ClearSign Technologies Corporation

Good afternoon and welcome to the ClearSign Technologies second quarter 2024 conference call. All participants will be in a listen-only mode. Should you need assistance, 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 your question, please press star, then two. Please note, this event is being recorded. I would now like to turn the conference over to Matthew Salinger of Firm IR Group. Please go ahead.

Good afternoon. Thank you, operator. Welcome, everyone, to the Clearsight Technologies Corporation second quarter 2024 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 included 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 risk 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, and other risks that are described in ClearSign's public periodic filings with the SEC, including a discussion in the risk factor section of the 2023 Annual Report on Form 10-K for the period ended December 31, 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. So on the call with me today are Jim Deller, ClearSign's Chief Executive Officer, and Brent Hines, ClearSign's Chief Financial Officer. So with that, at this point in the call, I would like to turn the call over to CFO Brent Hines. So Brent, please go ahead.

Thank you, Matthew. And thank you to everyone joining us here today. Before I begin, I'd like to note that our financial results for the second quarter of 2024 are included in the quarterly report on Form 10-Q that was filed with the SEC last Wednesday on August 14. With that, I'd like to give an overview of the financials for the second quarter of 2024. For the second quarter of 2024, the company recognized approximately $45,000 in revenues compared to $150,000 for the same comparable period in 2023. This $105,000 decrease in revenues is driven by the natural lumpiness in our business as we continue to work to build our sales pipeline. While we don't provide guidance, Jim will comment later on our project pipeline with shipping and delivery timeframes, which can give an indication of future revenues. Looking at the income statement as a whole, our net loss for the second quarter in 2024 was approximately $1.9 million. which is an unfavorable increase of approximately $400,000 compared to the same period in 2023. This unfavorable year-over-year change was predominantly due to a one-time non-cash event for $260,000 related to the vesting of restricted stock units in connection with the resignation of Mr. Hoffman from the Board of Directors. Now I'd like to shift focus from our income statement to the balance sheet, more specifically cash. Our net cash used in operations for the second quarter of 2024 was approximately $1.5 million, compared to a generation of cash of approximately $50,000 for the same period in 2023. This unfavorable year-over-year change was driven by the prior year's operations. As you may recall, during the second quarter of 2023, we collected a significant amount of cash from customers because we met billing milestones specified in our contracts. Shifting gears but continuing our focus on cash, I would also like to revisit an announcement we made on June 20, 2024, where we announced the full exercise of the Clear SPV participation right. Pursuant to a stock purchase agreement dated July 12, 2018, Clear SPV can participate in equity offerings to maintain its 19.99% ownership. The full exercise of the participation right added approximately $4.3 million in cash to the balance sheet. Couple this with the other recent equity offerings, we added approximately $13 million in cash to our balance sheet in the second quarter of 2024. So therefore, as of June 30th, 2024, we reported a balance of approximately $16 million in cash and cash equivalents. From a financial perspective, we believe this working capital position instills greater confidence in our customers and suppliers when doing business with us.