ClearSign Technologies Corporation

Good afternoon and welcome to the ClearSign Technologies third 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 the number one on your touchtone phone. To withdraw your question, please press star, then the number two. Please note that this event is being recorded. I would now like to turn the conference over to Matthew Selinger of Firm IRO Group. Please go ahead.

Good afternoon and thank you, operator. Welcome everyone to the ClearSign Technologies Corporation third 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 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 ClearSense 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 filings with the SEC, including those risks discussed under the risk factors section of the annual report on Form 10-K for the period ended December 31, 2023, and the quarterly reports on Form 10-Q for the quarters ended March 31, 2024, June 30, 2024, and September 30, 2024. So 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 in the call, I would like to turn the call over to Brent Hines. So, Brent, would you 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 quarter period ended September 30, 2024, was included on our Form 10-Q filed with the SEC on November 14. And with that, I'd like to give an overview of the financials for the third quarter of 2024. For the third quarter of 2024, the company recognized approximately $1.9 million in revenues, compared to $85,000 for the same comparable period in 2023. The year-over-year increase in revenues was driven predominantly by the shipment of multiple process burners to a California refinery customer. I would like to note that this quarter's revenue is the largest quarterly revenue figure ever reported by the company. Our year-to-date revenues for the nine months ended September 30, 2024, was approximately 3 million, which is a 1.9 million increase over the prior comparable period in 2023. This is also the largest year-to-date revenue figure reported by the company since inception. Our year-to-date gross profit margin also increased year-over-year by 11%, from 22% in 2023 to 33% in 2024, adding approximately $340,000 in profit compared to the prior period. This profit was offset by 394,000 as a result of a one-time accrual estimate related to the decision to suspend our China operations. Jim will give more color about our China decision and suspension in a few moments. Our year-to-date net loss for the nine months ended September 30th, 2024 decreased by 104,000, which is an improvement of 2.5% over the comparable period in 2023. I need you to keep in mind this net loss improvement includes the 394,000 from our one-time China approval estimate. Now I'd like to shift our focus from the income statement to the balance sheet, more specifically cash. Our ending cash balance for September 30th, 2024 was approximately 14.5 million. Our net cash used in operations for the quarter ended September 30th, 2024 was approximately $1.4 million compared to approximately $1.3 million for the same period in 2023. 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 your interest in ClearScience. The call today, we've decided to change the format from previous calls. We've received positive responses from previous presentations narrated in a question and answer format, and we believe that this will provide a more engaging call. We've also invited questions to be sent in by email. So we're trying something new, and we'll be interested in any feedback. So Matthew Selinger will lead a question and answer session where we'll go through our different product lines and business updates. So the overall subjects and updates covered will be much like our previous calls. We will review our product line starting with our process burners and then move on to boiler burners. And after that, I want to give some attention to our flare product line since there has been a recently announced order and additional activity there. I'll wrap up by discussing the outlook for the rest of the year and into 2025. So with that, I'll step back and hand it over to Matt.

Great, Jim. So, Jim, Chris and I just reported a record revenue quarter. Can you give them a high-level color on that, by chance?

Yes, certainly. So, Regal, this was definitely a record quarter for us by a long margin. I think it's also significant to look back over the trading 12 months because our business is lumpy. If you look back over the 12 months, it's also a record period of period for us, and you'll see that our revenue flows are significantly increasing. What's also important, and as Brent stated, there was 11% increase in our gross margins accompanying that revenue. That is good. From my perspective, I believe there is room for improvement with further volume and efficiency gains, but overall with the increase in revenue and margin, I truly believe the business is definitely going in the right direction.

And so that revenue, as Brent mentioned, was mainly attributed, in a sense, to one order. Would you mind kind of diving in and giving us a little more detail of that order?

Yeah. And this speaks to the lumpiness of our revenue flows. We have some very large, significant orders, but the nature of that is they don't hit consistently every quarter. So this cause was primarily driven by by the 20-burner order that shipped out to Los Angeles. Those burners were shipped from Zico out to Los Angeles and were finally in California. We were expecting them to be started up early next year. We have learned that that will be delayed. The clients clarified that that's got nothing to do with ClearSign, but the start of those burners will now be around the middle of 2025. But Matt, if I can, just to comment on the order. These burners are going to two heaters. These are two large heaters in a very prominent refinery in the LA refining hub. One heater's fitted with eight burners, and one is fitted with 12 burners. And the reason I'm bringing that up, and I know it's in the middle of next year now, but when these are up and running, I really believe that these are going to be a significant reference for us. These will be the biggest heaters we have in operation at that time. And I believe that having that reference and this performance in that LA hub is going to be a significant catalyst for increasing the future sales.

Great. Well, let's continue with the process burner line. Can you give us some more color on the pipeline and outlook? I think when we left off last call, there was another large order that actually fell into this quarter. But maybe start off from there, kind of talk about that other order.

Yeah, and I think this is relevant because it also gives some insight into future revenue expectations as well. So at the time of the last call, we just announced, in fact, the largest order we received to date. This is for 26 burners going into a Fortune 500 global petrochemical company down on the U.S. Gulf Coast. That order was received, by the way, from an engineering and heater manufacturer called Biwalco USA. If you get a minute, I'd really encourage you to look that company up so you understand the type of company we are dealing with. The order on the Gulf Coast has some special operating requirements, but we've got the technology to do that. And also the recent 100% hydrogen flexible fuel burner that we have started to sell in combination with the new CFD model we've invested in have really been some big drivers that led to us receiving that. That order's going well, and thinking of revenues, certainly one of these shipless burners, it gives some idea what to expect. But beyond that, we also have two other orders in progress for Kern Energy. Of course, Kern is a repeat customer for us. Those orders are incidentally also using this flexible fuel new hydrogen burner, and we're in further discussions with Kern about some other orders that we expect they're going to need.

next year and then so earlier this year too jim uh there was the backed designation and maybe kind of you know uh maybe kind of address that again what is backed and are you seeing that uh helping you know kind of drive business our direction so i think yes so switching from looking at what's in house and the revenue flow to

What's driving our sales? We're seeing a lot of interest in the process burner product line across the board. There are some drivers, Matt, as you mentioned, the BACT review that was done by the Southwest Air Quality Management District and announced early in the year. For those of you who don't know, BACT is Best Available Control Technology. It is a review of new technologies that's run in California, run by all the airports in California, but administered by the South Coast Air Quality Management District. They've reviewed two of our installations for a period of over a year with quarterly meetings and feedback. And the result is that the performance that was documented from those installations have reset their definition of best available control technology for single burner process heaters and for multiple burner process heaters. That is recognized throughout the industry. We believe that is a very good validated reference for us. If I can also, in the same period where we're talking of sales and enhancements, we conducted a burner demonstration with Zico.

Back in August, that went very well.

That allowed us to show our burners running in a multi-burner heater, giving lead engineers and consultants and representatives of many of the top refining and petro-core companies petrochemical companies the chance to look not only at our standard burner technology, but we also, again, were able to present our new hydrogen burner technology to them.

Great. And that was done at the Zico facilities, correct?

Yes.

Yeah. So, speaking of Zico, how is that relationship going?

You know, it's really been going very well.

Zico has been a very solid partner for us back since 2019 when we formed the relationship. Now, as we've increased our business, they obviously, they build all of our process burners. They're aware of the burners we shipped, about the 20 burners that went to California, shipped from Seco. They're aware of the 26 burner order that we've recently received and others, and aware of the quotes that are going out because we have to schedule resources with them. They're also aware of the hydrogen burner development we've done. We've, I really believe, with that visibility into our growing business, We've increased our status with Zico. And last week, we were able to meet with them and discuss a joint branding of a ClearSign Zico process burner line. The intention is that Zico will actually start now to promote ClearSign's process burner technology under their own name and to market it and to brand it and promote it with our own global sales team. So we met with them, we set a date for us to present our technology to their North American sales team, and also discuss things like branding, website promotion, et cetera. So this is a huge development for us, one I'm very excited about.

Wow, that is great news, and I think it's a development that many of us I've been waiting for. So from here, let's shift, if we could, Jim, to the horizontal process applications. And this also seems like an area of business that's gaining quite a bit of traction. Would you mind giving us a little color on what you're seeing in the horizontal process applications?

Yes, certainly. You know, this is a fairly new product line for us. It's one that has I'll be honest, has spread further than we anticipated when we started it. So just for everyone, the horizontally fired process heaters, these are small heaters often going into the midstream industry. That's typically gas processing. But also we're finding there are a very wide variety of different industries that are going into. We recently received an order, or in fact two orders, repeat orders from Exotherm going into the power generation industry. As an example, those orders going into Oklahoma and Missouri, so expanding our national footprint. We've also recently sold, in fact, our largest burners to date to another midstream heater manufacturer, Devco. And the first of these midstream heaters burners were sold to another company here in Tulsa called Tulsa Heater Midstream. But why these are all important is not just those burners. That order flow rate, although that in itself is important, but the repeats, inquiries, and the uptick of interest and just the flow of future opportunities from them is really exciting.

So that actually brings up another question, Jim, kind of regarding sales channels or channel partners. It seems to be a growing part of the ClearSight story. How do you see this continuing to roll out and kind of present business opportunities for ClearSight?

And if you don't mind, let me take a step back. So when I joined the company in 2019, and back at that point, we laid out a strategic plan to develop ClearSign as a business. Just for everyone, the parts of that, one was focused on the technology, right? We had to take the technology at the time and develop that into commercial products that met the customer's needs and and that would be delivered to them in a manner that the customers were needing. So that led to the partnership with ZECO, because to process burners, you have to be able to deliver burners with the credentials of a company like ZECO and access to a test furnace and from manufacturing facilities that they are willing to work with and have approved. On the boiler burner side, with California Boiler. They are the customer-facing service team that actually set up Rogue to carry our product line. But as another part of that plan, we're aware that the company is funded by investor money. We needed to keep the company asset light. Yet to really leverage the potential of ClearSight technology, we had to have a means to expand our sales force and get national and ultimately international reach. And the way we plan to do that was by working through partners. So partners obviously like Zico and California Boiler were able to leverage their sales team. And I'll refer back to the recent comments about Zico and why I'm so excited there. In the midstream heaters, we're selling to heater manufacturers. Now those heater manufacturers are out chasing their own work, chasing their own clients with their own industry. They are using ClearSign burners with our capabilities installed in their products to make them competitive. What that essentially means for us is that the sales teams and the marketing of these new partners, the midstream heater manufacturer in this case, become an extension of the ClearSight sales team. The ultimate goal that leveraging these companies and expanding the sales reach allows us to punch above our weight and have a much greater sales outreach than we could just operating as ClearSight alone. So we're very much developing this business and plan to develop this business through partnerships.

Jim, thank you for the caller there. You did mention the boiler burners, so can we shift to the boiler burner product line now? There were some recent developments and announcements regarding some very kind of important third-party testing. Would your mind just give me a little bit more explanation on that?

Certainly. So back earlier this year, the results were published from a study conducted by the California GET program. So quick background, the California GET program is funded by the gas utility companies in California. It's administered by the South Coast Air Quality Management District. They had engaged a global consulting company called ICF to conduct third-party testing to quantify the performance of this new burner technology, ClearSign technology, compared to the other ultra low-loss burners available in the market. That report was published. It's available through our website. We also put a press release out with a link. But to summarize the data, the third-party study found that a boiler fitted with a clear cyan burner ran and consumed 4% less energy than the burner fitted with or a boiler fitted with the industry standard burner. So to put that in meaningful terms, from mid-sized 500 horsepower boiler in California with California energy prices, that will provide a savings of about $80,000 per year to our customers. Our burners sell at a premium, but that $80,000 will more than cover that premium in a single year. So that in itself provides a very powerful selling proposition for ClearSign. In addition to that, that fuel savings would equate to about 500 tons per year CO2 savings for the customer. And the study also found, or what we knew, was that the clear sign burner is capable of operating down at sub 2.5 parts per million NOx levels. The standard industry oxalox burner was only able to run down to six parts per million.

So that is some compelling data. So with that, can you give us an update on kind of the project pipeline in boiler burners?

Yes, we have a few, you know, we have orders in progress. There's some burners due to be shipped. There was the first of a series of four boilers going out to a customer in California. That burner is built and close to being ready to ship. We, of course, have a number of burners now and operational. A couple of pieces of fairly big news that's new right now. We have a very large burner installed in San Joaquin Valley area. This has been installed and out there for a long time waiting for the construction. We have finally got to the point that that burner, I believe, is, let's say, about done, it's in, it's up and running. As of today, we have actually engaged a third-party source testing company. These are the companies that do the formal measurements. We've had them take preliminary measurements for us because down at the NOx levels we're running at, the analyzers are not all consistent, so we wanted to get their full-spec equipment. They've measured the performance and found that the NOx is under the guaranteed level. The final formal source testing and report is being conducted. That's not completed yet, so we don't have the final results. But obviously, at this point, we're optimistic that this is going to be a successful installation for us, accepted by the customer.

And when it is, I cannot emphasize how important I believe this will be for an installation

The very large boilers operating and requiring less than 2.5 parts per million NOx was the target market that was the primary objective when we initially engaged with California Boiler and mutually decided to develop a product line and to market it and to put the effort that we have to get into the California market. So this, I believe, is going to be a very big benchmark for the ClearSign and I'd brand it as the Road Burner out in California.

And when you say large, can you just quantify how large?

Yeah, I mean, in numeric terms, it's 1,200 horsepower, right? In terms of just physically looking at the boiler, this boiler is going to be in the region about 40 feet long. It's probably as big as you could put on the back of a semi-truck and transport across the country. So this is a very large boiler, classified boiler. It's getting close to as big as fire tube boilers get before they switch over to the larger water tube and power generation boilers. This is one of the biggest. It's not the biggest fire tube boiler, but it is right up there at the top end.

So a notable demonstration of our technology.

Oh, a huge demonstration. This is almost the perfect big boiler opportunity that people will look to and say, yes, that is a bona fide proof of the ClearSign technology.

Great. So we also announced a sale of a boiler last week for an asphalt company and didn't know if you wanted to just get a little color on that sale.

Yes. It's actually important not so much for the – this is a standard burner for us. The burner the client bought was just under 500 horsepower. Of course, our 500 horsepower or the burner model is the one that we'll use. But it's important to talk about this. So going back, I discussed the strategy and the vision we laid out in 2019 and how that manifests in the boiler burner business. The process burners are necessarily bespoke. There's unique details for every heater, and no two of those are exactly the same. That's just the way the industry is. The boiler industry is different. These burners are standard burners, and the goal is to have a standard range of burners with standard pricing that can allow our sales channels, in this case, Road Combustion California Boilers, to go out on their own and sell this product without needing input from us. Of course, we help with sales and marketing and strategic sales, et cetera, but the goal is to let them go hands-free and just sell as many of these things as they can. When they get an order, then, to turn around and just place the order with a clear sign, and we have ready-made drawings and prints. We place the orders with our fabricator, and they fabricate the burners. This order, or the reason for doing that is that gives us a highly scalable model with very little need of ClearSign resources, and it empowers the sales team to go out and pursue business on their own without needing to get back for quotes or details or engineering input from ClearSign. This order is the first of that system. It had, I don't believe, any input from ClearSign in the sales stage. We just received a purchase order, the drawings were done, we turned around and placed an order with our fabricator to deliver this burner. So that is, it is that vision that we laid out in 2019, actually coming through to Frisian for the first time in this order.

Jim, thanks for the detail. It sounds like things are kind of starting to hum along. To round out the boiler burner line, just last month there was a filing regarding the China operations, and Brent alluded to this in his financial overview. I don't know if you could just kind of touch base on this.

I can. Well, I've actually got some notes here, so I need – because this is formal, just to – Pass the details on to everyone. So, as you said, we filed a Form 8K. That was filed October 1st, announcing that we're suspending our operations in China and putting our registered business there into a formal state of dormancy by the end of the year. So, what that means is we still have the business in China, but that business is basically parked and not operational. You might think we're going into hibernation for a period until we choose to revive it. This decision was a result of an increasingly delayed progress to gain commercial traction in China. And as Bren said earlier, there will be some significant one-time costs. Those are mainly related to employee termination payments. But going forwards, our cost to maintain our business in that dormancy status will be minimal, but it also gives the ability to maintain that to maintain that business registration in China. There are additional details. Those are available if you look at the Form 8K. There is more detail there for anyone wanting to see more.

Great. Thanks for the update there. And then just weeks ago, there was an announcement regarding a flare. So this is a product line that we haven't heard about for some time. Again, can you do some color here and talk about what you're seeing regarding this product line?

Yes, I'm actually very pleased to. This is an exciting area for us. As you may know, we do have some flares out. Sold, I believe, it was 2020. I may be slightly off, but out and installed in the LA area right through the California border. Those are up and running. And even prior to my joining ClearSign, there were some flare technology sales. The recent order was for right, customizing our flare, right, it's the burner element that goes into a flare. This is for customizing our burner element to fit into an existing flare to bring it into compliance with the needs of actually a customer that has already experience of clear sign flare technology. That work is going well, and we expect it to roll onto an equipment supply order in the reasonably near future. I don't have an exact date for that yet. But when you bring this up, I actually want to talk about the flare industry and actually the reason that it's exciting today. On a previous call, I mentioned that we went to visit the government in the state of California, and especially their environmental regulatory personnel, as they have new emissions requirements there. We are seeing, right, the need for different flaring technology in regions like California in industries actually different from the standard in industries like the upstream oil industry. It's different industries from that as these new regulations are rolled out and as these new energy, right, projects are seeking permits. What that means for us is that we have a unique combustion technology. We also have a very strong engineering capability within ClearSign, and it puts us in a very strong position to actually be a solution provider for some of these new projects. And this manifests in, there may be flares, there may be quite small thermal oxidizer projects, but it allows us to get into an expansion of not just selling strictly the burner equipment, but actually selling more of a system-wide project. When we look at the long-term, right, our plans, my plans for ClearSign, they go beyond just the burners and the technology we have today. And a big part of that is getting into a solution provider and a systems provider. And one of the reasons that we're particularly excited about this is it starts to dip our toe into the role of a solutions provider and putting together a bigger package that has the potential to greatly expand the sales and the revenue of ClearSign.

That's exciting. It sounds like the ClearSign brand is getting out there as well as a reputation as a solution provider. One thing, you mentioned the state of California, but I think you had similar conversations, am I correct, Jim, in states like Colorado? Yes. Fantastic. Fantastic. So, Jim, that covers my questions regarding the business. So I don't know if at this point you'd like to take a moment for a final summary and use some thoughts on the business going forward.

Thank you, Matt. And I guess to flip back, that was a new way of presenting the update from the company. So we'll be very pleased to hear from anyone on if you liked it or if you didn't. But I would like to wrap up and share some thoughts and just to give a, you know, a a perspective on where we are. So firstly, I want to reflect back on the financial numbers in the 10Q that was filed last week and that Brent summarized earlier this afternoon. I also want to look back over the last 12 months. I want to emphasize that. I think this is a very significant development for ClearSign. Yes, the revenue is lumpy. and it will continue to be lumpy for some time, but it's also significantly more meaningful than at any time in ClearSign's history. During the call, I referred back a few times to the strategic path we laid out in 2019 as a framework for how the ClearSign business is developing. I do that because I think the framework is meaningful. It helps to understand how the specific items and developments that we talk about that may appear normal to face value by the interwoven building block of a highly integrated asset-like company and how we're growing that to have national reach and recognition and how we are growing and the importance of growing that with our partners. So building a network of companies, especially comprising our sales network, I can't mention all of them, but the ones that we can include by name, I'll just run through some key ones here. Of course, Zico. Zico are key for what we do. They've been a fantastic partner. And again, I want to emphasize the recent developments, the conversations we've had about jointly marketing a co-branded Zico ClearSign process burner. We will keep you updated as that rolls out. It will be a process. I cannot emphasize how big of a step forward this is for ClearSign. But I didn't mention in the call, Just putting Zico in perspective, they have in the region of 2,500 employees. They've got 30 offices worldwide. They are a true global company. And the ability to promote our technology and to actually have Zico promote our technology as a Zico burner with ClearSign technology is, I think, has massive potential for ClearSign. Secondly, California Boiler and Road Combustion, they are the customer-facing and sales partner we have. They are based in California. They have offices and affiliates in other regions of the country, especially strong in the West Coast. Working with them, recently we had this big success, or we believe the big success we're waiting to formalize of that very large boiler startup and the 2.5 ppm guarantee in California. We talked about the Welco and the large 26-burn order going down to the Texas Gulf Coast. please look up Iwoko on their website. They are a prominent engineering company. They work with the who's who of refining and petrochemical companies throughout the world, but especially in the U.S. And then in the midstream heater original equipment manufacturers, I mentioned we're now seeing a repeat flow of inquiries from Tulsa Heater Midstream, Devco, and Exotherm, who gave us the repeat orders just these last few months. So stepping back, we are growing. I'm pleased to note we've grown our installation base in California with both existing and repeat customers, and we've got larger installations coming, especially with the 20 burners going out to the California refinery. We're now making headway into Texas with the larger engineering firms, and I mentioned Bowalco, and heater manufacturers, and Fortune 500 customers. There's a lot of attention to our new flexible fuel hydrogen burner, and we have several projects in the execution phase utilizing this new technology. We have a pipeline of projects to be shipped, installed, and in the engineering phases, the largest we've ever had. And we have recently had the notable developments in our boiler burner product line, just the burner in California, in the progress of our sub-2.5 ppm large boiler burner range, and also the California GET report giving us third-party validation of a compelling financial case for the purchase of our boiler burners. And again, that report is available through our website. It's also available through links from the press release we put out. When reflecting on what we've achieved, I want us all to acknowledge that this takes more than just people showing up for work. From our finance team, our technical and order execution teams, to Ashley, who's constantly creating and improving our marketing and sales materials, which, by the way, includes our website and LinkedIn posts. I want to extend my sincere gratitude for the buy-in and dedication of all our ClearSign employees. And in the same thought, I want to thank Zico from the leadership to the staff we interact with on a daily basis, and California Boiler, especially for their commitment to taking care of our mutual customers and getting the job done.

So with that, I'd like to open up the call for questions. Please operate it.

We will now begin the question and answer session. To ask a question, you may press star, then the number one on your touchtone phone. If you are using a speaker phone, please pick up your handset before pressing any keys. To withdraw your question, please press star, then the number two. At this time, we will pause momentarily to assemble our roster.

Great.

And Constantine, this is Matthew Selinger. We also received quite a number of questions via email ahead of time. So I'm going to go ahead and start by reading off some questions here.

Please go ahead. Jim, directionally, where do you see margins heading?

As I mentioned in the call, we saw a very significant improvement in the numbers that Brent reported. I do believe that there is room for efficiency gains, certainly with the volume we're inspecting in the future as well. So there was an increase, there may be a room for that increase again just looking at the mix of projects we're targeting in the future. But we do expect – I think the key thing to emphasize is that we do expect the margins to improve even further than the improvement that Brent reported in the financials here today.

Fantastic. I've got another one for you here, Jim. During the most recent conference calls, we've not heard much about Nerion and the ClearSign Eye sensor technology. visiting their website, it seems like a lot's going on. Would you really give some insight on to the relationship and what's going on there?

Yes, certainly. Thank you. And whoever asked that question, thank you. That is part of our business. We've been very focused on the burner business in the course. So for those of you who don't know, Narion is a company. It's It's affiliated with ClearSign, but it is an independent company that was set up in Seattle by an engineer that used to work for Boeing. ClearSign has not only burner technology, we have a sensing technology. And NARA was set up to, with agreement with us, to develop applications using the ClearSign sensing technology. And especially in fields that are not core to the expertise we have at ClearSign, but to look at things like obviously with the engineer coming from Boeing in aerospace, transport, and a lot of other applications. I'll expand this a little. So we do have the standard burner sensors to actually get a burner product line. Narion is helping us also analyze that technology. We believe that we're going to have right, industrial installations on a demonstration basis of the pilot sensors in the, let's say, reasonably near future. With Narion, they've also adapted and engaged industrial partners for a flare pilot sensing technology or a development of our sensor into flare applications. We also expect through that work that we'll be able to get some field, at least demonstration units and hopefully commercial traction in the reasonably near future. But getting into the core business of Narion, they've got a number, if you look at the website, they have a number of really interesting projects. I think the most prominent one at this point is one feature of the ClearSign sensor is it is an extremely fast sensor. And they have engagements to adapt that for what I'll describe with SimFly is that as a performance monitoring for a new and growing form of jet engines. There's a lot of interest there. That is a longer-range prospect. I believe the opportunity and the potential market is huge. But in terms of timeframe, we'd appreciate that. Projects like that, getting into technology like that, do take longer to come to fruition. So that's going to be further out than the 12 to 24 months that we're looking at for something to show from the Burnham and Flare flame sensors. But I'd encourage you to look at that Norion website and just see what they're doing. We set the contract up for the work with Norion just to leverage our sensing technology, realizing there's some very big opportunities. Norion is self-funding, so it's a win-win for them and a win-win for us.

Another question, Jim. I've noticed some new hires posted on LinkedIn. Could you give some color on these hires? Secondly, do you foresee additional, and are there any positions you're actively looking to fill?

Yes, we have.

We've recently hired two new engineers. One, Dharmic, is reporting to our chief technology officer. And the second, Samuel, is reporting to the group headed up by Jeff Llewellyn, who oversees our burner business. So on the bottom line, the reason we brought these people in is our business is growing. We are getting incredibly busy, and we need some more resources in the office to handle our growing business. And what's really important, and the reason we did this now, is that both Matt Martin and Jeff Llewellyn are – very well known and respected engineers in our field are incredibly effective as customer facing and business development people. And quite frankly, as a business, we need to get them out in front of the customers. And as we get busy and they get consumed with more production and product development work, personally, it slows them down from doing that. So we've, We've hired two great engineers. They will give us some bench depth. They will handle the ongoing work and really free Jeff and Matt up to focus on technology development and being out in their customer-facing role of developing our business. So you asked about looking forwards. Right now, we do not have any open positions. But that said, as our business grows, I do expect that we will have open positions coming up. to execute the orders we work and to keep our business growing. But also those positions will be part of the order execution. So if you're looking at the overhead of the company, I do not expect that to actually increase the overhead as that will be part of the cost absorbed by the projects and they'll be brought in to handle our work as our work grows. Great.

Jim, here's one from the analysts that cover us. They unfortunately were unable to attend the call. But Jim, how would you describe your current pipeline compared to a year ago?

That's, I mean, it's grown substantially. The orders we're getting and the people we're talking to are much more mature. The orders are bigger. And we've seen that the 26 orders going down into Texas, working with companies like Milwaukee, If you just look at, I know you can't see, but the frequency of the inquiries we're getting in, we're now getting in multiple inquiries a week rather than an inquiry every few weeks. And just handling that, looking at, that's one of the key metrics that I look at internally, is just looking at the number of quotes we're putting out and the frequency. And that is just constantly picking up at a very pleasing rate. So it's looking very promising.

Great. So there's been a few questions very similar to this one, and I'll kind of surmise it here, you know, with the new administration coming to place next year, will a focus on reducing NOx emissions remain important? I know you can't see the future. And could, here's a second, A and B, and could more focus on production in the United States be beneficial for ClearSign?

Yeah, you know, I truly wish I had that calibrated crystal ball.

I've I've been in this industry now for about 30 years, so I've seen multiple administrations come and go. And typically at the start of every administration, there's great expectations one way or the other. And the reality is that the influence they have is significantly less than what we expect at the start of the administration. I mean, just the timescale of the projects and what we work with is measured in years, so the administration will come and go before they've had a significant effect. Regarding the NOx emissions, they are primarily controlled by the local states. They are based on the need to adjust ground level ozone down to standard levels that were set out many years ago. So we do not expect any significant change there. I mean, from what we're hearing, there's focus on decarbonization. is a periphery to us. We are mainly focused on MOX emissions and operating efficiency. But also bear in mind that most of our customers are global companies. A lot are based in Europe. They all post their own environmental mandates and their objectives. They're on their websites and they are driving towards that. So I think they are self-motivated to achieve their environmental goals. So again, changes in the administration don't dictate to the companies the goals they set for themselves, especially not when those companies have an international holding. I think on the other side, just looking forward to talking to our clients, one area of encouragement, maybe I don't think related to the political climate, We are seeing a increased interest in LNG, that's liquid natural gas export and production. And we believe that there is a likely an uptick in that business next year, which will, for us, that's very relevant to the horizontal process burden business and those other clients that I referenced earlier on today.

Here's another question that came in, Jim, and I think you've addressed this actually a couple of times in your comments, but Somebody's asking, could you please provide some color on the essence of the relationship with Zico? So maybe just kind of surmise what you said earlier.

Yes, this is probably the biggest step forward for ClearSign for a long time.

So Zico, the relationship we're having with them has basically taken the next step forward In the recent developments, we are taking steps now to jointly market ClearSign products. That gives the Zico sales team a product to promote that has the capabilities of ClearSign technology, has a dual-branded process burner. When the Zico sales team is worldwide, they're obviously truly a leading global company, and having them promote ClearSign is a huge step forward for us. It's one we envisioned back in 2019, and to get to this point and having this development in our collaboration is certainly a very big deal for ClearSign. And obviously from Zico's side, they have seen what we're doing and are doing this because they believe it's a very big deal and a big opportunity for Zico also.

Great.

We don't have any questions over the phones at this moment. This concludes our question and answer session. I would like to turn the conference back over to Jim Deller for any closing remarks. Sir, please go ahead.

Well, thank you.

I'd like to thank everyone 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. In the meantime, please keep checking in for developments on our website. That's www.clearsign.com. And for more behind-the-scenes updates, I really encourage you, please, to follow us on LinkedIn.

And with that, I'll say thank you very much, and we will talk to you next quarter.

This concludes today's conference. Thank you for attending today's presentation. You may now disconnect.