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SCHEDULE 14A

(RULE 14a-101)

INFORMATION REQUIRED IN PROXY STATEMENT

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

(Amendment No. )

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Filed by the Registrant ⌧

Filed by a Party other than the Registrant ¨

Check the appropriate box:

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ClearSign Technologies Corporation

(Name of Registrant as Specified in Its Charter)

(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)

Payment of Filing Fee (Check the appropriate box):

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PRELIMINARY PROXY STATEMENT—SUBJECT TO COMPLETION DATED APRIL 14, 2023

ClearSign Technologies Corporation

8023 E. 63^rd Place, Suite 101

Tulsa, Oklahoma 74133

Dear Shareholder:

You are invited to attend the 2023 annual meeting of shareholders of ClearSign Technologies Corporation (the “Annual Meeting”) on June 6, 2023 at 1:00 p.m. Central Daylight Standard Time. The Annual Meeting will be completely virtual conducted live via the Internet. You will be able to attend the Annual Meeting online and submit your questions during the Annual Meeting by visiting www.virtualshareholdermeeting.com/CLIR2023.

At this year’s meeting, you will be asked to: (1) elect five directors to serve until the election and qualification of their successors; (2) approve, on an advisory basis, the appointment of BPM CPA LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2023; (3) approve, on an advisory basis, the compensation paid to our named executive officers; (4) approve our reincorporation from the State of Washington to the State of Delaware; and (5) approve one or more adjournments of the Annual Meeting in certain circumstances.

The Board of Directors has fixed the close of business on April 14, 2023 as the record date for determining the shareholders entitled to notice of and to vote at the Annual Meeting and any adjournment and postponements thereof (the “Record Date”).

Please use this opportunity to take part in the affairs of the Company by voting on the business to come before this meeting. If you are a record holder of the Company’s common stock on the Record Date, you are eligible to vote with respect to these matters either electronically, at the meeting, or by proxy. It is important that your shares be voted, whether or not you plan to attend the meeting, to ensure the presence of a quorum. We urge you to authorize your proxy in advance by following the instructions printed on it. Returning the proxy does NOT deprive you of your right to attend the virtual meeting and vote your shares.

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Tulsa, Oklahoma
April 25, 2023

IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE SHAREHOLDER MEETING TO BE HELD ON JUNE 6, 2023; THIS PROXY STATEMENT AND THE 2022 ANNUAL REPORT ON FORM 10-K ARE AVAILABLE AT WWW.PROXYVOTE.COM

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PRELIMINARY PROXY STATEMENT—SUBJECT TO COMPLETION DATED APRIL 14, 2023

ClearSign Technologies Corporation

8023 E. 63^rd Place Suite 101

Tulsa, Oklahoma 74133

Notice of 2023 Annual Meeting of Shareholders

to be held June 6, 2023

To the Shareholders of ClearSign Technologies Corporation:

The 2023 Annual Meeting of Shareholders will at 1:00 p.m. Central Daylight Standard Time on June 6, 2023. The Annual Meeting will be a virtual meeting of shareholders conducted live via the Internet. You will be able to attend the Annual Meeting online by visiting www.virtualshareholdermeeting.com/CLIR2023. During the Annual Meeting, shareholders will be asked to:

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(4) approve our reincorporation from the State of Washington to the State of Delaware; and

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(5) approve one or more adjournments of the Annual Meeting in certain circumstances.

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If you are a shareholder of record as of April 14, 2023, you may vote at the Annual Meeting as further described in the accompanying proxy statement. The Notice of Internet Availability of Proxy Materials (“Notice of Internet Availability”), proxy statement and form of proxy are being distributed and made available on the Internet on or about April 25, 2023.

Dated: April 25, 2023

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Whether or not you expect to attend the Annual Meeting, please vote at your earliest convenience by following the instructions in the Notice of Internet Availability or the proxy card you received in the mail.

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PRELIMINARY PROXY STATEMENT—SUBJECT TO COMPLETION DATED APRIL 14, 2023

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ClearSign Technologies Corporation

8023 E. 63rd PL Suite 101

Tulsa, OK 74133

PROXY STATEMENT

FOR 2023 ANNUAL MEETING OF SHAREHOLDERS

IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE SHAREHOLDER MEETING TO BE HELD ON JUNE 6, 2023

The proxy statement and annual report on Form 10-K for the year ended December 31, 2022 are available at www.proxyvote.com.

In accordance with U.S. Securities and Exchange Commission (the “SEC”) rules, we are providing access to our proxy materials in connection with the solicitation of proxies by our board of directors (“Board”) for our virtual annual meeting of shareholders (the “Annual Meeting”) to be held on June 6, 2023, at 1:00 p.m. Central Daylight Standard Time over the Internet to our shareholders rather than in paper form, which reduces the environmental impact of the Annual Meeting and our costs.

Accordingly, if you are a shareholder of record, a one-page Notice of Internet Availability of Proxy Materials (the “Notice of Internet Availability”) has been mailed to you on or about April 25, 2023. Shareholders of record may access the proxy materials on the website listed above or request a printed set of the proxy materials be sent to them by following the instructions in the Notice of Internet Availability. The Notice of Internet Availability also explains how you may request that we send future proxy materials to you by e-mail or in printed form by mail. If you choose the e-mail option, you will receive an e-mail next year with links to those materials and to the proxy voting site. We encourage you to choose this e-mail option, which will allow us to provide you with the information you need in a timely manner, will save us the cost of printing and mailing documents to you and will conserve natural resources. Your election to receive proxy materials by e-mail or in printed form by mail will remain in effect until you terminate it.

If you are a beneficial owner, you will not receive a Notice of Internet Availability directly from us, but your broker, bank or other intermediary will forward you a notice with instructions on accessing our proxy materials and directing that organization how to vote your shares, as well as other options that may be available to you for receiving our proxy materials.

Our Board encourages you to read this document thoroughly and to take this opportunity to vote on the matters to be decided at the Annual Meeting. You will be able to attend the Annual Meeting online. To participate in the Annual Meeting, visit www.virtualshareholdermeeting.com/CLIR2023 and enter the 16-digit control number included on your Notice of Internet Availability, proxy card, or voting instruction form. You may begin to log into the meeting platform beginning at 12:45 p.m. Central Daylight Standard Time on June 6, 2023.

Shareholders will also have the opportunity to submit questions during the Annual Meeting through www.virtualshareholdermeeting.com/CLIR2023. A technical support telephone number will be posted on the login page of www.virtualshareholdermeeting.com/CLIR2023 you can call if you encounter any difficulties accessing the virtual meeting during the meeting.

IMPORTANT NOTICE

WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING, WE REQUEST THAT YOU VOTE BY TELEPHONE, OVER THE INTERNET OR BY MARKING, DATING, AND SIGNING THE ENCLOSED PROXY CARD AND RETURNING IT AS PROMPTLY AS POSSIBLE IN THE ENCLOSED ENVELOPE. SIGNING AND RETURNING A PROXY WILL NOT PREVENT YOU FROM VOTING AT THE MEETING.

THANK YOU FOR ACTING PROMPTLY

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THANK YOU FOR ACTING PROMPTLY

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ABOUT THE MEETING: QUESTIONS AND ANSWERS

What am I voting on?

At this year’s meeting, you will be asked to:

Who is entitled to vote at the Annual Meeting, and how many votes do they have?

Shareholders of record at the close of business on April 14, 2023 (the “Record Date”) may vote at the Annual Meeting. Each share of our common stock has one vote. There were 38,545,556 shares of common stock outstanding on April 14, 2023.

How do I vote?

You may vote over the Internet, by telephone, by mail, or at the Annual Meeting.

Vote by Internet. You can vote via the Internet at www.proxyvote.com. You will need to use the control number appearing on your proxy card to vote via the Internet. You can use the Internet to transmit your voting instructions up until 11:59 p.m. Eastern Time on Monday, June 5, 2023. Internet voting is available 24 hours a day. If you vote via the Internet, you do not need to vote by telephone or return a proxy card.

Vote by Telephone. You can vote by telephone by calling the toll-free telephone number 1-800-690-6903. You will need to use the control number appearing on your proxy card to vote by telephone. You may transmit your voting instructions from any touch-tone telephone up until 11:59 p.m. Eastern Time on Monday, June 5, 2023. Telephone voting is available 24 hours a day. If you vote by telephone, you do not need to vote over the Internet or return a proxy card.

Vote by Mail. If you received a printed proxy card, you can vote by marking, dating and signing it, and returning it in the postage-paid envelope provided to ClearSign Technologies Corporation, c/o Broadridge, 51 Mercedes Way, Edgewood, New York 11717. Please promptly mail your proxy card to ensure that it is received prior to the closing of the polls at the Annual Meeting.

Vote at the Meeting. You may vote during the Annual Meeting by going to www.virtualshareholdermeeting.com/CLIR2023. You will need the 16-digit control number included on your Notice of Internet Availability, proxy card, or voting instruction form. If you previously voted via the Internet or by telephone or mail, you will not limit your right to vote online at the Annual Meeting.

If you vote by Internet, telephone or mail, you will be designating Colin James Deller, our Chief Executive Officer, and/or Brent Hinds, our Vice President and Controller, Treasurer, as your proxy(ies). They may act together or individually on your behalf, and will have the authority to appoint a substitute to act as proxy.

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Submitting a proxy will not affect your right to attend the Annual Meeting and vote electronically.

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If your shares are held in the name of a bank, broker or other nominee, you will receive separate voting instructions from your bank, broker or other nominee describing how to vote your shares. The availability of Internet voting will depend on the voting process of your bank, broker or other nominee. Please check with your bank, broker or other nominee and follow the voting instructions it provides.

Can I receive future materials via the Internet?

If you vote by Internet, simply follow the prompts for enrolling in electronic proxy delivery service. This will reduce the Company’s printing and postage costs in the future, as well as the number of paper documents you will receive.

What is a proxy?

A proxy is a person you appoint to vote on your behalf. By using the methods discussed above, you will be appointing Colin James Deller, our Chief Executive Officer and Corporate Secretary, and/or Brent Hinds, our Vice President of Finance, Controller, and Treasurer, as your proxies. They may act together or individually to vote on your behalf, and will have the authority to appoint a substitute to act as proxy. If you are unable to attend the Annual Meeting, please vote by proxy so that your shares of common stock may be counted.

How will my proxy vote my shares?

If you are a shareholder of record, your proxy will vote according to your instructions. If you choose to vote by mail and complete and return the enclosed proxy card but do not indicate your vote, your proxy will vote “FOR” the election of the director-nominees (see Proposal 1); “FOR” the approval, on an advisory basis, of BPM CPA LLP as our independent registered public accounting firm for the year ending December 31, 2023 (see Proposal 2); “FOR” approving, on an advisory basis, of the compensation paid to our named executive officers (see Proposal 3); “FOR” approving our reincorporation to the State of Delaware (see Proposal 4); and “FOR” approving one or more adjournments of the Annual Meeting in certain circumstances (see Proposal 5).

We do not intend to bring any other matter for a vote at the Annual Meeting, and we do not know of anyone else who intends to do so, however, we will transact any such other business as may properly come before the Annual Meeting or any adjournments thereof. Your proxies are authorized to vote on your behalf, using their best judgment, on any other business that properly comes before the Annual Meeting.

If your shares are held in the name of a bank, broker or other nominee (a “Nominee”), you will receive separate voting instructions from your Nominee describing how to vote your shares. The availability of Internet voting will depend on the voting process of your Nominee. Please check with your Nominee and follow the voting instructions your Nominee provides.

You should instruct your Nominee how to vote your shares. If you do not give voting instructions to the Nominee, the Nominee will determine if it has the discretionary authority to vote on the particular matter. Under applicable regulations, brokers and other intermediaries have the discretion to vote on routine matters, such as the ratification of the selection of an independent registered public accounting firm, but do not have discretion to vote on non-routine matters. Under applicable regulations, the uncontested election of directors is no longer considered a routine matter. Matters related to executive compensation and to the implementation of, or a material revision to, an equity incentive plan are also not considered a routine matter. As a result, if you are a beneficial owner and hold your shares in street name, but do not give your Nominee instructions on how to vote your shares with respect to Proposals 1, 3 and 4, votes may not be cast on your behalf. Therefore, if you do not provide voting instructions to the Nominee, your Nominee may only vote in any other routine matters properly presented for a vote at the Annual Meeting, such as Proposal 2. If your Nominee indicates on its proxy card that it does not have discretionary authority to vote on a particular proposal, your shares will be considered to be “broker non-votes” with regard to that matter. Broker non-votes will be counted as

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present for purposes of determining whether enough votes are present to hold our Annual Meeting, but a broker non-vote will not otherwise affect the outcome of a vote.

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How do I change my vote?

If you are a shareholder of record, you may revoke your proxy at any time before your shares are voted at the Annual Meeting by:

If your shares are held in the name of a Nominee, you should check with your Nominee and follow the voting instructions provided by your Nominee.

Who will count the votes?

A representative of Broadridge Financial Solutions, Inc. will tabulate the votes and act as the inspector of election.

What constitutes a quorum?

The holders of a majority of the Company’s eligible votes as of the Record Date, either present or represented by proxy, constitute a quorum. A quorum is necessary in order to conduct the Annual Meeting. If you choose to have your shares represented by proxy at the Annual Meeting, you will be considered part of the quorum. Both abstentions and broker non-votes are counted as present for the purpose of determining the presence of a quorum. If a quorum is not present at the Annual Meeting, the shareholders present in person or by proxy may adjourn the meeting to a later date. If an adjournment is for more than 30 days or a new record date is fixed for the adjourned meeting, we will provide notice of the adjourned meeting to each shareholder of record entitled to vote at the meeting.

What vote is required to approve each proposal?

Election of Directors. For Proposal 1, the election of directors, the nominees will be elected by a plurality of the votes of the shares of common stock present in person or represented by proxy and entitled to vote at the Annual Meeting. You may choose to vote, or withhold your vote, separately for each nominee. A properly executed proxy with voting instructions marked “WITHHOLD” with respect to the election of one or more directors will not be voted with respect to the director or directors indicated, although it will be counted for the purposes of determining whether there is a quorum.

Approval, on an Advisory Basis, of the Appointment of BPM CPA LLC as the Company’s Independent Registered Public Accounting Firm. Proposal 2 is an advisory vote only and not binding on the Company. The Audit & Risk Committee will consider the outcome of this vote when making future decisions regarding the appointment of an independent registered public accounting firm.

Approval, on an Advisory Basis, of the Compensation Paid to our Named Executive Officers. Proposal 3 is also an advisory vote only. This vote will not be binding on us, our Board, or our Compensation Committee. However, the Board and the Compensation Committee will consider the outcome of this vote when making future compensation decisions for our executive officers.

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Approval of Reincorporation to Delaware. Proposal 4 will be approved if a majority of the shares outstanding on the Record Date votes in favor of the proposal.

Approval of One or More Adjournments of the Annual Meeting in Certain Circumstances. Proposal 5 will be approved if a quorum is present and the affirmative vote of the holders of shares of common stock entitled to vote at the Annual Meeting exceeds the votes cast against Proposal 5. If a quorum is not present at the Annual Meeting, Section 2, Subsection 2.8 of our bylaws states that a majority of the votes represented may adjourn the Annual Meeting.

Other Proposals. So long as a quorum is present, in order to approve any other proposal that might properly come before the Annual Meeting, the affirmative vote of the holders of shares of common stock entitled to vote must exceed the votes cast against the proposal, except when a different vote is required by law or by our articles of incorporation.

Abstentions and broker non-votes with respect to any matter will be counted as present and entitled to vote on that matter for purposes of establishing a quorum, but will not be counted for purposes of determining the number of votes cast. Accordingly, abstentions and broker non-votes will have no effect on the outcome of voting with respect to any of the proposals except for Proposal 4.

What percentage of the Company’s common stock do our directors and officers own?

As of April 14, 2023, our current directors and executive officers beneficially owned approximately 23.1% of our common stock outstanding. See the discussion under the heading “Security Ownership of Certain Beneficial Owners and Management” on page 4445 for more details.

Who is soliciting proxies, how are they being solicited, and who pays the cost?

We, on behalf of our Board, through our directors, officers, and employees, are soliciting proxies primarily by mail and the Internet. Proxies may also be solicited in person, by telephone, or facsimile. We will pay the cost of soliciting proxies. We will also reimburse stockbrokers and other custodians, nominees, and fiduciaries for their reasonable out-of-pocket expenses for forwarding proxy and solicitation materials to the owners of our common stock.

We do not plan to employ a professional solicitation firm with respect to proposals to be presented at the Annual Meeting. However if, for example, we do not believe we will meet the quorum requirements set forth in our bylaws, we may retain a proxy solicitation firm to solicit proxies. If we do so, we will pay a fee for those services and will reimburse the proxy solicitation firm for payments made to brokers and other nominee holders for their expenses in forwarding soliciting material. We may also agree that the proxy solicitation firm’s fees may increase if certain changes in the scope of its services occur.

Who is the independent registered public accounting firm, and will they be represented at the Annual Meeting?

BPM CPA LLP served as the independent registered public accounting firm auditing and reporting on our consolidated financial statements for the year ended December 31, 2022 and has been appointed to serve as our independent registered public accounting firm for 2023. We expect that representatives of BPM CPA LLP will not be present at the Annual Meeting.

What are the recommendations of the Board?

The recommendations of our Board are set forth together with the description of each proposal in this proxy statement. In summary, the Board recommends a vote:

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With respect to any other matter that properly comes before the Annual Meeting, the proxy holders will vote as recommended by the Board or, if no recommendation is given, in their own discretion.

If you sign and return your proxy card but do not specify how you want to vote your shares, the persons named as proxy holders on the proxy card will vote in accordance with the recommendations of the Board.

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GOVERNANCE OF THE COMPANY

The following table sets forth the names and ages of the directors and executive officers serving immediately prior to the Annual Meeting. Our officers are appointed by, and serve at the pleasure of, the Board.

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Our business, property and affairs are managed by, or under the direction of, our Board, in accordance with the Washington Business Corporation Act and our bylaws. Members of the Board are kept informed of our business through discussions with the Chief Executive Officer and other key members of management, by reviewing materials provided to them by management, and by participating in meetings of the Board and its Committees.

Shareholders may communicate with the members of the Board, either individually or collectively, or with any independent directors, individually or as a group, by writing to the Board at 8023 East 63^rd Place Suite 101 Tulsa, Oklahoma 74133. These communications will be reviewed by the Corporate Secretary who, depending on the subject matter, will (i) forward the communication to the director or directors to whom it is addressed or who is responsible for the topic matter, (ii) attempt to address the inquiry directly (for example, where it is a request for publicly available information or a stock related matter that does not require the attention of a director), or (iii) not forward the communication if it is primarily commercial in nature or if it relates to an improper or irrelevant topic. At each meeting of the Nominating and Corporate Governance Committee, the Corporate Secretary presents a summary of communications received and will make those communications available to any director upon request.

Independence of Directors

In determining the independence of our directors, we apply the definition of “independent director” provided under the listing rules of The Nasdaq Stock Market LLC (“Nasdaq”). On an annual basis, the Board reviews the independence of all directors under guidelines established by Nasdaq and in light of each director’s background, employment and affiliations with the Company and members of management, as well as significant holdings of Company securities. This review considers all known relevant facts and circumstances in making an independence determination. The Board concluded its annual review of director independence in March 2023. After considering all relevant facts and circumstances, the Board affirmatively determined that all of the directors then serving on the Board, including those nominated for election at the Annual Meeting, are independent within the meaning of Nasdaq Listing Rule 5605(a)(2) and Rule 10A-3(b) promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), with the exception of Robert T. Hoffman Sr. and Colin James Deller.

Board Meetings and Committees of our Board

The Board has three standing committees, the Audit & Risk Committee (the “Audit & Risk Committee”), the Compensation & Human Capital Committee(theCommittee (the “Compensation Committee”) and the Nominating and Corporate Governance Committee, (the “Governance Committee”) collectively, the (“Board Committees”). All members of the Board Committees are non-employee directors who are deemed independent. During the year ended December 31, 2022, the Board held seven meetings, the Audit & Risk Committee held five meetings, the Compensation Committee held nine meetings, and the Governance Committee held eight meetings. Each of our directors attended at least 75% of the meetings held by the Board and the Board Committees of which he or she is a member. We do not have a policy with regard to Board attendance at the annual meetings. All of the members of our Board attended the 2022 annual meeting of shareholders.

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Audit & Risk Committee

Immediately prior to the Annual Meeting, the Audit & Risk Committee was comprised of Judith Schrecker (Chairperson), Gary DiElsi and Catharine M. de Lacy. The role of the Audit & Risk Committee includes, but is not limited to, the following:

The Audit & Risk Committee is authorized (without seeking Board approval) to retain or terminate special legal, accounting or other advisors and may request any officer or employee of the Company or the Company’s outside counsel or independent registered public accounting firm to meet with any members of, or advisors to, the Audit & Risk Committee.

A copy of the charter of the Audit & Risk Committee is available on our website at www.clearsign.com (under “Investors-Corporate Governance”).

Compensation Committee

Immediately prior to the Annual Meeting, the Compensation Committee was comprised of Judith Schrecker (Chairperson), and Gary DiElsi. The role of the Compensation Committee is to:

A copy of the charter of the Compensation Committee is available on our website at www.clearsign.com (under “Investors-Corporate Governance”).

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The Compensation Committee may engage outside advisers, including outside auditors, attorneys, and consultants, as it deems necessary to discharge its responsibilities. The Compensation Committee has sole authority to retain and terminate any compensation expert or consultant used to provide advice on compensation levels or assist in the evaluation of director, Chief Executive Officer or senior executive compensation, including sole authority to approve the fees of any expert or consultant and other retention terms. In addition, the Compensation Committee considers, but is not bound by, the recommendations of our Chief Executive Officer with respect to the compensation packages of our other executive officers.

Pursuant to the terms of the ClearSign Technologies Corporation 2021 Equity Incentive Plan, the Compensation Committee may delegate to one or more officers of the Company the authority to grant awards under the plan to participants who are not insiders of the Company.

Governance Committee

Immediately prior to the Annual Meeting, the Governance Committee was comprised of Catharine M. de Lacy (Chairperson) and Judith Schrecker. The role of the Governance Committee is to:

A copy of the charter of the Governance Committee is available on our website at www.clearsign.com (under “Investors - Corporate Governance”). The members of the Governance Committee have reviewed the qualifications of the director-nominees.

Policy with Regard to Director Nominations

Shareholder proposals with regard to director nominations are reviewed by the Corporate Secretary for compliance with the requirements for such proposals, which are set forth in our Policy Regarding Shareholder Candidates for Nomination (the “Policy”). Shareholder proposals that meet these requirements will be summarized by the Corporate Secretary. Summaries and copies of the shareholder proposals are circulated to the Chairman of the Governance Committee.

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The Governance Committee will consider director candidates recommended by shareholders. If a director candidate is recommended by a shareholder (a “Nominating Shareholder”), the Governance Committee expects to evaluate such candidate in the same manner it evaluates director candidates it identifies. The Policy requires a Nominating Shareholder to have continuously held at least 5% of the Company’s common stock for at least three years by the date the name of the candidate is submitted, and to continue to hold the common stock through the date of the annual meeting. The Policy permits a Nominating Shareholder to submit one candidate for consideration at any annual meeting of shareholders. Pursuant to the Policy, a Nominating Shareholder must submit a candidate for consideration as a director in writing to the Corporate Secretary; the submission must be received by a date not later than the 120^th calendar day before the anniversary of the date that the prior year’s annual meeting proxy statement was released to shareholders (or if the annual meeting date has changed by more than 30 days, a reasonable time before we begin to print and mail the proxy statement) and must include the following information:

Our Policy Regarding Shareholder Candidates for Nomination is available on our website at www.clearsign.com (under “Investors - Corporate Governance”).

Director Qualifications and Diversity

The Board seeks independent directors who represent a diversity of backgrounds, ages and experiences that will enhance the quality of the Board’s deliberations and decisions. Candidates should preferably have board experience with one or more companies or should have achieved a high level of distinction in their chosen fields. The Board is particularly interested in maintaining a mix that includes individuals who are active or retired executive officers and

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senior executives, particularly those with experience in combustion, technology, air pollution control and air emission regulation, intellectual property, start-up companies, research and development, strategic planning, business development, upstream, midstream and downstream oil and gas, energy, finance, accounting and banking, as well as impact investing and environmental, social and governance investing, reporting and/or compliance.

In evaluating nominations to the Board of Directors, the Governance Committee also looks for certain personal attributes, such as integrity, ability and willingness to apply sound and independent business judgment, comprehensive understanding of a director’s role as a fiduciary to shareholders and with respect to corporate governance, availability for meetings and consultation on Company matters, and the willingness to assume and carry out such fiduciary responsibilities. The Governance Committee took these specifications into account, as well as the Company’s contractual agreements, in formulating and re-nominating its present Board members. The current director candidates were recommended by the Governance Committee, which is comprised of independent directors.

Board Diversity Matrix

As a Nasdaq listed company, we are required to disclose board level diversity statistics. The following table sets forth the relevant information of the current members of the Board.

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Compensation Committee Interlocks and Insider Participation

None of our prior or current executive officers serves as a member of the board of directors or compensation committee of any entity that has one or more executive officers serving as a member of our Board or the Compensation Committee.

Code of EthicsColin James Deller

We adopted a Code of Business Conduct and Ethics (“Code of Ethics”) applicable to our principal executive officer and principal financial and accounting officer and any persons performing similar functions, as well as to our employees, officers, directors, agents and representatives. The Code of Ethics requires, among other things, that all of the foregoing people avoid conflicts of interest, comply with all laws and other legal requirements, conduct business in an honest and ethical manner, and otherwise act with integrity and in our best interest. The Code of Ethics is available on our website at www.clearsign.com (under “Investors-Corporate Governance”). We intend to satisfy the disclosure requirement regarding an amendment to, or a waiver from, a provision of our Code of Ethics that applies to members of our board of directors, our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions by posting the information on our Internet website, www.clearsign.com.

Employee, Officer, and Director Hedging55

Our policy against insider trading prohibits all employees and directors from engaging in any short sales of our securities, hold our securities in a margin account, or pledge our securities as collateral for a loan.

Risk Oversight by the Board of Directors

It is management’s responsibility to assess and manage the various risks we face. It is the Board’s responsibility to oversee management in this effort, in order to ensure that risks and uncertainties that may relate to our ongoing operations and to our plans for the future are considered and sought to be managed appropriately. In exercising its oversight, the Board has allocated some areas of focus to its Committees and has retained areas of focus for itself, as more fully described below.

Full Board - Risks and exposures focused on by the full Board include risk management as a whole as well as strategic, financial and execution risks including safety risks, risks associated with intellectual property, and other current matters that may present material risk to our operations, plans, prospects or reputation. Throughout the year, the Chief Executive Officer, discusses these risks withCorporate Secretary and Director

Brent Hinds

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Vice President of Finance, Controller, Treasurer and Accounting Officer

Robert T. Hoffman Sr.

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Director, Chairperson of the Board during strategy reviews that focus on a particular function or aspect

Judith S. Schrecker

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Director, Lead Independent Director

Gary J. DiElsi

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Director

Catharine M. de Lacy

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Audit & Risk Committee

Immediately prior to the Annual Meeting, the Audit & Risk Committee was comprised of Judith Schrecker (Chairperson), Gary DiElsi and Catharine M. de Lacy. The role of the Audit & Risk Committee includes, but is not limited to, the following:

The Audit & Risk Committee is authorized (without seeking Board approval) to retain or terminate special legal, accounting or other advisors and may request any officer or employee of the Company or the Company’s outside counsel or independent registered public accounting firm to meet with any members of, or advisors to, the Audit & Risk Committee.

A copy of the charter of the Audit & Risk Committee is available on our website at www.clearsign.com (under “Investors-Corporate Governance”).

Compensation Committee

Immediately prior to the Annual Meeting, the Compensation Committee was comprised of Judith Schrecker (Chairperson), and Gary DiElsi. The role of the Compensation Committee is to:

A copy of the charter of the Compensation Committee is available on our website at www.clearsign.com (under “Investors-Corporate Governance”).

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The Compensation Committee may engage outside advisers, including outside auditors, attorneys, and consultants, as it deems necessary to discharge its responsibilities. The Compensation Committee has sole authority to retain and terminate any compensation expert or consultant used to provide advice on compensation levels or assist in the evaluation of director, Chief Executive Officer or senior executive compensation, including sole authority to approve the fees of any expert or consultant and other retention terms. In addition, the Compensation Committee considers, but is not bound by, the recommendations of our Chief Executive Officer with respect to the compensation packages of our other executive officers.

Pursuant to the terms of the ClearSign Technologies Corporation 2021 Equity Incentive Plan, the Compensation Committee may delegate to one or more officers of the Company the authority to grant awards under the plan to participants who are not insiders of the Company.

Governance Committee

Immediately prior to the Annual Meeting, the Governance Committee was comprised of Catharine M. de Lacy (Chairperson) and Judith Schrecker. The role of the Governance Committee is to:

A copy of the charter of the Governance Committee is available on our website at www.clearsign.com (under “Investors - Corporate Governance”). The members of the Governance Committee have reviewed the qualifications of the director-nominees.

Policy with Regard to Director Nominations

Shareholder proposals with regard to director nominations are reviewed by the Corporate Secretary for compliance with the requirements for such proposals, which are set forth in our Policy Regarding Shareholder Candidates for Nomination (the “Policy”). Shareholder proposals that meet these requirements will be summarized by the Corporate Secretary. Summaries and copies of the shareholder proposals are circulated to the Chairman of the Governance Committee.

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The Governance Committee will consider director candidates recommended by shareholders. If a director candidate is recommended by a shareholder (a “Nominating Shareholder”), the Governance Committee expects to evaluate such candidate in the same manner it evaluates director candidates it identifies. The Policy requires a Nominating Shareholder to have continuously held at least 5% of the Company’s common stock for at least three years by the date the name of the candidate is submitted, and to continue to hold the common stock through the date of the annual meeting. The Policy permits a Nominating Shareholder to submit one candidate for consideration at any annual meeting of shareholders. Pursuant to the Policy, a Nominating Shareholder must submit a candidate for consideration as a director in writing to the Corporate Secretary; the submission must be received by a date not later than the 120^th calendar day before the anniversary of the date that the prior year’s annual meeting proxy statement was released to shareholders (or if the annual meeting date has changed by more than 30 days, a reasonable time before we begin to print and mail the proxy statement) and must include the following information:

Robert T. Hoffman Sr.

Mr. Hoffman became

1.

The name, address and number of shares of common stock owned by the Nominating Shareholder;

2.

A representation that the Nominating Shareholder meets the requirements described above and will continue to meet them through the date of the annual meeting. If the Nominating Shareholder is not a directorregistered holder of our Companythe Company’s common stock, the Nominating Shareholder must provide evidence of eligibility as provided in July 2018 in conjunction withExchange Act Rule 14a-8(b)(2).

3.

A description of all arrangements or understandings (whether written or oral) between or among the execution of a Voting Agreement betweenNominating Shareholder and the candidate or any other person or entity (naming such person or entity) regarding the candidate’s nomination.

4.

All information regarding the candidate that the Company would be required to disclose in a proxy statement filed pursuant to the rules and clirSPV LLCregulations of the Securities and was appointed as Chairman in November 2018. Mr. Hoffman served asExchange Commission with respect to a meeting at which the interim Chief Executive Officercandidate would stand for ClearSign between January 1, 2019,election.

5.

Confirmation that the candidate is independent under the independence requirements established by the Company, Rule 10A-3(b) promulgated under the Exchange Act and April 1, 2019, prior to Dr. Deller’s appointment. Mr. Hoffman has more than 30 yearsNasdaq Listing Rule 5605(a)(2), or if the candidate is not independent under all such criteria, a description of relevant capital markets experience and expertise. In 2011, Mr. Hoffman founded and continues to manage Princeton Opportunity Management LLC. Previously, he served as founder and managing partnerthe reasons why the candidate is not independent.

6.

The consent of Candlewood Capital Management. The firm’s Candlewood Funds were a family of domestic and off-shore long/short funds which totaled more than $1 billion in primarily institutional assets. Mr. Hoffman also was a Managing Director and Portfolio Manager for the Growth & Income (G&I) mutual fund and institutional assets of what was originally Scudder Stevens and Clark, where he was responsible for all buy and sell decisions. During his tenure, G&I assets under management expanded from approximately $1.75 billion to more than $25 billion. Mr. Hoffman was also nominated by two separate governorscandidate to serve three terms as a Member and Chairman of the State of New Jersey Investment Council (SIC) from 1990 to 2002. The SIC has ultimate oversight responsibility for state and local pension funds totaling more than $80 billion. Mr. Hoffman’s career also includes service as the Assistant State Treasurer for Pensions and Investments for the State of New Jersey; Special Assistant to the Governor of New Jersey; and Mergers, and Acquisitions Analyst at ABN/LaSalle Bank. He holds an M.B.A. with Distinction from the Kellogg Graduate School of Management at Northwestern University and an Economics degree from Dartmouth College. -13- Table of Contents Judith S. Schrecker Ms. Schrecker became a director of our Company in February 2021. Ms. Schrecker brings more than 40 years of financial and operating leadership and board participation with broad international experience. Most recently Ms. Schrecker was VP of Finance of Flat Rolled Products at ATI – Allegheny Technologies, Inc., a Global manufacturer of technically advanced specialty materials and complex components, overseeing revenues of over $1 billion. Prior to that Ms. Schrecker was Chief Financial Officer of Alcoa’s Global Rolled Products business and a member of the executive councilCompany’s board of directors, if nominated and elected.

7.

A representation signed by the candidate that if elected he or she will:

(i)

represent all shareholders of the company. Under her leadership, the Global Rolled Products business achieved historically high profitability. Ms. Schrecker previously served on the boards of Finacity Corporation and Dress for Success Worldwide. She attended the University of Pittsburg Graduate School of Public and International Affairs along with a B.A. in History, Economics, and Latin American Studies from Temple University. Additionally, Ms. Schrecker is a 2020 Exceptional Women Awardees Foundation (EWA) recipient. Gary J. DiElsi Mr. DiElsi became a director of our Company in August 2022. Mr. DiElsi has over 25 yearsaccordance with applicable laws and the Company’s article of commercial, operatingincorporation, bylaws and executive experience across multiple segments of the alternativeother policies;

(ii)

comply with all rules, policies or requirements generally applicable to non-executive directors; and conventional energy industries, together with 15 years of experience as

(iii)

upon request, complete and sign a private equity investment professionalcustomary director and operating executive. Since 2018, Mr. DiElsi has served as Managing Member and Founder of Mountain Pass Energy Investing LLC, where he acts as an Independent Board Director and Senior Advisor to investment firms and their portfolio companies in the conventional and alternative energy sectors. Prior to forming Mountain Pass Energy, Mr. DiElsi was a Managing Director at Alinda Capital Partners, an infrastructure investment firm, where he served on the Investment Committee for energy investments and was responsible for evaluation of opportunities and management of energy infrastructure investments, including board representation, due diligence, macro-strategy, structuring, monitoring, performance improvements and monetization. Prior to Alinda, Mr. DiElsi served as an operating executive at First Reserve Corporation, one of the oldest energy-focused private equity firms, where he oversaw multi-billion dollar portfolio company operations and capital investments in the areas of midstream, downstream, power, shipping, terminals and renewables. Previously, Mr. DiElsi held executive, operating and capital project management positions at major global energy and technology companies, including Oxbow Group, Linde AG, UOP (Union Carbide/Allied Signal joint venture), and Chevron Corporation. Mr. DiElsi holds a Bachelor of Science degree in Mechanical Engineering (thermal sciences), Summa Cum Laude, and a Master of Engineering degree in Mechanical Engineering, both from Rensselaer Polytechnic Institute. officer questionnaire.

Our Policy Regarding Shareholder Candidates for Nomination is available on our website at www.clearsign.com (under “Investors - Corporate Governance”).

Director Qualifications and Diversity

The Board seeks independent directors who represent a diversity of backgrounds, ages and experiences that will enhance the quality of the Board’s deliberations and decisions. Candidates should preferably have board experience with one or more companies or should have achieved a high level of distinction in their chosen fields. The Board is particularly interested in maintaining a mix that includes individuals who are active or retired executive officers and

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senior executives, particularly those with experience in combustion, technology, air pollution control and air emission regulation, intellectual property, start-up companies, research and development, strategic planning, business development, upstream, midstream and downstream oil and gas, energy, finance, accounting and banking, as well as impact investing and environmental, social and governance investing, reporting and/or compliance.

In evaluating nominations to the Board of Directors, the Governance Committee also looks for certain personal attributes, such as integrity, ability and willingness to apply sound and independent business judgment, comprehensive understanding of a director’s role as a fiduciary to shareholders and with respect to corporate governance, availability for meetings and consultation on Company matters, and the willingness to assume and carry out such fiduciary responsibilities. The Governance Committee took these specifications into account, as well as the Company’s contractual agreements, in formulating and re-nominating its present Board members. The current director candidates were recommended by the Governance Committee, which is comprised of independent directors.

Board Diversity Matrix

As a Nasdaq listed company, we are required to disclose board level diversity statistics. The following table sets forth the relevant information of the current members of the Board.

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Compensation Committee Interlocks and Insider Participation

None of our prior or current executive officers serves as a member of the board of directors or compensation committee of any entity that has one or more executive officers serving as a member of our Board or the Compensation Committee.

Catharine M. de Lacy

Ms. de Lacy became a director of our Company in February 2023. She is a widely recognized expert in ESG/Sustainability initiatives, public affairs, corporate governance, and risk management. Ms. de Lacy has worked for both public and privately held companies including Albemarle Corporation, the Clorox Corp., Sun Products, Cabot Corp, AlliedSignal, and Occidental Petroleum Corp. Ms. de Lacy is the co-founder and Managing Director of Riar Associates, LLC, a management consultancy where she continues to work as a business advisor and subject matter expert on ESG, sustainability, business strategy, public policy and advocacy, communications, and risk management matters for public and private companies. She is a former board member of TORC Oil & Gas, Ltd. (TSX:TOG), and is currently serving as a board member of privately-held NTES LLC, which provides strategic, financial, and operations management expertise in evolving energy markets and real estate investment; a member of the Environmental Law Institute's Leadership Council; and in the Executive Advisory Council of the Responsible Battery Coalition. She holds a Board Certificate in ESG from UC Berkeley's Law School, is a Certified Director through the Harvard Business School, holds a certificate in Risk Governance from the DCRO, and is also a Qualified Risk Director®. Ms. de Lacy received a B.A. from Merrimack College, and an M.S. from Tufts University.

Colin James Deller

55

Chief Executive Officer, Corporate Secretary and Director

Brent Hinds

​

44

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Vice President of Finance, Controller, Treasurer and Accounting Officer

Robert T. Hoffman Sr.

64

Director, Chairperson of the Board

Judith S. Schrecker

70

Director, Lead Independent Director

Gary J. DiElsi

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65

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Director

Catharine M. de Lacy

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Audit & Risk Committee

Immediately prior to the Annual Meeting, the Audit & Risk Committee was comprised of Judith Schrecker (Chairperson), Gary DiElsi and Catharine M. de Lacy. The role of the Audit & Risk Committee includes, but is not limited to, the following:

The Audit & Risk Committee is authorized (without seeking Board approval) to retain or terminate special legal, accounting or other advisors and may request any officer or employee of the Company or the Company’s outside counsel or independent registered public accounting firm to meet with any members of, or advisors to, the Audit & Risk Committee.

A copy of the charter of the Audit & Risk Committee is available on our website at www.clearsign.com (under “Investors-Corporate Governance”).

Compensation Committee

Immediately prior to the Annual Meeting, the Compensation Committee was comprised of Judith Schrecker (Chairperson), and Gary DiElsi. The role of the Compensation Committee is to:

A copy of the charter of the Compensation Committee is available on our website at www.clearsign.com (under “Investors-Corporate Governance”).

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The Compensation Committee may engage outside advisers, including outside auditors, attorneys, and consultants, as it deems necessary to discharge its responsibilities. The Compensation Committee has sole authority to retain and terminate any compensation expert or consultant used to provide advice on compensation levels or assist in the evaluation of director, Chief Executive Officer or senior executive compensation, including sole authority to approve the fees of any expert or consultant and other retention terms. In addition, the Compensation Committee considers, but is not bound by, the recommendations of our Chief Executive Officer with respect to the compensation packages of our other executive officers.

Pursuant to the terms of the ClearSign Technologies Corporation 2021 Equity Incentive Plan, the Compensation Committee may delegate to one or more officers of the Company the authority to grant awards under the plan to participants who are not insiders of the Company.

Governance Committee

Immediately prior to the Annual Meeting, the Governance Committee was comprised of Catharine M. de Lacy (Chairperson) and Judith Schrecker. The role of the Governance Committee is to:

A copy of the charter of the Governance Committee is available on our website at www.clearsign.com (under “Investors - Corporate Governance”). The members of the Governance Committee have reviewed the qualifications of the director-nominees.

Policy with Regard to Director Nominations

Shareholder proposals with regard to director nominations are reviewed by the Corporate Secretary for compliance with the requirements for such proposals, which are set forth in our Policy Regarding Shareholder Candidates for Nomination (the “Policy”). Shareholder proposals that meet these requirements will be summarized by the Corporate Secretary. Summaries and copies of the shareholder proposals are circulated to the Chairman of the Governance Committee.

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The Governance Committee will consider director candidates recommended by shareholders. If a director candidate is recommended by a shareholder (a “Nominating Shareholder”), the Governance Committee expects to evaluate such candidate in the same manner it evaluates director candidates it identifies. The Policy requires a Nominating Shareholder to have continuously held at least 5% of the Company’s common stock for at least three years by the date the name of the candidate is submitted, and to continue to hold the common stock through the date of the annual meeting. The Policy permits a Nominating Shareholder to submit one candidate for consideration at any annual meeting of shareholders. Pursuant to the Policy, a Nominating Shareholder must submit a candidate for consideration as a director in writing to the Corporate Secretary; the submission must be received by a date not later than the 120^th calendar day before the anniversary of the date that the prior year’s annual meeting proxy statement was released to shareholders (or if the annual meeting date has changed by more than 30 days, a reasonable time before we begin to print and mail the proxy statement) and must include the following information:

Our Policy Regarding Shareholder Candidates for Nomination is available on our website at www.clearsign.com (under “Investors - Corporate Governance”).

Director Qualifications and Diversity

The Board seeks independent directors who represent a diversity of backgrounds, ages and experiences that will enhance the quality of the Board’s deliberations and decisions. Candidates should preferably have board experience with one or more companies or should have achieved a high level of distinction in their chosen fields. The Board is particularly interested in maintaining a mix that includes individuals who are active or retired executive officers and

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senior executives, particularly those with experience in combustion, technology, air pollution control and air emission regulation, intellectual property, start-up companies, research and development, strategic planning, business development, upstream, midstream and downstream oil and gas, energy, finance, accounting and banking, as well as impact investing and environmental, social and governance investing, reporting and/or compliance.

In evaluating nominations to the Board of Directors, the Governance Committee also looks for certain personal attributes, such as integrity, ability and willingness to apply sound and independent business judgment, comprehensive understanding of a director’s role as a fiduciary to shareholders and with respect to corporate governance, availability for meetings and consultation on Company matters, and the willingness to assume and carry out such fiduciary responsibilities. The Governance Committee took these specifications into account, as well as the Company’s contractual agreements, in formulating and re-nominating its present Board members. The current director candidates were recommended by the Governance Committee, which is comprised of independent directors.

Board Diversity Matrix

As a Nasdaq listed company, we are required to disclose board level diversity statistics. The following table sets forth the relevant information of the current members of the Board.

​

​

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Compensation Committee Interlocks and Insider Participation

None of our prior or current executive officers serves as a member of the board of directors or compensation committee of any entity that has one or more executive officers serving as a member of our Board or the Compensation Committee.

Code of Ethics

We adopted a Code of Business Conduct and Ethics (“Code of Ethics”) applicable to our principal executive officer and principal financial and accounting officer and any persons performing similar functions, as well as to our employees, officers, directors, agents and representatives. The Code of Ethics requires, among other things, that all of the foregoing people avoid conflicts of interest, comply with all laws and other legal requirements, conduct business in an honest and ethical manner, and otherwise act with integrity and in our best interest. The Code of Ethics is available on our website at www.clearsign.com (under “Investors-Corporate Governance”). We intend to satisfy the disclosure requirement regarding an amendment to, or a waiver from, a provision of our Code of Ethics that applies to members of our board of directors, our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions by posting the information on our Internet website, www.clearsign.com.

Employee, Officer, and Director Hedging

Our policy against insider trading prohibits all employees and directors from engaging in any short sales of our securities, hold our securities in a margin account, or pledge our securities as collateral for a loan.

Risk Oversight by the Board of Directors

It is management’s responsibility to assess and manage the various risks we face. It is the Board’s responsibility to oversee management in this effort, in order to ensure that risks and uncertainties that may relate to our ongoing operations and to our plans for the future are considered and sought to be managed appropriately. In exercising its oversight, the Board has allocated some areas of focus to its Committees and has retained areas of focus for itself, as more fully described below.

Full Board - Risks and exposures focused on by the full Board include risk management as a whole as well as strategic, financial and execution risks including safety risks, risks associated with intellectual property, and other current matters that may present material risk to our operations, plans, prospects or reputation. Throughout the year, the Chief Executive Officer discusses these risks with the Board during strategy reviews that focus on a particular function or aspect of our business.

Audit & Risk Committee - Risks and exposures focused on by the Audit & Risk Committee are those associated with financial matters, particularly financial reporting, tax, accounting, disclosure, internal control over financial reporting, cyber, the Foreign Corrupt Practices Act, financial policies, investment guidelines, and credit and liquidity matters.

Governance Committee - Risks and exposures focused on by the Governance Committee are those relating to corporate governance and management and director succession planning.

Compensation Committee - Risks and exposures focused on by the Compensation Committee are those associated with leadership assessment and compensation programs and arrangements, including incentive plans, to ensure that compensation incentives are aligned with our risk management objectives.

Board Leadership Structure

The Chairperson of the Board, if appointed pursuant to Section 4.5 of the Bylaws, presides at all meetings of the Board and the Annual Meeting of Shareholders. Mr. Hoffman was appointed as Chair of the Board at a special

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meeting of the Board held on November 6, 2018, at which time the Board determined to separate the offices of the Chief Executive Officer and the Chairperson. At that time, the Board believed such a leadership structure would increase the Board’s independence from management. Ms. Schrecker was appointed to the role of lead independent director at a board meeting held on February 18, 2023.

The responsibilities of our lead independent director include:

A determination regarding the designation and appointment of a Board Chair and/or lead independent director will be made each year following the Company’s annual meeting of shareholders.

​

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PROPOSAL 1 — ELECTION OF DIRECTORS

Nominees for Election

The Board of Directors is comprised of five members. Our Board, upon the recommendation of the Governance Committee, has nominated our five incumbent directors for re-election at the Annual Meeting. Each nominee has agreed, if elected, to serve until the election and qualification of his or her successor. If any nominee is unable to stand for election, which circumstance we do not anticipate, the Board may provide for a lesser number of directors or designate a substitute. In the latter event, shares represented by proxies may be voted for a substitute nominee.

If a quorum is present at the Annual Meeting, then nominees will be elected by a plurality of the votes cast. There is no cumulative voting in the election of directors.

The following biographical information is furnished as to each nominee for election as a director:

Robert T. Hoffman Sr.

Mr. Hoffman became a director of our Company in July 2018 in conjunction with the execution of a Voting Agreement between the Company and clirSPV LLC and was appointed as Chairman in November 2018. Mr. Hoffman served as the interim Chief Executive Officer for ClearSign between January 1, 2019, and April 1, 2019, prior to Dr. Deller’s appointment. Mr. Hoffman has more than 30 years of relevant capital markets experience and expertise. In 2011, Mr. Hoffman founded and continues to manage Princeton Opportunity Management LLC. Previously, he served as founder and managing partner of Candlewood Capital Management. The firm’s Candlewood Funds were a family of domestic and off-shore long/short funds which totaled more than $1 billion in primarily institutional assets. Mr. Hoffman also was a Managing Director and Portfolio Manager for the Growth & Income (G&I) mutual fund and institutional assets of what was originally Scudder Stevens and Clark, where he was responsible for all buy and sell decisions. During his tenure, G&I assets under management expanded from approximately $1.75 billion to more than $25 billion. Mr. Hoffman was also nominated by two separate governors to serve three terms as a Member and Chairman of the State of New Jersey Investment Council (SIC) from 1990 to 2002. The SIC has ultimate oversight responsibility for state and local pension funds totaling more than $80 billion. Mr. Hoffman’s career also includes service as the Assistant State Treasurer for Pensions and Investments for the State of New Jersey; Special Assistant to the Governor of New Jersey; and Mergers, and Acquisitions Analyst at ABN/LaSalle Bank. He holds an M.B.A. with Distinction from the Kellogg Graduate School of Management at Northwestern University and an Economics degree from Dartmouth College.

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Judith S. Schrecker

Ms. Schrecker became a director of our Company in February 2021. Ms. Schrecker brings more than 40 years of financial and operating leadership and board participation with broad international experience. Most recently Ms. Schrecker was VP of Finance of Flat Rolled Products at ATI – Allegheny Technologies, Inc., a Global manufacturer of technically advanced specialty materials and complex components, overseeing revenues of over $1 billion. Prior to that Ms. Schrecker was Chief Financial Officer of Alcoa’s Global Rolled Products business and a member of the executive council of the company. Under her leadership, the Global Rolled Products business achieved historically high profitability. Ms. Schrecker previously served on the boards of Finacity Corporation and Dress for Success Worldwide. She attended the University of Pittsburg Graduate School of Public and International Affairs along with a B.A. in History, Economics, and Latin American Studies from Temple University. Additionally, Ms. Schrecker is a 2020 Exceptional Women Awardees Foundation (EWA) recipient.

Gary J. DiElsi

Mr. DiElsi became a director of our Company in August 2022. Mr. DiElsi has over 25 years of commercial, operating and executive experience across multiple segments of the alternative and conventional energy industries, together with 15 years of experience as a private equity investment professional and operating executive. Since 2018, Mr. DiElsi has served as Managing Member and Founder of Mountain Pass Energy Investing LLC, where he acts as an Independent Board Director and Senior Advisor to investment firms and their portfolio companies in the conventional and alternative energy sectors. Prior to forming Mountain Pass Energy, Mr. DiElsi was a Managing Director at Alinda Capital Partners, an infrastructure investment firm, where he served on the Investment Committee for energy investments and was responsible for evaluation of opportunities and management of energy infrastructure investments, including board representation, due diligence, macro-strategy, structuring, monitoring, performance improvements and monetization. Prior to Alinda, Mr. DiElsi served as an operating executive at First Reserve Corporation, one of the oldest energy-focused private equity firms, where he oversaw multi-billion dollar portfolio company operations and capital investments in the areas of midstream, downstream, power, shipping, terminals and renewables. Previously, Mr. DiElsi held executive, operating and capital project management positions at major global energy and technology companies, including Oxbow Group, Linde AG, UOP (Union Carbide/Allied Signal joint venture), and Chevron Corporation. Mr. DiElsi holds a Bachelor of Science degree in Mechanical Engineering (thermal sciences), Summa Cum Laude, and a Master of Engineering degree in Mechanical Engineering, both from Rensselaer Polytechnic Institute. 

Catharine M. de Lacy

Ms. de Lacy became a director of our Company in February 2023. She is a widely recognized expert in ESG/Sustainability initiatives, public affairs, corporate governance, and risk management. Ms. de Lacy has worked for both public and privately held companies including Albemarle Corporation, the Clorox Corp., Sun Products, Cabot Corp, AlliedSignal, and Occidental Petroleum Corp. Ms. de Lacy is the co-founder and Managing Director of Riar Associates, LLC, a management consultancy where she continues to work as a business advisor and subject matter expert on ESG, sustainability, business strategy, public policy and advocacy, communications, and risk management matters for public and private companies. She is a former board member of TORC Oil & Gas, Ltd. (TSX:TOG), and is currently serving as a board member of privately-held NTES LLC, which provides strategic, financial, and operations management expertise in evolving energy markets and real estate investment; a member of the Environmental Law Institute's Leadership Council; and in the Executive Advisory Council of the Responsible Battery Coalition. She holds a Board Certificate in ESG from UC Berkeley's Law School, is a Certified Director through the Harvard Business School, holds a certificate in Risk Governance from the DCRO, and is also a Qualified Risk Director®. Ms. de Lacy received a B.A. from Merrimack College, and an M.S. from Tufts University.

Colin James Deller

Dr. Deller joined us as our President in February 2019, transitioned to the office of Chief Executive Officer on April 1, 2019 and was appointed as a director on February 13, 2020. Dr. Deller began his career at Hamworthy Combustion while also completing his Ph.D. In 1996, Dr. Deller joined Callidus, where he was employed in Project Engineering and Sales, and over the course of ten years advanced to serve as Chief Combustion Engineer and Manager

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of Burner Order Execution before being promoted to oversee Callidus’ entire burner business. From 2010 until he left Callidus, following the acquisition of Callidus by Honeywell, Dr. Deller served as General Manager with full profit and loss accountability for the Honeywell UOP Callidus burner business worldwide. During that time, he led his team in developing new international markets, including developing a leading market position in China. From May 2018 until he joined the Company, Dr. Deller served as the interim Global Operations Director for the entire Honeywell International UOP Callidus business, which includes flares and thermal oxidizers in addition to burners.

Dr. Deller has a Bachelor of Engineering in mechanical engineering from Portsmouth Polytechnic, U.K., a doctorate in flame chemistry from the University of Portsmouth, U.K., and an MBA from The University of London.

The investment experience that Mr. Hoffman brings to our Board includes his experience in analyzing the operations of businesses, and particularly smaller capitalized companies, to determine the likelihood of success. Ms. Schrecker has significant financial, business, operational and industrial experience. Mr. DiElsi has over forty years of experience in private equity, major global enterprises, smaller industrial companies, and startup ventures, including in both turnaround and growth situations. In addition, Ms. de Lacy has significant experience in the areas of corporate governance, environmental policy and risk management. We believe that their experience, together with the expertise brought to our operations by Dr. Deller, will help us achieve our goals of proving commercial viability of our products, generating interest from end users and original equipment manufacturers and licensing our technology. For these reasons, we concluded that each of these individuals should serve as a director.

None of our director nominees is related to any other director nominee or any officer. None of our director nominees has been involved in a legal proceeding that requires disclosure pursuant to Item 401(f) of Regulation S-K promulgated under the Exchange Act. Mr. Hoffman was selected as a director pursuant to the terms of a Voting Agreement we entered into with clirSPV LLC in July 2018.

Director Compensation

The following table sets forth information concerning compensation for services rendered by our non-executive directors for the year ended December 31, 2022. The amounts represented in the “Option Awards” and “Restricted Stock Units” column reflect the grant date fair value of the options computed in accordance with FASB ASC Topic 718 and do not necessarily equate to the income that will ultimately be realized by the director for such awards.

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Director Compensation for 2022

Our non-executive directors are entitled to an annual compensation of $60,000, except for the Chair of the Board, who receives an annual compensation of $80,000, plus reimbursement for ordinary and reasonable expenses incurred in exercising their responsibilities in accordance with the Company’s expense reimbursement procedure applicable to all employees of the Company. Our lead independent director is also entitled to receive additional annual compensation of $15,000. In addition, Ms. Schrecker received an additional $7,500 for her increased responsibilities as a member of the Audit & Risk Committee during 2022. This additional compensation was a one-time addition due to the death of Brian Fike, and it has been removed in 2023.

​

Our non-executive directors received the following additional annual compensation for service on the committees of the Board, as applicable, in 2022:

​

​

In 2022, each non-executive director’s annual compensation was paid in restricted stock units. This component of the Company’s director compensation program is designed to build an ownership stake in the Company while providing an incentive to directors that corresponds with the returns recognized by our shareholders. Restricted stock unit awards to non-executive directors are anticipated to continue in future years as a means to increase alignment of directors with the Company’s shareholders.

​

Other than the 2021 Equity Incentive Plan, the independent directors are not eligible to participate in the Company’s employee benefit plans, including the retirement plan.

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Vote Required and Recommendation

The affirmative vote of the holders of a plurality of the shares of common stock present in person or represented by proxy and entitled to vote on the nominees will be required to approve each nominee. This means that the five nominees receiving the most votes for election will be elected.

The Board unanimously recommends a vote “FOR” each of the nominees.

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REPORT OF THE AUDIT & RISK COMMITTEE

The following Report of the Audit & Risk Committee shall not be deemed incorporated by reference into any of our filings under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, except to the extent we specifically incorporate it by reference therein.

The Audit & Risk Committee of the Board has:

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In reliance on the review and discussions referred to above, the Audit & Risk Committee recommended to the Board that the consolidated financial statements audited by BPM CPA LLP for the year ended December 31, 2022 be included in its Annual Report on Form 10-K for such fiscal year.

Audit & Risk Committee of the Board

​

Judith S. Schrecker, Chairperson

Gary J. DiElsi

Catharine M. de Lacy

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PROPOSAL 2 – APPROVE, ON AN ADVISORY BASIS, OF THE APPOINTMENT

OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Effective July 1, 2021, Gumbiner Savett Inc. (“GS”), our independent registered public accounting firm since 2011, combined with BPM CPA LLP. As a result of this transaction, on July 1, 2021, GS resigned as the independent registered public accounting firm for the Company. The Audit & Risk Committee approved the engagement of BPM CPA LLP as our new independent registered public accounting firm for our fiscal year ended December 31, 2022 and 2021. The Audit & Risk Committee of the Board also appointed BPM CPA LLP as our independent registered public accounting firm to audit our consolidated financial statements for the year ending December 31, 2023.

Shareholder approval of the selection of BPM CPA LLP as our independent registered public accounting firm is advisory only and is not required by our bylaws or the Washington Business Corporation Act. The Board seeks such approval as a matter of good corporate practice. Should the shareholders fail to approve the selection of BPM CPA LLP as our independent registered public accounting firm, the Audit & Risk Committee will reconsider whether to retain that firm in the future. In making its recommendation to the Board that shareholders ratify the appointment of BPM CPA LLP as our independent registered public accounting firm for the year ending December 31, 2023, the Audit & Risk Committee considered whether BPM CPA LLP’s provision of non-audit services is compatible with maintaining its independence. The Audit & Risk Committee approved the audit fees, audit-related fees, tax fees and all other fees described below and believes such fees are compatible with the independence of BPM CPA LLP.

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Audit Fees. “Audit Fees” are the aggregate fees of BPM CPA LLP attributable to professional services rendered in 2022 and 2021 for the audit of our annual consolidated financial statements and for review of condensed consolidated financial statements included in our quarterly reports on Form 10-Q, and for services that are normally provided by BPM CPA LLP in connection with statutory and regulatory filings or engagements for those fiscal years.

Tax Fees. “Tax Fees” are billed for professional services rendered to us for tax compliance, tax advice, and tax planning.

All Other Fees. “All Other Fees” are attributable to customary agreed upon professional services in connection with our ATM (At-The Market) offering sales agreement executed in December 2020, filing our prospectus supplement related to the public offering on May 2022, filing our S-3 registration statement in July 2022, and review of our annual proxy statements.

Pre-approval Policies and Procedures

The Audit & Risk Committee is required to review and approve in advance the retention of the independent registered public accounting firm for the performance of all audit and lawfully permitted non-audit services and the fees for such services. The required pre-approval policies and procedures were complied with during 2022 and 2021.

BPM CPA LLP Representatives at Annual Meeting

We expect that representatives of BPM CPA LLP will not be present at the Annual Meeting.

Vote Required and Recommendation

This is an advisory vote and does not require a minimum number of votes.

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The Board unanimously recommends you vote “FOR” approval of the appointment of BPM CPA LLP as our independent registered public accounting firm for the year ending December 31, 2023.

EXECUTIVE COMPENSATION AND RELATED INFORMATION

The following is biographical information about our executive officers.

Colin James Deller, Ph.D., Chief Executive Officer and Secretary

See Dr. Deller’s biography included at Proposal 1.

Brent Hinds, Vice President and Controller, Treasurer

Mr. Hinds was appointed as our Vice President of Finance, Controller, Treasurer, principal financial officer, and principal accounting officer on October 18, 2021. Prior to joining the Company, from July 2014 to September 2021, Mr. Hinds was employed by Enovation Controls, Inc. (“Enovation Controls”). Enovation Controls is a stand-alone subsidiary of Helios Technologies (NASDAQ: HLIO), focused on global sales, manufacturing, and application engineering operations, working directly with original equipment manufacturers. Mr. Hinds successively held the positions of Assistant Controller, Controller and Vice President of Finance. In his capacity, Mr. Hinds was responsible for overseeing accounting and finance department activities to ensure accuracy and timely dissemination of reports, including income statement, balance sheet, and cash flow. Prior to joining Enovation Controls, Mr. Hinds worked for Stinnett & Associates, LLC, a professional advisory firm for public and private companies, where he established risk-based audit programs to determine the adequacy and effectiveness internal control environments. Additionally, Mr. Hinds served as a compliance analyst at Baker Hughes Company. Mr. Hinds earned his Bachelor of Science in Accounting from Oklahoma State University and is a certified public accountant.

None of our executive officers is related to any of our directors or any other officer. None of our executive officers has been involved in a legal proceeding that requires disclosure pursuant to Item 401(f) of Regulation S-K promulgated under the Exchange Act. None of our officers was selected as such as a result of an arrangement or understanding between him and any other person.

Summary Compensation Table for 2022 and 2021

The table below summarizes the total compensation paid to or earned by our Chief Executive Officer, Vice President of Finance and Controller, in 2022 and 2021, in accordance with Item 402(m)(2) of Regulation S-K. These officers are referred to herein as the “named executive officers” or “NEOs.” The amounts represented in the “Option Awards” column reflects the stock compensation expense recorded by the Company pursuant to ASC Topic 718 and does not necessarily equate to the income that will ultimately be realized by the named executive officers for such awards.

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Summary Compensation Table

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Outstanding Equity Awards

The following table sets forth information concerning outstanding equity awards held by our NEO’s at December 31, 2022.

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Employment Contracts and Termination of Employment and Change-in-Control Arrangements

Employment Agreement with Colin James Deller

On January 28, 2019 (the “Effective Date”), the Company and Colin James Deller entered into an employment agreement pursuant to which the Company employed Dr. Deller as its President until April 1, 2019, at which time Dr. Deller became the Company’s Chief Executive Officer. Pursuant to the agreement, the Company pays Dr. Deller an annual salary of $350,000. As an inducement to accept employment with the Company, Dr. Deller was also granted an option to purchase 400,000 shares of the Company’s common stock at an exercise price of $1.16 per share and an option to purchase 200,000 shares of the Company’s common stock at an exercise price of $2.25 per share. Each option has a term of 10 years and has vested as follows: one-third of the options vested on the Effective Date; one-third of the options vested on the first anniversary of the grant date; and one-third of the options vested on the second anniversary of the grant date. The Company agreed to pay certain living and relocation expenses, not to exceed the sum of $100,000, related to Dr. Deller’s travel from Tulsa, Oklahoma to Seattle, Washington. As of January 2022, the Company changed its headquarters from Seattle, Washington to Tulsa, Oklahoma, and, as a result, the relocation expense clause became void. The Company incurred approximately $32,000 in travel and living expenses related to temporary housing in 2021.

Offer Letter with Brent Hinds

Mr. Hinds received an offer letter from the Company, dated as of September 30, 2021 and effective as of October 18, 2021 (the “Offer Letter”), setting forth the terms of his employment and compensation arrangement, which he accepted. Pursuant to the Offer Letter, Mr. Hinds is paid an annual base salary of $200,000 in addition to equity compensation and other benefits set forth in the Offer Letter. Mr. Hinds is also eligible to participate in such healthcare and other benefit programs made available to employees of the Company. His employment has no specified term and will be on an at-will basis.

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Change of Control Arrangements

All of the option awards and stock awards granted to the Company’s executive officers pursuant to the Company’s 2021 Equity Incentive Plan include change-in-control arrangements whereby, in the event that a successor corporation does not assume or substitute the outstanding executive officers’ awards, any unvested award will be fully vested, including awards contingent on performance-based goals. Upon a change-in-control, these vested awards will be exercisable for a period of time determined by the administrator of the 2021 Equity Incentive Plan, and any award that becomes fully vested as a result of a change-in-control will terminate upon expiration of such period.

Compensation Discussion

Overview

The Compensation Committee of the Board administers our executive compensation and benefit programs. The Compensation Committee is comprised exclusively of independent directors and oversees all compensation and benefit programs and actions that affect our executive officers.

Compensation Process and Role of Management

The Compensation Committee is responsible for determining and approving all compensation for our executive officers. Pursuant to its charter, the Compensation Committee reviews and approves, subject to applicable Board ratification, the salary, annual incentive compensation or bonus, long-term incentive compensation in the form of stock options, restricted stock units, or stock grants, all other employment, severance and change-in-control agreements and any other compensation applicable to executive officers. As discussed below, our Chief Executive Officer assists the Compensation Committee in its deliberations with respect to the compensation payable to our other executive officers.

At the end of or immediately following each fiscal year, our Chief Executive Officer evaluates executive officer performance for the prior fiscal year, other than his own performance, and discusses the results of such evaluations with the Compensation Committee. The Chief Executive Officer assesses each executive officer’s performance during the year based upon subjective factors concerning such officer’s individual business goals and objectives, and the contributions made by the executive officer to our overall results. The Chief Executive Officer then makes specific recommendations to the Compensation Committee for adjustments to base salary and the grant of a target bonus and/or equity award, if appropriate, as part of the compensation package for each executive officer, other than himself, for the next fiscal year.

The Compensation Committee reviews the performance of the Chief Executive Officer and determines all compensation for the Chief Executive Officer. The Chief Executive Officer is not present at the time the Compensation Committee reviews his performance and discusses his compensation.

Evaluation of Compensation Practices

In developing our director compensation program and as basis for establishing such compensation, the Compensation Committee gathers and reviews data from the National Association of Corporate Directors as well as for various publicly traded companies that the Compensation Committee believes to be similar to the Company in some respect, taking into consideration market capitalization, number of employees, amount of revenue, net cash used or generated in operations and the industries in which such companies operate. The goal is to attract qualified candidates and motivate director behavior by adequately compensating for the time, effort, and commitment required. Establishing a transparent process that includes industry standards and comparisons, while factoring in the unique circumstances of the Company, is critical. Compensation may be in the form of cash, options, restricted stock units, or stock with consideration given to the Company’s overall resources during any given period when making a determination regarding the appropriate mix of each component of director compensation. As a result of such review, in 2022, each non-executive director’s annual compensation was paid in restricted stock units. Equity compensation for directors is designed to build an ownership stake in the Company while conveying incentives relative to the returns recognized by our shareholders.

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PROPOSAL 3 – APPROVE, ON AN ADVISORY BASIS, OF THE COMPENSATION

OF OUR NAMED EXECUTIVE OFFICERS (“SAY-ON-PAY”)

In recent years, good corporate governance commentators and advisors have advocated and, increasingly, governmental regulatory authorities, including the Securities and Exchange Commission, are mandating that public companies initiate procedures to ensure that our shareholders have input on our compensation programs for our named executive officers. This is commonly known as “Say-on-Pay.”

Our Board values and encourages constructive dialogue on executive compensation and other important governance topics with our shareholders, to whom it is ultimately accountable. We urge you to read this proxy statement for additional details on the Company’s executive compensation.

Our Say-on-Pay Proposal is designed to provide our shareholders with the opportunity to consider and vote upon the compensation paid to our named executive officers, as disclosed in this proxy statement pursuant to Item 402 of Regulation S-K, including the compensation table and narrative discussion. Although the vote is advisory and non-binding on the Company or the Board, our Board and the Compensation Committee will review the voting results. To the extent there is any significant lack of support for the compensation of our named executive officers, we would expect to initiate procedures designed to help us better understand shareholder concerns. We ask our shareholders to approve a Say-on-Pay proposal each year.

Shareholders will be asked at the annual meeting to approve the following resolution pursuant to this Proposal 3:

RESOLVED, that the shareholders of ClearSign Technologies Corporation approve, on an advisory basis, the compensation of the Company’s “named executive officers,” as such compensation is described in the tabular disclosure regarding such compensation under the caption “Executive Compensation” and the accompanying narrative disclosure, set forth in the proxy statement for the 2023 Annual Meeting of Shareholders.

Marking the proxy card “For” indicates approval of the foregoing resolution; marking the proxy card “Against” indicates lack of support for the foregoing resolution and the compensation of our named executive officers. You may abstain by marking the “Abstain” box on the proxy card.

Vote Required and Recommendation

This is an advisory vote and does not require a minimum number of votes.

The Board unanimously recommends you vote “FOR” the approval of the foregoing resolution approving the compensation paid to our named executive officers.

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PROPOSAL 4 – APPROVAL OF DELAWARE REINCORPORATION

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The Board has unanimously approved and recommends to the Company’s shareholders this proposal to change the Company’s state of incorporation from the State of Washington to the State of Delaware (the “Reincorporation”). If the Company’s shareholders approve this proposal, the Company will accomplish the Reincorporation as described below.

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Summary

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Assuming that shareholder approval of this Proposal 4 is obtained and the Reincorporation becomes effective:

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The Reincorporation

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The Reincorporation will not affect the trading of the shares of our common stock on the Nasdaq Capital Market under the same symbol “CLIR.” The Newco will continue to file periodic reports and other documents as and to the extent required by the rules and regulations of the SEC. Shareholders who own shares of the Company’s common stock that are freely tradable prior to the Reincorporation will continue to have freely tradable shares in the Newco after the Reincorporation, and shareholders holding restricted shares of common stock prior to the Reincorporation will continue to hold their shares in the Newco after the Reincorporation subject to the same restrictions on transfer to which their shares are presently subject. In summary, the Reincorporation will not change the respective positions under federal securities laws of the Company or its shareholders. For more information regarding the process by which the Reincorporation is expected to be consummated, see “The Conversion Process” below.

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The Board (i) has determined that the Reincorporation is advisable and in the best interests of the Company and its shareholders, (ii) has approved and declared advisable the Plan of Conversion and the consummation of the transactions contemplated thereby, including the Conversion and the Reincorporation and (iii) has submitted to the Company’s shareholders the Plan of Conversion and the principal terms of the Reincorporation for their consideration and approval. The Board believes that shareholder approval of the Reincorporation provides the following advantages to the Company:

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Highly Developed and Predictable Corporate Law

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The Board believes Delaware has one of the most modern statutory corporation laws, which is revised regularly to meet changing legal and business needs of corporations. The Delaware legislature is responsive to developments in modern corporate law and Delaware has proven sensitive to changing needs of corporations and their shareholders. The Delaware Secretary of State is particularly flexible and responsive in its administration of the filings required for mergers, acquisitions and other corporate transactions. Delaware has become a preferred domicile for many major U.S. corporations and the DGCL and administrative practices have become comparatively well known and widely understood. As a result of these factors, it is anticipated that the DGCL will provide greater efficiency, predictability and flexibility in our legal affairs than is presently available under the RCW.

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Access to Specialized Courts

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Delaware has a specialized Court of Chancery that is widely recognized as the nation’s preeminent forum for the resolution of disputes involving corporate internal affairs and related business matters. As the leading state of incorporation for both private and public companies, Delaware has developed a vast body of corporate law that helps to promote greater consistency and predictability in judicial rulings. In addition, Court of Chancery actions and appeals from Court of Chancery rulings proceed expeditiously. In contrast, Washington does not have a similar specialized court established to hear only corporate law cases. Rather, disputes involving questions of Washington corporate law are either heard by the Washington Superior Court, the general trial court in Washington that hears all types of cases, or, if federal jurisdiction exists, a federal district court.

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Improved Ability to Raise Capital

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In the opinion of the Board, underwriters and other members of the financial services industry may be more willing and better able to assist in capital-raising programs for corporations having the greater flexibility afforded by the DGCL. The familiarity with Delaware law is an additional benefit for underwriters and the financial services industry.  

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Opportunity to Reduce Legal Fees and Administrative Burden

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The Company regularly looks for ways to reduce administrative burden and reduce costs. The Board expects the familiarity and proliferation of Delaware law to assist in the reduction of administrative burden. The Company also retains separate counsel in Washington to advise on Washington corporate law matters. The Reincorporation of the Company will eliminate the need for such advice.

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Easier Recruitment of Future Board Members and Other Leaders

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The Company competes for talented individuals to serve on our management team and on our Board. The Board believes that the better understood and comparatively stable corporate environment afforded by Delaware will enable the Company to compete more effectively with other public and private companies, many of which are incorporated in Delaware, in the recruitment, from time to time, of talented and experienced directors and officers.

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Additionally, the parameters of director and officer liability are more extensively addressed in Delaware court decisions and are therefore better defined and better understood than under the RCW. The Board believes that Reincorporation in Delaware will enhance the Company’s ability to recruit and retain directors and officers in the future, while providing appropriate protection for shareholders from possible abuses by directors and officers.

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In this regard, it should be noted that directors’ personal liability is not, and cannot be, eliminated under the DGCL for intentional misconduct, bad faith conduct or any transaction from which the director derives an improper personal benefit.

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No Impact on Business Locations

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The Reincorporation will not result in the Company moving headquarters from Tulsa and will not require relocating the physical location of any of its offices due solely to the Reincorporation.

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The Conversion Process

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The Company intends to effect the Reincorporation by converting into a Delaware corporation (the “Conversion”). The Company will convert into a Delaware corporation, with all of the rights, privileges, powers, properties and debts of the Company to be unaffected. The Company will effect the Reincorporation by filing a Certificate of Conversion, attached hereto as Appendix A (the “Certificate of Conversion”), and the proposed Delaware Certificate of Incorporation, in substantially the form attached to this proxy statement as Appendix B (the “Delaware Charter”) with the Delaware Secretary of State and by filing Articles of Entity Conversion (the “Articles of Conversion”) with the Washington Secretary of State. In order to file Articles of Conversion with the Washington Secretary of State, shareholders must approve the Plan of Conversion attached hereto as Appendix C (the “Plan of Conversion”). The Newco would also adopt the proposed bylaws, in substantially the form attached to this proxy statement as Appendix D (the “Delaware Bylaws”). The approval by the Company’s shareholders of this Proposal 4 will constitute approval of the Certificate of Conversion, Plan of Conversion and the Delaware Charter. If this Proposal 4 is approved by the shareholders, the Company expects to file the Certificate of Conversion and Delaware Charter with the Delaware Secretary of State and Articles of Conversion with the Washington Secretary of State as soon as possible.

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The Plan of Conversion provides that the Company will convert into a Delaware corporation and will be subject to all of the provisions of the DGCL. By virtue of the Conversion, all of the rights, privileges and powers of the Company, all property owned by the Company, all debts due to the Company and all other causes of action belonging to the Company immediately prior to the Conversion will remain vested in the Newco following the Conversion. In addition, by virtue of the Conversion, all debts, liabilities and duties of the Company immediately prior to the Conversion will remain attached to the Newco following the Conversion.

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The Company’s shareholders will not be required to exchange their common stock certificates for new Newco common stock certificates. Following the effective time of the Reincorporation, any common stock certificates submitted to the Company for transfer, whether pursuant to a sale or otherwise, will automatically be exchanged for the Newco common stock certificates. The Company’s shareholders should not destroy any stock certificate(s) and should not submit any certificate(s) to the Company unless and until requested to do so.

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Effect on Capital Stock

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The Washington Charter currently authorizes the Company to issue up to 64,500,000 shares, consisting of (i) 62,500,000 shares of common stock and (ii) 2,000,000 shares of its preferred stock, par value $0.0001. The Delaware Charter will authorize the same number of shares of the authorized common stock and preferred stock. The Delaware Charter will also provide that the Board may authorize the issuance from time to time of shares of preferred stock in one or more series, and may specify the number of shares to be included in each such series and to fix the designations, powers, rights and preferences of the shares of each such series, and the qualifications, limitations and restrictions thereof, pursuant to the Delaware Charter and Delaware law. Each share of preferred stock outstanding immediately prior to the effective time of the Reincorporation will automatically be converted into one share of preferred stock of Newco.

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Effective Time

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If this Proposal 4 is approved, the Reincorporation will become effective upon the filing of, or at the later date and time specified in (as applicable), each of the Plan of Conversion to be filed with the Secretary of State of Washington in accordance with the RCW and the Certificate of Conversion to be filed with the Secretary of State of Delaware in accordance with the DGCL. If the Reincorporation is approved, it is anticipated that the Board will cause the Reincorporation to be effected as promptly as reasonably possible following such approval. However, the Reincorporation may be delayed or terminated and abandoned by action of the Board at any time prior to the effective time, whether before or after the approval by the Company’s shareholders, if the Board determines for any reason, in its sole judgment and discretion, that the consummation of the Reincorporation should be delayed or would be inadvisable or not in the best interests of the Company and its shareholders, as the case may be. If this Proposal 4 is approved by our shareholders, the

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Reincorporation would become effective upon the filing (and acceptance thereof by the Delaware Secretary of State) of the Certificate of Conversion.

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Regulatory Approval

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To the Company’s knowledge, the only required regulatory or governmental approvals or filings necessary in connection with the consummation of the Reincorporation will be the filing of the Plan of Conversion with the Secretary of State of Washington, the filing of the Certificate of Conversion with the Secretary of State of Delaware and filings with the SEC under the Exchange Act.

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Comparison of Shareholder Rights Before and After the Reincorporation

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Because of differences between the RCW and the DGCL, as well as differences between the Company’s charter and bylaws before (the “Washington Charter” and “Washington Bylaws,” respectively) and after the Reincorporation, the Reincorporation will effect some changes in the rights of the Company’s shareholders. Summarized below are the most significant differences between the rights of the shareholders of the Company before and after the Reincorporation, as a result of the differences among the RCW and the DGCL, the Washington Charter and the Delaware Charter, and the Washington Bylaws and the Delaware Bylaws. The Reincorporation will not result in a significant difference in the nature and scope of the business enterprise of the Company, or a significant change in the shareholders’ rights in the business enterprise of the Company.

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The summary below is not intended to be relied upon as an exhaustive list of all differences or a complete description of the differences between the DGCL and the Delaware Charter and the Delaware Bylaws, on the one hand, and the RCW and the Washington Charter and Washington Bylaws, on the other hand. The summary below is qualified in its entirety by reference to the RCW, the Washington Charter, the Washington Bylaws, the DGCL, the Delaware Charter and the Delaware Bylaws.

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