ClearSign Technologies Corp

ClearSign Technologies Corporation designs and develops technologies for decarbonization and improving key performance characteristics of industrial and commercial combustion systems, focusing on emission and operational performance, energy efficiency, and cost-effectiveness. The company's primary technology, ClearSign Core™, aims to enhance combustion systems in markets such as energy (upstream oil production, midstream gas processing and transportation, downstream refining), institutional, commercial, and industrial boiler, chemical, and petrochemical industries. ClearSign Core™ technology utilizes a porous ceramic structure or metal flame holder to significantly reduce flame length and achieve low emissions without external flue gas recirculation, selective catalytic reduction, or high excess air systems. The company believes its technology is more effective and cost-efficient than current industry-standard air pollution control technologies, capable of reducing nitrogen oxide (NOx) emissions to levels required by stringent regulations. Additionally, ClearSign is developing a range of sensing products called ClearSign Eye for industrial and transportation markets, with the latter being pursued through a collaboration with Narion Corporation. The company operates as a single business segment, focusing on the design, development, and sale of combustion technologies.

ClearSign's core business model revolves around generating revenue through the sale and deployment of its patented ClearSign Core™ technology, primarily through retrofits and replacements of existing burners and complete replacement units. The company emphasizes an "asset light" model, collaborating with strategic partners and OEMs like Zeeco Inc. and California Boiler to leverage their manufacturing capabilities and market reach. Revenue is recognized upon the delivery of goods or services, with contracts often including progress payments tied to defined milestones such as design engineering, customer witness tests, and burner shipment. The company's customer base is concentrated, with its two California refinery customers accounting for 15% ¹ and 86% ² of annual revenue for the years ended December 31, 2025 and 2024, respectively, and Birwelco USA Inc. accounting for 66% ³ and 4% ⁴ of annual revenue for the same periods.

The company's primary product line is the ClearSign Core™ Burner Technology, which includes process burners, boiler burners, and flaring burners. ClearSign Core™ process burners offer a simplified, pre-engineered, and standardized direct burner replacement for traditional refinery process heaters, designed for quick installation in single or multi-burner heaters. The M-Series burner line, including the M-1 and M-25, is a key development in this category, with the M-25 targeting midstream gas processing and transportation industries where stringent NOx regulations are not always required but improved burner technology is in demand. ClearSign Core™ boiler burner technology is similar but adapted for different orientations and internal chamber dimensions of boilers. ClearSign Core™ flaring technology is configured into standard designs for extremely low NOx emissions, with the company expanding its scope to include complete or partial flare systems to increase revenue and profit.

A secondary product line is the ClearSign Eye Flame Sensor, an electrical flame sensor for industrial applications that does not require contact with the flame, unlike traditional "flame rods." This technology is being developed for both retrofit solutions for existing equipment and inclusion in newly built equipment, with a primary market similar to ClearSign Core™ technology but not limited to regions requiring emissions reduction. A secondary potential market for the sensing technology is in transportation industries, pursued through a collaboration with Narion Corporation. The company believes this sensing technology offers a reliable alternative to current unreliable flame sensors and could provide future diversification and growth beyond combustion-related businesses.

For the fiscal year ended December 31, 2025, ClearSign reported total revenues of $5,234 thousand ⁵, an increase of 45.6% ⁶ from $3,596 thousand ⁷ in 2024. Cost of goods sold increased by 53.8% ⁸ to $3,810 thousand ⁹ from $2,478 thousand ¹⁰ in 2024. Gross profit for 2025 was $1,424 thousand ¹¹, up 27.4% ¹² from $1,118 thousand ¹³ in 2024. Operating expenses totaled $8,095 thousand ¹⁴, an increase of 6.5% ¹⁵ from $7,606 thousand ¹⁶ in 2024. This resulted in a loss from operations of $(6,671) thousand ¹⁷ in 2025, compared to $(6,488) thousand ¹⁸ in 2024. Net loss for 2025 was $(5,496) thousand ¹⁹, a 3.8% ²⁰ increase from $(5,299) thousand ²¹ in 2024. Basic and diluted net loss per common share improved to $(0.99) ²² in 2025 from $(1.08) ²³ in 2024. Cash and cash equivalents stood at $9,178 thousand ²⁴ at year-end 2025, down from $14,035 thousand ²⁵ in 2024. The company has no contractual debt obligations.

Year-over-year, revenues increased by $1,638 thousand ²⁶, or 45.6% ²⁷, driven primarily by an increase in performance obligations related to CFD studies, customer witness tests, flare shipments, and spare part deliveries, partially offset by a decrease in boiler burner deliveries. Gross profit increased by $306 thousand ²⁸, or 27.4% ²⁹, predominantly due to higher revenues, though this was partially offset by an additional warranty accrual of $447 thousand ³⁰ recognized in Q4 2025. Research and development expenses remained relatively consistent, decreasing by 3.3% ³¹ to $1,422 thousand ³² in 2025 from $1,471 thousand ³³ in 2024. General and administrative expenses increased by $538 thousand ³⁴, or 8.8% ³⁵, to $6,673 thousand ³⁶ in 2025 from $6,135 thousand ³⁷ in 2024, mainly due to a $746 thousand ³⁸ increase in legal fees and a $469 thousand ³⁹ increase in non-cash expenses related to RSU vesting, partially offset by a $394 thousand ⁴⁰ decrease in China dormancy cost accrual and a $154 thousand ⁴¹ decrease in incentive compensation costs.

During 2025, ClearSign continued to advance its commercialization efforts. The company successfully demonstrated a new revision of its ClearSign Core™ burner burning "pure" hydrogen fuel in an industrial scale test heater, controlling NOx emissions to applicable regulatory requirements, as part of a Department of Energy (DOE) grant. The company received multiple purchase orders from a California energy company for major components of two retrofit flare systems, driven by new low NOx emissions regulations for flares. ClearSign also received an order for twenty-six burners from Birwelco USA Inc. for a Gulf Coast facility operated by a Fortune 500 global chemical company, with installation anticipated around mid-2026. Additionally, the company received five more orders for its M-Series burners for horizontally fired process heaters since its first order in 2023, with two of these orders in Texas believed to be associated with anticipated changes to Texas air emissions regulations. The South Coast Air Quality Management District of California (SCAQMD) approved new Best Available Control Technology (BACT) performance guidelines for single and multi-burner configurations based on ClearSign Core™ burner technology in currently operating customer installations.

ClearSign Technologies Corporation has not provided specific revenue, margin, or EPS guidance for the upcoming period in this filing.

The company anticipates continued growth in demand for its ClearSign Core™ technology, particularly in response to evolving environmental regulations. New regulations are being adopted for NOx emissions from enclosed ground flares, which historically have not been heavily regulated. ClearSign believes its ClearSign Core™ technology is well-suited to address these challenges, citing multiple operational flare applications in California with NOx emissions below new regulatory levels. The company experienced an increase in low NOx flare inquiries during 2025, leading to multiple purchase orders from a California energy company. Furthermore, the Texas Commission on Environmental Quality (TCEQ) has proposed a fee program to fine major NOx emitters, which, if approved by the EPA, is expected to incentivize customers to seek NOx reduction technologies. ClearSign also sees opportunities in Europe, the Middle East, parts of Asia, and Canada, where emissions standards are expected to become stricter.

A significant growth area for ClearSign is the development of its hydrogen process burner technology. As part of a Department of Energy (DOE) grant totaling approximately $1.9 million ⁴² with a target end date in Q1 2026 ⁴³, the company successfully demonstrated a modified ClearSign Core™ process burner capable of burning "pure" hydrogen fuel at an industrial scale while maintaining ultra-low NOx emissions. This development is crucial for enabling the adoption of hydrogen fuel for industrial heating, which can lead to reductions in both carbon dioxide and nitrogen oxide emissions. The company believes this technology will solve complex problems related to multiple fuel feedstocks and will be a valuable addition to its offerings.

Operationally, ClearSign is focused on optimizing its ClearSign Core™ technology for easy adoption by customers and seamless integration into OEM burner structures. This involves product and component standardization, design for manufacture, and inventory management simplification. The company's "asset light" model, relying on subcontractors and collaborative partnerships, is central to its manufacturing and operational strategy. ClearSign uses subcontractors for sourcing, warehousing, and manufacturing, with Zeeco Inc. being a single-sourced subcontractor for the process burner product line. The company intends to pass along production cost increases to customers to the extent deemed appropriate.

ClearSign plans to continue investing in research and development, particularly for its flame sensing and hydrogen burner technologies, and to expand its burner technologies into adjacent customer applications and market verticals based on customer feedback and market trends. The company also aims to monetize its sensing technology through manufacturing and direct sales, or through licensing opportunities. For capital allocation, ClearSign intends to use net proceeds from cash exercises of its outstanding warrants, which could amount to up to $22.4 million ⁴⁴ in aggregate gross proceeds, for working capital, research and development, marketing and sales, and general corporate purposes. Additionally, under its At-the-Market (ATM) program with H.C. Wainwright & Co., LLC, the company can offer and sell shares of common stock for an aggregate offering price of up to $10.39 million ⁴⁵. The company has not paid dividends in the past and plans to reinvest all earnings to develop and market products, cover operating costs, and remain competitive.

Management has explicitly flagged several structural headwinds and execution risks. The industrial combustion market is characterized by intense competition from large, established suppliers with greater resources and mature technologies. Customers in target industries are historically risk-averse and slow to adopt new technologies, requiring significant effort to build market awareness and a critical mass of successful sales and installations. The company's reliance on an "asset light" model and collaborative partnerships means its success depends on these partners fulfilling their contractual obligations satisfactorily. Delays in contract performance, often due to customer onsite project delays, can impact revenue recognition. The company also faces challenges in developing engineering, order fulfillment, and customer service staff, as well as operational infrastructure, which are significant barriers to entry for new equipment manufacturers.

Geographic, regulatory, and macro factors also pose constraints. While environmental regulations are a key driver for demand, changes or relaxation of these regulations could make ClearSign's technology less desirable. The recent rescission of the 2009 greenhouse gas endangerment finding by the EPA, while not expected to materially impact NOx regulations, highlights the political volatility surrounding environmental policies. Anti-environmental, social, and governance (ESG) sentiment among stakeholders and government institutions could also reduce demand for ClearSign's products. Global supply-chain constraints, geopolitical conflicts, and fluctuations in commodity prices (like raw steel) could adversely affect the company's ability to procure raw materials, increase production costs, and delay shipments. The company's revenue concentration among a small number of customers also poses a risk, as the loss of a key customer could significantly harm results of operations and cash flow.

ClearSign faces several material risks, including its history of losses and expectation of continued operating losses and negative cash flows, with an accumulated deficit of approximately $104.5 million ⁴⁶ as of December 31, 2025. The company's ability to obtain future financing is uncertain, and its business is capital-intensive. Market acceptance of its new technology is difficult to predict, as target customers are historically risk-averse and slow to adopt. Changes or relaxation of environmental regulations, such as the EPA's rescission of the 2009 greenhouse gas endangerment finding, could reduce demand for its technology. Revenue is highly concentrated, with the three largest customers representing approximately 81% ⁴⁷ and 86% ⁴⁸ of total revenue for the years ended December 31, 2025 and 2024, respectively, posing credit risks and vulnerability to customer loss. Failure to adequately protect its intellectual property, including 75 active patent grants ⁴⁹ and 20 patents pending ⁵⁰, could allow competitors to leverage its R&D efforts. Collaborative partnerships involve risks of disagreements, delays, and non-performance, which could harm reputation and operating results. The market for environmental products is characterized by rapid technological change, potentially rendering ClearSign's products obsolete. Inherent dangers in the combustion process and limited operational data for new technologies expose the company to product liability claims and accidents. Dependence on third-party suppliers for raw materials like raw steel and fabricated steel, and subcontractors for manufacturing, creates supply chain risks, including interruptions, capacity constraints, and price increases. Macroeconomic pressures, geopolitical conflicts, and fluctuations in investment market values and interest rates also pose financial risks. The company's common stock is subject to volatility, and future equity issuances or warrant exercises could lead to dilution for existing stockholders. Furthermore, the company must satisfy Nasdaq's continued listing requirements, including a minimum bid price, to avoid delisting.

Management's message to shareholders conveys a tone of cautious optimism, emphasizing the company's innovative technology and strategic approach to commercialization despite a history of losses and anticipated negative cash flows in the near future. They highlight the successful deployment of ClearSign Core™ technology in commercial projects and its potential to provide cost-effective solutions for decarbonization and emissions reduction, particularly NOx, to meet increasingly stringent regulations. Management explicitly states their expectation to incur additional costs related to commercialization, product development, consulting, marketing, and human capital development, and that they will continue to experience operating losses and negative cash flows for the foreseeable future. A key strategic priority is the "asset light" business model, focusing on collaborative partnerships with major OEM equipment manufacturers like Zeeco and California Boiler to leverage their infrastructure and market reach, thereby minimizing ClearSign's capital investment and operational costs. Another strategic priority is the continued development and commercialization of new product offerings, specifically the ClearSign Eye flame sensor and the ultra-low NOx hydrogen burner, the latter being funded by Department of Energy grants totaling approximately $1.9 million ⁵¹. Management also emphasizes building a strong reference list of early sales and providing comprehensive technical support to overcome customer conservatism and drive market acceptance. They believe that the unique capabilities of their technology will allow for value-based pricing rather than standard competitive pricing.