ClearSign Technologies Corporation

Good day, and welcome to the ClearSign Technologies third quarter 2023 conference call. All participants will be in a listen-only mode, and should you need any assistance during the call, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on your touchtone phone. To withdraw a question, you may press star, then two. Please also note that this event is being recorded today. I would now like to turn the conference over to Matthew Selinger of Firm IR Group. Please go ahead, sir.

Good afternoon, and thank you, operator. Welcome, everyone, to the ClearSign Technologies Corporation third quarter 2023 results conference 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 by the company's projections, expectations, plans, beliefs, and prospects. These statements are based on judgments and analysis as 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 products will be successfully completed, whether ClearSign will be successful in expanding the market for its products, other risks that are described in ClearSign's public periodic filings with the SEC, including the discussion in the risk factors section of the 2022 annual report on Form 10-K and a quarterly report on the Form 10-Q for the quarterly period ended September 30, 2023. 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. On the call with me today are Jim Deller, ClearSign's Chief Executive Officer, and Brent Hines, ClearSign's Chief Financial Officer. So, at this point, I would like to turn the call over to CFO Brent Hines.

Brent, please go ahead. Brent Hines Thank you, Matthew, and thank you, everyone, for joining us here today. Before I begin, I'd like to note that our financial results on Form 10-Q were filed with the SEC earlier today after the market closed. With that, I'd like to give an overview of the financials for the third quarter of 2023. The company recognized $85,000 in revenue during the third quarter of 2023, compared to $324,000 for the comparable period in 2022. Revenues recognized year-to-date in 2023 were $1.1 million compared to $324,000 for the same period in 2022. The increase in year-over-year revenues are driven in large part by our two ongoing California process burner refinery projects. Now I'd like to shift our focus from revenue to cash. Our net cash used in operations for the quarter ended September 30, 2023 was approximately $1.3 million compared to approximately $900,000 for the same period in 2022. This $400,000 year-over-year increase was driven by project execution costs related to our California refinery projects. As noted in prior conference calls, many of our contracts are set up so as to allow us to collect meaningful amounts of cash before we recognize revenues. As we continue to work through these contracts, we will hit contract milestones in the coming months that will allow us to collect more cash from our customers. Now turning focus from cash to the income statement. Our net loss for the third quarter in 2023 was approximately 1.3 million, which is essentially the same for the comparable period in 2022. Our year-to-date net loss for 2023 was approximately $4.2 million, which is approximately a $200,000 decrease year-over-year compared to the prior year. This year-over-year decrease was predominantly due to our change in gross profit, which improved due to sales volume. As of September 30, 2023, we have $7.2 million in cash and cash equivalents, with 38.6 million shares of common stock outstanding. And with that, I'd like to turn the call over to our CEO, Jim Deller.

Jim?

Thank you, Brent, for the financial overview. As always, I'd like to thank everyone for joining us on the call today and for your interest in ClearSign. On today's call, I will review our business segments, changing our usual order, and I will start with boiler burners first this time. And at the end of this, I will touch on China, since boiler burners are our main product line there. Following that, I'll move on to process burners, which will include both what I will call typical process applications and also an update on high hydrogen projects and developments. Before I start, I have a couple of more general items I'd like to address. Firstly, I want to personally extend my thanks to board member Gary Delcy, who has just stepped down. Gary called me early Thursday last week to pass on his regrets that he has had some unavoidable time commitment to rise. And unfortunately, he will not be able to continue his service to ClearSign as a director. On behalf of myself and the other directors, I want to pass on that gratitude for his engagement and advisory and help.

And we do wish him the best in the future. The second item is to make you aware of some work completed by a third party that will be of interest.

This report was published by the consulting company ICF for the California State Gas Emerging Technologies, or GET, program, titled Market Assessment of Emerging Ultra Low NOx Burner Technologies, dated August 11, 2023, and that gives a comparison of the latest burner technologies and features ClearSign prominently. both our process burner and boiler burner technologies. Our boiler burners are also identified under the Rogue brand name. So a few quotes. The report findings include, unlike other burner manufacturers who have tweaked a regular burner to get ultra-low NOx levels, ClearSign's burner has been purposely developed to be ultra-low NOx from the beginning and therefore has tremendous operational flexibility. And then in a section reviewing the ClearSign Rogue boiler burner, The quote, this boiler burner using the ClearSign core technology has exceptional flexibility for controlling NOx emissions. During the site visit, we were able to tweak the burner to operate close to sub-1 ppm NOx.

We have put a link to this report on the homepage of our website. Now turning to our product line.

I will start with boiler burners first, as said on this call, because we have completed some significant work behind the scenes and want to give this some extra attention. We have previously discussed our first three boiler burner sales, two into California and one into Texas. These are meaningful, as they will be our first commercial deployments in the field. We actually have four deployments As for the first sale, we deployed the 500 horsepower rental boiler from our partner, California Boiler. This rental boiler was set up, and some of you may have seen our posting on LinkedIn regarding this. The first boiler burner sale was for a global medical and business waste services company and was in conjunction with our partner, California Boiler, into the San Joaquin Valley Air Pollution Control District of California. This burner was shipped out to California is now installed and, after some delays outside of the scope of Clearsign All-California Boiler, finally started up last week. This unit is now in operation. Formal third-party verification of the NOx performance has not yet been completed, but our preliminary numbers indicate that less than four parts per million are being achieved, and we have the capability to reduce this further if needed. The second boiler burner sold into the California market was to a national provider of recycling services to the food production and restaurant industries and will be installed in combination with a new boiler. This was sold as a package with our partner, California Boiler, into the San Joaquin Valley Air Pollution Control Districts of California. The installation is part of a recycling plant upgrade that will increase energy efficiency for one of this customer's nationwide sites. The new burner and new boiler are both shipped and in California awaiting installation. This new boiler and burner is part of an upgrade of this customer's operations and is our understanding that the new building into which this boiler will be installed is currently under construction. We believe we are truly resetting the bar for boiler burners. This burner is larger at 1,200 horsepower and is in the size range requiring sub 2.5 half a million NOx emissions. a capability that we believe is unique to clear sign burners. All other solutions require the inclusion of an SCR and associated capital costs and ammonia handling that go with them. It's also worth noting that the new boiler for this site is being supplied by Hearst, the largest manufacturer of fire tube boilers in the United States. The third boiler burner sale was into Texas where, after California, we anticipate the Texas Gulf Coast region will be the next large market for us. This sale was to a chemicals company and the first into the industrial chemical sector. This is unique in the fact that this is our first application of our boiler burner technology into a non-boiler heater and, very importantly, our first sale to a heater manufacturer. who has included our burner as their chosen solution to meet their customers' needs. This burner has been installed and actually run, enabling us to collect preliminary NOx data significantly below the required five parts per million permit level. The unit is not yet in full operation, but we anticipate that it will be in the coming weeks, and in doing so will provide a valuable reference for us in this important Texas Gulf Coast region. This installation in particular is receiving significant attention. Specifically, we believe that this opportunity will enable us to quote new heaters once this burner is fully operational. Further, this sale is to a heater manufacturer who has also provided the boiler burner and boiler package to our end-user customer in Texas, who will now have first-hand experience of the efficacy of ClearSign burners and the competitive advantage that they provide for them. which we believe will result in even more sales, both for the heater manufacturer and us. In fact, just this past week, we were asked to quote for two other projects that this customer is chasing. Over the last couple of months, we've made some significant, albeit subtle, changes to the marketing and branding of our Rogue burner product line. For those of you who follow us closely, you will start to see references to Rogue MZN, Rogue S5, and Rogue S9 burners. This is the result of market segmentation and assessing what is needed to be competitive in different regions. And what I'm excited about is developing an offering that we believe will be competitive throughout the United States and beyond, significantly expanding the customer base that we can pursue today. For anyone new, and to avoid confusion, Rogue is the name given to the boiler burner built with that clear side core burner body and the fuel gas controls and equipment, which are provided by Rogue Combustion, a subsidiary of our partner, California Boiler. Rogue NZN, an abbreviation for near-zero NOx, is our high-end, fully capable burner provided with NOx emission guarantees at 2.5 parts per million or below, needed in boilers over 500 horsepower in the Valley District of California. And we anticipate other regions of California, including the Los Angeles region, in the future. In this segment, our competition is a catalytic unit back-end cleanup system, which is a much more capital and operationally expensive alternative. The S5 version is a simplified clear sign core burner and a simpler control system, modified to provide a superior offering in a segment where there are some alternative burners available, albeit with hit and miss results, low operating efficiency, and high maintenance needs. This burner and the sales materials are focused on our California customers, and particularly fire tube boilers smaller than 500 horsepower. The S9 version is targeted at all regions outside of California. The main difference between the S5 and the S9 is the sales channel and promotional strategy, as a competitive landscape is different. I appreciate that these distinctions may seem subtle, but this approach leads to the development of sales channels targeted these distinctly different markets and customers. On our last call, we introduced Tina Anichukwu, who had just joined us as Director of Customer Relations and Business Development. Tina was instrumental in orchestrating the aforementioned rebranding and segmentation. Driving changes like this through takes focus, management, and experience, and I'm very pleased to have Tina work with us and with California Boiler to bring this revision into practice together. This has truly been a collaborative project. While I do not have any actual orders to report today, we already have seen traction with customers in two states outside of California and Texas, and in addition have been notified that we have been identified as the favored supplier for a new multi-burner project in California. For some detail, one of the attributes identified in our segmentation project was the ability to provide a sub-5 ppm or sub-9 ppm burner and then provide a simple upgrade to enable our customers to comply with a future 2.5 PPM requirement, should that be needed without a major change-out of their equipment. This capability was specifically referenced in our proposal and also in the feedback passed back to us by this customer when explaining why they selected the ClearSign Rogue offering. I look forward to letting you know as these opportunities are brought to fruition. Now a quick update on our work in China. We are in the commissioning phase of our 500 horsepower demonstration unit there in China. This has admittedly taken longer than we originally anticipated due to the time required to get some final components fabricated, but we do believe we are in the final stages and look forward to being able to coordinate the formal visit from the Chinese officials to demonstrate the burner operating for its full performance range. I anticipate that this will be around the end of the year or very early 2024. Please note all boiler burner companies, domestic and foreign, need to go through this government burner certification process in order to be allowed to sell burners in China. The regulations in China continue to push the reduction of emissions. China's National Development and Reform Commission issued guidance in 2023 to accelerate the retrofit of equipment to further improve energy savings CO2, and harmful emissions. We continue to have good engagements with governments at local levels. In particular, we continue to work with administration in Shenzhen and promote our joint capabilities with Shuanlian. We have similar engagement in Tangshan and, in general, have engaged in strategic outreach to major industrial parks in Suzhou, Nantong, and Tianjin. Now switching to process burners. Last time we spoke, at the start of this quarter, we had just received the award of $1.6 million for the Phase II SBIR grant from the Department of Energy for a 100% hydrogen low-mox burner. This grant follows the previous Phase I grant for $250,000, which was for the proof of concept work. As we discussed, this second grant is for up to two years and will fund the development and commercialization all range of burners that will enable the control of NOx emissions to the levels required to control ground level ozone in critical polluted areas. These burners will coincide with the adoption of the new hydrogen economy and use of hydrogen fuel for industrial heating. The anticipated outcome is to achieve reductions in the industrial emissions of both carbon dioxide and nitrogen oxides or to enable our customers to transition to hydrogen or hydrogen fuels within the constraints of their current operating permits. As we have highlighted previously, the current available solutions are able to reduce CO2 through the burning of hydrogen in place of hydrocarbon fuels, but the byproduct is much higher NOx. A novel burner enables down to zero CO2 by burning pure hydrogen and creates NOx emissions so low that they compete with SCRs in the low single digit parts per million range. Phase 1 saw the completion and demonstration of a prototype process burner that successfully integrated hydrogen and hydrogen blending while maintaining NOx below 5 parts per million. Phase 2 will entail scaling up the size of the burner from 2 million BTUs per hour up to 8 million BTUs per hour and deploying it in real world commercial industrial settings where high heat is required over the next two years. The design of the first burner of the second phase is done. And we are in the process of scheduling for fabrication and testing. This is anticipated for early 2024. We did mention on the last call that we are seeing interest from additional parties regarding our hydrogen technology. And on the heels of this, we announced on September 20 a collaboration with Southern California Gas Company, or SoCal Gas, for additional funding, as well as other support of this project. SoCalGas has pledged $500,000 to the project with the objective of promoting the installation of our hydrogen-capable clear sign core burn technology into their client space in Southern California. This latter part of the support of the field demonstration is vital as they will help us find and select demonstration sites from their client list so that we can get the technology into the field. and of course the SoCalGas, so they can prepare their customers to receive the hydrogen fuels from the infrastructure the SoCalGas is developing and continues to operate within their environmental permits. SoCalGas is an exciting partner as they have focused on clean energy innovations designed to decarbonize hard-to-electrify sectors of the economy. It's the segment that is the focus of most hydrogen projects. and in this case, a key component of the efforts to help California achieve net zero by 2045. To that end, SoCalGas is working to develop Angela's Link, a proposed green hydrogen pipeline system that could deliver hydrogen to the Los Angeles region, a project which could be the nation's largest green hydrogen pipeline system. On top of our collaborative focus on a hydrogen fuel process burner, we have been able to present to them our other existing products in our portfolio, like our Ocalonox boiler burners. In turn, SoCalGas has set up meetings and made introductions and abilites to present our technology and business to opportunities to not only a significant number of their customers, but also their peers from other regions and other technology development organizations largely funded by these large utilities. It is an exciting opportunity to be able to leverage our collaborative relationships with SoCalGas and get in front of the customers that rely on them for their fuel. We hope to grow and foster this relationship by bringing products into the market that can help companies like SoCalGas meet their forward-looking mandates by providing their customers access to our boiler and process heater technology. Turning to the projects in our pipeline, we have two multi-heater, multi-burner orders that we are processing. The second of these two orders is actually on the tightest schedule, As a quick reminder, this order is for the burners to fit into two different existing heaters. The order, which we received back in May of this year, includes 13 burners in total. The factory performance test for the first of these two heaters went very smoothly and was completed mid-October. These burners are now in the manufacturing process and are due to be shipped and installed this year. The performance test for the second of these heaters is underway this week. and these burdens are scheduled to be installed early after the new year. And if you recall, due to our contract structures, these are the events that will trigger significant revenue recognition. We are anxious to get this order completed because, as some of you may recollect, this order is a repeat order from a customer who was an early adopter of our technology in Southern California. Additionally, as we have mentioned, and it's very important, This customer came back to ClearSign after initiating an alternative option to install a traditional selective catalytic reduction, or SCR, NOx control system and the inherent complexities associated with such a system. We believe that successfully completing this project will make a powerful statement for ClearSign, significant to both our customer base and also the regional air regulators. One feature of this installation is that the burners will operate on fuels with a very high concentration of hydrogen. This feature is included in the factory testing protocol. The other 20 burner California project is also progressing, but on a less tight timeline. As we indicated previously, the final witness testing went as planned. At this time, we do not have confirmation whether the site shutdown during which these burners will be installed will be undertaken in 2024 or 2025. This is dependent on our clients' plans and scheduling. Bear in mind that there are a lot of activities included in these refinery shutdowns, so the planning process is complex and dependent on many factors. We will be able to invoice and receive payment upon delivery of the burners, and only a small part of the purchase order will remain until installation. As we have stated before, the burners used for this witness demonstration are not part of the final production ramp and will not be included in the shipment to California. These burners will be kept for demonstration purposes for potential customers and stakeholders. We have customer demonstration events planned for the coming months. Beyond these projects, we do see a growing pipeline and encouragingly a growing interest from customers in the Texas Gulf Coast region. As we have said in the past, We very much believe that a lot of the industry is watching these larger multi-burn orders. When in the field of operational, we anticipate that being able to refer to these operational units will give other customers who may be on the fence, who are not fully considering at this time, the confidence that they need to include ClearSign when assessing their options for future burner upgrades or a more cost-efficient alternative to installing an SCRI. Most recently, on November 7th, just last week, we issued a press release announcing that Matthew Martin has joined ClearSign as Chief Technology Officer. I want to give some insight into who he is and his role at ClearSign. I'm sure for anyone in the fire equipment industry, Matthew Martin needs no introduction. But for those who are not, Matthew is one of the leading and recognized technical experts in this field. He has spent his entire career in the field of fire equipment and energy systems, covering the technical development of them and the tools, particularly computer-based modeling and predictions required to do so. He also has a strong background in assessing the refining and related energy equipment markets and opportunities to deliver value to customers through improving the technology available. I have known Matt for over 20 years and worked with him for most of that time. His combination of technical excellence and creativity combined with his market and business acumen is exceptional. While at Honeywell, he had the rare distinction of being appointed an engineering fellow in recognition of his extraordinary contributions. There are more details of his background and accomplishments in the press release for anyone who did not see it.

I am very excited to have Matt join us.

It is very encouraging to have someone of his stature in the industry redirect their career and join us at ClearSign. We already have a very strong technical team at ClearSign, with world-class talent supporting all our product lines, so I want to talk a little about his new role. Everyone at ClearSign wears multiple hats, and as you would expect in a company of our size, our working protocol is very collaborative and responsive, as opposed to being formal and rigid. So Matt's input and expertise will be additive across all our products and projects. But Matt's objective is to focus on the growth of ClearSight. As an example, taking our Texas Chemicals installation where we have a boiler burner successfully installed in a new process heater and extrapolating that capability into applications in different types of heaters and other fired equipment and adapting the burner to operate in more diverse operating regimes. At a higher level, his objective is is to efficiently simulate the customer's needs, business opportunities, and technical possibilities to meaningfully expand that business. And to achieve these outcomes takes focus, resources, and a particular talent.

Take a step back and look at ClearSign more generally.

The recent additions of Tina Anachukiu bring her considerable sales management and business development talent to ClearSign. And now Matthew Martin, with his opportunity-focused technical expertise, in addition to what I believe is a truly world-class talent we already have in the team at ClearSign, provides ClearSign with a very strong capability to expand our offerings beyond the progression of our current low-emission burner technologies.

I'm very optimistic and truly looking forward to the future opportunities for ClearSign. Looking forward, there are key events on our horizons.

The most immediate will be the installations and startups that are so important to our sales growth. We have the 300-horsepower, 5-parts-per-million burner in California, commissioned last week, now awaiting independent emissions verification. We have the 500-horsepower boiler burner in a process heater on a chemicals plant in the Texas Gulf Coast, just waiting on the replacement of a component in the piping system outside of our supply area. and with opportunities to quote several other process burners waiting on that performance verification. And very significantly, the installation and startup of the 1,200 horsepower sub 2.5 parts per million boiler burner in the San Joaquin Valley Air Pollution Control District of California. And the installation and startup of the two process heaters at California Refinery anticipated next month and early 2024. These startups will transform our install base and reference list. We have sales opportunities to progress in both boiler burner and process burner product lines, and both in and out of California. And I'm particularly eager to develop our opportunities enabled by our recent boiler burner product line segmentation project. Longer term, I'm very much looking forward to working with Matthew Martin, engaging with his extensive industry network, and promoting our products into diversifying opportunities.

With that, I'd like to open up the call for questions. Please, operator.

We will now begin the question and answer session. To ask a question, you may press star, then one on your touchtone phone. If you're using a speakerphone, please pick up your handset before pressing the keys. And if you would like to withdraw a question, please press star, then two. At this time, we will pause just momentarily to assemble our roster.

And our first question here will come from Eric Groskin, a private investor.

Please go ahead.

Hi, good day, Dr. Deller. You've talked a lot about process burners and boiler burners, but can you also talk about the prospects for the fire tube product, the flame cameras, and the new hydrogen fuel burners. And perhaps you could rank those in terms of sales capacity.

Certainly.

And I can give some more color around those and some clarification. So I'll start with the boiler burners. You mentioned the fire tube. The fire tube is the smaller range of the boiler products. Basically, the boilers that we address fit into two types. There's water tube, which tend to be the larger end of the range, and the fire tube boilers, which are typically on the smaller end of the range, and they are the main focus of our sales at this time. The boiler burner products are sold in collaboration with our partner, California Boiler, and branded as the Rogue Burner, and those are actually the rather subject of the segmentation project that I referenced that we worked with California Boiler. So in terms of the immediate sales opportunities, I think that has to be the one that I would focus on most from the outside. The response we have to that segmentation project and making these products relevant to now all areas of the United States, both within California and outside California, And the response that we've seen to date in the very short time since that project was rolled out definitely made that a major focus for us. We have two major product lines. One is that boiler burner line, and the second is the process burners. The immediate startups I referenced, the one that was started last week, there's another one. just waiting on one component down in Texas that's actually in a process heater and a much larger boiler burner due to be started up around the end of the year. Those are all of that 5G boiler burner product line. And then the indications we've got from customers following the segmentation of products of clear sign being favorably seen amongst the other bidders for other projects in California also resulting from that segmentation. So of those we've mentioned, I really would focus on the 5G boiler burners. Longer term, you know, obviously we're all watching the so-called hydrogen economy and the development of the hydrogen pipelines and the introduction of hydrogen into the fuel gas systems. And that has got enormous potential. And just to emphasize that, one, of course, is the customer is burning hydrogen and needing equipment to burn hydrogen. But what may be the bigger influence for us is whenever you add hydrogen to a typical fuel gas, even in a smaller percentage range, in the region of 15% to 20% as we discussed, that has a very large influence on the NOx created. you may put the NOx up by 40 to doubling the NOx. So for a client that's operating currently just under their NOx permit, introducing the hydrogen to fuel gas is going to put them over their permit levels and require them to address that. And we really believe the most efficient way to address that is to put in a new, much lower NOx-creating burner, which we have and we're promoting as the ClearSign products. That is the focus of not just the project we mentioned with the SBIR grant, but also the reasons for promoting the clear sign boiler burners. The last topic you mentioned was the clear sign sensor. I know you referenced it as a camera. What we have is a sensing technology that's unique. Our biggest prospects for that, we have a partner company called Narion based out in Seattle. And Narion was the recipient of a government grant recently which we announced of $250,000 to develop a sensor that will control the steam flow to industrial flares. That's a very big need in that market. Narion is also pursuing many other opportunities. These are longer range and further out, but they're

I really believe there's great potential in the work that NARA is completing as well. Okay. Thank you very much. Thank you, Eric.

Again, if you have a question, you may press star then 1 to join the queue. Our next question will come from Robert Keksek with Los Colinas Capital Management. Please go ahead.

Yes.

I was wondering about the the cash flow and the dilution, um, with the 7 million that's shown on the balance sheet at the end of the quarter and the anticipation of these orders flowing some cash in, do you believe that we'll get into the next year before, um, into the next calendar year before, um, you need any more, uh, public financing?

Yeah. Thank you for the questions. Um,

Our balance sheet, we feel, is healthy right now. We're comfortable with it. We have projects that we're working on and cash coming in from those projects and cash to come from those projects.

Bob, just to add some color to that, I know everyone's watching the revenue. Specifically, the projects that drive the revenue are exactly the ones we're talking about. The revenue is recognized on significant milestones. But typical milestones will be the delivery and the start of the burners. We've got the free boiler burners we talked about today. And also the testing and the installation of the process burners. There are some significant projects that are happening in these next few months that will trigger the milestones typical to lead to the revenue recognition.

Good, good. So that'll give us some runway to go. That sounds good. Okay, thank you. Thank you both.

And our next question will come from Jeff Feinglass, a private investor. Please go ahead.

Hey, Jim. I was hoping you could expand a bit on China. And specifically, you mentioned the prospects of relatively soon getting certification for the fire tube boiler project. But what are the next steps after that as far as sales? I mean, maybe it's too speculative at this point, but could you speak on that?

Hey, Jeff. Yes, certainly I can. I appreciate the question. I'll just preface this, but obviously at this time, I will tell you what I see, but this is very speculative. We are... You know, as I mentioned, we are in the process of completing the run-in soon to be followed by the government certification of the 500 horsepower firetube boiler burner in California. But, Jeff, I know you've been following, but for those that haven't, one of our key strengths in China is our partnership with what may be their biggest firetube boiler manufacturer in China called Shuangliang. This is a truly enormous company. And their interest in ClearSign and what we've agreed through our alliance with them is to provide what we're calling an integrated boiler burner package into the Chinese market. So we have a truly national scale Chinese boiler manufacturer developing a product incorporating the ClearSign burner package to achieve the new low MOX requirements that are being rolled out by the Chinese government. In recent years, we've seen a shift in China and the regulations are being rolled out now in the heavily industrialized regions of China, whereas previously the focus was on the northern regions, especially around Beijing, where the air was notoriously bad. and focused on the district heating. That is still in place, but this new development is in the industrial cities. In the call, I mentioned Shenzhen and Suzhou and Hong Kong and Tianjin. These are all very large industrial regions within China. These industrial regions are heavily populated with fire tube boilers, and they are not a seasonal heating. This is industrial heating that's used year-round. The local governments are driving the marks levels down in these regions, and being able to partner with a Chinese company like Shuangliang that is very prominent within the Chinese market, and then along with them the outreach to the local governments in those areas and to the industrial parks, to me it's a really exciting opportunity. I don't have any details to report, But that is the path that we're following and the sales pursuits that we are undertaking as we complete the certification of this larger 500 horsepower boiler burner.

All right. Thank you on that. Thank you for that. Appreciate it. Thank you, Jeff.

And our next question will come from Brad Van Duker, a private investor. Please go ahead.

Hi, Dr. Deller. My question is, as a long-term investor, is the market cap of the company and the fact that the stock prices remain really low and we can't seem to turn the corner on it or maintain anything with it. What are your thoughts on getting the stock price up, the shares up, and the interest up where investment is up?

I really can't comment on the share price and what people pay. That's not really in our control, but we're obviously in control of the progress of the company and the news that flows out. I can reinforce my excitement, hopefully for everyone, but the absolute importance of of getting the reference projects out into the market and having the equipment in the field for our customers to see and to give them confidence in placing those orders. And I know I've said that before, but let me give you a bit of color. Just this past week, we started up the 300 horsepower firetube boiler project in California. In that same week, we have already had one customer contact our sales team with California Boiler and go and visit that boiler to look at it as a reference in preparation for them making plans for their NOx control equipment in California. It's absolutely critical to get this equipment out. We have two boilers starting up in California this year or the big one may be rolling site the next year. We've got one down in Texas that we have process burner quotes or a request for a quote being waiting to come to us on that burner started up. And in addition, the heater manufacturer who manufactured that heater has already come back to us and asked for quotes for two more burners for projects that they are chasing. So when you ask, you know, I know everyone's looking forward and looking at the development. I just cannot stress from my perspective how important getting these units out into the field are, and then it's absolutely our job to leverage that, to do exercise like we have with the segmentation, to get people like Tina and Matt on board and to really focus on the growth of ClearSign so we can leverage that installed base and finally show the world what ClearSign products can do.

Yeah, I can remember when the boilers first came out that there was, I think you quoted in the 50s, the number of inquiries into it. But we didn't have any out and installed. So you think now that we're getting installation that we'll start seeing, you know, things come across the finish line with orders?

I truly believe so, Brad.

And based on what we've seen just this past, past few months, both with the segmentation project that I talked about and the targeting and the interest in that, and then just seeing people want to see the equipment installed. Just examples, the reference that I quoted this past week of a customer immediately coming and asking to see the 300 horsepower burner in operation. And my background, my previous background in the process burner industry, what the clients always ask for was your reference list. So for us to finally be putting a reference list together, I believe is absolutely key for us.

Okay, thank you. I think the encouraging thing for me is that I have not seen a failure in a product that once it's been installed that a customer has had to withdraw or anything. Everything's been successful. So I think as an investor and a long-term believer in the company, it's just a frustration that things aren't picking up faster. But I understand patience. Thank you.

Thank you, Brad. And this concludes our question and answer session. I'd like to turn the conference back over to Jim Deller for any closing remarks.

Thank you, everyone, as always, for your interest and taking the time to participate today. We look forward to updating you regarding our developments and speaking with you on our next call.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect your lines.