Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2023 | May 10, 2023 | |
Document and Entity Information | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2023 | |
Document Transition Report | false | |
Entity Registrant Name | CLEARSIGN TECHNOLOGIES CORPORATION | |
Entity File Number | 001-35521 | |
Entity Incorporation, State or Country Code | WA | |
Entity Tax Identification Number | 26-2056298 | |
Entity Address, Address Line One | 8023 E. 63rd Place, Suite 101 | |
Entity Address, City or Town | Tulsa | |
Entity Address, State or Province | OK | |
Entity Address, Postal Zip Code | 74133 | |
City Area Code | 918 | |
Local Phone Number | 236-6461 | |
Title of 12(b) Security | Common Stock | |
Trading Symbol | CLIR | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 38,545,556 | |
Entity Central Index Key | 0001434524 | |
Document Fiscal Year Focus | 2023 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Current Assets: | ||
Cash and cash equivalents | $ 5,328 | $ 6,451 |
Short-term held-to-maturity investments | 3,161 | 2,606 |
Accounts receivable, net | 50 | 79 |
Contract assets | 4 | 20 |
Prepaid expenses and other assets | 317 | 577 |
Total current assets | 8,860 | 9,733 |
Fixed assets, net | 515 | 384 |
Patents and other intangible assets, net | 782 | 798 |
Other assets | 10 | 10 |
Total Assets | 10,167 | 10,925 |
Current Liabilities: | ||
Accounts payable and accrued liabilities | 398 | 296 |
Current portion of lease liabilities | 77 | 133 |
Accrued compensation and related taxes | 253 | 471 |
Contract liabilities | 639 | 247 |
Total current liabilities | 1,367 | 1,147 |
Long Term Liabilities: | ||
Long term lease liabilities | 213 | 226 |
Total liabilities | 1,580 | 1,373 |
Commitments and contingencies (note 11) | ||
Stockholders' Equity: | ||
Preferred stock, $0.0001 par value, zero shares issued and outstanding | ||
Common stock, $0.0001 par value, 38,545,556 and 38,023,701 shares issued and outstanding at March 31, 2023 and December 31, 2022, respectively | 4 | 4 |
Additional paid-in capital | 98,543 | 98,079 |
Accumulated other comprehensive income (loss) | (8) | (8) |
Accumulated deficit | (89,952) | (88,523) |
Total equity | 8,587 | 9,552 |
Total Liabilities and Equity | $ 10,167 | $ 10,925 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2023 | Dec. 31, 2022 |
Consolidated Balance Sheets | ||
Preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares issued | 38,545,556 | 38,023,701 |
Common stock, shares outstanding | 38,545,556 | 38,023,701 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Revenues | $ 894,000 | |
Cost of goods sold | 788,000 | |
Gross profit | 106,000 | |
Operating expenses: | ||
Research and development | 160,000 | $ 108,000 |
General and administrative | 1,650,000 | 1,409,000 |
Total operating expenses | 1,810,000 | 1,517,000 |
Loss from operations | (1,704,000) | (1,517,000) |
Other income | ||
Interest, net | 58,000 | |
Government assistance, reimbursements from Department of Energy | 93,000 | |
Gain from sale of assets | 5,000 | 23,000 |
Other income, net | 119,000 | 4,000 |
Total other income | 275,000 | 27,000 |
Net loss | $ (1,429,000) | $ (1,490,000) |
Net loss per share - basic | $ (0.04) | $ (0.05) |
Net loss per share - fully diluted | $ (0.04) | $ (0.05) |
Weighted average number of shares outstanding - basic | 38,262,710 | 31,826,221 |
Weighted average number of shares outstanding - fully diluted | 38,262,710 | 31,826,221 |
Comprehensive loss | ||
Net loss | $ (1,429,000) | $ (1,490,000) |
Research Grant From The Department Of Energy [Member] | ||
Other income | ||
Government assistance, reimbursements from Department of Energy | 69,000 | 0 |
Oklahoma Quality Jobs Act [Member] | ||
Other income | ||
Government assistance, reimbursements from Department of Energy | $ 24,000 | $ 0 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands | Common Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Income (loss) | Accumulated Deficit | Total ClearSign Technologies Corp. Stockholders' Equity | Total |
Beginning Balance at Dec. 31, 2021 | $ 3 | $ 91,035 | $ 9 | $ (82,765) | $ 8,282 | |
Beginning Balances (in shares) at Dec. 31, 2021 | 31,582,000 | |||||
Shares issued upon exercise of options ($0.89 per share) (in shares) | 1,000 | |||||
Shares issued upon exercise of options ($2.93 per share) (in shares) | 3,000 | |||||
Fair value of stock issued in payment of accrued compensation | 95 | 95 | ||||
Fair value of stock issued in payment of accrued compensation (in shares) | 66,000 | |||||
Fair value of stock options granted in payment of accrued compensation | 12 | 12 | ||||
Share based compensation | 80 | 80 | ||||
Share based compensation (in shares) | 3,000 | |||||
Shares issued through the use of At-The Market issuance | 578 | 578 | ||||
Shares issued through the use of At-The Market issuance (in shares) | 496,000 | |||||
Shares issued for services ($1.93 per share) | 7 | 7 | ||||
Shares issued for services ($1.93 per share) (in shares) | 4,000 | |||||
Net loss | (1,490) | (1,490) | $ (1,490) | |||
Ending Balance at Mar. 31, 2022 | $ 3 | 91,807 | 9 | (84,255) | $ 7,564 | |
Ending Balances (in shares) at Mar. 31, 2022 | 32,155,000 | |||||
Beginning Balance at Dec. 31, 2022 | $ 4 | 98,079 | (8) | (88,523) | 9,552 | |
Beginning Balances (in shares) at Dec. 31, 2022 | 38,023,000 | |||||
Fair value of stock issued in payment of accrued compensation | 234 | 234 | ||||
Fair value of stock issued in payment of accrued compensation (in shares) | 296,000 | |||||
Share based compensation | 227 | 227 | ||||
Share based compensation (in shares) | 223,000 | |||||
Shares issued for services ($0.66 per share) | 3 | 3 | ||||
Shares issued for services ($0.66 per share) (in shares) | 4,000 | |||||
Net loss | (1,429) | (1,429) | ||||
Ending Balance at Mar. 31, 2023 | $ 4 | $ 98,543 | $ (8) | $ (89,952) | $ 8,587 | |
Ending Balances (in shares) at Mar. 31, 2023 | 38,546,000 |
Consolidated Statements of St_2
Consolidated Statements of Stockholders' Equity (Parenthetical) - $ / shares | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Consolidated Statements of Stockholders' Equity | ||
Common stock for options exercise, 0.89 per share issue | $ 0.89 | |
Common stock for options exercise, 2.93 per share issue | 2.93 | |
Shares issued through at the market issuance 1.24 average per share | 1.24 | |
Common stock for services | $ 0.66 | |
Common stock for services | $ 1.93 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Cash flows from operating activities: | ||
Net loss | $ (1,429) | $ (1,490) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Common stock issued for services | 3 | 7 |
Share-based compensation | 242 | 80 |
Depreciation and amortization | 80 | 36 |
Gain from sale of fixed assts | (5) | (23) |
Right of use asset amortization | 43 | 35 |
Realized gain from market securities | (20) | |
Lease amendments | (14) | |
Change in operating assets and liabilities: | ||
Contract assets | 16 | (205) |
Accounts receivable | 29 | 6 |
Prepaid expenses and other assets | 51 | (56) |
Accounts payable and accrued liabilities | 57 | 22 |
Accrued compensation and related taxes | 1 | 85 |
Contract liabilities | 392 | |
Net cash used in operating activities | (554) | (1,503) |
Cash flows from investing activities: | ||
Acquisition of fixed assets | (5) | |
Disbursements for patents and other intangible assets | (24) | (33) |
Proceeds from sale of fixed assets | 5 | 23 |
Purchases of held-to-maturity short-term US treasuries | (2,162) | |
Redemption of held-to-maturity US treasuries | 1,627 | |
Net cash used in investing activities | (554) | (15) |
Cash flows from financing activities: | ||
Proceeds from issuance of common stock, net of offering costs | 578 | |
Taxes paid related to vesting of restricted stock units | (15) | |
Net cash (used in) provided by financing activities | (15) | 578 |
Net change in cash and cash equivalents | (1,123) | (940) |
Cash and cash equivalents, beginning of period | 6,451 | 7,607 |
Cash and cash equivalents, end of period | 5,328 | 6,667 |
Supplemental disclosure of cash flow information: | ||
Officer and employee equity awards for prior year accrued compensation | 234 | $ 107 |
Prior year prepaid expenses repurposed to fixed assets as demonstration equipment | $ 209 |
Organization and Description of
Organization and Description of Business | 3 Months Ended |
Mar. 31, 2023 | |
Organization and Description of Business | |
Organization and Description of Business | Note 1 – Organization and Description of Business ClearSign Technologies Corporation (“ClearSign” or the “Company”) designs and develops products and technologies that have been shown to significantly improve key performance characteristics of industrial and commercial systems, including operational performance, energy efficiency, emission reduction, safety, and overall cost-effectiveness. The Company’s patented technologies are designed to be embedded in established OEM products as ClearSign Core™ and ClearSign Eye™ and other sensing configurations in order to enhance the performance of combustion systems and fuel safety systems in a broad range of markets. These markets include energy (upstream oil production and down-stream refining), commercial/industrial boiler, chemical, petrochemical, transport and power industries. The Company’s primary technology is its ClearSign Core technology, which achieves very low emissions without the need of selective catalytic reduction. The Company was incorporated in the State of Washington in 2008. During January 2022, the Company relocated its headquarters from Seattle, Washington to Tulsa, Oklahoma. On July 28, 2017, the Company incorporated a subsidiary, ClearSign Asia Limited, in Hong Kong to represent the Company’s business and technological interests throughout Asia. Through ClearSign Asia Limited, the Company has established a Wholly Foreign Owned Enterprise (WFOE) in China – ClearSign Combustion (Beijing) Environmental Technologies Co., LTD. Unless otherwise stated or the context otherwise requires, the terms ClearSign and the Company refer to ClearSign Technologies Corporation and its subsidiary, ClearSign Asia Limited. Liquidity The Company's condensed consolidated financial statements have been presented on the basis that it is a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. As of March 31, 2023, the Company’s cash and cash equivalents totaled $5,328 thousand, and short-term held-to-maturity investments totaled $3,161 thousand, which is sufficient to fund current operating expenses beyond twelve months from the date hereof. The Company’s technologies are currently in field development, but with nominal fully operational commercial installations, and have generated nominal revenues from operations to date to meet operating expenses. In order to generate meaningful revenues, the technologies must be fully developed, gain market recognition and acceptance, and develop a critical level of successful sales and product installations. Historically, the Company has financed operations primarily through issuances of equity securities. Since inception, the Company has raised approximately $91.0 million in gross proceeds through the sale of its equity securities. During the three months ended March 31, 2023, the Company did not raise proceeds through the issuance of common stock. The Company has incurred losses since its inception totaling $90.0 million and expects to experience operating losses and negative cash flows for the foreseeable future. Management believes that the successful growth and operation of the Company’s business is dependent upon its ability to obtain adequate sources of funding through co-development agreements, strategic partnering agreements, or equity or debt financing to adequately support product commercialization efforts, protect intellectual property, form relationships with strategic partners, and provide for working capital and general corporate purposes. There can be no assurance that the Company will be successful in achieving its long-term plans as set forth above, or that such plans, if consummated, will result in profitable operations or enable the Company to continue in the long-term as a going concern. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2023 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | Note 2 – Summary of Significant Accounting Policies Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (the “SEC”) for Form 10-Q. Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations. The condensed consolidated balance sheet at December 31, 2022 has been derived from the Company’s audited financial statements as of that date. In the opinion of management, these condensed consolidated financial statements reflect all normal recurring and other adjustments necessary for a fair presentation. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022. Operating results for interim periods are not necessarily indicative of operating results for an entire fiscal year or any other future periods. The accompanying unaudited condensed consolidated financial statements include the accounts of ClearSign and its subsidiary. Intercompany balances and transactions have been eliminated in consolidation. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Revenue Recognition and Cost of Sales The Company recognizes revenue and related cost of goods sold in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification Topic 606 Revenue from Contracts with Customers The Company’s contracts generally include progress payments from the customer upon completion of defined milestones. As these payments are received, they are offset against accumulated project costs and recorded as either contract assets or contract liabilities. Upon completion of the performance obligations and collectability is determined, revenue is recorded. For any contract that is expected to incur costs in excess of the contract price, the Company accrues the estimated loss in full in the period such determination is made. Contract Costs The Company capitalizes project costs until performance obligations related to the contract are completed. The Company expenses selling and marketing expenses when incurred within the statements of operations in general and administrative expenses. Product Warranties The Company warrants all installed products against defects in materials and workmanship for a period specified in each contract by replacing failed parts. Accruals for product warranties are based on historical or expected warranty experience and current product performance trends and are recorded as a component of cost of sales at the time revenue is recognized. The warranty liabilities are reduced by material and labor costs used to replace parts over the warranty period in the periods in which the costs are incurred. The Company periodically assesses the adequacy of its recorded warranty liabilities and adjusts the amounts as necessary, and such adjustments could be material in the future if estimates differ significantly from actual warranty expense. Product warranties are included in accounts payable and accrued liabilities in the consolidated balance sheets. Cash and Cash Equivalents Cash and cash equivalents consist of cash on deposit in a checking and savings account, and short-term money market instruments with an original maturity of three months or less. Cash equivalents, which consist of short-term U.S. treasury bills, are based on quoted market prices, a Level 1 fair value measure. Short-Term Investments Short-term investments consist of U.S. treasuries with original maturities of twelve months or less and greater than three months. These short-term investments are classified as held to maturity and are recorded on an amortized cost basis based on the Company’s positive intent and ability to hold these securities to maturity. As of March 31, 2023, the Company has not experienced any other-than-temporary impairment of its short-term investments. A decline in the market value of any held-to-maturity security below cost that is deemed other than temporary results in a reduction in carrying amount to fair value. The impairment is charged to earnings and a new cost basis for the security is established. The company evaluates whether the decline in fair value of its investments is other-than temporary at each quarter-end. The cost basis for the Company’s short-term investments totaled approximately $3,161 thousand and $2,606 thousand as of March 31, 2023 and December 31, 2022, respectively. The unrealized holding gains for the Company’s short-term investments totaled approximately $33 thousand and $4 thousand as of March 31, 2023 and December 31, 2022, respectively. The Company has not experienced any continuous unrealized holding losses on these investments. The fair value for the Company’s short-term investments totaled approximately $3,194 thousand and $2,610 thousand as of March 31, 2023 and December 31, 2022, respectively. Accounts Receivable and Allowance for Doubtful Accounts Accounts receivables are recorded at the contractual invoiced amount. An allowance for doubtful accounts is established, as necessary, based on past experience and management’s judgment. The determination of the collectability of amounts due from customers require the Company to make judgments regarding future events and trends. Allowances for doubtful accounts are determined based on assessing the Company’s portfolio on an individual customer and on an overall basis. This process consists of a review of historical collection experience, current aging status of the customer accounts, and the financial condition of the Company’s customers. Based on a review of these factors, the Company may establish or adjust the allowance for specific customers and the accounts receivable portfolio as a whole. Fixed Assets and Leases Fixed assets are recorded at cost. Leases are recorded in accordance with FASB ASC 842, Leases whichever is shorter. All other fixed assets are depreciated over three Patents and Trademarks Third-party expenses related to patents and trademarks are recorded at cost, less accumulated amortization. Amortization is computed using the straight-line method over the estimated useful lives of the assets once they are awarded. Patent application costs are deferred pending the outcome of patent and trademark applications. Costs associated with unsuccessful patent applications and abandoned intellectual property are expensed when determined to have no continuing value in current business activity. The Company evaluates the recoverability of the carrying values of intangible assets each reporting period. Impairment of Long-Lived Assets The Company tests long-lived assets, consisting of fixed assets, patents, trademarks, and other intangible assets, for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable through the estimated undiscounted cash flows expected from the use and eventual disposition of the assets. In the event an asset is not fully recoverable, a loss is recognized based on the amount by which the carrying amount exceeds the fair value of the long-lived assets. Fair value is determined based on the present value of estimated expected cash flows using a discount rate commensurate with the risks involved, quoted market prices, or appraised values depending upon the nature of the assets. Losses on long-lived assets to be disposed are determined in a similar manner, except those fair values are reduced for the cost of disposal. Fair Value of Financial Instruments Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Assets and liabilities measured at fair value are categorized based on whether or not the inputs are observable in the market and the degree that the inputs are observable. The categorization of financial assets and liabilities within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The three levels of inputs used to establish fair value are the following: ● Level 1 – Quoted prices in active markets for identical assets or liabilities; ● Level 2 – Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and ● Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. The Company’s financial instruments primarily consist of cash equivalents, short-term investments, accounts receivable, accounts payable, and accrued expenses. As of the balance sheet dates, the estimated fair values of the financial instruments were not materially different from their carrying values as presented on the balance sheets. This is primarily attributable to the short-term nature of these instruments. The Company did not identify any other recurring or non-recurring assets and liabilities that are required to be presented in the balance sheets at fair value. Research and Development The cost of research and development is expensed as incurred. Research and development costs consist of salaries, benefits, share based compensation, consumables, and consulting fees, including costs to develop and test prototype equipment and parts. Research and Development costs have been offset by funds received, if any, from strategic partners in cost sharing, collaborative projects. During the three months ended March 31, 2023 and 2022, the Company did not receive funds from these arrangements. Government Assistance The Company has adopted Accounting Standards Update (“ASU”) 2021-10, Government Assistance (Topic 832) Disclosures by Business Entities about Government Assistance, which requires footnote disclosure of assistance received from government entities. The Company records gross monies received from government entities in other income, and associated expenses such as salaries and supplies are recorded in Research and Development or General and Administration, depending on the nature of expenditure. The Company accrues for reimbursement requests submitted to government entities in accounts receivable. Income Taxes The Company accounts for income taxes using an asset and liability approach which allows for the recognition and measurement of deferred tax assets based upon the likelihood of realization of tax benefits in future years. Under the asset and liability approach, deferred taxes are provided for the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. A valuation allowance is provided for deferred tax assets if it is more likely than not the Company would not be able to realize their benefits, or that future deductibility is uncertain. Tax benefits are recognized only if it is more likely than not that the tax benefits will be utilized in the foreseeable future. Share-Based Compensation The costs of all employee stock options, as well as other equity-based compensation arrangements, are reflected in the unaudited condensed consolidated financial statements based on the estimated fair value of the awards on the grant date. That cost is recognized over the period during which an employee is required to provide service in exchange for the award, or in the case of performance options, expense is recognized upon completion of milestones as defined in the grant agreement. Share-based compensation for stock grants to non-employees is determined as the fair value of the consideration received or the fair value of equity instruments issued, whichever is more reliably measured. Foreign Operations The accompanying unaudited condensed consolidated balance sheets as of March 31, 2023 and December 31, 2022 include assets amounting to approximately $277 thousand and $172 thousand, respectively, relating to operations of ClearSign Asia Limited. The Beijing registered capital requirement is $350 thousand, which is required to be paid by 2027, and of which $111 thousand has been paid as of March 31, 2023. It is always possible that unanticipated events in foreign countries could disrupt the Company’s operations, and since the first quarter of 2020 this has been and currently continues to be the case with the effects of the COVID-19 pandemic. Foreign Currency Assets and liabilities of ClearSign Asia Limited with non-U.S. Dollar functional currency are translated to U.S. Dollars using exchange rates in effect at the end of the period. Revenue and expenses are translated to U.S. Dollars using rates that approximate those in effect during the period. The resulting translation adjustments are included in the Company’s condensed consolidated balance sheets in the stockholders’ equity section as a component of accumulated other comprehensive income (loss). Net Loss per Common Share Basic loss per share is computed by dividing loss available to common stockholders by the weighted-average number of common shares outstanding. Diluted loss per share is computed similar to basic loss per share except that the denominator is increased to include additional common shares available upon exercise of stock options and warrants using the treasury stock method, except for periods for which no common share equivalents are included because their effect would be anti-dilutive. At March 31, 2023 and March 31, 2022, potentially dilutive shares outstanding amounted to 3.7 million and 3.3 million, respectively. Recently Issued Accounting Pronouncements Adopted In June 2017, the FASB issued an Accounting Standards Update (“ASU”) ASU 2016-13, Financial Instruments (Topic 326) Measurement of Credit Losses on Financial Instruments |
Fixed Assets
Fixed Assets | 3 Months Ended |
Mar. 31, 2023 | |
Fixed Assets | |
Fixed Assets | Note 3 – Fixed Assets Fixed Assets Fixed assets are summarized as follows: March 31, December 31, (in thousands) 2023 2022 Machinery and equipment $ 209 $ 390 Office furniture and equipment 60 177 Leasehold improvements 43 192 312 759 Accumulated depreciation and amortization (81) (697) 231 62 Operating lease ROU assets, net 284 322 Total $ 515 $ 384 Depreciation and amortization expense for the three months ended March 31, 2023 and 2022 totaled $40 thousand and $7 thousand, respectively. Leases The Company leases office space in Seattle, Washington, Tulsa, Oklahoma and Beijing, China. During June 2022, the Company entered into a new lease agreement for its Beijing office space for a period of one year with monthly rent at approximately $2 thousand. The Company classified this lease as an operating lease since it is more likely than not the lease will be renewed at the end of its term. During March 2023, the Company amended its Seattle lease to extend the lease term to September 2023. The amended lease reduced the square footage and lowered the monthly payment to approximately $4 thousand. The Company increased the right of use asset by $5 thousand and decreased the lease liability by $9 thousand. The Seattle, Tulsa, and Beijing leases are classified as operating leases, with remaining terms ranging from six months to six years ; contractual language requires renewal negotiations to occur at or near termination. These leases are normal and customary for office space, in that, contractual guarantees exist requiring the lessee to return the premises to its original functional state. The Company accrued a liability of $2 thousand and $87 thousand as of March 31, 2023 and December 31, 2022, respectively, for the estimated cost of the restoration of the Seattle office. The Company plans to exit the Seattle lease on or before contract termination as part of the Company’s headquarters move from Seattle to Tulsa. The Tulsa lease contains fixed annual lease payments that increase annually by 2%. The Seattle, Tulsa, and Beijing total monthly minimum rent is approximately $11 thousand. Operating lease costs for the three months ended March 31, 2023 and 2022 were $48 thousand and $57 thousand, respectively. Supplemental balance sheet information related to operating leases is as follows: March 31, December 31, (in thousands) 2023 2022 Operating lease ROU assets, net $ 284 $ 322 Lease Liabilities: Current lease liabilities $ 77 $ 133 Long term lease liabilities 213 226 Total lease liabilities $ 290 $ 359 Weighted average remaining lease term (in years): 2.7 Weighted average discount rate: 5.2 % For the Three Months Ended March 31, 2023 2022 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows used in operating leases $ 66 $ 57 Non-cash impact of new leases and lease modifications Change in operating lease liabilities $ (9) $ — Change in operating lease ROU assets $ 5 $ — Minimum future payments under the Company’s lease liabilities as of March 31, 2023 are as follows: Discounted Payments lease due under (in thousands) liability lease payments agreements 2023 $ 64 $ 73 2024 54 65 2025 59 66 2026 63 67 2027 50 51 Total $ 290 $ 322 At March 31, 2023, $32 thousand of the Company’s future minimum lease payments represents interest. |
Patents and Other Intangible As
Patents and Other Intangible Assets | 3 Months Ended |
Mar. 31, 2023 | |
Patents and Other Intangible Assets | |
Patents and Other Intangible Assets | Note 4 – Patents and Other Intangible Assets Patents and other intangible assets are summarized as follows: March 31, December 31, (in thousands) 2023 2022 Patents Patents pending $ 330 $ 307 Issued patents 815 815 1,145 1,122 Trademarks Trademarks pending 7 6 Registered trademarks 95 95 102 101 Other 8 8 1,255 1,231 Accumulated amortization (473) (433) $ 782 $ 798 Future amortization expense associated with issued patents and registered trademarks as of March 31, 2023 is as follows: (in thousands) 2023 $ 108 2024 126 2025 96 2026 61 2027 39 Thereafter 7 $ 437 The amortization life for patents ranges between three to five years , with trademark lives set at ten years . The Company does not amortize patents or trademarks classified as pending. During the three months ended March 31, 2023 and 2022, the Company assessed its patent and trademark assets. The Company also evaluated its strategic approach to the pursuit and protection of its intellectual property. It is the intent of the Company to continue to pursue intellectual property protection. If the Company identifies certain assets where the intellectual property does not directly align with its core technology, the Company will impair the intangible asset and write-off the asset as an expense. |
Revenue, Contract Assets and Co
Revenue, Contract Assets and Contract Liabilities | 3 Months Ended |
Mar. 31, 2023 | |
Revenue, Contract Assets and Contract Liabilities | |
Revenue, Contract Assets and Contract Liabilities | Note 5 – Revenue, Contract Assets and Contract Liabilities The Company recognized $894 thousand of revenues and $788 thousand of cost of goods sold during the three months ended March 31, 2023. The revenue and cost of goods sold relate predominately to the Company’s process burner product line, where the Company successfully completed a burner performance customer witness test, which represented a contractual performance obligation per ASC 606. The Company did not recognize revenue or cost of goods sold for the three months ended March 31, 2022. The Company had contract assets of $4 thousand and $20 thousand at March 31, 2023 and December 31, 2022, respectively. The Company had contract liabilities of $639 thousand and $247 thousand at March 31, 2023 and December 31, 2022, respectively. |
Equity
Equity | 3 Months Ended |
Mar. 31, 2023 | |
Equity | |
Equity | Note 6 – Equity Common Stock and Preferred Stock The Company is authorized to issue 62.5 million shares of common stock and 2.0 million shares of preferred stock. Preferences, limitations, voting powers and relative rights of any preferred stock to be issued may be determined by the Company’s Board of Directors. The Company has not issued any shares of preferred stock. In July 2018, the Company completed a private equity offering and executed a Stock Purchase Agreement with clirSPV LLC (“clirSPV”) which permits participation in future capital raising transactions (the “Participation Right”) on the same terms as other investors participating in such transactions. In no event may the Participation Right be exercised to the extent it would cause clirSPV or any of its affiliates to beneficially own 20% or more of the Company’s then outstanding common stock. In May 2022, the Company signed an agreement with clirSPV, that provides for an election right to extend the Participation Right beyond the original expiration date of December 31, 2023, but to no later than June 30, 2027. This election is pursuant to specific terms and conditions and expires on December 31, 2023. The Company has an At-The-Market (“ATM”) Offering Sales Agreement with Virtu Americas LLC, as sales agent pursuant to which it may currently sell shares of common stock with an aggregate offering price of up to $8.7 million. During the three months ended March 31, 2023, the Company issued zero shares of its common stock from the ATM program. As of March 31, 2023, the Company has cumulatively issued approximately 1.6 million shares of common stock under the ATM program, at an average price of $3.84 per share. Gross proceeds totaled approximately $6.1 million and net cash proceeds was approximately $5.9 million. The Company is currently subject to the SEC’s “baby shelf rules,” which prohibits companies with a public float of less than $75 million from issuing securities under a shelf registration statement in excess of one-third of such company’s public float in a 12-month period. These rules may limit future issuances of shares by the Company under its shelf registration statement on Form S-3, the ATM Offering Sales Agreement or other securities offerings. Equity Incentive Plan On June 17, 2021, the Company's shareholders approved and the Company adopted the ClearSign Technologies Corporation 2021 Equity Incentive Plan (the “2021 Plan”) which permits the Company to grant Incentive Stock Options, Non-statutory Stock Options, Stock Appreciation Rights, Restricted Stock, Restricted Stock Units, Performance Units, and Performance Shares, to eligible participants, which includes employees, directors and consultants. The Compensation Committee of the Board of Directors is authorized to administer the 2021 Plan. The 2021 Plan provides for an annual increase in available shares equal to the lesser of (i) 10% of the aggregate number of shares of Common Stock issued by the Company in the prior fiscal year; or (ii) such number provided by the Compensation Committee; provided, however, that the total cumulative increase in the number of shares available for issuance pursuant to this automatic share increase shall not exceed 400 thousand shares of common stock. In 2023, the board of directors approved an increase of 400,000 shares available for issuance pursuant to future awards in accordance with the terms of the 2021 Plan. Ending balances for the 2021 Plan is as follows: March 31, December 31, ( in thousands 2023 2022 Outstanding options and restricted stock units 3,332 3,202 Reserved but unissued shares under the Plans 2,530 2,777 Total authorized shares under the Plans 5,862 5,979 Stock Options Under the terms of the 2021 Plan, incentive stock options and nonstatutory stock options must have an exercise price at or above the fair market value on the date of the grant. At the time of grant, the Company will determine the period within which the option may be exercised and will specify any conditions that must be satisfied before the option vests and may be exercised. The Company estimates the fair value of stock options on the date of grant using the Black-Scholes option-pricing model. As permitted by SEC Staff Accounting Bulletin (SAB) 107, management utilized the simplified approach to estimate the expected term of the options, which represents the period of time that options granted are expected to be outstanding. Expected volatility has been determined through the Company’s historical stock price volatility. The Company has not made an estimate of forfeitures at the time of the grant, but rather accounts for forfeitures at the time they occur. The risk-free rate for periods within the expected life of the option is based on the U.S. Treasury yield in effect at the time of grant. The Company has never declared or paid dividends and has no plans to do so in the foreseeable future. During the three months ended March 31, 2023, no new options were awarded by the company. Compensation expense associated with stock option awards for the three months ended March 31, 2023 and 2022 totaled $ 44 thousand and $ 42 thousand, respectively. A summary of the Company’s stock option activity and changes is as follows: March 31, 2023 ( in thousands Options to Purchase Common Stock Weighted Average Exercise Price Weighted Average Remaining Contractual Life (in years) Outstanding at beginning of year 2,779 $ 2.05 6.43 Granted — $ — — Exercised — $ — — Forfeited/Expired — $ — — Outstanding at end of period 2,779 $ 2.05 6.18 Exercisable at end of period 2,011 $ 1.70 5.68 The estimated aggregate pretax intrinsic value of the Company’s outstanding vested stock options at March 31, 2023 is $27 thousand. The intrinsic value is the difference between the Company’s common stock price and the option exercise prices multiplied by the number of in-the-money options. This amount changes based on the fair value of the Company’s common stock. At March 31, 2023, there was $1.0 million of total unrecognized compensation cost related to non-vested stock option-based compensation arrangements. Vesting criteria ranges from time-based to performance-based. The Company records costs for time-based arrangements ratably across the timeframe, whereas performance-based arrangements require management to continually evaluate predetermined goals against actual circumstances. Restricted Stock Units The Company awards employees and directors restricted stock units (“RSUs”) in lieu of cash payment for compensation. These awards are granted pursuant to the 2021 Plan. Employee vesting criteria is time based, and compensation expense is recognized ratably across the timeframe. Director vesting criteria is contingent upon the occurrence of one of four future events, which the Company cannot predict or control. Therefore, compensation expense for director RSUs is not recognized until one of these four future events occur, which is in accordance with FASB Accounting Standards Codification , , Compensation-Stock Compensation, A summary of the Company’s RSUs activity and changes is as follows: March 31, 2023 ( in thousands Number of Shares Weighted Average Grant Date Fair Value Nonvested at beginning of year 423 $ 1.49 Granted 374 $ 0.69 Vested (245) $ 1.34 Nonvested at end of period 552 $ 1.01 A summary of the Company’s RSU compensation expense is as follows: For the Three Months Ended March 31, ( in thousands 2023 2022 Compensation Expense $ 199 $ 35 Weighted Average Value Per Share $ 1.25 $ 1.44 Stock Awards The Company awards employees stock in lieu of cash payment for compensation, typically to satisfy accrued bonus compensation. The awards are granted from the Company’s 2021 Plan. For the Three Months Ended March 31, 2023 2022 Fair value $ 234 $ 98 Weighted Average Value Per Share $ 0.79 $ 1.43 Consultant Stock Plan The 2013 Consultant Stock Plan (the “Consultant Plan”) provides for the granting of shares of common stock to consultants who provide services related to capital raising, investor relations, and making a market in or promoting the Company’s securities. The Company’s officers, employees, and board members are not entitled to receive grants from the Consultant Plan. The Compensation Committee of the Board of Directors is authorized to administer the Consultant Plan and establish the grant terms. The Consultant Plan provides for periodic increases in the number of authorized shares available for issuance under the Consultant Plan on the first day of each of the Company’s fiscal quarters. The quarterly increases are equal to 1% of any new shares subsequently issued by the Company or such lesser amount as the Board of Directors shall determine. The Consultant Plan activity and change is as follows: March 31, ( in thousands 2023 Reserved but unissued shares at beginning of year 196 Increases in the number of authorized shares 5 Grants (4) Reserved but unissued shares at end of year 197 The Consultant Plan compensation expense is summarized as follows: For the Three Months Ended March 31, 2023 2022 Compensation Expense $ 3 $ 7 Weighted Average Value Per Share $ 0.66 $ 1.93 |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2023 | |
Commitments and Contingencies | |
Commitments and Contingencies | Note 7 – Commitments and Contingencies Litigation From time to time the Company may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. Litigation is subject to inherent uncertainties and an adverse result in any such matter may harm the Company’s business. As of the date of this report, the Company is not a party to any material pending legal proceedings or claims that the Company believes will have a material adverse effect on the business, financial condition or operating results. Indemnification Agreements The Company maintains indemnification agreements with its directors and officers that may require the Company to indemnify these individuals against liabilities that arise by reason of their status or service as directors or officers, except as prohibited by law. |
Government Assistance
Government Assistance | 3 Months Ended |
Mar. 31, 2023 | |
Government Assistance [Abstract] | |
Government Assistance | Note 8 – Government Assistance During 2022, the Company was awarded a research grant from the Department of Energy (“DOE”) for approximately $250 thousand with the completion occurring in March 2023. The purpose of the grant was to produce a research paper for a flexible fuel ultra-low NOx process burner capable of burning 100% hydrogen fuel. The award allowed the Company to request reimbursements for expenditures such as labor, material, and administrative costs. During the three months ended March 31, 2023, the Company recognized $69 thousand in reimbursements from DOE. The Company did Beginning in 2021, the Company received funds relating to the Oklahoma 21 st |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2023 | |
Subsequent Events | |
Subsequent Events | Note 9 – Subsequent Events The Company has evaluated subsequent events as of the date of this report, and has none to report. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2023 | |
Summary of Significant Accounting Policies | |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (the “SEC”) for Form 10-Q. Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations. The condensed consolidated balance sheet at December 31, 2022 has been derived from the Company’s audited financial statements as of that date. In the opinion of management, these condensed consolidated financial statements reflect all normal recurring and other adjustments necessary for a fair presentation. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022. Operating results for interim periods are not necessarily indicative of operating results for an entire fiscal year or any other future periods. The accompanying unaudited condensed consolidated financial statements include the accounts of ClearSign and its subsidiary. Intercompany balances and transactions have been eliminated in consolidation. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
Revenue Recognition and Cost of Sales | Revenue Recognition and Cost of Sales The Company recognizes revenue and related cost of goods sold in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification Topic 606 Revenue from Contracts with Customers The Company’s contracts generally include progress payments from the customer upon completion of defined milestones. As these payments are received, they are offset against accumulated project costs and recorded as either contract assets or contract liabilities. Upon completion of the performance obligations and collectability is determined, revenue is recorded. For any contract that is expected to incur costs in excess of the contract price, the Company accrues the estimated loss in full in the period such determination is made. |
Contract Costs | Contract Costs The Company capitalizes project costs until performance obligations related to the contract are completed. The Company expenses selling and marketing expenses when incurred within the statements of operations in general and administrative expenses. |
Product Warranties | Product Warranties The Company warrants all installed products against defects in materials and workmanship for a period specified in each contract by replacing failed parts. Accruals for product warranties are based on historical or expected warranty experience and current product performance trends and are recorded as a component of cost of sales at the time revenue is recognized. The warranty liabilities are reduced by material and labor costs used to replace parts over the warranty period in the periods in which the costs are incurred. The Company periodically assesses the adequacy of its recorded warranty liabilities and adjusts the amounts as necessary, and such adjustments could be material in the future if estimates differ significantly from actual warranty expense. Product warranties are included in accounts payable and accrued liabilities in the consolidated balance sheets. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents consist of cash on deposit in a checking and savings account, and short-term money market instruments with an original maturity of three months or less. Cash equivalents, which consist of short-term U.S. treasury bills, are based on quoted market prices, a Level 1 fair value measure. |
Short-term Investments | Short-Term Investments Short-term investments consist of U.S. treasuries with original maturities of twelve months or less and greater than three months. These short-term investments are classified as held to maturity and are recorded on an amortized cost basis based on the Company’s positive intent and ability to hold these securities to maturity. As of March 31, 2023, the Company has not experienced any other-than-temporary impairment of its short-term investments. A decline in the market value of any held-to-maturity security below cost that is deemed other than temporary results in a reduction in carrying amount to fair value. The impairment is charged to earnings and a new cost basis for the security is established. The company evaluates whether the decline in fair value of its investments is other-than temporary at each quarter-end. The cost basis for the Company’s short-term investments totaled approximately $3,161 thousand and $2,606 thousand as of March 31, 2023 and December 31, 2022, respectively. The unrealized holding gains for the Company’s short-term investments totaled approximately $33 thousand and $4 thousand as of March 31, 2023 and December 31, 2022, respectively. The Company has not experienced any continuous unrealized holding losses on these investments. The fair value for the Company’s short-term investments totaled approximately $3,194 thousand and $2,610 thousand as of March 31, 2023 and December 31, 2022, respectively. |
Accounts Receivable and Allowance for Doubtful Accounts | Accounts Receivable and Allowance for Doubtful Accounts Accounts receivables are recorded at the contractual invoiced amount. An allowance for doubtful accounts is established, as necessary, based on past experience and management’s judgment. The determination of the collectability of amounts due from customers require the Company to make judgments regarding future events and trends. Allowances for doubtful accounts are determined based on assessing the Company’s portfolio on an individual customer and on an overall basis. This process consists of a review of historical collection experience, current aging status of the customer accounts, and the financial condition of the Company’s customers. Based on a review of these factors, the Company may establish or adjust the allowance for specific customers and the accounts receivable portfolio as a whole. |
Fixed Assets and Leases | Fixed Assets and Leases Fixed assets are recorded at cost. Leases are recorded in accordance with FASB ASC 842, Leases whichever is shorter. All other fixed assets are depreciated over three |
Patents and Trademarks | Patents and Trademarks Third-party expenses related to patents and trademarks are recorded at cost, less accumulated amortization. Amortization is computed using the straight-line method over the estimated useful lives of the assets once they are awarded. Patent application costs are deferred pending the outcome of patent and trademark applications. Costs associated with unsuccessful patent applications and abandoned intellectual property are expensed when determined to have no continuing value in current business activity. The Company evaluates the recoverability of the carrying values of intangible assets each reporting period. |
Impairment of Long-lived Assets | Impairment of Long-Lived Assets The Company tests long-lived assets, consisting of fixed assets, patents, trademarks, and other intangible assets, for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable through the estimated undiscounted cash flows expected from the use and eventual disposition of the assets. In the event an asset is not fully recoverable, a loss is recognized based on the amount by which the carrying amount exceeds the fair value of the long-lived assets. Fair value is determined based on the present value of estimated expected cash flows using a discount rate commensurate with the risks involved, quoted market prices, or appraised values depending upon the nature of the assets. Losses on long-lived assets to be disposed are determined in a similar manner, except those fair values are reduced for the cost of disposal. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Assets and liabilities measured at fair value are categorized based on whether or not the inputs are observable in the market and the degree that the inputs are observable. The categorization of financial assets and liabilities within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The three levels of inputs used to establish fair value are the following: ● Level 1 – Quoted prices in active markets for identical assets or liabilities; ● Level 2 – Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and ● Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. The Company’s financial instruments primarily consist of cash equivalents, short-term investments, accounts receivable, accounts payable, and accrued expenses. As of the balance sheet dates, the estimated fair values of the financial instruments were not materially different from their carrying values as presented on the balance sheets. This is primarily attributable to the short-term nature of these instruments. The Company did not identify any other recurring or non-recurring assets and liabilities that are required to be presented in the balance sheets at fair value. |
Research and Development | Research and Development The cost of research and development is expensed as incurred. Research and development costs consist of salaries, benefits, share based compensation, consumables, and consulting fees, including costs to develop and test prototype equipment and parts. Research and Development costs have been offset by funds received, if any, from strategic partners in cost sharing, collaborative projects. During the three months ended March 31, 2023 and 2022, the Company did not receive funds from these arrangements. |
Government Assistance | Government Assistance The Company has adopted Accounting Standards Update (“ASU”) 2021-10, Government Assistance (Topic 832) Disclosures by Business Entities about Government Assistance, which requires footnote disclosure of assistance received from government entities. The Company records gross monies received from government entities in other income, and associated expenses such as salaries and supplies are recorded in Research and Development or General and Administration, depending on the nature of expenditure. The Company accrues for reimbursement requests submitted to government entities in accounts receivable. |
Income Taxes | Income Taxes The Company accounts for income taxes using an asset and liability approach which allows for the recognition and measurement of deferred tax assets based upon the likelihood of realization of tax benefits in future years. Under the asset and liability approach, deferred taxes are provided for the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. A valuation allowance is provided for deferred tax assets if it is more likely than not the Company would not be able to realize their benefits, or that future deductibility is uncertain. Tax benefits are recognized only if it is more likely than not that the tax benefits will be utilized in the foreseeable future. |
Share-Based Compensation | Share-Based Compensation The costs of all employee stock options, as well as other equity-based compensation arrangements, are reflected in the unaudited condensed consolidated financial statements based on the estimated fair value of the awards on the grant date. That cost is recognized over the period during which an employee is required to provide service in exchange for the award, or in the case of performance options, expense is recognized upon completion of milestones as defined in the grant agreement. Share-based compensation for stock grants to non-employees is determined as the fair value of the consideration received or the fair value of equity instruments issued, whichever is more reliably measured. |
Foreign Operations | Foreign Operations The accompanying unaudited condensed consolidated balance sheets as of March 31, 2023 and December 31, 2022 include assets amounting to approximately $277 thousand and $172 thousand, respectively, relating to operations of ClearSign Asia Limited. The Beijing registered capital requirement is $350 thousand, which is required to be paid by 2027, and of which $111 thousand has been paid as of March 31, 2023. It is always possible that unanticipated events in foreign countries could disrupt the Company’s operations, and since the first quarter of 2020 this has been and currently continues to be the case with the effects of the COVID-19 pandemic. |
Foreign Currency | Foreign Currency Assets and liabilities of ClearSign Asia Limited with non-U.S. Dollar functional currency are translated to U.S. Dollars using exchange rates in effect at the end of the period. Revenue and expenses are translated to U.S. Dollars using rates that approximate those in effect during the period. The resulting translation adjustments are included in the Company’s condensed consolidated balance sheets in the stockholders’ equity section as a component of accumulated other comprehensive income (loss). |
Net Loss per Common Share | Net Loss per Common Share Basic loss per share is computed by dividing loss available to common stockholders by the weighted-average number of common shares outstanding. Diluted loss per share is computed similar to basic loss per share except that the denominator is increased to include additional common shares available upon exercise of stock options and warrants using the treasury stock method, except for periods for which no common share equivalents are included because their effect would be anti-dilutive. At March 31, 2023 and March 31, 2022, potentially dilutive shares outstanding amounted to 3.7 million and 3.3 million, respectively. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements Adopted In June 2017, the FASB issued an Accounting Standards Update (“ASU”) ASU 2016-13, Financial Instruments (Topic 326) Measurement of Credit Losses on Financial Instruments |
Fixed Assets (Tables)
Fixed Assets (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Fixed Assets | |
Summary of Fixed Assets | March 31, December 31, (in thousands) 2023 2022 Machinery and equipment $ 209 $ 390 Office furniture and equipment 60 177 Leasehold improvements 43 192 312 759 Accumulated depreciation and amortization (81) (697) 231 62 Operating lease ROU assets, net 284 322 Total $ 515 $ 384 |
Schedule Of Supplemental Information | March 31, December 31, (in thousands) 2023 2022 Operating lease ROU assets, net $ 284 $ 322 Lease Liabilities: Current lease liabilities $ 77 $ 133 Long term lease liabilities 213 226 Total lease liabilities $ 290 $ 359 Weighted average remaining lease term (in years): 2.7 Weighted average discount rate: 5.2 % |
Supplemental cash flow information related to leases | For the Three Months Ended March 31, 2023 2022 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows used in operating leases $ 66 $ 57 Non-cash impact of new leases and lease modifications Change in operating lease liabilities $ (9) $ — Change in operating lease ROU assets $ 5 $ — |
Schedule of minimum future payments | Minimum future payments under the Company’s lease liabilities as of March 31, 2023 are as follows: Discounted Payments lease due under (in thousands) liability lease payments agreements 2023 $ 64 $ 73 2024 54 65 2025 59 66 2026 63 67 2027 50 51 Total $ 290 $ 322 |
Patents and Other Intangible _2
Patents and Other Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Patents and Other Intangible Assets | |
Schedule of Patents and Other Intangible Assets | Patents and other intangible assets are summarized as follows: March 31, December 31, (in thousands) 2023 2022 Patents Patents pending $ 330 $ 307 Issued patents 815 815 1,145 1,122 Trademarks Trademarks pending 7 6 Registered trademarks 95 95 102 101 Other 8 8 1,255 1,231 Accumulated amortization (473) (433) $ 782 $ 798 |
Schedule of future amortization expense | Future amortization expense associated with issued patents and registered trademarks as of March 31, 2023 is as follows: (in thousands) 2023 $ 108 2024 126 2025 96 2026 61 2027 39 Thereafter 7 $ 437 |
Equity (Tables)
Equity (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Schedule of Outstanding, Reserved and Authorized Shares under Share-based Compensation Plans | March 31, December 31, ( in thousands 2023 2022 Outstanding options and restricted stock units 3,332 3,202 Reserved but unissued shares under the Plans 2,530 2,777 Total authorized shares under the Plans 5,862 5,979 |
Schedule of stock option activity | A summary of the Company’s stock option activity and changes is as follows: March 31, 2023 ( in thousands Options to Purchase Common Stock Weighted Average Exercise Price Weighted Average Remaining Contractual Life (in years) Outstanding at beginning of year 2,779 $ 2.05 6.43 Granted — $ — — Exercised — $ — — Forfeited/Expired — $ — — Outstanding at end of period 2,779 $ 2.05 6.18 Exercisable at end of period 2,011 $ 1.70 5.68 |
Schedule of share-based compensation activity | March 31, ( in thousands 2023 Reserved but unissued shares at beginning of year 196 Increases in the number of authorized shares 5 Grants (4) Reserved but unissued shares at end of year 197 |
Schedule of restricted stock unit activity | March 31, 2023 ( in thousands Number of Shares Weighted Average Grant Date Fair Value Nonvested at beginning of year 423 $ 1.49 Granted 374 $ 0.69 Vested (245) $ 1.34 Nonvested at end of period 552 $ 1.01 |
Restricted Stock Units | |
Schedule of Compensation Expense | For the Three Months Ended March 31, ( in thousands 2023 2022 Compensation Expense $ 199 $ 35 Weighted Average Value Per Share $ 1.25 $ 1.44 |
Warrant [Member] | |
Schedule of Compensation Expense | For the Three Months Ended March 31, 2023 2022 Fair value $ 234 $ 98 Weighted Average Value Per Share $ 0.79 $ 1.43 |
Consultant Stock Plan | |
Schedule of Compensation Expense | For the Three Months Ended March 31, 2023 2022 Compensation Expense $ 3 $ 7 Weighted Average Value Per Share $ 0.66 $ 1.93 |
Organization and Description _2
Organization and Description of Business (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Organization and Description of Business | ||
Cash and cash equivalents | $ 5,328 | $ 6,451 |
Short-term held-to-maturity investments | 3,161 | 2,606 |
Gross proceeds to date | 91,000 | |
Accumulated deficit | $ (89,952) | $ (88,523) |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies - Short-Term Investments (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Summary of Significant Accounting Policies | ||
Short-term investments at cost | $ 3,161 | $ 2,606 |
Unrealized holding gains | 33 | 4 |
Fair value of short-term investments | $ 3,194 | $ 2,610 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Fixed Assets and Leases (Details) - Fixed Assets Other Than Leasehold Improvements | 3 Months Ended |
Mar. 31, 2023 | |
Minimum | |
Property, Plant and Equipment [Line Items] | |
Fixed assets, depreciated life | 3 years |
Maximum | |
Property, Plant and Equipment [Line Items] | |
Fixed assets, depreciated life | 4 years |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Foreign Operations (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Property, Plant and Equipment [Line Items] | ||
Assets | $ 10,167 | $ 10,925 |
CHINA | ||
Property, Plant and Equipment [Line Items] | ||
Assets | 277 | $ 172 |
Registered capital requirement | 350 | |
Capital Requirement Satisfied | $ 111 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Research and Development (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Summary of Significant Accounting Policies | ||
Research and Development costs have been offset by funds received | $ 0 | $ 0 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Net Loss per Common Share (Details) - shares shares in Millions | 3 Months Ended | 12 Months Ended |
Mar. 31, 2023 | Dec. 31, 2022 | |
Summary of Significant Accounting Policies | ||
Potentially dilutive shares outstanding (in shares) | 3.7 | 3.3 |
Fixed Assets - Summary (Details
Fixed Assets - Summary (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Property, Plant and Equipment [Line Items] | |||
Fixed assets, gross | $ 312 | $ 759 | |
Less: Accumulated depreciation and amortization | (81) | (697) | |
Fixed assets, net, after accumulated amortization | 231 | 62 | |
Operating lease ROU assets, net | 284 | 322 | |
Total | 515 | 384 | |
Depreciation expense | 40 | $ 7 | |
Machinery and equipment | |||
Property, Plant and Equipment [Line Items] | |||
Machinery and equipment | 209 | 390 | |
Office furniture and equipment | |||
Property, Plant and Equipment [Line Items] | |||
Office furniture and equipment | 60 | 177 | |
Leasehold improvements | |||
Property, Plant and Equipment [Line Items] | |||
Leasehold improvements | $ 43 | $ 192 |
Fixed Assets - Leases (Details)
Fixed Assets - Leases (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2023 | Jun. 30, 2022 | Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Leases | |||||
Monthly rent expense | $ 11 | ||||
Operating lease cost | 48 | $ 57 | |||
Seattle and Tulsa | |||||
Leases | |||||
Restoration expense | $ 2 | $ 87 | |||
Monthly rent expense | $ 4 | ||||
CHINA | |||||
Leases | |||||
Renewal option term | 1 year | ||||
Monthly rent expense | $ 2 | ||||
Minimum | Seattle and Tulsa | |||||
Leases | |||||
Remaining term (in years) | 6 months | 6 months | |||
Annual rent expense, increase (in percent) | 2% | ||||
Maximum | Seattle and Tulsa | |||||
Leases | |||||
Remaining term (in years) | 6 years | 6 years |
Fixed Assets - Leases - Supplem
Fixed Assets - Leases - Supplemental balance sheet and cash flow information (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Operating Lease | ||||
Operating lease ROU assets, net | $ 284 | $ 284 | $ 322 | |
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration] | Property, Plant and Equipment, Net | Property, Plant and Equipment, Net | Property, Plant and Equipment, Net | |
Lease Liabilities: | ||||
Current lease liabilities | $ 77 | $ 77 | $ 133 | |
Long term lease liabilities | 213 | 213 | 226 | |
Total lease liabilities | $ 290 | $ 290 | $ 359 | |
Weighted average remaining lease term (in years) | 2 years 8 months 12 days | 2 years 8 months 12 days | ||
Weighted average discount rate | 5.20% | 5.20% | ||
Cash paid for amounts included in the measurement of lease liabilities: | ||||
Operating cash flows used in operating leases | $ 66 | $ 57 | ||
Change in operating lease liabilities | $ (9) | (9) | ||
Change in operating lease ROU assets | $ 5 | $ 5 |
Fixed Assets - Minimum future l
Fixed Assets - Minimum future lease payments (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Fixed Assets | ||
2023 (remaining) | $ 73 | |
2024 | 65 | |
2025 | 66 | |
2026 | 67 | |
2027 | 51 | |
Total | 322 | |
Discounted payments, 2023 (remaining) | 64 | |
Discounted payments, 2024 | 54 | |
Discounted payments, 2025 | 59 | |
Discounted payments, 2026 | 63 | |
Discounted payments, 2027 | 50 | |
Operating Lease, Liability | 290 | $ 359 |
Total discounted payments | 290 | |
Interest on future minimum payments | $ 32 |
Patents and Other Intangible _3
Patents and Other Intangible Assets - Summary (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Patents | $ 1,145 | $ 1,122 |
Trademarks | 102 | 101 |
Other | 8 | 8 |
Patents and other intangible assets | 1,255 | 1,231 |
Accumulated amortization | (473) | (433) |
Finite-Lived Intangible Assets, Net | 782 | 798 |
Patents pending | ||
Patents | 330 | 307 |
Issued patents | ||
Patents | 815 | 815 |
Trademarks pending | ||
Trademarks | 7 | 6 |
Registered trademarks | ||
Trademarks | $ 95 | $ 95 |
Patents and Other Intangible _4
Patents and Other Intangible Assets - Future amortization expense (Details) $ in Thousands | Mar. 31, 2023 USD ($) |
Patents and Other Intangible Assets | |
2023 | $ 108 |
2024 | 126 |
2025 | 96 |
2026 | 61 |
2027 | 39 |
Thereafter | 7 |
Finite-Lived Intangible Assets, Net | $ 437 |
Patents and Other Intangible _5
Patents and Other Intangible Assets - Additional information (Details) | 3 Months Ended |
Mar. 31, 2023 | |
Minimum | |
Intangible assets | |
Amortization life (in years) | 3 years |
Maximum | |
Intangible assets | |
Amortization life (in years) | 5 years |
Trademarks | |
Intangible assets | |
Amortization life (in years) | 10 years |
Revenue, Contract Assets and _2
Revenue, Contract Assets and Contract Liabilities (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Dec. 31, 2022 | |
Revenue, Contract Assets and Contract Liabilities | ||
Revenues | $ 894 | |
Cost of goods sold | 788 | |
Contract assets | 4 | $ 20 |
Contract liabilities | $ 639 | $ 247 |
Equity - Common Stock and Prefe
Equity - Common Stock and Preferred Stock (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Jul. 31, 2018 | |
Stockholders' equity | |||
Common stock, authorized shares | 62,500,000 | ||
Preferred stock, authorized shares | 2,000,000 | ||
Gross proceeds to date | $ 91,000 | ||
Proceeds from issuance of common stock, net of offering costs | $ 578 | ||
ATM | |||
Stockholders' equity | |||
Number of shares of common stock issued | 0 | ||
Number of shares issued to date | 1,600,000 | ||
Aggregate offering price | $ 8,700 | ||
Participation Right | |||
Stockholders' equity | |||
Stock Issued, Investor, Maximum Beneficial Ownership Percentage | 20% | ||
Common Stock | ATM | |||
Stockholders' equity | |||
Gross proceeds to date | 6,100 | ||
Net proceeds to date | $ 5,900 | ||
Share price of shares issued in offering (in dollars per share) | $ 3.84 |
Equity - Equity Incentive Plan
Equity - Equity Incentive Plan (Details) - shares | 3 Months Ended | |
Mar. 31, 2023 | Dec. 31, 2022 | |
Equity Incentive Plan [Member] | ||
Share-based compensation | ||
Outstanding options and restricted stock units | 3,332,000 | 3,202,000 |
Reserved but unissued shares under the Plans | 2,530,000 | 2,777,000 |
Number of shares authorized | 5,862,000 | 5,979,000 |
Increases in the number of authorized shares | 400,000 | |
2021 Plan | ||
Share-based compensation | ||
Maximum number of shares that may be issued as a proportion of outstanding stock | 10% | |
Maximum increase in number of shares available for issuance | 400,000 |
Equity - Stock Options - Activi
Equity - Stock Options - Activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Share-based compensation | |||
Outstanding shares, beginning balance | 2,779,000 | ||
Outstanding shares, ending balance | 2,779,000 | 2,779,000 | |
Exercisable (in shares) | 2,011,000 | ||
Outstanding - Weighted Average Exercise Price (in dollars per share) | $ 2.05 | ||
Outstanding - Weighted Average Exercise Price (in dollars per share) | 2.05 | $ 2.05 | |
Exercisable - Weighted Average Exercise Price (in dollars per share) | $ 1.70 | ||
Stock options, Contractual life (in years) | 6 years 2 months 4 days | 6 years 5 months 4 days | |
Exercisable - Weighted Average Remaining Contractual Life (in years) | 5 years 8 months 4 days | ||
Estimated aggregate pretax intrinsic value | $ 27 | ||
Total unrecognized compensation | 1,000 | ||
Compensation expense | $ 44 | $ 42 | |
Equity Incentive Plan [Member] | |||
Share-based compensation | |||
Granted (in shares) | 0 |
Equity - Restricted Stock Units
Equity - Restricted Stock Units (Details) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Compensation expense | $ 44 | $ 42 |
Restricted Stock Units | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Compensation expense | $ 199 | 35 |
Number of shares vested | 245 | |
Restricted Stock Units | Director | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Target Value of Compensation per Quarter | $ 85 | |
Unrecognized compensation | $ 68 | $ 85 |
Equity - Restricted Stock uni_2
Equity - Restricted Stock units Activity (Details) - Restricted Stock Units shares in Thousands | 3 Months Ended |
Mar. 31, 2023 $ / shares shares | |
Number of Shares | |
Nonvested at beginning of year | shares | 423 |
Granted | shares | 374 |
Vested | shares | (245) |
Nonvested at end of year | shares | 552 |
Weighted Average Grant Date Fair Value | |
Nonvested at beginning of year | $ / shares | $ 1.49 |
Granted | $ / shares | 0.69 |
Vested | $ / shares | 1.34 |
Nonvested at end of year | $ / shares | $ 1.01 |
Equity - Restricted Stock Uni_3
Equity - Restricted Stock Units - Compensation Expense (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Compensation expense | $ 44 | $ 42 |
Restricted Stock Units | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Compensation expense | $ 199 | $ 35 |
Weighted Average Value Per Share | $ 1.25 | $ 1.44 |
Equity - Stock Grants (Details)
Equity - Stock Grants (Details) - Employee compensation in lieu of bonus - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Share-based compensation | ||
Fair value | $ 234 | $ 98 |
Weighted Average Value Per Share | $ 0.79 | $ 1.43 |
Equity - Consultant Stock Plan
Equity - Consultant Stock Plan (Details) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Compensation expense | $ 44 | $ 42 |
Consultant Stock Plan | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Reserved but unissued shares at beginning of year | 196 | |
Increases in the number of authorized shares | 5 | |
Stock grants | (4) | |
Reserved but unissued shares at end of year | 197 |
Government Assistance (Details)
Government Assistance (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | |
Government Assistance [Line Items] | ||||
Government assistance, reimbursements from Department of Energy | $ 93,000 | |||
Research Grant From The Department Of Energy [Member] | ||||
Government Assistance [Line Items] | ||||
Total award | $ 250,000 | |||
Government assistance, reimbursements from Department of Energy | 69,000 | $ 0 | ||
Oklahoma Quality Jobs Act [Member] | ||||
Government Assistance [Line Items] | ||||
Government assistance, reimbursements from Department of Energy | $ 24,000 | $ 0 | ||
Duration of the program | 10 years |