Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2023 | Apr. 02, 2024 | Jun. 30, 2023 | |
Document and Entity Information | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2023 | ||
Document Transition Report | false | ||
Entity Registrant Name | CLEARSIGN TECHNOLOGIES CORPORATION | ||
Entity File Number | 001-35521 | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 26-2056298 | ||
Entity Address, Address Line One | 8023 East 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 | ||
ICFR Auditor Attestation Flag | false | ||
Document Financial Statement Error Correction [Flag] | false | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Public Float | $ 40,360,983 | ||
Entity Shell Company | false | ||
Entity Common Stock, Shares Outstanding | 39,039,273 | ||
Entity Central Index Key | 0001434524 | ||
Document Fiscal Year Focus | 2023 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Auditor Name | BPM CPA LLP | ||
Auditor Location | Santa Monica, California | ||
Auditor Firm ID | 207 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Current Assets: | ||
Cash and cash equivalents | $ 5,684 | $ 6,451 |
Short-term held-to-maturity investments | 0 | 2,606 |
Accounts receivable, net | 287 | 79 |
Contract assets | 188 | 20 |
Prepaid expenses and other assets | 350 | 577 |
Total current assets | 6,509 | 9,733 |
Fixed assets, net | 275 | 384 |
Patents and other intangible assets, net | 836 | 798 |
Other assets | 10 | |
Total Assets | 7,620 | 10,925 |
Current Liabilities: | ||
Accounts payable and accrued liabilities | 366 | 296 |
Current portion of lease liabilities | 71 | 133 |
Accrued compensation and related taxes | 703 | 471 |
Contract liabilities | 1,116 | 247 |
Total current liabilities | 2,256 | 1,147 |
Long Term Liabilities: | ||
Long term lease liabilities | 172 | 226 |
Total liabilities | 2,428 | 1,373 |
Commitments and contingencies (Note 10) | ||
Stockholders' Equity: | ||
Preferred stock, $0.0001 par value, zero shares issued and outstanding | ||
Common stock, $0.0001 par value, 38,687,061 and 38,023,701 shares issued and outstanding at December 31, 2023 and December 31, 2022, respectively | 4 | 4 |
Additional paid-in capital | 98,922 | 98,079 |
Accumulated other comprehensive loss | (17) | (8) |
Accumulated deficit | (93,717) | (88,523) |
Total equity | 5,192 | 9,552 |
Total Liabilities and Equity | $ 7,620 | $ 10,925 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 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 | 38,687,061 | 38,023,701 |
Common stock, shares outstanding | 38,687,061 | 38,023,701 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Loss - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Consolidated Statements of Operations and Comprehensive Loss | ||
Revenues | $ 2,403 | $ 374 |
Cost of goods sold | 1,586 | 258 |
Gross profit | 817 | 116 |
Operating expenses: | ||
Research and development | 739 | 505 |
General and administrative | 6,059 | 5,728 |
Total operating expenses | 6,798 | 6,233 |
Loss from operations | (5,981) | (6,117) |
Other income | ||
Interest | 324 | 83 |
Government assistance | 255 | 232 |
Gain from sale of assets | 5 | 38 |
Other income, net | 203 | 6 |
Total other income | 787 | 359 |
Net loss | $ (5,194) | $ (5,758) |
Net loss per share - basic | $ (0.13) | $ (0.16) |
Net loss per share - fully diluted | $ (0.13) | $ (0.16) |
Weighted average number of shares outstanding - basic | 38,500,933 | 35,338,712 |
Weighted average number of shares outstanding - fully diluted | 38,500,933 | 35,338,712 |
Comprehensive loss | ||
Net loss | $ (5,194) | $ (5,758) |
Foreign-exchange translation adjustments | (9) | (17) |
Comprehensive loss | $ (5,203) | $ (5,775) |
Consolidated Statement of Stock
Consolidated Statement of Stockholders' Equity - USD ($) shares in Thousands, $ in Thousands | Common Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Income (loss) | Accumulated Deficit | 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 | ||||
Shares issued upon exercise of options ($0.89 per share) (in shares) | 11 | ||||
Shares issued upon exercise of options ($2.93 per share) (in shares) | 3 | ||||
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 | ||||
Fair value of stock options granted in payment of accrued compensation | 12 | 12 | |||
Share based compensation | 373 | 373 | |||
Share based compensation (in shares) | 67 | ||||
Shares issued through the use of At-The Market issuance | 587 | 587 | |||
Shares issued through the use of At-The Market issuance (in shares) | 501 | ||||
Shares issued for services ($1.93 per share) | 25 | 25 | |||
Shares issued for services ($1.93 per share) (in shares) | 13 | ||||
Shares issued for services ($0.66 per share) | 1 | 1 | |||
Shares issued for services ($0.66 per share) (in shares) | 2 | ||||
Shares issued in stock offering | $ 1 | 4,210 | 4,211 | ||
Shares issued in stock offering (in shares) | 4,186 | ||||
Shares issued pursuant to purchase right ($1.11 per share) | 1,741 | 1,741 | |||
Shares issued pursuant to purchase right ($1.11 per share) (in shares) | 1,592 | ||||
Foreign-Exchange Translation Adjustment | (17) | (17) | |||
Net loss | (5,758) | (5,758) | |||
Ending Balance at Dec. 31, 2022 | $ 4 | 98,079 | (8) | (88,523) | 9,552 |
Ending Balances (in shares) at Dec. 31, 2022 | 38,023 | ||||
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 | ||||
Share based compensation | 599 | 599 | |||
Share based compensation (in shares) | 339 | ||||
Shares issued upon exercise of options ($0.54 per share) (in shares) | 12 | ||||
Shares issued for services | 3 | 3 | |||
Shares issued for services (in shares) | 3 | ||||
Shares issued for services ($0.66 per share) | 7 | 7 | |||
Shares issued for services ($0.66 per share) (in shares) | 12 | ||||
Shares issued upon exercise of options ($1.31 per share) (in shares) | 2 | ||||
Foreign-Exchange Translation Adjustment | (9) | (9) | |||
Net loss | (5,194) | (5,194) | |||
Ending Balance at Dec. 31, 2023 | $ 4 | $ 98,922 | $ (17) | $ (93,717) | $ 5,192 |
Ending Balances (in shares) at Dec. 31, 2023 | 38,687 |
Consolidated Statement of Sto_2
Consolidated Statement of Stockholders' Equity (Parenthetical) - $ / shares | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Consolidated Statement of Stockholders' Equity | ||
Share price of common stock issued for services (in dollars per share) | $ 1.93 | |
Share price of shares issued upon exercise of options (in dollars per share) | $ 0.54 | |
Common stock issued for services one | 0.66 | 0.66 |
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 | |
Share price of shares issued in stock offering (in dollars per share) | 1.11 | |
Share price of shares issued pursuant to purchase right (in dollars per share) | $ 1.11 | |
Common stock for services two | 0.81 | |
Common stock for options exercise, 1.31 per share issue | $ 1.31 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Cash flows from operating activities: | ||
Net loss | $ (5,194) | $ (5,758) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Common stock issued for services | 10 | 26 |
Share-based compensation | 614 | 373 |
Depreciation and amortization | 299 | 161 |
Gain from sale of fixed assets | (5) | (38) |
Right of use asset amortization | 125 | 131 |
Realized gain from marketable securities | (79) | (45) |
Lease amendments | (14) | |
Impairment of fixed assets | 81 | |
Impairment of intangible assets | 14 | 19 |
Change in operating assets and liabilities: | ||
Contract assets | (168) | 19 |
Accounts receivable | (208) | (46) |
Prepaid expenses and other assets | 18 | (232) |
Other long term assets | 10 | |
Accounts payable and accrued liabilities | (57) | (125) |
Accrued compensation and related taxes | 452 | 360 |
Contract liabilities | 869 | 163 |
Net cash used in operating activities | (3,233) | (4,992) |
Cash flows from investing activities: | ||
Acquisition of fixed assets | (10) | |
Disbursements for patents and other intangible assets | (200) | (154) |
Proceeds from sale of fixed assets | 5 | 39 |
Purchases of held-to-maturity short-term U.S. treasuries | (2,162) | (5,898) |
Redemption of held-to-maturity short-term U.S. treasuries | 4,847 | 3,337 |
Net cash provided by (used in) investing activities | 2,490 | (2,686) |
Cash flows from financing activities: | ||
Proceeds from issuance of common stock, net of offering costs | 0 | 6,539 |
Taxes paid related to vesting of restricted stock units | (15) | |
Net cash (used in) provided by financing activities | (15) | 6,539 |
Effect of exchange rate changes on cash and cash equivalents | (9) | (17) |
Net change in cash and cash equivalents | (767) | (1,156) |
Cash and cash equivalents, beginning of year | 6,451 | 7,607 |
Cash and cash equivalents, end of year | 5,684 | 6,451 |
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 | |
Non-cash impact of new lease | $ 34 |
Organization and Description of
Organization and Description of Business | 12 Months Ended |
Dec. 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 originally incorporated in the State of Washington in 2008. During January 2022, the Company relocated its headquarters from Seattle, Washington to Tulsa, Oklahoma. Effective June 15, 2023, the Company changed its state of incorporation to Delaware. 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 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 December 31, 2023, the Company’s cash and cash equivalents totaled $5,684 thousand, which is not 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. These factors raise substantial doubt about the Company’s ability to continue as a going concern for the twelve months from the date of this report. 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 year ended December 31, 2023, the Company did not raise proceeds through the issuance of common stock. The Company has incurred losses since its inception totaling $93.7 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. As a result, the substantial doubt the Company’s ability to continue as a going concern had not been alleviated. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2023 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | Note 2 – Summary of Significant Accounting Policies Basis of Presentation The accompanying 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 statement 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 US 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 December 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 our short-term investments totaled approximately zero and $2,606 thousand for the years ended December 31, 2023 and 2022, respectively. The unrealized holding gains for our short-term investments totaled approximately zero and $4 thousand for the years ended December 31, 2023 and 2022, respectively. We have not experienced any continuous unrealized holding losses on these investments. The fair value for our short-term investments totaled approximately zero and $2,610 thousand for the years ended December 31, 2023 and 2022, respectively. Accounts Receivable and Allowance for Doubtful Accounts Trade accounts receivable is stated at the cost less a reserve for expected credit losses. The Company performs ongoing credit evaluations of its customers’ financial condition and generally requires no collateral from its customers or interest on past due amounts. Management estimates the allowance for credit loss based on review and analysis of specific customer balances that may not be collectible and how recently payments have been received in addition to an expected credit loss model based on aging analysis as per the invoice date as re-imbursement risks could exist. Though an exception exists, the vast majority of the outstanding accounts receivable share the same expected credit risk due to the re-imbursement risk is same for the current customer pool. Accounts are considered for write-off when they become past due and when it is determined that the probability of collection is remote. In accordance with Company policy and based on the Company’s historical experience, the Company estimates a reserve due to the nature of uncertainty for collectability of reimbursement. The allowance for collectability reserve as of December 31, 2023, and 2022 was zero, respectively. Fixed Assets and Leases Fixed assets are recorded at cost. Leases are recorded in accordance with FASB ASC 842, Leases 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 year ended December 31, 2023, the Company received Government Assistance We have adopted Accounting Standards Update (“ASU”) 2021-10, Government Assistance (Topic 832) Disclosures by Business Entities about Government Assistance, 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 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 a milestone 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 consolidated balance sheets as of December 31, 2023 and 2022 include assets amounting to approximately $334 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 December 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 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 consolidated balance sheets in the stockholders’ equity section as a component of accumulated other comprehensive (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 December 31, 2023 and 2022, potentially dilutive shares outstanding amounted to 3.9 million and 3.5 million, respectively. Recently Issued Accounting Pronouncements 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 | 12 Months Ended |
Dec. 31, 2023 | |
Fixed Assets | |
Fixed Assets | Note 3 – Fixed Assets Fixed Assets Fixed assets are summarized as follows: December 31, (in thousands) 2023 2022 Machinery and equipment $ — $ 390 Office furniture and equipment 60 177 Leasehold improvements 43 192 103 759 Accumulated depreciation and amortization (63) (697) 40 62 Operating lease ROU assets, net 235 322 Total $ 275 $ 384 Depreciation and amortization expense for the years ended 2023 and 2022 totaled $152 thousand and $24 thousand, respectively. In the year ended December 31, 2023, we impaired $81 thousand of machinery and equipment, specifically demonstration burners. These burners were capitalized at Leases The Company leases office space in Tulsa, Oklahoma, Seattle, Washington and Beijing, China. During June 2023, the Company renewed its Beijing, China lease agreement for 13 months with monthly rent at approximately $3 thousand. The Company increased the right of use asset and lease liability by $34 thousand. 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. During October 2023, the Company entered into a sub-lease agreement to rent office space in Seattle for approximately $2 thousand per month for twelve months . The Tulsa and Beijing leases are classified as operating leases, with remaining terms ranging from less than twelve months to four 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 return the premises to its original functional state. The Company incurred restoration expenses of $33 thousand and $55 thousand for the years ended December 31, 2023 and 2022, respectively. The Tulsa lease contains fixed annual lease payments that increase annually by 2%. The Seattle, Tulsa, and Beijing total monthly minimum rent is approximately $10 thousand. Operating lease costs for the years ended December 31, 2023 and 2022 were $141 thousand and $186 thousand, respectively. Supplemental balance sheet information related to operating leases is as follows: December 31, December 31, (in thousands) 2023 2022 Operating lease ROU assets, net $ 235 $ 322 Lease Liabilities: Current lease liabilities $ 71 $ 133 Long term lease liabilities 172 226 Total lease liabilities $ 243 $ 359 Weighted average remaining lease term (in years): 2.4 Weighted average discount rate: 5.2 % Supplemental cash flow information related to leases is as follows: For the Year Ended December 31, (in thousands) 2023 2022 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows used in operating leases $ 158 $ 251 Non-cash impact of new leases and lease modifications Change in operating lease liabilities $ 25 $ 25 Change in operating lease ROU assets $ 39 $ — Minimum future payments under the Company’s lease liabilities as of December 31, 2023 are as follows: Discounted Payments lease due under (in thousands) liability lease payments agreements 2024 $ 71 $ 81 2025 59 66 2026 63 67 2027 50 51 Total $ 243 $ 265 At December 31, 2023, $22 thousand of our future minimum lease payments represents interest. |
Patents and Other Intangible As
Patents and Other Intangible Assets | 12 Months Ended |
Dec. 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: December 31, (in thousands) 2023 2022 Patents Patents pending $ 477 $ 307 Issued patents 810 815 1,287 1,122 Trademarks Trademarks pending 4 6 Registered trademarks 86 95 90 101 Other 8 8 1,385 1,231 Accumulated amortization (549) (433) $ 836 $ 798 Amortization expense for the years ended December 31, 2023 and 2022 totaled $147 thousand and $136 thousand, respectively. Future amortization expense associated with issued patents and registered trademarks as of December 31, 2023 is as follows: (in thousands) 2024 $ 129 2025 99 2026 66 2027 43 2028 7 Thereafter 3 $ 347 The amortization life for patents ranges between three During the years ended December 31, 2023 and 2022, the Company assessed its patent and trademark assets, and determined $14 thousand and $19 thousand impairment costs were incurred, respectively. 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 | 12 Months Ended |
Dec. 31, 2023 | |
Revenue, Contract Assets and Contract Liabilities | |
Revenue, Contract Assets and Contract Liabilities | Note 5 – Revenue, Contract Assets and Contract Liabilities The Company’s contracts with customers generally have performance obligations and a schedule of non-refundable cancellation obligations. Performance obligations typically fall into one of three categories, product shipment, burner performance tests and engineering feasibility studies. Customer payment milestones are unique to individual contracts and may occur prior to completion of performance obligations. Customer payment terms typically range between thirty . Delays in contract performance, if any, typically occur as a result of customer onsite project delays outside of our control. The Company recognized $2,403 thousand of revenues and $1,586 thousand of cost of goods sold during the year ended December 31, 2023. Revenues and cost of goods sold relate predominately to the Company’s process burner product line. During 2023, the Company delivered multiple burners in connection with a single customer order. Prior to delivery, we successfully completed multiple customer witness tests at a burner test facility for separate customer orders. Both the witness tests and burner shipment constitute contractual performance obligations per ASC 606. The Company recognized $374 thousand of revenues and $258 thousand of cost of goods sold during the year ended December 31, 2022. The revenue and cost of goods sold are mostly in connection with the completion of a technology validation project. The Company had contract assets of $188 thousand and $20 thousand and contract liabilities of $1,116 thousand and $247 thousand at December 31, 2023 and 2022, respectively. Of the $247 thousand contract liability balance at December 31, 2022, the Company recognized revenue $247 thousand during the year ended December 31, 2023. In addition, the net accounts receivable balance at December 31, 2021, was $33 thousand. |
Product Warranties
Product Warranties | 12 Months Ended |
Dec. 31, 2023 | |
Product Warranties | |
Product Warranties | Note 6 – Product Warranties A summary of the Company’s warranty liability activity, which is included in accrued liabilities in the accompanying balance sheets as of December 31, 2023 and 2022, is as follows: December 31, (in thousands) 2023 2022 Warranty liability at beginning of year $ 5 $ — Accruals 105 5 Payments — — Warranty liability at end of year $ 110 $ 5 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2023 | |
Income Taxes | |
Income Taxes | Note 7 - Income Taxes For the years ended December 31, 2023 and 2022 the Company's loss before provision for income taxes were as follows: For the Year Ended December 31, ( in thousands 2023 2022 Domestic $ (5,145) $ (5,649) Foreign (50) (109) Loss before provision for income taxes $ (5,194) $ (5,758) There was no provision for income taxes for the years ended December 31, 2023 and 2022. Income tax benefit attributable to loss from continuing operations differed from the amounts computed by applying the statutory U.S federal income tax rate of 21% to pretax loss from continuing operations as a result of the following: For the Year Ended December 31, ( in thousands 2023 2022 Tax benefit at federal statutory rate $ (1,091) $ (1,209) Tax benefit at state rate (126) (197) Meals and entertainment 5 4 Prior year deferred tax true ups — (2,805) Other (75) (82) Change in valuation allowance 1,287 4,289 $ — $ — The significant components of the Company's deferred tax assets and liabilities as of December 31, 2023 and 2022 were as follows: For the Year Ended December 31, ( in thousands 2023 2022 Deferred tax assets: Accrued expenses $ 86 $ 74 Stock-based compensation 388 337 Depreciation 177 102 Prepaid expenses 61 (31) Accrued vacation (1) (3) ASC 842 lease standard (51) (16) Net operating loss carryforwards 21,020 20,263 Gross deferred tax assets 21,680 20,726 Valuation allowance (21,598) (20,677) Total deferred tax assets, net of valuation allowance 82 49 Deferred tax liabilities Other (82) (49) Net deferred tax assets $ — $ — For the year ended December 31, 2023, based on all available objective evidence, including the existence of cumulative losses, the Company determined that it was not more likely than not that the net deferred tax assets were fully realizable as of December 31, 2023. Accordingly, the Company established a full valuation allowance against its deferred tax assets. As of December 31, 2023, the Company had $85.3 million of federal and $48.5 million of state net operating loss carryforwards available to reduce future taxable income, of which federal net operating loss carryforwards of $39.1 million have an indefinite life. The federal net operating losses begin to expire in 2028, while state net operating losses begin to expire in 2025. The Company experienced an “ownership change” within the meaning of Section 382 of the Internal Revenue Code in April 2012, subjecting net operating loss carryforwards (incurred prior to the ownership change) to an annual limitation, which may restrict the ability to use these losses to offset taxable income in periods following the ownership change. The Company determined the amount of the annual limitation to be $686 thousand annually. The net operating loss carryforwards generated before 2018 may be used to reduce taxable income through the years 2028 to 2037. Federal net operating loss carryforwards generated for year 2018 and thereafter do not expire. The Company files income tax returns in the U.S. federal, state and foreign jurisdictions. All tax years generally remain subject to examination by the IRS and various state taxing authorities, although the Company is not currently under examination in any jurisdiction. The Company’s policy is to recognize interest and penalties related to income tax matters in income tax expense. As of December 31, 2023 and 2022 there was |
Equity
Equity | 12 Months Ended |
Dec. 31, 2023 | |
Equity | |
Equity | Note 8 – 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, in connection with a waiver of the Participation Right’s notice requirements and other related closing mechanics for such Participation Right (the “Waiver”) the Company and clirSPV, LLC agreed that the Participation Right may be extended from December 31, 2023, to such date that the holders of two two -thirds of the outstanding units of clirSPV agreed to extend the waiver of the Redemption Right until December 31, 2024. Accordingly, the Participation Right will now expire on December 31, 2024. The Company has an At-The-Market (“ATM”) program pursuant to a Sales Agreement with Virtu Americas LLC, as sales agent, dated December 23, 2020 (the “Sales Agreement”), pursuant to which the Company may sell shares of common stock with an aggregate offering price of up to $8.7 million. On March 18, 2024, the Company filed a prospectus supplement suspending the ATM program. The Company will not make any sales of its common stock pursuant to the Sales Agreement unless and until a new prospectus supplement is filed with the SEC; however, the Sales Agreement remains in full force and effect. During the year ended December 31, 2023, the Company issued zero shares of its common stock from the ATM program. As of December 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 prohibit 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 our 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 thousand 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: December 31, December 31, ( in thousands 2023 2022 Outstanding options and restricted stock units 3,430 3,202 Reserved but unissued shares under the Plan 2,302 2,777 Total authorized shares under the Plan 5,732 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. Inducement Options During the year ended December 31, 2023, the Company granted non-qualified stock options to its Chief Technology Officer to purchase an aggregate of 150 thousand shares of common stock with an exercise price of $0.91 as a material inducement to accept employment with the Company. These inducement options vest in three equal installments, with one During the year ended December 31, 2023, the Company granted non-qualified stock options to its Director of Customer Relationships and Business Development to purchase an aggregate of 150 thousand shares of common stock with an exercise price of $1.31 as a material inducement to accept employment with the Company. These inducement options vest in three equal installments, with one thousand. Two These inducement options were granted outside of the 2021 Plan and in accordance with the employment inducement exemption provided under Nasdaq Listing Rule 5635(c)(4). Equity Incentive Plan Options Compensation expense associated with stock option awards for the years ended December 31, 2023 and 2022 totaled $ 174 thousand and $ 118 thousand, respectively. A summary of the Company’s Equity Incentive Plan stock option activity and changes is as follows: December 31, 2023 ( in thousands, except per share data 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 (20) $ 0.54 — Forfeited/Expired — $ — — Outstanding at end of period 2,759 $ 2.07 5.38 Exercisable at end of period 2,024 $ 1.71 4.87 The estimated aggregate pretax intrinsic value of the Company’s outstanding vested stock options at December 31, 2023 is $171 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 December 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 from the Company’s Equity Incentive 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: December 31, December 31, 2023 2022 ( in thousands, except per share data Number of Shares Weighted Average Grant Date Fair Value Number of Shares Weighted Average Grant Date Fair Value Nonvested at beginning of year 423 $ 1.49 112 $ 2.28 Granted 617 $ 0.82 376 $ 1.30 Vested (361) $ 1.18 (65) $ 1.77 Forfeited (8) $ 0.79 — $ — Nonvested at end of period 671 $ 1.05 423 $ 1.49 A summary of the Company’s RSU compensation expense is as follows: For the Year Ended December 31, ( in thousands, except per share data 2023 2022 Compensation Expense $ 337 $ 252 Weighted Average Value Per Share $ 0.83 $ 1.57 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 Year Ended December 31, ( in thousands, except per share data 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 quarterly increases in the available number of authorized shares equal to the lesser of 1% of any new shares issued by the Company during the quarter immediately prior to the adjustment date or such lesser amount as the Board of Directors shall determine. The Consultant Plan activity and change is as follows: December 31, ( in thousands 2023 2022 Reserved but unissued shares at beginning of year 196 211 Increases in the number of authorized shares 7 — Grants (15) (15) Reserved but unissued shares at end of year 188 196 The Consultant Plan compensation expense is summarized as follows: For the Year Ended December 31, ( in thousands, except per share data 2023 2022 Compensation Expense $ 10 $ 26 Weighted Average Value Per Share $ 0.69 $ 1.61 |
Retirement Plan
Retirement Plan | 12 Months Ended |
Dec. 31, 2023 | |
Retirement Plan | |
Retirement Plan | Note 9 – Retirement Plan The Company has a defined contribution retirement plan covering all of its U.S. employees whereby the Company matches employee contributions up to 3% of their base salary. The Company’s matching contribution expense totaled $64 thousand and $54 thousand during the years ended December 31, 2023 and 2022, respectively. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2023 | |
Commitments and Contingencies | |
Commitments and Contingencies | Note 10 – 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 our 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 | 12 Months Ended |
Dec. 31, 2023 | |
Government Assistance | |
Government Assistance | Note 11 – 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. During 2023, the Company was awarded a Phase 2 grant from the DOE to continue developing this ultra-low NOx hydrogen burner. The Phase 2 grant amount totaled approximately $1.6 million over a two-year period. These awards allow the Company to request reimbursements for expenditures such as labor, material, and administrative costs. During the years ended December 31, 2023 and 2022, the Company recognized $ Beginning in 2021, the Company received funds relating to the Oklahoma 21 st |
Quarterly Results (unaudited)
Quarterly Results (unaudited) | 12 Months Ended |
Dec. 31, 2023 | |
Quarterly Results (unaudited) | |
Quarterly Results | Note 12 – Quarterly Results (unaudited) Quarterly results for the years ended December 31, 2023 and 2022 are as follows: (in thousands, except per share data) First Second Third Fourth For the year ended December 31, 2023 Quarter Quarter Quarter Quarter Revenue $ 894 $ 150 $ 85 $ 1,274 Gross Profit (Loss) $ 106 $ 129 $ 24 $ 558 Operating Expense $ 1,810 $ 1,758 $ 1,521 $ 1,709 Net loss $ (1,429) $ (1,478) $ (1,332) $ (955) Net Loss per share - basic and fully diluted $ (0.04) $ (0.04) $ (0.03) $ (0.03) For the year ended December 31, 2022 Revenue $ — $ — $ 324 $ 50 Gross Profit (Loss) $ — $ — $ 123 $ (7) Operating Expense $ 1,517 $ 1,660 $ 1,558 $ 1,498 Net loss $ (1,490) $ (1,638) $ (1,312) $ (1,318) Net Loss per share - basic and fully diluted $ (0.05) $ (0.05) $ (0.03) $ (0.03) |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2023 | |
Subsequent Events | |
Subsequent Events | Note 13 – Subsequent Events On February 22, 2024, the Company’s board of directors and compensation committee approved and paid the 2023 bonus accrual allocated to the Company’s Chief Executive Officer, Colin James Deller, and Chief Financial Officer, Brent Hinds, in the form of common stock and restricted stock units (“RSUs”). After applicable tax withholdings, Dr. Deller received 66,019 shares of common stock valued at $1.06 per share. After applicable tax withholdings, Mr. Hinds received 28,555 shares of common stock valued at $1.06 per share. In addition, Mr. Hinds received RSUs for 7,547 shares of common stock that will vest in three equal installments commencing on the first anniversary of the grant date, and performance-based restricted stock units (“PRSUs”) for 2,627 shares of common stock that will vest upon the achievement of certain established performance targets. The PRSUs will not vest and be forfeited if such performance targets are not achieved during the measuring period ending December 31, 2024. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2023 | |
Summary of Significant Accounting Policies | |
Basis of Presentation | Basis of Presentation The accompanying 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 statement 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 US 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 December 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 our short-term investments totaled approximately zero and $2,606 thousand for the years ended December 31, 2023 and 2022, respectively. The unrealized holding gains for our short-term investments totaled approximately zero and $4 thousand for the years ended December 31, 2023 and 2022, respectively. We have not experienced any continuous unrealized holding losses on these investments. The fair value for our short-term investments totaled approximately zero and $2,610 thousand for the years ended December 31, 2023 and 2022, respectively. |
Accounts Receivable and Allowance for Doubtful Accounts | Accounts Receivable and Allowance for Doubtful Accounts Trade accounts receivable is stated at the cost less a reserve for expected credit losses. The Company performs ongoing credit evaluations of its customers’ financial condition and generally requires no collateral from its customers or interest on past due amounts. Management estimates the allowance for credit loss based on review and analysis of specific customer balances that may not be collectible and how recently payments have been received in addition to an expected credit loss model based on aging analysis as per the invoice date as re-imbursement risks could exist. Though an exception exists, the vast majority of the outstanding accounts receivable share the same expected credit risk due to the re-imbursement risk is same for the current customer pool. Accounts are considered for write-off when they become past due and when it is determined that the probability of collection is remote. In accordance with Company policy and based on the Company’s historical experience, the Company estimates a reserve due to the nature of uncertainty for collectability of reimbursement. The allowance for collectability reserve as of December 31, 2023, and 2022 was zero, respectively. |
Fixed Assets and Leases | Fixed Assets and Leases Fixed assets are recorded at cost. Leases are recorded in accordance with FASB ASC 842, Leases 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 year ended December 31, 2023, the Company received |
Government Assistance | Government Assistance We have adopted Accounting Standards Update (“ASU”) 2021-10, Government Assistance (Topic 832) Disclosures by Business Entities about Government Assistance, |
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 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 a milestone 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 consolidated balance sheets as of December 31, 2023 and 2022 include assets amounting to approximately $334 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 December 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 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 consolidated balance sheets in the stockholders’ equity section as a component of accumulated other comprehensive (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 December 31, 2023 and 2022, potentially dilutive shares outstanding amounted to 3.9 million and 3.5 million, respectively. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements 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) | 12 Months Ended |
Dec. 31, 2023 | |
Fixed Assets | |
Summary of Fixed Assets | Fixed Assets Fixed assets are summarized as follows: December 31, (in thousands) 2023 2022 Machinery and equipment $ — $ 390 Office furniture and equipment 60 177 Leasehold improvements 43 192 103 759 Accumulated depreciation and amortization (63) (697) 40 62 Operating lease ROU assets, net 235 322 Total $ 275 $ 384 |
Schedule Of Supplemental Information | December 31, December 31, (in thousands) 2023 2022 Operating lease ROU assets, net $ 235 $ 322 Lease Liabilities: Current lease liabilities $ 71 $ 133 Long term lease liabilities 172 226 Total lease liabilities $ 243 $ 359 Weighted average remaining lease term (in years): 2.4 Weighted average discount rate: 5.2 % |
Supplemental cash flow information related to leases | Supplemental cash flow information related to leases is as follows: For the Year Ended December 31, (in thousands) 2023 2022 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows used in operating leases $ 158 $ 251 Non-cash impact of new leases and lease modifications Change in operating lease liabilities $ 25 $ 25 Change in operating lease ROU assets $ 39 $ — |
Schedule of minimum future payments | Minimum future payments under the Company’s lease liabilities as of December 31, 2023 are as follows: Discounted Payments lease due under (in thousands) liability lease payments agreements 2024 $ 71 $ 81 2025 59 66 2026 63 67 2027 50 51 Total $ 243 $ 265 |
Patents and Other Intangible _2
Patents and Other Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Patents and Other Intangible Assets | |
Schedule of Patents and Other Intangible Assets | December 31, (in thousands) 2023 2022 Patents Patents pending $ 477 $ 307 Issued patents 810 815 1,287 1,122 Trademarks Trademarks pending 4 6 Registered trademarks 86 95 90 101 Other 8 8 1,385 1,231 Accumulated amortization (549) (433) $ 836 $ 798 |
Schedule of future amortization expense | (in thousands) 2024 $ 129 2025 99 2026 66 2027 43 2028 7 Thereafter 3 $ 347 |
Product Warranties (Tables)
Product Warranties (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Product Warranties | |
Summary of warranty liability activity | December 31, (in thousands) 2023 2022 Warranty liability at beginning of year $ 5 $ — Accruals 105 5 Payments — — Warranty liability at end of year $ 110 $ 5 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Income Taxes | |
Schedule of company's loss before provision for income taxes | For the Year Ended December 31, ( in thousands 2023 2022 Domestic $ (5,145) $ (5,649) Foreign (50) (109) Loss before provision for income taxes $ (5,194) $ (5,758) |
Schedule of reconciliation of expected tax computed at statutory federal income tax rate to provision for income taxes | For the Year Ended December 31, ( in thousands 2023 2022 Tax benefit at federal statutory rate $ (1,091) $ (1,209) Tax benefit at state rate (126) (197) Meals and entertainment 5 4 Prior year deferred tax true ups — (2,805) Other (75) (82) Change in valuation allowance 1,287 4,289 $ — $ — |
Schedule of components of deferred tax assets and liabilities | For the Year Ended December 31, ( in thousands 2023 2022 Deferred tax assets: Accrued expenses $ 86 $ 74 Stock-based compensation 388 337 Depreciation 177 102 Prepaid expenses 61 (31) Accrued vacation (1) (3) ASC 842 lease standard (51) (16) Net operating loss carryforwards 21,020 20,263 Gross deferred tax assets 21,680 20,726 Valuation allowance (21,598) (20,677) Total deferred tax assets, net of valuation allowance 82 49 Deferred tax liabilities Other (82) (49) Net deferred tax assets $ — $ — |
Equity (Tables)
Equity (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Schedule of outstanding, reserved and authorized shares under share-based compensation plans | December 31, December 31, ( in thousands 2023 2022 Outstanding options and restricted stock units 3,430 3,202 Reserved but unissued shares under the Plan 2,302 2,777 Total authorized shares under the Plan 5,732 5,979 |
Schedule of stock option activity | December 31, 2023 ( in thousands, except per share data 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 (20) $ 0.54 — Forfeited/Expired — $ — — Outstanding at end of period 2,759 $ 2.07 5.38 Exercisable at end of period 2,024 $ 1.71 4.87 |
Schedule of restricted stock unit activity | December 31, December 31, 2023 2022 ( in thousands, except per share data Number of Shares Weighted Average Grant Date Fair Value Number of Shares Weighted Average Grant Date Fair Value Nonvested at beginning of year 423 $ 1.49 112 $ 2.28 Granted 617 $ 0.82 376 $ 1.30 Vested (361) $ 1.18 (65) $ 1.77 Forfeited (8) $ 0.79 — $ — Nonvested at end of period 671 $ 1.05 423 $ 1.49 |
Schedule of share-based compensation activity | December 31, ( in thousands 2023 2022 Reserved but unissued shares at beginning of year 196 211 Increases in the number of authorized shares 7 — Grants (15) (15) Reserved but unissued shares at end of year 188 196 |
Restricted Stock Units | |
Schedule of compensation expense | For the Year Ended December 31, ( in thousands, except per share data 2023 2022 Compensation Expense $ 337 $ 252 Weighted Average Value Per Share $ 0.83 $ 1.57 |
Equity Incentive Plan | |
Schedule of compensation expense | For the Year Ended December 31, ( in thousands, except per share data 2023 2022 Fair value $ 234 $ 98 Weighted Average Value Per Share $ 0.79 $ 1.43 |
Consultant Stock Plan | |
Schedule of compensation expense | For the Year Ended December 31, ( in thousands, except per share data 2023 2022 Compensation Expense $ 10 $ 26 Weighted Average Value Per Share $ 0.69 $ 1.61 |
Quarterly Results (unaudited) (
Quarterly Results (unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Quarterly Results (unaudited) | |
Schedule of quarterly results | Quarterly results for the years ended December 31, 2023 and 2022 are as follows: (in thousands, except per share data) First Second Third Fourth For the year ended December 31, 2023 Quarter Quarter Quarter Quarter Revenue $ 894 $ 150 $ 85 $ 1,274 Gross Profit (Loss) $ 106 $ 129 $ 24 $ 558 Operating Expense $ 1,810 $ 1,758 $ 1,521 $ 1,709 Net loss $ (1,429) $ (1,478) $ (1,332) $ (955) Net Loss per share - basic and fully diluted $ (0.04) $ (0.04) $ (0.03) $ (0.03) For the year ended December 31, 2022 Revenue $ — $ — $ 324 $ 50 Gross Profit (Loss) $ — $ — $ 123 $ (7) Operating Expense $ 1,517 $ 1,660 $ 1,558 $ 1,498 Net loss $ (1,490) $ (1,638) $ (1,312) $ (1,318) Net Loss per share - basic and fully diluted $ (0.05) $ (0.05) $ (0.03) $ (0.03) |
Organization and Description _2
Organization and Description of Business (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Organization and Description of Business | ||
Cash and cash equivalents | $ 5,684 | $ 6,451 |
Gross proceeds to date | 91,000 | |
(Losses) since inception | $ 93,717 | $ 88,523 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies - Short-Term Investments (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Summary of Significant Accounting Policies | ||
Short-term investments at cost | $ 0 | $ 2,606 |
Unrealized holding gains | 0 | 4 |
Fair value of short-term investments | $ 0 | $ 2,610 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Accounts Receivable and Allowance for Doubtful Accounts (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Summary of Significant Accounting Policies | ||
Allowance for collectability reserve | $ 0 | $ 0 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Fixed Assets and Leases (Details) - Fixed Assets Other Than Leasehold Improvements | Dec. 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_6
Summary of Significant Accounting Policies - Research and Development (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Summary of Significant Accounting Policies | ||
Research and Development costs have been offset by funds received | $ 60 | $ 0 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Foreign Operations (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Property, Plant and Equipment [Line Items] | ||
Assets | $ 7,620 | $ 10,925 |
CHINA | ||
Property, Plant and Equipment [Line Items] | ||
Assets | 334 | $ 172 |
Registered capital requirement | 350 | |
Capital requirement paid | $ 111 |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies - Net Loss per Common Share (Details) - shares shares in Millions | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Summary of Significant Accounting Policies | ||
Potentially dilutive shares outstanding (in shares) | 3.9 | 3.5 |
Fixed Assets - Summary (Details
Fixed Assets - Summary (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Property, Plant and Equipment [Line Items] | ||
Machinery and equipment | $ 390 | |
Office furniture and equipment | $ 60 | 177 |
Leasehold improvements | 43 | 192 |
Fixed assets, gross | 103 | 759 |
Accumulated depreciation and amortization | (63) | (697) |
Fixed assets, net, after accumulated amortization | 40 | 62 |
Operating lease ROU assets, net | 235 | 322 |
Total | 275 | 384 |
Depreciation expense | 152 | $ 24 |
Demonstration Burners | ||
Property, Plant and Equipment [Line Items] | ||
Impairment of Machinery and Equipment | 81 | |
Machinery and Equipment capitalized | 209 | |
Accumulated depreciation | $ 128 |
Fixed Assets - Leases (Details)
Fixed Assets - Leases (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | |||
Oct. 31, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | |
Leases | |||||
Increase (decrease) in operating lease right of use asset | $ 34 | ||||
Change in operating lease ROU assets | $ 39 | ||||
Change in operating lease liabilities | 25 | $ 25 | |||
Restoration expense | 33 | 55 | |||
Operating lease cost | 141 | $ 186 | |||
CHINA | |||||
Leases | |||||
Renewal option term | 13 months | ||||
Short term monthly rent expense | $ 3 | ||||
Seattle and Tulsa | |||||
Leases | |||||
Monthly rent expense | $ 4 | $ 10 | |||
Change in operating lease ROU assets | 5 | ||||
Change in operating lease liabilities | $ 9 | ||||
Short term monthly rent expense | $ 2 | ||||
Lease Term | 12 months | ||||
Annual rent expense, increase (in percent) | 2% | ||||
Agreement expiration term (in years) | 12 months | ||||
Minimum | Seattle and Tulsa | |||||
Leases | |||||
Remaining term (in years) | 12 months | ||||
Maximum | Seattle and Tulsa | |||||
Leases | |||||
Remaining term (in years) | 4 years |
Fixed Assets - Leases - Supplem
Fixed Assets - Leases - Supplemental balance sheet and cash flow information (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Operating Lease | ||
Operating lease ROU assets, net | $ 235 | $ 322 |
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration] | Property, Plant and Equipment, Net | Property, Plant and Equipment, Net |
Lease Liabilities: | ||
Current lease liabilities | $ 71 | $ 133 |
Long term lease liabilities | 172 | 226 |
Total lease liabilities | $ 243 | 359 |
Weighted average remaining lease term (in years) | 2 years 4 months 24 days | |
Weighted average discount rate | 5.20% | |
Cash paid for amounts included in the measurement of lease liabilities: | ||
Operating cash flows used in operating leases | $ 158 | 251 |
Change in operating lease liabilities | 25 | $ 25 |
Change in operating lease ROU assets | $ 39 |
Fixed Assets - Minimum future l
Fixed Assets - Minimum future lease payments (Details) $ in Thousands | Dec. 31, 2023 USD ($) |
Fixed Assets | |
Discounted payments, 2024 | $ 71 |
Discounted payments, 2025 | 59 |
Discounted payments, 2026 | 63 |
Discounted payments, 2027 | 50 |
Total discounted payments | 243 |
2024 | 81 |
2025 | 66 |
2026 | 67 |
2027 | 51 |
Total | 265 |
Interest on future minimum payments | $ 22 |
Patents and Other Intangible _3
Patents and Other Intangible Assets - Summary (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Patents | $ 1,287 | $ 1,122 |
Trademarks | 90 | 101 |
Other | 8 | 8 |
Patents and other intangible assets | 1,385 | 1,231 |
Accumulated amortization | (549) | (433) |
Finite-Lived Intangible Assets, Net | 836 | 798 |
Patents pending | ||
Patents | 477 | 307 |
Issued patents | ||
Patents | 810 | 815 |
Trademarks pending | ||
Trademarks | 4 | 6 |
Registered trademarks | ||
Trademarks | $ 86 | $ 95 |
Patents and Other Intangible _4
Patents and Other Intangible Assets - Future amortization expense (Details) $ in Thousands | Dec. 31, 2023 USD ($) |
Patents and Other Intangible Assets | |
2024 | $ 129 |
2025 | 99 |
2026 | 66 |
2027 | 43 |
2028 | 7 |
Thereafter | 3 |
Finite-Lived Intangible Assets, Net | $ 347 |
Patents and Other Intangible _5
Patents and Other Intangible Assets - Additional information (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Intangible assets | ||
Amortization expense | $ 147 | $ 136 |
Impairment | $ 14 | $ 19 |
Patents | Minimum | ||
Intangible assets | ||
Amortization life (in years) | 3 years | |
Patents | 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) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2023 USD ($) | Sep. 30, 2023 USD ($) | Jun. 30, 2023 USD ($) | Mar. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) | Sep. 30, 2022 USD ($) | Jun. 30, 2022 USD ($) | Mar. 31, 2022 USD ($) | Dec. 31, 2023 USD ($) category item | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | |
Number of Categories of Performance Obligation | category | 3 | ||||||||||
Number of Orders For Which Customer Witness Tests Completed | item | 2 | ||||||||||
Revenues | $ 1,274 | $ 85 | $ 150 | $ 894 | $ 50 | $ 324 | $ 0 | $ 0 | $ 2,403 | $ 374 | |
Cost of goods sold | 1,586 | 258 | |||||||||
Contract assets | 188 | 20 | 188 | 20 | |||||||
Contract liabilities | 1,116 | 247 | 1,116 | 247 | |||||||
Revenue recognized | 247 | ||||||||||
Accounts receivable, net | $ 287 | $ 79 | $ 287 | $ 79 | $ 33 | ||||||
Maximum | |||||||||||
Customer Payment Term | 60 days | ||||||||||
Customer Contract Term | 12 months | ||||||||||
Minimum | |||||||||||
Customer Payment Term | 30 days |
Product Warranties (Details)
Product Warranties (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Product Warranties | ||
Warranty liability at beginning of year | $ 5 | |
Accruals | 105 | $ 5 |
Warranty liability at end of year | $ 110 | $ 5 |
Income Taxes - Components of Lo
Income Taxes - Components of Loss Before Provision for Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Income Taxes | ||
Domestic | $ (5,145) | $ (5,649) |
Foreign | (50) | (109) |
Loss before provision for income taxes | (5,194) | (5,758) |
Income Tax Expense (Benefit) | $ 0 | $ 0 |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of tax rate (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Income Taxes | ||
Federal income tax rate (as a percent) | 21% | |
Tax benefit at federal statutory rate | $ (1,091) | $ (1,209) |
Tax benefit at state rate | (126) | (197) |
Meals and entertainment | 5 | 4 |
Prior year deferred tax true ups | (2,805) | |
Other | (75) | (82) |
Change in valuation allowance | 1,287 | 4,289 |
Provision for income taxes | $ 0 | $ 0 |
Income Taxes - Components of De
Income Taxes - Components of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Deferred Tax Assets: | ||
Accrued expenses | $ 86 | $ 74 |
Stock-based compensation | 388 | 337 |
Depreciation | 177 | 102 |
Prepaid expenses | 61 | (31) |
Accrued vacation | (1) | (3) |
ASC 842 lease standard | (51) | (16) |
Net operating loss carryforwards | 21,020 | 20,263 |
Gross deferred tax assets | 21,680 | 20,726 |
Valuation allowance | (21,598) | (20,677) |
Total deferred tax assets, net of valuation allowance | 82 | 49 |
Deferred tax liabilities | ||
Other | $ (82) | $ (49) |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Income taxes | ||
Operating loss carryforwards, Annual limitation | $ 686 | |
Accrued interest or penalties | 0 | $ 0 |
Federal | ||
Income taxes | ||
Net operating losses carryforward | 85,300 | |
Operating loss carryforwards not subject to expiration | 39,100 | |
State | ||
Income taxes | ||
Net operating losses carryforward | $ 48,500 |
Equity - Common Stock and Prefe
Equity - Common Stock and Preferred Stock (Details) - USD ($) $ / shares in Units, $ in Millions | 1 Months Ended | 12 Months Ended | |||
Dec. 30, 2023 | Dec. 23, 2020 | May 31, 2022 | Dec. 31, 2023 | Jul. 31, 2018 | |
Stockholders' equity | |||||
Common stock, authorized shares | 62,500,000 | ||||
Preferred stock, authorized shares | 2,000,000 | ||||
Percentage of Participation right extended | 0.67% | ||||
Gross proceeds to date | $ 91 | ||||
Minimum | |||||
Stockholders' equity | |||||
Percentage of Redemption right extended | 0.67% | ||||
ATM | |||||
Stockholders' equity | |||||
Aggregate offering price | $ 8.7 | ||||
Number of shares of common stock issued | 0 | ||||
Number of shares issued to date | 1,600,000 | ||||
Participation Right | |||||
Stockholders' equity | |||||
Maximum beneficial ownership (as a percent) | 20% | ||||
Common Stock | ATM | |||||
Stockholders' equity | |||||
Share price of shares issued in offering (in dollars per share) | $ 3.84 | ||||
Gross proceeds to date | $ 6.1 | ||||
Net proceeds to date | $ 5.9 |
Equity - Equity Incentive Plan
Equity - Equity Incentive Plan (Details) - shares shares in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Equity Incentive Plan | ||
Share-based compensation | ||
Outstanding options and restricted stock units | 3,430 | 3,202 |
Reserved but unissued shares under the Plan | 2,302 | 2,777 |
Total authorized shares under the Plan | 5,732 | 5,979 |
Increases in the number of authorized shares | 400 | |
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 |
Equity - Inducement Options (De
Equity - Inducement Options (Details) - Non-Qualified Stock Option $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended |
Dec. 31, 2023 USD ($) installment $ / shares shares | |
Chief Technology Officer | |
Share-based compensation | |
Grants of stock options | shares | 150 |
Exercise price (in dollars per share) | $ / shares | $ 0.91 |
Number of installments | installment | 3 |
Vesting percentage | 0.33% |
Fair value of options granted (in dollars) | $ 112 |
Share based compensation cost related to vesting awards | $ 43 |
Director of Customer Relationships and Business Development | |
Share-based compensation | |
Grants of stock options | shares | 150 |
Exercise price (in dollars per share) | $ / shares | $ 1.31 |
Number of installments | installment | 3 |
Vesting percentage | 0.33% |
Fair value of options granted (in dollars) | $ 160 |
Share based compensation cost related to vesting awards | $ 74 |
Percentage of Inducement options forfeited | 0.67% |
Equity - Stock Options - Activi
Equity - Stock Options - Activity (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Share-based compensation | ||
Outstanding shares, beginning balance | 2,779 | |
Exercised (in shares) | (20) | |
Outstanding shares, ending balance | 2,759 | 2,779 |
Exercisable (in shares) | 2,024 | |
Outstanding - Weighted Average Exercise Price (in dollars per share) | $ 2.05 | |
Exercised - Weighted Average Exercise Price (in dollars per share) | 0.54 | |
Outstanding - Weighted Average Exercise Price (in dollars per share) | 2.07 | $ 2.05 |
Exercisable - Weighted Average Exercise Price (in dollars per share) | $ 1.71 | |
Stock options, Contractual life (in years) | 5 years 4 months 17 days | 6 years 5 months 4 days |
Exercisable - Weighted Average Remaining Contractual Life (in years) | 4 years 10 months 13 days | |
Estimated aggregate pretax intrinsic value | $ 171 | |
Total unrecognized compensation | 1,000 | |
Equity Incentive Plan | ||
Share-based compensation | ||
Compensation expense | $ 174 | $ 118 |
Equity - Restricted Stock Units
Equity - Restricted Stock Units (Details) - Restricted Stock Units - Director - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Target value of compensation per quarter | $ 85 | |
Unrecognized compensation expense for director services | $ 244 | $ 491 |
Equity - Restricted Stock uni_2
Equity - Restricted Stock units Activity (Details) - Restricted Stock Units - $ / shares shares in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Number of Shares | ||
Nonvested at beginning of year | 423 | 112 |
Granted | 617 | 376 |
Vested | (361) | (65) |
Forfeited | (8) | |
Nonvested at end of period | 671 | 423 |
Weighted Average Grant Date Fair Value | ||
Nonvested at beginning of year | $ 1.49 | $ 2.28 |
Granted | 0.82 | 1.30 |
Vested | 1.18 | 1.77 |
Forfeited | 0.79 | |
Nonvested at end of period | $ 1.05 | $ 1.49 |
Equity - Restricted Stock Uni_3
Equity - Restricted Stock Units - Compensation Expense (Details) - Restricted Stock Units - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Compensation Expense | $ 337 | $ 252 |
Weighted Average Value Per Share | $ 0.83 | $ 1.57 |
Equity - Stock Awards (Details)
Equity - Stock Awards (Details) - Employee compensation in lieu of bonus - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 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) - Consultant Stock Plan - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Maximum increase in available number of authorized shares as a percentage of new shares issued | 1% | |
Reserved but unissued shares at beginning of year | 196 | 211 |
Increases in the number of authorized shares | 7 | |
Grants | (15) | (15) |
Reserved but unissued shares at end of year | 188 | 196 |
Compensation Expense | $ 10 | $ 26 |
Weighted Average Value Per Share | $ 0.69 | $ 1.61 |
Retirement Plan (Details)
Retirement Plan (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Retirement Plan | ||
Company match (as a percent) | 3% | 3% |
Matching contribution expense (in dollars) | $ 64 | $ 54 |
Government Assistance (Details)
Government Assistance (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Government Assistance [Line Items] | |||
Government assistance | $ 255 | $ 232 | |
Research Grant From the Department of Energy | |||
Government Assistance [Line Items] | |||
Total award | 1,600 | 250 | |
Government assistance | $ 191 | 181 | |
Duration of the program | 2 years | ||
Oklahoma Quality Jobs Act | |||
Government Assistance [Line Items] | |||
Government assistance | $ 64 | $ 51 | |
Duration of the program | 10 years |
Quarterly Results (unaudited)_2
Quarterly Results (unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||
Dec. 31, 2023 | Sep. 30, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | |
Quarterly Results (unaudited) | ||||||||||
Revenues | $ 1,274 | $ 85 | $ 150 | $ 894 | $ 50 | $ 324 | $ 0 | $ 0 | $ 2,403 | $ 374 |
Gross Profit (Loss) | 558 | 24 | 129 | 106 | (7) | 123 | 817 | 116 | ||
Operating Expense | 1,709 | 1,521 | 1,758 | 1,810 | 1,498 | 1,558 | 1,660 | 1,517 | 6,798 | 6,233 |
Net loss attributed to common stockholders | $ (955) | $ (1,332) | $ (1,478) | $ (1,429) | $ (1,318) | $ (1,312) | $ (1,638) | $ (1,490) | $ (5,194) | $ (5,758) |
Net loss per share - basic | $ (0.03) | $ (0.03) | $ (0.04) | $ (0.04) | $ (0.03) | $ (0.03) | $ (0.05) | $ (0.05) | $ (0.13) | $ (0.16) |
Net loss per share - fully diluted | $ (0.03) | $ (0.03) | $ (0.04) | $ (0.04) | $ (0.03) | $ (0.03) | $ (0.05) | $ (0.05) | $ (0.13) | $ (0.16) |
Subsequent Events (Details)
Subsequent Events (Details) | 12 Months Ended | ||
Feb. 22, 2024 installment $ / shares shares | Dec. 31, 2023 shares | Dec. 31, 2022 shares | |
Restricted Stock Units | |||
Subsequent Event | |||
Number of Grants made | 617,000 | 376,000 | |
Number of shares that will vest | 361,000 | 65,000 | |
Chief Executive Officer | Subsequent Event | |||
Subsequent Event | |||
Shares issued for services (in shares) | 66,019 | ||
Shares Issued Price per share | $ / shares | $ 1.06 | ||
Chief Financial Officer | Subsequent Event | |||
Subsequent Event | |||
Shares issued for services (in shares) | 28,555 | ||
Shares Issued Price per share | $ / shares | $ 1.06 | ||
Chief Financial Officer | Subsequent Event | Restricted Stock Units | |||
Subsequent Event | |||
Number of Grants made | 7,547 | ||
Number of Installments of vesting | installment | 3 | ||
Chief Financial Officer | Subsequent Event | PRSUs | |||
Subsequent Event | |||
Number of shares that will vest | 2,627 |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||
Dec. 31, 2023 | Sep. 30, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | |
Pay vs Performance Disclosure | ||||||||||
Net Income (Loss) | $ (955) | $ (1,332) | $ (1,478) | $ (1,429) | $ (1,318) | $ (1,312) | $ (1,638) | $ (1,490) | $ (5,194) | $ (5,758) |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Dec. 31, 2023 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
Rule 10b5-1 Arrangement Modified | false |
Non-Rule 10b5-1 Arrangement Modified | false |