ClearSign Technologies Corp

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 original equipment manufacturers (“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 “we,” “us,” “our,” “ClearSign” and the “Company” refer to ClearSign Technologies Corporation and its subsidiary, ClearSign Asia Limited.

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, 2023 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, 2023. 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.

Liquidity

The Annual Report on Form 10-K filed with the SEC on April 1, 2024, contained a “going concern” note within the annual audit report, which raised substantial doubt about our ability to continue operations. We believe that we have alleviated the substantial doubt raised by our independent auditor by selling equity securities on April 23, 2024, and subsequently on May 15, 2024, which resulted in aggregate gross proceeds of $9.9 million and net proceeds of $8.7 million, after broker discounts and related fees. Refer to “Note 10 – Subsequent Events” for further details about the offerings effectuated on April 23, 2024.

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.

Short-Term Investments

The cost basis for our short-term investments totaled approximately zero as of March 31, 2024 and December 31, 2023, respectively. The unrealized holding gains for our short-term investments totaled approximately zero as of March 31, 2024 and December 31, 2023, respectively. As of March 31, 2024, the Company has not experienced any other-than-temporary impairment of its short-term investments. The fair value for our short-term investments totaled approximately zero as of March 31, 2024 and December 31, 2023, respectively.

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 in cost sharing, collaborative projects. During the three months ended March 31, 2024, the Company received $107 thousand from these arrangements. During the three months ended March 31, 2023, the Company didnot receive funds from these arrangements.

Foreign Operations

The accompanying unaudited condensed consolidated balance sheets as of March 31, 2024 and December 31, 2023 include assets amounting to approximately $279 thousand and $334 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 $161 thousand has been paid as of March 31, 2024. It is always possible that unanticipated events in foreign countries could disrupt the Company’s operations, and since the first quarter of 2020, this has been the case with the effects of the COVID-19 pandemic.

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 effect would be anti-dilutive. At March 31, 2024 and March 31, 2023, potentially dilutive shares outstanding amounted to 4.1 million and 3.7 million, respectively.

On April 23, 2024, we issued common stock, redeemable warrants to purchase common stock and pre-funded warrants to purchase common stock in connection with a public offering and concurrent private placement. As a result of these offerings, investors experienced immediate dilution and an increase to potentially dilutive shares outstanding. Refer to “Note 10 – Subsequent Events” below for more details.

Recently Issued Accounting Pronouncements

In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures” (“ASU 2023-07”). ASU 2023-07 requires expanded disclosures about reportable segments including additional information on segment expenses, expanded interim period disclosures, and an explanation of how the chief operating decision maker utilizes

segment information in evaluating segment performance. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024. ASU 2023-07 only currently impacts the disclosures in our annual consolidated financial statements, which will be included in our 2024 Annual Report on Form 10-K. We are currently assessing the impact that the adoption of ASU 2023-07 will have on the disclosures in our consolidated financial statements.

In December 2023, the FASB issued Accounting Standards Update No. 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures” (“ASU 2023-09”). The FASB issued ASU 2023-09 to enhance the transparency and decision-making usefulness of income tax disclosures by requiring additional information on an entity's tax rate reconciliation, as well as income taxes paid. ASU 2023-09 is effective for our reporting period beginning January 1, 2025. We are currently assessing the impact that the adoption of ASU 2023-09 will have on the disclosures in our consolidated financial statements.

Note 3 – Fixed Assets

Fixed Assets

Fixed assets are summarized as follows:

Depreciation and amortization expense for the three months ended March 31, 2024 and 2023 totaled $7 thousand and $40 thousand, respectively.

Leases

The Company leases office space in Tulsa, Oklahoma, Seattle, Washington, and Beijing, China. During June 2023, the Company renewed its Beijing, China lease agreement for 13 months with monthly rent at approximately$3 thousand. As a result of this renewal, the Company increased the right of use asset and lease liability by$34 thousand.

The Company exited our long-term Seattle operating lease on September 30, 2023. During October 2023, the Company entered into a sub-lease agreement to rent office space in Seattle for approximately$2 thousand per month fortwelve months. The Tulsa and Beijing leases are classified as operating leases, with remaining terms ranging from less than twelve months to approximately four years; contractual language requires renewal negotiations to occur at or near termination. These leases are normal and customary for office space, in that, contractual guarantees exist requiring the lessee return the premises to its original functional state. The Company didnot incur restoration expenses for the three months ended March 31, 2024, and incurred$2 thousand for the three months ended March 31, 2023.

The Tulsa lease contains fixed annual lease payments that increase annually by 2%. The Seattle, Tulsa, and Beijing total monthly minimum rent is approximately $10 thousand. Operating lease costs for the three months ended March 31, 2024 and 2023 were $24 thousand and $48 thousand, respectively.

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

Supplemental cash flow information related to leases is as follows:

Minimum future payments under the Company’s lease liabilities as of March 31, 2024 are as follows:

At March 31, 2024, $19 thousand of our future minimum lease payments represents interest.

Note 4 – Patents and Other Intangible Assets

Patents and other intangible assets are summarized as follows:

Amortization expense for the three months ended March 31, 2024 and 2023 totaled $38 thousand and $40 thousand, respectively. Future amortization expense associated with issued patents and registered trademarks as of March 31, 2024 is as follows:

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

During the three months ended March 31, 2024 and 2023, the Company assessed its patent and trademark assets. 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 $1,102 thousand of revenues and $665 thousand of cost of goods sold during the three months ended March 31,2024. The revenue and cost of goods sold relate predominately to the Company’s process burner product line. The Company delivered multiple burners in connection with a single customer order; successfully completed an engineering study and a Computational Fluid Dynamic analysis; and fulfilled multiple spare parts orders. These products and services constitute performance obligations per Accounting Standards Codification (“ASC”) 606.

The Company recognized $894 thousand of revenues and $788 thousand of cost of goods sold during the three months ended March 31, 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 had contract assets ofzero and $188 thousand at March 31, 2024 and December 31, 2023, respectively. The Company had contract liabilities of $1,038 thousand and $1,116 thousand at March 31, 2024 and December 31,2023, respectively. Of the$1,116 thousand contract liability balance at December 31, 2023, the Company recognized revenue of $253 thousand during the three months ended March 31, 2024.

Note 6 – Product Warranties

A summary of the Company’s warranty liability activity, which is included in accrued liabilities in the accompanying balance sheets as of March 31, 2024 and December 31, 2023, is as follows:

Note 7 – 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 “Board”). The Company has not issued any shares of preferred stock.

In July 2018, in connection with a private placement of the Company’s common stock pursuant to a Stock Purchase Agreement, the Company granted clirSPV LLC (“clirSPV”) a right to purchase certain new equity securities that the Company sells for purpose of raising capital on terms and conditions no different from those offered to other purchasers (the “Participation Right”), so that clirSPV could maintain a 19.99% percentage ownership of the Company’s outstanding common stock. 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, in connection with a waiver of the Participation Right’s notice requirements and other related closing mechanics for such Participation Right (the “Waiver”) the Company and clirSPV, agreed that the Participation Right may be extended from December 31, 2023, to such date that the holders oftwo-thirds of the outstanding units of clirSPV agree to extend each such holder’s existing agreement that he/she/it will have no right to force a redemption of his/her/its interests in clirSPV (the “Redemption Right”); provided, however, that the Participation Right could not be extended to a date later than June 30, 2027. On December 30, 2023, the Company received notice from clirSPV that the holders of at leasttwo-thirds of the outstanding units of clirSPV agreed to extend the waiver of the Redemption Right until December 31, 2024. Accordingly, the Participation Right will now expire on December 31, 2024.

The Company has an At-The-Market (“ATM”) program pursuant to a Sales Agreement with Virtu Americas LLC, as sales agent, dated December 23, 2020 (the “Sales Agreement”), pursuant to which the Company may sell shares of common stock with an aggregate offering price of up to $8.7 million. On March 18, 2024, the Company filed a prospectus supplement suspending the ATM program. The Company will not make any sales of its common stock pursuant to the Sales Agreement unless and until a new prospectus supplement is filed with the SEC; however, the Sales Agreement remains in full force and effect. During the three months ended March 31, 2024, the Company issued zero shares of its common stock from the ATM program. As of March 31, 2024, the Company has cumulatively issued

approximately 1.6 million shares of common stock under the ATM program, at an average price of $3.84 per share. Gross proceeds totaled approximately $6.1 million and net cash proceeds was approximately $5.9 million.

The Company is currently subject to the SEC’s “baby shelf rules,” which prohibit companies with a public float of less than $75 million from issuing securities under a shelf registration statement in excess of one-third of such company’s public float in a 12-month period. These rules may limit future issuances of shares by the Company under our “shelf” registration statement on Form S-3, the ATM program or other securities offerings.

On April 23, 2024, we issued common stock, redeemable warrants to purchase common stock and pre-funded warrants to purchase common stock in connection with a public offering and concurrent private placement. As a result of these offerings, investors experienced immediate dilution and an increase to potentially dilutive shares outstanding. Refer to “Note 10 – Subsequent Events” below for more details.

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 Board’s Human Capital & Compensation Committee (the “Compensation Committee”) 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 2024, the Board did not exercise their right to limit the automatic increase. Accordingly, the 2021 Plan share reserve increased by 66 thousand shares.

Ending balances for the 2021 Plan is as follows:

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.

Equity Incentive Plan Options

Compensation expense associated with stock option awards for the three months ended March 31, 2024 and 2023 totaled $22 thousand and $44 thousand, respectively.

A summary of the Company’s 2011 Equity Incentive Plan and the 2021 Plan stock option activity and changes is as follows:

The estimated aggregate pretax intrinsic value of the Company’s outstanding vested stock options at March 31, 2024 is $61 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 March 31, 2024, 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.

Inducement Options

During the year ended December 31, 2023, the Company granted non-qualified stock options to its Chief Technology Officer to purchase an aggregate of 150 thousand shares of common stock with an exercise price of $0.91 as a material inducement to accept employment with the Company. These inducement options vest inthree equal installments, withone third of the option vesting on the grant date, and each remaining third vesting on the second and third anniversaries of the grant date, subject to continued employment with the Company. The fair value of these options were estimated on the grant date using the Black Scholes valuation model, which resulted in $112 thousand. The compensation expense recognized for these awards for the three months ended March 31, 2024 and 2023 was $9 thousand andzero, respectively.

These inducement options were granted outside of the 2021 Plan and in accordance with the employment inducement

exemption provided under Nasdaq Listing Rule 5635(c)(4).

Restricted Stock Units

The Company awards employees and directors restricted stock units (“RSUs”) in lieu of cash payment for compensation. These awards are granted from the 2021 Plan. Employee vesting criteria is time based, and compensation expense is recognized ratably across the timeframe. The Company pays payroll withholding taxes on behalf of the employee at vesting, and withholds shares from the employee’s award to cover the taxes payable. The Company’s accrued reserve for RSU share-based compensation is $16 thousand and $3 thousand for the three months ended March 31, 2024 and 2023, respectively.

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 ASC*,Topic 718, Compensation-Stock Compensation,*(ASC 718). Unrecognized compensation expense for director services as of March 31, 2024 and 2023 was $65 thousand and $68 thousand, respectively. Director compensation is earned on a quarterly basis with the target value of compensation set at $84 thousand per quarter, assuming four directors; one chairman; one lead independent director; one chair for each committee; and two committee members for each of the three committees.

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

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

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 2021 Plan.

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

The Consultant Plan activity and change is as follows:

The Consultant Plan compensation expense is summarized as follows:

Note 8 – 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 our 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.

Note 9 – Government Assistance

During 2022, the Company was awarded a research grant from the Department of Energy (“DOE”) for approximately $250 thousand with the completion of such grant occurring in March 2023. The purpose of the grant was to produce a research paper for a flexible fuel ultra-low NOx process burner capable of burning 100% hydrogen fuel. During 2023, the Company was awarded a Phase 2 grant from the DOE to continue developing this ultra-low NOx hydrogen burner. The Phase 2 grant amount totaled approximately $1.6 million over atwo-year period. These awards allow the Company to request reimbursements for expenditures such as labor, material, and administrative costs. During the three months ended March 31, 2024 and 2023, the Company recognized $48 thousand and $69 thousand in reimbursements from the DOE, respectively.

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. During the three months ended March 31, 2024 and 2023, the Company recognized $31 thousand and $24 thousand in government assistance from this program, respectively.

Note 10 – Subsequent Events

Public Offering

On April 23, 2024, we completed a public offering pursuant to an Underwriting Agreement, dated April 19, 2024 (the “Underwriting Agreement”), of 4,620,760 shares of our common stock and redeemable warrants to purchase 4,620,760 shares of our common stock (the “Public Warrants”). The Public Warrants were offered and sold at the rate ofone Public Warrant for everyone share of common stock purchased. The public offering price for each set ofone share of common stock and accompanying Public Warrant was $0.92, yielding an effective price of $0.91 per share and $0.01 per warrant. Each Public Warrant has an exercise price of $1.05 per share, subject to adjustments provided therein, and are redeemable by us once they become exercisable upon 30 days’ advance notice if the closing price of our common stock reported equals or exceeds $2.275 for any 20 business days within a 30 consecutive business-day period. The Public Warrants are exercisable for a period offive years starting from the date of issuance.

In connection with the public offering, we also issued warrants to Public Ventures, LLC, as underwriter of the public offering (“Public Ventures”), to purchase up to 369,660 shares of our common stock at an exercise price of $1.1375 per share as a consideration for the services provided (the “Underwriter Warrants”), the Underwriter Warrants will become exercisable 180 days after the execution of the Underwriting Agreement. The Underwriter Warrants will expire 5 years after the execution date of the Underwriting Agreement and may be exercised on a cashless basis based on a formula set forth therein.

Pursuant to the Underwriting Agreement, we also granted to Public Ventures an option, exercisable not later than 45 days after the execution of the Underwriting Agreement, to purchase from us (i) up to an additional 693,114 shares of common stock and accompanying Public Warrants to purchase up to 693,114 shares of common stock; or (ii) up to an additional 693,114 shares of common stock only (the “Over-Allotment Option”), representing up to 15% of the shares of common stock and Public Warrants, or common stock only, as the case may be, sold in the public offering for the purpose of covering the exercise of the Over-Allotment Option, if applicable.

On May 15, 2024, we issued an additional 693,114 shares of common stock and accompanying Public Warrants to purchase up to 693,114 shares of common stock pursuant to Public Ventures’ full exercise of the Over-Allotment Option (the “Over-Allotment Securities”) at a price of $0.92 per set ofone share of common stock and accompanying Public Warrants, yielding an effective price of $0.91 per share of common stock and $0.01 per accompanying Public Warrant. In connection with the exercise of the Over-Allotment Option, we also issued to Public Ventures additional Underwriter Warrants to purchase up to 55,449 shares of common stock.

Concurrent Private Placement

In a private placement that was completed concurrently with the public offering described above, in accordance with a Securities Purchase Agreement, dated April 19, 2024, and subsequently amended on April 22, 2024 (as amended, the “Purchase Agreement”), we also issued toone accredited investor (i)2,249,763 shares of common stock (the “Private Shares”), (ii) pre-funded warrants (the “Pre-Funded Warrants”) to purchase up to 3,155,642 shares of common stock, and (iii) redeemable warrants (the “Private Warrants”) to purchase up to 8,108,106 shares of common stock. The Pre-Funded Warrants are each exercisable forone share of common stock at an exercise price of $0.0001 per share and will expire when exercised in full. We are prohibited from effecting an exercise of any Pre-Funded Warrants to the extent that such exercise would result in the number of shares of common stock beneficially owned by the holder and its affiliates exceeding 4.99% (or 9.99% at election of the holder) of the total number of shares of common stock outstanding immediately after giving effect to the exercise, which percentage may be increased or decreased at the holder’s election not to exceed 9.99%.

The Private Warrants were offered and sold at the rate of three Private Warrant for every two shares of common stock (or Pre-Funded Warrants in lieu thereof) purchased in the private placement. The offering prices in the private placement per set of securities was $0.91 per share and $0.01 per accompanying Private Warrant, or $0.9099 per Pre-Funded Warrant and $0.01 per accompanying Private Warrant, as applicable. The Private Warrants will be exercisable at an exercise price of $1.05 per share, will be exercisable 6 months after issuance and will expire 5 years from the date of issuance. The Private Warrants are also redeemable on the same terms as the Public Warrants, provided that there is an effective registration statement covering the resale of the shares issuable upon exercise of the Private Warrants. The Pre-Funded Warrants are immediately exercisable upon issuance and will expire when exercised in full.

In connection with the private placement, we also issued Public Ventures, as our exclusive placement agent, warrants to purchase up to 432,432 shares of our common stock at an exercise price of $1.1375 per share as a consideration for the services provided (the “Placement Agent Warrants”). The Placement Agent Warrants will be exercisable 180 days after the execution of the Purchase Agreement, expire 5 years after the date of the Purchase Agreement and may be exercised on a cashless basis based on a formula set forth therein.

The public offering and the concurrent private placement resulted in combined gross proceeds of approximately $9.3 million, and net proceeds of approximately $8.1 million. The sale of the Over-Allotment Securities resulted in additional gross and net proceeds of approximately $0.6 million, respectively.

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

This Quarterly Report on Form 10-Q (this “Form 10-Q” or “report”) 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 (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). 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:

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.