Good afternoon and welcome to the ClearSign Third Quarter Results Conference Call. All participants will be in listen-only mode. (Operator Instructions) After today’s presentation there will be an opportunity to ask questions. (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 of 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 belief 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 in the 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 event is being recorded. I’d now like to turn the conference over to Rick Rutkowski, CEO. Please go ahead, sir.

Thank you everyone for joining us today. We have got a lot to report and lot to talk about in terms of the -- for going forward here so we’ll jump right into that we’re tremendously excited based on some recent development for their document and the press release so you’ve seen that. Jim Harmon our Chief Financial Officer is here and I’m going to ask him to walk us through the financials.

Great, thanks Rick and I’ll be brief since that historical results are lot exciting than the forward-looking thoughts that Rick have to share. For the quarter we continue to be on page from prior quarters and under budget by the way, we recorded a loss of $1.7 million for the quarter and roughly $5 million for the nine months ended September 30th. For the quarter again, our expenses were up by $200,000 primarily related to increased personnel levels on the R&D side and the corresponding increased cost of consumable the testing material. On the G&A side our cost were up about $140,000 primarily related to two things one is our monthly business development expenditures and secondly we had a $53,000 of intellectual property and write off which is normal pruning of cost that has been capitalized in the past and there is a - time goes by rationalizing them and determining where to put our efforts on good patent. Our patents hold the intangible pool come to $2.3 million as of September 30, to give you some comparison. Currently, on cash levels at the end of the quarter is just short of $3.3 million our projections are that should loft [ph] beyond the first quarter of 2015. With that I’ll turn it back over to you Rick.

Thank you, Jim. Okay, so I want to jump right in obviously the very exciting news here is that we have demonstrated a duplex style successfully operating at a scale more than 8 times of anything that we have reported previously. So, at 45 million Btus per hour. We can’t yet disclose all of the detailed data from this initial path other than as we characterize it here, it’s well in to the single digits -- it would comply with existing regulations in many territories certainly in San Joaquin Valley, Southern California we will as we coordinate with our customer and the regulatory authorities they’ll obviously disclose more detail on this data as we go into this. It’s very fresh that’s all occurred in actually recent days but the project has been delayed somewhat initially by a permitting issue that we fail to recognize or anticipate and thankfully it wasn’t when we could have anticipated because when the customer filed for the experimental permit the regulatory authority also recommended that they obtain a variance which is not strictly necessary but again recommended that have the impact of requiring than a public notice period and a hearing and the hearing are going to make indeed once a month. So that did this put delay on the front end of the process and then once we actually got going on side things went smoothly for the most part other than that in Monday and things like that there was a power outage on site one day and which delayed some times and at one point we thought we’re going to be able to work through the weekend and that didn’t turn out to be the case. That said, again this is a really exciting development for us. And I think as we…

We will now begin the question-and-answer session (Operator Instructions). Our first question is from Bernt Preston [ph] who is a Private Investor.

Good afternoon. Thanks for the great report. I did not have a chance to read the press release, so I don’t know what the results were in terms of the contract actually been in both based upon performance and whether or not you’ve acquired an income stream here with the results for test if you [multiple speakers].

In the first test that we agreement to refine is different from than we done since them. So that one did not have an automatic if it performs by the [ex-money] and so on so forth because it was our first. What it did was it gave that customer an option to purchase an additional unit. So, in this particular case it hasn’t triggered anything that we have absolute certainly on. Having said that, the whole region for the test is again goes to this question of unmet demand and a lack of cost effective alternatives. So we do anticipate that there is some good business there in the pipeline and then with that customer and also in the broader segment for one steam generators there are 768 of these units throughout the Central valley in California and so we think it’s a major opportunity if you were to install selected catalytic reduction or even conventional Ultra Low-NOx burner technologies, you’re looking at price tags of several $100,000 per unit call it anywhere from $350,000 to $0.5 million or more per unit and again that’s before you get to that recurring cost of and the case of selected catalytic reduction consumables and replacement of the catalyst installment so forth and in the case of Ultra Low-NOx burners the recurring cost of operating high levels of gas or circulation in the loss of energy efficiency. So we think there is going to be fall in demand we’re replacing terms that we negotiated in the option relate to a specific number of units we’re assuming that they had a rationale for identifying that number of units. In the other cases and you should see these coming up relatively correctly, we’re encountering latter stages of negotiation and then the contract languages been approved…

Yes, thank you very much. As a follow up, does that imply that if you can achieve efficiency improvements that there might be way to monetize those ongoing benefit streams to the customer a little bit of it -- shareholders?

Absolutely in fact it’s an interesting question because I was in Hong Kong back in July and I met with a very well known here in Hong Kong who is an investor, the primary investor in a fund that does exactly that. So that will go into a situation like this and also you guys don’t have to spend a dime, we’ll provide all the capital for the equipment and the installation. What we want is exactly that some percentage of the energy savings that we produce. So, that’s one way in which we could participate in that along with them and yes we’ve actually had folks suggest this to us I had lunch a few weeks ago in Bakersfield with the president of a very large engineering and construction company that is heavily focused on upstream oil and gas activity and he said we’re cautious there is really a process improvement. So, we’re going to price it on that basis and it’s a little over time I think we can that’s going to require that data history that we’ve just been alluding to here. But initially because we think it’s a faster sales cycle we’re pricing at against our competing capital equipment cost and of course our bill of materials cost is low probably lower than competing equipment and in some cases substantially lower. And I don’t think our labor costs are any higher. So, I think we’re -- given the data points here but yes I think as we go over time there will be exactly those kinds of opportunities.

You mentioned Hong Kong I think if you look at that Chinese market that’s so visible to us now how is the progress in there? And do we have still protection of our intellectual property there?

We do and just like everything else in China you’re seen recently in the last year sort of the anticorruption projects and things of that nature and some moves as recently as conversation with APAC to open up markets and the adherence to intellectual property in [indiscernible] is obviously essential to that becoming a player on the global seat [ph] and it’s been our experience and the experience of the folks that we’re close to and our expert in that domain that like everything else in China that’s changed very rapidly for the better than recent years as well. So we are very close to the guys that we work with there have deep expertise in this domain one of them was in fact --. So the people represent us in China are two former Chief Trade Negotiators to China so they worked for the U.S. representatives office reported directly to [indiscernible] and negotiated some very-very important trade agreements over the last 30 years with China including some of those early treaties relating to trademarks intellectual property. While part of that team is also that their former Chinese government counterparts who are now in private practice including an attorney who is very senior in the Chinese government at the time and wrote many of those trademark and patent treaties. And in fact he then successfully prosecuted several 100 digital rights infringers when he went into private practice. So they are becoming much better at a holding intellectual property law and then and returning judgments as well in that regard. With reference to the first part of your question in terms of the kind of traction we’re gaining over there, we’re getting a tremendous reception. We are dealing with C level people at major companies ranging from waste to energy to…

And final question is from Louis Basenese with Disruptive Tech Research. Mr. Basenese.

Rick, just two quick questions congrats on the scale with there. You mentioned you guys got into the well into the single digits. Can you just confirm whether you got under the stated goal of five parts per million from the August 19th press release?

I think in the press release we referenced the requirement of nine parts per million and again more on easy about disclosing the actual data without coordinating with our customer there for obvious reasons sensitivity to that because -- so definitely rolling on that regulatory rule do you recall what is at the end of the press release six, seven [indiscernible] do you have it front of you?

So Louis it’s five…

So I know we’re talked about five the bottom line is I will tell you this we think that number the number - you just mentioned five is very-very attainable and whether we have attained it or not would probably be inappropriate for me to say but what was the wording that shows in the press release to stop short of that well into the single digit. So please mention [indiscernible].

Yes, that’s we’ve confident that we will achieve that number in that configuration.

Fair enough, just one other question on the pipeline, is there any way to give us a range maybe $1 range or number of bids outstanding and then I’m assuming competitive winning situation since the competitive technology but just want to confirm that.

No, there are not competitive bids, there is not a broad felicitation, they’re competitive to the extent that in some cases absent our technology these customers would be looking at because in many cases it’s because they’re responding to a regulatory timeline so they have to do something, right and so the alternatives are not necessarily big competitively but -- part of the time of reference. So the number of heaters in the pipeline at the moment is probably in the neighborhood of dozen or so. The number represented by the customers with that dozen is probably in the neighborhood of six present years or so. A large heater could be a $2 million job something that might have been now 30 or 40 burners, it could be $2 million for single leader, small one could be a $200,000 and so the range of pricing in that domain. So I think in the aggregate you’re currently looking at sort of low seven figure pipeline what is growing all the time. So those are ones that our proposals have gone out we’ve just got solicitation for one. There is nine heater system in Texas and we’re getting new inquires all the time and there is somewhere we have sort of an agreement that we’re going to do a test and eval but they haven’t identified which specific heater or so. There is lot of activity, but I hope that sort of give you some color. What we’re encouraged about is it’s not static and that we continue to see both large and small companies moving into it. I think I touched on this on the previous call a big opportunity to give you some color that doesn’t specifically address your question, but the way we’re thinking about this is that we’re likely to see the smaller companies they have the faster sale cycle and so that’s more of a sales type of activity and they’ve got folks out there who are acting as distributors and we will formalize those relationships very soon here and recruit on those. We also have larger sources of referral business in the form of large engineering and construction firms. But we think it as sort of two parallel paths one of which is sales to smaller operators and then strategic accounts meaning large operators with many, many heaters and very, very large facilities. So that’s -- I hope I touched on what you need into that.

Our next question is from John [indiscernible].

What I read in the press release to have learn fairly but I see you have enough cash on hand and you mentioned it earlier in the call the year on the first call which means you’re going to have to raise some cash likely sometime in the first quarter in order the business going. Based on the current stock price, while the last time you raised cash $8 a share that was a private deal. And based on the current stock price actually what we want to do $5 or $6 a share. My concern, my question is earlier you see that we get some revenue flow, any comment in here?

So John I think there is several things that can happen, the start has been at $14 previously. The company in my view is far more valuable today. We’ve seen some improvements in market conditions. We’ve seen the variety of other catalyst move the stock in the past and putting news. We think there is going to be plenty of that. We obviously share your concern and we’re going to do the best we can to get sponsorship we’re very underfollowed right now. And I think if you allow put it back that as we produced this news have the success we may see some appreciation in the shares that’s what we anticipate and we’re working hard to do that. So thanks very much for the question, but…

No idea when the revenue you can anticipate some decent revenues coming in.

I’ve spoken to John is that we expected to build over the next several quarters and it’s likely to be waited towards the second half, I got to tell you though I mean we’re talking about something here that is world changing in a massive market and we expect the revenue to ramp in the way that you would expect it to do with an innovation of this kind, at first, somewhat slowly and then dramatic acceleration and we’re perfectly happy with that and we think our investors are going to be extremely happy with that and now I have a lot of stock in this company so I think we share your concerns but thank you very again for the question.

I think I remember the last time -- you said you see some really good ramp up before the end at least I thought you said for the end of the third quarter and the fourth quarter now what I hear is first quarter, second quarter.

This is Jim Harmon, the CFO. So, one of the things that I want to emphasize is as Rick spoke, I’ll reemphasize for you is that the field development process has taken longer than we’ve previously anticipated and I think the sales process is going to take more than simply doing one field test and then having [indiscernible] in technology. Linking to that as we’re talking about large oil companies, these are process oriented companies, they are very capital intensive that shut down of their processes is extremely expensive to them and so they’re very careful about those shut down. Additionally, they’re also very careful about implementing some new technology into that process and that would fear an interruption. So they want to take due diligence to assure that it that they don’t have interruption there. As a result, -- you actually have a sale where our technology is incorporated into their process is that more time consuming. So, this is not a we’ve a field test that’s going favorably as is the case down in Southern California right now and then I sort of do a sale in December. You understand the nature that I’m communicating?

I don’t just agree with I don’t - in other words how you step back a whole year, revenue this whole process is taking considerably longer and I think that anybody ever ever anticipated I mean there is a good new story at the front.

Hey John, I want to ask you to do me a favor, would you call Joe Colannino, I’d ask him how long it typically took John [indiscernible] to bring me burners to market based on existing conventional technology because we’re actually going far faster than that and this is I don’t want to get into a debate here it’s not really the purpose of this phone call. So, if you like to call us offline and we can discuss it in more depth with you. It’s taking us longer us as well but in my view a quarter too in the context and the size of the picture that we’re talking about is really nothing whatsoever and by the way it took Qualcomm longer as well and I’m not trying to compare us to Qualcomm other than that whenever you bring disruptive technology to market the timing is the most difficult thing, this is not a matured business what we’re going from 30 million to 40 million or 300 million to 400 million in revenue and so visibility is more challenging and the uncertainty if you look at the bell curve that they describe bringing new innovations to market, the reason it has that shape is indicates that uncertainty so yes, -- we would have all love to borrowed popcorn and ice soda and have the movie be over in an hour and a half and be sitting on our piles of cash but in the real world we’re in the factors like Jim mentions come into play and the factor that it’s new, it’s unfamiliar, we’re incredibly pleased with it and if it like discuss the further we’re more than happy to do I think the way that is just call us offline and we’ll be happy to get into it. So, I want to make sure we’ve time for another question here.

Our next question is from [indiscernible].

So my question is I would like to get one I guess let’s say I have two questions. First one is to understand the area of timeline, I guess what is most important to ask - to me in the rest of the world is the independent third party confirmation and so what we’re based on the standards when you expect in the coming weeks so to ask for the independent testing with the regulator? And then the second question is I guess we had expected that if few of these deals, pipeline deals would have been announced by now, is there a timeline of those?

Yes, I think it’s timeline I just gave you that we think that this quarter and into the first quarter some of these are - so let me describe a dynamic to you and you can tell me whether you think it’s the right way to handle it or not. So, let’s say it get under a refinery and they want to purchase one heater and I manage to up sell among 5 which can take a little bit longer to do the up sell because if that got back in authorized the budget for 5x initial spend, were conditional time. I mean it’s a rhetorical question in my view it is. So I think folks what I’m hearing is, people wanting the kind of predictability that you would typically associate with the company in a later stage of the commercialization effort. We are just making transition from laboratory instantiation of the technology. By the way as I mentioned moving at lightning speed from a proof-of-concept prototype a year ago to a factor of 450 and scaling in something like that and a year plus kind of timeframe. So what kind of visibility, so if you think about how statistics work -- the predictability and validity of statistical models have to do with sample size. So every year on the front end of this kind of curve will final you always encounter more challenges associated with that and we do the best we can. We try to be transparent and cause it’s a good thing to do that. But you think it helps my negotiating faster with these guys and by the way this has come back and hurt us before in negotiations when we’ve been prevailed upon us to get timeline and there is another guy on the other side of the table negotiating with me knows that again my head on the timeline. So right now it looks as if we’re I have no idea I hear the questions you and John are asking I feel like you’re missing huge pieces of the big picture with all due respect here.

Don’t misunderstand me I completely appreciate the not wanting to give up any sort of negotiating leverage but understandably as John saying there is a -- a liquidity constraint which perhaps you’ve already accounted for.

[indiscernible] can I offer you the same suggestion I offer to John given the sensitive nature of the topic and you call us offline and we’ll discuss it.

Absolutely, but I was hoping to understand that there is a plan would be attracting specifically I know you guys want to do --

I can’t comment on and that would be hugely an appropriate for me to comment on something that occurs between customers like that and a regulatory authority again I hope you appreciate the sensitivity of that.

Okay. Yes, absolutely. Thanks.

In any case. Thanks very much everyone for joining us on the call today. We’re excited about what we think is a major event that promises to deliver huge changes in enormous global market here in the U.S. and overseas especially in China as I mention. As we’ve said what we thinking we’ll see is a series of really important validation events I mean I hope that John would acknowledge that if we can sign anytime the contract with a major oil company to go and testing the value to system in a refinery and specially having the success behind us that’s likely going to be seen by the market as further evidence that this technology is going to. And by the way if you do call me I’m big more than happy to share some of the commentary and the color. We’ll get third-party experts that people can talk to you about the significance of the technology. What we’re not trying to build $20 million or $30 million business here. We’re trying to build something much, much larger than that and trust me I appreciate the need for patience and sometimes with difficulty in doing that. But we remind ourselves that the value under the curve has to do with the lot of components here and in terms of not just how quickly we move but how fully we value the technology and the pricing models that we use and the monetization models that we use as asked in the earlier question. So we’re extremely happy from the perspective of people who are trying to build a very large business with the names who are lining up with size of the deals, with size of the upside with any two of those accounts and I think what offset this as I said this period of performance thing is interesting in that let say for example you have booked several dozen heaters which by the way could be $150 million worth of business. But the period of person if 2.5 year performance, that’s one customer potentially, right. That’s not a bad problem ultimately. In the early days yes, you’ll see some lumpiness, you’ll see some -- but overtime the benefit that you get is visibility further out into the future because of that backlogs that builds up. And that’s really sort of what we’re trying to achieve is enough deals in the pipeline that we see that smoothing effect as quickly as we can. But if anyone that ever been an investors in disruptive technology and I’ve been doing this for 20 years it’s my experience that first deals are only hardest ones to predict some of which are obvious and some not as obvious. So in any case I want to return to the notion in general this a huge milestone for us and we really appreciate the support of all of you folks. Thank you so much.

Conference is now concluded. Thank you for attending today’s presentation. You may now disconnect.