised to the extent it would cause clirSPV or any of its affiliates to beneficially own 20 % or more of the Company’s then outstanding common stock.

In May 2022, the Company signed an agreement with clirSPV, that provides for an election right to extend the Participation Right beyond the original expiration date of December 31, 2023, but to no later than June 30, 2027.

This election is pursuant to specific terms and conditions and expires on December 31, 2023.

On June 1, 2022, the Company completed a firm commitment underwritten public offering pursuant to an underwriting agreement, dated May 27, 2022, by and between the Company and Newbridge Securities Corporation by issuing 4,186 thousand shares of common stock at a price to the public of $ 1.11 per share, resulting in gross proceeds of approximately $ 4.6 million and net cash proceeds of approximately $ 4.2 million.

During July 2022, the Company issued approximately 1,592 thousand shares to clirSPV pursuant to the Participation Right, at a price per share of $ 1.11 , resulting in net cash proceeds to the Company of approximately $ 1.7 million.

During the year ended December 31, 2021, the Company issued common stock pursuant to an At-The-Market Offering Sales Agreement, dated December 23, 2020, with Virtu Americas LLC, as sales agent pursuant to which it may currently sell shares of common stock with an aggregate offering price of up to $ 8.7 million (ATM).

During the year ended December 31, 2022, the Company issued approximately 501 thousand shares of its common stock at an average price of $ 1.24 per share for gross proceeds of approximately $ 624 thousand and net cash proceeds of approximately $ 587 thousand.

During the year ended December 31, 2021, the Company issued approximately 1.1 million shares of common stock under the ATM program at an average price of $ 5.03 per share.

Gross proceeds totaled approximately $ 5.5 million and net cash proceeds was approximately $ 5.3 million.

As of December 31, 2022, the Company has issued approximately 1.6 million shares of common stock under the ATM program, at an average price of $ 3.84 per share.

In May 2022, in

connection with a waiver of the Participation Right’s notice requirements and other related closing mechanics for such Participation

Right (the “Waiver”) the Company and clirSPV, LLC agreed that the Participation Right may be extended from December 31, 2023, to such date that the holders of two -thirds of the outstanding units of clirSPV LLC agree to extend each such holder’s existing agreement that he/she/it will have no right to force a redemption of his/her/its interests in clirSPV LLC (the “Redemption Right”);

provided, however, that the Participation Right could not be extended to a date later than June 30, 2027.

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

Accordingly, the Participation Right will now expire on 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, 2023, the Company issued zero shares of its common stock from the ATM program.

As of December 31, 2023, 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 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, our ATM Offering Sales Agreement or other common stock offerings.

These rules may limit future issuances of shares by the Company under our Shelf Registration statement on Form S-3, the ATM Offering Sales Agreement or other securities offerings.

Equity Incentive Plan

4 unchanged sentences

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.

The prior incentive plan (2011 Plan) expired January 2021 and outstanding awards from this plan were assigned to the 2021 Plan.

The total amount of carryover awards from the 2011 plan amounted to 3,381 thousand.

Any forfeiture or expiration of carryover awards were added to the 2021 Plan.

In 2022, the board of directors approved an increase of 150,423 shares available for issuance pursuant to future awards in accordance with the terms of the 2021 Plan.

In 2023, the board of directors approved an increase of 400 thousand shares available for issuance pursuant to future awards in accordance with the terms of the 2021 Plan.

Ending balances for the 2021 Plan is as follows:

1 unchanged sentence

Outstanding options and restricted stock units

Reserved but unissued shares under the Plans

Total authorized shares under the Plans

Reserved but unissued shares under the Plan

Total authorized shares under the Plan

Stock Options

8 unchanged sentences

The Company has never declared or paid dividends and has no plans to do so in the foreseeable future.

During the year ended December 31, 2022, the following weighted-average assumptions were utilized in the calculation of the fair value of stock options:

Expected life

Weighted average volatility

Weighted average risk-free interest rate

Expected dividend rate

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 year ended December 31, 2023 was $ 43 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.

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).

Equity Incentive Plan Options

Compensation expense associated with stock option awards for the years ended December 31, 2023 and 2022 totaled $ 174 thousand and $ 118 thousand, respectively.

A summary of the Company’s stock option activity and changes is as follows:

( in thousands )

A summary of the Company’s Equity Incentive Plan stock option activity and changes is as follows:

( in thousands, except per share data )

Options to Purchase Common Stock

3 unchanged sentences

Forfeited/Expired

Outstanding at end of year

Exercisable at end of year

The estimated aggregate pretax intrinsic value of the Company’s outstanding vested stock options at December 31, 2022 is zero .

Outstanding at end of period

Exercisable at end of period

The estimated aggregate pretax intrinsic value of the Company’s outstanding vested stock options at December 31, 2023 is $ 171 thousand.

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.

9 unchanged sentences

Therefore, compensation expense for director RSUs is not recognized until one of these four future events occur, which is in accordance with FASB Accounting Standards Codification , Topic 718 , Compensation-Stock Compensation, (ASC 718).

Unrecognized compensation expense for director services amounted to $ 491 thousand and $ 255 thousand for the years ended December 31, 2022 and December 31, 2021, respectively.

Unrecognized compensation expense for director services amounted to $ 244 thousand and $ 491 thousand for the years ended December 31, 2023 and 2022, respectively.

Director compensation is earned on a quarterly basis with the target value of compensation set at $ 85 thousand per quarter.

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

( in thousands )

( in thousands, except per share data )

Number of Shares

3 unchanged sentences

Nonvested at beginning of year

Nonvested at end of year

Nonvested at end of period

A summary of the Company’s RSU compensation expense is as follows:

For the Year Ended

( in thousands, except per share data )

Compensation Expense

1 unchanged sentence

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

The awards are granted from the Company’s Equity Incentive Plan.

The awards are granted from the Company’s 2021 Plan.

For the Year Ended

( in thousands, except per share data )

Weighted Average Value Per Share

2 unchanged sentences

The Company’s officers, employees, and board members are not entitled to receive grants from the Consultant Plan.

The Compensation

Committee of the Board of Directors is authorized to administer the Consultant Plan and establish the grant terms.

The Compensation Committee of the Board of Directors is authorized to administer the Consultant Plan and establish the grant terms.

The Consultant Plan provides for quarterly increases in the available number of authorized shares equal to the lesser of 1 % of any new shares issued by the Company during the quarter immediately prior to the adjustment date or such lesser amount as the Board of Directors shall determine.

6 unchanged sentences

For the Year Ended

( in thousands, except per share data )

Compensation Expense

Weighted Average Value Per Share

Inducement Stock Options

Pursuant to the rules of The Nasdaq Stock Market, and in compliance with those rules, the Company may issue equity awards, including stock options, as an inducement to an individual to accept employment with the Company.

Inducement awards need not be approved by the Company's shareholders.

During the year ended December 31, 2019, the Company granted 341 thousand non-qualified stock options to its Chief Executive Officer.

The fair value of the non-qualified stock options estimated on the date of grant using the Black-Scholes valuation model was $ 176 thousand.

The compensation expense recognized for these awards for the years ended December 31, 2022 and 2021 was zero and $ 13 thousand.

A summary of warrant activity and related information is as follows:

( in thousands )

Outstanding at beginning of year

Forfeited/Expired

Outstanding at end of year

There were no outstanding warrants at December 31, 2022 and 2021.

Note 9 – Retirement Plan

1 unchanged sentence

employees whereby the Company matches employee contributions up to 3 % of their base salary.

The Company’s matching contribution expense totaled $ 54 thousand and $ 43 thousand in 2022 and 2021, respectively.

Note 10 – The Paycheck Protection Program (PPP) Loan

On May 8, 2020, the Company obtained a loan in the amount of $ 251 thousand (the “PPP loan”) from Bank of America (the “Lender”), pursuant to the Paycheck Protection Program (the “PPP”) under the Coronavirus Aid, Relief, and Economics Security Act (the “CARES Act”) that was signed into law in March 2020.

In accordance with the PPP, the Company was permitted to use the PPP loan proceeds to fund designated expenses, including certain payroll costs, rent, utilities, and other permitted expenses.

The PPP loan was evidenced by a promissory note, dated effective May 1, 2020, issued by the Company to the Lender.

The PPP loan was unsecured with a 2 -year term and bore interest at a rate of 1.00 % per annum.

The Company applied with the Small Business Administration, ("SBA") for loan forgiveness in January 2021.

Payments on this note were deferred by the Lender until the forgiveness status of the loan was ascertained.

In the second quarter of 2021, the Company received documentation from the SBA stating that this loan was forgiven in full.

As a result, the Company recorded a $ 251 thousand gain on forgiveness of debt and accrued interest during the year ended December 31, 2021.

The Company’s matching contribution expense totaled $ 64 thousand and $ 54 thousand during the years ended December 31, 2023 and 2022, respectively.

Note 10 – Commitments and Contingencies

5 unchanged sentences

Note 11 – Government Assistance

During 2022, the Company was awarded a research grant from the Department of Energy (“DOE”) for approximately $ 250 thousand with an estimated completion occurring in the first three months of 2023.

The purpose of the grant is to produce a research paper for a flexible fuel ultra-low NOx process burner capable of burning 100% hydrogen fuel.

The award allows the Company to request reimbursements for expenditures such as labor, material, and administrative costs.

During the year ended December 31, 2022, the Company recognized $ 181 thousand in reimbursements from DOE.

During 2022, the Company was awarded a research grant from the Department of Energy (“DOE”) for approximately $ 250 thousand with the completion occurring in March 2023.

The purpose of the grant was to produce a research paper for a flexible fuel ultra-low NOx process burner capable of burning 100% hydrogen fuel.

During 2023, the Company was awarded a Phase 2 grant from the DOE to continue developing this ultra-low NOx hydrogen burner.

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

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

During the years ended December 31, 2023 and 2022, the Company recognized $ 191 thousand and $ 181 thousand in reimbursements from the DOE, respectively.

Beginning in 2021, the Company received funds relating to the Oklahoma 21 st Century Quality Jobs Act.

1 unchanged sentence

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

For the year ended December 31, 2022, the Company recognized $ 51 thousand in government assistance.

The Company did not recognize benefit monies for this program during the year ended December 31, 2021.

During the years ended December 31, 2023 and 2022, the Company recognized $ 64 thousand and $ 51 thousand in government assistance from this program, respectively.

Note 12 – Quarterly Results (unaudited)

4 unchanged sentences

Operating Expense

Net loss attributed to common stockholders

Net Loss per share - basic and fully diluted

2 unchanged sentences

Operating Expense

Net loss attributed to common stockholders

Net Loss per share - basic and fully diluted

Note 13 – Subsequent Events

The Company has evaluated subsequent events as of the date of this report, and has none to report.

On February 22, 2024, the Company’s board of directors and compensation committee approved and paid the 2023 bonus accrual allocated to the Company’s Chief Executive Officer, Colin James Deller, and Chief Financial Officer, Brent Hinds, in the form of common stock and restricted stock units (“RSUs”).

After applicable tax withholdings, Dr.

Deller received 66,019 shares of common stock valued at $ 1.06 per share.

After applicable tax withholdings, Mr.

Hinds received 28,555 shares of common stock valued at $ 1.06 per share.

In addition, Mr.

Hinds received RSUs for 7,547 shares of common stock that will vest in three equal installments commencing on the first anniversary of the grant date, and performance-based restricted stock units (“PRSUs”) for 2,627 shares of common stock that will vest upon the achievement of certain established performance targets.

The PRSUs will not vest and be forfeited if such performance targets are not achieved during the measuring period ending December 31, 2024.

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

March 31, 2023

April 1, 2024

Chief Executive Officer

March 31, 2023

April 1, 2024

/s/ Brent Hinds

Vice President and Controller

Chief Financial Officer

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Colin

James Deller and Brent Hinds as their true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution,

for him and in his name, place and stead, in any and all capacities, to sign any and all amendments to this Annual Report on Form 10-

K, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange

Commission, granting unto said attorney-in-fact and agents full power and authority to do and perform each and every act and thing

requisite and necessary to be done in connection therewith, as fully to all intents and purposes as he might or could do in person,

hereby ratifying and confirming all that said attorney-in- fact and agents, or his substitute or substitutes, may lawfully do or cause to

be done by virtue hereof.

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.

March 31, 2023

April 1, 2024

Chief Executive Officer and Director

(Principal Executive Officer)

March 31, 2023

April 1, 2024

/s/ Brent Hinds

Vice President and Controller

Chief Financial Officer

(Principal Financial and Accounting Officer)

March 31, 2023

April 1, 2024

/s/ Robert T.

Hoffman Sr., Director

March 31, 2023

April 1, 2024

/s/ Judith S.

Schrecker, Director

March 31, 2023

April 1, 2024

/s/ Catharine Marie de Lacy

Catharine Marie de Lacy, Director

March 31, 2023

DiElsi, 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