Form 10-Q - Quarterly report [Sections 13 or 15(d)]

CLIR ClearSign Technologies Corporation

CLIR ClearSign Technologies Corporation

Notizie ClearSign Technologies Corporation - CLIR

Notizie ClearSign Technologies Corporation - CLIR

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2023


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______________ to _______________

Commission File Number 001-35521

CLEARSIGN TECHNOLOGIES CORPORATION

(Exact name of registrant as specified in its charter)


Delaware (State or other jurisdiction of incorporation or organization)		26-2056298 (I.R.S. Employer Identification No.)

8023 E. 63rd Place, Suite 101

Tulsa, Oklahoma 74133

(Address of principal executive offices)

(Zip Code)

(918) 236-6461

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered

Common Stock	CLIR	The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ⌧ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period than the registrant was required to submit such files). Yes ⌧ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐		Accelerated filer ☐

Non-accelerated filer ⌧		Smaller reporting company ☒

		Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ⌧

As of August 9, 2023, the issuer has 38,562,086 shares of common stock, par value $0.0001, issued and outstanding.

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TABLE OF CONTENTS


PART I	FINANCIAL INFORMATION

Item 1.	Unaudited Condensed Consolidated Financial Statements

	Unaudited Condensed Consolidated Balance Sheets as of June 30, 2023 and December 31, 2022	1

	Unaudited Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2023 and 2022	2

	Unaudited Condensed Consolidated Statements of Stockholders’ Equity for the three and six months ended June 30, 2023 and 2022	3

	Unaudited Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2023 and 2022	5

	Notes to Unaudited Condensed Consolidated Financial Statements	6

Item 2.	Management’s Discussion and Analysis of Financial Conditions and Results of Operations	20

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	26

Item 4.	Controls and Procedures	26

PART II	OTHER INFORMATION	27

Item 1.	Legal Proceedings	27

Item 1A.	Risk Factors	27

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	27

Item 3.	Defaults Upon Senior Securities	27

Item 4.	Mine Safety Disclosures	27

Item 5.	Other Information	27

Item 6.	Exhibits	29

	SIGNATURES	30

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PART I-FINANCIAL INFORMATION

ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

ClearSign Technologies Corporation and Subsidiary

Condensed Consolidated Balance Sheets

(Unaudited)


(in thousands, except share and per share data)	June 30,		December 31,
	2023		2022
ASSETS

Current Assets:
Cash and cash equivalents	$	7,600	$	6,451
Short-term held-to-maturity investments		931		2,606
Accounts receivable, net		39		79
Contract assets		3		20
Prepaid expenses and other assets		575		577
Total current assets		9,148		9,733

Fixed assets, net		478		384
Patents and other intangible assets, net		762		798
Other assets		10		10

Total Assets	$	10,398	$	10,925

LIABILITIES AND EQUITY

Current Liabilities:
Accounts payable and accrued liabilities	$	428	$	296
Current portion of lease liabilities		95		133
Accrued compensation and related taxes		413		471
Contract liabilities		2,105		247
Total current liabilities		3,041		1,147
Long Term Liabilities:
Long term lease liabilities		199		226
Total liabilities		3,240		1,373

Commitments and contingencies (Note 7)

Stockholders’ Equity:
Preferred stock, $0.0001 par value, zero shares issued and outstanding		—		—
Common stock, $0.0001 par value, 38,562,086 and 38,023,701 shares issued and outstanding at June 30, 2023 and December 31, 2022, respectively		4		4
Additional paid-in capital		98,604		98,079
Accumulated other comprehensive loss		(20)		(8)
Accumulated deficit		(91,430)		(88,523)
Total equity		7,158		9,552

Total Liabilities and Equity	$	10,398	$	10,925

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

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ClearSign Technologies Corporation and Subsidiary

Condensed Consolidated Statements of Operations

(Unaudited)


(in thousands, except share and per share data)	For the Three Months Ended				For the Six Months Ended
	June 30,				June 30,
	2023		2022		2023		2022

Revenues	$	150	$	—	$	1,044	$	—
Cost of goods sold		21		—		809		—

Gross profit		129		—		235		—

Operating expenses:
Research and development		187		188		347		296
General and administrative		1,571		1,472		3,221		2,881

Total operating expenses		1,758		1,660		3,568		3,177

Loss from operations		(1,629)		(1,660)		(3,333)		(3,177)

Other income
Interest		94		—		152		—
Government assistance		14		—		107		—
Gain from sale of assets		—		14		5		37
Other income, net		43		8		162		12
Total other income		151		22		426		49

Net loss		(1,478)		(1,638)		(2,907)		(3,128)

Net loss per share - basic and fully diluted	$	(0.04)	$	(0.05)	$	(0.08)	$	(0.09)

Weighted average number of shares outstanding - basic and fully diluted		38,549,810		33,541,408		38,407,053		33,378,054

Comprehensive loss
Net loss	$	(1,478)	$	(1,638)	$	(2,907)	$	(3,128)
Foreign-exchange translation adjustments		(12)		(10)		(12)		(10)
Comprehensive loss	$	(1,490)	$	(1,648)	$	(2,919)	$	(3,138)

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

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ClearSign Technologies Corporation and Subsidiary

Condensed Consolidated Statements of Stockholders’ Equity

(Unaudited)

For the Three Month Periods During the Six Months Ended June 30, 2023 and 2022


										Total ClearSign
						Accumulated Other				Technologies Corp.
(in thousands, except per share data)	Common Stock			Additional		Comprehensive		Accumulated		Stockholders’
	Shares	Amount		Paid-In Capital			Income (Loss)	Deficit		Equity
Balances at December 31, 2022	38,023	$	4	$	98,079	$	(8)	$	(88,523)	$	9,552
Share-based compensation	223		—		227		—		—		227
Fair value of stock issued in payment of accrued compensation	296		—		234		—		—		234
Shares issued for services ($0.66 per share)	4		—		3		—		—		3
Net loss	—		—		—		—		(1,429)		(1,429)
Balances at March 31, 2023	38,546		4		98,543		(8)		(89,952)		8,587

Share-based compensation	—		—		59		—		—		59
Shares issued upon exercise of options ($0.54 per share)	12		—		—		—		—		—
Shares issued for services ($0.66 per share)	4		—		2		—		—		2
Foreign-Exchange Translation Adjustment	—		—		—		(12)		—		(12)
Net loss	—		—		—		—		(1,478)		(1,478)
Balances at June 30, 2023	38,562	$	4	$	98,604	$	(20)	$	(91,430)	$	7,158

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										Total ClearSign
						Accumulated Other				Technologies Corp.
	Common Stock			Additional		Comprehensive		Accumulated		Stockholders'
	Shares	Amount		Paid-In Capital			Income (Loss)	Deficit		Equity
Balances at December 31, 2021	31,582	$	3	$	91,035	$	9	$	(82,765)	$	8,282
Shares issued upon exercise of options ($0.89 per share)	1		—		—		—		—		—
Shares issued upon exercise of options ($2.93 per share)	3		—		—		—		—		—
Fair value of stock issued in payment of accrued compensation	66		—		95		—		—		95
Fair value of stock options granted in payment of accrued compensation	—		—		12		—		—		12
Share based compensation	3		—		80		—		—		80
Shares issued through the use of At-The Market issuance ($1.24 average per share)	496		—		578		—		—		578
Shares issued for services ($1.93 per share)	4		—		7		—		—		7
Net loss	—		—		—		—		(1,490)		(1,490)
Balances at March 31, 2022	32,155	$	3	$	91,807	$	9	$	(84,255)	$	7,564

Share based compensation	—		—		50		—		—		50
Shares issued through the use of At-The Market issuance ($1.71 average per share)	5		—		9		—		—		9
Shares issued for services ($1.93 per share)	4		—		7		—		—		7
Shares issued in stock offering ($1.11 average per share)	4,186		1		4,210		—		—		4,211
Foreign-Exchange Translation Adjustment	—		—		—		(10)		—		(10)
Net loss	—		—		—		—		(1,638)		(1,638)
Balances at June 30, 2022	36,350	$	4	$	96,083	$	(1)	$	(85,893)	$	10,193

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

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ClearSign Technologies Corporation and Subsidiary

Condensed Consolidated Statements of Cash Flows

(Unaudited)


(in thousands)	For the Six Months Ended June 30,
	2023		2022
Cash flows from operating activities:
Net loss	$	(2,907)	$	(3,128)
Adjustments to reconcile net loss to net cash used in operating activities:
Common stock issued for services		5		14
Share-based compensation		300		130
Depreciation and amortization		158		13
Gain from sale of fixed assets		(5)		(37)
Right of use asset amortization		73		59
Realized gain from marketable securities		(60)		—
Lease Amendments		(14)		—
Impairment of intangible assets		14		—
Change in operating assets and liabilities:
Contract assets		17		(448)
Accounts receivable		40		33
Prepaid expenses and other assets		(207)		(260)
Accounts payable and accrued liabilities		58		102
Accrued compensation and related taxes		162		175
Contract liabilities		1,858		—
Net cash used in operating activities		(508)		(3,347)

Cash flows from investing activities:
Acquisition of fixed assets		—		(5)
Disbursements for patents and other intangible assets		(56)		(73)
Proceeds from sale of fixed assets		5		37
Purchases of held-to-maturity short-term US treasuries		(2,162)		—
Redemption of held-to-maturity US treasuries		3,897		—
Net cash provided by (used in) investing activities		1,684		(41)

Cash flows from financing activities:
Proceeds from issuance of common stock, net of offering costs		—		4,798
Taxes paid related to vesting of restricted stock units		(15)		—
Net cash (used in) provided by financing activities		(15)		4,798
Effect of exchange rate changes on cash and cash equivalents		(12)		(10)
Cash and cash equivalents:
Net change in cash and cash equivalents		1,149		1,400
Cash and cash equivalents, beginning of period		6,451		7,607
Cash and cash equivalents, end of period	$	7,600	$	9,007

Supplemental disclosure of cash flow information:
Officer and employee equity awards for prior year accrued compensation	$	234	$	107
Prior year prepaid expenses repurposed to fixed assets as demonstration equipment	$	209	$	—
Non-cash impact of new lease	$	34	$	—

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

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ClearSign Technologies Corporation

Notes to Unaudited Condensed Consolidated Financial Statements

Note 1 – Organization and Description of Business

ClearSign Technologies Corporation (“ClearSign” or the “Company”) designs and develops products and technologies that have been shown to significantly improve key performance characteristics of industrial and commercial systems, including operational performance, energy efficiency, emission reduction, safety, and overall cost-effectiveness. The Company’s patented technologies are designed to be embedded in established OEM products as ClearSign Core™ and ClearSign Eye™ and other sensing configurations in order to enhance the performance of combustion systems and fuel safety systems in a broad range of markets. 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 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. Through ClearSign Asia Limited, the Company has established a Wholly Foreign Owned Enterprise (WFOE) in China – ClearSign Combustion (Beijing) Environmental Technologies Co., LTD.

Unless otherwise stated or the context otherwise requires, the terms ClearSign and the Company refer to ClearSign Technologies Corporation and its subsidiary, ClearSign Asia Limited.

Liquidity

The Company's condensed 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 June 30, 2023, the Company’s cash and cash equivalents totaled $7,600 thousand, and short-term held-to-maturity investments totaled $931 thousand, which is 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.

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 six months ended June 30, 2023, the Company did not raise proceeds through the issuance of common stock.

The Company has incurred losses since its inception totaling $91.4 million and expects to experience operating losses and negative cash flows for the foreseeable future. Management believes that the successful growth and operation of the Company’s business is dependent upon its ability to obtain adequate sources of funding through co-development agreements, strategic partnering agreements, or equity or debt financing to adequately support product commercialization efforts, protect intellectual property, form relationships with strategic partners, and provide for working capital and general corporate purposes. 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.

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Note 2 – Summary of Significant Accounting Policies

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (the “SEC”) for Form 10-Q. Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations. The condensed consolidated balance sheet at December 31, 2022 has been derived from the Company’s audited financial statements as of that date.

In the opinion of management, these condensed consolidated financial statements reflect all normal recurring and other adjustments necessary for a fair presentation. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022. Operating results for interim periods are not necessarily indicative of operating results for an entire fiscal year or any other future periods.

The accompanying unaudited condensed consolidated financial statements include the accounts of ClearSign and its subsidiary. Intercompany balances and transactions have been eliminated in consolidation.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Revenue Recognition and Cost of Sales

The Company recognizes revenue and related cost of goods sold in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification Topic 606 Revenue from Contracts with Customers (“ASC 606”). When applying ASC 606, the Company performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the promises and performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the performance obligations are satisfied. Revenues and cost of goods sold are recognized once the goods or services are delivered to the customer’s control or non-refundable performance obligations are satisfied. The Company’s contracts with customers generally have performance obligations and a schedule of non-refundable cancellation obligations. The contracts generally will be fully performed upon delivery of certain drawings or equipment. Revenue related to the contracts is recognized following the completion of non-refundable performance obligations as defined in the contract.

The Company’s contracts generally include progress payments from the customer upon completion of defined milestones. As these payments are received, they are offset against accumulated project costs and recorded as either contract assets or contract liabilities. Upon completion of the performance obligations and collectability is determined, revenue is recorded. 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 Costs

The Company capitalizes project costs until performance obligations related to the contract are completed. The Company expenses selling and marketing expenses when incurred within the statements of operations in general and administrative expenses.

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Product Warranties

The Company warrants all installed products against defects in materials and workmanship for a period specified in each contract by replacing failed parts. Accruals for product warranties are based on historical or expected warranty experience and current product performance trends and are recorded as a component of cost of sales at the time revenue is recognized. The warranty liabilities are reduced by material and labor costs used to replace parts over the warranty period in the periods in which the costs are incurred. 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 accounts payable and accrued liabilities in the consolidated balance sheets.

Cash and Cash Equivalents

Cash and cash equivalents consist of cash on deposit in a checking and savings account, and short-term money market instruments with an original maturity of three months or less. Cash equivalents, which consist of short-term U.S. treasury bills, are based on quoted market prices, a Level 1 fair value measure.

Short-Term Investments

Short-term investments consist of U.S. treasuries with original maturities of twelve months or less and greater than three months. These short-term investments are classified as held to maturity and are recorded on an amortized cost basis based on the Company’s positive intent and ability to hold these securities to maturity. As of June 30, 2023, the Company has not experienced any other-than-temporary impairment of its short-term investments. A decline in the market value of any held-to-maturity security below cost that is deemed other than temporary results in a reduction in carrying amount to fair value. The impairment is charged to earnings and a new cost basis for the security is established. The company evaluates whether the decline in fair value of its investments is other-than temporary at each quarter-end.

The cost basis for the Company’s short-term investments totaled approximately $931 thousand and $2,606 thousand as of June 30, 2023 and December 31, 2022, respectively. The unrealized holding gains for the Company’s short-term investments totaled approximately $17 thousand and $4 thousand as of June 30, 2023 and December 31, 2022, respectively. The Company has not experienced any continuous unrealized holding losses on these investments. The fair value for the Company’s short-term investments totaled approximately $948 thousand and $2,610 thousand as of June 30, 2023 and December 31, 2022, respectively.

Accounts Receivable and Allowance for Doubtful Accounts

Accounts receivable 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.

Fixed Assets and Leases

Fixed assets are recorded at cost. Leases are recorded in accordance with FASB ASC 842, Leases. For those leases with a term greater than one year, the Company recognizes a right-of-use asset, which is included in fixed assets, net on the consolidated balance sheets, and a lease liability measured at the present value of the lease payments at the time of the lease inception or modification. Lease costs are recognized in the consolidated statement of operations over the lease term on a straight-line basis. Leases with a term of 1 year or less are considered short term leases with rent expense recognized over the lease term. Depreciation is computed using the straight-line method over the estimated useful lives of the respective lease assets. Leasehold improvements are depreciated over the life of the lease or their useful life,

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whichever is shorter. All other fixed assets are depreciated over three to four years. Maintenance and repairs are expensed as incurred.

Patents and Trademarks

Third-party expenses related to patents and trademarks are recorded at cost, less accumulated amortization. Amortization is computed using the straight-line method over the estimated useful lives of the assets once they are awarded. Patent application costs are deferred pending the outcome of patent and trademark applications. Costs associated with unsuccessful patent applications and abandoned intellectual property are expensed when determined to have no continuing value in current business activity. The Company evaluates the recoverability of the carrying values of intangible assets each reporting period.

Impairment of Long-Lived Assets

The Company tests long-lived assets, consisting of fixed assets, patents, trademarks, and other intangible assets, for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable through the estimated undiscounted cash flows expected from the use and eventual disposition of the assets. In the event an asset is not fully recoverable, a loss is recognized based on the amount by which the carrying amount exceeds the fair value of the long-lived assets. Fair value is determined based on the present value of estimated expected cash flows using a discount rate commensurate with the risks involved, quoted market prices, or appraised values depending upon the nature of the assets. Losses on long-lived assets to be disposed are determined in a similar manner, except those fair values are reduced for the cost of disposal.

Fair Value of Financial Instruments

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Assets and liabilities measured at fair value are categorized based on whether or not the inputs are observable in the market and the degree that the inputs are observable. The categorization of financial assets and liabilities within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The three levels of inputs used to establish fair value are the following:

●

Level 1 – Quoted prices in active markets for identical assets or liabilities;

●

Level 2 – Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and

●

Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

The Company’s financial instruments primarily consist of cash equivalents, short-term investments, accounts receivable, accounts payable, and accrued expenses. As of the balance sheet dates, the estimated fair values of the financial instruments were not materially different from their carrying values as presented on the balance sheets. This is primarily attributable to the short-term nature of these instruments.

The Company did not identify any other recurring or non-recurring assets and liabilities that are required to be presented in the balance sheets at fair value.

Research and Development

The cost of research and development is expensed as incurred. Research and development costs consist of salaries, benefits, share based compensation, consumables, and consulting fees, including costs to develop and test prototype equipment and parts. Research and Development costs have been offset by funds received, if any, from strategic partners

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in cost sharing, collaborative projects. During the six months ended June 30, 2023 and 2022, the Company did not receive funds from these arrangements.

Government Assistance

The Company has adopted Accounting Standards Update (“ASU”) 2021-10, Government Assistance (Topic 832) Disclosures by Business Entities about Government Assistance, which requires footnote disclosure of assistance received from government entities. The Company records gross monies received from government entities in other income, and associated expenses such as salaries and supplies are recorded in Research and Development or General and Administration, depending on the nature of expenditure. The Company accrues for reimbursement requests submitted to government entities in accounts receivable.

Income Taxes

The Company accounts for income taxes using an asset and liability approach which allows for the recognition and measurement of deferred tax assets based upon the likelihood of realization of tax benefits in future years. Under the asset and liability approach, deferred taxes are provided for the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. A valuation allowance is provided for deferred tax assets if it is more likely than not the Company would not be able to realize their benefits, or that future deductibility is uncertain. Tax benefits are recognized only if it is more likely than not that the tax benefits will be utilized in the foreseeable future.

Share-Based Compensation

The costs of all employee stock options, as well as other equity-based compensation arrangements, are reflected in the unaudited condensed consolidated financial statements based on the estimated fair value of the awards on the grant date. That cost is recognized over the period during which an employee is required to provide service in exchange for the award, or in the case of performance options, expense is recognized upon completion of milestones as defined in the grant agreement. Share-based compensation for stock grants to non-employees is determined as the fair value of the consideration received or the fair value of equity instruments issued, whichever is more reliably measured.

Foreign Operations

The accompanying unaudited condensed consolidated balance sheets as of June 30, 2023 and December 31, 2022 include assets amounting to approximately $279 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 $111 thousand has been paid as of June 30, 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 and currently continues to be the case with the effects of the COVID-19 pandemic.

Foreign Currency

Assets and liabilities of ClearSign Asia Limited with non-U.S. Dollar functional currency are translated to U.S. Dollars using exchange rates in effect at the end of the period. Revenue and expenses are translated to U.S. Dollars using rates that approximate those in effect during the period. The resulting translation adjustments are included in the Company’s condensed consolidated balance sheets in the stockholders’ equity section as a component of accumulated other comprehensive income (loss).

Net Loss per Common Share

Basic loss per share is computed by dividing loss available to common stockholders by the weighted-average number of common shares outstanding. Diluted loss per share is computed similar to basic loss per share except that the denominator is increased to include additional common shares available upon exercise of stock options and warrants using the treasury stock method, except for periods for which no common share equivalents are included because their

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effect would be anti-dilutive. At June 30, 2023 and June 30, 2022, potentially dilutive shares outstanding amounted to 3.8 million and 3.4 million, respectively.

Recently Issued Accounting Pronouncements Adopted

In June 2017, the FASB issued an Accounting Standards Update (“ASU”) ASU 2016-13, Financial Instruments (Topic 326) Measurement of Credit Losses on Financial Instruments, which requires the measurement and recognition of expected credit losses for financial assets held at amortized cost. The standard replaces the existing incurred loss impairment model with an expected loss methodology, which will result in more timely recognition of credit losses. ASU 2016-13, and related amendments, are effective for fiscal years beginning after December 15, 2022. The Company adopted this standard on January 1, 2023. This standard did not have a material impact on the Company’s condensed consolidated financial statements.

Note 3 – Fixed Assets

Fixed Assets

Fixed assets are summarized as follows:


	June 30,		December 31,
(in thousands)	2023		2022
Machinery and equipment	$	209	$	390
Office furniture and equipment		60		177
Leasehold improvements		43		192
		312		759
Accumulated depreciation and amortization		(121)		(697)
		191		62
Operating lease ROU assets, net		287		322
Total	$	478	$	384

Depreciation and amortization expense for the six months ended June 30, 2023 and 2022 totaled $81 thousand and $13 thousand, respectively.

Leases

The Company leases office space in Seattle, Washington, Tulsa, Oklahoma 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. The Seattle, Tulsa, and Beijing leases are classified as operating leases, with remaining terms ranging from three months to five 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 incurred restoration expenses of $31 thousand and $87 thousand for the six months ended June 30, 2023 and twelve months ended December 31, 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 $12 thousand. Operating lease costs for the three and six months ended June 30, 2023 were $34 thousand and $82 thousand, respectively. Operating lease costs for the three and six months ended June 30, 2022 were $46 thousand and $88 thousand, respectively.

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Supplemental balance sheet information related to operating leases is as follows:


		June 30,			December 31,
(in thousands)		2023			2022
Operating lease ROU assets, net	$	287		$	322
Lease Liabilities:
Current lease liabilities	$	95		$	133
Long term lease liabilities		199			226
Total lease liabilities	$	294		$	359

Weighted average remaining lease term (in years):		2.4
Weighted average discount rate:		5.4	%


	For the Six Months Ended
	June 30,
		2023		2022
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows used in operating leases	$	99	$	119
Non-cash impact of new leases and lease modifications
Change in operating lease liabilities	$	25	$	25
Change in operating lease ROU assets	$	39	$	—

Minimum future payments under the Company’s lease liabilities as of June 30, 2023 are as follows:


	Discounted		Payments
	lease		due under
(in thousands)	liability		lease
	payments		agreements
2023 (remaining 6 months)	$	52	$	59
2024		71		81
2025		58		66
2026		63		67
2027		50		51
Total	$	294	$	324

At June 30, 2023, $30 thousand of the Company’s future minimum lease payments represents interest.

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Note 4 – Patents and Other Intangible Assets

Patents and other intangible assets are summarized as follows:


	June 30,		December 31,
(in thousands)	2023		2022
Patents
Patents pending	$	360	$	307
Issued patents		782		815
		1,142		1,122
Trademarks
Trademarks pending		4		6
Registered trademarks		86		95
		90		101
Other		8		8
		1,240		1,231
Accumulated amortization		(478)		(433)
	$	762	$	798

Future amortization expense associated with issued patents and registered trademarks as of June 30, 2023 is as follows:


(in thousands)
2023 (remaining 6 months)	$	67
2024		125
2025		94
2026		60
2027		38
Thereafter		6
	$	390

The amortization life for patents ranges between three to five years, with trademark lives set at ten years. The Company does not amortize patents or trademarks classified as pending.

During the six months ended June 30, 2023 and 2022, the Company assessed its patent and trademark assets, and determined $14 thousand and zero impairment costs were incurred, respectively. The Company also evaluated its strategic approach to the pursuit and protection of its intellectual property. It is the intent of the Company to continue to pursue intellectual property protection. 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.

Note 5 – Revenue, Contract Assets and Contract Liabilities

The Company recognized $150 thousand of revenues and $21 thousand of cost of goods sold during the three months ended June 30, 2023. The revenue and cost of goods sold relate to an engineering feasibility study and spare parts order.

The Company recognized $1,044 thousand of revenues and $809 thousand of cost of goods sold during the six months ended June 30, 2023. The revenue and cost of goods sold relate predominately to the Company’s process burner product line, where the Company successfully completed a burner performance customer witness test, which represented a contractual performance obligation per ASC 606.

The Company did not recognize revenue or cost of goods sold for the three and six months ended June 30, 2022.

The Company had contract assets of $3 thousand and $20 thousand at June 30, 2023 and December 31, 2022, respectively. The Company had contract liabilities of $2,105 thousand and $247 thousand at June 30, 2023 and

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December 31, 2022, respectively. Of the $247 thousand contract liability balance at December 31, 2022, the Company recognized revenue of $120 thousand during the six months ended June 30, 2023.

Note 6 – Equity

Common Stock and Preferred Stock

The Company is authorized to issue 62.5 million shares of common stock and 2.0 million shares of preferred stock. Preferences, limitations, voting powers and relative rights of any preferred stock to be issued may be determined by the Company’s Board of Directors. The Company has not issued any shares of preferred stock.

In July 2018, the Company completed a private equity offering and executed a Stock Purchase Agreement with clirSPV LLC (“clirSPV”) which permits participation in future capital raising transactions (the “Participation Right”) on the same terms as other investors participating in such transactions. 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.

The Company has an At-The-Market (“ATM”) Offering Sales Agreement 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. During the six months ended June 30, 2023, the Company issued zero shares of its common stock from the ATM program. As of June 30, 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 prohibits 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 its Shelf

Registration statement on Form S-3, the ATM Offering Sales Agreement or other securities offerings.

Equity Incentive Plan

On June 17, 2021, the Company's shareholders approved and the Company adopted the ClearSign Technologies Corporation 2021 Equity Incentive Plan (the “2021 Plan”) which permits the Company to grant Incentive Stock Options, Non-statutory Stock Options, Stock Appreciation Rights, Restricted Stock, Restricted Stock Units, Performance Units, and Performance Shares, to eligible participants, which includes employees, directors and consultants. The Compensation Committee of the Board of Directors is authorized to administer the 2021 Plan.

The 2021 Plan provides for an annual increase in available shares equal to the lesser of (i) 10% of the aggregate number of shares of Common Stock issued by the Company in the prior fiscal year; or (ii) such number provided by the Compensation Committee; 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. In 2023, the board of directors approved an increase of 400,000 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:


	June 30,	December 31,
(in thousands)	2023	2022
Outstanding options and restricted stock units	3,409	3,202
Reserved but unissued shares under the Plans	2,439	2,777
Total authorized shares under the Plans	5,848	5,979

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Stock Options

Under the terms of the 2021 Plan, incentive stock options and nonstatutory stock options must have an exercise price at or above the fair market value on the date of the grant. At the time of grant, the Company will determine the period within which the option may be exercised and will specify any conditions that must be satisfied before the option vests and may be exercised. The Company estimates the fair value of stock options on the date of grant using the Black-Scholes option-pricing model.

As permitted by SEC Staff Accounting Bulletin (SAB) 107, management utilized the simplified approach to estimate the expected term of the options, which represents the period of time that options granted are expected to be outstanding. Expected volatility has been determined through the Company’s historical stock price volatility. The Company has not made an estimate of forfeitures at the time of the grant, but rather accounts for forfeitures at the time they occur. The risk-free rate for periods within the expected life of the option is based on the U.S. Treasury yield in effect at the time of grant. The Company has never declared or paid dividends and has no plans to do so in the foreseeable future.

During the six months ended June 30, 2023, no new options were awarded by the company.

Compensation expense associated with stock option awards for the three and six months ended June 30, 2023 totaled $46 thousand and $90 thousand, respectively. Compensation expense associated with stock option awards for the three and six months ended June 30, 2022 totaled $15 thousand and $57 thousand, respectively.

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


	June 30,
	2023
(in thousands)	Options to Purchase Common Stock	Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (in years)
Outstanding at beginning of year	2,779	$	2.05	6.43
Granted	—	$	—	—
Exercised	(20)	$	0.54	—
Forfeited/Expired	—	$	—	—
Outstanding at end of period	2,759	$	2.07	5.83
Exercisable at end of period	1,991	$	1.71	5.25

The estimated aggregate pretax intrinsic value of the Company’s outstanding vested stock options at June 30, 2023 is $383 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. This amount changes based on the fair value of the Company’s common stock.

At June 30, 2023, there was $1.0 million of total unrecognized compensation cost related to non-vested stock option-based compensation arrangements. Vesting criteria ranges from time-based to performance-based. The Company records costs for time-based arrangements ratably across the timeframe, whereas performance-based arrangements require management to continually evaluate predetermined goals against actual circumstances.

Restricted Stock Units

The Company awards employees and directors restricted stock units (“RSUs”) in lieu of cash payment for compensation. These awards are granted pursuant to the 2021 Plan. Employee vesting criteria is time based, and compensation expense is recognized ratably across the timeframe.

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Director vesting criteria is contingent upon the occurrence of one of four future events, which the Company cannot predict or control. 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 for the three and six months ended June 30, 2023 was $83 thousand and $150 thousand, respectively. Unrecognized compensation expense for director services for the three and six months ended June 30, 2022 was $85 thousand and $170 thousand, respectively. Director compensation is earned on a quarterly basis with the target value of compensation set at approximately $83 thousand per quarter.

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


	June 30,
	2023
(in thousands)	Number of Shares	Weighted Average Grant Date Fair Value
Nonvested at beginning of year	423	$	1.49
Granted	477	$	0.71
Vested	(245)	$	1.34
Forfeited	(5)		0.79
Nonvested at end of period	650	$	0.98

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


	For the Six Months Ended
	June 30,
(in thousands)	2023			2022
Compensation Expense	$	212	$	70
Weighted Average Value Per Share	$	1.23	$	1.44

Stock Awards

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 2021 Plan.


	For the Six Months Ended
	June 30,
	2023		2022
Fair value	$	234	$	98
Weighted Average Value Per Share	$	0.79	$	1.43

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Consultant Stock Plan

The 2013 Consultant Stock Plan (the “Consultant Plan”) provides for the granting of shares of common stock to consultants who provide services related to capital raising, investor relations, and making a market in or promoting the Company’s securities. 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 Consultant Plan provides for periodic increases in the number of authorized shares available for issuance under the Consultant Plan on the first day of each of the Company’s fiscal quarters. The quarterly increases are equal to 1% of any new shares subsequently issued by the Company or such lesser amount as the Board of Directors shall determine.

The Consultant Plan activity and change is as follows:


	June 30,
(in thousands)	2023
Reserved but unissued shares at beginning of year		196
Increases in the number of authorized shares		5
Grants		(8)
Reserved but unissued shares at end of year		193

The Consultant Plan compensation expense is summarized as follows:

Note 7 – Commitments and Contingencies

Litigation

From time to time the Company may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. Litigation is subject to inherent uncertainties and an adverse result in any such matter may harm the Company’s business. As of the date of this report, the Company is not a party to any material pending legal proceedings or claims that the Company believes will have a material adverse effect on the business, financial condition or operating results.

Indemnification Agreements

The Company maintains indemnification agreements with its directors and officers that may require the Company to indemnify these individuals against liabilities that arise by reason of their status or service as directors or officers, except as prohibited by law.

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Note 8 – Government Assistance

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. The award allowed the Company to request reimbursements for expenditures such as labor, material, and administrative costs. During the six months ended June 30, 2023, the Company recognized $69 thousand in reimbursements from DOE. The Company did not recognize reimbursements from the DOE for the six months ended June 30, 2022.

Beginning in 2021, the Company received funds relating to the Oklahoma 21^st Century Quality Jobs Act. The estimated duration of the program is up to 10 years and is designed to attract growth industries to Oklahoma. By reporting quarterly salary statistics and meeting agreed upon employment thresholds, the state remits benefit monies to the Company. The Company recognized $38 thousand and $12 thousand in government assistance from this program during the six months ended June 30, 2023 and 2022, respectively.

Note 9 – Subsequent Events

On July 31, 2023, we hired Tina Oby Unachukwu as our Director of Customer Relationships and Business Development. On the same day, we granted non-qualified stock options, in accordance with Nasdaq Listing Rule 5635(c)(4) and outside of the 2021 Plan, to purchase an aggregate of 150 thousand shares of common stock with an exercise price of $1.31 as a material inducement to Ms. Unachukwu’s entering into employment with us. These options vest in three equal installments, with one third of the option vesting on the grant date, and each remaining third of the options to vest on the second and third anniversaries of the grant date, subject to continued employment with the Company. This event does not impact the six months ended June 30, 2023 consolidated financial statements, but will impact the nine months ended September 30, 2023 consolidated financial statements.

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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS AND OTHER INFORMATION CONTAINED IN THIS REPORT

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and the provisions of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements give our current expectations or forecasts of future events. You can identify these statements by the fact that they do not relate strictly to historical or current facts. You can find many (but not all) of these statements by looking for words such as “approximates,” “believes,” “hopes,” “expects,” “anticipates,” “estimates,” “projects,” “intends,” “plans,” “would,” “should,” “could,” “may,” “will” or other similar expressions in this report. In particular, these include statements relating to future actions; prospective products, applications, customers, and technologies; future performance or results of any products; anticipated expenses; and future financial results. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from our historical experience and our present expectations or projections. Factors that could cause actual results to differ materially from those discussed in the forward-looking statements include, but are not limited to:

●

our limited cash, history of losses, and our expectation that we will continue to experience operating losses and negative cash flows in the near future;

●

our ability to successfully develop and implement our technologies and achieve profitability;

●

our limited operating history;

●

changes in government regulations that could substantially reduce, or even eliminate, the need for our technology;

●

emerging competition and rapidly advancing technology in our industry that may outpace our technology;

●

customer demand for the products and services we develop;

●

the impact of competitive or alternative products, technologies, and pricing;

●

our ability to manufacture any products we design;

●

general economic conditions and events and the impact they may have on us and our potential customers;

●

our doing business in China and related risks with respect to intellectual property protection, currency exchange, contract enforcement, rules on foreign investment and pandemic era regulations;

●

the impact of a cybersecurity incident or other technology disruption;

●

our ability to protect our intellectual property;

●

our ability to obtain adequate financing in the future;

●

our ability to retain and hire personnel with the experience and talent to develop our products and business;

●

the financial and operational impacts of the coronavirus pandemic on our business and results of operations, including impacts on our day-to-day operations, collaborative arrangements, revenue and marketing efforts and suppliers;

●

our success at managing the risks involved in the foregoing items; and

●

other factors discussed in this report and in the section titled “Risk Factors” in our most recent Annual Report on Form 10-K.

Forward-looking statements may appear throughout this report, including, without limitation, Item 2 “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” The forward-looking statements are based upon management’s beliefs and assumptions and are made as of the date of this report. We undertake no obligation to publicly update or revise any forward-looking statements included in this report. You should not place undue reliance on these forward-looking statements.

Unless otherwise stated or the context otherwise requires, the terms “ClearSign,” “we,” “us,” “our” and the “Company” refer to ClearSign Technologies Corporation and its subsidiary, ClearSign Asia Limited.

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ITEM 2.MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the unaudited consolidated condensed financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q as well as our audited financial statements and related notes included in our most recent Annual Report on Form 10-K. In addition to historical information, this discussion and analysis here and throughout this Form 10-Q contains forward-looking statements that involve risks, uncertainties, and assumptions. Our actual results may differ materially from those anticipated in these forward-looking statements due to a number of factors, including but not limited to, the risks described in the section titled “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2022.

Overview

We design and develop technologies for the purpose of improving key performance characteristics of combustion systems, including emission and operational performance, energy efficiency and overall cost-effectiveness. Our ClearSign Core™ technology has been proven in full scale industrial test furnaces and boilers and first customer installations are currently operating in normal commercial applications. We have generated nominal revenues from operations to date to meet operating expenses.

We have incurred losses since inception totaling $91.4 million and we expect to experience operating losses and negative cash flow for the foreseeable future. We have historically financed our operations primarily through issuances of equity securities. Since inception, we have raised approximately $91.0 million in gross proceeds through the sale of our equity securities. We may need to raise additional capital in the future, however, the significant volatility in the capital markets may negatively affect our ability to raise this additional capital.

In order to generate meaningful revenues, our technologies must gain market recognition and acceptance to develop sufficient recurring sales. In addition, management believes that the successful growth and operation of our business is dependent upon our ability to obtain adequate sources of funding through co-development agreements, strategic partnering agreements, or equity or debt financing to support commercialization of our research and development efforts, protect intellectual property, form relationships with strategic partners and provide for working capital and general corporate purposes. There can be no assurance that we will be successful in achieving our long-term plans, or that such plans, if consummated, will result in profitable operations or enable us to continue in the long-term as a going concern.

With respect to our China operations, we have a satellite office located in Beijing, China to support our commercialization efforts. At this time, these operations in China are immaterial compared to total company operations. As of June 30, 2023, our China asset balance totaled $279 thousand, or approximately 3%, compared to our total asset balance of $10,398 thousand. During the six months ended June 30, 2023 and 2022, our China operations reported zero revenues.

Our costs include employee salaries and benefits, compensation paid to consultants, materials and supplies for prototype development and manufacture, costs associated with development activities including materials, sub-contractors, travel and administration, legal and accounting expenses, sales and marketing costs, general and administrative expenses, and other costs associated with an early stage, publicly traded technology company. We currently have 15 full-time employees. Because using third party expertise and resources is more efficient than maintaining full time resources, we also expect to incur ongoing consulting expenses related to technology development and some administrative, sales and legal functions commensurate with our current level of activities.

The amount that we spend for any specific purpose may vary significantly, and could depend on a number of factors including, but not limited to, the pace of progress of our commercialization and development efforts, actual needs with respect to product testing, development and research, market conditions, and changes in or revisions to our sales and marketing strategies.

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Research, development, and commercial acceptance of new technologies are, by their nature, unpredictable. Although we undertake development and commercialization efforts with reasonable diligence, there can be no assurance that the net proceeds from our securities offerings will be sufficient to enable us to develop our technology to the extent needed to create sufficient future sales to sustain operations. If the net proceeds from these offerings are insufficient for this purpose, we will consider other options to continue our path to commercialization, including, but not limited to, additional financing through follow-on equity offerings, debt financing, co-development agreements, sale or licensing of developed intellectual or other property, or other alternatives.

We cannot assure that our technologies will be accepted, that we will ever earn revenues sufficient to support our operations, or that we will ever be profitable. Furthermore, we have no committed source of financing, and we cannot assure that we will be able to raise money as and when we need it to continue our operations. If we cannot raise funds as and when we need them, we may be required to scale back our development by reducing expenditures for employees, consultants, business development and marketing efforts or to otherwise severely curtail, or even to cease, our operations.

Critical Accounting Policies

The following discussion and analysis of financial condition and results of operations is based upon our financial statements, which have been prepared in conformity with accounting principles generally accepted in the United States of America. Certain accounting policies and estimates are particularly important to the understanding of our financial position and results of operations. These policies and estimates require the application of significant judgment by management. These estimates can be materially affected by changes from period to period as economic factors and conditions outside of our control change. As a result, they are subject to an inherent degree of uncertainty. In applying these policies, our management uses their judgment to determine the appropriate assumptions to be used in the determination of certain estimates. Those estimates are based on our historical operations, our future business plans and projected financial results, the terms of existing contracts, our observance of trends in the industry, information provided by our customers and information available from other outside sources, as appropriate. See Note 2 to our unaudited condensed consolidated financial statements included elsewhere in this report for a more complete description of our significant accounting policies.

Revenue Recognition and Cost of Goods Sold.

The Company recognizes revenue and related cost of goods sold in accordance with FASB ASC 606 Revenue from Contracts with Customers (ASC 606). Revenues and cost of goods sold are recognized once the goods or services are delivered to the customer’s control or non-refundable performance obligations are satisfied. The Company’s contracts with customers generally have performance obligations and a schedule of non-refundable cancellation obligations. The contracts generally will be fully performed upon delivery of certain documents or equipment. Revenue related to the contracts is recognized following the completion of non-refundable performance obligations as defined in the contract.

The Company’s contracts generally include progress payments from customers upon completion of defined milestones. As these payments are received, they are offset against accumulated project costs and recorded as either contract assets or contract liabilities. Upon completion of the performance obligations and collectability is determined, revenue can be recorded. For any contract in connection with which the Company is expected to incur costs in excess of the contact price, the Company accrues the estimated loss in full in the period such determination is made.

Impairment of Long-Lived Assets

The Company tests long-lived assets, consisting of fixed assets, patents, and other intangible assets, for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable through the estimated undiscounted cash flows expected from the use and eventual disposition of the assets. In the event an asset in not fully recoverable a loss is recognized based on the amount by which the carrying amount exceeds the fair value of the long-lived assets. Fair value is determined based on the present value of estimated expected cash flows using a discount rate commensurate with the risks involved, quoted market prices, or appraised values

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depending upon the nature of the assets. Losses on long-lived assets to be disposed of is determined in a similar manner, except those fair values are reduced for the cost of disposal.

Product Warranties

The Company warrants all installed products against defects in materials and workmanship, and shortcomings in performance compared to contractual guarantees for a period specified in each contract. Accruals for product warranties are based on expected warranty experience and current product performance trends which are recorded as a component of cost of sales at the time revenue is recognized. The warranty liabilities are reduced by material and labor costs during the warranty period in the periods in which the costs are incurred. The Company periodically assesses the adequacy of our recorded warranty liabilities and adjusts the amounts as necessary, and such adjustments could be material if estimates differ significantly from actual warranty expense. The warranty liabilities are included in accounts payable and accrued liabilities in the unaudited condensed consolidated balance sheets.

Research and Development

The cost of research and development is expensed as incurred. Research and development costs consist of salaries, benefits, share based compensation, consumables, and consulting fees, including costs to develop and test prototype equipment and parts. Research and development costs are offset by any funds received from strategic partners in cost sharing, collaborative projects.

Stock-Based Compensation

The costs of all employee stock options, as well as other equity-based compensation arrangements, are reflected in the unaudited, condensed consolidated financial statements based on the estimated fair value of the awards on the grant date. That cost is recognized over the period during which an employee is required to provide service in exchange for the award, or in the case of performance options, expense is recognized upon completion of a milestone as defined in the grant agreement. Stock-based compensation for stock grants to non-employees is determined as the fair value of the consideration received or the fair value of equity instruments issued, whichever is more reliably measured.

Fair Value of Financial Instruments

The Company's financial instruments primarily consist of cash equivalents, accounts payable, accrued expenses and short-term investments in government securities. As of the balance sheet date, the estimated fair values of the financial instruments were not materially different from their carrying values as presented on the consolidated balance sheets. This is primarily attributed to the short maturities of these instruments.

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Recent Developments

Delaware Reincorporation

At our annual meeting of shareholders held on June 6, 2023, the shareholders of the Company approved our proposed conversion from a Washington corporation to a Delaware corporation (the “Reincorporation”) by means of a plan of conversion. In connection with the Reincorporation, we filed on June 14, 2023 (the “Effective Date”) a certificate of incorporation (the “Certificate of Incorporation”) and a certificate of conversion with the Delaware Secretary of State and adopted new bylaws (the “Bylaws”), and filed articles of entity conversion with the Washington Secretary of State.

As of the Effective Date, our domicile changed from the State of Washington to the State of Delaware and our affairs ceased to be governed by the Revised Code of Washington and our previous articles of incorporation and bylaws, and instead became governed by the General Corporation Law of the State of Delaware (the “DGCL”), and the Certificate of Incorporation and Bylaws. The number of shares of common stock and preferred stock that we are authorized to issue remained the same upon completion of the Reincorporation.

RESULTS OF OPERATIONS

Comparison of the Three and Six Months Ended June 30, 2023 and 2022

Highlights of our quarter financial performance are as follows:



	For the Three Months Ended
(in thousands, except per share data)	June 30,
	2023		2022		$ Change		% Change
Revenues	$	150	$	—	$	150	NM
Cost of goods sold		21		—	$	21	NM
Gross profit		129		—	$	129	NM
Research and development		187		188	$	(1)	(0.5)	%
General and administrative		1,571		1,472	$	99	6.7	%
Operating Expenses		1,758		1,660	$	98	5.9	%
Other income, net		151		22	$	129	586.4	%
Net loss	$	(1,478)	$	(1,638)	$	160	9.8	%
Basic and diluted net income per common share	$	(0.04)	$	(0.05)	$	0.01	20.0	%


	For the Six Months Ended
(in thousands, except per share data)	June 30,
	2023		2022		$ Change		% Change
Revenues	$	1,044	$	—	$	1,044	NM
Cost of goods sold		809		—	$	809	NM
Gross profit		235		—	$	235	NM
Research and development		347		296	$	51	17.2	%
General and administrative		3,221		2,881	$	340	11.8	%
Operating Expenses		3,568		3,177	$	391	12.3	%
Other income, net		426		49	$	377	769.4	%
Net loss	$	(2,907)	$	(3,128)	$	221	7.1	%
Basic and diluted net income per common share	$	(0.08)	$	(0.09)	$	0.01	11.1	%
NM = Not meaningful

Sales and Gross Profit

Consolidated revenues for the three and six months ended June 30, 2023 were $150 thousand and $1,044 thousand, respectively, compared to zero revenues for the same time periods in 2022. Revenues for the three months ended June 30, 2023, were mostly generated from a stand-alone engineering feasibility study and spare parts sale.

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Revenues for the six months ended June 30, 2023 were generated from multiple spare parts orders, burner performance testing and an engineering feasibility study.

Gross profit for the three and six months ended June 30, 2023, increased by $129 thousand and $235 thousand, respectively, as compared to zero profit for the same periods in 2022. Gross profit was realized by each revenue source noted in the above paragraph for both the three and six month periods during 2023. The mix of gross profit was predominately weighted towards our engineering feasibility study, with the profit profile considered to be abnormally high due to expedited timing commitments and mix of engineering activities.

Operating Expenses

Operating expenses consist of research and development (“R&D”) and general and administrative (“G&A”) expenses. These are addressed separately below.

Research and Development

R&D expenses for the three and six months ended June 30, 2023, remained relatively consistent year-over-year.

General and Administrative

G&A expenses increased by $99 thousand or 6.7%, and $340 thousand or 11.8% for the three and six month periods ending on June 30, 2023, respectively, as compared to the same time periods in 2022. During the three months ended June 30, 2023, G&A expenses were negatively impacted by $105 thousand in project management and refurbishment costs related to our Seattle office decommissioning project. Monies received for selling used materials as a result of our Seattle office decommissioning project are reported in other income. During the six months ended June 30, 2023, G&A expenses were impacted by a one-time $187 thousand vesting of restricted stock units triggered by the departure of a board director. In addition, project management and refurbishment costs for our Seattle office decommissioning project totaled $168 thousand for the six months ended June 30, 2023.

Other Income

Other income increased by $129 thousand or 586.4%, and $377 thousand or 769.4% for the three and six month periods ending on June 30, 2023, respectively, as compared to the same time periods in 2022. During the three months ended June 30, 2023, other income increased by $35 thousand for materials sold as a result of our Seattle office decommissioning project. Interest income also increased by $94 thousand when compared to the same three month period in 2022. During the six months ended June 30, 2023, other income increased compared to the same period in 2022 by $152 thousand for interest income and $93 thousand for government assistance. Government assistance monies are related to our Oklahoma Quality Jobs rebate agreement and our Department of Energy hydrogen burner development grant. In addition, income from materials sold during our Seattle office decommissioning project resulted in a favorable impact of $154 thousand, for the six months ended June 30, 2023. These increases were offset by decreases of $32 thousand for asset sales in the six months ended June 30, 2023 versus the same period in 2022.

Net Loss

Net loss for the three months ended June 30, 2023, was $1,478 thousand as compared to $1,638 thousand for the three months ended June 30, 2022, or an approximate 9.8% decrease. The $160 thousand decrease in net loss during the three months ended June 30, 2023, is primarily attributable to the $129 thousand increase in gross profit referenced in the above explanation.

Net loss for the six months ended June 30, 2023, was $2,907 thousand as compared to $3,128 thousand for the six months ended June 30, 2022, or an approximate 7.1% decrease. The $221 thousand decrease in net loss during the six months ended June 30, 2023, is primarily attributable to the $235 thousand increase in gross profit referenced in the above explanation.

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Liquidity and Capital Resources

At June 30, 2023, our cash and cash equivalent balance totaled $7,600 thousand compared to $6,451 thousand at December 31, 2022, an increase of $1,149 thousand. The increase in cash and cash equivalent balance is primarily attributable to the change of short-term held-to-maturity investments. At June 30, 2023, our short-term held-to-maturity investments totaled $931 thousand, which is a decrease of $1,675 thousand compared to $2,606 thousand at December 31, 2022.

At June 30, 2023, our current assets were in excess of current liabilities resulting in working capital of $6,107 thousand as compared to $8,586 thousand at December 31, 2022. We have no contractual debt obligations, and the Company has sufficient working capital to fund current operating expenses for over twelve months. To the extent the Company requires additional funds more than 12 months from the date hereof, and customer cash collections cannot fund our needs, the Company may utilize equity offerings. Historically, the Company has funded operations predominately through equity offerings.

Currently, the Company can sell shares of common stock through its ATM program. As of June 30, 2023, the remaining aggregate offering price for future sales of common stock on the ATM is approximately $8.7 million, subject to the SEC’s “baby shelf rules,” which prohibits 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 (for more details, see “Note 6 – Equity” in the notes to our condensed consolidated financial statements). Future sales of shares of common stock and the price at which we may be able to sell such shares of common stock under the ATM are dependent on factors beyond our control, including, but not limited to, market conditions, the trading price of our common stock and our capital needs.

We filed a Form S-3 shelf registration statement with the SEC on July 1, 2022 that was declared effective on August 12, 2022.The registration statement on Form S-3 allows us to offer common stock, preferred stock, warrants, subscription rights, debt securities and units from time to time, as market conditions permit to fund, to the extent required beyond the 12 months from the date hereof, the ongoing operations of the Company. Until the growth of revenue increases to a level that covers operating expenses, the Company intends to continue to fund operations in this manner, although, the volatility in the capital markets and potential upcoming recession may negatively affect our ability to do so.

Operating activities for the six months ended June 30, 2023, resulted in cash outflows of $508 thousand, primarily due to the loss for the period of $2,907 thousand, offset with non-cash expenses of $471 thousand, and an increase of $1,858 thousand of contract liabilities, which represents payments from customers in advance of future project costs.

Operating activities for the six months ended June 30, 2022, resulted in cash outflows of $3,347 thousand, primarily due to the loss for the period of $3,128 thousand, offset with non-cash expenses of $179 thousand.

Investing activities for the six months ended June 30, 2023, resulted in cash inflows of $1,684 thousand, which is primarily attributable to the redemption $3,897 thousand of short-term held-to-maturity U.S. treasuries, offset by $2,162 thousand of purchases for the same type of investments.

Investing activities for the six months ended June 30, 2022, resulted in cash outflows of $78 thousand in disbursements for fixed and intangible assets, and cash inflows of $37 thousand in proceeds from fixed asset sales.

Financing activities for the six months ended June 30, 2023, included $15 thousand in disbursements for taxes paid related to vesting of employee restricted stock units.

Financing activities for the six months ended June 30, 2022, included $4,798 thousand in net proceeds from the sale of 501 thousand shares of our common stock through our ATM program at an average price of $1.24 per share, and sale of 4.2 million shares of our common stock through a public offering at an average price of $1.11 per share.

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Off-Balance Sheet Transactions

We do not have any off-balance sheet transactions.

ITEM 3.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

As a smaller reporting company, we are not required to provide this information.

ITEM 4.CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

We maintain disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended, (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 June 30, 2023, the end of the period covered by this Quarterly Report on Form 10-Q. Based upon the evaluation of our disclosure controls and procedures as of June 30, 2023, 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.

Changes in Internal Control over Financial Reporting

There have been no changes in our internal control over financial reporting that occurred during the quarter ended June 30, 2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Limitations on Effectiveness of Controls and Procedures

Our management, including our Chief Executive Officer (principal executive officer) and our Vice President and Controller (principal accounting and financial officer), does not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent or detect all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. These inherent limitations include the realities that judgments in decision making can be faulty, and that breakdowns can occur because of a simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people or by management override of the controls. The design of any system of controls is also based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, controls may become inadequate because of changes in conditions, or the degree of compliance with policies or procedures. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

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PART II-OTHER INFORMATION

ITEM 1.LEGAL PROCEEDINGS

From time to time, we may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. However, litigation is subject to inherent uncertainties and an adverse result in these or other matters may arise from time to time that may harm our business. We are currently not aware of any such legal proceedings or claims that we believe will have a material adverse effect on our business, financial condition or operating results.

ITEM 1A.RISK FACTORS

We incorporate herein by reference the risk factors included under “Part I - Item 1A. Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2022 which we filed with the Securities and Exchange Commission on March 31, 2023, and the risk factors included in the reports and other documents we filed with the Securities and Exchange Commission subsequent to that date. There are no material changes from the risk factors set forth in such prior filings.

ITEM 2.UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

On June 30, 2023, we issued 3,750 shares of common stock at a price per share of $0.66, the closing price of our common stock on November 17, 2022, the date of grant, from our 2013 Consultant Stock Plan to our investor relations firm, Firm IR, for services provided during the three months ended June 30, 2023. These shares were issued in reliance upon the exemption from registration provided by Section 4(a)(2) of the Securities Act of 1933, as amended, for a transaction by an issuer not involving a public offering.

ITEM 3.DEFAULTS UPON SENIOR SECURITIES

Not applicable.

ITEM 4.MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5.OTHER INFORMATION

Disclosure Pursuant to Item 1.01 of Current Report on Form 8-K – Entry into a Material Definitive Agreement.

On August 9 and 10, 2023, in connection with the Reincorporation (as defined above), our Board of Directors entered into indemnification agreements with each of its directors and executive officers, which replaced any prior indemnification agreement with the Company to which such director or officer was a party (the
“Indemnification Agreement”). The prior indemnification agreements were governed by Washington law, the Company's state of incorporation until it was reincorporated in Delaware in June 2023 (see “Recent Developments – Delaware Reincorporation” above for more information). The Indemnification Agreement supplements the indemnification rights provided under the Certificate of Incorporation, Bylaws, and applicable law.

This form of Indemnification Agreement, among other things, requires the Company to indemnify each director and executive officer, under the circumstances and to the extent provided in the agreement, to the fullest extent permitted by Delaware law, including indemnification of expenses such as attorneys’ fees, judgments, fines and settlement amounts incurred by the director or executive officer in any action or proceeding arising out of the person’s service as a director or executive officer. The form of agreement also sets forth procedures with respect to requests for indemnification from a director or executive officer.

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A copy of a form of the Indemnification Agreement is attached as Exhibit 10.1 to this Quarterly Report on Form 10-Q for the quarter ended June 30, 2023. The foregoing description of the Indemnification Agreement is a summary and does not purport to be complete and is qualified in its entirety by reference to Exhibit 10.1.

Disclosure Pursuant to Item 5.02 of Current Report on Form 8-K - Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

On August 8, 2023, the Company promoted Brent Hinds as Chief Financial Officer of the Company, effective immediately. Mr. Hinds will continue to serve as the Company’s principal financial and accounting officer.

In connection with the promotion, the Company amended Mr. Hinds’ employment agreement entered into with the Company on September 30, 2021 (the “Employment Agreement”), to provide for severance payments in certain instances (the “Amendment”). Specifically, the Amendment provides for severance payments in an amount equal to one (1) year salary plus any accrued but unpaid salary, vacation, and bonus amounts upon termination of Mr. Hinds’ employment without “Cause” or upon a “Change in Control.” For purposes of the Amendment, “Cause” means: (a) the commission by the employee of an act relating to employee’s duties constituting a felony under the laws of the United States or any state or political subdivision thereof or any other jurisdiction; (b) the commission by employee of an act constituting a breach of fiduciary duty, willful misconduct, or gross negligence; (c) the commission by employee of an act of fraud, dishonesty or misrepresentation related to employee’s duties that is detrimental to the Company; or (d) a material breach by employee of his obligations under the Employment Agreement. Further, for purposes of the Amendment, “Change in Control” means the sale or disposition by the Company to an unrelated third party of substantially all of its business or assets, or the sale of the capital stock of the Company in connection with the sale or transfer of the Company’s voting securities representing greater than 50% of the voting power in the Company (a “Controlling Interest”) to an unrelated third party, or the merger or consolidation of the Company with another corporation as part of the sale or transfer of a Controlling Interest in the Company to an unrelated third party. Additionally, if Mr. Hinds’ employment is terminated for Cause, he will not be eligible for any severance payments. No other changes were made to the Employment Agreement.

A copy of the Amendment is attached as Exhibit 10.2 to this Quarterly Report on Form 10-Q for the quarter ended June 30, 2023. The foregoing description of the Amendment is a summary and does not purport to be complete and is qualified in its entirety by reference to Exhibit 10.2.

Disclosure Pursuant to Item 7.01 of Current Report on Form 8-K - Required FD Disclosure.

A press release issued by the Company on August 8, 2023, announcing Mr. Hinds’ promotion to Chief Financial Officer is included as Exhibit 99.1 to this Quarterly Report on Form 10-Q for the quarter ended June 30, 2023.

Further, on August 14, 2023, the Company made an updated corporate presentation available on its website (www.clearsign.com). The Company intends, from time to time, to present and/or distribute the corporate presentation to the investment community and utilize at various industry and other conferences. The corporate presentation is filed as Exhibit 99.2 to this Quarterly Report on Form 10-Q for the quarter ended June 30, 2023. The Company undertakes no obligation to update, supplement or amend the materials attached hereto as Exhibit 99.2.

The information under this Item 5, provided pursuant to Item 7.01 of Form 8-K, including Exhibits 99.1 and 99.2 hereto, is being furnished herewith and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall such information be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such filing. Furthermore, the furnishing of information under this Item 5, provided pursuant to Item 7.01 of Form 8-K, is not intended to constitute a determination by the Company that the information contained herein, including the exhibit hereto, is material or that the dissemination of such information is required by Regulation FD.

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ITEM 6.EXHIBITS

Exhibit
Number		Document

2.1		Plan of Conversion dated June 14, 2023 (1)
3.1		Certificate of Incorporation of ClearSign Technologies Corporation, a Delaware corporation (1)
3.2		Bylaws of ClearSign Technologies Corporation, a Delaware corporation (1)
3.3		Certificate of Conversion, as filed with the Secretary of the State of Delaware on June 14, 2023 (1)
3.4		Articles of Conversion, as filed with the Secretary of State of the State of Washington on June 14, 2023 (1)
10.1*		Form of Indemnification Agreement
10.2*+		Amendment to Offer Letter between the Company and Brent Hinds, dated August 8, 2023
31.1*		Rule 13a-14(a)/15d-14(a) Certification of Principal Executive Officer
31.2*		Rule 13a-14(a)/15d-14(a) Certification of Principal Financial Officer
32.1**		Section 1350 Certification of Principal Executive Officer and Principal Financial Officer
99.1**		Press Release, dated August 8, 2023
99.2**		Corporate Presentation, dated August 2023
101.INS		Inline XBRL Instance Document*
101.SCH		Inline XBRL Taxonomy Extension Schema Document*
101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document*
101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document*
101.LAB		Inline XBRL Taxonomy Extension Label Linkbase Document*
101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document*
104		Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)

*Filed herewith

**Furnished herewith

+ Agreement with management or compensatory plan or arrangement.

(1) Incorporated by reference from the Form 8-K filed with the Securities and Exchange Commission on June 15, 2023.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

		CLEARSIGN TECHNOLOGIES CORPORATION


Date: August 14, 2023	By:	/s/ Colin James Deller
		Colin James Deller
		Chief Executive Officer
		(Principal Executive Officer)




Date: August 14, 2023	By:	/s/ Brent Hinds
		Brent Hinds
		Vice President and Controller (Principal Financial and Accounting Officer)

Exhibit 10.1

INDEMNIFICATION AGREEMENT

This Indemnification Agreement (“Agreement”), dated as of the Effective Date, is entered by and between ClearSign Technologies Corporation, a Delaware corporation (the “Company”), and ______________ (“Indemnitee”). This Agreement supersedes and replaces any and all previous Agreements between the Company and Indemnitee covering the subject matter of this Agreement.

RECITALS

WHEREAS, the board of directors of the Company (the “Board”) believes that highly competent persons have become more reluctant to serve publicly-held corporations as directors, officers or in other capacities unless they are provided with adequate protection through insurance or adequate indemnification against inordinate risks of claims and actions against them arising out of their service to and activities on behalf of the corporation;

WHEREAS, the Board has determined that, in order to attract and retain qualified individuals, the Company will attempt to maintain on an ongoing basis, at its sole expense, liability insurance to protect persons serving the Company and its subsidiaries from certain liabilities. Although the furnishing of such insurance has been a customary and widespread practice among United States-based corporations and other business enterprises, the Company believes that, given current market conditions and trends, such insurance may be available to it in the future only at higher premiums and with more exclusions. At the same time, directors, officers, and other persons in service to corporations or business enterprises are being increasingly subjected to expensive and time-consuming litigation relating to, among other things, matters that traditionally would have been brought only against the Company or business enterprise itself. The bylaws (the “Bylaws”) and certificate of incorporation of the Company (the “Certificate of Incorporation”) require indemnification of the officers and directors of the Company. Indemnitee may also be entitled to indemnification pursuant to the General Corporation Law of the State of Delaware (the “DGCL”). The Bylaws and the DGCL expressly provide that the indemnification provisions set forth therein are not exclusive, and thereby contemplate that contracts may be entered into between the Company and members of the board of directors, officers and other persons with respect to indemnification;

WHEREAS, the uncertainties relating to such insurance and to indemnification may increase the difficulty of attracting and retaining such persons;

WHEREAS, the Board has determined that the increased difficulty in attracting and retaining such persons is detrimental to the best interests of the Company and its stockholders and that the Company should act to assure such persons that there will be increased certainty of such protection in the future;

WHEREAS, it is reasonable, prudent and necessary for the Company contractually to obligate itself to indemnify, and to advance expenses on behalf of, such persons to the fullest extent permitted by applicable law so that they will serve or continue to serve the Company free from undue concern that they will not be so indemnified;

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WHEREAS, this Agreement is a supplement to and in furtherance of the Bylaws and Certificate of Incorporation and any resolutions adopted pursuant thereto, and shall not be deemed a substitute therefor, nor to diminish or abrogate any rights of Indemnitee thereunder;

WHEREAS, Indemnitee does not regard the protection available under the Bylaws and Certificate of Incorporation and insurance as adequate in the present circumstances, and may not be willing to serve or continue to serve as an officer or director without adequate protection, and the Company desires Indemnitee to serve or continue to serve in such capacity. Indemnitee is willing to serve, continue to serve and to take on additional service for or on behalf of the Company on the condition that Indemnitee be so indemnified;

WHEREAS, the Company and Indemnitee are parties to an Indemnity Agreement governed by Washington law (the “Prior Agreement”), and, subsequent to the parties entering into the Prior Agreement, the Company converted from the State of Washington to the State of Delaware on June 14, 2023 (the date and time of such conversion, the “Effective Date”); and

WHEREAS, this Agreement amends and restates the Prior Agreement, as set forth herein.

NOW, THEREFORE, in consideration of the premises and the covenants contained herein, the Company and Indemnitee do hereby covenant and agree as follows:

Section 1.Services to the Company. Indemnitee agrees to serve as a [director] [officer] of the Company. Indemnitee may at any time and for any reason resign from such position (subject to any other contractual obligation or any obligation imposed by operation of law), in which event the Company shall have no obligation under this Agreement to continue Indemnitee in such position. This Agreement shall not be deemed an employment contract between the Company (or any of its subsidiaries or any Enterprise) and Indemnitee. Indemnitee specifically acknowledges that Indemnitee's employment with the Company (or any of its subsidiaries or any Enterprise), if any, is at will, and the Indemnitee may be discharged at any time for any reason, with or without cause, except as may be otherwise provided in any written employment contract between Indemnitee and the Company (or any of its subsidiaries or any Enterprise), other applicable formal severance policies duly adopted by the Board, or, with respect to service as a director or officer of the Company, by the Certificate of Incorporation, the Company's Bylaws, and the DGCL. The foregoing notwithstanding, this Agreement shall continue in force after Indemnitee has ceased to serve as an [director] [officer] of the Company, as provided in Section 16 hereof.

Section 2. Definitions. As used in this Agreement:

(a)

References to “agent” shall mean any person who is or was a director, officer, or employee of the Company or a subsidiary of the Company or other person authorized by the Company to act for the Company, to include such person serving in such capacity as a director, officer, employee, fiduciary or other official of another corporation, partnership, limited liability company, joint venture, trust or other enterprise at the request of, for the convenience of, or to represent the interests of the Company or a subsidiary of the Company.

(b)

A “Change in Control” shall be deemed to occur upon the earliest to occur after the date of this Agreement of any of the following events:

15066598.2

Acquisition of Stock by Third Party. Any Person (as defined below) is or becomes the Beneficial Owner (as defined below), directly or indirectly, of securities of the Company representing thirty percent (30%) or more of the combined voting power of the Company's then outstanding securities unless the change in relative Beneficial Ownership of the Company's securities by any Person results solely from a reduction in the aggregate number of outstanding shares of securities entitled to vote generally in the election of directors;

ii.

Change in Board of Directors. During any period of two (2) consecutive years (not including any period prior to the execution of this Agreement), individuals who at the beginning of such period constitute the Board, and any new director (other than a director designated by a person who has entered into an agreement with the Company to effect a transaction described in Sections 2(b)(i), 2(b)(iii) or 2(b)(iv)) whose election by the Board or nomination for election by the Company's stockholders was approved by a vote of at least two-thirds of the directors then still in office who either were directors at the beginning of the period or whose election or nomination for election was previously so approved, cease for any reason to constitute at least a majority of the members of the Board;

iii.

Corporate Transactions. The effective date of a merger or consolidation of the Company with any other entity, other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior to such merger or consolidation continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) more than 51% of the combined voting power of the voting securities of the surviving entity outstanding immediately after such merger or consolidation and with the power to elect at least a majority of the board of directors or other governing body of such surviving entity;

iv.

Liquidation. The approval by the stockholders of the Company of a complete liquidation of the Company or an agreement for the sale or disposition by the Company of all or substantially all of the Company's assets; and

Other Events. There occurs any other event of a nature that would be required to be reported in response to Item 6(e) of Schedule 14A of Regulation 14A (or a response to any similar item on any similar schedule or form) promulgated under the Exchange Act (as defined below), whether or not the Company is then subject to such reporting requirement.

For purposes of this Section 2(b), the following terms shall have the following meanings:

(A)

“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended from time to time.

(B)

“Person” shall have the meaning as set forth in Sections 13(d) and 14(d) of the Exchange Act; provided, however, that Person shall exclude (i) the Company, (ii) any trustee or other fiduciary holding securities under an employee benefit plan of the Company, and (iii) any

15066598.2

corporation owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of stock of the Company.

(C)

“Beneficial Owner” shall have the meaning given to such term in Rule 13d-3 under the Exchange Act; provided, however, that Beneficial Owner shall exclude any Person otherwise becoming a Beneficial Owner by reason of the stockholders of the Company approving a merger of the Company with another entity.

(c)

“Corporate Status” describes the status of a person who is or was a director, officer, employee or agent of the Company or of any other corporation, limited liability company, partnership or joint venture, trust or other enterprise which such person is or was serving at the request of the Company.

(d)

“Disinterested Director” shall mean a director of the Company who is not and was not a party to the Proceeding in respect of which indemnification is sought by Indemnitee.

(e)

“Enterprise” shall mean the Company and any other corporation, limited liability company, partnership, joint venture, trust or other enterprise of which Indemnitee is or was serving at the request of the Company as a director, officer, trustee, partner, managing member, employee, agent or fiduciary.

(f)

“Expenses” shall include all reasonable attorneys' fees, retainers, court costs, transcript costs, fees of experts and other professionals, witness fees, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees, any federal, state, local or foreign taxes imposed on Indemnitee as a result of the actual or deemed receipt of any payments under this Agreement, ERISA excise taxes and penalties, and all other disbursements or expenses of the types customarily incurred in connection with prosecuting, defending, preparing to prosecute or defend, investigating, being or preparing to be a witness in, or otherwise participating in, a Proceeding. Expenses also shall include (i) Expenses incurred in connection with any appeal resulting from any Proceeding, including without limitation the premium, security for, and other costs relating to any cost bond, supersedeas bond, or other appeal bond or its equivalent, and (ii) for purposes of Section 14(d) only, Expenses incurred by Indemnitee in connection with the interpretation, enforcement or defense of Indemnitee's rights under this Agreement, by litigation or otherwise. The parties agree that for the purposes of any advancement of Expenses for which Indemnitee has made written demand to the Company in accordance with this Agreement, all Expenses included in such demand that are certified by affidavit of Indemnitee's counsel as being reasonable in the good faith judgment of such counsel shall be presumed conclusively to be reasonable. Expenses, however, shall not include amounts paid in settlement by Indemnitee or the amount of judgments or fines against Indemnitee.

(g)

“Independent Counsel” shall mean a law firm, or a member of a law firm, that is experienced in matters of corporation law and neither presently is, nor in the past five years has been, retained to represent: (i) the Company or Indemnitee in any matter

15066598.2

material to either such party (other than with respect to matters concerning the Indemnitee under this Agreement, or of other indemnitees under similar indemnification agreements), or (ii) any other party to the Proceeding giving rise to a claim for indemnification hereunder. Notwithstanding the foregoing, the term “Independent Counsel” shall not include any person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing either the Company or Indemnitee in an action to determine Indemnitee's rights under this Agreement. The Company agrees to pay the reasonable fees and expenses of the Independent Counsel referred to above and to fully indemnify such counsel against any and all Expenses, claims, liabilities and damages arising out of or relating to this Agreement or its engagement pursuant hereto.

(h)

The term “Proceeding” shall include any threatened, pending or completed action, suit, claim, counterclaim, cross claim, arbitration, mediation, alternate dispute resolution mechanism, investigation, inquiry, administrative hearing or any other actual, threatened or completed proceeding, whether brought in the right of the Company or otherwise and whether of a civil, criminal, administrative, legislative, or investigative (formal or informal) nature, including any appeal therefrom, in which Indemnitee was, is or will be involved as a party, potential party, non-party witness or otherwise by reason of the fact that Indemnitee is or was a director or officer of the Company, by reason of any action taken by Indemnitee (or a failure to take action by Indemnitee) or of any action (or failure to act) on Indemnitee's part while acting pursuant to Indemnitee's Corporate Status, in each case whether or not serving in such capacity at the time any liability or Expense is incurred for which indemnification, reimbursement, or advancement of Expenses can be provided under this Agreement. If the Indemnitee believes in good faith that a given situation may lead to or culminate in the institution of a Proceeding, this shall be considered a Proceeding under this paragraph.

(i)

Reference to “other enterprise” shall include employee benefit plans; references to “fines” shall include any excise tax assessed with respect to any employee benefit plan; references to “serving at the request of the Company” shall include any service as a director, officer, employee or agent of the Company which imposes duties on, or involves services by, such director, officer, employee or agent with respect to an employee benefit plan, its participants or beneficiaries; and a person who acted in good faith and in a manner Indemnitee reasonably believed to be in the best interests of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in a manner “not opposed to the best interests of the Company” as referred to in this Agreement.

Section 3. Indemnity in Third-Party Proceedings. The Company shall indemnify Indemnitee in accordance with the provisions of this Section 3 if Indemnitee is, or is threatened to be made, a party to or a participant in any Proceeding, other than a Proceeding by or in the right of the Company to procure a judgment in its favor, by reason of Indemnitee’s Corporate Status. Pursuant to this Section 3, Indemnitee shall be indemnified to the fullest extent permitted by applicable law against all Expenses, judgments, fines and amounts paid in settlement (including all interest, assessments and other charges paid or payable in

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connection with or in respect of such Expenses, judgments, fines and amounts paid in settlement) actually and reasonably incurred by Indemnitee or on Indemnitee's behalf in connection with such Proceeding or any claim, issue or matter therein, if Indemnitee acted in good faith and in a manner Indemnitee reasonably believed to be in or not opposed to the best interests of the Company and, in the case of a criminal Proceeding had no reasonable cause to believe that Indemnitee's conduct was unlawful. The parties hereto intend that this Agreement shall provide to the fullest extent permitted by law for indemnification in excess of that expressly permitted by statute, including, without limitation, any indemnification provided by the Certificate of Incorporation, the Bylaws, vote of its stockholders or disinterested directors or applicable law.

Section 4. Indemnity in Proceedings by or in the Right of the Company. The Company shall indemnify Indemnitee in accordance with the provisions of this Section 4 if Indemnitee is, or is threatened to be made, a party to or a participant in any Proceeding by or in the right of the Company to procure a judgment in its favor by reason of Indemnitee’s Corporate Status. Pursuant to this Section 4, Indemnitee shall be indemnified to the fullest extent permitted by applicable law against all Expenses actually and reasonably incurred by Indemnitee or on Indemnitee's behalf in connection with such Proceeding or any claim, issue or matter therein, if Indemnitee acted in good faith and in a manner Indemnitee reasonably believed to be in or not opposed to the best interests of the Company. No indemnification for Expenses shall be made under this Section 4 in respect of any claim, issue or matter as to which Indemnitee shall have been finally adjudged by a court to be liable to the Company, unless and only to the extent that the Delaware Court (as hereinafter defined) or any court in which the Proceeding was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, Indemnitee is fairly and reasonably entitled to indemnification.

Section 5. Indemnification for Expenses of a Party Who is Wholly or Partly Successful. Notwithstanding any other provisions of this Agreement, to the fullest extent permitted by applicable law and to the extent that Indemnitee is a party to (or a participant in) and is successful, on the merits or otherwise, in any Proceeding or in defense of any claim, issue or matter therein, in whole or in part, the Company shall indemnify Indemnitee against all Expenses actually and reasonably incurred by Indemnitee in connection therewith. If Indemnitee is not wholly successful in such Proceeding but is successful, on the merits or otherwise, as to one or more but less than all claims, issues or matters in such Proceeding, the Company shall indemnify Indemnitee against all Expenses actually and reasonably incurred by Indemnitee or on Indemnitee's behalf in connection with or related to each successfully resolved claim, issue or matter to the fullest extent permitted by law. For purposes of this Section and without limitation, the termination of any claim, issue or matter in such a Proceeding by dismissal, with or without prejudice, shall be deemed to be a successful result as to such claim, issue or matter.

Section 6. Indemnification For Expenses of a Witness. Notwithstanding any other provision of this Agreement, to the fullest extent permitted by applicable law and to the extent that Indemnitee is, by reason of Indemnitee's Corporate Status, a witness or otherwise asked to participate in any Proceeding to which Indemnitee is not a party, Indemnitee shall be indemnified against all Expenses actually and reasonably incurred by Indemnitee or on Indemnitee's behalf in connection therewith.

Section 7. Partial Indemnification. If Indemnitee is entitled under any provision of this Agreement to indemnification by the Company for some or a portion of Expenses, but not, however, for

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the total amount thereof, the Company shall nevertheless indemnify Indemnitee for the portion thereof to which Indemnitee is entitled.

Section 8. Additional Indemnification.

(a)

Notwithstanding any limitation in Sections 3, 4, or 5, the Company shall indemnify Indemnitee to the fullest extent permitted by applicable law if Indemnitee is a party to or threatened to be made a party to any Proceeding (including a Proceeding by or in the right of the Company to procure a judgment in its favor) by reason of Indemnitee’s Corporate Status.

(b)

For purposes of Section 8(a), the meaning of the phrase “to the fullest extent permitted by applicable law” shall include, but not be limited to:

to the fullest extent permitted by the provision of the DGCL that authorizes or contemplates additional indemnification by agreement, or the corresponding provision of any amendment to or replacement of the DGCL, and

ii.

to the fullest extent authorized or permitted by any amendments to or replacements of the DGCL adopted after the date of this Agreement that increase the extent to which a corporation may indemnify its officers and directors.

Section 9. Exclusions. Notwithstanding any provision in this Agreement, the Company shall not be obligated under this Agreement to make any indemnification payment in connection with any claim involving Indemnitee:

(a)

for which payment has actually been made to or on behalf of Indemnitee under any insurance policy or other indemnity provision, except with respect to any excess beyond the amount paid under any insurance policy or other indemnity provision; or

(b)

for (i) an accounting of profits made from the purchase and sale (or sale and purchase) by Indemnitee of securities of the Company within the meaning of Section 16(b) of the Exchange Act (as defined in Section 2(b) hereof) or similar provisions of state statutory law or common law, (ii) any reimbursement of the Company by the Indemnitee of any bonus or other incentive-based or equity-based compensation or of any profits realized by the Indemnitee from the sale of securities of the Company, as required in each case under the Exchange Act (including any such reimbursements that arise from an accounting restatement of the Company pursuant to Section 304 of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”), or the payment to the Company of profits arising from the purchase and sale by Indemnitee of securities in violation of Section 306 of the Sarbanes-Oxley Act) or (iii) any reimbursement of the Company by Indemnitee of any compensation pursuant to any compensation recoupment or clawback policy adopted by the Board or the compensation committee of the Board, including but not limited to any such policy adopted to comply with stock exchange listing requirements implementing Section 10D of the Exchange Act; or

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(c)

except as provided in Section 14(d) of this Agreement, in connection with any Proceeding (or any part of any Proceeding) initiated by Indemnitee, including any Proceeding (or any part of any Proceeding) initiated by Indemnitee against the Company or its directors, officers, employees or other indemnitees, unless (i) the Board authorized the Proceeding (or any part of any Proceeding) prior to its initiation or (ii) the Company provides the indemnification, in its sole discretion, pursuant to the powers vested in the Company under applicable law.

Section 10. Advances of Expenses. Notwithstanding any provision of this Agreement to the contrary (other than Section 14(d)), the Company shall advance, to the extent not prohibited by law, the Expenses incurred by Indemnitee in connection with any Proceeding (or any part of any Proceeding) not initiated by Indemnitee or any Proceeding initiated by Indemnitee with the prior approval of the Board as provided in Section 9(c), and such advancement shall be made within thirty (30) days after the receipt by the Company of a statement or statements requesting such advances from time to time, whether prior to or after final disposition of any Proceeding. Advances shall be unsecured and interest free. Advances shall be made without regard to Indemnitee's ability to repay the Expenses and without regard to Indemnitee's ultimate entitlement to indemnification under the other provisions of this Agreement. In accordance with Section 14(d), advances shall include any and all reasonable Expenses incurred pursuing an action to enforce this right of advancement, including Expenses incurred preparing and forwarding statements to the Company to support the advances claimed. The Indemnitee shall qualify for advances upon the execution and delivery to the Company of this Agreement, which shall constitute an undertaking providing that the Indemnitee undertakes to repay the amounts advanced (without interest) to the extent that it is ultimately determined that Indemnitee is not entitled to be indemnified by the Company. No other form of undertaking shall be required other than the execution of this Agreement. This Section 10 shall not apply to any claim made by Indemnitee for which indemnity is excluded pursuant to Section 9.

Section 11. Procedure for Notification and Defense of Claim.

(a)

Indemnitee shall notify the Company in writing of any matter with respect to which Indemnitee intends to seek indemnification or advancement of Expenses hereunder as soon as reasonably practicable following the receipt by Indemnitee of written notice thereof. The written notification to the Company shall include a description of the nature of the Proceeding and the facts underlying the Proceeding. To obtain indemnification under this Agreement, Indemnitee shall submit to the Company a written request, including therein or therewith such documentation and information as is reasonably available to Indemnitee and is reasonably necessary to determine whether and to what extent Indemnitee is entitled to indemnification following the final disposition of such Proceeding. The omission by Indemnitee to notify the Company hereunder will not relieve the Company from any liability which it may have to Indemnitee hereunder or otherwise than under this Agreement, and any delay in so notifying the Company shall not constitute a waiver by Indemnitee of any rights under this Agreement. The Secretary of the Company shall, promptly upon receipt of such a request for indemnification, advise the Board in writing that Indemnitee has requested indemnification.

(b)

The Company will be entitled to participate in the Proceeding at its own expense.

Section 12. Procedure Upon Application for Indemnification.

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(a)

Upon written request by Indemnitee for indemnification pursuant to Section 11(a), a determination, if required by applicable law, with respect to Indemnitee's entitlement thereto shall be made in the specific case: (i) if a Change in Control shall have occurred, by Independent Counsel in a written opinion to the Board, a copy of which shall be delivered to Indemnitee; or (ii) if a Change in Control shall not have occurred, (A) by a majority vote of the Disinterested Directors, even though less than a quorum of the Board, (B) by a committee of Disinterested Directors designated by a majority vote of the Disinterested Directors, even though less than a quorum of the Board, (C) if there are no such Disinterested Directors or, if such Disinterested Directors so direct, by Independent Counsel in a written opinion to the Board, a copy of which shall be delivered to Indemnitee or (D) if so directed by the Board, by the stockholders of the Company; and, if it is so determined that Indemnitee is entitled to indemnification, payment to Indemnitee shall be made within ten (10) days after such determination. Indemnitee shall cooperate with the person, persons or entity making such determination with respect to Indemnitee's entitlement to indemnification, including providing to such person, persons or entity upon reasonable advance request any documentation or information which is not privileged or otherwise protected from disclosure and which is reasonably available to Indemnitee and reasonably necessary to such determination. Any costs or Expenses (including attorneys' fees and disbursements) incurred by Indemnitee in so cooperating with the person, persons or entity making such determination shall be borne by the Company (irrespective of the determination as to Indemnitee's entitlement to indemnification) and the Company hereby indemnifies and agrees to hold Indemnitee harmless therefrom. The Company promptly will advise Indemnitee in writing with respect to any determination that Indemnitee is or is not entitled to indemnification, including a description of any reason or basis for which indemnification has been denied.

(b)

In the event the determination of entitlement to indemnification is to be made by Independent Counsel pursuant to Section 12(a) hereof, the Independent Counsel shall be selected as provided in this Section 12(b). If a Change in Control shall not have occurred, the Independent Counsel shall be selected by the Board, and the Company shall give written notice to Indemnitee advising Indemnitee of the identity of the Independent Counsel so selected. If a Change in Control shall have occurred, the Independent Counsel shall be selected by Indemnitee (unless Indemnitee shall request that such selection be made by the Board, in which event the preceding sentence shall apply), and Indemnitee shall give written notice to the Company advising it of the identity of the Independent Counsel so selected. In either event, Indemnitee or the Company, as the case may be, may, within ten (10) days after such written notice of selection shall have been given, deliver to the Company or to Indemnitee, as the case may be, a written objection to such selection; provided, however, that such objection may be asserted only on the ground that the Independent Counsel so selected does not meet the requirements of “Independent Counsel” as defined in Section 2 of this Agreement, and the objection shall set forth with particularity the factual basis of such assertion. Absent a proper and timely objection, the person so selected shall act as Independent Counsel. If such written objection is so made and substantiated, the Independent Counsel so selected may not serve as Independent Counsel unless and until such objection is withdrawn or the Delaware Court has determined that such objection is without merit. If, within twenty (20) days after the later of

15066598.2

submission by Indemnitee of a written request for indemnification pursuant to Section 11(a) hereof and the final disposition of the Proceeding, no Independent Counsel shall have been selected and not objected to, either the Company or Indemnitee may petition the Delaware Court for resolution of any objection which shall have been made by the Company or Indemnitee to the other's selection of Independent Counsel and/or for the appointment as Independent Counsel of a person selected by such court or by such other person as such court shall designate, and the person with respect to whom all objections are so resolved or the person so appointed shall act as Independent Counsel under Section 12(a) hereof. Upon the due commencement of any judicial proceeding or arbitration pursuant to Section 14(a) of this Agreement, Independent Counsel shall be discharged and relieved of any further responsibility in such capacity (subject to the applicable standards of professional conduct then prevailing).

Section 13. Presumptions and Effect of Certain Proceedings.

(a)

In making a determination with respect to entitlement to indemnification hereunder, the person or persons or entity making such determination shall, to the fullest extent not prohibited by law, presume that Indemnitee is entitled to indemnification under this Agreement if Indemnitee has submitted a request for indemnification in accordance with Section 11(a) of this Agreement, and the Company shall, to the fullest extent not prohibited by law, have the burden of proof to overcome that presumption in connection with the making by any person, persons or entity of any determination contrary to that presumption. Neither the failure of the Company (including by its directors or Independent Counsel) to have made a determination prior to the commencement of any action pursuant to this Agreement that indemnification is proper in the circumstances because Indemnitee has met the applicable standard of conduct, nor an actual determination by the Company (including by its directors or Independent Counsel) that Indemnitee has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that Indemnitee has not met the applicable standard of conduct.

(b)

Subject to Section 14(e), if the person, persons or entity empowered or selected under Section 12 of this Agreement to determine whether Indemnitee is entitled to indemnification shall not have made a determination within sixty (60) days after receipt by the Company of the request therefor, the requisite determination of entitlement to indemnification shall, to the fullest extent not prohibited by law, be deemed to have been made and Indemnitee shall be entitled to such indemnification, absent (i) a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitee's statement not materially misleading, in connection with the request for indemnification, or (ii) a prohibition of such indemnification under applicable law; provided, however, that such 60-day period may be extended for a reasonable time, not to exceed an additional thirty (30) days, if the person, persons or entity making the determination with respect to entitlement to indemnification in good faith requires such additional time for the obtaining or evaluating of documentation and/or information relating thereto; and provided, further, that the foregoing provisions of this Section 13(b) shall not apply (i) if the determination of entitlement to indemnification is to be made by the stockholders pursuant to Section 12(a) of this Agreement and if (A) within fifteen (15) days after receipt by the Company of the request for such determination the Board has

15066598.2

resolved to submit such determination to the stockholders for their consideration at an annual meeting thereof to be held within seventy-five (75) days after such receipt and such determination is made thereat, or (B) a special meeting of stockholders is called within fifteen (15) days after such receipt for the purpose of making such determination, such meeting is held for such purpose within sixty (60) days after having been so called and such determination is made thereat, or (ii) if the determination of entitlement to indemnification is to be made by Independent Counsel pursuant to Section 12(a) of this Agreement.

(c)

The termination of any Proceeding or of any claim, issue or matter therein, by judgment, order, settlement or conviction, or upon a plea of nolo contendere or its equivalent, shall not (except as otherwise expressly provided in this Agreement) of itself adversely affect the right of Indemnitee to indemnification or create a presumption that Indemnitee did not act in good faith and in a manner which Indemnitee reasonably believed to be in or not opposed to the best interests of the Company or, with respect to any criminal Proceeding, that Indemnitee had reasonable cause to believe that Indemnitee's conduct was unlawful.

(d)

For purposes of any determination of good faith, Indemnitee shall be deemed to have acted in good faith if Indemnitee's action is based on the records or books of account of the Enterprise, including financial statements, or on information supplied to Indemnitee by the directors or officers of the Enterprise in the course of their duties, or on the advice of legal counsel for the Enterprise or on information or records given or reports made to the Enterprise by an independent certified public accountant or by an appraiser, financial advisor or other expert selected with reasonable care by or on behalf of the Enterprise. The provisions of this Section 13(d) shall not be deemed to be exclusive or to limit in any way the other circumstances in which the Indemnitee may be deemed to have met the applicable standard of conduct set forth in this Agreement.

(e)

The knowledge and/or actions, or failure to act, of any director, officer, trustee, partner, managing member, fiduciary, agent or employee of the Enterprise shall not be imputed to Indemnitee for purposes of determining the right to indemnification under this Agreement.

Section 14. Remedies of Indemnitee.

(a)

Subject to Section 14(e), in the event that (i) a determination is made pursuant to Section 12 of this Agreement that Indemnitee is not entitled to indemnification under this Agreement, (ii) advancement of Expenses is not timely made pursuant to Section 10 of this Agreement, (iii) no determination of entitlement to indemnification shall have been made pursuant to Section 12(a) of this Agreement within ninety (90) days after receipt by the Company of the request for indemnification, (iv) payment of indemnification is not made pursuant to Section 5, 6 or 7 or the second to last sentence of Section 12(a) of this Agreement within ten (10) days after receipt by the Company of a written request therefor, (v) payment of indemnification pursuant to Section 3, 4 or 8 of this Agreement is not made within ten (10) days after a determination has been made that Indemnitee is entitled to indemnification, or (vi) in the event that the Company or any other person takes or threatens to take any action to declare this Agreement void or unenforceable, or institutes any litigation or other action or Proceeding designed to

15066598.2

deny, or to recover from, the Indemnitee the benefits provided or intended to be provided to the Indemnitee hereunder, Indemnitee shall be entitled to an adjudication by a court of Indemnitee's entitlement to such indemnification or advancement of Expenses. Alternatively, Indemnitee, at Indemnitee's option, may seek an award in arbitration to be conducted by a single arbitrator pursuant to the Commercial Arbitration Rules of the American Arbitration Association. Indemnitee shall commence such proceeding seeking an adjudication or an award in arbitration within 180 days following the date on which Indemnitee first has the right to commence such proceeding pursuant to this Section 14(a); provided, however, that the foregoing clause shall not apply in respect of a proceeding brought by Indemnitee to enforce Indemnitee's rights under Section 5 of this Agreement. The Company shall not oppose Indemnitee's right to seek any such adjudication or award in arbitration.

(b)

In the event that a determination shall have been made pursuant to Section 12(a) of this Agreement that Indemnitee is not entitled to indemnification, any judicial proceeding or arbitration commenced pursuant to this Section 14 shall be conducted in all respects as a de novo trial, or arbitration, on the merits and Indemnitee shall not be prejudiced by reason of that adverse determination. In any judicial proceeding or arbitration commenced pursuant to this Section 14 the Company shall have the burden of proving Indemnitee is not entitled to indemnification or advancement of Expenses, as the case may be.

(c)

If a determination shall have been made pursuant to Section 12(a) of this Agreement that Indemnitee is entitled to indemnification, the Company shall be bound by such determination in any judicial proceeding or arbitration commenced pursuant to this Section 14, absent (i) a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitee's statement not materially misleading, in connection with the request for indemnification, or (ii) a prohibition of such indemnification under applicable law.

(d)

The Company shall, to the fullest extent not prohibited by law, be precluded from asserting in any judicial proceeding or arbitration commenced pursuant to this Section 14 that the procedures and presumptions of this Agreement are not valid, binding and enforceable and shall stipulate in any such court or before any such arbitrator that the Company is bound by all the provisions of this Agreement. It is the intent of the Company that, to the fullest extent permitted by law, the Indemnitee not be required to incur legal fees or other Expenses associated with the interpretation, enforcement or defense of Indemnitee's rights under this Agreement by litigation or otherwise because the cost and expense thereof would substantially detract from the benefits intended to be extended to the Indemnitee hereunder. The Company shall, to the fullest extent permitted by law, indemnify Indemnitee against any and all Expenses and, if requested by Indemnitee, shall (within ten (10) days after receipt by the Company of a written request therefor) advance, to the extent not prohibited by law, such Expenses to Indemnitee, which are incurred by Indemnitee in connection with any action brought by Indemnitee for indemnification or advancement of Expenses from the Company under this Agreement or under any directors' and officers' liability insurance policies maintained by the Company if, in the case of indemnification, Indemnitee is wholly successful on the underlying claims; if Indemnitee is not wholly successful on the underlying claims,

15066598.2

then such indemnification shall be only to the extent Indemnitee is successful on such underlying claims or otherwise as permitted by law, whichever is greater.

(e)

Notwithstanding anything in this Agreement to the contrary, no determination as to entitlement of Indemnitee to indemnification under this Agreement shall be required to be made prior to the final disposition of the Proceeding.

Section 15. Non-exclusivity; Survival of Rights; Insurance; Subrogation.

(a)

The rights of indemnification and to receive advancement of Expenses as provided by this Agreement shall not be deemed exclusive of any other rights to which Indemnitee may at any time be entitled under applicable law, the Certificate of Incorporation, the Bylaws, any agreement, a vote of stockholders or a resolution of directors, or otherwise. No amendment, alteration or repeal of this Agreement or of any provision hereof shall limit or restrict any right of Indemnitee under this Agreement in respect of any action taken or omitted by Indemnitee in Indemnitee's Corporate Status prior to such amendment, alteration or repeal. To the extent that a change in Delaware law, whether by statute or judicial decision, permits greater indemnification or advancement of Expenses than would be afforded currently under the Bylaws and Certificate of Incorporation and this Agreement, it is the intent of the parties hereto that Indemnitee shall enjoy by this Agreement the greater benefits so afforded by such change. No right or remedy herein conferred is intended to be exclusive of any other right or remedy, and every other right and remedy shall be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other right or remedy.

(b)

To the extent that the Company maintains an insurance policy or policies providing liability insurance for directors, officers, employees, or agents of the Enterprise, Indemnitee shall be covered by such policy or policies in accordance with its or their terms to the maximum extent of the coverage available for any such director, officer, employee or agent under such policy or policies. If, at the time of the receipt of a notice of a claim pursuant to the terms hereof, the Company has director and officer liability insurance in effect, the Company shall give prompt notice of such claim or of the commencement of a Proceeding, as the case may be, to the insurers in accordance with the procedures set forth in the respective policies. The Company shall thereafter take all necessary or desirable action to cause such insurers to pay, on behalf of the Indemnitee, all amounts payable as a result of such Proceeding in accordance with the terms of such policies.

(c)

In the event of any payment made by the Company under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee, who shall execute all papers required and take all action necessary to secure such rights, including execution of such documents as are necessary to enable the Company to bring suit to enforce such rights.

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(d)

The Company shall not be liable under this Agreement to make any payment of amounts otherwise indemnifiable (or for which advancement is provided hereunder) hereunder if and to the extent that Indemnitee has otherwise actually received such payment under any insurance policy, contract, agreement or otherwise.

(e)

The Company's obligation to indemnify or advance Expenses hereunder to Indemnitee who is or was serving at the request of the Company as a director, officer, trustee, partner, managing member, fiduciary, employee or agent of any other corporation, limited liability company, partnership, joint venture, trust, employee benefit plan or other enterprise shall be reduced by any amount Indemnitee has actually received as indemnification or advancement of Expenses from such other corporation, limited liability company, partnership, joint venture, trust or other enterprise.

Section 16. Duration of Agreement. This Agreement is effective as of the Effective Date and shall continue until and terminate upon the later of: (a) ten (10) years after the date that Indemnitee shall have ceased to serve as a [director] [officer] of the Company or (b) one (1) year after the final termination of any Proceeding then pending in respect of which Indemnitee is granted rights of indemnification or advancement of Expenses hereunder and of any proceeding commenced by Indemnitee pursuant to Section 14 of this Agreement relating thereto. The indemnification and advancement of expenses rights provided by or granted pursuant to this Agreement shall be binding upon and be enforceable by the parties hereto and their respective successors and assigns (including any direct or indirect successor by purchase, merger, consolidation or otherwise to all or substantially all of the business or assets of the Company), shall continue as to an Indemnitee who has ceased to be a director, officer, employee or agent of the Company or of any other Enterprise, and shall inure to the benefit of Indemnitee and Indemnitee's spouse, assigns, heirs, devisees, executors and administrators and other legal representatives.

Section 17. Severability. If any provision or provisions of this Agreement shall be held to be invalid, illegal or unenforceable for any reason whatsoever: (a) the validity, legality and enforceability of the remaining provisions of this Agreement (including without limitation, each portion of any Section of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby and shall remain enforceable to the fullest extent permitted by law; (b) such provision or provisions shall be deemed reformed to the extent necessary to conform to applicable law and to give the maximum effect to the intent of the parties hereto; and (c) to the fullest extent possible, the provisions of this Agreement (including, without limitation, each portion of any Section of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall be construed so as to give effect to the intent manifested thereby.

Section 18. Enforcement.

(a)

The Company expressly confirms and agrees that it has entered into this Agreement and assumed the obligations imposed on it hereby in order to induce Indemnitee to serve as a director or officer of the Company, and the Company acknowledges that Indemnitee is relying upon this Agreement in serving or continuing to serve as a director or officer of the Company.

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(b)

This Agreement constitutes the entire agreement between the parties hereto with respect to the subject matter hereof and supersedes all prior agreements and understandings, oral, written and implied, between the parties hereto with respect to the subject matter hereof; provided, however, that this Agreement is a supplement to and in furtherance of the Certificate of Incorporation, the Bylaws and applicable law, and shall not be deemed a substitute therefor, nor to diminish or abrogate any rights of Indemnitee thereunder.

Section 19. Modification and Waiver. No supplement, modification or amendment of this Agreement shall be binding unless executed in writing by the parties hereto. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions of this Agreement nor shall any waiver constitute a continuing waiver.

Section 20. Notice by Indemnitee. Indemnitee agrees promptly to notify the Company in writing upon being served with any summons, citation, subpoena, complaint, indictment, information or other document relating to any Proceeding or matter which may be subject to indemnification or advancement of Expenses covered hereunder. The failure of Indemnitee to so notify the Company shall not relieve the Company of any obligation which it may have to the Indemnitee under this Agreement or otherwise.

Section 21. Notices. All notices, requests, demands and other communications under this Agreement shall be in writing and shall be deemed to have been duly given if (a) delivered by hand and receipted for by the party to whom said notice or other communication shall have been directed, (b) mailed by certified or registered mail with postage prepaid, on the third business day after the date on which it is so mailed, (c) mailed by reputable overnight courier and receipted for by the party to whom said notice or other communication shall have been directed or (d) sent by facsimile transmission, with receipt of oral confirmation that such transmission has been received:

(a)

If to Indemnitee, at the address indicated on the signature page of this Agreement, or such other address as Indemnitee shall provide to the Company.

(b)

If to the Company to:

ClearSign Technologies Corporation

8023 E. 63rd Place, Suite 101

Tulsa, Oklahoma 74133

or to any other address as may have been furnished to Indemnitee by the Company.

Section 22. Contribution. To the fullest extent permissible under applicable law, if the indemnification provided for in this Agreement is unavailable to Indemnitee for any reason whatsoever, the Company, in lieu of indemnifying Indemnitee, shall contribute to the amount incurred by Indemnitee, whether for judgments, fines, penalties, excise taxes, amounts paid or to be paid in settlement and/or for Expenses, in connection with any claim relating to an indemnifiable event under this Agreement, in such proportion as is deemed fair and reasonable in light of all of the circumstances of such Proceeding in order to reflect (i) the relative benefits received by the Company and Indemnitee as a result of the event(s) and/or transaction(s) giving cause to such Proceeding; and/or (ii) the relative fault of the Company (and its

15066598.2

directors, officers, employees and agents) and Indemnitee in connection with such event(s) and/or transaction(s).

Section 23. Applicable Law and Consent to Jurisdiction. This Agreement and the legal relations among the parties shall be governed by, and construed and enforced in accordance with, the laws of the State of Delaware, without regard to its conflict of laws rules. Except with respect to any arbitration commenced by Indemnitee pursuant to Section 14(a) of this Agreement, the Company and Indemnitee hereby irrevocably and unconditionally (i) agree that any action or proceeding arising out of or in connection with this Agreement shall be brought only in the Chancery Court of the State of Delaware (the “Delaware Court”), and not in any other state or federal court in the United States of America or any court in any other country, (ii) consent to submit to the exclusive jurisdiction of the Delaware Court for purposes of any action or proceeding arising out of or in connection with this Agreement, (iii) appoint, to the extent such party is not otherwise subject to service of process in the State of Delaware, irrevocably Corporation Service Company, 251 Little Falls Drive, Wilmington, New Castle County, Delaware 19808 as its agent in the State of Delaware as such party's agent for acceptance of legal process in connection with any such action or proceeding against such party with the same legal force and validity as if served upon such party personally within the State of Delaware, (iv) waive any objection to the laying of venue of any such action or proceeding in the Delaware Court, and (v) waive, and agree not to plead or to make, any claim that any such action or proceeding brought in the Delaware Court has been brought in an improper or inconvenient forum.

Section 24. Identical Counterparts. This Agreement may be executed in one or more counterparts, each of which shall for all purposes be deemed to be an original but all of which together shall constitute one and the same Agreement. Only one such counterpart signed by the party against whom enforceability is sought needs to be produced to evidence the existence of this Agreement.

Section 25. Miscellaneous. Use of the masculine pronoun shall be deemed to include usage of the feminine pronoun where appropriate. The headings of this Agreement are inserted for convenience only and shall not be deemed to constitute part of this Agreement or to affect the construction thereof.

15066598.2

IN WITNESS WHEREOF, the parties have caused this Agreement to be signed as of the day and year first above written.



CLEARSIGN TECHNOLOGIES CORPORATION			INDEMNITEE

By:
Name:			Name:
Office:			Address:

15066598.2

Exhibit 10.2

Exhibit 31.1

CERTIFICATION

I, Colin James Deller, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of ClearSign Technologies Corporation;

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15-d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including any consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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;

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.	The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 14, 2023
/s/ Colin James Deller
Colin James Deller
Chief Executive Officer
(Principal Executive Officer)

Exhibit 31.2

CERTIFICATION

I, Brent Hinds, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of ClearSign Technologies Corporation;

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

5.	The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 14, 2023
/s/ Brent Hinds
Brent Hinds
Vice President and Controller
(Principal Financial and Accounting Officer)

Exhibit 32.1

CERTIFICATION

In connection with the periodic report of ClearSign Technologies Corporation (the “Company”) on Form 10-Q for the quarterly period ended June 30, 2023 as filed with the Securities and Exchange Commission (the “Report”), we, Colin James Deller, Chief Executive Officer (Principal Executive Officer) and Brent Hinds, Vice President of Finance & Controller (Principal Financial and Accounting Officer) of the Company, hereby certify as of the date hereof, solely for purposes of Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and Title 18, Chapter 63, Section 1350 of the United States Code, that to the best of my knowledge:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Exchange Act, and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company at the dates and for the periods indicated.

Date: August 14, 2023

/s/ Colin James Deller
Colin James Deller
Chief Executive Officer
(Principal Executive Officer)

/s/ Brent Hinds
Brent Hinds
Vice President of Finance & Controller (Principal Financial and Accounting Officer)

This certification accompanies the Form 10-Q to which it relates, is not deemed filed with the Securities and Exchange Commission and is not to be incorporated by reference into any filing of ClearSign Technologies Corporation under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended (whether made before or after the date of the Form 10-Q), irrespective of any general incorporation language contained in such filing.

Exhibit 99.1

ClearSign Technologies Corporation Announces Promotion of Brent Hinds to Chief Financial Officer

TULSA, Okla., August 8, 2023 — ClearSign Technologies Corporation (Nasdaq: CLIR) (“ClearSign” or the “Company”), an emerging leader in industrial combustion and sensing technologies that improve energy, operational efficiency and safety while dramatically reducing emissions, announces that Brent Hinds has been promoted to Chief Financial Officer.

“Brent has demonstrated an outstanding capability and professionalism since joining ClearSign back in October of 2021,” said Jim Deller, Ph.D., Chief Executive Officer of ClearSign. “From day one, Brent has been focused on developing ClearSign’s systems to be robust and scalable. Under his tenure, Brent has overseen the relocation of our head office to Tulsa and redomicile to the State of Delaware. He has also overseen a successful equity raise in addition to upgrading and improving our internal systems, accounting controls and processes. He has established himself as a true leader in our ClearSign team, and we congratulate him on his promotion,” concluded Dr. Deller.

Mr. Hinds was previously Vice President of Finance and Controller at the Company. Mr. Hinds joined ClearSign from Enovation Controls, Inc. a standalone subsidiary of Helios Technologies, where he served as Vice President of Finance focused on global sales, manufacturing, and application engineering operations, working directly with original equipment manufacturers. His responsibilities there included consolidation of reporting across four legal entities totaling $120 million in revenues, $600 million in assets and $70 million in net-working capital. Mr. Hinds previously served as Controller and Assistant Controller at Enovation Controls. Prior to joining Enovation Controls, Mr. Hinds worked for Stinnett & Associates, LLC, a professional advisory firm for public and private companies, where he established risk-based audit programs to determine adequacy and effectiveness of internal control environment and devised audit reports for executive management and audit committees. Additionally, Mr. Hinds served as a compliance analyst at Baker Hughes Company. Mr. Hinds earned his Bachelor of Science in Accounting from Oklahoma State University and is a certified public accountant.

About ClearSign Technologies Corporation

Exhibit 99.1

ClearSign Technologies Corporation designs and develops products and technologies for the purpose of improving key performance characteristics of industrial and commercial systems, including operational performance, energy efficiency, emission reduction, safety and overall cost-effectiveness. Our patented technologies, embedded in established OEM products as ClearSign Core™ and ClearSign Eye™ and other sensing configurations, enhance the performance of combustion systems and fuel safety systems in a broad range of markets, including the energy (upstream oil production and down-stream refining), commercial/industrial boiler, chemical, petrochemical, transport and power industries. For more information, please visit www.clearsign.com.

Cautionary note on forward-looking statements

All statements in this press release that are not based on historical fact are “forward-looking statements.” You can find many (but not all) of these statements by looking for words such as “approximates,” “believes,” “hopes,” “expects,” “anticipates,” “estimates,” “projects,” “intends,” “plans,” “would,” “should,” “could,” “may,” “will” or other similar expressions. While management has based any forward-looking statements included in this press release on its current expectations on the Company’s strategy, plans, intentions, performance, or future occurrences or results, the information on which such expectations were based may change. These forward-looking statements rely on a number of assumptions concerning future events and are subject to a number of risks, uncertainties and other factors, many of which are outside of our control, that could cause actual results to materially differ from such statements. Such risks, uncertainties and other factors include, but are not limited to general business and economic conditions, the performance of management and our employees, our ability to obtain financing, competition, whether our technology will be accepted and adopted and other factors identified in our Annual Report on Form 10-K filed with the Securities and Exchange Commission and available at www.sec.gov and other factors that are detailed in our periodic and current reports available for review at www.sec.gov. Furthermore, we operate in a competitive environment where new and unanticipated risks may arise. Accordingly, investors should not place any reliance on forward-looking statements as a prediction of actual results. We disclaim any intention to, and, except as may be required by law, undertake no obligation to, update or revise forward-looking statements to reflect events or circumstances that subsequently occur or of which we hereafter become aware.

For further information:

Investor Relations:

Exhibit 99.1

Matthew Selinger

Firm IR Group for ClearSign

+1 415-572-8152

mselinger@firmirgroup.com

August 8th, 2023|Investor News, Press Releases

Exhibit 99.2

Corporate Presentation August 2023 NASDAQ: CLIR Commercializing Innovative Combustion & Sensing Technologies

2 Safe Harbor Statement This presentation is made solely for informational purposes and no representation or warranty, express or implied, is made by ClearSign Technologies Corporation (“ClearSign,” “we,” “us,” “our,” and, together with our subsidiaries, the “Company”) or any of its representatives as to the information contained in these materials or disclosed during any related presentations or discussions. This presentation is intended solely for the purposes of familiarizing investors with ClearSign. This presentation is not an offer to sell nor does it seek an offer to by any securities. This presentation contains forward-looking statements. These statements include statements about our plans, strategies, financial performance, prospects or future events and involve known and unknown risks that are difficult to predict. As a result, our actual results, performance or achievements may differ materially from those expressed or implied by these forward-looking statements. In some cases, you can identify forward-looking statements by the use of words such as “may,” “could,” “expect,” “intend,” “plan,” “seek,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “continue,” “likely,” “will,” “would,” and variations of these terms and similar expressions, or the negative of these terms or similar expressions. Such forward-looking statements are necessarily based upon estimates and assumptions that, while considered reasonable by the Company and its management team based on their experience, are inherently uncertain. All statements in this presentation regarding our business strategy, future operations, financial position, prospects, business plans and objectives, as well as information concerning industry trends and expected actions of third parties, are forward-looking statements. All forward-looking statements speak only as of the date as of which they are made. These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions concerning future events that are difficult to predict. The following factors, among others, could cause actual results to differ materially from those set forth in this presentation: • our limited cash, history of losses, and our expectation that we will continue to experience operating losses and negative cash flows in the near future; • our ability to successfully develop and implement our technologies and achieve profitability; • our limited operating history; • changes in government regulations that could substantially reduce, or even eliminate, the need for our technology; • emerging competition and rapidly advancing technology in our industry that may outpace our technology; • customer demand for the products and services we develop; • the impact of competitive or alternative products, technologies, and pricing; • our ability to manufacture any products we design; • general economic conditions and events and the impact they may have on us and our potential customers; • our doing business in China and related risks with respect to intellectual property protection, currency exchange, contract enforcement, rules on foreign investment and pandemic era regulations; • the impact of a cybersecurity incident or other technology disruption; • our ability to protect our intellectual property; • our ability to obtain adequate financing in the future; • our ability to retain and hire personnel with the experience and talent to develop our products and business; • the financial and operational impacts of the coronavirus pandemic on our business and results of operations, including impacts on our day-to-day operations, collaborative arrangements, revenue and marketing efforts and suppliers; • our success at managing the risks involved in the foregoing items; and • other factors discussed in the section titled “Risk Factors” in our most recent Annual Report on Form 10-K. We caution you not to place undue reliance on any forward-looking statements, which are made as of the date hereof or as otherwise specified herein. The Company undertakes no obligation to update any of these forward-looking statements to reflect actual results, new information or future events, changes in assumptions or changes in other factors affecting forward-looking statements, except to the extent required by applicable law. If we update one or more forward-looking statements, no inference should be drawn that we will make additional updates with respect to those or other forwarding-looking statements.

3 Company Overview ClearSign is an emerging leader in industrial combustion and sensing technologies that improve efficiency and lower costs, while dramatically reducing emissions. We believe global adoption of ClearSign’s technologies will significantly improve today’s environmental footprint and assist in the transition to the hydrogen economy of tomorrow. 3

ClearSign in 20 Seconds Providing Clean Air Customers Nitrogen Oxides (NOX ) are a highly toxic and highly regulated pollutant from combustion. We essentially prevent the emissions of NOX from industrial sources. ClearSign burner technology enables customers to meet new and anticipated NOX regulations at a fraction of the cost of traditional solutions. Enabling Decarbonization Investment Opportunity Adding hydrogen to fuel increases NOX emissions. ClearSign technology enables hydrogen to be burned while remaining compliant with mandatory NOX emission regulations. Emerging technology with initial adoption in an expansive market. Highly scalable business model with strong operating margins and comprehensive IP. 4

5 Creating Better Solutions Problem Nitrogen from the air is converted to NOX by two chemical paths in a flame. ClearSign technology addresses both of these chemical paths. Incumbent burners address just one. Flame temperature is the dominant influence on NOX formation. Hydrogen in the fuel gas increases flame temperature. Solution Our burners are designed to install easily into refinery heaters and industrial boilers, either into new equipment or to upgrade the burners in the expansive existing energy infrastructure. NOX is an issue across the globe with 24M tons emitted annually from human activity. The US alone emitted ~7.4M tons of NOX in 2022, excluding wildfires. 5

6 Refinery and Petrochemical Process Heater Technology Boiler Technology Breaking Barriers • Paradigm breaking technology providing unique performance and value • Products engineered for industry standard deployment • Sales, supply and service capabilities developed to comply with typical industry processes and requirements Doesn’t merely treat emissions – reduces their creation in the first place 6

7 Structured for Growth • Attractive operating margins • Asset light structure that leverages national and global incumbent partner company’s infrastructure • Highly scalable • Licensing opportunities • Protected by strong IP portfolio • Led by established industry experts Provides a cost -effective solution versus additional cap -ex and op -ex costs associated with existing methods 7

Domestic & Global Market Opportunity “You have the best burners in the world” - Lead engineer from 2022 California Refinery project customer demonstration Process Burner data: Energy Information Administration – Refining Capacity 2021 & 2022 bp Statistical Review of World Energy (estimation based on 1 burner per 250 bpd) US Boiler burner data from CA air board records and scaled by population for other regions and American Boiler Manufacturers Association 2015 Survey China data from confidential sources Estimated Process Burners Installed 28,000 California and Texas 72,000 Total in US 42,000 Europe 280,000 Worldwide Estimated Boiler Burners Installed 7,000 California 5,000 Texas 57,000 Total in US 350,000 In Critical Emissions Regions of China 8

Driven by Political & Social Initiatives • Regulation of critical emissions tightening - including NOx • Transition to Hydrogen economy • ESG reporting and disclosure initiatives • Global “good citizen” momentum • Substantial government funding – IRA, Dept. of Energy ClearSign is part of the solution 9

10 Evolving Regulations Impacting Our Market • Regulations finalized in major areas of California* • Anticipate revisions in industrial regions of Texas and Utah, other regions of California and North Eastern USA • EPA ozone enforcement • Proposed SEC Climate Disclosure Requirements • New and expanding regulations in China *Los Angeles Area and San Joaquin Valley District 10

11 Global Orders and Installations

12 Commercialization Advancing Order Boiler Burner Boiler Burner Boiler Burner Two Process Heaters Process Heater Two Process Heaters Company Recycling Plant CA Medical Waste CA Global Chemical TX Refinery CA Refinery CA Refinery CA Expected Install Q3 2023 Q3-Q4 2023 Q3-Q4 2023 Q1-Q2 2024 Q3 2024 Q1-Q2 2025 Growing Orders Expanding Technology - to develop technology for H2 economy and decarbonization Engagements with Diversifying Markets Refining Companies Boiler Companies Midstream Equipment Providers Chemical Companies Major Utilities $0.25M Up to $1.6M $0.25M Phase 1 DOE Grant Phase 2 DOE Grant DOE Grant with Narion

13 ESG Credentials – Technology & Company Aspiring to the highest ESG standards Environmental Impact • Stewards of the environment, work space managed to conserve resources • Developing and providing technologies enabling reduction of toxic air emissions, enhanced safety, increased efficiency and the use of hydrogen as a fuel Social Impact • Inclusive and fair employer, with considerate and respectful culture • Emphasize ethics, employee wellbeing and customer satisfaction Governance Framework & Structure • Robust governance and regulatory policies • Diverse BOD and leadership team with fair and reasonable compensation 13

14 Investment Summary Gaining traction and positioned for growth Asset light, highly scalable business model High margin business with robust IP portfolio Significant potential upside with growing market adoption Experienced and proven team Commitment to ESG Principles 14

15 Capital Markets Snapshot NASDAQ CLIR Market Cap $50.5M Cash & Short-Term Investments $8.5M Long-Term Debt $0 Shares Outstanding 38.6M Insider Holdings 20% Patent Portfolio 110 Headquarters Tulsa, OK State of Incorporation Delaware Above data per Q2 2023 10-Q Sell-Side Analyst Coverage HC Wainwright - Amit Dayal News Releases • Announces Promotion of Brent Hinds to Chief Financial Officer – Aug 8, 2023 • Announces Hire of Tina Unachukwu as Director of Customer Relations and Business Development – Aug 1, 2023 • Collaboration Partner Narion Corp. Receives SBIR Grant to Develop Flare Methane Sensor - Jul 13, 2023 • Announces Reincorporation in the State of Delaware - Jun 15, 2023 • Receives Follow on Process Burner Order for Two Multi Burner Heaters from a California Refinery - May 18, 2023 • Receives Engineering Order for Two Multi Burner Heaters from a California Refinery - Apr 19, 2023 • Provides Full Year 2022 Update - Apr 6, 2023 • Announces Successful Testing of Ultra-Low NOx Hydrogen Burner - Apr 5, 2023 Included in the Russell MicroCap Index

16 Contact Us ClearSign Technologies Headquarters 8023 E. 63rd Place, Suite 101 Tulsa, Oklahoma 74133 info@clearsign.com Investor Relations Matthew Selinger Firm IR Group 415-572-8152 mselinger@firmirgroup.com Management Team Jim Deller, Ph.D. Tina Oby Unachukwu Chief Executive Officer Dir. Business Development Brent Hinds Manny Menendez Chief Financial Officer President ClearSign Asia Ltd. Jeff Lewallen Business Leader Refining & Ethylene Board of Directors Robert T. Hoffman Sr., Chairman Judith Schrecker Gary DiElsi Jim Deller Catharine de Lacy www.clearsign.com

Document and Entity Information - shares	6 Months Ended
Document and Entity Information - shares	Jun. 30, 2023	Aug. 09, 2023
Document and Entity Information
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Jun. 30, 2023
Document Transition Report	false
Entity Registrant Name	CLEARSIGN TECHNOLOGIES CORPORATION
Entity File Number	001-35521
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	26-2056298
Entity Address, Address Line One	8023 E. 63rd Place, Suite 101
Entity Address, City or Town	Tulsa
Entity Address, State or Province	OK
Entity Address, Postal Zip Code	74133
City Area Code	918
Local Phone Number	236-6461
Title of 12(b) Security	Common Stock
Trading Symbol	CLIR
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		38,562,086
Entity Central Index Key	0001434524
Document Fiscal Year Focus	2023
Current Fiscal Year End Date	--12-31
Document Fiscal Period Focus	Q2
Amendment Flag	false

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Current Assets:
Cash and cash equivalents	$ 7,600	$ 6,451
Short-term held-to-maturity investments	931	2,606
Accounts receivable, net	39	79
Contract assets	3	20
Prepaid expenses and other assets	575	577
Total current assets	9,148	9,733
Fixed assets, net	478	384
Patents and other intangible assets, net	762	798
Other assets	10	10
Total Assets	10,398	10,925
Current Liabilities:
Accounts payable and accrued liabilities	428	296
Current portion of lease liabilities	95	133
Accrued compensation and related taxes	413	471
Contract liabilities	2,105	247
Total current liabilities	3,041	1,147
Long Term Liabilities:
Long term lease liabilities	199	226
Total liabilities	3,240	1,373
Commitments and contingencies (Note 7)
Stockholders' Equity:
Preferred stock, $0.0001 par value, zero shares issued and outstanding
Common stock, $0.0001 par value, 38,562,086 and 38,023,701 shares issued and outstanding at June 30, 2023 and December 31, 2022, respectively	4	4
Additional paid-in capital	98,604	98,079
Accumulated other comprehensive loss	(20)	(8)
Accumulated deficit	(91,430)	(88,523)
Total equity	7,158	9,552
Total Liabilities and Equity	$ 10,398	$ 10,925

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Jun. 30, 2023	Dec. 31, 2022
Condensed Consolidated Balance Sheets
Preferred stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Common stock, shares issued	38,562,086	38,023,701
Common stock, shares outstanding	38,562,086	38,023,701

Condensed Consolidated Statements of Operations - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Condensed Consolidated Statements of Operations
Revenues	$ 150		$ 1,044
Cost of goods sold	21		809
Gross profit	129		235
Operating expenses:
Research and development	187	$ 188	347	$ 296
General and administrative	1,571	1,472	3,221	2,881
Total operating expenses	1,758	1,660	3,568	3,177
Loss from operations	(1,629)	(1,660)	(3,333)	(3,177)
Other income
Interest	94		152
Government assistance	14		107
Gain from sale of assets		14	5	37
Other income, net	43	8	162	12
Total other income	151	22	426	49
Net loss	$ (1,478)	$ (1,638)	$ (2,907)	$ (3,128)
Net loss per share - basic	$ (0.04)	$ (0.05)	$ (0.08)	$ (0.09)
Net loss per share - fully diluted	$ (0.04)	$ (0.05)	$ (0.08)	$ (0.09)
Weighted average number of shares outstanding - basic	38,549,810	33,541,408	38,407,053	33,378,054
Weighted average number of shares outstanding - fully diluted	38,549,810	33,541,408	38,407,053	33,378,054
Comprehensive loss
Net loss	$ (1,478)	$ (1,638)	$ (2,907)	$ (3,128)
Foreign-exchange translation adjustments	(12)	(10)	(12)	(10)
Comprehensive loss	$ (1,490)	$ (1,648)	$ (2,919)	$ (3,138)

Condensed Consolidated Statements of Stockholders' Equity - USD ($) shares in Thousands, $ in Thousands	Common Stock	Additional Paid-In Capital	Accumulated Other Comprehensive Income (loss)	Accumulated Deficit	Total
Beginning Balance at Dec. 31, 2021	$ 3	$ 91,035	$ 9	$ (82,765)	$ 8,282
Beginning Balances (in shares) at Dec. 31, 2021	31,582
Shares issued upon exercise of options ($0.89 per share) (in shares)	1
Shares issued upon exercise of options ($2.93 per share) (in shares)	3
Share based compensation		80			80
Share based compensation (in shares)	3
Fair value of stock issued in payment of accrued compensation		95			95
Fair value of stock issued in payment of accrued compensation (in shares)	66
Fair value of stock options granted in payment of accrued compensation		12			12
Shares issued through the use of At-The Market issuance		578			578
Shares issued through the use of At-The Market issuance (in shares)	496
Shares issued for services ($1.93 per share)		7			7
Shares issued for services ($1.93 per share) (in shares)	4
Net loss				(1,490)	(1,490)
Ending Balance at Mar. 31, 2022	$ 3	91,807	9	(84,255)	7,564
Ending Balances (in shares) at Mar. 31, 2022	32,155
Beginning Balance at Dec. 31, 2021	$ 3	91,035	9	(82,765)	8,282
Beginning Balances (in shares) at Dec. 31, 2021	31,582
Net loss					(3,128)
Ending Balance at Jun. 30, 2022	$ 4	96,083	(1)	(85,893)	10,193
Ending Balances (in shares) at Jun. 30, 2022	36,350
Beginning Balance at Mar. 31, 2022	$ 3	91,807	9	(84,255)	7,564
Beginning Balances (in shares) at Mar. 31, 2022	32,155
Share based compensation		50			50
Shares issued through the use of At-The Market issuance		9			9
Shares issued through the use of At-The Market issuance (in shares)	5
Shares issued for services ($1.93 per share)		7			7
Shares issued for services ($1.93 per share) (in shares)	4
Shares issued in stock offering	$ 1	4,210			4,211
Shares issued in stock offering (in shares)	4,186
Foreign-Exchange Translation Adjustment			(10)		(10)
Net loss				(1,638)	(1,638)
Ending Balance at Jun. 30, 2022	$ 4	96,083	(1)	(85,893)	10,193
Ending Balances (in shares) at Jun. 30, 2022	36,350
Beginning Balance at Dec. 31, 2022	$ 4	98,079	(8)	(88,523)	9,552
Beginning Balances (in shares) at Dec. 31, 2022	38,023
Share based compensation		227			227
Share based compensation (in shares)	223
Fair value of stock issued in payment of accrued compensation		234			234
Fair value of stock issued in payment of accrued compensation (in shares)	296
Shares issued for services ($0.66 per share)		3			3
Shares issued for services ($0.66 per share) (in shares)	4
Net loss				(1,429)	(1,429)
Ending Balance at Mar. 31, 2023	$ 4	98,543	(8)	(89,952)	8,587
Ending Balances (in shares) at Mar. 31, 2023	38,546
Beginning Balance at Dec. 31, 2022	$ 4	98,079	(8)	(88,523)	9,552
Beginning Balances (in shares) at Dec. 31, 2022	38,023
Net loss					(2,907)
Ending Balance at Jun. 30, 2023	$ 4	98,604	(20)	(91,430)	7,158
Ending Balances (in shares) at Jun. 30, 2023	38,562
Beginning Balance at Mar. 31, 2023	$ 4	98,543	(8)	(89,952)	8,587
Beginning Balances (in shares) at Mar. 31, 2023	38,546
Share based compensation		59			59
Shares issued upon exercise of options ($0.54 per share) (in shares)	12
Shares issued for services ($0.66 per share)		2			2
Shares issued for services ($0.66 per share) (in shares)	4
Foreign-Exchange Translation Adjustment			(12)		(12)
Net loss				(1,478)	(1,478)
Ending Balance at Jun. 30, 2023	$ 4	$ 98,604	$ (20)	$ (91,430)	$ 7,158
Ending Balances (in shares) at Jun. 30, 2023	38,562

Condensed Consolidated Statements of Stockholders' Equity (Parenthetical) - $ / shares	3 Months Ended
	Jun. 30, 2023	Mar. 31, 2023	Jun. 30, 2022	Mar. 31, 2022
Condensed Consolidated Statements of Stockholders' Equity
Common stock for options exercise, 0.54 per share issue	$ 0.54
Common stock for options exercise, 0.89 per share issue				$ 0.89
Common stock for options exercise, 2.93 per share issue				2.93
Shares issued through at the market issuance 1.24 average per share				1.24
Common stock for services	$ 0.66	$ 0.66	$ 1.93	$ 1.93
Shares issued in stock offering			1.11
Shares issued through at the market issuance 1.71 average per share			$ 1.71

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
Cash flows from operating activities:
Net loss	$ (2,907)	$ (3,128)
Adjustments to reconcile net loss to net cash used in operating activities:
Common stock issued for services	5	14
Share-based compensation	300	130
Depreciation and amortization	158	13
Gain from sale of fixed assets	(5)	(37)
Right of use asset amortization	73	59
Realized gain from marketable securities	(60)
Lease Amendments	(14)
Impairment of intangible assets	14
Change in operating assets and liabilities:
Contract assets	17	(448)
Accounts receivable	40	33
Prepaid expenses and other assets	(207)	(260)
Accounts payable and accrued liabilities	58	102
Accrued compensation and related taxes	162	175
Contract liabilities	1,858
Net cash used in operating activities	(508)	(3,347)
Cash flows from investing activities:
Acquisition of fixed assets		(5)
Disbursements for patents and other intangible assets	(56)	(73)
Proceeds from sale of fixed assets	5	37
Purchases of held-to-maturity short-term US treasuries	(2,162)
Redemption of held-to-maturity US treasuries	3,897
Net cash provided by (used in) investing activities	1,684	(41)
Cash flows from financing activities:
Proceeds from issuance of common stock, net of offering costs		4,798
Taxes paid related to vesting of restricted stock units	(15)
Net cash (used in) provided by financing activities	(15)	4,798
Effect of exchange rate changes on cash and cash equivalents	(12)	(10)
Net change in cash and cash equivalents	1,149	1,400
Cash and cash equivalents, beginning of period	6,451	7,607
Cash and cash equivalents, end of period	7,600	9,007
Supplemental disclosure of cash flow information:
Officer and employee equity awards for prior year accrued compensation	234	$ 107
Prior year prepaid expenses repurposed to fixed assets as demonstration equipment	209
Non-cash impact of new lease	$ 34

Organization and Description of Business

6 Months Ended

Jun. 30, 2023

Organization and Description of Business

Organization and Description of Business

Note 1 – Organization and Description of Business

Unless otherwise stated or the context otherwise requires, the terms ClearSign and the Company refer to ClearSign Technologies Corporation and its subsidiary, ClearSign Asia Limited.

Liquidity

Summary of Significant Accounting Policies

6 Months Ended

Jun. 30, 2023

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

Note 2 – Summary of Significant Accounting Policies

Basis of Presentation

Use of Estimates

Revenue Recognition and Cost of Sales

Contract Costs

Product Warranties

Cash and Cash Equivalents

Short-Term Investments

Accounts Receivable and Allowance for Doubtful Accounts

Fixed Assets and Leases

whichever is shorter. All other fixed assets are depreciated over three to four years. Maintenance and repairs are expensed as incurred.

Patents and Trademarks

Impairment of Long-Lived Assets

Fair Value of Financial Instruments

●

Level 1 – Quoted prices in active markets for identical assets or liabilities;

●

Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

The Company did not identify any other recurring or non-recurring assets and liabilities that are required to be presented in the balance sheets at fair value.

Research and Development

in cost sharing, collaborative projects. During the six months ended June 30, 2023 and 2022, the Company did not receive funds from these arrangements.

Government Assistance

Income Taxes

Share-Based Compensation

Foreign Operations

Foreign Currency

Net Loss per Common Share

effect would be anti-dilutive. At June 30, 2023 and June 30, 2022, potentially dilutive shares outstanding amounted to 3.8 million and 3.4 million, respectively.

Recently Issued Accounting Pronouncements Adopted

Fixed Assets

6 Months Ended

Jun. 30, 2023

Fixed Assets

Fixed Assets

Note 3 – Fixed Assets

Fixed Assets

Fixed assets are summarized as follows:


	June 30,		December 31,
(in thousands)	2023		2022
Machinery and equipment	$	209	$	390
Office furniture and equipment		60		177
Leasehold improvements		43		192
		312		759
Accumulated depreciation and amortization		(121)		(697)
		191		62
Operating lease ROU assets, net		287		322
Total	$	478	$	384

Depreciation and amortization expense for the six months ended June 30, 2023 and 2022 totaled $81 thousand and $13 thousand, respectively.

Leases

Supplemental balance sheet information related to operating leases is as follows:


		June 30,			December 31,
(in thousands)		2023			2022
Operating lease ROU assets, net	$	287		$	322
Lease Liabilities:
Current lease liabilities	$	95		$	133
Long term lease liabilities		199			226
Total lease liabilities	$	294		$	359

Weighted average remaining lease term (in years):		2.4
Weighted average discount rate:		5.4	%


	For the Six Months Ended
	June 30,
		2023		2022
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows used in operating leases	$	99	$	119
Non-cash impact of new leases and lease modifications
Change in operating lease liabilities	$	25	$	25
Change in operating lease ROU assets	$	39	$	—

Minimum future payments under the Company’s lease liabilities as of June 30, 2023 are as follows:


	Discounted		Payments
	lease		due under
(in thousands)	liability		lease
	payments		agreements
2023 (remaining 6 months)	$	52	$	59
2024		71		81
2025		58		66
2026		63		67
2027		50		51
Total	$	294	$	324

At June 30, 2023, $30 thousand of the Company’s future minimum lease payments represents interest.

Patents and Other Intangible Assets

6 Months Ended

Jun. 30, 2023

Patents and Other Intangible Assets

Patents and Other Intangible Assets

Note 4 – Patents and Other Intangible Assets

Patents and other intangible assets are summarized as follows:


	June 30,		December 31,
(in thousands)	2023		2022
Patents
Patents pending	$	360	$	307
Issued patents		782		815
		1,142		1,122
Trademarks
Trademarks pending		4		6
Registered trademarks		86		95
		90		101
Other		8		8
		1,240		1,231
Accumulated amortization		(478)		(433)
	$	762	$	798

Future amortization expense associated with issued patents and registered trademarks as of June 30, 2023 is as follows:


(in thousands)
2023 (remaining 6 months)	$	67
2024		125
2025		94
2026		60
2027		38
Thereafter		6
	$	390

The amortization life for patents ranges between three to five years, with trademark lives set at ten years. The Company does not amortize patents or trademarks classified as pending.

Revenue, Contract Assets and Contract Liabilities

6 Months Ended

Jun. 30, 2023

Revenue, Contract Assets and Contract Liabilities

Revenue, Contract Assets and Contract Liabilities

Note 5 – Revenue, Contract Assets and Contract Liabilities

The Company did not recognize revenue or cost of goods sold for the three and six months ended June 30, 2022.

December 31, 2022, respectively. Of the $247 thousand contract liability balance at December 31, 2022, the Company recognized revenue of $120 thousand during the six months ended June 30, 2023.

Equity

6 Months Ended

Jun. 30, 2023

Equity

Equity

Note 6 – Equity

Common Stock and Preferred Stock

The Company is currently subject to the SEC’s “baby shelf rules,” which prohibits 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 its Shelf

Registration statement on Form S-3, the ATM Offering Sales Agreement or other securities offerings.

Equity Incentive Plan

Ending balances for the 2021 Plan is as follows:


	June 30,	December 31,
(in thousands)	2023	2022
Outstanding options and restricted stock units	3,409	3,202
Reserved but unissued shares under the Plans	2,439	2,777
Total authorized shares under the Plans	5,848	5,979

Stock Options

During the six months ended June 30, 2023, no new options were awarded by the company.

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


	June 30,
	2023
(in thousands)	Options to Purchase Common Stock	Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (in years)
Outstanding at beginning of year	2,779	$	2.05	6.43
Granted	—	$	—	—
Exercised	(20)	$	0.54	—
Forfeited/Expired	—	$	—	—
Outstanding at end of period	2,759	$	2.07	5.83
Exercisable at end of period	1,991	$	1.71	5.25

Restricted Stock Units

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


	June 30,
	2023
(in thousands)	Number of Shares	Weighted Average Grant Date Fair Value
Nonvested at beginning of year	423	$	1.49
Granted	477	$	0.71
Vested	(245)	$	1.34
Forfeited	(5)		0.79
Nonvested at end of period	650	$	0.98

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


	For the Six Months Ended
	June 30,
(in thousands)	2023			2022
Compensation Expense	$	212	$	70
Weighted Average Value Per Share	$	1.23	$	1.44

Stock Awards

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 2021 Plan.


	For the Six Months Ended
	June 30,
	2023		2022
Fair value	$	234	$	98
Weighted Average Value Per Share	$	0.79	$	1.43

Consultant Stock Plan

The Consultant Plan activity and change is as follows:


	June 30,
(in thousands)	2023
Reserved but unissued shares at beginning of year		196
Increases in the number of authorized shares		5
Grants		(8)
Reserved but unissued shares at end of year		193

The Consultant Plan compensation expense is summarized as follows:

Commitments and Contingencies

6 Months Ended

Jun. 30, 2023

Commitments and Contingencies

Commitments and Contingencies

Note 7 – Commitments and Contingencies

Litigation

Indemnification Agreements

Government Assistance

6 Months Ended

Jun. 30, 2023

Government Assistance

Government Assistance

Note 8 – Government Assistance

Subsequent Events

6 Months Ended

Jun. 30, 2023

Subsequent Events

Subsequent Events

Note 9 – Subsequent Events

Summary of Significant Accounting Policies (Policies)

6 Months Ended

Jun. 30, 2023

Summary of Significant Accounting Policies

Basis of Presentation

Use of Estimates

Revenue Recognition and Cost of Sales

Contract Costs

Product Warranties

Cash and Cash Equivalents

Short-term Investments

Short-Term Investments

Accounts Receivable and Allowance for Doubtful Accounts

Fixed Assets and Leases

whichever is shorter. All other fixed assets are depreciated over three to four years. Maintenance and repairs are expensed as incurred.

Patents and Trademarks

Impairment of Long-lived Assets

Impairment of Long-Lived Assets

Fair Value of Financial Instruments

●

Level 1 – Quoted prices in active markets for identical assets or liabilities;

●

Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

The Company did not identify any other recurring or non-recurring assets and liabilities that are required to be presented in the balance sheets at fair value.

Research and Development

in cost sharing, collaborative projects. During the six months ended June 30, 2023 and 2022, the Company did not receive funds from these arrangements.

Government Assistance

Income Taxes

Share-Based Compensation

Foreign Operations

Foreign Currency

Net Loss per Common Share

effect would be anti-dilutive. At June 30, 2023 and June 30, 2022, potentially dilutive shares outstanding amounted to 3.8 million and 3.4 million, respectively.

Recently Issued Accounting Pronouncements Adopted

Fixed Assets (Tables)

6 Months Ended

Jun. 30, 2023

Fixed Assets

Summary of Fixed Assets


	June 30,		December 31,
(in thousands)	2023		2022
Machinery and equipment	$	209	$	390
Office furniture and equipment		60		177
Leasehold improvements		43		192
		312		759
Accumulated depreciation and amortization		(121)		(697)
		191		62
Operating lease ROU assets, net		287		322
Total	$	478	$	384

Schedule Of Supplemental Information


		June 30,			December 31,
(in thousands)		2023			2022
Operating lease ROU assets, net	$	287		$	322
Lease Liabilities:
Current lease liabilities	$	95		$	133
Long term lease liabilities		199			226
Total lease liabilities	$	294		$	359

Weighted average remaining lease term (in years):		2.4
Weighted average discount rate:		5.4	%

Supplemental cash flow information related to leases


	For the Six Months Ended
	June 30,
		2023		2022
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows used in operating leases	$	99	$	119
Non-cash impact of new leases and lease modifications
Change in operating lease liabilities	$	25	$	25
Change in operating lease ROU assets	$	39	$	—

Schedule of minimum future payments


	Discounted		Payments
	lease		due under
(in thousands)	liability		lease
	payments		agreements
2023 (remaining 6 months)	$	52	$	59
2024		71		81
2025		58		66
2026		63		67
2027		50		51
Total	$	294	$	324

Patents and Other Intangible Assets (Tables)

6 Months Ended

Jun. 30, 2023

Patents and Other Intangible Assets

Schedule of Patents and Other Intangible Assets


	June 30,		December 31,
(in thousands)	2023		2022
Patents
Patents pending	$	360	$	307
Issued patents		782		815
		1,142		1,122
Trademarks
Trademarks pending		4		6
Registered trademarks		86		95
		90		101
Other		8		8
		1,240		1,231
Accumulated amortization		(478)		(433)
	$	762	$	798

Schedule of future amortization expense


(in thousands)
2023 (remaining 6 months)	$	67
2024		125
2025		94
2026		60
2027		38
Thereafter		6
	$	390

Equity (Tables)

6 Months Ended

Jun. 30, 2023

Schedule of Outstanding, Reserved and Authorized Shares under Share-based Compensation Plans


	June 30,	December 31,
(in thousands)	2023	2022
Outstanding options and restricted stock units	3,409	3,202
Reserved but unissued shares under the Plans	2,439	2,777
Total authorized shares under the Plans	5,848	5,979

Schedule of stock option activity


	June 30,
	2023
(in thousands)	Options to Purchase Common Stock	Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (in years)
Outstanding at beginning of year	2,779	$	2.05	6.43
Granted	—	$	—	—
Exercised	(20)	$	0.54	—
Forfeited/Expired	—	$	—	—
Outstanding at end of period	2,759	$	2.07	5.83
Exercisable at end of period	1,991	$	1.71	5.25

Schedule of share-based compensation activity


	June 30,
(in thousands)	2023
Reserved but unissued shares at beginning of year		196
Increases in the number of authorized shares		5
Grants		(8)
Reserved but unissued shares at end of year		193

Schedule of restricted stock unit activity


	June 30,
	2023
(in thousands)	Number of Shares	Weighted Average Grant Date Fair Value
Nonvested at beginning of year	423	$	1.49
Granted	477	$	0.71
Vested	(245)	$	1.34
Forfeited	(5)		0.79
Nonvested at end of period	650	$	0.98

Restricted Stock Units

Schedule of Compensation Expense


	For the Six Months Ended
	June 30,
(in thousands)	2023			2022
Compensation Expense	$	212	$	70
Weighted Average Value Per Share	$	1.23	$	1.44

Equity Incentive Plan

Schedule of Compensation Expense


	For the Six Months Ended
	June 30,
	2023		2022
Fair value	$	234	$	98
Weighted Average Value Per Share	$	0.79	$	1.43

Consultant Stock Plan

Schedule of Compensation Expense

Organization and Description of Business (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Organization and Description of Business
Cash and cash equivalents	$ 7,600	$ 6,451
Short-term held-to-maturity investments	931	2,606
Gross proceeds to date	91,000
Accumulated deficit	$ (91,430)	$ (88,523)

Summary of Significant Accounting Policies - Short-Term Investments (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Summary of Significant Accounting Policies
Short-term investments at cost	$ 931	$ 2,606
Unrealized holding gains	17	4
Fair value of short-term investments	$ 948	$ 2,610

Summary of Significant Accounting Policies - Fixed Assets and Leases (Details) - Fixed Assets Other Than Leasehold Improvements	6 Months Ended
	Jun. 30, 2023
Minimum
Property, Plant and Equipment [Line Items]
Fixed assets, depreciated life	3 years
Maximum
Property, Plant and Equipment [Line Items]
Fixed assets, depreciated life	4 years

Summary of Significant Accounting Policies - Research and Development (Details) - USD ($)	6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
Summary of Significant Accounting Policies
Research and Development costs have been offset by funds received	$ 0	$ 0

Summary of Significant Accounting Policies - Foreign Operations (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Property, Plant and Equipment [Line Items]
Assets	$ 10,398	$ 10,925
CHINA
Property, Plant and Equipment [Line Items]
Assets	279	$ 172
Registered capital requirement	350
Capital requirement paid	$ 111

Summary of Significant Accounting Policies - Net Loss per Common Share (Details) - shares shares in Millions	6 Months Ended	12 Months Ended
	Jun. 30, 2023	Dec. 31, 2022
Summary of Significant Accounting Policies
Potentially dilutive shares outstanding (in shares)	3.8	3.4

Fixed Assets - Summary (Details) - USD ($) $ in Thousands	6 Months Ended
Fixed Assets - Summary (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Jun. 30, 2022	Dec. 31, 2022
Property, Plant and Equipment [Line Items]
Fixed assets, gross	$ 312		$ 759
Accumulated depreciation and amortization	(121)		(697)
Fixed assets, net, after accumulated amortization	191		62
Operating lease ROU assets, net	287		322
Total	478		384
Depreciation expense	81	$ 13
Machinery and equipment
Property, Plant and Equipment [Line Items]
Machinery and equipment	209		390
Office furniture and equipment
Property, Plant and Equipment [Line Items]
Office furniture and equipment	60		177
Leasehold improvements
Property, Plant and Equipment [Line Items]
Leasehold improvements	$ 43		$ 192

Fixed Assets - Leases (Details) - USD ($) $ in Thousands	1 Months Ended		3 Months Ended		6 Months Ended		12 Months Ended
Fixed Assets - Leases (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Mar. 31, 2023	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022	Dec. 31, 2022
Leases
Increase (decrease) in operating lease right of use asset	$ 34
Restoration expense					$ 31		$ 87
Monthly rent expense					12
Operating lease cost			$ 34	$ 46	$ 82	$ 88
Seattle and Tulsa
Leases
Annual rent expense, increase (in percent)					2.00%
Monthly rent expense		$ 4
CHINA
Leases
Short term monthly rent expense	$ 3
Renewal option term	13 months		13 months		13 months
Minimum \| Seattle and Tulsa
Leases
Remaining term (in years)		3 months
Maximum \| Seattle and Tulsa
Leases
Remaining term (in years)		5 years

Fixed Assets - Leases - Supplemental balance sheet and cash flow information (Details) - USD ($) $ in Thousands	1 Months Ended	6 Months Ended
	Mar. 31, 2023	Jun. 30, 2023	Jun. 30, 2022	Dec. 31, 2022
Operating Lease
Operating lease ROU assets, net		$ 287		$ 322
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration]		Property, Plant and Equipment, Net		Property, Plant and Equipment, Net
Lease Liabilities:
Current lease liabilities		$ 95		$ 133
Long term lease liabilities		199		226
Total lease liabilities		$ 294		$ 359
Weighted average remaining lease term (in years)		2 years 4 months 24 days
Weighted average discount rate		5.40%
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows used in operating leases		$ 99	$ 119
Change in operating lease liabilities	$ (9)	25	$ 25
Change in operating lease ROU assets	$ 5	$ 39

Fixed Assets - Minimum future lease payments (Details) $ in Thousands	Jun. 30, 2023 USD ($)
Fixed Assets
Discounted payments, 2023 (remaining 6 months)	$ 52
Discounted payments, 2024	71
Discounted payments, 2025	58
Discounted payments, 2026	63
Discounted payments, 2027	50
Total discounted payments	294
2023 (remaining 6 months)	59
2024	81
2025	66
2026	67
2027	51
Total	324
Interest on future minimum payments	$ 30

Patents and Other Intangible Assets - Summary (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Patents	$ 1,142	$ 1,122
Trademarks	90	101
Other	8	8
Patents and other intangible assets	1,240	1,231
Accumulated amortization	(478)	(433)
Finite-Lived Intangible Assets, Net	762	798
Patents pending
Patents	360	307
Issued patents
Patents	782	815
Trademarks pending
Trademarks	4	6
Registered trademarks
Trademarks	$ 86	$ 95

Patents and Other Intangible Assets - Future amortization expense (Details) $ in Thousands	Jun. 30, 2023 USD ($)
Patents and Other Intangible Assets
2023 (remaining 6 months)	$ 67
2024	125
2025	94
2026	60
2027	38
Thereafter	6
Finite-Lived Intangible Assets, Net	$ 390

Patents and Other Intangible Assets - Additional information (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
Intangible assets
Impairment	$ 14	$ 0
Minimum
Intangible assets
Amortization life (in years)	3 years
Maximum
Intangible assets
Amortization life (in years)	5 years
Trademarks
Intangible assets
Amortization life (in years)	10 years

Revenue, Contract Assets and Contract Liabilities (Details) - USD ($) $ in Thousands	3 Months Ended	6 Months Ended
	Jun. 30, 2023	Jun. 30, 2023	Dec. 31, 2022
Revenue, Contract Assets and Contract Liabilities
Revenues	$ 150	$ 1,044
Cost of goods sold	21	809
Contract assets	3	3	$ 20
Contract liabilities	$ 2,105	2,105	$ 247
Revenue recognized		$ 120

Equity - Common Stock and Preferred Stock (Details) - USD ($) $ / shares in Units, $ in Millions	6 Months Ended
	Jun. 30, 2023	Jul. 31, 2018
Stockholders' equity
Common stock, authorized shares	62,500,000
Preferred stock, authorized shares	2,000,000.0
Gross proceeds to date	$ 91.0
ATM
Stockholders' equity
Number of shares of common stock issued	0
Number of shares issued to date	1,600,000
Aggregate offering price	$ 8.7
Participation Right
Stockholders' equity
Stock Issued, Investor, Maximum Beneficial Ownership Percentage		20.00%
Common Stock \| ATM
Stockholders' equity
Gross proceeds to date	6.1
Net proceeds to date	$ 5.9
Share price of shares issued in offering (in dollars per share)	$ 3.84

Equity - Equity Incentive Plan (Details) - shares	6 Months Ended
Equity - Equity Incentive Plan (Details) - shares	Jun. 30, 2023	Dec. 31, 2022
Equity Incentive Plan
Share-based compensation
Outstanding options and restricted stock units	3,409,000	3,202,000
Reserved but unissued shares under the Plans	2,439,000	2,777,000
Total authorized shares under the Plans	5,848,000	5,979,000
Increases in the number of authorized shares	400,000
2021 Plan
Share-based compensation
Maximum number of shares that may be issued as a proportion of outstanding stock	10.00%
Maximum increase in number of shares available for issuance	400,000

Equity - Stock Options - Activity (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022	Dec. 31, 2022
Share-based compensation
Outstanding shares, beginning balance			2,779,000
Exercised (in shares)			(20,000)
Outstanding shares, ending balance	2,759,000		2,759,000		2,779,000
Exercisable (in shares)	1,991,000		1,991,000
Outstanding - Weighted Average Exercise Price (in dollars per share)			$ 2.05
Exercised - Weighted Average Exercise Price (in dollars per share)			0.54
Outstanding - Weighted Average Exercise Price (in dollars per share)	$ 2.07		2.07		$ 2.05
Exercisable - Weighted Average Exercise Price (in dollars per share)	$ 1.71		$ 1.71
Stock options, Contractual life (in years)			5 years 9 months 29 days		6 years 5 months 4 days
Exercisable - Weighted Average Remaining Contractual Life (in years)			5 years 3 months
Estimated aggregate pretax intrinsic value	$ 383		$ 383
Total unrecognized compensation	1,000		1,000
Compensation expense	$ 46	$ 15	$ 90	$ 57
Equity Incentive Plan
Share-based compensation
Granted (in shares)			0

Equity - Restricted Stock Units (Details) - Restricted Stock Units - Director - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Target Value of Compensation per Quarter			$ 83
Unrecognized compensation expense for director services	$ 83	$ 85	$ 150	$ 170

Equity - Restricted Stock units Activity (Details) - Restricted Stock Units shares in Thousands	6 Months Ended
	Jun. 30, 2023 $ / shares shares
Number of Shares
Nonvested at beginning of year \| shares	423
Granted \| shares	477
Vested \| shares	(245)
Forfeited \| shares	(5)
Nonvested at end of year \| shares	650
Weighted Average Grant Date Fair Value
Nonvested at beginning of year \| $ / shares	$ 1.49
Granted \| $ / shares	0.71
Vested \| $ / shares	1.34
Forfeited \| $ / shares	0.79
Nonvested at end of year \| $ / shares	$ 0.98

Equity - Restricted Stock Units - Compensation Expense (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Compensation expense	$ 46	$ 15	$ 90	$ 57
Restricted Stock Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Compensation expense			$ 212	$ 70
Weighted Average Value Per Share			$ 1.23	$ 1.44

Equity - Stock Grants (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Mar. 31, 2022	Jun. 30, 2023	Jun. 30, 2022
Share-based compensation
Stock Issued During Period, Value, Issued for Services	$ 7	$ 7
Employee compensation in lieu of bonus
Share-based compensation
Fair value			$ 234	$ 98
Weighted Average Value Per Share			$ 0.79	$ 1.43

Equity - Consultant Stock Plan (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Compensation expense	$ 46	$ 15	$ 90	$ 57
Consultant Stock Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Reserved but unissued shares at beginning of year			196
Increases in the number of authorized shares			5
Grants			(8)
Reserved but unissued shares at end of year	193		193
Compensation expense			$ 5	$ 14
Weighted Average Value Per Share			$ 0.66	$ 1.93

Government Assistance (Details) - USD ($) $ in Thousands	3 Months Ended	6 Months Ended		12 Months Ended
Government Assistance (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Jun. 30, 2023	Jun. 30, 2022	Dec. 31, 2022	Dec. 31, 2021
Government Assistance [Line Items]
Government assistance	$ 14	$ 107
Research Grant From the Department of Energy
Government Assistance [Line Items]
Total award				$ 250
Government assistance		69	$ 0
Oklahoma Quality Jobs Act
Government Assistance [Line Items]
Government assistance		$ 38	$ 12
Duration of the program					10 years

Subsequent Events (Details) - Non-Qualified Stock Option - Director of customer relationships and business development - Subsequent Event shares in Thousands	Jul. 31, 2023 installment $ / shares shares
Subsequent Event
Grants of stock options \| shares	150
Exercise price (in dollars per share) \| $ / shares	$ 1.31
Number of installments \| installment	3
Vesting percentage	33.33%

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For the Six Months Ended

June 30,

Compensation Expense

Weighted Average Value Per Share