Hello and welcome to the ClearSign Technologies Third Quarter 2022 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] Please note this event is being recorded. I would now like to turn the conference over to Matthew Selinger of Firm IR Group. Please go ahead.

Good afternoon and thank you operator. Welcome everyone, to the ClearSign Technologies Corporation third quarter 2022 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 ClearSign's products will be successfully completed, whether ClearSign will be successful in expanding the market for its products and other risks that are described in ClearSign's public periodic filings with the SEC, including the discussion in the Risk Factors section of the 2021 Annual Report on Form 10-K. 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 President and Chief Executive Officer; and Brent Hinds, ClearSign's Vice President of Finance and Controller. So at this point, I would like to turn the call over to Brent Hinds. Please go ahead, Brent.

Thank you, Matthew, and thanks everyone for joining us today. Before I begin, I'd like to note that our financial results on Form 10-Q were filed with the SEC on November 14. And with that, I would like to give an overview of the financials for the third quarter of 2022. The company recognized $324,000 in revenues during the three months ended September 30 2022, as compared to revenues of $190,000 for the same time period in 2021. During the three months ended September 30 2022, we invested $3.9 million of cash in the short-term U.S. Treasuries to improve the overall effective interest income as compared to our money market account. If you add our cash and short-term investment balances together, the net result would amount to approximately $9.8 million. Our net cash used in operations for the quarter ended September 30 2022 was approximately $0.9 million, compared to approximately $1.9 million for the same time period in 2021. This favorable variance of $1 million was driven in large part by cash receipts from customer collections of approximately $440,000, a $1 million decrease in net loss during the three months ended September 30 2022 is primarily attributable to decreased R&D expenses. If you recall from prior investor calls, during the same period in 2021, we incurred R&D expenses to demonstrate our Boiler Burners in both California and China. For the nine months ended September 30 2022, our net loss decreased $2.2 million as compared to the same time period in 2021. As noted earlier, the decrease in net loss is primarily attributable to decreased R&D costs, coupled with an increase in our gross profit. There were 38,019,951 shares of our common stock issued and outstanding as of September 30 2022. We have confidence in our financial position and with our quarter ending balances, we have sufficient working capital available to cover us through to 2024 and that is without revenue from any other sources. And with that, I would like to turn our call over to our CEO, Jim Deller. Jim?

Thank you, Brent for the financial overview. I'd like to thank everyone on the call today for your time and interest in ClearSign. During this call, I will go through developments and progress in our major business segments. Starting with our Process Burner business, then on to Boiler Burners and then touch on our progress in China. We have significant developments in two of our previously announced projects. We also have updates related to our markets and sales channels, which I will mention as we cover the related product lines. Starting with Process Burners, we have progressed report regarding our previously announced projects for the California refinery and the government sponsored project to provide a commercial 5ppm NOx 100% Hydrogen capable burner. The Midwest debottlenecking project is still live. But we did not have any significant updates since our last call. Both 20 burner California, Refinery Heater retrofit and Hydrogen Burner project, our progress to the beta testing and demonstration phase. For both of these projects, we are working with our partner Zeeco and scheduling this work in conjunction with Zeeco's other commercial testing needs. These tests are expected to be completed in succession, with the Commercial California Burners being addressed first, due to both the availability of the testing resources. And more importantly, because this is a commercial supply project, especially since the burners are scheduled for installation in the customers refinery turnaround plan for Q2 of 2023. We have discussed this 20 burner California refinery retrofit project on prior calls, mentioning that the project timeline has been compressed, and we were notified that the fabrication and delivery schedule had been moved up. For those who did not see the press release yesterday, we have also just received the concluding purchase order for the final manufacture and delivery of…

Thank you. We will now begin the question-and-answer session. [Operator Instructions] Today's first question comes from Sameer Joshi with H.C. Wainwright. Please go ahead.

Thanks. Thanks, Jim, for taking my questions. And congratulations on the order. Just clarification or maybe more elaboration on the timeline. Is the turnaround at this facility scheduled for 2Q and would you be ready with all 20 burners to be installed before that in terms of having it ready and ready to go?

Hi, Sameer, good afternoon. Thank you for your question. You are correct, I think we've mentioned earlier the schedule for the California refinery project is that the burners are expected to be installed in the turnaround on that site and that turnaround is currently scheduled for late Q2 next year. Everybody these things can change but that is what we believe and have been told. And yes we absolutely will have a plan to have the burners out there on site ready to be installed into that furnace prior to the start of that turnaround that is absolutely our goal.

Understood, and then will you remind us as to the size of this project as it relative to other projects. For example, this one has 20 burners, are the other opportunity we are looking at also similarly sized, or bigger or smaller?

Yes, I can certainly. It helps, I think to focus on this California project in whole, if you and I get straight, if you recall, this actually being comprised of three purchase orders that we've received over the past year. The first was for the -- the initial phase, the engineering, and some computer fluid dynamic modeling. The second then progressed into burner testing, we had to fabricate four burners for that testing. And then this final phase, the purchase order we received yesterday for the fabrication and supplier of the 20 burners that put our arms around the size and value of the order. And I really did help everyone build up and to track the value of all our other orders. I'll give some guidance, it will be aligned to what you've given before. A reasonable estimation of about $100,000 a burner is appropriate, you can add some controls equipment to those burners in the range of $10,000 to $15,000 per burner. The engineering phase will be in the region of $200,000, $250,000, somewhere in that range. And then depending on the complexity of testing, that's going to be in the region of $200,000, $250,000 somewhere in that range, you can build that up to give a magnitude of that order. And then as you look at the other orders we have received in the past, and using those numbers for future orders, you'll be able to gauge now, how important they are to ClearSign.

Yes, yes, certainly. I was just wondering if the other parties that are also interested are on the fence, will they be similarly sized in terms of say 20 burners or would they be 40 burners or like that?

Yes, Sameer, we have -- we have put out a lot of proposals and have and continued to talk to. Most or at least most, if not all of the major refineries, certainly in the United States, we've talked about projects ranging from single burners and three burners and heater up to projects with multiple heaters with 20 plus burners, two heaters, two of those heaters are they really cover the gamut.

Understood.

I think to, just for everyone's expectations, I think really set a typical large project is likely going to be in the maybe bigger than the California project, we're probably in the 20 to 40 burner range that I think we'll be in the larger end of what have normal as certainly ranging down to smaller heaters, which incidentally, we really are chasing because they're more likely to be good first installations for us or more readily available, which will be the smallest of three burner, four burner, and even the single burner heaters but that's a typical range of the type of refinery heaters that our burners are extremely well suited for.

Understood, thanks for that color. And you mentioned several times on this call that there are several other parties that are looking at it and including some of the interaction that you had at the API meeting earlier this month, earlier in November. What is this -- like what is the stage of their involvement with you? Have they issued RFQs and have you responded to those, are they waiting for the California project to come through. And then they will be going through the RFQ process?

I mix, we talked to, I believe, we talked to all of it. I like to think all the refineries in the U.S. certainly the very vast majority, and rather global majors. Their engagement with this ranges to the other refinery and has the European Super major installations. So they're actually running one of our burners and continue to be very interested. They also have California refineries. We have other refiners that have given us RFQs to quote, although they're not ready to move, but they are looking at us very seriously. And then there are others who are interested in the technology, they meet with us often with -- met with their engineering teams. But they are waiting to get comfortable with the technology before they start to present specific heaters to us for quote.

Okay, okay. I think there was some technical difficulty on my side. So I will follow-up on this separately. But just one last question, for the enclosed oxidizer, I think the press release said it was sold. Does that mean that you have a purchase order? And are working on delivering it or has it already been delivered?

That project is the order has been received, and the equipment has been shipped to our clients. So that order is complete.

Understood, thanks a lot. And good luck on execution. Thanks, Jim.

Thanks, Sameer.

The next question comes from Jeff Feinglas [ph], Private Investor. Please go ahead.

Yes, hi, Jim. Thanks for taking my question. Hey, I just want to try to put a little meat to some of the numbers you're throwing around there. I mean, if I put back of the envelope, that this 20 burner order, sort of north of $2.5 million, is that fair to say in revenue?

Yes, we can follow those guidelines, Jeff, yes you've got the math about right there.

Okay, and that's just to make sure the 20 burner order was just for one heating unit itself. It's not for an entire facility.

It's a single order, the burners are actually going into its two heaters that are in one unit of the refinery but they are a very small part of the refinery in total.

Okay, and I may have missed it, but I mean, I think you said that this is a pretty typical size order, even though you may be focusing on smaller for that you guys will be seeing from facilities of your size?

Yes, from my background as well of course, it was just prior to ClearSign, I spent 20 years working with Honeywell selling burners into the process industry. A 20 burner process order is pretty close to the middle of the bell curve in terms of order size.

Got you.

Okay, I'm just -- in my head extrapolating what that means from potential revenue on that.

Okay, that answered my question. Thank you, Jim.

Thank you, Jeff. Good to hear from you.

[Operator Instructions] Seeing no further questions, this concludes our question-and-answer session. I would like to turn the conference back over to CEO, Jim Deller for any closing remarks.

Well, thank you, 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.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.