SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

 

  

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

 

Date of report (Date of earliest event reported): April 20, 2020

 

 

 

CLEARSIGN TECHNOLOGIES CORPORATION

(Exact name of registrant as specified in Charter)

  

Washington   001-35521   26-2056298

(State or other jurisdiction of

incorporation or organization)

  (Commission File No.)   (IRS Employee Identification No.)

 

12870 Interurban Avenue South

Seattle, Washington 98168

(Address of Principal Executive Offices)

 

206-673-4848

(Issuer Telephone number)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the Registrant under any of the following provisions (see General Instruction A.2 below).

 

¨Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR240.14a-12)

 

¨Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)).

 

¨Pre-commencement communications pursuant to Rule 13e-(c) under the Exchange Act (17 CFR 240.13(e)-4(c))

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company ¨

 

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

 

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

 

Title of each class   Trading Symbol(s)   Name of each exchange on which registered
         
Common Stock   CLIR   The Nasdaq Stock Market LLC

 

 

 

 

 

Item 7.01Regulation FD Disclosure.

 

The attached updated investor slide presentation contains information that the members of the management of ClearSign Technologies Corporation (the “Company”) will use from time-to-time during meetings with investors, analysts, and other interested parties to assist their understanding of the Company. The Company frequently provides relevant information to its investors and other interested parties by posting to its corporate website. This presentation is also available under the Investors/Company Information link in the Company’s website at http://www.clearsign.com.

 

The investor slide presentation is furnished under this Item 7.01 and shall not be deemed filed with the U.S. Securities and Exchange Commission for purposes of Section 18 of the Securities Exchange Act of 1934, as amended. The information contained in the investor slide presentation shall not be incorporated by reference into any filing the Company makes regardless of general incorporation language in the filing, unless expressly incorporated by reference in such filing.

 

Item 9.01Financial Statements and Exhibits

 

Exhibit 99.1Investor Slide Presentation.

 

SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Current Report to be signed on its behalf by the undersigned hereunto duly authorized.

 

Dated: April 21, 2020

 

  CLEARSIGN TECHNOLOGIES CORPORATION
   
   
   
  By:  /s/ Brian G. Fike
    Brian G. Fike
Chief Financial Officer

 

 

Exhibit 99.1

 

ClearSign Technologies Corporation

 
 

Cautionary Note on Forward Looking Statements This presentation contains forward - looking statements. These statements include statements about our plans, strategies, financia l performance, prospects or future events and involve known and unknown risks that are difficult to predict. As a result, the actual results, performance or achievements of ClearSign Technologies Corporation (“ClearSign,” “we ,” “us,” “our,” and, together with our subsidiaries, the “Company”) may differ materially from those expressed or implied by these forward - looking statements. In some cases, you can identify forward - looking statements by the use of words such as “may,” “could,” “expect,” “intend,” “plan,” “seek,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “continue,” “likely,” “will,” “would,” and variations of these terms and similar expressions, or the neg ative of these terms or similar expressions. Such forward - looking statements are necessarily based upon estimates and assumptions that, while considered reasonable by the Company and its management team based on their experience, ar e inherently uncertain. All statements in this presentation regarding our business strategy, future operations, financial position, prospects, business plans and objectives, as well as information concerning industry trends a nd expected actions of third parties, are forward - looking statements. All forward - looking statements speak only as of the date as of which they are made. These statements are not guarantees of future performance and involve certain ris ks, uncertainties and assumptions concerning future events that are difficult to predict. The following factors, among others, could cause actual results to differ materially from those set forth in this presentatio n: • We are a company with a limited operating history and our future profitability is uncertain. We anticipate future losses and neg ative cash flow and we may never be profitable; • If we do not receive additional financing when and as needed in the future, we may not be able to continue our research and d eve lopment efforts or commercialization efforts and our business may fail; • Market acceptance of our technology and business is difficult to predict. If our technology does not achieve market acceptan ce, our business could fail; • Our efforts may never demonstrate the feasibility of our product; • Changes to environmental regulations could make our technology less desirable; • We may fail to adequately protect our proprietary technology, which would allow our competitors to take advantage of our rese arc h and development efforts; • We may incur substantial costs as a result of litigation or other proceedings relating to patent and other intellectual prope rty rights; • We cannot guarantee that any research and development partnership or collaboration agreement we enter into will be successful ; • If we are unable to keep up with rapid technological changes, our products may become obsolete; • We are uncertain of our profit margins and whether such profit margins, if achieved, will be able to sustain our business; • Our assessment and third party reports of the benefits and value of our technology may not be realized or appreciated by our cus tomers: • Many of our potential competitors have greater resources, and it may be difficult to compete against them; • The loss of the services of our key management and personnel or the failure to attract additional key personnel could adverse ly affect our ability to operate our business. We caution you not to place undue reliance on any forward - looking statements, which are made as of the date hereof or as otherwi se specified herein. The Company undertakes no obligation to update any of these forward - looking statements to reflect actual results, new information or future events, changes in assumptions or changes in other factors af fec ting forward - looking statements, except to the extent required by applicable law. If we update one or more forward - looking statements, no inference should be drawn that we will make additional updates with respect to those or othe r forwarding - looking statements. 2

 
 

Company Overview 3 ClearSign technology provides, we believe, a unique solution to some of the worlds most pressing productivity, energy efficiency and pollution problems affecting the energy, oil and gas production, boiler and processing industries • Based in Seattle, WA with offices in Tulsa, OK and Beijing, China • Experienced management team • Disruptive technology proven in key markets and verticals • High - margin, asset - light business model with attractive operating leverage

 
 

Addressing an Urgent, Global Problem 4 From Los Angeles… … to Beijing

 
 

5 Forms ground level ozone Serious respiratory problems Forms smog Reduces visibility Forms nitrate particles and acid vapors Causes respiratory problems Depletes ozone layer Contributes to greenhouse gas Forms acid rain Deteriorates water quality Reacts to form toxic chemicals NOx Source US EPA - 456/F - 98 - 005 1998 Why Care about NOx? Here’s what the United States Environmental Protection Agency Says Reducing emissions of NOx is a crucial component of EPA’s strategy for cleaner air

 
 

Addressing a Costly Operational Problem 6 Modern low emission flames are large and often do not fit properly into existing heaters. Run time, operating efficiency and throughput are limited ClearSign technology avoids this limitation

 
 

Provide cost and energy efficient solutions that enable the world’s refining, petrochemical and boiler industries to meet the most stringent environmental toxic emissions regulations and increase safety and efficiency We do this using our patented unique and revolutionary ceramic - based combustion and unique sensing technologies Company Vision 7

 
 

To leverage our revolutionary intellectual property by embedding ClearSign technology as the core of modern burners and other combustion equipment. We plan to accomplish this by forming mutually beneficial collaborative partnerships with or making strategic acquisitions of the world’s leading combustion equipment manufacturers Company Strategy 8

 
 

Investment Highlights 9 * [Frost & Sullivan] • Patented and proven technology provides attractive ROI from improved operational performance while providing transformational improvement in emissions • Proven management team with deep industry experience • Rapid scale - up potential via “plug & play” product introductions and key strategic partnerships • “Asset light” model and premium pricing provides substantial growth and margin potential • Large, growing global addressable market. Estimated $3.6B+ U.S.*, $8B+ China • Strong balance sheet with growing commercial interest from the world’s leading oil companies

 
 

Refinery and Petrochemical Process Heater Technology • Our ClearSign Core is provided as the heart of an industrial burner. The key component is a ceramic element that controls the flame structure and radiates heat efficiently to the heater or boiler process tubes. • As of Dec 2019 we have 29 issued patents protecting this technology. • Our designs are configurable from standard components, enabling sourcing efficiency and rapid scale up. Boiler Technology The ClearSign Core™ Technology 10

 
 

• Operating companies are forced to modify combustion equipment to meet environmental emissions mandates. The current technology required to meet the latest requirements is very expensive to install, has high operational costs and reduces process efficiency or throughput. • Even where less stringent emissions limitations are in place, many refinery heaters are forced to run at reduced production rates due to constraints caused by the large volume of current low emission burner flames. • ClearSign Core technologies provide a substantial value opportunity compared to available alternative technologies. ClearSign Traditional low NOx burner NOx 5ppm 15ppm to 50ppm Energy Efficiency Improved Decreased Operational Efficiency Improved Decreased and costly ClearSign vs Competition The Value ClearSign Core™ Provides 11

 
 

Cost Comparisons 12 Case 1 100 MMBtu/ hr (no fuel supply automation) Case 2 40 MMBtu/ hr (no fuel supply automation) Case3 40 MMBtu/ hr (automation for fuel supply) 1,440 13,400 Capital cost $ thousands Operational cost $ thousands/year 0 211 960 11,200 Capital cost $ thousands Operational cost $ thousands/year 0 85 1,950 11,200 Capital cost $ thousands Operational cost $ thousands/year 0 85 SCR Three Sample Case Cost Comparisons : ClearSign Core Technology compared to SCR - Selective Catalytic Reduction (best alternative technology) Source: Norton Engineering – Duplex Technology Evaluation and Cost Comparison to SCR, January 2017

 
 

Competitive Position - less expensive to install (vs SCR) - adds virtually no operating costs (vs SCR and LowNOx with FGR) - installs quickly 13 ClearSign Core Technology Low NOx Burner SCR Systems NOx Performance < 5 ppm < 15 ppm < 5 ppm CAPEX Low Low Very High OPEX Very Low Very Low Very High Installation Time Very Low Very Low Very High

 
 

ClearSign Eye ™: Pilot Sensing Flame sensors validate whether the flame of a burner pilot is on or off . The most common current technology available, flame rods, have a history of poor reliability, frequent need for replacement and thus create operational delay and resulting added expense to our customers. • Our solution, The ClearSign Eye, is positioned significantly outside of the flame and therefore is is not subject to heat - induced deterioration. • First demonstration installations of this technology to be installed in customer equipment in the next few months. • ClearSign plans to sell this technology directly and through channel partners to burner manufacturers and pilot manufacturers as well as to refining and petrochemical customers. 14

 
 

ClearSign Eye ™: Aerospace Development • Announced contract with a major global aerospace company to validate the application of our sensor technology as a key component of a new system which focuses on increased efficiency and reduced maintenance on commercial and military aircraft. • Contract includes the testing and demonstration of ClearSign's sensing technology in the unique environmental conditions experienced by aerospace technologies. • Goal of the project is to develop a series of commercial sensing products to benefit a wide range of aerospace fleet and military applications . • Project represents the long term future growth of the Company’s technologies into large addressable markets outside of combustion. 15

 
 

The Team 16 Colin “Jim” Deller, Ph.D., Chief Executive Officer • General Manager/Global Operations Director, Honeywell UOP Callidus Burner Business Steve Sock SVP Business Development • Business Development Manager, Burrow Global • VP Commercial, Amec Foster Wheeler Donald Kendrick, Ph.D. Chief Technology Officer • CTO, Lean Flame Inc. • Operations Manager, UTC (Pratt & Whitney) Manuel “Manny” Menendez President – ClearSign Asia Ltd. • Founder, MCM Group Holdings Ltd • President & CEO, Great Eastern Development Ltd. Brian Fike Chief Financial Officer • Regional Controller, Darigold , Inc Jeff Lewallen Business Leader Refining and Ethylene • Lead Technical Sales, Honeywell UOP Callidus • John Zink, Senior Applications Engineer and Process Engineering Manager

 
 

• Global Customers = Highly centralized expertise • Engineering companies and OEMs recommending ClearSign • Supply partners incentivized to find opportunities • ClearSign provides standard proprietary parts • Customer orders are engineered and manufactured by supply partners • ClearSign will retain ClearSign Core aftermarket business ClearSign resources are leveraged as sales are not dependent on a large dispersed ClearSign sales team Highly Leveraged Sales Model and Channel to Market 17 Sales model Channel to market

 
 

Premium Pricing Strategy 18 • Current combustion market has little product differentiation and commodity - based pricing • ClearSign’s revolutionary technologies provides substantial value to customers through reduced capital expenditure, reduced operational costs and anticipated increased production rates • By incorporating “ClearSign Core™ ” and “ ClearSign Eye™” into the equipment of our collaborative partners, we leverage the high added value provided to customers This provides the opportunity for ClearSign to generate profit while creating differentiated products for our partners to sell

 
 

U.S. Targeted Markets 19 Refinery Segment • up to $826M ¹ Institutional Commercial and Industrial (ICI) Boiler Segment • up to $1,723M ¹ Large Industrial Segment • up to $802M ¹ Enhanced Oil Recovery (EOR) Segment • up to $100M ² Flare Segment • up to $201M ¹ Targeted 10 - Year Addressable U.S. Market of $3.6 Billion ¹ Frost & Sullivan Market Assessment Report, June 2016 ² The EOR Segment includes Western Canada 10 yr. estimate by ClearSign of $45M as well as the U.S. market of $79M determined by Frost & Sullivan Market Assessment Report, June 2016

 
 

USA Primary Target markets 20 Texas 6,025,900 bpd refining capacity and estimated 21,000 burners installed Louisiana 3,530,355 bpd refining capacity and estimated 12,000 burners installed California 2,096,000 bpd refining capacity and estimated 7,000 burners installed Ethylene Adding an estimated 2,000 new or retrofit burners per year Boiler, Flare, Vapor Recovery Significant retrofit (and OEM) market Aftermarket parts Installed base provides consistent replacement parts business Refining by Region Other Markets

 
 

China’s $5.5 Trillion 10yr Environmental Commitment China Market Opportunity 21 • Govt. mandates drive investment and local participation • Chinese government approved $550B per year for next 10 years to invest in environmental equipment and technologies that reduce harmful emissions • NOx boiler emission standard for Beijing and key regions reduced to 15 ppm (April 2017) • Multiple ClearSign Core Markets MS16

 
 

235,000 District Heating Gas Fired Boilers 500,000 Boilers in other Industries Approximately 220,000 district heating boilers in critical emissions regions Approximately 130,000 other boilers in critical emissions regions 350,000 of these boilers are expected to be converted to low emissions technology over the next for 10 years Additional opportunities exist to replace burners in ethylene furnaces ClearSign Boiler Opportunity in China 22 Bifurcated strategy offering both watertube and firetube boiler products addressing an estimated $8B opportunity* * [ClearSign estimate] District Heating Area Non - District Heating Area

 
 

• Partnerships – Under development for Process Heaters, Fire Tube Boilers, Water Tube Boilers, Flares and Vapor Combustors (Collaboration with ASHCOR announced) • Technology endorsed by Southern California South Coast Air Quality Management District • Multiple Fielded and commercially operating installations Market/Business Traction Already Underway 23

 
 

Commercial Relationships 24

 
 

Balance Sheet and Capitalization Table 25 Cash & Short - Term Investments (Dec 31, 2019) $8,550,000 Long - term debt $0 Total Fully Diluted Shares Outstanding 26,707,261 As of Q4 2019 SEC filing (Dec 31, 2019)

 
 

Structured to Capitalize 26 Develop Western business and provide technology and support to global subsidiaries ClearSign Asia Ltd Investment and business development into all Asia ClearSign Combustion (Beijing) Environmental Technologies Co., Ltd Investment and business development in domestic China …on the Biggest Global Opportunities ClearSign Technologies Corporation

 
 

Investment Recap 27 * [Frost & Sullivan] • Patented and proven technology provides attractive ROI from improved operational performance while providing transformational improvement in emissions • Proven management team with deep industry experience • Rapid scale - up potential via “plug & play” product introductions and key strategic partnerships • “Asset light” model and premium pricing that provide substantial growth and margin potential • Large, growing global addressable market. Estimated $3.6B+ U.S.*, $8B+ China • Strong balance sheet with growing commercial interest from the world’s leading oil companies

 
 

ClearSign Technologies Boost Operational Efficiency Reduce Costs Decrease NOx Emissions 28