Welcome to the Clearsign Third Quarter Results Conference Call. (Operator Instructions). Before we get started, during the course of this conference call the company will be making forward-looking statements. We caution you that any statement that is not a statement of historical fact is a forward-looking statement. This includes any projections in earnings, revenues, cash or other financial statements, any statements about plans, strategies or objective of management for future operations. Any statements concerning proposed new products, any statements regarding expectations for the success of our products in the U.S. and international markets; the outcome of product research and development. Any statements regarding future economic conditions or performance, statements or believes and any statements of assumptions, underlying any of the foregoing. These statements are based on expectations and assumptions as of the date of this conference call and are subject to numerous risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. These risks are described in the section of today’s press release titled cautionary note on forward-looking statements and then reports we filed with the Securities and Exchange Commission. Investors or potential investors should read these risks. ClearSign Combustion Corporation assumes no obligation to update these forward-looking statements to reflect future events or actual outcomes and does not intend to do so. Please note this is event is being recorded. I’d now like to turn the conference over to Rick Rutkowski, Chairman and Chief Executive Officer. Please go ahead sir.

Good afternoon. Thanks for joining us on Veterans Day and I’m sure you all share my appreciation for our military and it's a special day in that regard. Lots to report here at Clearsign so we will jump right in. I’m going to turn it over to Jim Harmon to take us through the numbers, certainly no surprises. There we continue to be largely on plan and on budget with respect to the financial picture and I’ll let Jim describe that more in detail.

Thanks Rick and good afternoon to all. As Rick mentioned we continue to be on our plan through the third quarter in our results. I remind everyone that we remain a development stage company but I will go into that in greater depth here after I go to the expenses because this is the first quarter that we in fact have recorded some revenue. So let me come right down on expenses first in our net loss. Our loss for the quarter was a $1.362 million which was an increase of about $230,000. That difference in terms of R&D cost was an increase of about 139,000 which is comprised about a $100,000 of increased personnel level and then about $50,000 of increased consumables in our lab operations. On the G&A side our marketing and business development efforts increased cost by about $75,000 whereas G&A for the quarter went up to $100,000. For the nine months ended September 30, our loss was $4.1 million which is an increase of $1.1 million again largely with same rationale, our R&D compensation was up by about $350,000 which is increased head count in our lab. Our consumables are up by $180,000 in the lab and on the G&A side our cost are up about a $1.5 million in total. Marketing and business development efforts about a $140,000 and we had a differential related to our expenses of being a public company, we went public last year in April so we had along the period of time we were public this year both increased costs of about $320,000. That kind of explains the expense side of things, let me go back to revenue. We recognized $50,000 of revenue during the quarter related to the initial phase of a solid fuel burner co-development project that we…

Thanks I want to pick up on a point that Jim made about the contract revenue because it's certainly was a small number in the last quarter but we do expect more of this in 2014 and going forward from this point where we will report some more on the current quarter contract revenue and just to highlight the point that Jim made you know as you view these and try to figure out what kind of contribution there would be from contract revenue. [It’s good] [ph] to recognize that yes there is a gross margin contribution but if we look at the cost side of the equation apart from third party cost and/or materials the balance of the cost are allocated costs. So on a net basis the contribution is actually quite high, it can be as much as 80% or 90% of the contract value going forward. So if you’re watching the headlines unfold over the next several quarters and you watch us book contract revenue I think that will give you better appreciation of how to view that as offsetting the expenses that we have. We have cut the design in internal R&D program obviously which is for the most part highly synergistic with what would be required by prospective partners to commercialize the technology and there has been a real emphasis on applied research, big D small R although, a fair amount of what we are doing is so ground-breaking that it's tremendous source of innovation and intellectual property as a consequence. So I think the way I like to sort of frame this brief discussion today is to sort or recapture a couple of eye elements one of which I think first and foremost as I look at what we are developing and what we…

Okay. We’ve our first question from Daniel Pavnos [ph] a private investor. Please go ahead.

Do you anticipate that the completion of agreements in the next quarter or two will affect cash flow such that by Q3, 2014 the company will not reach the depletion of it's funds and if not is a secondary public offering coming around the bend, and also is there a consideration of a sector time based exclusive development relationship and for example the petrochemical industry in order to gain the cash infusion that might be preclude or augment a secondary offering.

Good questions. Hang on one second, just making notes here because I want to make sure I cover all of them. Look it's certainly the case that these contracts will offset our burn rate for 2013 current year our total burn rate for the year is going to be about $5.3 million, $5.4 million all in. So if we go back to my earlier statement it doesn’t take a lot of contract dollars to sort of cut it then I’m going to stop short of prognosticating about whether it would break us even in a third quarter of next year that’s not so much the goal as is really optimizing the potential for growth in these very, very significant product franchises that we have described, but it does have a bearing in that I think you make a very good point which is the point about capital efficiency. We have designed this model to be capital efficient; we’re being very successful being capital efficient already. I mean again if we look just at the scale of the market opportunities that we’re addressing and have identified there and how convincingly I think we have set the table here with respect to real measurable performance measures against the very small budget with which we have achieved that and capital efficiency is something that investors got to be very attuned to here and certainly we’re as large shareholders ourselves. So yes it will certainly minimize dilution to the extent that we can be successful with these contracts that will reduce our near term needs for capital and the same would be true for example with joint ventures which might be separately funded and things of that nature. So with respect to a pull on secondary we don’t see the need for that anytime…

Our next question will come from Richard Deutsch of Ladenburg Thalmann. Please go ahead.

Rick you laid out such a broad level of opportunity, it's almost too hard to be able to understand how to value these things. You mentioned you’ve several negotiations going on which might result in some sort of an agreement even before the end of the year. Can you just lay out what you feel is most likely to happen over the nearest term? Now is which one do you think is a low hanging fruit you know that what arena? What segment of the markets that you’re talking about? Which one do you think we should expect that might be the easiest to conclude the earliest?

Well the packaged boiler and refinery heaters are very much in play. Process heaters potentially more broadly speaking and that one could get you know segmented into a couple of different ways [ph] in other words you’ve some companies that play only in very, very large process heater, some companies that play more broadly. The thing that’s efficient about that from our perspective is there is enormous overlap in the system architecture by example I’ll illustrate what was done here when we went from our earlier work with a duplex which was done in an up fire configuration where the burner fire straight up in an open furnace that’s very analogous to what you would see in a refinery heater, like a crude heater for example. What we wanted to show with the work related to package boilers was that we could achieve the same results with the same methodology by titling that on it's side and firing it horizontally into steel sheet called Morrison tube and which is used in what we call fire tube boilers which are the bulk the overwhelming majority of packaged boilers are also water tube boilers but they are less common. So those are kind of moving forward more and less in parallel. Those two are pretty closer, it would be a very close call to tell you which of those is likely to drop first and at least one case we have a company that’s interested in both of those opportunities for example and there is enormous optionality in that with respect to their business franchise but there is a lot of congruity in terms of developing those two things in parallel. One thing to keep note of is that the scale milestones to get into to packaged boilers are little bit lower,…

Just follow-up, Rick thanks, to model the financial aspects of these contracts. Do you envision them as having a cash upfront to get in the door and then pay for the R&D or do you envision just supporting the R&D and dropping you cash burn or both and on top of that will you be naming you know any of these parties so you can see who you’re dealing with?

Yes so dealing with the back end first I mean naming can go both ways, some folks are more sensitive to it than others. Some think you know it really depends on the partner strategy and more certainly differential to that, again this type of business model has that sort of awkwardness to it intrinsically whether you’re burner manufacturer or manufacturer of microchips that enable next generation products. People going often like to telegraph their product plans too early in the cycle. So in the past when we did this deals at Microvision we saw both, we saw companies they were more than happy to identify themselves and companies that were more reluctant in the near term and we saw companies who initially didn’t want to identify themselves but we’re happy to do it later. So I anticipate we will see some of the same here and certainly have seen that, our waste to energy partner was originally reticent to disclose their identify but as I mentioned earlier I think in short order that will change and we will be able to talk about who they are and what’s some of the benefits are. With respect to how these are structured, what we’re really trying to do here is get our partners into the market as quickly as possible and cost effectively, we’re valuing the investment that we have made not just in technology but in intellectual property. So it's really a balancing act, so the question in some respect you can say well do you hold out for more money or do you try and do the deal quickly and the answer is really very much dependent on the situation and the context what’s I think most important is that there is alignment of interest in terms of bringing…

Our next question will come from Lucas Pipes of Brean Capital. Please go ahead.

Quick follow-up question, you addressed most of my questions in your previous answers but do you have a sense of when you might be able to give specific revenue guidance and things of that nature?

Well certainly once we book a couple of contracts it becomes a lot easier to do that and I think that’s the short answer is it's easy to do that from a backlog position harder to do that when everything is the funnel. We do have a lot of activity in the bottom of the funnel and you know a sense for what those numbers look like but we have stopped short of providing that kind of guidance partly because it distracts a little bit from I think the bigger picture which is so important here and I sort of you know defer back to our biotech model, a value is created certainly in this stage of development of this business not by the dollar value of these revenue contract, many more than you could extrapolate the value of what we’re doing from our R&D budget. You know this is the point I was making about capital efficiency, so these contracts are going to reflect the same kind of capital efficiency with some premiums associated with it and therefore you know wouldn’t be the first way you want to value the company on the basis of that revenue. Those are really just an indicator of the much bigger revenue to follow. So how is value created at this stage? Value is created through the systematic retirement first of technology risk which we have done by achieving these milestone performance goal, scaling the technology to commercial closer and closer to commercial instantiations and then market risk which we reduce and retire by entering into partnerships with folks who are well positioned in the channel, have the customer relationships and by creating the kinds of pull that we’re seeing from larger refinery operators, other end use customers and many of the folks.…

And ladies and gentlemen that will conclude our question and answer session. I would like to turn the conference back over to Rick Rutkowski for any closing remarks.

Well again thank you everyone for joining us this afternoon. We certainly appreciate the ongoing support and high level of interest that we have from so many of you and we hope that we continue to reward it with the kinds of breakthroughs that Joe and his team continue to deliver and again I think these are the leading indicators with every step that we make towards disruptive performance and cost implications that galvanizes the attention and interest of the companies that we’re actively engaged with and discussing the strategy for how we bring this to market. So it's a very busy time here we have got. As I mentioned the new level of interest from EPA regulators and others in that domain I think promises to sort of take that to a whole other level as well. So we continue to very pleased. I think you will see some news of some market leading companies joining forces with us to bring what we believe is a very disruptive technology to market and again what we like about this is that the economic benefits stand on their own, the business case for installing this system is unique and environmental controls. We have used the phrase before turning the economics of emissions control on it's head. So in a solid fuel case gosh you’re getting an increase in capacity while you’re reducing NOx and in the refinery case you’re getting an increase in process through-put and a single refinery site could be worth 10s and millions of dollars a year while further reducing emissions control. This is really the heart of the matter is the compelling incentives that exists and/or implied by not just the performance attributes of this technology but the substantially reduced cost of ownership and in many cases…

Ladies and gentlemen the conference has now concluded. We thank you for attending today’s presentation. You may now disconnect your lines.