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Good everyone, welcome to the ClearSign Technologies First Quarter 2026 Earnings Conference Call. At this time, all participants are placed on a listen-only mode. If you have any questions or comments during the presentation, you may press star one on your phone to enter the question queue at any time, and we will open the floor for your questions and comments after the presentation. It is now my pleasure to hand the floor over to your host, Matthew Selinger, Investor Relations at ClearSign Technologies. Sir, the floor is yours.

Good afternoon. Thank you, operator. Welcome everyone to the ClearSign Technologies Corporation first quarter 2026 corporate update call. During this conference call, the company will make forward-looking statements. Any statement that is not a statement of historical fact is a forward-looking statement. This includes remarks about the company's projections, expectations, plans, beliefs, and prospects. These statements are based on judgments and analysis as of the date of this conference call and are subject to numerous important risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements.

The risks and uncertainties associated with the forward-looking statements made in this conference call include, but are not limited to, whether field testing and sales of ClearSign's product will be successfully completed, whether ClearSign will be successful in expanding the market for its products, and other risks that are described in ClearSign's filings with the SEC, including those discussed under the Risk Factors section of the annual report on Form 10-K for the period ended December 31st, 2025. Except as required by law, ClearSign assumes no responsibility to update these forward-looking statements to reflect future events or actual outcomes and does not intend to do so. With me on the call today are Jim Deller, ClearSign's Chief Executive Officer, and Brent Hinds, ClearSign's Chief Financial Officer. With that, I'm going to turn the call over to Jim.

Thank you, Matthew. As always, I'd like to thank everyone for joining us on the call today and for your continued interest in ClearSign. Like our more recent quarterly calls, we will use a Q&A format for this session. Some of you have sent in questions ahead of time, and we did assimilate those questions into the materials that we will cover today. For the call today, Matthew will lead a Q&A session where we'll go through the different business units, much like our previous calls. If you wish, you can send in questions to our investor relations at [email protected]. To start us off today, I'm going to hand over to Brent Hinds, who will go over the financial numbers for the first quarter for 2026.

Thank you, Jim, and thank you to everyone joining us here today. Before I begin, I'd like to note that our financial results on Form 10-Q was filed last week with the SEC. With that, I'd like to give an overview of our financial results for the first quarter of 2026. For the first quarter of 2026, the company recognized approximately $200,000 in revenues, compared to approximately $400,000 for the same period in 2025. This year-over-year decrease in revenues was predominantly driven by decreases in parts deliveries during the first quarter this year. Our gross profit for the quarter decreased compared to the same period in 2025. This decrease was mainly due to lower revenues and a warranty accrual of $410,000 made in anticipation of potential modifications to some installed equipment in a California refinery. As a result, the year-over-year decrease in gross profit was approximately $589,000.

Our net loss for the first quarter increased by $114,000 compared to the same period in 2025. The impact from the gross profit on our net loss was offset by a $369,000 decrease in general and administrative expenses. Our G&A expenses decreased in comparison to 2025, in large part due to reduced legal fees that were incurred during 2025 for a special committee of our board of directors that was decommissioned after our 2025 stockholder meeting. Now let's shift focus to cash. Our net cash used in operations for the first quarter of 2026 was approximately $1.3 million, compared to approximately $1.1 million for the same period in 2025. This year-over-year change was predominantly driven by a reduction in our current liabilities. As of March 31st, 2026, we had approximately $7.7 million in cash and cash equivalents, with approximately 5.4 million shares of common stock outstanding.

With that, I'd like to turn the call over to our CEO, Jim Deller. Jim?

Thank you, Brent. Again, thank you everyone for joining us today. I'm actually going to hand it over to Matthew Selinger, who's going to lead the question and answer session. Just a reminder as we go through this, if you do have questions, you can send those in to [email protected]. With that, Matthew, I'll hand it over to you.

Great. Jim, Brent, thanks for joining me here today. We did just have a call a few weeks ago. We have been busy between now and then, and we do have some significant events and development to discuss. With that, let's dive right in. Jim, just last week, we announced an order for the next phase of a 32-burner project for a California refinery. Could we dive into this and talk about what do we mean by the next phase of this order?

Yeah. I think this is good. Especially investors new to ClearSign. We were given at the start, actually two orders late in 2025. One was for 36 burners going down to a Texas refinery, one for 32 burners destined for a refinery out in California. As is common with our projects, these are released in phases. The first phase was for the initial engineering and the computation modeling, where we basically simulate the burners and the burners' effects and flow and performance on a computer modeling system. That phase is now complete for the California order. The next phase of the project is for us to fabricate or do the detailed engineering and fabricate the first article of those burners. We will install that and demonstrate it. We'll make any optimizations necessary, but show it performing in a full-scale test furnace at the Zeeco facility.

Okay. Jim, this is the ClearSign Core Gen 2 technology.

Yes. In a modified form. What's actually interesting about this order is the burner that was developed, or the round burner that was developed as part of the SBIR program, was our standard shape. What we actually developed was a configurable architecture that we could then adapt to flat planes or different burner shapes or formats to fit into the variety of different heaters you find on a refinery, rather than just being restricted to the heaters that needed a round burner. This particular order is for a heater that needs a long, thin burner that actually fires up against a wall to make this heater work. That's just the type of heater this is.

This is in the press release we referred to it as a flat flame application.

Yes.

Yeah. This I'm going to go jump back a little bit. The ClearSign Core Gen 2 is really, and you've referred to it as such in the past, it's a burner platform.

Yep.

Is that right? You just mentioned the word there, which has configurable architecture. Is that correct?

That's what we refer to it, yes. I think that's a good description. I mean, the way that the burner works is a series of components that create the flow field that controls the NOx and allows the burner to operate the way it does. We can arrange those components to control the flame shape and the shape of the burner depending on the needs of the client burner. It's a very flexible technology that gives us that ability to adapt it to the different types of heaters, fit into different processes on refineries and chemical plants or wherever they need.

Okay. Let's move back to the discussion of the order. The progression of this order, can you quantify what this might mean in terms of dollars?

I can. There's more engineering in this particular project because it is, one, it's a very technical heater, and it's also the first flat flame configuration or this type of burner we've done. The engineering and testing portion is just shy of 500 million dollars for this part.

Part of the order.

The order we've received.

Okay. With that, let's take a step back. Can we break down an average process burner order by the phases, and maybe the potential dollars on each phase? Can we map this out?

Yeah, I think we can. It's probably useful. I know we have a lot of new investors in ClearSign. I think to make this easier, let's talk about a hypothetical project. The orders we started at the end of last year, first of all, we got one was for 36 burners going down to Texas, one was 32 out to California. Let's just take a hypothetical 30 burner order. We've given guidance, an average price of a process burner is about $100,000. For a 30 burner order, the equipment is going to be about $3 million. On top of that, there is typically about $300,000 in engineering, computer modeling, and testing that goes into the initial phase of the product as we dial the burner details in.

As we walk through the typical process, as we've seen in this California order, typically about $150,000 would be the initial engineering and modeling the burners on the computational platform, showing the customer how they work, how they operate in heater, what they should expect. The next phase is typically about a $250,000. $100,000 of that will be the first burner because that next phase is going to take that first production article, put it into the test furnace, and then demonstrate that to the customer. That's their chance to come and see it firing for real. Put the burner through its paces, check emissions, check the operation, make sure it does everything they need. The completion of that phase, we would then be released for the fabrication orders. In this case, if this was a 30 burner order, we've manufactured one for the test.

We'd be released to manufacture the other 29, and of course, refurbish the one we used for testing.

That last phase I know we've referred to in the past as kind of the equipment order, the bulk of the equipment order.

Yes.

Yeah.

Yeah. In terms of finance and revenue, that's the bulk of the project for us. The initial engineering phases really are dialing that design in. Of course, the manufacturing is the large revenue driver.

On that equipment manufacture, what are the terms? We tend to get, is it 50% up front of that?

Yeah. We often get stage payments. They can vary. A good approximation is 50% up front at the point of release your order. Obviously, our process burners are fabricated by Zeeco. They have to go out and buy materials, and then they start working on those. We get the other 50% of the payment for that part of the project. Typically, when a product is created and ready to be collected from the Zeeco facility.

Brent, I'll turn to you. These projects then are basically self-funding. Is that right?

Yes, that's correct. Before we recognize revenue, we'll receive cash from the customer to augment the costs that we incur.

Great.

I mean, just to, Brent, to that point you mentioned that the Right. What's key from my perspective is we're typically able to collect cash ahead of our expenditures on a project. When we look, especially at projects in the $3+ million range, we don't have to dig into our cash reserves to execute those projects. We get cash in from the customer ahead of our cash going out to actually execute the projects. They're essentially self-funding through the project.

Okay, fantastic. Let's move forward into the other large project you mentioned, the 36 burner order. This one, as we mentioned on the last call, differs as well, differs from the 32 and differs than what we previously announced. Is that correct? Could you kind of describe what's going on with this?

It is, I mean, from a technical perspective, with our burner technology, we really offer two different things to our customers, right? The first is the obvious. Our customers have to meet new aggressive emissions regulations. Our burner technology allows them to do this for a much lower cost than the incumbent technology that's buying a Selective Catalytic Reduction unit. For the emissions, we're a much more economical option for our clients to comply. Our burner technology gives us the ability to structure flames and shape them so that we can control the flame shape, how they interact, and how they transfer the heat to the client's heater. What that means in a real perspective is it gives us the ability to make heaters operate better, whether that's to reduce maintenance requirements or in some cases, to increase the throughput of a heater.

On projects like that, we can actually offer our clients a very positive return on investment. They're not just buying burners to meet emissions requirements, we're actually enabling them to either save downtime and through reduced maintenance or to get more production through their heaters, i.e., make more money. What's exciting about this 36 burner order going down to Texas is while there is obviously an emissions limit on that job, the driver is actually increased performance of that client's heater. The configuration of the burners in this case, again, is different. If you think of this particular heater as being a series of square boxes pushed up against each other, our burners are firing horizontally through opposing walls, so they're on side walls of the heater firing in towards each other.

This again is another adaptation of the burner technology to fit this need, just with the benefit that the objective is actually increased performance of the heater, in addition to controlling the NOx emissions.

Is this getting us into a larger market and/or larger heaters? Or maybe is it larger heaters and/or a larger market?

Yeah. Well, there's some of both. Getting the heaters that use the flat flames, there are some processes with a lot of burners in that use a flat flame technology. For anyone looking at the process, you might look at a delayed coker as one example in refineries. There's lots of flat flame burners typically in a delayed coking unit. Being able to put burners into heaters that we would not have been able to do before we completed the SBIR program with this Gen 2 technology, essentially expanded the addressable market for ClearSign. The other phenomenon that we've seen recently is there's been a lot more interest in ClearSign, and we've got true engagement from the majors in the industry, right, the household names, the global refineries. These refineries have a much bigger throughput, essentially means their heat is much bigger.

They have a lot more burners in them. The orders we just talked about, the one going to California has 32 burners in it. The one we have going down to Texas has 36. The previous orders to ClearSign have been five burners, eight burners, much smaller heaters. Getting involved in these bigger projects means there's a lot more revenue in these orders as they flow through the orders and we get to process them.

Okay. One of the events I'd like to bring up and talk about is, and we highlighted this on our last call, was the process burner demonstration at Zeeco, and that was scheduled to happen on the 23rd. Can you give some discussion of how that event went? I know you can't name names, but perhaps you can describe the attendees.

I can. Just for anyone not on the last call, two of the major events for this year in the process burners we identified was this launch and demonstration of our new Gen 2 process burner technology. Then the 2nd is the startup of a major order that we shipped at the end of last year. Those burners are down on the client site in the U.S. Gulf Coast waiting to be installed, and startup is critical, and we're scheduled for October. At the time of the last call, we were getting ready for the first of those two, which was this demonstration. It was really successful. The burner ran through all of its paces. The NOx was good.

We ran from 100% natural gas to 100% hydrogen, demonstrated that transitioning smoothly back to 100% natural gas. We put the burner through its paces. We demonstrated some other criteria, showed the safety and the op, how good is the burner, along with some demonstration information sessions for the customers. The attendance was one of the major things for me, just looking at our traction in the industry. We had about 100% of the people that responded, not quite 100%, but almost there. Of the people that responded they would come, actually showed up. That's a really big deal. I believe we had 23 people in attendance on the day. Amongst those 23 were representatives from eight large refiners or natural energy companies, along with consultants and heater manufacturers.

I think also what was really pleasing to note, Ben, we have a collaborative partnership with Zeeco, a very important partner for us. They're a 1 billion-dollar-plus company. They manufacture our burners. That's where we did the demonstration. Darton Zink, the president and CEO of Zeeco, actually came down and gave a welcome and an introduction to ClearSign as a start of that demonstration to our customers. Showing their buy-in and his interest in what we're doing and the technology that we're developing, I think was very pleasing to us and a very powerful message to the clients in attendance.

What sort of feedback have you received then post the event?

It's been positive. We actually had a chance to talk with customers that were there and also people I've spoken to. Twice a year, there's American Petroleum Institute, API, conference where we review and update the refining equipment standards. That conference was the week after our demonstration, so we were there. I was there personally, and while there, we got to meet half the fact people who have been in attendance at our demonstration and people who had talked to people who had been there at the demonstration. We got a general feedback from the industry, and that was very positive. I'm quite confident that we hit the mark with this demonstration. I think it was a great success.

Are these customers or others kind of discussing the regulatory environment right now?

They are. That was the reason that a lot of the refineries and consequent heating and the other attendees were there at the demonstration. Many of them we're talking to about projects that they have. They came to check out the technology. This was a great chance for them to see some technology they've not seen before and check that box. Yes, they're very much looking at what they have to do, trying to work out their best plans to meet the regulatory compliance and the new regulations that are being formalized for Texas. Of course, for any of the refineries in California already know, and they have plans in place to get their refineries to the state they need to be.

All right. One of the projects you did address, or you mentioned then, is that 26 burner order. That was shipped back in December.

Yes.

That's on schedule then to be installed coming up?

Yes. Just clarification, the project was completed in September, but actually shipped early in January. Our completion was to create the burners. That's just for details. Those burners are down on site. They're due to be installed. Things change, but right now they're due to be installed around the middle of the year, we're thinking July. The project's due to start up in October.

That's for a petrochemical company, we've always said. Now, does that get us into the chemicals, the chemical market?

It does. It's actually the second chemical customer we have. The first was a midstream heater down also on the Gulf Coast of Texas. If I can, I think a bit of clarity is worthwhile. As we look to the long term, the big picture for ClearSign, part of our future plan is to get into high-temperature applications. By that I mean ethylene furnaces, downfire reforms. That is a very big potential market for ClearSign. Those are hot chemical processes. On the chemical plant are the more refinery-type heaters that are a stepping stone towards those high temp applications. The heaters that we are starting up in October are refinery process type heaters, but they are in a chemical plant.

With the flat flame configurations we've talked about for the California project, we do see that as a very significant stepping stone towards getting into the high temperature work that we plan for the longer term growth of ClearSign.

All right. Well, it's interesting you brought up, Jim, the M1 installation in a chemical plant, and that was about a year ago, and that was through Tulsa Midstream.

Tulsa U.S. Midstream.

Yeah.

Yes.

We just announced today another M1 order from them. Is that correct?

That's correct, yes.

They were the first adopter of the M1 Series product.

That is correct. In fact, that heater down on the US Gulf Coast was the very first M1 that we shipped.

Great. It's nice to see them come back, let's say, a year later. How are you feeling about the M Series products in general?

I'm feeling very good. I know there's not been a lot of orders coming in. We've talked about it frequently. I've been worried if there wasn't the interest and inquiries. We have had a lot of interest, a lot of inquiries about more even coming in this week. We have an M1, we have a M25 started up that's down in Midland. We have an M1 already out and shipped, waiting to be installed. We have another M25 that's out and shipped, waiting to be installed. There are a lot of M1 quotes and M25 quotes, and they continue to come in. I'm feeling very good about that market. I think it's just time as they start to come in. Obviously we'd like more quicker, but in terms of the interest, there's a lot of interest and I'm quite confident that market's there.

Okay.

For these burners.

You mentioned two startups pending. Speaking of startups, there's also a flare project poised to start up very soon. Is that correct?

There is. To clarify, the formal source testing is started. We've already run this equipment, but we couldn't do the formal source testing until a particular component outside of our scope was in and installed. I believe that's in and installed right now. The latest we've heard is the source testing is scheduled for next month. That will be the first source testing of our new generation of flares out in the California market. This has actually been a good product line for us. We've talked about systems projects where we've taken our burner technology and been able to expand that into a full system in the $750,000 to $1 million range. This burner that's starting up is of that order.

At the same time, we have our first full system project actually well on its way in fabrication right now that's due to ship later on this year. Getting the source testing done and having that as a signed-off formal recognition of the performance of our technology, I think is going to be powerful in that flare market.

Yeah, I think we've mentioned on the previous call that I believe that last one is the fifth installation. We're seeing repeat orders from a customer. Again, could you say that's a similar conversation you're having with our other customers in the other product lines as well too? I know we've mentioned even at some of the process burners that while we're working on, I believe it was a 32 burner order that you're already even having conversations with that customer about potential future products.

Yeah. It's the same. We do believe that this flare front does have future needs. In that same industry, there's other clients. These go into the California market predominantly. We believe that there's other applications outside of this customer as well.

That's great. I want to ask you this one, Jim. First of all, how are you feeling about the status of the ClearSign business? I'll maybe give it a follow-up. Are you still confident in the proposal pipeline that we've discussed in previous calls?

To be honest, Steve, the answer to the second is also the answer to the first one. I appreciate the orders have been fairly slow over the last few months. The inquiries and the customer engagements have not. We continue to have inquiries for process burners that we've got a lot coming in for midstream. We continue to be active with flares with the recent M1, with the flare start up next week, with the success of the process burner demonstration just a couple of weeks ago. When I'm looking at the big picture, I do think our revenues are going to be lumpy. Our order intake has been lumpy. Saying that, we do have, what, we've got a 36 burner order, we've got a 32 burner order. Those orders are in-house and being processed at this time. There is a substantial backlog in inquiries for process burners.

We know a lot of those customers are also looking to the installation down on the U.S. Gulf Coast, due to start up in October. While we have a few orders right now, I think we're going to see a significant pickup after that project is up and running. Our clients that are talking to us right now that have not engaged will see that as a vote of confidence once that has started up, and that's aligned with the conversations we've actually had with them.

Fantastic. With that, Jim, is there any sort of last comments or any items you'd like to bring up before we bring on questions?

There is one. This is more general, but just, we talk about the highlights on these calls. We talk about the purchase orders come in and the rather big events. I've talked about a lot of sales activities, getting ready for the demonstration, a lot of customer events. There's a lot of engineering. There's a lot of work going on within ClearSign, a lot within the finance and in the function of just keeping the business running. We do keep our headcount down. There's not a lot of us here at ClearSign, and I just want to publicly take this chance just to extend my thanks and appreciation to the staff here at ClearSign for everything they do. They truly believe in ClearSign, and I really appreciate their efforts, and I'd like to say that publicly. I think that's necessary and appropriate.

Fantastic. With that, we will take the time then to open up for questions and also review and read off some questions that were sent in ahead of time. With that, operator.

Certainly. Everyone at this time will be conducting a question and answer session. If you have any questions or comments, please press star one on your phone at this time. We do ask that while posing your question, please pick up your handset if you're listening on speakerphone to provide optimum sound quality. Once again, if you have any questions or comments, please press star one on your phone. Please hold low for questions. Thank you. There are no question in a queue at this time. Apologies. Your first question's coming from Amit Dayal from H.C. Wainwright. Your line is live.

Hey, good afternoon, guys. Thanks for taking my question. Matt went through pretty much a lot of the things I had, was going to bring up, but just one clarification, Jim. It looks like you have five or six project starts between 1Q and 2Q. Are some of these at least underway already at this point?

Amit, I am sorry. Could you repeat that question, please?

I was saying, it seems that you may have five or six project starts between 1Q and 2Q. Are these underway at this point, or some of these are at least going for you?

I think the big startups for us at this time, we have a flare for the source testing. We're planning that. The actual events when you start a unit up typically happen over just a few days, there is a lot of, obviously, preparation going into that and planning. That flare will be a significant event for us. The big burner startup down at the Gulf Coast will be later on this year. That will be down in October, we will be supporting the installation that's scheduled to occur in July. Because of what that project is and how large it is, that will be very significant for us. The M Series startups, we do help with. We are getting to the point with our repeat customers where they are getting quite familiar with those products.

Whilst we give them technical support, they do not always require us to be out on the job site. We will wait to hear from them. We have other work in progress. We have a very large flare order in production also. We've got the one starting up next month. We also have the second large one that's due to complete fabrication later on in Q3 and be out on the job site. We're expecting that startup later on this year as well.

Okay. That's all I have.

Just talking through those, just remember, the startups are significant for us. Most of these customers, if you think of the flare, we actually have in our proposal pipeline, we have additional quotes out to those customers. The startup we're expecting next month and the source testing, we believe is going to be a last check mark for them before they look at their futures. We have one other quote. We believe they have additional ones permitted waiting to be moved on as well. We do see a very big significance in these startups, not just for completing those individual projects, but for what it means for our future orders and growth.

Got you. Thank you. That's all I have.

Thank you Amit.

Thank you Jim.

Your next question's coming from Peter Gastreich from Water Tower Research. Your line is live. Once again, Peter, your line is live. Peter, please double-check your line to ensure you're not muted on your end. There are no further questions in the queue at this time.

Great, operator. I can read a couple. We've got one actually that's coming from New Zealand. The question is: There's been some announced reductions in EPA regulations across a wide range of areas. Jim, do you view that negatively for adoption going forward?

For ClearSign, referring to the reduction as in the easing of the regulations for ClearSign, the CO2 emission regulations do not really affect us. They have an impact on hydrogen consumptions of fuel. The ClearSign technology is focused on NOx emissions, and those have continued to be pushed. They're largely regulated by the states, driven in the U.S. by the EPA and ground-level ozone. I think from what we've seen generally around the world, the emissions continue to be tightened. Everyone values clean air as population grows. While our businesses are predominantly in the United States at this time, we have one installation in Europe. We are very much looking at the wider global market in our future plans through our relationship with Zeeco. Zeeco is a global company with support and manufacturing around the world.

Through them, we definitely have the ability to survey a global market. Mesh benefited from that Zeeco relationship when we serviced the one installation we have out in Europe. That is a proven model for us. Yes, we do watch the global market. The regulations do change, as do the types of equipment that the clients use. I generally see the tightening of emissions out in the Far East and in Europe as a very positive sign for ClearSign.

Good. There is another question, kind of a simple one. Jim, what does an average M Series burner sell for?

That's a great question. We've given general guidance of an average burner price of $100,000 to keep things simple and to allow easy math. I think that number holds for the M Series. As you asked the question, there's obviously a variation. The ClearSign Core M1 is the low emissions burner. That's our higher technology, and it does sell for a premium price, and there's actually a bit more engineering and manufacturing that goes into that burner. The common sizes of that burner range from somewhere in the region of $80,000 up to north of $200,000. The ClearSign Core M25 is a detuned version with less engineering, less IP to leverage. Those will sell for lower price points. Again, the common size is ranging from probably $50,000 up to somewhere in the region of $150,000 to $200,000 for the common sizes. I think the $100,000 average is good.

One other thing to consider with the M Series, while we're talking about those, is these are standard burners. Unlike the process burners that go through a lot of engineering and have to get dialed in in the test furnace and the very long duration of the orders, the M Series are a standard burner configuration. What we're finding is that also amongst those size ranges, there are common sizes. What that means is once we have built a, say, if you take this recent order, as we build this one M1 for this application for Tulsa Heater Midstream, as we have further applications for that same burner, we already have the drawings and the engineering done. It's just a case of manufacturing those same burners. That enables us to have a very high degree of efficiency and really focus on the profitability for ClearSign.

We can talk about the revenue and the sales price, but when we look at the profitability and what this means for ClearSign, I really like the M Series burners.

Great. Operator, I have no more questions coming in. I'll turn it back to you.

Certainly. Once again, everyone, if you have any questions or comments, please press star then one on your phone. Your next question's coming from Peter Gastreich from Water Tower Research. Your line is live.

Thank you very much. Apologies before there, I had muted my line. Congratulations on the results. It's great to see the momentum in the orders this month. Also appreciate the comprehensive presentation, and you have answered a few of the questions that I've had, so I really appreciate that. I just want to ask a kind of an industry-wide sort of question. You talk a lot about the comparisons versus the incumbent technologies, and the advantage there is very clear. I'd just be curious if you could share any thoughts about how you would describe the landscape for any competing new technologies, if any, that are out there. Thank you.

Thank you, Peter. Yeah. Thank you for your questions there and comments. I definitely see the incumbent SCR, Selective Catalytic Reduction technology, as the main competition for ClearSign. I think we have a much more efficient product, and it's certainly much more economical for the customer. Very simply, when we look at the market, our objective is to displace SCRs going forwards. There's obviously other burner manufacturers trying to come up with products. We don't see a lot from others. There's obviously, we see advertising and marketing. At this time, I do believe that ClearSign very much has the dominant share and the main name recognition in the SCR level NOx burner market within the industry. For somebody new starting up with a burner technology, there are some significant barriers. One, you have to have people expert in the industry.

It is a very specialized field of engineering. Beyond that, the customers have certain needs. One is to demonstrate burners in a full-scale furnace. They have very specific manufacturing needs. ClearSign has overcome that barrier through our collaborative arrangement with Zeeco. For somebody else without those connections, I think just for that, getting into this market would be very difficult.

Thank you. That concludes our Q&A session. I'll now hand the conference back to Jim Deller, Chief Executive Officer, for closing remarks. Please go ahead.

Thank you, operator. Thank you everyone for your interest in ClearSign and taking the time to join our call today. I do thank you also for the questions that you've sent in and for the questions that you've asked live here. It is always good to get some feedback. We look forward to updating you regarding our developments and speaking with you on our next call. In the meantime, we do update LinkedIn. We do send less formal messages out that way. Please keep checking for our developments on our websites and please follow us on LinkedIn.

Thank you. Everyone, this concludes today's event. You may disconnect at this time, and have a wonderful day. Thank you for your participation.

And good afternoon, ladies and gentlemen, and thank you for your patience. Your conference will begin shortly. Once again, thank you for your patience. Your conference will begin shortly.

Greetings. Welcome to the ClearSign Technologies fourth quarter and full year 2025 corporate update call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note this conference is being recorded. I will now turn the conference over to your host, Matthew Selinger, Investor Relations. You may begin.

Good afternoon, and thank you, operator. Welcome everyone to the ClearSign Technologies Corporation Fourth Quarter and Full Year 2025 Corporate Update Call. During this conference call, the company will make forward-looking statements. Any statement that is not a statement of historical fact is a forward-looking statement. This includes remarks about the company's projections, expectations, plans, beliefs and prospects. These statements are based on judgments and analysis as of the date of this conference call and are subject to numerous important risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements.

The risks and uncertainties associated with the forward-looking statements made in this conference call include, but are not limited to, whether field testing and sales of ClearSign products will be successfully completed, whether ClearSign will be successful in expanding the market for its products, and the other risks that are described in ClearSign's filings with the SEC, including those discussed under the Risk Factors section of the annual report on Form 10-K for the period ended December 31st, 2025. Except as required by law, ClearSign assumes no responsibility to update these forward-looking statements to reflect future events or actual outcomes and does not intend to do so. With me on the call today are Jim Deller, ClearSign's Chief Executive Officer, and Brent Hinds, ClearSign's Chief Financial Officer. With that, I am going to turn it over to Jim Deller. Jim?

Thank you, Matthew. As always, I'd like to thank everyone for joining us on the call today and for your interest in ClearSign. Like our most recent calls, we will use a Q&A format for the session. Some of you have sent in questions ahead of time, and we will assimilate those questions as we go through this call today. For the call today, Matthew will lead a question and answer session and we'll go through the different business units, much like our previous calls. Many of you may have seen this, but just a reminder, you can send in questions ahead of time to our Investor Relations, that is Matthew Selinger at [email protected]. With that, Brent will go over a summary of the company financials for fourth quarter and full year 2025. Brent?

Thank you, Jim, and thank you to everyone joining us here today. Before I begin, I'd like to note that our financial results on Form 10-K were filed last week with the SEC. With that, I'd like to give an overview of our financial results for 2025. For the fourth quarter of 2025, the company recognized approximately $3.7 million in revenues, compared to approximately $590,000 for the same period in 2024. This year-over-year increase in revenues was predominantly driven by our $2.6 million process burner order that will be installed at a petrochemical plant off the Gulf Coast of Texas. Now for the full year perspective. We recognized approximately $5.2 million in revenues, compared to approximately $3.6 million for the same period in 2024. This 44% year-over-year increase in revenues was predominantly driven by our process burner products.

It is important to note that during 2025, we did recognize revenues from our other offerings, specifically midstream burners, flares, spare parts, and engineering services like CFD studies. Now I'd like to turn our attention to the full year income statement. Our year-end 2025 gross profit was approximately 27%, which is down approximately four percentage points from 31% compared to 2024. This year-over-year decrease in gross profit was driven by our warranty accrual. In addition, our year-end 2025 net loss increased approximately $197,000 compared to the same period in 2024.

This year-over-year increase was predominantly driven by non-recurring legal fees of approximately $746,000 in 2025. Now I'd like to shift the focus to cash. Our net cash used in operations for the full year 2025 was approximately $4.7 million, compared to approximately $4.4 million for the same period in 2024. This year-over-year change was predominantly driven by our change in net loss discussed earlier. As of December 31st, 2025, we had approximately $9.2 million in cash and cash equivalents, with approximately 5.3 million shares of common stock outstanding. We believe our overall working capital positions us to continue executing on our long-term growth plan to scale our revenue and profits beyond our breakeven goal as we continue to build a technology company recognized for its innovative solutions. With that, I'd like to turn the call over to Matthew Selinger.

Thanks, Brent. Jim, thank you for joining me today. Jim, we've had a lot of new interest in the company lately, and I see some new attendees on the call today. Can we take a moment to give a high level overview of what ClearSign does, and then maybe move into how we do it? Jim, what in a nutshell does ClearSign do?

Sure. Yeah. We are an industrial technology company, but the technology we make is a low emissions industrial burner. These are the components that control the flames in companies like oil refiners and chemical plant, also boilers, midstream gas heaters. They're very large industrial flames. This industry is driven by the need to meet the latest emissions regulation and specifically to provide ultra-low NOx emissions. We can do that by controlling the chemistry in a flame. We do through controlling the flame structure. The NOx emissions are driven by the Clean Air Act. They're imposed by regulation. These are a level that our customers are required to meet. Our advantage in the market is we enable them to do it in a much more cost-efficient manner than with the existing technology.

The levels we're talking about, the other technology to reduce emissions is called a SCR or a Selective Catalytic Reduction. It's basically a backend chemical plant that has to be built into a heater to remove the emissions from the flames before those gases go out the stack. With the ClearSign technology, we just don't make those emissions in the first place. To put that into perspective, one of the orders we have in-house, we were talking to the customer prior to receiving that order, and their estimated costs for going with the alternative SCR solution were about a $50 million project for a conversion of one of their heaters. Our estimate of the ClearSign solution, their total cost, which includes our burners, is in the region of $7-$10 million.

It's our belief, just on this one project, that we're saving this client in the region of $40 million. There's a very clear cost advantage to our customers in selecting this new ClearSign technology and not making emissions in the first place.

All right. You've talked about what we do, the drivers in the market, kind of the competitive landscape of technology. Maybe describe more kind of the market, the market opportunity, Jim. Would you be able to kind of quantify what our addressable market is?

Sure. Our biggest market segment is oil refining. We're also looking to develop into the petrochemical industry, but to try and put our arms around the rather realistic market opportunity for ClearSign. The regulations that require our technology are the newest, strictest areas. For us, while there's some in Europe, predominantly for this purpose, we just think about Texas and California, is that our estimate is there is about 28,000 burners installed in refineries in California and Texas. In a week-to-day technology feasibility study with ExxonMobil back in 2019, and as part of our conversations during that process, ExxonMobil expressed their assessment that about 15% of their burners were good targets for ClearSign technology.

If we use that 15% guideline of the 28,000 installed burners in California and Texas, that gives about 4,200 burners currently installed in refineries in California and Texas that are good applications to be retrofit with ClearSign technology to comply with modern emissions requirements. For timing, you can expect that will be done over probably 10 years as we just try and get our arms around or bracket the market. The other important piece of information is the average price for burners is about $100,000, plus more for the big ones, less for smaller ones. For the sake of this math, we consider a ClearSign burner to sell for about $100,000 a piece. That'll give you a number for the refining industry. The petrochemical industry, we've assessed to be about the same size as the refining industry.

When we look at the total ClearSign product sales, we have other products as well. I'd expect our flare and thermal oxidizer products combined to make about 20% of our business, our midstream and boiler products make up another 20%. The refining petrochemical, that will be about 60% of the total.

Okay, great. Again, you refer to that burner, a typical burner price is around $100,000 because we've referred to that as what Brent said in that 26 burner order. We'll talk about some orders later that will help investors kind of quantify what a total order size may look like if you apply that dollar amount to a burner for one of our orders.

Yes. It's a good guide. I think the other piece of relevant information, if you're looking at the company, we talk about the company structure and how we work. We are an asset-light company. We need a run rate of about $16 million per year or 160 process burners per year to get to breakeven. That's not an extremely high number. With that market size, when you do the math, there is plenty of market there for ClearSign to develop a very profitable business.

Great. One thing you just said there, Jim, which is a good segue to the next question. You mentioned asset-light. You mentioned obviously we're an industrial technology company, and because of being asset-light, allows us to capture these ballpark 30% margins, which Brent said. How does ClearSign do it? How are we structured and how are we going to market?

Yeah. We have a unique IP and technology, and in fact, we have unique capabilities with our computer modeling. Since I joined the company in 2019, we set a strategy of leveraging that IP, but selling into this very industrial market with very established clients like our refining companies. Those clients require full-scale demonstration of burners. They require the equipment to be manufactured in a shop that they've accredited with a very sophisticated quality control system. It takes a lot of money to develop that kind of asset. Rather than doing that, we set about leveraging our IP, but to work through collaborative partnerships with other companies that already have that infrastructure in place, and there are some really big companies in this industry. We formed a collaborative partnership with one of the really big majors, Zeeco, in late 2019.

Zeeco is a multi-billion dollar, that's B with a B, billion with a B, company. They're based here in Tulsa. They're about 15 minutes down the road from our office. They have the largest burner test facility and manufacturing plant here. We can demonstrate our products now in the Zeeco test facility. Our process burners get built by Zeeco, so our clients get to benefit from the approval of their manufacturing and their quality control systems. Basically, we get to deliver our IP, but to present it through the market with the credentials of Zeeco. For Zeeco, our collaborative arrangement allows them to compete in areas of the market that extend beyond the capabilities of their own technology. This is truly a win-win relationship for both of us.

Okay. That's great. Well, let's turn to the year-end and fourth quarter. The company ended the year-end on a high note and recorded record quarterly and annual revenues. Brent did mention, but what were the contributors to this?

No, I'm going to actually turn this over to Brent. He has the details on the finances and can talk about it more specifically.

Thank you, Jim. Thanks, Matt. Yeah, the fourth quarter revenues were predominantly from our 26 burner order that we shipped down to that petrochemical company in the Texas Gulf Coast. I think it's important to note that in the fourth quarter, the revenues weren't just made up of that. We also recognized revenues related to spare parts orders and engineering services. Specifically, one of the engineering services that were exciting was a customer witness test, where a subject matter expert from a petrochemical company came in and got to look at our burner and run it through the test facility. I liken it to inviting a test driver to come run the race car around a racetrack, and get to play with it.

That went well?

Yes, it went well.

Great. Good to hear. The 26 burner order was completed and delivered and the revenues have been booked. Is that right, Jim?

That's correct. The requirement was that we had the burners complete and packaged and ready to collect by year-end, and Zeeco really came through for us there. They worked long hours, but before everyone left for the holidays, we, combined with Zeeco, had that done. Yes, we did recognize correctly.

When will this project start up in the field?

The burners are currently on the client site. They're waiting to be installed, which is scheduled to happen early after mid-year this year. The current expectation is the startup will occur in October.

Okay. Let me ask you this. Do you think this will boost or help our visibility and potential pipeline?

We expect this to be very important for us. There's a number of reasons for that. I mean, clearly it's a very dominant client. It's in the heart of our biggest market down on the Texas Gulf Coast. The burners are an early version of our new Gen 2 technology, which is a great burner for us. The project was done through Calco, who are, I believe, the leading engineering and heater revamp company here in the U.S. There are a lot of eyes on these burners, I think generally for everyone. We have to be very careful when we talk about customer names and the details of projects openly. Within the industry, through all the conferences and the interpersonal relationships, this project is very well-known. They know the burners. There are a lot of people watching this project and talking about it.

Even companies like Calco have been a very good reference for us because they've been through this project and seen the burner development, seen them operate in the Zeeco test burners. They've already been very meaningful in talking to other clients about ClearSign burners and their experience of working with us.

Yeah. I know we mentioned our previous call, and mentioned the name Birwelco. You can go to their website and they list the logos of their clients, and it really is a who's who of super majors, major petrochemical companies, and you can see it on their website.

Yes. They're actually part of a very large organization themselves. Yes, they've been a very good client for us.

Right. Let's talk about other announced process burner orders. We've announced a 32 burner order for a major refiner and a 36 burner order for another major, we're calling it a household name. In regard to the latter, the 36 burner order going to the Gulf Coast, how is that order progressing?

Very well. Both of these orders are released in phases, which is actually very common. The first phase being engineering and the computational modeling or simulation of the burners operating in the client's heater. That has gone extremely well. The results are sent to the client, so we're currently discussing moving into the testing phase for that project. The other interesting part is the installation has been split into two phases, and in fact, the first half has been pulled forward, so we can supply the burners into the first two sections of it. This is a large four-section heater. We supply the burners into the first two sections, and those will be established quickly. We expect to complete the other two sections, but the first manufacturing phase has actually been pulled forward, which is very good news for us.

Earlier you spoke about the drivers for our technology and the use of our products, and you spoke about NOx emissions being a main one. This project is about some other drivers. Is that correct?

It is. We mentioned the CFD and the computational modeling. This is where that really gets to be very valuable. A big part of the economic driver for our client in undertaking this project is not only maintaining compliance with NOx emissions, but in this case, to improve the performance and the operation of the heater. Another thing that we can do with our technology is we have great ability to control the shape and the structure of the flame and impact the pattern or the way that the heat is transferred to the heating surfaces inside the heater. We can distribute the heat evenly and basically reduce hotspots that are going to occur if you don't do that well. What that means for the client is that we can reduce the maintenance requirements, we can reduce the frequency or prevent them having to replace damaged tubes.

It increases the, what they call the uptime of the heater, basically increasing their productivity and reducing their maintenance costs. We can deliver a very real return on investment for the client. In addition to, or as opposed to on the emissions-based projects, in that case, we're delivering a much more economical way of solving a problem for them. In projects like this, we can actually give them a return on their investment in terms of making more money.

Okay. We're actually making the heater run better and more efficiently.

That's correct. Yes.

Now the other layer about this project, you and I were discussing recently, is what I'll call the design or engineering of this order. You were telling me this is kind of a new iteration or application of our burners. Could you give some more color about that?

Yes. It makes sense. To tie back to when we talked about the company and the industry in general and the feasibility or the assessment from ExxonMobil of 50% of burner being good application for ClearSign, that was based on the burners we had available at that time, which were upwards vertically fired round shape burners, which is the most common shape. There are different types of heaters and different shapes and configurations. This particular case on the Gulf Coast, the burners are mounted and firing horizontally on opposed walls at the end of a square box. They're firing in towards each other. There are a number of offshore heaters of this configuration.

Getting into and getting this reference and demonstrating the burners performing well in this configuration provides a very good reference for us and opens up this new type of heater for ClearSign and expanding our market. It's actually not just showing what we can do in controlling the flame shape and making the heater run better, it's also getting us a reference and an extension of our product line into the horizontally fired configuration.

Great. Demonstrating a larger applicability and expanding our addressable market.

Yes.

Excellent. Let's turn to the 32 burner order, and how is this order progressing?

This order is very similar to the first in many ways. We received the CFD and the engineering order up front. That has gone very well. The same as the first order, this project has also been split into two parts and the first part being accelerated. We're actually going to expect to move into the testing phase quite soon. In fact, we've recently received the order for some engineering to support that test. After that, expect to move in and be able to make the product for that first heater ahead of the schedule that we originally anticipated. That's good news.

That's positive. Since we're on that previous order, we're talking about designs or applications. Is this a standard application or configuration?

It's amazing how similar these projects are. It's a different configuration.

Okay.

This is a flat burner. Whereas the standard burners are round, in fact, the horizontally fired burners we just talked about are round. This burner is a long, thin flame, and the burner's designed to fire up against the wall inside the heater. Again, the details on the heater, the heater has either a brick or a high temperature concrete wall. The burner heats the wall up, the heat radiates from the wall onto the process tubes. What's especially interesting here is there are a large number of heaters and refineries of this configuration that makes this burner very relevant. What's particularly interesting is looking forward to our product development pipeline, we're looking to get into the petrochemical business, specifically the ethylene manufacturing heaters. Having a flat burner that fires up against the wall of this configuration is a very common format in the ethylene furnaces.

That industry in itself is about the same size as the entire refining industry, if we can get into that production. These burners, as we're developing them for this refining process heater, are a good step in that direction. It shows our capability to produce this shape of burner. There's still work to do to get into the ethylene furnaces, but I believe it's going to provide a very valuable step forward as we move into and expand into that ethylene market, so very exciting for us.

Yeah. Not only are these two orders large orders for us, they're both different configurations and each one that are going to be great references and expand our applicable market.

That's true. I think at a higher level, when you look at these, I think what it's showing with our very developed CFD capabilities and the very adaptable burner technology that we developed through the government SBIR program, is that we have the ability to take our standard burner and to adapt that to meet the special needs of customers in these different heater applications where other burners have not been successful. It truly platforms and showcases what we can do at ClearSign.

The high level of engineers that we've been able to recruit and hire, the sophisticated CFD technology that we deploy, the experience within the company, combine that with the IP that we have and what we've developed through the big SBIR project we've just completed, I think shows those capabilities at a high level in how we can adapt this technology and readily take it, put it into these different configurations and show the success that we've been able to show.

Okay. Well then, beyond these two existing projects, what does the pipeline look like? Now, we did mention a story on the last call about a new major refiner wanting to get quotes on 10 or so heaters. Now, have you seen any of these requests?

We have. Again, let's take a step back if we can. We gave an update call in February of this year, and the main reason we did that is we'd seen a shift in the type of inquiries for quotes that we'd received. Basically, we'd started to get a lot of interest from super major household name, major refineries. Two have rolled into the orders we've just talked about, but there was a lot of other interest from these big customers that we've been pursuing and had not had great success while our technology was just not well known or trusted within the industry. Seeing that significant shift in the market dynamic was very relevant leading to the update call we gave in February.

As part of that call, one instance we discussed was through heater engineering company, Birwelco, one of the major refineries, and one of the key decision makers, subject matter expert there, talking to his close relationship person at Birwelco to get references of their experience working on the 26 burner project, had turned around and asked Birwelco to refer 10 projects that they had lined up in their queue to ClearSign for input going forwards. Now to date, we've received four of those inquiries and have been able to provide proposals for them to set expectations. These type of projects are usually scheduled over a long period of time. They're scheduled around our refinery turnarounds and project planning. There's a lot of work. This is not all work that's going to come in the next 12 months.

Some of these are scheduled out years and will continue to be. In terms of building up our proposal backlog, this is very significant for us. Yeah, to date, we've quoted four of these. We expect more to come.

Great. For those, you're right, we were referring to that last call in February. We did talk a kind of a market dynamic that we're seeing, right? Larger customers, larger facilities, larger heaters, thus we're seeing kind of larger orders, quoting larger orders.

Yes.

From that, could you talk about the total process burner pipeline in general?

Yes, I can. To put some data points out, those four heaters for that one refinery total about 73 burners. I think that's the total for those four. In the last call, we gave a general number. The backlog total was around 200. That included what we knew about the 10 heaters from the one that, because we've continued to get inquiries. We've received some more in. I believe that totals up around 225 as we sit today. Those are also from household name, well-recognized major refiners.

I mean, also we talked about in the last call, but what sort of marketing initiatives do we have kind of on the horizon coming up? We mentioned a demonstration coming up later this month.

Yes. I mean, there's obviously we're pushing LinkedIn and advertising campaigns. The big event right now, we have a new burner technology we developed under the DOE SBIR grant. That development was completed last year. In the last part of that project, we're actually releasing that and demonstrating that to industry in a couple of weeks on April 23rd. We have a demonstration going on at the Zeeco test facility. We have decision makers and subject matter experts from major refineries and engineering companies coming in to town for that.

How does this compare? I know we've done previous demonstrations like this, but maybe just could you give a comparison how this might compare? I know it hasn't happened yet, but how does it look like so far compared to previous demonstrations that we've done?

Yeah, we can, because obviously we track the responses to the invitations and who's coming in. Much like the dynamic in the market and proposals. The previous demonstration, I believe the attendance was around 16-18 people. So far we have just over 30 and counting people coming into this demonstration. What's particularly important is who is in that 32. We have key decision makers, subject matter experts from the major refineries and major engineering companies, including customers that we're bidding to and have on these prospective pipelines coming in to see how it burns. These people are taking time out of their schedule, flying to Tulsa to spend the day with us. This is a very pleasing development for us.

Yeah, I think it'll be a great event. Well then let's shift to the M series, which is our midstream focused product. Jim, like you did with process burner, would you mind kind of describing the midstream application and maybe in comparison to the process burners?

Yes. The industry to start with, the refining side of the family is taking crude oil and processing it to an end product. The midstream, we're moving upstream. The midstream is really transportation and predominantly with this being about gas, it's also the purification and the cleaning of the gas. When it comes out of the ground, it's got components in it you don't want to burn. So it gets cleaned and then transported to the gas you'll see coming out in your homes and the downstream. For the heaters and burners, the equipment is typically a lot more simple than the refinery heaters. It's also a lot more standardized. That means that the burner products that we have can be designed, but once designed, they don't get customized on a job-by-job basis.

The fuel is nearly always natural gas compared to refineries where you get a whole mixture of blends. The business, for that reason, can be much shorter cycle. The burners tend to get built to existing prints. It is a very low consumption of engineering and project management resources once the products have been developed. While it's based on the same technology and expertise in terms of the product line itself and how we think about it actually operates pretty differently to the process burner. It can take in orders or revenue much more quickly. We don't have always detailed visibility of the pipeline because our clients are heater manufacturers. Once they have pricing of our burners, they will use that pricing on multiple occasions. Whenever they have an application for that burner, they don't come back to us for details.

There are, I'm sure, many quotes out there using our equipment that we don't even know about.

We did talk about pipeline. I know, again, we keep referring to that last call, but we did mention, I think our proposal pipeline on that last call.

Yeah.

Which sits about.

It was up 50 at that time, I believe.

50?

Yep.

Yep.

They continue to come in. Like I said, that's what we know about. I'm sure there are others out there that we don't even know about at this time. I think just on that note, we have those two burners. We have an M1 burner that has run now for many months. That's our first burner. That's the ultra-low NOx burner. That version ran around 2 PPM, far exceeding any requirements of these burners. We've also developed a lower cost, what we call the M25, which is a lower spec burner, but for a much broader application. There's a lot of inquiries in using this burner. The first of those started up two weeks ago, met all requirements, that burner's up and running.

That was a very pleasing development for us to actually have one of those burners up and running at actually another DEVCO heater down in Texas.

Okay. That's through DEVCO. That was a dynamic we talked about, how we sell to third party manufacturers, companies like DEVCO. Have there been some developments with these third party manufacturers?

Yep. In particular, DEVCO and watching the news. We've mentioned Zeeco is our partner. Zeeco is a multi-billion-dollar company. Zeeco have actually purchased DEVCO, now into Zeeco. They are now very close to our office. Well, the first thing that happened was I reached out to Zeeco at the same time that Zeeco were reaching out to us to confirm that the ClearSign burners would still be part of the Zeeco business. We were both pursuing the same goal there, so that's very pleasing. My understanding is Zeeco's obviously taken that business over, looking to grow it. They have a lot more resources than the old DE. I believe that's actually very good. We could be seeing a lot more Devco work in the future.

Okay. Great dynamic. We've covered refining, we've covered midstream. Let's get closer to the production well and talk about another product line, flares. Now this is a product line that we've seen a strong resurgence and expansion in orders and in the monetary size of orders. Can you give, just like the other two product lines, Jim, could you give a brief description of our flare products?

Yes. Most people would see flares. You'll look at the oil refinery, you see the large flames on very tall sticks or pipes or structures going up in the air. There are many different types of flares. Ours are a much smaller flare. They typically stand 30-50 feet high, and they're inside of that size of pole on vessel. They're an enclosed flame. The reason they're built that way is that like with our other products, we have a low emissions flare. On flares in certain regions of the country, they're also required to control their NOx emissions. We have a burner product that can do that. The early orders for the flare burners we took were to upgrade the burners in existing flares. Basically our clients have purchased flares from another supplier. The flares didn't work, or they couldn't meet the emissions requirements.

They came to ClearSign to replace the burner element, which we did inside the existing stack. Those orders to us ran in the region of $200,000-$250,000 per burner order. Recently, our clients have seen benefit from having us replace more and more of the equipment. Now we're typically replacing not just the burner but replacing the fuel control system, the blower, and in fact, the elements of the stack. The most recent order is a good example of this. We refer to them as system projects by replacing the entire system. These orders are coming in on the low end, $500,000, up to about $1 million a piece. In fact, the last order was right around that, $1 million.

Right. We talked about that, our most recent order was, I think the customer's fifth order from us. That customer evolved from, you say just ordering the burner parts, morphing into a full system. This last full system came in around that, closer to that latter number, the $1 million range. Is that correct?

Yes. That's right.

What does our prospective pipeline look like here for this product?

Yeah. Just with this client, we have one flare with them is due to start at any time. We're just waiting on a component, which is not our supply, somebody else's supply. We have the one that we've mentioned now that has been built. We believe or understand from them that they have four or five more flares that they will need. Now we don't know exactly the timing, but there are more flares needing a lot of emissions coming up based in California, and also we believe also the Midwest. When we think about this technology, though, we also look at it in a horizontal equipment, which generally referred to an incinerator or thermal oxidizer. In that format, the ability to burn a more hard to burn or a waste gas that has a lot of inerts is another big cost driver, right?

Typically, the clients would have to buy natural gas to burn this type of gas completely. With our burners, we can burn this in its raw form without the need to buy any supplemental gas. We have a number of projects quoted and hopefully going to come through later this year based on that. Those, we generally group those also into that description of system projects. Both in the vertical enclosed flare format and in the horizontal incinerator or thermal oxidizer format, we're seeing a very healthy pipeline there. In the latter, in the thermal oxidizer format, there are a lot of renewables applications. It's not just the refining and the wellhead fields. It's getting into other industries.

Okay. We can look to some potential continued momentum in this product line.

Yes. Yeah. Very much.

With that being said, Jim, we're probably into 2026 and looking forward into this year, what are the milestones that investors should be looking for?

Yeah. Very clearly at this time, it's all about building our backlog in the company, so it's getting orders in. We're seeing significant opportunities out there now. We need to bring those orders in-house, so we've got that backlog to consistently get to our breakeven point and to stay there. We're bringing in these large refining process heater orders and by building on that momentum. The startup down on the Texas Gulf Coast is going to be a very significant reference point for us. I believe there are a lot of people watching that project. The demonstration on April 23rd, in just a couple of weeks to industry, is going to be very significant.

All in that effort is all about building the backlog, bringing these orders in, growing our traction with the refining industry and pushing out with new shapes and getting into more heats and showing what we can do and getting more and more of that work. Beyond that, the flare systems projects and thermal oxidizer projects with the size of those orders, that can be a very meaningful revenue stream for the company. We're absolutely looking to push and to maximize the references from the installations we get in that segment. In the midstream, there are a lot of quotes out there in that midstream industry, just bringing those in and turning that into a routine business for us.

Okay, that's great. That's all the prepared questions I have today. With that, why don't we take a pause, and we will open it up for Q&A from analysts and investors.

At this time, we will be conducting a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment please while we poll for questions. Once again, please press star one if you have a question or a comment. Our first question comes from Peter Gastreich with Water Tower Research. Please proceed.

Yes, thank you. Congratulations on your results and a great start to 2026. Also, thanks for taking my questions. Just first of all, I appreciate the detail around the burner order configuration. Are you able to expand a bit more on what this will mean for your addressable markets? And how would you characterize the size of the market opportunity?

Thank you, Peter. Yeah. It's actually very large. The most pleasing part about the SBIR project was the burner platform that we've developed. It's certainly a very good straight refinery burner. The way that the burner technology is structured, it allows us to adapt it to different shapes. In the orders we talked about, if I had to put a number to it probably adds 20%-25% to our refining coverage in just those two formats. When you think larger about what we can do with that burner, I truly think it opens up the door for us to get into the ethylene production, as I mentioned, which is about the size of the refining industry in itself. I'm not sure where the boundaries are, to be honest.

It's just a very flexible burner format that is very applicable, I think, and can probably open up some new markets we've not even considered yet.

Okay, great. Thank you. For the fourth quarter, you had a big jump in revenue with that equivalent to 70% of the full year. Meanwhile, you mentioned before that Zeeco made a substantial effort to ship 26 burners by year end. With your technology really being something as potentially being disruptive, big addressable market out there, orders could expand meaningfully. How should we think about the capacity of Zeeco and the supply chain to facilitate this large growth outlook?

Yeah. To put things in perspective, Zeeco is a multi-billion dollar company. They have global manufacturing. I would love to be a supply problem for Zeeco. They have the biggest test facility in the world. They truly have multiple. They're up in the region, I believe, north of 15 test furnaces there. It is not a problem. Also, for the other product lines, we have multiple other manufacturers in Tulsa that we can use, that are used to manufacturing equipment for the combustion and the oil industry in general. That's part of the reason we moved the company here, in addition to the human personnel and the expertise here. Believe me, there is very adequate resources within Zeeco and then within Tulsa for the other product lines for ClearSign.

Okay, great. Thank you. I'll just ask one more question here before getting back in the queue. It looks like your installed base here is on a solid trajectory. How should we think about the aftermarket pull-through here, maintenance, spare parts, things like that, as a contributor to future revenue? Like how substantial will that be?

Based on what we've seen at ClearSign, and also for me, based on my prior experience, it is an extremely meaningful product line in itself. It is very profitable because all the engineering and the design work is done, and the client's need is based on responsiveness. It's very profitable, and the more equipment we get out as our business grows, it will continue to grow. It is likely that in terms of profit margin, it may well end up being close to the largest source of income for ClearSign as we look farther ahead in the field and as we get more equipment out there in the market. It is a very important product line, and one that we pay special attention to now because of how important we expect it to be in the future.

Okay, that's great. Thanks very much, and congratulations again. I'll get back in the queue.

Hey, Peter. Thank you very much.

Once again, if you have a question or a comment, please press star one on your touchtone phone. The next question comes from Amit Dayal with H.C. Wainwright. Please proceed.

Thank you, guys. Just with respect to sort of cadence of revenues in 2026, how should we think about quarterly revenue flows this year?

That's a great question. From a quarterly perspective, Q1, I feel confident in saying that it's not going to replicate Q4 2025. From a overall annual perspective, we feel confident with the revenues for 2026.

We've said this before. Given that our orders are very large and also long-term, our revenue flows will be lumpy, right? We're not going to get consistent, smooth quarters, especially not at this stage. As the business grows and we get more orders in-house, that will tend to smooth out with the volume. At the period we're at right now with these large orders, as I say, it's going to fluctuate. Looking long term, while we talked a lot about the interest from our customers and the pipeline we're seeing on the proposals, as that flows through and those come in, I mean, the long-term view for the company is very healthy. I try to be really quite cautious that I do expect things to be lumpy in the short term.

No, I appreciate that. Just wanted to see if that is still sort of in play. Not expecting anything different. It's good to know how we should think about 2026. Then just from a balance sheet perspective, are you comfortable, as your orders ramp with respect to working capital needs, et cetera, to meet your growth requirements?

Yes.

Okay.

Yeah. We feel very confident in the cash position that we have.

Understood.

I think for the new investors on the call as well, it's good to point out with our projects that they're typically self-funding. We actually bring enough money in early in the project to cover our costs for the execution of those orders. We do not need cash. As the large orders in our pipeline come in, we don't actually need our cash to execute those orders. We typically get that cash in advance of our costs or expenses.

Okay, understood. Thank you for that. This last one, with sort of this current macro situation in the Middle East, in the energy space, some of the product deployments need downtime, et cetera, for customers to put these things into play. Do you think you might face some push-outs from that perspective? I don't know, it may be too early to tell, but any thoughts on how that part of the execu-

Are you referring to the Middle East?

We lost Amit's line.

Yeah.

Let me see if I can get him back on the line for you.

Okay. I believe he was asking about the Middle East and the disruption there. Amit, so those projects will be long-term. We don't know what is happening there. Typically, the emissions regulations in the Middle East are not in the same level as those in the U.S. It's unlikely that ClearSign technology will be deployed to the Middle East in the near term. Now, if that increases the demand and the production in the U.S., it may well drive the need for equipment or upgrades in the U.S. There may be some benefit there for ClearSign, but to be clear at this point, I don't see ClearSign products being shipped out to the Middle East just because there's not a need for them.

I'm gonna go ahead and dovetail a question that was sent in about a similar topic. There was a question asked, "Jim, if there was a great need for U.S. products being sent there, could our, in a sense, manufacturing supply be disrupted? Could we have issues getting our own burners manufactured, let's say, here locally?

Yeah. I don't see that as being a concern. I mean, one, typically these projects tend to be long, but also if we're thinking, most of these will be refineries. If it's Zeeco is a global company. They have manufacturing around the world. In fact, they actually have a manufacturing base in Saudi Arabia there to serve the Middle East. So our product is typically manufactured in a U.S. plant. So I don't see that as a concern at this time.

I'll give another follow-up question if I could, Jim.

Sure.

From an email that came in. There's been also recent news kind of relevant, that there's been a lot of discussion of potentially the first new refinery being built in Texas. Are we seeing or hearing anything about that?

We obviously see the news. There's been a couple of releases out this week. Within the industry, we're not hearing much actual factual news. We're watching it closely. I think at this point I just say we are paying attention to it. I would not put too much at stake at this time. As things develop, if they do, and they've mentioned there being a hydrogen fuel to that site, if that does materialize, it could be very relevant for ClearSign. At this point, we are watching for developments, let me say. We've not seen any solid details about that yet.

Okay, great. Jim, I'm seeing no more questions. With that, I think we'll go ahead and wrap up the call. I will pass it back over to you.

Great. Thank you, Matthew. Thank you everyone for joining us today and for your interest in ClearSign, and especially for taking the time to listen to our call. We will be presenting at Water Tower Research Insights Conference next week on April 15th. The company can be found on their website, watertowerresearch.com. We look forward to updating you regarding our developments and speaking with you on our Q1 2026 call, which will occur in May. In the meantime, please keep checking in for developments on our website. For more behind-the-scenes updates, please follow us on LinkedIn. With that, thank you very much. Thank you, operator.

Thank you. This concludes today's conference, and you may disconnect your lines at this time. Thank you for your participation.