ClearSign Technologies Corp Q1 FY2025 earnings call

• Financials: Revenues down year-over-year; net loss increased due to lower sales volume and legal fees. Cash used in operations was flat.
• Product Lines:
  • Flare Orders: Received repeat orders from a customer, with recent order in the $250,000-$300,000 range, and potential for larger system orders.
  • Process Burners: 20 burners for a Los Angeles refinery scheduled for Q3 2025; 26 burners for a Gulf Coast chemical company in final engineering/testing.
  • Zeeco Partnership: Sales and marketing agreement with co-branding launched in March; working on packaging info for Zeeco sales team, testing burners at Zeeco, and client interactions.
  • Sales Pipeline: Quotations doubled year-to-date, with total proposal value nearly 5 times last year's, driven by process burner opportunities and midstream interest.
  • Midstream: M1 burners seeing growth, with repeat inquiries and quotes for new/retrofit burners, leveraging channel partners.
  • Conferences: Attended key conferences like American Petroleum Institute, interacting with key industry players.
  • ClearSign Eye Sensor: First installations expected in next 2-3 months, with potential for significant market growth due to wide applicability.

For the first quarter of 2025, ClearSign Technologies recognized approximately $400,000 in revenues, a decrease from $1.1 million in the same period of 2024. The decline was mainly due to fewer process burner shipments, with this quarter's revenue mostly from spare parts orders. Net loss increased by approximately $1 million compared to the same quarter in 2024, driven by lower sales volume and $581,000 in legal fees. Cash used in operations was relatively flat at around $1.1 million, and the company ended the quarter with approximately $12.8 million in cash and cash equivalents.

• Key milestones include startup of major process burner projects (LA refinery and Gulf Coast chemical company), progress with Zeeco partnership (expecting first inquiries from Zeeco sales team), and commercial installations of ClearSign Eye Sensors.

Risks associated with forward-looking statements include success of field testing/sales, market expansion, and risks detailed in SEC filings, such as those discussed in the Risk Factors section of the Annual Report on Form 10-K for the period ended December 31, 2024.

Q: How are Zeeco salespeople incentivized to sell ClearSign's product?

A: That is a subject we have yet to work out. This engagement at this level with Zeeco is quite new and obviously we're working through getting the materials to them and getting them engaged with our sales team.

Q: Comments on proposal pipeline, competitive situations, and source of proposals?

A: The growth in the sales value of the proposals out is a combination of multiple different product lines. A significant portion is from the process burners and inquiries from major refineries. As to the competitive situation of those bids, we've got a number but I think generally the refining process burner opportunities are in the early stages where the clients are assessing their options to control their emissions. These proposals are developed through the ClearSign team, a lot through personal connections, knowing the subject matter experts on the refineries, through conference meetings, etc.

Q: Progress on tweaking burners for mass market and ClearSign Eye Sensor commercialization?

A: We have got some quotes out with customers for this lower spec or less Ferrari product. We do have good feedback and what's been interesting is as we pursue this initiative, we're actually uncovering new areas of collaboration and new partners and new opportunities. The ClearSign Eye Sensor will have the first sensors installed in the next 2 months to 3 months. Being realistically, the client and the industry want to see them operate and get confidence in their performance and the durability.

Q: Collaboration with Narion and SoCal Gas DOE grant?

A: The relationship with Narion is very much in place. We do talk with them frequently. The projects they work on are their business. We talk to our interests, they share some information, but they have a wide range of projects. We continue to be involved with SoCal Gas. The ICF report where they actually sponsored a third-party monitored testing of the ClearSign burner versus the best alternative burner in the boiler space showed about a 4% efficiency increase.