ClearSign Technologies Corporation Common Stock (DE) 2026 Q2 Earnings Call

You may begin. Good afternoon, and thank you, operator.

Welcome, everyone, to ClearSign Technologies Corporation's second quarter 2026 corporate update 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 can 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 products will be successfully completed, whether ClearSign will be successful in expanding the market for its products, and the other risks that are described in ClearSign's filings with the SEC, including those discussed under the Risk Factors section of the annual report on Form 10-K for the period ended December 31st, 2025. 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 Hinds, ClearSign's Chief Financial Officer. With that, I am going to turn the call over to Jim Deller. Jim, please go ahead. Thank you, Matthew.

As always, I'd like to thank everyone for joining us on the call today and your interest in ClearSign. Like our more recent conference calls, we will use a Q&A format for this session. Some of you have sent in questions ahead of time, and we did assimilate those into the questions we will cover. For the call today, Matthew will lead a question and answer session where we'll go through the different business units much like our previous calls. Many of you may have seen this, but you can send in questions ahead of time to our investor relations at mselinger@firmirgroup.com. We will start with Brent Hinds going over the company financials for the second quarter of 2026.

Brent? Thank you, Jim. Thank you, everyone, joining us here today.

Before I begin, I'd like to note that our financial results on Form 10-Q was filed with the SEC last week. With that, I'd like to give an overview of our financial results for the second quarter of 2026. For the second quarter of 2026, the company recognized approximately $560,000 in revenues, compared to approximately $133,000 for the same period in 2025. The year-over-year increase in revenues was predominantly driven by delivering a portion of our Flare's system order and completing multiple CFD studies and spare parts orders. Our second quarter gross profit margin was approximately 41%, which was relatively flat year-over-year. Our net loss for the second quarter decreased by $373,000 compared to the same period in 2025.

The decrease in our net loss was predominantly driven by a $368,000 decrease in general and administrative expenses. Our general and administrative expenses decreased in comparison to 2025, in large part due to reduced legal fees that were incurred during 2025 for a special committee of our board of directors that was ultimately dissolved after our annual meeting of stockholders. Now let's shift our focus to cash. Our net cash used in operations for the second quarter of 2026 was approximately $1.2 million, compared to approximately $511,000 for the same period in 2025. This year-over-year change was predominantly driven by timing of customer cash collections. As of June 30th, 2026, we had approximately $9.9 million in cash and cash equivalents.

Now, I do believe it's important to note that subsequent to June 30th, 2026, we raised additional funds through a private equity offering with a long-time investor. We sold 500,000 shares at market value, or rather $3.54 per share on July 21st, 2026. This added approximately $1.7 million in net proceeds to our cash balance. Considering this addition of cash, our pro forma June 30th, 2026 cash balance would be approximately $11.6 million. As noted on our Form 10-Q, as of August 8th, 2026, we have 6.8 million shares of common stock outstanding. This share count includes our most recent share offerings. With that, I'd like to turn the call over to Matthew Selinger.

Thank you, Brent, for the financial overview. Jim, thank you both for joining me today here. Let's start the call at kind of the corporate level and discuss some recent developments there, if we could. Jim, Brent mentioned a capital raise recently. Could you shed some color on the decision-making process for the few raises that just happened?

Yes, certainly. The first, we were approached by a long-term investor group. They expressed an interest in acquiring some more shares. From a company perspective, having a stronger balance sheet is always good, especially when talking to large customers. We went ahead, we arranged a small strategic raise. This was done at market pricing and was common stock only. Following that, a long-term private investor reached out to us and expressed an interest in topping up their ownership of the company to maintain their percentage. Again, we raised a simple direct placement. In this case, it was done at market pricing, and again, it was share-based.

Okay, great. The other development was just announced last week, and this was the announcement that former Exxon global technology leader, Larry Saddler, joined the board of directors. Jim, I know you've known Larry for a while, so maybe give a little background there on that relationship.

Yes, certainly. So yeah, I have. First, I'm really pleased that Larry has decided to join us at ClearSign. I've known Larry, I think I first met him back in the 1990s. He was working on the Baytown Refinery for ExxonMobil. We've worked together. I stayed in touch with Larry since joining ClearSign. For a background, Larry's career has progressed up, or has, up through the ExxonMobil organization, both with the technical oversight of fired equipment, which includes heaters and burners, and also up to the corporate level, where he's overseeing policies and how the company assesses heat performance and new technologies. From our perspective, his experience and insights are extremely valuable to ClearSign. Just in general, he is a fantastic guy and has a great reputation within the industry.

I know you and I were talking about this, and you mentioned that he wanted an opportunity to see the newest and latest burner technology himself before joining us.