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Item 1. Business

2025-03-31 compared with 2024-04-01 · 145 added, 123 removed, 215 unchanged (55% of the section changed)

We design and develop technologies that have been shown to significantly improve key performance characteristics of industrial combustion systems, including emission and operational performance, energy efficiency, safety and overall cost-effectiveness.

We believe that our patented ClearSign Core™ technology can enhance the performance of combustion systems in a broad range of markets, including the energy (upstream oil production and down-stream refining), institutional, commercial and industrial boiler, chemical, and petrochemical industries.

Our ClearSign Core technology, which is our primary technology, uses either a porous ceramic structure or metal flame holder device held at a distance from the injection planes of a burner to significantly reduce flame length and achieve low emissions without the need for external flue gas recirculation, selective catalytic reduction, or high excess air systems.

We design and develop technologies for the purpose of decarbonization and improving key performance characteristics of industrial and commercial combustion systems, including emission and operational performance, energy efficiency, and overall cost-effectiveness.

We believe that our patented ClearSign Core™ technology can enhance the performance of combustion systems in a broad range of markets, including the energy (upstream oil production, midstream gas processing and transportation, and down-stream refining), institutional, commercial and industrial boiler, chemical, and petrochemical industries.

Our ClearSign Core TM technology, which is our primary technology, uses either a porous ceramic structure or metal flame holder device held at a distance from the injection planes of a burner to significantly reduce flame length and achieve low emissions without the need for external flue gas recirculation, selective catalytic reduction, or high excess air systems.

To date, our operations have been funded primarily through sales of our equity securities.

We have earned nominal revenue since inception in 2008.

Our combustion technology has been successfully deployed in commercial projects such as down-stream refining and upstream oil production.

These applications include both our process burner and boiler burner technologies.

Our process burner technology is able to operate in high-intensity multiple burner industrial applications at sites that are required to meet low air pollutant emissions.

Our boiler burner technology, which has been proven to achieve ground-breaking low air pollutant emissions, has been deployed in the US and is currently undergoing commercialization in China.

We believe that combustion equipment utilizing ClearSign Core technology is more effective and cost-efficient than current industry-standard air pollution control technologies, and can reduce nitrogen oxide (NOx) emissions down to the levels required by new stringent emission regulations.

These applications include our process burner, flaring and boiler burner technologies.

Both our process burner and boiler burner technology can operate in high-intensity industrial burner applications at sites that are required to meet low air pollutant emissions.

We believe that combustion equipment utilizing ClearSign Core TM technology is more effective and cost-efficient than current industry-standard air pollution control technologies and can reduce nitrogen oxide (“NOx”) emissions down to the levels required by new stringent emission regulations.

NOx is a regulated greenhouse gas pollutant comprised of nitrogen oxide and nitrogen dioxide.

These current technologies include selective catalytic reduction devices (SCRs), low- and ultra-low NOx burners, external flue gas recirculation systems and other similar technologies.

Such air pollution control systems are widely used in places within our current target markets such as in petroleum refining and petrochemical process heaters, large-scale once through steam generators (OTSGs), enclosed flares, institutional commercial and industrial boilers and other similar equipment.

We believe that our ClearSign Core technology can provide value to our customers not only by helping them meet current and possible future legislative mandates to reduce pollutant emissions, but also by improving operating efficiency and increasing overall return on investment.

Based on the operating data we have obtained from our installed products, burners utilizing ClearSign Core technology can provide increased heat transfer efficiency as compared to other emission reducing technologies.

These current industry-standard air pollution control technologies include selective catalytic reduction devices (“SCRs”), low- and ultra-low NOx burners, external flue gas recirculation systems and other similar technologies.

Such air pollution control systems are widely used in places within our current target markets such as petroleum refining and petrochemical process heaters, large-scale once through steam generators (“OTSGs”), enclosed flares, institutional commercial and industrial boilers and other similar equipment.

We believe that our ClearSign Core TM technology can provide value to our customers not only by helping them meet current and possible future legislative mandates to reduce pollutant emissions, but also by improving operating efficiency and increasing overall return on investment.

Based on the operating data we have obtained from our installed products, burners utilizing ClearSign Core TM technology can provide increased heat transfer efficiency as compared to other emission reducing technologies.

This is consistent with the physics of heat transfer and the mechanisms by which the technology functions.

The reported increased heat transfer efficiency may potentially result in cost savings in the low to mid-single digit percentage range for burners employing our technology.

We believe that these potential costs savings could produce an extremely attractive pay-back period for an investment in ClearSign Core technology-based burners.

In addition, because the flame volumes in heaters utilizing ClearSign Core technology are typically small, heaters using our technology are expected to operate at a lower cost, have increased productivity, and require less maintenance and downtime compared to heaters that operate with enlarged flames produced by traditional low NOx burners.

The flames in a ClearSign Core system are established from a predominantly premixed stream of fuel, combustion air and flue gasses stabilized on a downstream structure that promotes turbulence and ignition with minimal “bulking up”.

In comparison, flames resulting from the traditional legacy process of slow mixing of the fuel and air, and dilutive inert flue gasses have a much larger size.

With a lower volume flame in a ClearSign Core system, surfaces in the heater or boiler experience less touching by the flame and it is anticipated that our systems can virtually eliminate flame impingement.

We believe that these potential costs savings could produce a significantly attractive pay-back period for an investment in ClearSign Core TM technology-based burners.

In addition, because the flame volumes in heaters utilizing ClearSign Core TM technology are typically small, heaters using our technology are expected to operate at a lower cost, have increased productivity, and require less maintenance and downtime compared to heaters that operate with enlarged flames produced by traditional low NOx burners.

The flames in a ClearSign Core TM system are established from a predominantly premixed stream of fuel, combustion air and flue gasses stabilized on a downstream structure that promotes turbulence and ignition with minimal “bulking up.” In comparison, flames resulting from the traditional legacy process of slow mixing of the fuel and air, and dilutive inert flue gasses have a much larger size.

With a lower volume flame in a ClearSign Core TM system, surfaces in the heater or boiler experience less touching by the flame and it is anticipated that our systems can virtually eliminate flame impingement.

Our technology also enables burners to function better in tightly spaced heaters compared to the flames of traditional low NOx burners.

Most importantly, using our technology has the potential to decrease process downtime required during installation compared to retrofits utilizing the legacy technology of SCRs or flue gas recirculation systems.

We are also designing and commercializing a range of sensing products called the ClearSign Eye TM for two potential markets.

The primary addressable market is similar to that of our ClearSign Core technology, although not limited to regions requiring emissions reduction.

We are also designing and commercializing a range of sensing products called the ClearSign Eye for two potential markets.

The primary addressable market is similar to that of our ClearSign Core TM technology, although not limited to regions requiring emissions reduction.

The flame sensing products are applicable to all installed burners that use a pilot for ignition, including in markets and regions beyond those where reducing emissions is a high priority.

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The secondary potential market for our sensing technology is outside of the typical combustion industry and includes transportation industries.

While use of this fundamental technology in applications intended for transportation markets is proven, the

development and refinement of specific products, obtaining the certifications required for commercial deployment and establishing an efficient manufacturing source and channels to market will take some time, and we cannot assure that these goals will be achieved.

We are collaborating with Narion Corporation to further develop our technology for this industry, which

allows us to incur minimal costs while pursuing this market opportunity.

While use of this fundamental technology in applications intended for transportation markets is proven, the development and refinement of specific products, obtaining the certifications required for commercial deployment and establishing an efficient manufacturing source and channels to market will take some time, and we cannot assure that these goals will be achieved.

We believe that the opportunities for application of our sensing technology in the transportation market are global and of great value, but it will also take longer to commercialize products targeted for this market for the reasons stated above.

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(i) environmental regulations imposed on these markets, (ii) total available market size, (iii) this technology being the most readily adapted to the needs of these industries and (iv) management experience and expertise.

Our initial target markets center on the energy sector, including downstream oil refineries through the use of process heaters and boilers as well as upstream crude oil production through the use of Once Through Steam Generator (OTSGs) and wellhead enclosed flares.

We believe operators in our domestic target markets are under pressure to meet current and proposed federal, state and local pollution emissions standards.

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As a result, these standards are a significant driver for our development and sales efforts.

We believe that our ClearSign Core technology can provide a unique, cost-effective pollution control solution for operators in comparison to known competing products.

In the U.S., emissions standards largely emanate from the Clean Air Act, which is administered by the Environmental Protection Agency (EPA) and regulates six common criteria air pollutants, including ground-level ozone.

We believe that our ClearSign Core TM technology can provide a unique, cost-effective pollution control solution for operators in comparison to known competing products.

In the U.S., emissions standards largely emanate from the Clean Air Act of 1963 (as amended, the “Clean Air Act”), which is administered by the Environmental Protection Agency (“EPA”) and regulates six common criteria air pollutants, including ground-level ozone.

These regulations are enforced by state and local air quality districts as part of their compliance plans.

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BACT guidelines are periodically updated by SCAQMD to reflect advancements in technology and to ensure affected equipment utilize the most efficient technologies.

While the establishment of a new BACT benchmark does not specifically endorse ClearSign or our products, it does establish a limit in the industry that favors our products.

According to SCAQMD, BACT is the most stringent

emission limitation or control technique for a class and category of equipment that is “Achieved in Practice,” or “Contained in a State Implementation Plan” (SIP), or “Technologically Feasible.”

While the establishment of a new BACT benchmark does not specifically endorse ClearSign or our

products, it does establish a limit in the industry that favors our products.

According to SCAQMD, BACT is the most stringent emission limitation or control technique for a class and category of equipment that is “Achieved in Practice,” or “Contained in a State Implementation Plan” (“SIP”), or “Technologically Feasible.”

In addition, new regulations are starting to be adopted with respect to the NOx emissions of enclosed ground flares, which historically have not been viewed as a source of NOx emissions or subject to the same level of regulation.

We believe that our ClearSign Core technology is well-suited to address the challenges faced by oil producers and other industries in complying with current and predicted future local air emission standards.

There are multiple ClearSign Core flare applications now operational in California with NOx emissions below the levels required by new regulations.

We believe that our ClearSign Core TM technology is well-suited to address the challenges faced by oil producers and other industries in complying with current and predicted future local air emission standards.

There are multiple ClearSign Core TM flare applications now operational in California with NOx emissions below the levels required by new regulations.

In addition, we believe that current emissions standards in Europe, the Middle East, parts of Asia and Canada will continue to become stricter as these jurisdictions seek to achieve cleaner air.

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To date, we have one installation operating in the refinery of a major global oil refiner in Europe.

The current environmental impetus to reduce CO2 emissions has created an interest in burner technology that can use hydrogen as a fuel source.

The current environmental impetus to reduce carbon dioxide emissions has created an interest in burner technology that can use hydrogen as a fuel source.

Because hydrogen burns at a higher temperature than most other fuel gasses, it tends to create more NOx emissions.

ClearSign Core burners have demonstrated the ability to burn fuels with up to 80% hydrogen while still controlling NOx emissions to meet required regulatory levels.

We believe that we can extend the capability of our ClearSign Core technology to burn “pure” hydrogen fuel.

ClearSign Core TM burners have demonstrated the ability to burn fuels with up to 80% hydrogen while still controlling NOx emissions to meet required regulatory levels.

We believe that we can extend the capability of our ClearSign Core TM technology to burn “pure” hydrogen fuel.

Our Proprietary Technology

ClearSign Core Burner Technology

ClearSign Core TM Burner Technology

The name “ClearSign Core” was adopted to describe the inclusion of ClearSign’s burner technology in the products of original equipment manufacturers (“OEM”).

Including our technology in OEM burner products enables us to leverage our technology by providing OEMs with the ability to offer a new product range with our technologies’ unique capabilities and differentiated product performance.

Our ClearSign Core burner technology consists of an industrial burner body and a downstream flame stabilizing structure made of either porous ceramic or metal.

Our ClearSign Core TM burner technology consists of an industrial burner body and a downstream flame stabilizing structure made of either porous ceramic or metal.

When the unreacted mixture of gaseous fuel and air is directed at the flame stabilizing structure, the mixture ignites and the flame forms either within or immediately downstream from the structure itself.

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The ability to modify the flame stabilizing structure enables a high level of control over the flame shape for optimization in a wide range of different applications.

For example, we believe our ClearSign Core products, without any external fans or associated power, can significantly reduce the harmful emission of NOx to levels of 5 ppm or below, depending on the application.

For example, we believe our ClearSign Core TM products, without any external fans or associated power, can significantly reduce the harmful emission of NOx to levels of 5 ppm or below, depending on the application.

The shorter flame in a ClearSign Core product can also potentially allow a furnace to operate at a higher capacity.

We believe that heaters using the ClearSign Core will be able to remain in operation for an extended time before the need for maintenance as its flame structure and heat transfer profile minimize the possibility of flame impingement, reduce the likelihood of carbon deposits forming on the inside surfaces of the process tubes (coking) and reduce the likelihood of process tube failure all while operating with enhanced thermal efficiency.

We believe that heaters using the ClearSign Core TM will be able to remain in operation for an extended time before the need for maintenance as its flame structure and heat transfer profile minimize the possibility of flame impingement, reduce the likelihood of carbon deposits forming on the inside surfaces of the process tubes (coking) and reduce the likelihood of process tube failure all while operating with enhanced thermal efficiency.

Refinery and Petrochemical

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Boiler Technology

ClearSign Core Process Burner Technology

Our ClearSign Core burners provide a simplified, pre-engineered and standardized direct burner replacement for traditional refinery process heaters.

ClearSign Core TM Process Burner Technology

Our ClearSign Core TM burners provide a simplified, pre-engineered and standardized direct burner replacement for traditional refinery process heaters.

We believe that this product minimizes the customized engineering associated with retrofits and lends itself to mass production.

The product was designed to enable quick and easy installation in single burner or multi-burner heaters or furnaces.

We believe that the simplicity of the actions required to retrofit refinery process heaters with the ClearSign Core technology, and the potential ability to install these burners will potentially contribute to demand for our ClearSign Core process burners.

ClearSign Core Boiler Burner Technology

Our ClearSign Core technology for boiler burners is essentially the same as our technology for process burners, but with different component details.

We believe that the simplicity of the actions required to retrofit refinery process heaters with the ClearSign Core TM technology, and the potential ability to install these burners will potentially contribute to demand for our ClearSign Core TM process burners.

ClearSign Core TM Boiler Burner Technology

Our ClearSign Core TM technology for boiler burners is essentially the same as our technology for process burners, but with different component details.

Boiler burners have a different orientation and internal chamber dimensions, operate with a relatively high combustion air pressure, and, in the case of small fire tube boiler burners, have a lower fuel gas pressure.

Our go to market strategy of incorporating the ClearSign Core technology into a typical OEM process burner is the same as for our boiler burners.

ClearSign Core Flaring Burners

Our ClearSign Core flaring technology incorporates the same mechanisms as our burner technology, namely directing the fuel gas (typically waste gas), into an air stream with that air and gas mixture forming a flame stabilized downstream on a flame stabilizing structure.

Our go to market strategy of incorporating the ClearSign Core TM technology into a typical OEM process burner is the same as for our boiler burners.

ClearSign Core TM Flaring Burners

Our ClearSign Core TM flaring technology incorporates the same mechanisms as our burner technology, namely directing the fuel gas (typically waste gas), into an air stream with that air and gas mixture forming a flame stabilized downstream on a flame stabilizing structure.

This technology has been configured into standard modular designs that can be used individually, or in combination, to provide a flare product with extremely low NOx emissions.

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Development of Our Technology

To date, we have deployed our ClearSign Core technology through retrofits and replacements of existing burners and complete replacement units in the case of our process burner and boiler burner products.

Retrofits often involve engineering around an existing burner architecture that can complicate the ClearSign Core burner installation, whereas replacements are more straightforward and more amenable to being sold and installed by third parties, enabling more expansive channels to market.

To date, we have deployed our ClearSign Core TM technology through retrofits and replacements of existing burners and complete replacement units in the case of our process burner and boiler burner products.

Retrofits often involve engineering around an existing burner architecture that can complicate the ClearSign Core TM burner installation, whereas replacements are more straightforward and more amenable to being sold and installed by third parties, enabling more expansive channels to market.

Because of this, we have focused the development of our technology to provide designs that can be included into our prospective customers’ equipment as self-contained modules or assemblies rather than projects involving the re-engineering of existing burner systems.

In this form, we believe that the ClearSign Core burner technology is ideally suited for installation into new heaters and burner replacements, including heater and furnaces requiring large quantities of burners.

In this form, we believe that the ClearSign Core TM burner technology is ideally suited for installation into new heaters and burner replacements, including heater and furnaces requiring large quantities of burners.

In addition, this strategy also provides for simple new burner installations, or burner replacements to reduce emissions in boilers ranging from small fire tube boilers to large water tube boilers.

We have also developed the ClearSign Core flare technology into similar repeatable forms to aid its inclusion in standard industry installations on a commercial scale with multiple installations now operational in California.

We have also developed the ClearSign Core TM flare technology into similar repeatable forms to aid its inclusion in standard industry installations on a commercial scale with multiple installations now operational in California.

For simplification and marketing, we have adopted the term “ClearSign Core” to refer to the inclusion of our standardized proprietary combustion technology into a variety of combustion equipment types including, but not limited to, process heater burners, boiler burners, burners for thermal oxidizers and flares.

Earlier ClearSign technology-based heater retrofits, in which a continuous ceramic “wall” was suspended above the existing burners, also continue to operate, and are referred to as “Duplex” technology.

Although the combustion controlling principles of both the “ClearSign Core” and “Duplex” technologies are the same, ClearSign Core products have standardized technology and we believe they are easier to use and have a different channel to market.

ClearSign Core burners currently operate in multiple boilers, heaters and flares and meet new compliance standards enacted by California air authority.

We also have products in commercial use in Europe and certified for sale in the Chinese boiler market.

Although the combustion controlling principles of both the “ClearSign Core” and “Duplex” technologies are the same, ClearSign Core TM products have standardized technology and we believe they are easier to use and have a different channel to market.

ClearSign Core TM burners currently operate in multiple boilers, heaters and flares and meet new compliance standards enacted by California air authority.

We also have products in commercial use in Europe.

As noted above, our principal technologies have been developed into standardized designs.

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ClearSign Core Technology Product Applications

To date, we have deployed our ClearSign Core technology through the retrofit or replacement of existing burners.

To date, we have deployed our ClearSign Core TM technology through the retrofit or replacement of existing burners.

As noted above, retrofits often involve engineering around an existing burner architecture that can complicate the installation.

By developing our ClearSign Core technology into a replacement product, we have been able to standardize our designs and simplify supply-chain demands.

In addition, we have enabled collaboration with other commercial equipment suppliers with the intent to incorporate our ClearSign Core technology into their standard product lines.

By developing our ClearSign Core TM technology into a replacement product, we have been able to standardize our designs and simplify supply-chain demands.

In addition, we have enabled collaboration with other commercial equipment suppliers with the intent to incorporate our ClearSign Core TM technology into their standard product lines.

We believe that this further development of our products has greatly increased our ability to collaborate with partners to extend our potential market reach and the resources we make available to our prospective customers.

Process Heaters in the Oil Refining, Petrochemical and Gas Processing Industries

To date, we have retrofitted six process heaters with our new ClearSign Core process burners for refineries and fuel distributors, some of which are owned by global supermajor companies and Fortune 500 companies.

To date, we have retrofitted six process heaters with our new ClearSign Core TM process burners for refineries and fuel distributors, some of which are owned by global supermajor companies and Fortune 500 companies.

Sites include four locations in California and one in Europe.

The ClearSign Core design provides a more simplified, pre-engineered and standardized direct burner replacement for traditional refinery process heaters that we believe can be mass produced and reduce the need for the customized engineering associated with typical retrofits.

The ClearSign Core design (including the boiler burner version) is our most developed burner product.

The ClearSign Core TM design provides a more simplified, pre-engineered and standardized direct burner replacement for traditional refinery process heaters that we believe can be mass produced and reduce the need for the customized engineering associated with typical retrofits.

The ClearSign Core TM design (including the boiler burner version) is our most developed burner product.

It operates essentially in the same way as a standard burner, including fitting into a heater and integrating with existing control systems.

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The process burner installed at this site was used by SCAQMD to set new BACT guidelines (see discussion above under the “Our Industry” section).

We also received a purchase order in 2022 from a California refinery for our ClearSign Core process burners.

To date, this purchase order is the largest received by ClearSign with the total order quantity amounting to twenty burners.

Due to project delays, which were outside of our control, the process burner for this order has not yet been shipped to the jobsite.

We also received a purchase order in 2022 from a California refinery for our ClearSign Core TM process burners, amounting to twenty burners.

Due to project delays, which were outside of our control, the process burners for this order were shipped to the jobsite during the third quarter of 2024 but the installation into the customer’s heater is now expected to occur during the third quarter of 2025.

On May 18, 2023, we received an order for thirteen process burners from an existing California refinery customer.

The order covered retrofitting two heaters, one of which we satisfied the contractual obligations for during the fourth quarter of 2023.

The process burners installed in this heater passed the customer’s NOx emissions permit level, which was validated by a third-party inspector.

We expect to satisfy the contractual obligations for the second heater during 2024.

In 2023, we received a purchase order from a heater manufacturer to install a modified ClearSign Core boiler burner into a horizontally fired process heater.

The order covered retrofitting two heaters, both of which have been installed and are currently operating.

The process burners installed in both heaters have passed the customer’s NOx emissions permit level, which were validated by third-party inspectors.

In 2023, we received a purchase order from a heater manufacturer to install a modified ClearSign Core TM boiler burner into a horizontally fired process heater.

The end customer was a chemical company located in Texas.

We believe this project was a significant achievement to us, specifically for its ability to demonstrate a new product offering;

Moreover, we believe this order may be the first step towards more stringent changes to the Texas air emissions regulations, which we expect will turn into additional demand for our technology.

As we seek to expand the markets into which we can sell our products, we plan to continue extending the range of ClearSign Core process burners to enable the replacement of other burner shapes and configurations, as well as for use in alternate process applications.

This project was a significant achievement for us, since it gave us the ability to demonstrate a new product offering.

Since that first order in 2023, we have received three more orders for this same type of application.

We believe these orders are representative of an underserved and growing market opportunity in low emissions burners for horizontally fired process heaters.

Two of these orders are in the state of Texas, and are believed to be a response to anticipated changes to Texas air emissions regulations, which we expect will ultimately lead to additional demand for our technology.

As we seek to expand the markets into which we can sell our products, we plan to continue extending the range of ClearSign Core TM process burners to enable the replacement of other burner shapes and configurations, as well as for use in alternate process applications.

Hydrogen Process Burners

We are currently in the research and development phase to design a one-hundred percent 100% hydrogen capable ClearSign Core process burner.

We are currently in the research and development phase to design a one-hundred percent hydrogen capable ClearSign Core TM process burner.

The goal of this project is to develop an ultra-low NOx hydrogen burner, which we believe will enable the adoption of hydrogen fuel for industrial heating, leading to reductions in the industrial emissions of both carbon dioxide and nitrogen oxides.

Current burners and previous efforts to decarbonize industrial combustion processes through the utilization of hydrogen fuel are inhibited by the lack of industrial hydrogen burners capable of burning pure hydrogen while controlling emissions of NOx emissions to the most stringent levels required in the industry.

We have received a series of grants from the Department of Energy (DOE) to fund the development of this technology.

In total, the two DOE awards approximate $1.9 million with a target end date occurring in 2025.

Refer to the financial statement “Note 11 – Government Assistance” for further details about these monies.

We have received two grants from the Department of Energy (“DOE”) to fund the development of this technology.

In total, the DOE awards approximate $1.9 million in the aggregate, with a target end date occurring in 2025.

See “Note 12 – Government Assistance” for further details about these monies.

Industrial Commercial Boilers

Boilers are used in many industrial applications, and smaller scale commercial and residential applications, to generate steam and hot water.

A large number of boiler manufacturers produce many styles of boiler equipment for these different applications.

Several boiler manufacturers produce many styles of boiler equipment for these different applications.

In our target markets, boilers exist in two different industry-standard forms:

water tube, which tend to be larger and in which the water or steam flows through a series of tubes that surround the space in which the flame forms;

water tube, which tend to be larger and in which the water or steam

flows through a series of tubes that surround the space in which the flame forms;

or fire tube in which the flame is formed inside a large tube that passes through the outer vessel holding the water.

Our “Core” boiler burner technology has been developed to enable it to be used in a series of consistently designed sizes ranging from small fire tube boilers up to large industrial water tube boilers.

For fire tube products, we have developed our own patent protected burner replacement product that is similar in concept to our ClearSign Core burners for process heaters.

Our “Core” boiler burner technology has been developed to enable it to be used in a series of consistently designed firetube boilers.

For fire tube products, we have developed our own patent protected burner replacement product that is similar in concept to our ClearSign Core TM burners for process heaters.

These boiler burners have achieved performance levels meeting the most stringent new California NOx regulations, in a typical commercial fire tube boiler produced by one of the industry’s largest suppliers in the U.S.

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In 2023, we received two purchase orders for our ClearSign Core boiler burner technology.

Both boiler burner purchase orders were sold as a package with our partner California Boiler into the San Joaquin Valley Air Pollution Control District of California.

Both boiler burner purchase orders were sold as a package with our collaborative partner, California Boiler, and its subsidiary, Rogue Combustion, into the San Joaquin Valley Air Pollution Control District of California.

The NOx emission permits for these boilers vary, with one boiler noted at 5ppm and the other at 2.5ppm.

Third-party source testing has validated the 5ppm emission order, but due to customer on-site construction delays, the other order has yet to be installed.

Additionally, we demonstrated the operation of our small fire tube burner for Chinese officials, who subsequently certified it for sale in China.

We plan to seek certification of larger fire tube and water tube boiler burners with our collaborative partner Jiangsu Shuang Liang Boiler Co.

Ltd, which is a subsidiary of China's Shuang Liang Group Co.

Ltd and one of China's top 500 enterprises.

If further testing and certification is successful in China, our goal will be to sell the boiler burner technology into the very large Chinese market through our collaborative partnership.

We anticipate making continued progress during 2024 both demonstrating and commercializing such equipment.

Third-party source testing has validated the 5ppm and 2.5ppm emission orders.

In 2024, we received three additional orders from Rogue Combustion with one of these three orders accompanied by a letter of intent for three follow-on orders.

Wellhead Enclosed Flares

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Sensing Products

We are currently seeking first adopters to install our flame sensors for field demonstration.

Although we have not yet completed the product launch of our sensing products and subsequent commercialization, we have obtained clear and consistent customer feedback guiding its first application.

We are currently engaged with a prominent refining customer as a first adopter to install our flame sensors on burners in one of their heaters facilitating our first field demonstration.

Although we have not yet completed the product launch of our sensing products and subsequent commercialization thereof, we have obtained clear and consistent customer feedback guiding its first application.

The target market for this technology is potentially every burner with a pilot on which flame sensors are deployed, providing a global and very high-volume opportunity.

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Our Target Markets

Our ClearSign Core products compete in the combustion and emissions control markets.

Our ClearSign Core TM products compete in the combustion and emissions control markets.

These industries are highly competitive and currently dominated by companies that have comparatively more established products and substantially greater infrastructure, customer support networks, and financial resources.

Based on testing and completed field installations to date, however, we believe that our ClearSign Core technology provides several unique and powerful business solutions for our customers, including, but not limited to:

Based on testing and completed field installations to date, however, we believe that our ClearSign Core TM technology provides several unique and powerful business solutions for our customers, including, but not limited to:

(i) overall cost-effective installation, (ii) energy efficiency, (iii) operational performance and (iv) significantly reduced emissions.

Further, we believe that our technology is well-suited to create substantial synergistic value by incorporating it into mainstream commercial offerings with the market incumbents, thus leveraging the “ClearSign Core” technology along with the established breadth and capabilities of collaborating companies, such as Zeeco and California Boiler.

We are targeting the following segments of the combustion market for adoption of our ClearSign Core technology:

We are targeting the following segments of the combustion market for adoption of our ClearSign Core TM technology:

● institutional, commercial and industrial boilers;

● refinery, energy infrastructure and petrochemical process heaters;

● enclosed flares;

● refining, energy infrastructure and petrochemical process heaters;

● enclosed flares and thermal oxidizers;

● enhanced oil recovery steam generators

In each of these segments, we are marketing solutions that include our ClearSign Core technology which we believe could simultaneously improve productivity, operational efficiency and pollution control.

In each of these segments, we are marketing solutions that include our ClearSign Core TM technology which we believe could simultaneously improve productivity, operational efficiency and pollution control.

Our target markets are greatly affected by air emission regulations and economic conditions.

Accordingly, we prioritize our activities in target market segments geographically based on the needs of the local industries and the current and anticipated future requirements imposed by local environmental regulation.

Details regarding the localized effect of environmental regulation in the United States are described in the section of this report titled “Our Industry.” In general, our immediate regional opportunities are in the West and Gulf Coasts of the United States and China.

Competition, Barriers to Entry and Go to Market Strategy

Details regarding the localized effect of environmental regulations in the United States are described in the section of this report titled “Our Industry.” In general, our immediate regional opportunities are in the West and Gulf Coasts of the United States.

Competition and Barriers to Entry

The industry in which we operate is global in scope and populated by large, established suppliers of burners and post-combustion air pollution control systems.

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Unlike most other kinds of capital equipment that provide an economic return through enhanced productivity or efficiency, we believe customers of traditional emissions control equipment do not expect any positive return on emissions control investments other than the ability to continue to operate or avoid fines.

We believe the ClearSign Core suite of products are further differentiated from its competitors because they give prospective customers the opportunity to greatly reduce capital investment and, in certain cases, realize a return on investment through increased efficiency and/or increased productivity.

We believe the ClearSign Core TM suite of products are further differentiated from its competitors because they give prospective customers the opportunity to greatly reduce capital investment and, in certain cases, realize a return on investment through increased efficiency and/or increased productivity.

As indicated above, we are seeking to develop our business in the combustion and emissions control market and to establish ourselves in a highly competitive industry among companies that have substantial financial resources, a well-developed infrastructure and established products.

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Developing operational infrastructure:

Again, especially in the refining and petrochemical industries, customers require thorough quality assurance procedures, including demonstration of an item from their order, to prove that it meets performance guarantees.

Especially in the refining and petrochemical industries, customers require thorough quality assurance procedures, including demonstration of an item from their order, to prove that it meets performance guarantees.

This requires, among other things, having access to a test furnace.

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Any new entrant without a differentiating technology will not have this established source of significant and immediate profit.

We developed our “go to market” strategy for the ClearSign Core combustion business considering our strengths and weaknesses.

Go to Market Strategy

We developed our “go to market” strategy for the ClearSign Core TM combustion business considering our strengths and weaknesses.

The most important weaknesses are related to the barriers to entry identified above.

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Although we have highly skilled and experienced employees, we do not have the manpower to provide comprehensive service and customer support ourselves.

We believe that it is in the best interests of the Company and our shareholders to develop our business utilizing an “asset light” model.

We believe that it is in the best interests of the Company and our stockholders to develop our business utilizing an “asset light” model.

Accordingly, we seek to collaborate with strategic partners to the extent possible to sell our products and maximize the profitability of those sales.

Our strengths include our technology, which has been developed to provide a standard set of “core” components that can be incorporated into any generic OEM burner body.

We believe that our technology is our main strength, which has been developed to provide a standard set of “core” components that can be incorporated into any generic OEM burner body.

These components enable unique performance that minimizes emissions and controls flame size.

Our strengths also include the market opportunity potentially created by new and anticipated environmental emissions control regulations.

We believe that our strengths also include the market opportunity potentially created by new and anticipated environmental emissions control regulations.

These regulations will potentially require combustion performance that either exceeds the technology available from the incumbent equipment manufacturers or requires retrofitting existing equipment with a post-combustion clean up apparatus.

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We believe that the incumbent burner OEM product development approaches are, and will continue to be, incremental in nature, and are unlikely to pose a significant threat to the value provided by ClearSign Core technology in the foreseeable future.

Manufacturing Footprint and Product Quality Strategy

Our business has been, and continues to be, developed with the goal of combining our technology with the infrastructure and resources of major OEM equipment manufacturers.

Through such collaborative arrangements, OEM burner manufacturers can reap the benefits of adding truly differentiated and unique product lines to their offerings and ClearSign can overcome the barrier to market of needing to build capital and operating expense-intensive infrastructure and hiring a large specialist staff.

In addition, we believe that having orders fulfilled by a well-known and trusted supplier will reduce the risk, as perceived by prospective customers, of dealing with a small company and aid in the adoption of our technology.

Our business plan contemplates forming collaborative partnerships with major OEM equipment manufacturers.

At this time, we have demonstrated that our technology has commercial viability by generating interest from OEMs and end users.

We expect that developing strategically chosen collaborative partnerships will result in supplying ClearSign Core technology to major global customers in large quantities together with the attendant engineering, quality control, customer support and project management services required by these sophisticated customers.

We also believe that having orders fulfilled by a well-known and trusted supplier will reduce the risk, as perceived by prospective customers, of dealing with a small company.

We expect that developing strategically chosen collaborative partnerships will result in supplying ClearSign Core TM technology to major global customers in large quantities together with the attendant engineering, quality control, customer support and project management services required by these sophisticated customers.

We also believe that our collaborative partnerships will enable our OEM partners to offer a unique product in the marketplace and provide both parties with a potentially significant commercial opportunity.

Forming such alliances is expected to dramatically accelerate the global sales and market adoption of our technology.

As announced in June 2019, we already have an agreement in place with Zeeco, who is one of the world’s largest burner manufacturers, to globally manufacture ClearSign Core process burners.

The selling and marketing of our process burners pursuant to this agreement, however, is contingent upon terms still under negotiation.

In addition, we have a collaborative agreement with California Boiler to sell and

produce both fire tube boiler burner and flare products.

We are also pursuing various licensing types of arrangements for other market verticals and ClearSign Core applications.

As announced in June 2019, we already have an agreement in place with Zeeco, who is one of the world’s largest burner manufacturers, to globally manufacture ClearSign Core TM process burners.

In December 2024, Zeeco and ClearSign announced the launch of a co-branded ClearSign Core process burner product line.

We believe that this announcement marked the next stage of

evolution in our relationship with Zeeco, where we will work together to market and sell ClearSign Core TM technology.

We are continuing to negotiate this next phase of our relationship, but we view this announcement as a commitment to solidify our shared marketing and sales efforts of ClearSign Core™ technology going forward.

In addition, we have a collaborative agreement with California Boiler to sell and produce both fire tube boiler burner and flare products.

California Boiler created a wholly owned subsidiary Rogue Combustion for the purpose of marketing boiler burner systems solution using our ClearSign Core TM technology, which are branded as Near Zero NOx (“NZN”) and Sub 5ppm NOx (“S5”) and Sub 9ppm NOx (“S9”) solutions.

Typically, boiler burner customers rely on integrated service providers to design, install and service boiler burner systems.

Our collaborative relationship with California Boiler and Rogue Combustion aligns with our “asset light” philosophy by providing us with a low-cost path to market, by limiting human capital investment in maintenance and installation technicians.

Sales Channel and Marketing Strategy

In addition to targeting OEM manufacturers and service providers to augment our manufacturing footprint and on-time service capabilities, we target sales and marketing efforts at OEM heater companies and engineering companies supporting our refining, petrochemical and energy infrastructure customers.

By focusing on this sales channel, we believe we can quickly gain repeat sales given these customers act as a conduit to multiple end users, which also allows us to maximize the reach of our limited selling and marketing resources.

In 2024, as a result of adopting such go-to-market strategy, we received multiple orders originating from a single heater OEM.

We value and nurture our relationships with end users, and we view this sales channel as a critical path to overall market acceptance, since end users ultimately own and operate our equipment.

Further, by maintaining and growing such relationships, we were able to successfully enter the market and generate the first adopters of our technology.

We further believe that fostering these relationships will help us drive demand for our products downstream to OEM heater manufacturers and engineering service companies.

We expect that these end users, as first adopters of our technology, will also play a vital role in future sales efforts by providing references to prospective customers, as, based on our experience, prospective customers frequently request a reference from an existing customer.

Another aspect of our marketing strategy relies on obtaining reputable third-party validation of our technology by demonstrating that our burners can meet or exceed the operational characteristics we set out to achieve.

As noted above in the “Our Industry” section, the SCAQMD approved new BACT performance guidelines for both single and multi-burner configurations using our burners as part of an assessment review.

While BACT guidelines do not specifically endorse our technology, we believe these new guidelines reinforce the viability of our burners’ operational capabilities to any industry skeptic.

In addition, we participated in a study executed by the California Gas Emerging Technologies (“GET”) program to test and quantify the emissions improvements and efficiency gains of our ultra-low NOx boiler burner as compared to a conventional (or baseline) ultra-low-NOx burner.

ICF a global advisory and technology service company, released its independent report on October 2, 2024, detailing the results of this study.

In summary, our technology reported fuel savings at 3.3% when operating at sub-2.5 ppm NOx and 4.7% at sub-9 ppm NOx;

electricity savings reported 7% at sub-2.5 ppm NOx and 25% at sub-9 ppm NOx.

We believe these third-party reviews of our technology play a critical role in proving the efficacy of our technologies and dispelling industry skepticism.

Pricing Strategy

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As a result, we expect that products containing ClearSign Core™ technology will sell at prices based on the value they offer rather than pursuant to standard competitive pricing that our competitors are forced to use in these mature markets.

Our Business Segment and Major Customers

We conduct our business activities and report financial results as one business segment.

Our business segment engages in the design, development and sale of combustion technologies that improve the performance and cost-effectiveness of industrial combustion systems.

The presentation of financial results as one reportable segment is consistent with the way that we operate our business and the manner in which our chief operating decision maker, currently our Chief Executive Officer, manages our operations for purposes of allocating resources and assessing financial results.

Our operating activities are substantially all located within the United States, and our customers located in the United States accounted for 100% of revenues in the fiscal years ended December 31, 2024 and 2023.

Our two California refinery customers accounted for 86% and 87% of our annual revenue for the years ended December 31, 2024 and 2023, respectively.

No other customer represented greater than ten percent of annual revenues for the years ended December 31, 2024, and 2023.

For the Year Ended

Suppliers and Subcontractors

Due to our “asset light” model, we use subcontractors to source, warehouse and manufacture our products.

allows us to maximize the value of our limited resources while minimizing capital investment.

This model allows us to maximize the value of our limited resources while minimizing capital investment.

Our subcontractor, for the process burner product line, is intentionally single sourced through a collaborative agreement with a well-known and established industry leader, Zeeco.

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Research and Development Program

The experience and industry contacts of our management team, board of directors, and consultants, along with potential customers in the petroleum, petrochemical, and industrial steam applications industries inform our research and development program.

The experience and industry contacts of our management team and consultants, along with potential customers in the petroleum, petrochemical, and industrial steam applications industries inform our research and development program.

Field evaluation agreements, research agreements, and memoranda of understanding with potential development partners, customers and research institutions support this process.

Our research and development activities make use of employees and consultants who are experts in the areas of industrial combustion, statistical experimental design, fluid mechanics and heat transfer.

With the maturation of our ClearSign Core technology, our development process has transitioned from research to commercialization.

With the maturation of our ClearSign Core TM technology, our development process has transitioned from research to commercialization.

This has included optimizing the technology to perform in a manner readily adoptable by our prospective customers and easy to incorporate into the burner structures of our collaborative alliance partners.

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We will continue to assess research and development opportunities to develop new product offerings where appropriate based on customer feedback and market trends.

We are currently continuing to develop our flame sensing and hydrogen burner technology, which is discussed in detail under the “ClearSign Core Technology Product Applications” section above in addition to the expansion of our burner technologies into adjacent customer applications and market verticals.

We are currently continuing to develop our flame sensing and hydrogen burner technology, which is discussed in detail under the “ClearSign Core™ Technology Product Applications” section above in addition to the expansion of our burner technologies, and potentially other technologies aligned with our expertise and business focus, into adjacent customer applications and market verticals.

Intellectual Property Protection

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Further, we may modify a patent application in the future as we develop additional information.

As a result, we may create additional patent applications from an

existing application, consolidate existing patent applications, abandon applications, or otherwise modify applications based upon our judgment in order to protect our intellectual property in a reasonably cost-efficient manner.

As a result, we may create additional patent applications from an existing application, consolidate existing patent applications, abandon applications, or otherwise modify applications based upon our judgment in order to protect our intellectual property in a reasonably cost-efficient manner.

Government Regulation

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Possible legislation related to greenhouse gases, boiler Maximum Available Control Technology (“MACT”) rules, or other general reductions in required pollutant levels globally, especially in the U.S.

and China, could bolster our ability to meet our business objectives.

could bolster our ability to meet our business objectives.

Although the timing of any such regulations is uncertain, the general trend over the last decades continues to be government-mandated reduction for all criteria pollutants.

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At this time, we believe that the current U.S.

administration supports “green initiatives,” and we are not aware of any current or proposed federal, state or local environmental compliance regulations that would have a material detrimental effect on our business objectives.

We do not anticipate any major expenditures to be required in order for our technology to comply with any environmental protection statutes.

Concurrently the Chinese government has enacted notable tightening of allowable emissions levels, particularly for NOx emissions, and we anticipate this trend will continue in the future.

administration does not support “green initiatives.” Nevertheless, we are not aware of any current or proposed federal, state or local environmental compliance regulations that would have a material detrimental effect on our business objectives or operations.

environmental regulation that supports the adoption of our technology originates from the Clean Air Act, which had several subsequent amendments specifically targeting NOx emissions, including the 1990 amendments to the Clean Air Act, or the Acid Rain Program, which contained requirements to reduce NOx emissions through the use of available combustion controls.

While the current political environment may not be conducive for strengthening emissions controls at a national level, we believe global mega trends induced by social and political sentiment, and local and state regulatory requirements have laid the groundwork for continued support and adoption of our technology.

In addition, we do not anticipate any major expenditures to be required in order for our technology to comply with any environmental protection statutes.

Human Capital

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Effective June 14, 2023, we changed our domicile from the State of Washington to the State of Delaware by means of a plan of conversion.

The address of our corporate headquarters is 8023

East 63rd Place, Suite 101, Tulsa, Oklahoma 74133 and our telephone number is (918) 236-6461.

The address of our corporate headquarters is 8023 East 63rd Place, Suite 101, Tulsa, Oklahoma 74133 and our telephone number is (918) 236-6461.

Our website can be accessed at www.clearsign.com.

The information contained on our website is not a part of this report.

We currently operate in the United States, People’s Republic of China and Hong Kong.

We currently operate in the United States.

We have a wholly-owned subsidiary incorporated Hong Kong, China, but we are not currently operating in Hong Kong, China, because such entity is in a dormant status, which status became effective on March 12, 2025.

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 1. Business