ClearSign Technologies (NASDAQ: CLIR) Q1 2026 loss widens as revenue falls

Rhea-AI Filing Summary

ClearSign Technologies Corporation reported a net loss of $2.19 million for the quarter ended March 31, 2026, slightly wider than the $2.08 million loss a year earlier. Revenue was $191 thousand, down from $401 thousand, as Q1 2025 included larger spare parts and engineering orders.

The company generated a gross loss of $393 thousand versus a prior gross profit, mainly due to a roughly $410 thousand warranty-related cost tied to process burners installed in 2025. Operating expenses fell to $1.89 million, driven by lower R&D and reduced legal spending after a prior special committee.

Cash and cash equivalents were $7.74 million with working capital of $6.61 million and no debt, and management believes this supports more than twelve months of operations. A 1-for-10 reverse stock split effective March 16, 2026 brought the share price back into compliance with Nasdaq’s minimum bid requirement.

Insights

Small-cap clean-tech equity analyst

ClearSign remains pre-revenue focused, with higher warranty costs but solid cash.

ClearSign continues to operate as an early-stage technology company, with Q1 2026 revenue of only $191 thousand and a net loss of $2.19 million. The shift from gross profit to gross loss is largely due to a sizable warranty accrual on 2025 burner installations.

Operating expenses declined year over year to $1.89 million, mostly from lower R&D and winding down one-off legal work. Cash of $7.74 million and working capital of $6.61 million provide some runway, and the company has no debt plus access to an unused ATM facility.

Future results will depend on scaling burner and boiler revenues, resolving warranty issues efficiently, and converting its DOE-funded hydrogen burner work into commercial demand. The recent 1-for-10 reverse split and restored Nasdaq compliance remove an immediate listing overhang but do not change the fundamental need for revenue growth.

Key Figures

Revenue: $191 thousand Revenue prior-year quarter: $401 thousand Net loss: $2,190 thousand +5 more

8 metrics

Revenue $191 thousand Three months ended March 31, 2026

Revenue prior-year quarter $401 thousand Three months ended March 31, 2025

Net loss $2,190 thousand Three months ended March 31, 2026

Gross profit (loss) -$393 thousand Q1 2026, impacted by warranty accrual

Cash and cash equivalents $7,736 thousand As of March 31, 2026

Working capital $6,609 thousand As of March 31, 2026

Warranty liability $1,108 thousand As of March 31, 2026

Shares outstanding 5,412,633 shares Common stock as of May 11, 2026

Key Terms

reverse stock split, warranty liability, At-The-Market (ATM) program, pre-funded warrants, +2 more

6 terms

reverse stock split financial

"to effect a 1-for-10 reverse stock split of the Company’s shares of common stock"

A reverse stock split is when a company reduces the number of its shares outstanding, making each share more valuable. For example, if you own 100 shares worth $1 each, a 1-for-10 reverse split would turn your 100 shares into 10 shares worth $10 each. Companies often do this to boost their stock price and appear more stable to investors.

warranty liability financial

"Warranty liability at end of period | $ | 1,108"

At-The-Market (ATM) program financial

"The Company has an At-The-Market (“ATM”) program pursuant to an ATM Offering Agreement"

An at-the-market (ATM) program is a way for a company to sell newly issued shares directly into the open market at the current trading price over time, rather than all at once. For investors it matters because it provides a flexible, ongoing source of capital but can dilute existing ownership and put steady selling pressure on a stock’s price—similar to a store quietly adding more items for sale at the posted price.

pre-funded warrants financial

"The pre-funded warrants have no expiration date and only expire when exercised in full."

Pre-funded warrants are financial instruments that give investors the right to purchase a company's stock at a set price, but with most or all of the purchase price paid upfront. They function like a coupon or gift card for stock, allowing investors to buy shares later at a fixed price, which can be beneficial if they want to avoid future price increases. This makes them important for investors seeking flexibility and certainty in their investment plans.

research and development financial

"Research and development | 249 | 447"

Research and development is the work a company does to discover, test and improve new products, services or processes. Think of it as planting seeds for future growth: it costs money now but can create competitive advantages, new revenue streams or regulatory approvals later, so investors watch R&D spending and progress to judge a company's future growth potential and the risk that those investments may or may not pay off.

government assistance financial

"During the three months ended March 31, 2026 and 2025, the Company recognized $28 thousand and $48 thousand in reimbursements from the DOE"

Earnings Snapshot

Revenue: $191 thousand

Q1 2026

Revenue $191 thousand -52.4% YoY

Net loss $2,190 thousand -5.5% YoY

Gross profit (loss) -$393 thousand down $589 thousand YoY

10-Q Quarterly Reports: What Changes Quarter to Quarter →

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

​

For the quarterly period ended March 31, 2026

OR

​

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

​

For the transition period from ______________ to _______________

Commission File Number: 001-35521

CLEARSIGN TECHNOLOGIES CORPORATION

(Exact name of registrant as specified in its charter)

​

Delaware
(State or other jurisdiction of
incorporation or organization)   ​ ​ ​ 26-2056298
(I.R.S. Employer
Identification No.)

​

8023 E. 63rd Place, Suite 101

Tulsa, Oklahoma 74133

(Address of principal executive offices)

(Zip Code)

​

(918) 500-7312

(Registrant’s telephone number, including area code)

​

Securities registered pursuant to Section 12(b) of the Act:

​

Title of each class	​ ​ ​	Trading Symbol(s)	​ ​ ​	Name of each exchange on which registered
Common Stock	​	CLIR	​	The Nasdaq Stock Market LLC

​

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ⌧ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ⌧ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

​

Large accelerated filer ☐	​ ​ ​	Accelerated filer ☐
Non-accelerated filer ⌧		Smaller reporting company ☒
​	​	​
		Emerging growth company ☐

​

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐  No ⌧

​

As of May 11, 2026, the issuer has 5,412,633 shares of common stock, par value $0.0001, issued and outstanding.

​

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Table of Contents

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TABLE OF CONTENTS

​

​	​	​
PART I	FINANCIAL INFORMATION	​
​	​	​
Item 1.	Financial Statements (unaudited)	​
​	​	​
​	Condensed Consolidated Balance Sheets as of March 31, 2026 and December 31, 2025	1
​	​	​
​	Condensed Consolidated Statements of Operations and Comprehensive Loss for the three months ended March 31, 2026 and 2025	2
​	​	​
​	Condensed Consolidated Statements of Stockholders’ Equity for the three months ended March 31, 2026 and 2025	3
​	​	​
​	Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2026 and 2025	4
​	​	​
​	Notes to Condensed Consolidated Financial Statements	5
​	​	​
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	19
​	​	​
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	23
​	​	​
Item 4.	Controls and Procedures	23
​	​	​
PART II	OTHER INFORMATION	24
​	​	​
Item 1.	Legal Proceedings	24
​	​	​
Item 1A.	Risk Factors	24
​	​	​
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	24
​	​	​
Item 3.	Defaults Upon Senior Securities	24
​	​	​
Item 4.	Mine Safety Disclosures	24
​	​	​
Item 5.	Other Information	24
​	​	​
Item 6.	Exhibits	25
​	​	​
​	SIGNATURES	27

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Table of Contents

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PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

ClearSign Technologies Corporation and Subsidiary

Condensed Consolidated Balance Sheets

(Unaudited)

​

​	​	​	​	​	​	​	​
(in thousands, except share and per share data)	​	March 31,		​	December 31,		​
​	​ ​ ​	2026		​ ​ ​	2025		​ ​ ​
ASSETS	​	​	​	​	​	​	​
​	​	​	​	​	​	​	​
Current Assets:		​	​		​	​
Cash and cash equivalents	​	$	7,736	​	$	9,178	​
Accounts receivable	​	​	171	​	​	1,360	​
Deferred costs	​		433	​		329	​
Contract assets	​	​	8	​	​	—	​
Prepaid expenses and other assets	​		431	​		359	​
Total current assets	​		8,779	​		11,226	​
​	​	​	​	​	​	​	​
Fixed assets, net	​		166	​		195	​
Contract assets	​	​	127	​	​	—	​
Patents and other intangible assets, net	​		764	​		760	​
Total Assets	​	$	9,836	​	$	12,181	​
​	​	​	​	​	​	​	​
LIABILITIES AND STOCKHOLDERS' EQUITY	​		​	​		​	​
​	​	​	​	​	​	​	​
Current Liabilities:	​		​	​		​	​
Accounts payable and accrued liabilities	​	$	1,752	​	$	1,644	​
Current portion of lease liabilities	​		98	​		96	​
Accrued compensation and related taxes	​		257	​		564	​
Contract liabilities	​	​	63	​	​	100	​
Other current liabilities	​	​	—	​	​	180	​
Total current liabilities	​		2,170	​		2,584	​
Long Term Liabilities:	​		​	​		​	​
Long term lease liabilities	​		42	​	​	67	​
Total liabilities	​		2,212	​		2,651	​
​	​	​	​	​	​	​	​
Commitments and contingencies (Note 10)	​	​	​	​	​	​	​
​	​	​	​	​	​	​	​
Stockholders’ Equity:	​		​	​		​	​
Preferred stock, $0.0001 par value, 2,000,000 shares authorized, no shares issued or outstanding	​		—	​		—	​
Common stock, $0.0001 par value, 87,500,000 shares authorized, 5,409,133 and 5,328,730 shares issued and outstanding at March 31, 2026 and December 31, 2025, respectively.	​		1	​	​	1	​
Additional paid-in capital	​		114,343	​	​	114,061	​
Accumulated other comprehensive loss	​	​	(18)	​	​	(20)	​
Accumulated deficit	​		(106,702)	​	​	(104,512)	​
Total stockholders' equity	​		7,624	​		9,530	​
​	​	​	​	​	​	​	​
Total Liabilities and Stockholders' Equity	​	$	9,836	​	$	12,181	​
​	​	​	​	​	​	​	​

​

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

​

1

Table of Contents

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ClearSign Technologies Corporation and Subsidiary

Condensed Consolidated Statements of Operations and Comprehensive Loss

(Unaudited)

​

​	​	​	​	​	​	​	​
(in thousands, except share and per share data)	​	For the Three Months Ended					​
​	​	March 31,					​
​	​ ​ ​	2026		​ ​ ​	2025		​ ​ ​
​	​	​	​	​	​	​	​
Revenues	​	$	191	​	$	401	​
Cost of goods sold	​		584	​		205	​
Gross profit (loss)	​		(393)	​		196	​
​	​	​	​	​	​	​	​
Operating expenses:	​	​	​	​	​	​	​
Research and development	​		249	​		447	​
General and administrative	​		1,637	​		2,006	​
Total operating expenses	​		1,886	​		2,453	​
​	​	​	​	​	​	​	​
Loss from operations	​		(2,279)	​		(2,257)	​
​	​	​	​	​	​	​	​
Other income, net:	​	​	​	​	​	​	​
Interest income	​	​	62	​	​	133	​
Government assistance	​	​	28	​	​	48	​
Other income, net	​	​	(1)	​	​	—	​
Total other income, net	​		89	​		181	​
Net loss	​	$	(2,190)	​	$	(2,076)	​
​	​	​	​	​	​	​	​
Net loss per share - basic and fully diluted	​	$	(0.39)	​	$	(0.38)	​
​	​	​	​	​	​	​	​
Weighted average number of shares outstanding - basic and fully diluted	​		5,627,127	​		5,499,598	​
​	​	​	​	​	​	​	​
Comprehensive loss:	​	​	​	​	​	​	​
Net loss	​	$	(2,190)	​	$	(2,076)	​
Foreign-exchange translation adjustments	​	​	2	​	​	—	​
Comprehensive loss	​	$	(2,188)	​	$	(2,076)	​
​	​	​	​	​	​	​	​

​

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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2

Table of Contents

ClearSign Technologies Corporation and Subsidiary

Condensed Consolidated Statements of Stockholders’ Equity

For the Three Months Ended March 31, 2026 and 2025

(Unaudited)

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Accumulated Other

​

​

​

​

Total

(in thousands)

​

Common Stock

​

Additional

​

Comprehensive

​

Accumulated

​

Stockholders’

​

​

Shares

​

Amount

​

Paid-In Capital

​

​

Loss

​

Deficit

​

Equity

Balances at December 31, 2025

5,328

​

$

1

​

$

114,061

​

$

(20)

​

$

(104,512)

​

$

9,530

Share-based compensation, net of tax withholdings

​

11

​

​

—

​

​

76

​

​

—

​

​

—

​

​

76

Fair value of stock issued in payment of accrued compensation

​

36

​

​

—

​

​

203

​

​

—

​

​

—

​

​

203

Shares issued for services

​

1

​

​

—

​

​

3

​

​

—

​

​

—

​

​

3

Exercise of prefunded warrants

​

33

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

Foreign-exchange translation adjustment

​

—

​

​

—

​

​

—

​

​

2

​

​

—

​

​

2

Net loss

​

—

​

​

—

​

​

—

​

​

—

​

​

(2,190)

​

​

(2,190)

Balances at March 31, 2026

​

5,409

​

$

1

​

$

114,343

​

$

(18)

​

$

(106,702)

​

$

7,624

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​ ​ ​

​

​ ​ ​

​

​ ​ ​

​

​ ​ ​

Accumulated Other

​

​

​ ​ ​

Total

(in thousands)

​

Common Stock

​

Additional

​

Comprehensive

​

Accumulated

​

Stockholders'

​

​

Shares

​

Amount

​

Paid-In Capital

​

​

Loss

​

Deficit

​

Equity

Balances at December 31, 2024

​

5,028

​

$

1

​

$

112,800

​

$

(21)

​

$

(99,016)

​

$

13,764

Share-based compensation, net of tax withholdings

​

8

​

​

—

​

​

45

​

​

—

​

​

—

​

​

45

Fair value of stock issued in payment of accrued compensation

33

​

​

—

​

​

279

​

​

—

​

​

—

​

​

279

Shares issued for services

​

1

​

​

—

​

​

4

​

​

—

​

​

—

​

​

4

Exercise of warrants

​

2

​

​

—

​

​

24

​

​

—

​

​

—

​

​

24

Exercise of prefunded warrants

​

170

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

Net loss

​

—

​

​

—

​

​

—

​

​

—

​

​

(2,076)

​

​

(2,076)

Balances at March 31, 2025

​

5,242

​

$

1

​

$

113,152

​

$

(21)

​

$

(101,092)

​

$

12,040

​

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

​

3

Table of Contents

ClearSign Technologies Corporation and Subsidiary

Condensed Consolidated Statements of Cash Flows

(Unaudited)

​

​	​	​	​	​	​	​	​
(in thousands)	​	For the Three Months Ended March 31,					​
​	​ ​ ​	2026		​ ​ ​	2025		​ ​ ​
Cash flows from operating activities:	​	​	​	​	​	​	​
Net loss	​	$	(2,190)	​	$	(2,076)	​
Adjustments to reconcile net loss to net cash used in operating activities:	​		​	​	​	​	​
Common stock issued for services	​		3	​	​	4	​
Share-based compensation, net of tax withholdings	​		76	​	​	45	​
Depreciation and amortization	​		43	​	​	47	​
Impairment of intangible assets	​	​	23	​	​	—	​
Right-of-use asset amortization	​		22	​	​	22	​
Change in operating assets and liabilities:	​		​	​	​	​	​
Deferred costs	​		(104)	​	​	(253)	​
Accounts receivable	​		1,189	​	​	30	​
Prepaid expenses and other assets	​		(72)	​	​	110	​
Contract assets	​	​	(135)	​	​	—	​
Accounts payable, accrued liabilities, and lease liabilities	​		117	​	​	(33)	​
Other current liabilities	​	​	(180)	​	​	—	​
Accrued compensation and related taxes	​		(102)	​	​	(118)	​
Contract liabilities	​	​	(38)	​	​	1,111	​
Net cash used in operating activities	​		(1,348)	​		(1,111)	​
​	​	​	​	​	​	​	​
Cash flows from investing activities:	​		​	​		​	​
Acquisition of fixed assets	​		—	​	​	(4)	​
Disbursements for patents and other intangible assets	​		(64)	​	​	(37)	​
Net cash used in investing activities	​		(64)	​		(41)	​
​	​	​	​	​	​	​	​
Cash flows from financing activities:	​		​	​		​	​
Proceeds from exercise of warrants	​	​	—	​	​	24	​
Taxes paid related to employee stock awards	​	​	(32)	​	​	(41)	​
Net cash used in financing activities	​		(32)	​		(17)	​
Effect of exchange rate changes on cash and cash equivalents	​	​	2	​	​	—	​
​	​	​	​	​	​	​	​
Net change in cash and cash equivalents	​		(1,442)	​	​	(1,169)	​
Cash and cash equivalents, beginning of period	​		9,178	​	​	14,035	​
Cash and cash equivalents, end of period	​	$	7,736	​	$	12,866	​
​	​	​	​	​	​	​	​
Supplemental disclosure of cash flow information:	​	​	​	​	​	​	​
Officer and employee equity awards for prior year accrued compensation	​	$	203	​	$	279	​

​

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

​

4

Table of Contents

ClearSign Technologies Corporation

Notes to Unaudited Condensed Consolidated Financial Statements

Note 1 – Organization and Description of Business

ClearSign Technologies Corporation (“ClearSign” or the “Company”) designs and develops products and technologies for the purpose of decarbonization and improving 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 original equipment manufacturers (“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 downstream 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 in China – ClearSign Combustion (Beijing) Environmental Technologies Co., LTD. On August 22, 2024, the Company’s Board of Directors (the “Board”) authorized management to move forward with filing for dormancy with Chinese regulators to suspend the Company’s Beijing, China operations. A dormancy filing allows the Company to keep its China legal entity in a suspended status for up to three years. The Company can revive its China operations at any time during those three years with minimal cost impact. The effective date of our dormancy filing was March 12, 2025.

Unless otherwise stated or the context otherwise requires, the terms “we,” “us,” “our,” “ClearSign” and the “Company” refer to ClearSign Technologies Corporation and its subsidiary, ClearSign Asia Limited.

Business Segments

The Company operates in one operating and reportable segment engaged in the design, development and sale of combustion technologies that improve the performance and cost-effectiveness of industrial combustion systems, referred to herein as the “Combustion” segment. The Company manages its business activities on a consolidated basis. Since the operations comprise a single reportable segment, amounts reported in the consolidated balance sheets, statements of operations and comprehensive loss, stockholders’ equity, and cash flows represent the activities of the Combustion segment.

​

The Combustion segment derives revenues by delivering products and technology solutions to OEMs and end-users. Our products and solutions can be incorporated into a new or existing customer infrastructure or equipment. Customer contracts can include multiple billing milestones and performance obligations. The Company can typically satisfy its performance obligations within a twelve-month period, but customer project delays, some of which can be beyond the Company’s control, can impact timing of performance and there is no assurance we will satisfy all performance obligations in such period of time.

​

The Company’s Chief Executive Officer, who is the chief operating decision-maker (“CODM”), reviews quarterly and annual financial information on a consolidated basis for making operating decisions, allocating resources and evaluating financial performance. The CODM consistently reviews the consolidated statements of operations and comprehensive loss to manage operations and monitor performance against management expectations. Factors considered by the CODM when assessing a reportable segment include factors such as, but not limited to, human capital, intellectual property, customer relationships and business model design.

​

Substantially all the Company’s operating activities, including its long-lived assets, are located within the United States. Customers in the United States accounted for 100% of revenues during the three months ended March 31, 2026 and 2025. The Company disaggregates geographical revenues by selling location, since many of our target customers are

5

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global entities, and it would be more likely than not, that these customers would negotiate sales within our current territory in the United States.

​

Note 2 – Summary of Significant Accounting Policies

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (the “SEC”) for reporting on Form 10-Q. Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations. The condensed consolidated balance sheet at December 31, 2025 has been derived from the Company’s audited consolidated financial statements as of that date.

In the opinion of management, these unaudited condensed consolidated financial statements reflect all normal recurring and other adjustments necessary for a fair presentation. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025 (the “Form 10-K”). Operating results for interim periods are not necessarily indicative of operating results for an entire fiscal year or any other future periods.

The accompanying unaudited condensed consolidated financial statements include the accounts of ClearSign and its subsidiary. Intercompany balances and transactions have been eliminated in consolidation.

Reverse Stock Split

On March 6, 2026, the Company filed a certificate of amendment to its certificate of incorporation, as amended, with the Secretary of State of the State of Delaware to effect a 1-for-10 reverse stock split of the Company’s shares of common stock, which became effective at 12:01 a.m. Eastern Time on March 16, 2026. Such amendment and reverse stock split ratio were previously approved by the Company’s stockholders and Board.

As a result of the reverse stock split, which was effective for trading purposes on March 16, 2026, every 10 shares of the Company’s pre-reverse split outstanding common stock were combined and reclassified into one share of common stock. Proportionate voting rights and other rights of holders of common stock, par value and shares authorized were not affected by the reverse stock split. Any fractional shares of common stock resulting from the reverse stock split were rounded up to the nearest whole share at the participant level with the Depository Trust Company. All stock options and restricted stock units outstanding and common stock reserved for issuance under the Company’s equity incentive plans and warrants outstanding immediately prior to the reverse stock split were proportionately adjusted, and the exercise prices were proportionately increased, as a result of the reverse stock split. All share and per-share amounts in these unaudited condensed consolidated financial statements have been restated to reflect the reverse stock split as if it had occurred at the beginning of the earliest period presented.

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.

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

6

Table of Contents

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 condensed consolidated balance sheets. Although a warranty is a type of guarantee, assurance-type warranties are not subject to the general recognition provisions of Accounting Standards Codification (“ASC”) Topic 460, Guarantees, which requires recognizing guarantees 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 and/or collaborative projects. During the three months ended March 31, 2026 and 2025, the Company received $115 thousand and zero, respectively, from these types of arrangements.

​

Foreign Operations

The accompanying unaudited condensed consolidated balance sheets as of March 31, 2026 and December 31, 2025 include assets amounting to approximately $149 thousand and $175 thousand, respectively, relating to the operations of ClearSign Asia Limited. The Beijing registered capital requirement is $350 thousand, which is required to be paid by June 30, 2032, and of which $261 thousand has been paid as of March 31, 2026. On August 22, 2024, the Board authorized management to move forward with filing for dormancy with Chinese regulators to suspend the Company’s Beijing, China operations. A dormancy filing allows the Company to keep its China legal entity in a suspended status for up to three years. The Company can revive its China operations at any time during those three years with minimal cost impact. The dormancy filing became effective as of March 12, 2025.

Recently Issued Accounting Pronouncements

In November 2024, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40) (“ASU 2024-03”). ASU 2024-03 requires enhanced disclosures about types of expenses, including purchases of inventory, employee compensation, depreciation, and amortization, in commonly presented expense captions. The amendments are effective for fiscal years beginning after December 15, 2026, and interim periods beginning after December 15, 2027, with early adoption permitted. Entities may apply the amendments prospectively or retrospectively to any or all prior periods presented in the financial statements. We are currently evaluating the impact that this guidance will have on the disclosures within our consolidated financial statements. While ASU 2024-03 will impact only our disclosures and not our financial condition and results of operations, we are assessing when we will adopt the ASU 2024-03.

In May 2025, FASB issued ASU No. 2025-04, Compensation—Stock Compensation (Topic 718) and Revenue from Contracts with Customers (“Topic 606”): Clarifications to Share-Based Consideration Payable to a Customer (“ASU 2025-04”), which clarifies the guidance on the accounting for share-based payment awards that are granted by an entity as consideration payable to its customer, with the intent to reduce diversity in practice and improve existing guidance by revising the definition of a “performance condition” and eliminating a forfeiture policy election for service conditions associated with share-based consideration payable to a customer. ASU 2025-04 also clarifies the guidance in Topic 606 on the variable consideration constraint does not apply to share-based consideration payable to a customer “regardless of whether an award’s grant date has occurred.” ASU 2025-04 is effective for our reporting period beginning January 1, 2027, with early adoption permitted. We are currently assessing the impact that the adoption of ASU 2025-04 will have on the disclosures in our annual consolidated financial statements.

​

In December 2025, FASB issued ASU No. 2025-11, "Interim Reporting (Topic 270): Narrow-Scope Improvements.” ASU 2025-11 is intended to provide clarity about the current interim reporting requirements, provides a list of the interim disclosures required by all other Codification topics and establishes a disclosure principle that requires entities to disclose events since the end of the last annual reporting period that have a material impact on the entity. ASC 2025-11 will be effective for the Company beginning January 1, 2028, with early adoption permitted, and is not expected to have a significant impact on the Company’s condensed consolidated financial statements.

​

7

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In December 2025, the FASB issued ASU No. 2025-10, "Government Grants (Topic 832): Accounting for Government Grants Received by Business Entities" (“ASU 2025-10”). The FASB issued ASU 2025-10 to establish authoritative guidance on the accounting for government grants received by business entities. ASU 2025-10 is effective for our annual and quarterly reporting periods beginning January 1, 2029. Early adoption is permitted. We are currently assessing the impact that the adoption of ASU 2025-10 will have on our consolidated financial statements.

​

​

​

Note 3 – Fixed Assets, Net

Fixed Assets, Net

Fixed assets, net are summarized as follows:

​

​	​	​	​	​	​	​	​
​	​	March 31,		​	December 31,		​
(in thousands)	​ ​ ​	2026		​ ​ ​	2025		​ ​ ​
Office furniture and equipment	​	$	103	​	$	103	​
Leasehold improvements	​		43	​		43	​
​	​	​	146	​	​	146	​
Accumulated depreciation and amortization	​		(115)	​		(108)	​
​	​	​	31	​	​	38	​
Operating lease ROU assets, net	​	​	135	​	​	157	​
Total	​	$	166	​	$	195	​

​

Depreciation expense related to office furniture, equipment and leasehold improvements for the three months ended March 31, 2026 and 2025 was $6 thousand and $5 thousand, respectively.

Leases

The Company leases office space in Tulsa, Oklahoma, Seattle, Washington, and Beijing, China. During May 2025, the Company renewed its Beijing, China lease for 24 months with monthly rent at approximately $3 thousand. As a result of this renewal, the Company increased the right-of-use (“ROU”) asset and lease liability by $68 thousand during the year ended December 31, 2025.

​

During October 2024, the Company entered into a sub-lease agreement to rent office space in Seattle for approximately $2 thousand per month for twelve months. The Seattle lease is considered a short-term lease, as the lease term is 12 months or less from the commencement date. The Seattle lease was renewed in October 2025 with similar terms. The short-term lease expense for the three months ended March 31, 2026 and 2025 was approximately $6 thousand. The Tulsa and Beijing leases are classified as operating leases, each with remaining terms of less than two 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 Tulsa lease contains fixed annual lease payments that increase annually by approximately 2%. The Seattle, Tulsa, and Beijing total monthly minimum rent is approximately $10 thousand. Operating lease costs for the three months ended March 31, 2026 and 2025 were $25 thousand and $24 thousand, respectively.

8

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Supplemental balance sheet information related to operating leases is as follows:

​

​	​	​	​	​	​	​	​
​	​	​	March 31,	​	​	December 31,	​
(in thousands)	​	​	2026	​	​	2025	​
Operating lease ROU assets, net	​	$	135	​	$	157	​
Lease Liabilities:	​	​	​	​	​	​	​
Current lease liabilities	​	$	98	​	$	96	​
Long term lease liabilities	​	​	42	​	​	67	​
Total lease liabilities	​	$	140	​	$	163	​
​	​	​	​	​	​	​	​
Weighted average remaining lease term (in years):	​		1.4	​	​	1.7	​
Weighted average discount rate:	​		4.4	%	​	4.4	%

​

​

Supplemental cash flow information related to operating leases is as follows:

​

​	​	​	​	​	​	​
​	​	For the Three Months Ended
​	​	March 31,
(in thousands)	​	​	2026	​	​	2025
Cash paid for amounts included in the measurement of lease liabilities:	​	​	​	​	​	​
Operating cash flows used in operating leases	​	$	25	​	$	25

​

Minimum future payments under the Company’s operating lease liabilities as of March 31, 2026 are as follows:

​

​	​	​	​
(in thousands)	​	​
​	​	​
2026 (remaining)		$	76
2027		​	69
Total future lease payments	​	​	145
Less: imputed interest	​	​	(5)
​	​	$	140

​

​

​

​

Note 4 – Patents and Other Intangible Assets, Net

Patents and other intangible assets, net are summarized as follows:

​

​	​	​	​	​	​	​	​
​	​	March 31,		​	December 31,		​
(in thousands)	​ ​ ​	2026		​ ​ ​	2025		​ ​ ​
Patents	​	​	​	​	​	​	​
Patents pending	​	$	386	​	$	358	​
Issued patents	​		1,095	​		1,110	​
​	​		1,481	​		1,468	​
Trademarks	​		​	​		​	​
Registered trademarks	​		86	​		86	​
​	​		86	​		86	​
Other	​		8	​		8	​
​	​		1,575	​		1,562	​
Accumulated amortization	​		(811)	​		(802)	​
​	​	$	764	​	$	760	​

​

9

Table of Contents

Amortization expense for the three months ended March 31, 2026 and 2025 was $37 thousand and $42 thousand, respectively.

​

Future amortization expense associated with issued patents and registered trademarks as of March 31, 2026 is as follows:

​

​	​	​	​
(in thousands)	​	​	​
2026 (remaining)	​	$	104
2027	​		116
2028	​		82
2029	​		48
2030	​	​	19
Thereafter	​		1
​	​	$	370

​

The amortization life for patents ranges between three to five years and trademark lives are set at ten years. The Company does not amortize patents or trademarks classified as pending.

​

During the three months ended March 31, 2026 and 2025, the Company assessed its patent and trademark assets. During the three months ended March 31, 2026 and 2025, we recorded impairments of $23 thousand and zero, respectively. These impairment costs are included within research and development in the unaudited condensed consolidated statements of operations and comprehensive loss. 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.

​

​

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, customer witness tests, and engineering services, such as delivery of Computational Fluid Dynamic (“CFD”) studies, engineering documents, and engineering consultation. Customer payment milestones are unique to individual contracts and may occur prior to completion of performance obligations. Customer payment terms typically range between thirty and sixty days from the date of billing. Our customer contracts typically have a duration of less than twelve months. Delays in contract performance, if any, typically occur as a result of customer onsite project delays outside of our control.

​

The Company recognized $191 thousand of revenues and $584 thousand of cost of goods sold during the three months ended March 31, 2026. The revenue and cost of goods sold predominately relates to our mid-stream and boiler burner product offerings. The cost of goods sold is comprised of two components: (i) costs related to our revenue and (ii) costs related to a warranty accrual estimate (refer to “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations – Results of Operation” below for further details). The product offerings associated with the recognized revenue constitute performance obligations.

​

The Company recognized $401 thousand of revenues and $205 thousand of cost of goods sold during the three months ended March 31, 2025. The revenue and cost of goods sold predominantly relate to multiple spare parts orders for a single customer. Additionally, the Company successfully completed a CFD engineering study and sold a single boiler burner. The product offerings associated with the recognized revenue constitute performance obligations.

​

The Company had contract assets of $135 thousand and zero at March 31, 2026 and December 31, 2025, respectively. The Company had contract liabilities of $63 thousand and $100 thousand at March 31, 2026 and December 31, 2025, respectively. Of the $100 thousand contract liabilities balance at December 31, 2025, the Company recognized revenue of $49 thousand during the three months ended March 31, 2026.

​

10

Table of Contents

Note 6 – Deferred Costs

​

A summary of the Company’s deferred costs activity in the accompanying unaudited condensed consolidated balance sheets as of March 31, 2026 and December 31, 2025, is as follows:

​

​	​	​	​	​	​	​
​	​	March 31,		​	December 31,
(in thousands)	​	2026		​	2025
Deferred costs at beginning of year	​	$	329	​	$	562
Capitalization	​	​	​	​	​	​
Labor and overhead allocations	​	​	66	​	​	484
Supplier and subcontractor costs	​	​	195	​	​	2,284
​	​	​	261	​	​	2,768
Amortization of deferred costs	​	​	(142)	​	​	(2,996)
Impairment of costs in excess of contractual value	​	​	(15)	​	​	(5)
Deferred costs at end of period	​	$	433	​	$	329

​

​

​

Note 7 – Product Warranties

​

A summary of the Company’s warranty liability activity, which is included in accounts payable and accrued liabilities in the accompanying unaudited condensed consolidated balance sheets as of March 31, 2026 and December 31, 2025, is as follows:

​

​	​	​	​	​	​	​	​
​	​	March 31,		​	December 31,		​
(in thousands)	​	2026		​ ​ ​	2025		​ ​ ​
Warranty liability at beginning of year	​	$	792	​	$	471	​
Accruals	​		427	​		840	​
Payments	​		(111)	​		(488)	​
Changes related to expirations and settlements	​	​	-	​	​	(31)	​
Warranty liability at end of period	​	$	1,108	​	$	792	​

​

​

Note 8 – Equity

Common Stock and Preferred Stock

The Company is authorized to issue 87.5 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 Board. The Company has not issued any shares of preferred stock.

The Company has an At-The-Market (“ATM”) program pursuant to an ATM Offering Agreement with H.C. Wainwright & Co., LLC (“Wainwright”) as sales agent, dated July 17, 2025 (the “Sales Agreement”), pursuant to which the Company may offer and sell shares of common stock with an aggregate offering price of up to approximately $10.4 million. As of the date of this report, no shares have been sold pursuant to the Sales Agreement.

​

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, including through the ATM program with Wainwright or other securities offerings.

Warrants and Pre-Funded Warrants 

​

The following table summarizes the activity and outstanding balance of our outstanding warrants and pre-funded warrants as of March 31, 2026, along with the associated weighted average exercise price and weighted average remaining life for such warrants and pre-funded warrants.  

​

11

Table of Contents

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

March 31, 2026

​

​

Warrants

​

Pre-Funded Warrants(1)

(in thousands, except per share data)

​

Number

​

Wtd. Avg. Exercise Price

​

Wtd. Avg. Remaining Life (in years)

​

Aggregate Intrinsic Value

​

Number

​

Wtd. Avg. Exercise Price

​

Aggregate Intrinsic Value

Outstanding at beginning of year

​

2,128

$

10.54

​

3.37

$

—

​

280

$

0.001

$

1,554

Granted

​

—

​

—

​

​

​

​

​

—

​

—

​

​

Exercised

​

—

​

—

​

​

​

​

​

(33)

​

0.001

​

​

Forfeited/Expired

​

—

​

—

​

​

​

​

​

—

​

—

​

​

Outstanding at end of period

​

2,128

$

10.54

​

3.12

$

—

​

247

$

0.001

$

1,075

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

(1) The pre-funded warrants have no expiration date and only expire when exercised in full.

​

​

​

Refer to the Form 10-K for additional details related to our outstanding warrants and pre-funded warrants.

Equity Incentive Plan

On June 17, 2021, the Company's stockholders approved and the Company adopted the ClearSign Technologies Corporation 2021 Equity Incentive Plan (as it may be amended from time to time, 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 Board’s Human Capital and Compensation Committee (the “Compensation Committee”) 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 40 thousand shares of common stock. In 2025, the Board did not exercise their right to limit the automatic increase. Accordingly, the 2021 Plan share reserve increased by 40 thousand shares.

​

Ending balances for the 2021 Plan is as follows:

​

​	​	​	​	​
​	​	March 31,	​	December 31,
(in thousands)	​ ​ ​	2026	​ ​ ​	2025
Outstanding options and restricted stock units		303		291
Reserved but unissued shares under the 2021 Plan	​	120	​	149
Reserved but unissued shares at end of period		423		440

​

Stock Options

​

Under the terms of the 2021 Plan, incentive stock options and non-statutory 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 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.

​

12

Table of Contents

During the three months ended March 31, 2026, the following weighted-average assumptions were utilized in the calculation of the fair market value of stock options granted:

​

​	​	​	​
​	​	March 31,
​	​	2026
Expected life	​ ​ ​	5.00	years
Weighted average volatility	​	99.28	%
Forfeiture rate	​	0	%
Weighted average risk-free interest rate	​	3.97	%
Expected dividend rate	​	0	%

​

No stock options were granted during the three months ended March 31, 2025.

​

Equity Incentive Plan Options

​

Compensation expense associated with stock option awards for the three months ended March 31, 2026 and 2025 totaled $46 thousand and $20 thousand, respectively.

​

A summary of the Company’s 2011 Equity Incentive Plan and the 2021 Plan stock option activity and changes is as follows:

​

​	​	​	​	​	​	​	​	​	​
​	​	March 31,
​	​	2026
(in thousands, except per share data)	​	Options to Purchase Common Stock	​	Weighted Average Exercise Price		​	Weighted Average Remaining Contractual Life (in years)	​	Aggregate Intrinsic Value
Outstanding at beginning of year		238	​	$	20.24		3.64	$	855
Granted		9	​	$	4.36		​	​	​
Exercised		—	​	$	—		​	​	​
Forfeited/expired		(18)	​	$	16.69		​	​	​
Outstanding at end of period		229	​	$	19.89		3.93	$	—
Exercisable at end of period		176	​	$	16.24		3.66	$	—
​	​	​	​	​	​	​	​	​	​

​

The intrinsic value is the difference between the Company’s common stock price and the option exercise prices multiplied by the number of in-the-money options. This amount changes based on the fair value of the Company’s common stock.

​

At March 31, 2026, there was $234 thousand 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. The maximum contractual term for these options is ten years from the grant date.

​

Inducement Options

​

The inducement options summarized below were granted outside of the 2021 Plan and in accordance with the employment inducement exemption provided under Nasdaq Listing Rule 5635(c)(4). The compensation expense recognized for the inducement options for the three months ended March 31, 2026 and 2025 was zero and $9 thousand, respectively.

​

13

Table of Contents

A summary of the Company’s inducement option activity and changes is as follows:

​

​	​	​	​	​	​	​	​	​	​
​	​	March 31,
​	​	2026
(in thousands, except per share data)	​	Options to Purchase Common Stock	​	Weighted Average Exercise Price		​	Weighted Average Remaining Contractual Life (in years)	​	Aggregate Intrinsic Value
Outstanding at beginning of year		49	​	$	15.27		4.53	$	—
Granted		—	​	$	—		​	​	​
Exercised		—	​	$	—		​	​	​
Forfeited/expired		—	​	$	—		​	​	​
Outstanding at end of period		49	​	$	15.27		4.24	$	—
Exercisable at end of period		49	​	$	15.27		4.24	$	—
​	​	​	​	​	​	​	​	​	​

​

Restricted Stock Units

The Company awards its directors and certain employees restricted stock units (“RSUs”) in lieu of cash payment for compensation, if such non-executive directors elect to receive RSUs in lieu of cash payment as allowed by the Company’s director compensation policy. These awards are granted pursuant to the 2021 Plan. Employee vesting criteria are time-based, and compensation expense is recognized ratably across the timeframe. The Company pays payroll withholding taxes on behalf of the employee at vesting by withholding shares from the employee’s award to cover taxes payable in connection with such vesting. The Company accrued taxes for RSU share-based compensation of $6 thousand and $8 thousand for the three months ended March 31, 2026 and 2025, respectively. Total unrecognized compensation expense for employee restricted stock units as of March 31, 2026 was $336 thousand.

Director vesting criteria are 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 occurs in accordance with FASB ASC Topic 718, “Compensation – Stock Compensation.” Total unrecognized compensation expense for director services as of March 31, 2026 was $154 thousand.

A summary of the Company’s RSUs activity is as follows:

​

​	​	​	​	​	​	​	​
​	​	March 31,
​	​	2026
(in thousands, except per share data)	​	Number of Shares	​	Weighted Average Grant Date Fair Value		​	Weighted Average Contractual Life (in years) (1)
Nonvested at beginning of year		53	​	$	8.36	​	0.85
Granted		38	​	$	5.50	​	​
Vested		(16)	​	$	8.88	​	​
Forfeited	​	(1)	​	$	5.62	​	​
Nonvested at end of period		74	​	$	6.80	​	1.69
​	​	​	​	​	​	​	​

​

1) Weighted Average Contractual Life calculation excludes the number of director RSUs that vest upon one of four performance events (refer to discussion above for details).

14

Table of Contents

A summary of the Company’s RSU compensation expense is as follows:

​

​	​	​	​	​	​	​
​	​	For the Three Months Ended
​	​	March 31,
(in thousands, except per share data)	​	2026		​ ​ ​	2025
Share-based compensation expense	​	$	34	$	32	​
Weighted average value per share	​	$	7.52	$	8.90	​
​	​	​	​	​	​	​

​

​

Stock Awards

​

The Company awards employees stock in lieu of cash payment for compensation, typically to satisfy accrued bonus compensation and for ad-hoc bonuses for exemplary performance. These awards are granted pursuant to the 2021 Plan.

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

For the Three Months Ended

​

​

March 31,

​

​

2026

​

2025

(in thousands, except per share data)

​

Number of Shares

​ ​ ​

Fair Value

​

Weighted Average per Share

​

Number of Shares

​ ​ ​

Fair Value

​

Weighted Average per Share

Fair value of stock payments in accrued compensation

​

36

​

$

203

​

$

5.60

​

33

​

$

279

​

$

8.57

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Consultant Stock Plan

​

The Company’s 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 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 shall determine.

​

The Consultant Plan activity is as follows:

​

​	​	​	​
​	​	March 31,
(in thousands)	​ ​ ​	2026
Reserved but unissued shares at beginning of period	​	​	19
Increases in the number of authorized shares	​	​	1
Grants	​	​	—
Reserved but unissued shares at end of period	​		20
​	​	​	​

​

The Consultant Plan compensation expense is summarized as follows:

​

​	​	​	​	​	​	​
​	​	For the Three Months Ended
​	​	March 31,
(in thousands, except per share data)	​ ​ ​	2026		​ ​ ​	2025
Share-based compensation expense	​	$	3	​	$	4
Weighted average value per share	​	$	8.59	​	$	9.40
​	​	​	​	​	​	​

​

​

15

Table of Contents

​

​

​

Note 9 – Net Loss per Common Share

The Company calculates net loss per common stock in accordance with ASC Topic 260, Earnings Per Share (“ASC 260”). Basic and diluted net loss per common stock was determined by dividing net loss applicable to common stockholders by the weighted average number of shares of common stock outstanding during the period. Under ASC 260, shares issuable for little or no cash consideration are considered outstanding common stock and included in the computation of basic net loss per share. As such, for the three months ended March 31, 2026 and 2025, the Company included its outstanding pre-funded warrants in its computation of net loss per share. The pre-funded warrants are each exercisable into one share of common stock at an exercise price of $0.001 per share.

​

The following potentially dilutive securities have not been included in the computation of diluted net loss per share for the three months ended March 31, 2026 and 2025, as the result would be anti-dilutive:

​

​	​	​	​	​
​	​	March 31,	​	March 31,
(in thousands)	​	2026	​	2025
Stock options	​	278	​	289
Restricted stock units	​	74	​	99
Warrants	​	2,128	​	2,127
Total shares excluded from calculation	​	2,480	​	2,515

​

​

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.

On January 16, 2026, Judith Schrecker, David Maley, and Catharine M. de Lacy (collectively, the “Former Directors”), filed a petition for advancement (case number 2026-0082-CDW) in the Delaware court of Chancery for an advancement of legal fees relating to a request, by us, for the Former Directors to return material generated by a dissolved special committee formed by the Board on February 10, 2025 (“Special Committee”), which was subsequently dissolved following our 2025 annual meeting of stockholders. The advancement proceeding effectuated an advancement of monies to the Former Directors counsel for monies incurred to represent the Former Directors in this matter. The advancement proceeding followed a prescribed court process where the legal fees were reviewed to determine a reasonable amount payable to the Former Directors’ counsel for representation in this matter. We do not believe this advancement claim will have a material adverse effect on the future operations of the Company, and we do not anticipate any additional claims for advancement of legal fees in this case in the future. The total advancement claim amounted to $319 thousand, of which $180 thousand was accrued during the three months ended December 31, 2025. We delivered the full amount of the advancement claim to their legal counsel during the three months ended March 31, 2026.

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.

​

16

Table of Contents

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 of such grant 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. During the three months ended March 31, 2026, we received a deadline extension from the DOE allowing us to continue work until May 27, 2026. These awards allow the Company to request reimbursements for expenditures such as labor, material, and administrative costs. During the three months ended March 31, 2026 and 2025, the Company recognized $28 thousand and $48 thousand in reimbursements from the DOE, respectively.

​

Note 12 – Subsequent Events

The Company has evaluated subsequent events as of the date of this report and has none to report.

​

17

Table of Contents

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS AND OTHER INFORMATION CONTAINED IN THIS REPORT

This Quarterly Report on Form 10-Q (this “Form 10-Q” or “report”) contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and the provisions of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements give our current expectations or forecasts of future events. You can identify these statements by the fact that they do not relate strictly to historical or current facts. You can find many (but not all) of these statements by looking for words such as “approximates,” “believes,” “hopes,” “expects,” “anticipates,” “estimates,” “projects,” “intends,” “plans,” “would,” “should,” “could,” “may,” “will” or other similar expressions in this report. In particular, these include statements relating to future actions; prospective products, applications, customers, and technologies; future performance or results of any products; anticipated expenses; and future financial results. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from our historical experience and our present expectations or projections. Factors that could cause actual results to differ materially from those discussed in the forward-looking statements include, but are not limited to:

● our limited cash, history of losses, and our expectation that we will continue to experience operating losses and negative cash flows in the near future;

● our ability to successfully develop and implement our technologies and achieve profitability;

● changes in government regulations that could substantially reduce, or even eliminate, the need for our technology;

● emerging competition and rapidly advancing technology in our industry that may outpace our technology;

● customer demand for the products and services we develop;

● the impact of competitive or alternative products, technologies, and pricing;

● our ability to manufacture any products we design;

● general economic conditions and events and the impact they may have on us and our potential customers;

● the impact of global supply-chain constraints and the threat of, or implementation of, tariffs on imported or exported goods and materials may adversely affect our commercialization efforts and business operations;

● our revenue has been highly concentrated among a small number or customers, and our results of operations could be harmed if we lose a key revenue source and fail to replace it;

● the impact of a cybersecurity incident or other technology disruption;

● our ability to protect our intellectual property;

● our ability to obtain adequate financing in the future;

● lawsuits and other claims by third parties or investigations by various regulatory agencies that we may be subjected to;

● our ability to retain and hire personnel with the experience and talent to develop our products and business;

● our success at managing the risks involved in the foregoing items; and

● other factors discussed in this report and in the section titled “Risk Factors” in our most recent Annual Report on Form 10-K.

Forward-looking statements may appear throughout this report, including, without limitation, Item 2 “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” The forward-looking statements are based upon management’s beliefs and assumptions and are made as of the date of this report. We undertake no obligation to publicly update or revise any forward-looking statements included in this report. You should not place undue reliance on these forward-looking statements.

Unless otherwise stated or the context otherwise requires, the terms “ClearSign,” “we,” “us,” “our” and the “Company” refer to ClearSign Technologies Corporation and its subsidiary, ClearSign Asia Limited.

​

Note Regarding Reverse Stock Split

​

 We effected a reverse stock split of our outstanding common stock at a ratio of 1-for-10, effective as of March 16, 2026, for the purpose of complying with Nasdaq Listing Rule 5550(a)(2). We have reflected the reverse stock split herein, unless otherwise indicated.

18

Table of Contents

​

ITEM 2.MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the unaudited condensed consolidated financial statements and related notes included elsewhere in this Form 10-Q as well as our audited consolidated financial statements and related notes included in our most recent Annual Report on Form 10-K. In addition to historical information, this discussion and analysis here and throughout this Form 10-Q contains forward-looking statements that involve risks, uncertainties, and assumptions. Our actual results may differ materially from those anticipated in these forward-looking statements due to a number of factors, including but not limited to, the risks described in the section titled “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2025.

​

Overview

​

We design and develop technologies for the purpose of decarbonization and improving key performance characteristics of combustion systems, including emission and operational performance, energy efficiency and overall cost-effectiveness. Our ClearSign Core™ technology has been proven in full scale industrial test furnaces and boilers and first customer installations are currently operating in normal commercial applications. We have generated nominal revenues from operations to date to meet operating expenses.

​

We have incurred losses since inception totaling $106.7 million and we expect to experience operating losses and negative cash flow for the foreseeable future. We have historically financed our operations primarily through issuances of equity securities. As of March 31, 2026, we have raised approximately $105.3 million in gross proceeds through the sale of our equity securities. We may need to raise additional capital in the future, however, the significant volatility in the capital markets may negatively affect our ability to raise this additional capital.

​

In order to generate meaningful revenues, our technologies must gain market recognition and acceptance to develop sufficient recurring sales. In addition, management believes that the successful growth and operation of our business is dependent upon our ability to obtain adequate sources of funding through co-development agreements, strategic partnering agreements, or equity or debt financing to support commercialization of our research and development efforts, protect intellectual property, form relationships with strategic partners and provide for working capital and general corporate purposes. There can be no assurance that we will be successful in achieving our long term plans, or that such plans, if consummated, will result in profitable operations or enable us to continue in the long term as a going concern.

​

Our costs include employee salaries and benefits, compensation paid to consultants, materials and supplies for prototype development and manufacture, costs associated with development activities including materials, sub-contractors, travel and administration, legal and accounting expenses, sales and marketing costs, general and administrative expenses, and other costs associated with an early stage, publicly traded technology company. We currently have 15 full-time employees. Because using third party expertise and resources is more efficient than maintaining full time resources, we also expect to incur ongoing consulting expenses related to technology development and some administrative, sales and legal functions commensurate with our current level of activities.

​

The amount that we spend for any specific purpose may vary significantly, and could depend on a number of factors including, but not limited to, the pace of progress of our commercialization and development efforts, actual needs with respect to product testing, development and research, market conditions, and changes in or revisions to our sales and marketing strategies.

​

Research, development, and commercial acceptance of new technologies are, by their nature, unpredictable.  Although we undertake development and commercialization efforts with reasonable diligence, there can be no assurance that the net proceeds from our securities offerings will be sufficient to enable us to develop our technology to the extent needed to create sufficient future sales to sustain operations.  If the net proceeds from these offerings are insufficient for this purpose, we will consider other options to continue our path to commercialization, including, but not limited to, additional financing through follow-on equity offerings, debt financing, co-development agreements, sale or licensing of developed intellectual or other property, or other alternatives.

19

Table of Contents

​

We cannot assure that our technologies will be accepted, that we will ever earn revenues sufficient to support our operations, or that we will ever be profitable. Furthermore, we have no committed source of financing, and we cannot assure that we will be able to raise money as and when we need it to continue our operations. If we cannot raise funds as and when we need them, we may be required to scale back our development by reducing expenditures for employees, consultants, business development and marketing efforts or to otherwise severely curtail, or even to cease, our operations.

​

Recent Developments

​

Advancement Claim

​

On January 16, 2026, the Former Directors filed a petition for advancement (case number 2026-0082-CDW) in the Delaware court of Chancery for an advancement of legal fees relating to a request, by us, for the Former Directors to return material generated by the Special Committee, which was dissolved following our 2025 annual meeting of stockholders. The advancement proceeding effectuated an advancement of monies to the Former Directors counsel for monies incurred to represent the Former Directors in this matter. The advancement proceeding followed a prescribed court process where the legal fees were reviewed to determine a reasonable amount payable to the Former Directors’ counsel for representation in this matter. We do not believe this advancement claim will have a material adverse effect on the future operations of the Company, and we do not anticipate any additional claims for advancement of legal fees in this case in the future. The total advancement claim amounted to $319 thousand, of which $180 thousand was accrued during the three months ended December 31, 2025. We delivered the full amount of the advancement claim to their legal counsel during the three months ended March 31, 2026.

​

Reverse Stock Split

​

On February 26, 2026, at our special meeting of stockholders, our stockholders approved a certificate of amendment to our certificate of incorporation, as amended (a “Charter Amendment”) to effect a reverse stock split of our outstanding shares of common stock at a ratio to be determined by the Board (the “Reverse Split”). On March 6, 2026, we filed a Charter Amendment with the Secretary of State of Delaware to effect a 1-for-10 Reverse Split of our outstanding shares of common stock as of 12:01 a.m. Eastern Time on March 16, 2026, in order to regain compliance with Listing Rule 5550(a)(2) of The Nasdaq Stock Market LLC (“Nasdaq”). 

​

Nasdaq Bid Price Compliance

​

On March 30, 2026, we received a letter from Nasdaq stating that, because our shares of common stock had a closing bid price at or above $1.00 per share for a minimum of 10 consecutive business days, we had regained compliance with the minimum bid price requirement of $1.00 per share for continued listing on Nasdaq, as set forth in Nasdaq Listing Rule 5550(a)(2), and that the matter is now closed.

​

Critical Accounting Policies

​

The following discussion and analysis of financial condition and results of operations is based upon our unaudited condensed consolidated financial statements, which have been prepared in conformity with accounting principles generally accepted in the United States. Certain accounting policies and estimates are particularly important to the understanding of our financial position and results of operations. These policies and estimates require the application of significant judgment by management. These estimates can be materially affected by changes from period to period as economic factors and conditions outside of our control change. As a result, they are subject to an inherent degree of uncertainty. In applying these policies, our management uses their judgment to determine the appropriate assumptions to be used in the determination of certain estimates. Those estimates are based on our historical operations, our future business plans and projected financial results, the terms of existing contracts, our observance of trends in the industry, information provided by our customers and information available from other outside sources, as appropriate. We believe the current assumptions and other considerations used to estimate amounts reflected in the unaudited condensed consolidated financial statements included in this Form 10-Q are appropriate.

​

20

Table of Contents

This Form 10-Q and our most recent Annual Report on Form 10-K include discussions of our accounting policies, as well as methods and estimates used in the preparation of our audited consolidated financial statements. For further information on our critical accounting policies and estimates, see “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Form 10-K, the notes to our audited consolidated financial statements included in the Form 10-K and “Note 2 – Summary of Significant Accounting Policies” of our unaudited condensed consolidated financial statements included elsewhere in this Form 10-Q. Since our most recent Annual Report on Form 10-K, we have not experienced a material change to our critical accounting policies or the methods and applications used to develop our accounting estimates.

​

Results of Operations

​

Comparison of the Three Months Ended March 31, 2026 and 2025

​

Highlights of our quarter financial performance are as follows:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

For the Three Months Ended

​

​

​

​

​

​

(in thousands, except per share data)

​

March 31,

​

​

​

​

​

​

​

​ ​ ​

2026

​ ​ ​

2025

​ ​ ​

$ Change

​ ​ ​

% Change

Revenues

​

$

191

​

$

401

​

$

(210)

​

(52.4)

%

Cost of goods sold

​

​

584

​

​

205

​

$

379

​

184.9

%

Gross profit (loss)

​

​

(393)

​

​

196

​

$

(589)

​

(300.5)

%

Research and development

​

​

249

​

​

447

​

$

(198)

​

(44.3)

%

General and administrative

​

​

1,637

​

​

2,006

​

$

(369)

​

(18.4)

%

Operating expenses

​

​

1,886

​

​

2,453

​

$

(567)

​

(23.1)

%

Other income, net

​

​

89

​

​

181

​

$

(92)

​

(50.8)

%

Net loss

​

$

(2,190)

​

$

(2,076)

​

$

(114)

​

(5.5)

%

Basic and diluted net loss per common share

​

$

(0.39)

​

$

(0.38)

​

$

(0.01)

​

(2.6)

%

​

Revenues and Gross Profit (Loss)

​

Consolidated revenues for the three months ended March 31, 2026 were $191 thousand compared to $401 thousand for the same period in 2025, which were predominantly generated by fulfilling orders related to mid-stream and boiler burner product offerings. Revenues for the three months ended March 31, 2025 were predominantly generated from spare parts and engineering services offerings.

​

Gross profit decreased by $589 thousand, or 300.5%, for the three months ended March 31, 2026, compared to the same period in 2025. Gross profit decreased primarily due to lower revenues and a $410 thousand increase in cost of goods sold expenses for a warranty accrual estimate adjusted during the three months ended March 31, 2026. The adjusted warranty accrual estimate related to process burners installed during the third quarter of 2025. These burners are operational and have met applicable emissions requirements up to 80% of the specified normal firing rates. However, a temporary adjustment to these burners was required to enable operational performance up to the maximum specified firing rate, which in turn affected burner compliance with our emission guarantees. To establish our technology and customer service reputation within the market, we have established a warranty accrual estimate, that we believe, will provide for us to meet both our product guarantees and maintain our good standing with this customer.

​

Operating Expenses

​

Operating expenses consist of research and development (“R&D”) and general and administrative (“G&A”) expenses. These are addressed separately below.

​

Research and Development

​

R&D expenses decreased $198 thousand, or 44.3%, for the three months ended March 31, 2026, compared to the same period in 2025. The decrease was predominantly due to receipt of $115 thousand in monies for cost-sharing expenses associated with a collaborative R&D project. These monies were received in accordance with the terms of a

21

Table of Contents

collaborative R&D agreement that we entered into during the fourth quarter of 2025, pursuant to which we agreed to test our boiler burner product using hydrogen fuel for the purpose of assessing its emissions and efficiency.

​

General and Administrative

​

G&A expenses decreased $369 thousand, or 18.4%, for the three months ended March 31, 2026, compared to the same period in 2025. The decrease was predominantly due to $450 thousand in accrued legal fees during the prior period that were not present during the current period, which legal fees related to work performed by the former Special Committee to respond, manage and otherwise address attempts by several stockholders to submit director nomination notices in connection with our 2025 annual meeting of stockholders. The decrease in year-over-year legal fees was partially offset by an increase of $139 thousand in legal fees associated with an advancement claim by the Former Directors (refer to “Recent Developments – Advancement Claim” above for further details).

​

Other Income, Net

​

Other income, net decreased $92 thousand, or 50.8%, for the three months ended March 31, 2026, compared to the same period in 2025. The decrease was predominantly due to a decrease in interest income from our short-term U.S. treasuries and money market accounts of $71 thousand driven by a lower year-over-year cash balance and declining interest rates.

​

​

Liquidity and Capital Resources

​

At March 31, 2026, our cash and cash equivalents balance totaled $7,736 thousand compared to $9,178 thousand at December 31, 2025, a decrease of $1,442 thousand. The decrease in the cash and cash equivalents balance is primarily attributable to our net loss of $2,190 thousand, which was partially offset primarily by a decrease in accounts receivables of $1,189 thousand.

At March 31, 2026, our current assets were in excess of current liabilities resulting in working capital of $6,609 thousand compared to $8,642 thousand at December 31, 2025. We believe we have sufficient cash and expected cash collections to fund current operating expenses for over twelve months. We have no contractual debt obligations and to the extent we may require additional funds beyond twelve months from the date hereof, and customer cash collections cannot fund our needs, we may utilize equity offerings. Historically, we have funded operations predominantly through equity offerings. Until the growth of revenue increases to a level that covers our operating expenses, we intend to continue to fund operations in this manner, although the volatility in the capital markets may negatively affect our ability to do so. As of March 31, 2026, approximately 2.1 million shares of our common stock are issuable upon exercise of our outstanding warrants, which number excludes the shares of common stock issuable upon exercise of our outstanding pre-funded warrants, and we may receive up to $22.4 million in aggregate gross proceeds from the cash exercises thereof, subject to certain beneficial ownership limitations set forth therein. These warrants require the warrant holder to tender cash upon exercise, with the exception of the warrants issued to Public Ventures LLC as compensation for their services in connection with our public offering and concurrent private placement in April 2024, which allow the holder to exercise cashless if they so desire. These equity financial instruments may from time to time fund future cash needs, but the volatility of our common stock price and the risk tolerance of warrant holders will determine the extent to which we will be able to raise funds in this manner.

​

Operating activities for the three months ended March 31, 2026, resulted in cash outflows of $1,348 thousand, primarily due to the net loss of $2,190 thousand and a decrease in other current liabilities of $180 thousand partially offset primarily by a decrease in accounts receivables of $1,189 thousand during such period.

Operating activities for the three months ended March 31, 2025, resulted in cash outflows of $1,111 thousand, primarily due to the net loss of $2,076 thousand partially offset primarily by non-cash expense of $118 thousand and an increase in contract liabilities of $814 thousand during such period. The change in contract liabilities during the three months ended March 31, 2025, was impacted by customer collections for uncompleted orders as of March 31, 2025.

Investing activities for the three months ended March 31, 2026, resulted in cash outflows of $64 thousand, which is primarily attributable to disbursements for patents and other intangible assets.

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Investing activities for the three months ended March 31, 2025, resulted in cash outflows of $41 thousand, which is primarily attributable to $37 thousand of disbursements for patents and other intangible assets.

Financing activities for the three months ended March 31, 2026, resulted in cash outflows of $32 thousand, which is attributable to disbursements related to taxes paid for the vesting of certain employee restricted stock units.

​

Financing activities for the three months ended March 31, 2025, resulted in cash outflows of $17 thousand, which is primarily attributable to $41 thousand of disbursements related to taxes paid for the vesting of employee restricted stock units, partially offset by $24 thousand in net proceeds received from the exercise of certain warrants.

​

Off-Balance Sheet Transactions

​

We do not have any off-balance sheet transactions.

​

ITEM 3.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

​

As a smaller reporting company, we are not required to provide this information.

​

ITEM 4.CONTROLS AND PROCEDURES

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Disclosure Controls and Procedures

​

We maintain disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, that are designed to reasonably ensure that information required to be disclosed in our reports filed under the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal accounting and financial officer, as appropriate, to allow timely decisions regarding required disclosure.

​

We carried out an evaluation under the supervision and with the participation of management, including our Chief Executive Officer (principal executive officer) and our Chief Financial Officer (principal accounting and financial officer), of the effectiveness of the design and operation of our disclosure controls and procedures as of March 31, 2026, the end of the period covered by this Form 10-Q. Based upon the evaluation of our disclosure controls and procedures as of March 31, 2026, our Chief Executive Officer (principal executive officer) and our Chief Financial Officer (principal accounting and financial officer) concluded that, as of such date, our disclosure controls and procedures were effective at the reasonable assurance level.

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Changes in Internal Control over Financial Reporting

​

There have been no changes in our internal control over financial reporting that occurred during the quarter ended March 31, 2026 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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Limitations on Effectiveness of Controls and Procedures

​

Our management, including our Chief Executive Officer (principal executive officer) and our Chief Financial Officer (principal accounting and financial officer), does not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent or detect all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. These inherent limitations include the realities that judgments in decision making can be faulty, and that breakdowns can occur because of a simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people or by management override of the controls. The design of any system of controls is also based in part upon certain assumptions about the likelihood of future events, and there can be

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no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, controls may become inadequate because of changes in conditions, or the degree of compliance with policies or procedures. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

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PART II - OTHER INFORMATION

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ITEM 1.LEGAL PROCEEDINGS

​

From time to time, we may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. However, litigation is subject to inherent uncertainties and an adverse result in these or other matters may arise from time to time that may harm our business. We are currently not aware of any such legal proceedings or claims that we believe will have a material adverse effect on our business, financial condition or operating results, except as set forth below.

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Catharine M. de Lacy, David Maley, and Judith Schrecker v. ClearSign Technologies Corporation, Case No. 2026-0082-CDW (Delaware Court of Chancery)

​

On January 16, 2026, the Former Directors filed a petition for advancement in the Delaware court of Chancery for an advancement of legal fees relating to a request, by us, for the Former Directors to return material generated by the Special Committee. The advancement proceeding effectuated an advancement of monies to the Former Directors counsel for monies incurred to represent the Former Directors in this matter. The advancement proceeding followed a prescribed court process where the legal fees were reviewed to determine a reasonable amount payable to the Former Directors’ counsel for representation in this matter. We do not believe this proceeding will have a material adverse effect on the future operations of the Company. In addition, we do not anticipate any additional claims for advancement of legal fees in this case in the future. The total advancement request amounted to $319 thousand, which was paid in full during the three months ended March 31, 2026.

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ITEM 1A.RISK FACTORS

​

We incorporate herein by reference the risk factors included under “Part I - Item 1A. Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2025 which we filed with the SEC on March 31, 2026. There are no material changes from the risk factors set forth in such prior filing.

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ITEM 2.UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

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On November 11, 2025, the Board authorized issuance of 1,500 shares to be remitted in quarterly installments to our investor relations firm, Firm IR Group LLC (“Firm IR”), for services rendered by them, pursuant to our 2013 Consultant Stock Plan. On March 30, 2026, we issued 375 shares of common stock to Firm IR at a fair market value price per share of $8.59, the closing price of our common stock as reported on Nasdaq on November 11, 2025, the date of grant, as adjusted for the Reverse Split. These shares were issued in reliance upon the exemption from registration provided by Section 4(a)(2) of the Securities Act, for a transaction by an issuer not involving a public offering.

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ITEM 3.DEFAULTS UPON SENIOR SECURITIES

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Not applicable.

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ITEM 4.MINE SAFETY DISCLOSURES

​

Not applicable.

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ITEM 5.OTHER INFORMATION

None of the Company’s directors or officers adopted, modified or terminated a Rule 10b-5 trading arrangement or a non-Rule 10b-5 trading arrangement during the fiscal quarter ended March 31, 2026, as such terms are defined under Item 408(a) of Regulation S-K.

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​

Item 6. ​ Exhibit	EXHIBITS ​ ​
Number	Document
​	​
3.1	Certificate of Incorporation of ClearSign Technologies Corporation, a Delaware corporation (incorporated by reference to Exhibit 3.3 of the Company’s Form 8-K filed with the Securities and Exchange Commission on June 15, 2023).
​	​
3.2	Certificate of Amendment, as filed with the Secretary of the State of Delaware on June 25, 2024 (incorporated by reference to Exhibit 3.1 of the Company’s Form 8-K filed with the Securities and Exchange Commission on June 26, 2024).
​	​
3.3	Certificate of Amendment to Certificate of Incorporation, as amended, of ClearSign Technologies Corporation, filed with the Secretary of State of the State of Delaware on March 6, 2026 (incorporated by reference to Exhibit 3.1 of the Company’s Form 8-K filed with the Securities and Exchange Commission on March 10, 2026).
​	​
3.4	Amended and Restated Bylaws of ClearSign Technologies Corporation, a Delaware corporation (incorporated by reference to Exhibit 3.1 of the Company’s Form 8-K filed with the Securities and Exchange Commission on November 17, 2025).
​	​
4.1	Form of Common Warrant (incorporated by reference to Exhibit 4.1 of the Company’s Form 8-K filed with the Securities and Exchange Commission on April 19, 2024).
​	​
4.2	Form of Underwriter’s Warrant (incorporated by reference to Exhibit 4.2 of the Company’s Form 8-K filed with the Securities and Exchange Commission on April 19, 2024).
​	​
4.3	Form of Private Warrant (incorporated by reference to Exhibit 4.3 of the Company’s Form 8-K filed with the Securities and Exchange Commission on April 19, 2024).
​	​
4.4	Form of Pre-Funded Warrant (incorporated by reference to Exhibit 4.1 of the Company’s Form 8-K filed with the Securities and Exchange Commission on April 23, 2024).
​	​
4.5	Form of Placement Agent Warrant (incorporated by reference to Exhibit 4.4 of the Company’s Form 8-K filed with the Securities and Exchange Commission on April 19, 2024).
​	​
31.1*	Rule 13a-14(a)/15d-14(a) Certification of Principal Executive Officer.
​	​
31.2*	Rule 13a-14(a)/15d-14(a) Certification of Principal Financial Officer.
​	​
32.1**	Section 1350 Certification of Principal Executive Officer and Principal Financial Officer.

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101.INS*	Inline XBRL Instance Document.
101.SCH*	Inline XBRL Taxonomy Extension Schema Document.
101.CAL*	Inline XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF*	Inline XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB*	Inline XBRL Taxonomy Extension Label Linkbase Document.
101.PRE*	Inline XBRL Taxonomy Extension Presentation Linkbase Document.
104*	Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101).

​

*Filed herewith.

**Furnished herewith.

​

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​

​

SIGNATURES

​

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

​

​	​	CLEARSIGN TECHNOLOGIES CORPORATION
​	​	​
​	​	​
Date: May 15, 2026	By:	/s/ Colin James Deller
​	​	Colin James Deller
​	​	Chief Executive Officer
​	​	(Principal Executive Officer)

​

​

​	​	​
​	​	​
​	​	​
Date: May 15, 2026	By:	/s/ Brent Hinds
​	​	Brent Hinds
​	​	Chief Financial Officer (Principal Financial and Accounting Officer)

​

​

​

27

FAQ

How did ClearSign (CLIR) perform financially in Q1 2026?

ClearSign posted a Q1 2026 net loss of $2.19 million on $191 thousand of revenue. Revenue fell from $401 thousand a year earlier, and a large warranty-related cost turned gross profit into a gross loss, while operating expenses declined versus the prior-year quarter.

Why did ClearSign’s gross profit turn into a gross loss in Q1 2026?

Gross profit turned into a $393 thousand gross loss mainly due to higher warranty costs. Management recorded about $410 thousand of additional warranty-related cost for process burners installed in 2025, which outweighed the quarter’s modest revenues and reversed the prior-year gross profit.

What is ClearSign’s cash position and liquidity as of March 31, 2026?

ClearSign held $7.74 million of cash and cash equivalents with working capital of $6.61 million. The company reported no debt and believes its cash and expected collections are sufficient to fund operating expenses for more than twelve months based on current plans.

How did ClearSign (CLIR) reduce its operating expenses year over year?

Operating expenses fell to $1.89 million in Q1 2026 from $2.45 million in Q1 2025. Research and development declined to $249 thousand, and general and administrative costs dropped to $1.64 million as prior-period special committee legal fees did not recur.

What is the impact of ClearSign’s Q1 2026 warranty accrual on future results?

The warranty liability increased to $1.11 million after a $427 thousand accrual in Q1 2026. This reflects expected costs to address performance and emissions issues on certain 2025 burner installations and could pressure near-term margins until remediation is completed.

Why did ClearSign implement a 1-for-10 reverse stock split in March 2026?

The company executed a 1-for-10 reverse stock split effective March 16, 2026. This corporate action was taken to lift the per-share trading price and regain compliance with Nasdaq Listing Rule 5550(a)(2) requiring a minimum $1.00 bid price, which Nasdaq later confirmed was satisfied.

Does ClearSign (CLIR) have access to additional capital beyond its current cash?

ClearSign has several potential equity-based funding sources. It maintains an unused at-the-market program for up to about $10.4 million of stock and has roughly 2.13 million warrants outstanding with an aggregate cash exercise value of about $22.4 million, subject to holder decisions.