Q4 2020 Clearsign Technologies Corp Earnings Call

[music].

Yeah.

Good day and welcome to the clear sign technologies fourth quarter and full year 'twenty 'twenty conference call. All participants will be in a listen only mode should you need assistance. Please signal conference specialist by pressing the Starkey followed by zero.

After todays presentation, there will be an opportunity to ask questions.

To ask a question you May press Star then one on a touchtone phone to withdraw your question. Please press Star then two please note. This event is being recorded I would like now to turn the conference over to Matthew Selinger of firm IR Group. Please go ahead.

Good afternoon, and thank you operator, welcome everyone to the clear signs of Technologies Corporation.

<unk> fourth quarter, 2020, and 40 <unk> full year results conference call. During this conference call of the company will make forward looking statements any statement that is not a statement of historical fact is a forward looking statement. This includes remarks about the company's projections expectations plans beliefs and prospects. These statements are based on judgments and analysis.

As of the date of this conference call and are subject to numerous important risks and uncertainties that could cause actual results to differ materially from those described in the forward looking statements the risks and uncertainties associated with the forward looking statements made in this conference call include but are not limited to whether field testing in the sales of clear signs of products will be successfully completed.

We're the clear sign will be successful in expanding the market for its products and other risks that are described in criticized public periodic filings with the SEC, including the discussion of the risk factors section of the 2019 annual report on form 10-K.

Except as required by law clear sign of assumes no responsibility to update these forward looking statements to reflect future events.

Actual outcomes and does not intend to do so.

So on the call with me today are Jim Deller clear signs of President and Chief Executive Officer, and Brian Fike clarifying the Chief Financial Officer.

So at this point of the call I would like to turn it over to Brian Fike, Brian. Please go ahead.

Thank you Matthew and thank you to everyone joining us here today.

Our financial results on the form 10-K will be filed with the SEC in the coming weeks all numbers mentioned here are preliminary.

The cash burn for the quarter ended December 31, 2020 was approximately one 8 million.

Compared to approximately $1.

One 5 million in the same period of 2019.

This increase is specifically due to the extensive product development, we have ongoing and our process burner product line and some delayed payments from past the big projects.

Our cash and investment resources were approximately $8 8 million.

At the end of the fourth quarter of 2020 compared to $10 6 million at the end of the third quarter of 2020.

Shares outstanding at December 31 of 2020, where 30 million 77436.

It is important to note that with our quarter ending.

Lending balances, we have sufficient working capital.

Available to carry us well into 2022 and that is without revenue from any other sources.

And with that I would like to turn the call over to our Chief Executive Officer, Jim Deller.

Please go ahead Jim.

Thank you.

Brian the financial overview.

Hello, everyone and welcome to the cliffs line technologies fourth quarter and full year 2020 conference call.

Thank you for joining us.

We have had a lot of recent activity, especially in the last few weeks of.

We are excited to share more details.

Sales with you.

Some of this will be new on some giving more color and background to topics covered in press releases issued in the last three months.

As there have been many new developments since our last call.

In late November.

I will spend the majority of this updates giving more detail of these recent activity.

And how they fit into our overall strategic plan.

I will start of discussing two recently completed multi burn of process burner installations.

One of these related to our infrastructure project was the topic of our press release issued early today.

That make further comments on this product line in.

General and then move into developments and a boiler burner product lines, both domestic and the significant progress in China that we announced yesterday.

I will end up with my review of other technologies, some comments related to flares and provide an update on our <unk> sense of products.

After some general.

The business related topics of my closing remarks, we will open up the call to questions and answers.

We have been quiet all activities in the Zika test facility for the last few weeks, because we have been announcing California, installing and starting up a process of <unk> into installations.

Due to the.

Timing of the planned shutdowns of more importantly, startups both of these projects needed to be executing concurrently.

Both of these projects from multi burner heaters. Both in critical service that is the plans cannot run without these heaters both projects presented complex operational requirements and now <unk>.

Our very talented and dedicated process better engineers on the accumulation of months of product refinement and optimization both projects are in operation.

The first is world oil you may recall that this is a collaborative demonstration projects one third.

Net funded by the California, South Coast Air.

The quality management district.

That is the government regulator charged with setting the admissions directives for southern California, identifying the technologies and economic justification to support the new mandates.

The remainder was funded by the customer will the oil and clear sign contributing in kind.

Installation is comprised of five bonus arrange the the circle in the form of a cylinder cohesive.

The fine intensity of this project is almost twice the American Petroleum Institute recommended maximum.

The 81 on this call from the industry defined density of the season is over 500000 the btu.

Per hour per square foot.

For the rest of you just know that such a fine density is very rare in a multibillion the heater and creates an extremely challenging situations, especially when low Nox as Youll go.

During the startup of the performance proving process the bonus of all brought up to the maximum rate concurrently.

And delivered steady sustained operation of the maximum permitted fine right of the heaters for several hours before the slight reduce the rate slightly to match the current process demand.

Prior to the installation of these banners with demonstrated the global oil while operating in the Zika test furnace.

They are very similar in size.

Exxon Mobil project. It was efficient to include this optimization and demonstration of the slight detail from that project.

It also is a confirmation of the progress we are making day is scalable and repeatable to enable it to be deployed as a complete highly functioning product line.

As is routine now.

All of materials required for these burners for fabricated by Zika.

And the bonus shipped from base line to California early this year.

Okay.

We do have a small punch list of items to complete before closing out of this project and frustratingly.

Following a one off anomaly and a few.

<unk> gas supply to the burners that occurred <unk>, Ben is we're up and running.

Three of the burn is need attention to resume the earlier and as desired operating mode.

Even so the Caesar is in full production and under the operation of all of oil.

Overall this installation has been a success of testament of the great advances.

<unk> made in getting our process then the points they are ready to handle the rigors of commercial refinery deployment.

Having this multibillion installation performing in such a highly fired heater.

Quite a great reference and validation of <unk> core technology.

And we anticipate will be of great benefit when.

When discussing opportunities with all of the prospective customers, who have told us in one form or another.

We love what you can do we just don't want to be first.

This project was installed and the control system provided by our collaborative part of the California boiler <unk>.

Demonstrating great efficiency now gaining great knowledge.

As we have variance installing the equipment and bringing it into operation.

As announced in the press release issued early this morning.

The second installation and startup was for our infrastructure projects.

This is an internationally known Fortune 500 company, whose main business is the transportation and storage.

And the stores.

The purchase order for this project was announced back in October 2020 the.

This is again, a vertical cylindrical heater with bonus of range in the circle and the heat the floor.

These <unk> are close to half the size of the Exxonmobil the world oil business that have the same core configuration.

Roger again.

Validating the scalability of the technology.

This project was sold by California boiler of displaced the SCR system that was originally planned for this project.

This is noteworthy as we believe play of sign coal burners are significantly more cost effective solution to reducing nox.

In the span of CLS.

As a reminder, SCL Street knocks after it has been produced while our bonus create dramatically less marks in the first place.

Thus, eliminating the capital and operational costs of post combustion Nox reduction.

California boiler also provided the <unk>.

Submission and work the amount of engineered to bring the units online.

The formal third party emission verification for the site is anticipated in the near future.

We did not have a specific date yet.

The informal measurements were taken during the commissioning process indicate that our business are performing.

The only as expected and this heater is fully operational and the site is up and full production the set of new place on core vendors.

This brings us to the Exxonmobil testing.

The project installation was moved by Exxon Mobil to Q3 of this year as we've previously.

<unk> announced.

Testing has gone well and has been to use the additive to our process been of technology in general.

In part driven by the extensive and holistic operating envelope requested to be demonstrated by Exxonmobil.

One significant final hurdle has been enabling the business to operate with fuel gas containing.

<unk> up to 80% of hydrogen.

Again kudos from our engineering team, we have now worked out how to achieve this.

Now that the two installations in California are in running we anticipate completing the testing at the range in the full performance demonstration for Exxon Mobil in the near future.

The improvements to our tech.

From ZIP, resulting from this project have been incorporated also into the been supplied for.

While the World oil project and.

Of the infrastructure projects, enabling us to achieve the success that we have.

Even understanding the magnitude and significance of the Exxonmobil performance test and future installation.

Knowledge design, we always have to prioritize the site installations and 10 of our schedules of our customers are the pending on us to enable them to get that signed back up and running on schedule.

Additionally on February the second this year, we were pleased to announce another order for the <unk> cycle.

Coal process better from the second Supermajor.

We believe this project is another validation projects for our technology are part of our roadmap for future implementation to meet the anticipated future emissions requirements.

The installation is in Europe, and other first for us, but the Supermajor has multiple.

Refineries in California, the U S Gulf Coast and many other U S locations.

This brings us to our boiler burner product line.

We have made significant improvements this technology over the last few months.

This has been specifically focused.

On the fly achieved by the design.

Primarily because we have the ability to test and prove other line in the small size range, but we believe we can and fully intend to use the improvements we have made in the smaller battery sizes to scale up to deliver.

Similar benefits and a much larger or to achieve.

The <unk> product line.

The most significant development has been to redesign this product into a single piece burner.

That will insert into the boiler through the traditional been opening in the same way that typical burns for these applications are installed.

This follows the same philosophy that we have applied.

<unk> to the process business.

We need to make our products easy to use and as similar as possible in the installation and operation to the traditional equipment with which our customers are familiar.

We believe that this will increase the rate of adoption of our equipment and enable more efficient installation and servicing because.

<unk> more aligned with the other better equipment with which the site engineers and service personnel I used to work.

Last month, we announced our collaboration with California boiler for the sale of the installation of <unk> boiler burners and players in the USA.

Under this agreement both parties will sell.

It will be promoted the product line.

The California boiler will provide the controls equipment or adapt to what is already on site and provide the installation startup and ongoing servicing of the vendors.

This is the core business.

Now and they have a very efficient team providing the service.

The bulk of the technology itself <unk>.

Well the base on coal will be fabricated to place I'm drawings by third party fabricators.

As an added bonus, California boiler also has a fleet of rental boilers that can be outfitted with clear cycle vendors.

This will provide the opportunity to demonstrate and if need be optimize the scale of that vision.

Leading the <unk> before they are deployed into customer installations.

Our initial target markets of the fire tube boiler vendors was the Chinese market.

This is still our biggest opportunity.

But with the recent developments with players like coal burn of design.

We are able.

We should see Nox emissions below the new SCR focused two to two five parts per million Nox threshold.

Opening up what we believe.

Its really great opportunity to provide an alternative to <unk> and the California boiler by the market.

Total replacement and retrofit opportunities.

The San Joaquin Valley Air Pollution control District has already announced a $2 five ppm target of mid to large sized <unk> boilers.

This will cover an estimated 230 boilers.

We expect that the other regions of California will settle of similar requirements and if that happens we foresee an.

And estimate the potential market in the region of 7000 boilers, which will be targets for conversion.

Obviously, the market kind of expand throughout the rest of the USA and other markets as Nox emission requirements of lowered.

Now turning our attention to China.

Despite the restriction.

In place to control of the spread of COVID-19, we have also continued to push forwards there and.

And I highlighted.

Bye.

The press release issued yesterday morning, we have success the share in this market also.

At present, we have been limited to.

The only half.

<unk>, Mr. Manny Menendez, our president of the players in Asia in country.

So we have had to work around not being able to deploy of technical resources there.

However, we were very pleased to announce that a form of government better prototype testing applications and extensive documentation was successfully submitted and accepted.

By the China government burn of testing authorities.

Acceptance of our place on application was required before the government agreed to proceed and scheduled formal onsite commercial.

Ben of product testing for safety performance and to verify the Alberta is in compliance with.

These regulations.

Further as announced in the press release, we have successfully produced installed commissioned and broad into full operation.

Clear sign call Ultra low Nox <unk> been in the commercial fire tube boiler in China.

And.

The China importantly, our range for the Chinese government testing with authorities to conduct and complete the rigorous Ben of product tests.

We believe this demonstration metal requirements, although to be absolutely transparent in accordance with the official Chinese process. We did not have written confirmation of this at this time.

But this.

The expected to be received during the second quarter of this year.

For anyone not aware of the Chinese government type of testing is mandatory for boiler badness and if granted a formal government.

On the product certification.

Satisfy the that clear sign coal volume.

<unk> as a commercially approved production ultra low Nox burner model and accordingly is allowed to be marketed and sold in the China market.

This formal government certification assuming it has received will be a major milestone for class line.

While we celebrate.

As a non anticipated breakthrough completing the product certification process is only a means to an end.

Concurrent with the documentation on demonstration of our <unk>, we have been busy developing sales channels and the supply chain to turn this into a profitable business in China.

And as in the USA, we plan to do this through collaborations and partnerships.

One Avenue that we have been developing as a strategic sales channel and alliance with China's top tier boiler company Jang Soo shrine line boiler company limited.

A subsidiary of China is strongly on the group Company limited.

<unk> one of China's top 500 enterprises.

Strongly on the boiler company has the largest market share and ranked as China's number one for the manufacturer and the industrial boiler district heating and boiler and commercial and institutional boiler markets.

Over 700 active sales personnel.

We have been developing a relationship with strong non boil the company now for some time.

And in fact, they have provided the fire tube boiler personnel and facilities needed for a demonstration of <unk>.

To date, they are aligned with the <unk> line and see great potential in providing a next generation ultra low.

And high efficiency integrated boiler burner combustion system.

As was included in the press release issued yesterday morning, I'm excited to announce we have signed a non binding collaboration framework agreement too.

To this effect.

And in addition to the relationship.

Imation has been nurtured with strong loan we have confidence in this and see the interest of the shine loan group.

Due to the fact that they have already invested notable resources expense and effort and facilitating a burn of demonstration.

We do continue to maintain close relationships with the Beijing.

Ship the heating groups.

We are both looking forward to being able to resume work to demonstrate a large boiler burner technology in the 29 megawatt water tube boiler in Beijing.

In addition, the Beijing District heating group has expressed the interest and possible <unk> burn opportunities once the <unk> certification is in.

<unk> district.

I will now briefly switched our other product lines as mentioned earlier, our agreement with California boiler includes flares. In addition to buoy the vendors.

Following the successful startup of our most recent flat order discussed in our call last November we of optimize this product and extend the this operating.

In the manage.

Our plan is to provide the fabrication details for a range of complete flares, starting with the smaller sizes.

These will then be fabricated by a third party vendor on an as needed basis.

As of controls elements of the company's affair equipment. In addition to the need of instead.

<unk> ration startup and ongoing services.

Our collaboration with California boiler is very complementary to our respective technology and capabilities in this regard.

And given that the current need for this ultra low emission flat technology is in primarily the California.

Our collaborative partners.

Installation for them makes us very well positioned to develop this market.

A clear on my sense of product is now operational and we have a full demonstration units setup and in hands of our sales team.

This demonstration comprises a fully functional industrial pilot.

Basically set up on the transport.

Published tripod.

Of that runs on fuel from the standard propane bottle just as issues non backyard grills.

<unk> is mounted to the pilots just as it will be on the operational pilots on customer sites.

This demonstration setup also includes all of the controls equipment necessary to operate the center.

Portable to the flame is on the flame strength and the send the signal back to the customers' operations control system.

To date.

Opportunities to demonstrate the <unk> have been limited by customers generally not being in the office or if they are not able to receive external visitors.

His working life return.

Returns to normal in hopefully the near future. We look forward to finally being able to get this new technology into the hands of our customers and ultimately installed and some first adopter sites.

Turning our attention to internal matters I am very pleased to welcome Judy <unk> to our board of directors.

And showed the energy Judy brings more than 40 years of financial and operating leadership with bold.

Participation and broad international experience.

Most recently MS. Schreker was vice President of finance of flat rolled products at Hei metals, Inc.

The global manufacturer.

The low end of technically advanced specialty materials and complex components.

<unk> revenues of over $1 billion.

Prior to that Judy was Chief Financial Officer Officer of Alcoa's Global rolled products business and the member of the Executive Council of the company.

From my.

<unk> patients with Judy to day, she has demonstrated a strong affinity for the operations of the business and applying her financial acumen to identifying and maximizing opportunities for profit.

I am personally very confident she will be of great complement to our board and.

And on behalf of the board the game, we're very pleased to welcome Judy to the team.

The Columbus all of these calls of necessarily retrospective.

Our focus is always on the future.

We have some key events on the Horizon, then it makes sense to note.

And the next few months, we expect to receive the formal confirmation that our first fire tube boiler burner is certified and authorized for sale in China.

This will be a great milestone for clear signs and enable us to start selling assets fully commercial product in China.

Expectation is then to a range of negotiate the partner and vendor relationships, we need to sell deliver and service hub business, while in parallel cycling through the certification process of other burn the sizes.

To complete our commercial fire tube boiler burner range in China.

We will follow a similar course in the USA we.

We will first demonstrating our 125 horsepower of fire tube boiler burner.

The non <unk> operating boiler.

The Nintendo without China projects will develop improves the largest sizes.

<unk> product range.

The commercialization in the USA will be done the new collaborative partner in this market, California boiler.

A big milestone on the net horizon for our process better product. It is complete the performance demonstration for Exxonmobil.

As discussed.

The complete this has been delayed a few weeks by a recent startup activities on the two multi burner E. The slides in California.

But we look forward to returning to the Zika test facility are bringing this extensive testing project to fruition.

As an indication of the quality of our relationship with <unk>. We have continued to make progress of this testing remotely.

Just colonia.

Working with the CECO team, who like US are eager to demonstrate the finished product and to push forward with the debt.

Development of our process burner business.

The completion of this testing is also a milestone in the development of our mutual business the Zika.

From calendar will initiate a much more comprehensive engagement.

For both the validation of our better technology across the very extensive operating requirements requested by Exxonmobil and.

We believe being watched by the United States refining industry at large.

And the strategic engagement of the past CECO business infrastructure.

Ts.

The completion of the Exxonmobil demonstration will be a very.

Significant importance to clear sign.

Of course.

We also have the new order for a second supermajors are complete.

This will be tested at the Zika facility prior to shipping.

The next Thursday of the final destination in Europe.

This will add further to our installation references.

And we anticipate the general confidence with the.

Within the industry of the solutions and benefits that place on core office.

Beyond this we do have an active sales funnel and look forward to future orders.

Our sense of place II is in the hands of our sales team, we look forward to customer engagement of being able to place the first units into the operation.

Before I close I want to thank our employees for their continued focus and hard work this past quarter.

And the working out how to get the job done.

Despite the complexities presented by the effects of COVID-19.

In particular for the dedication and commitment of those developing our technology and seeing a sign of installation projects through to a successful conclusion.

Of particular note.

Mr Management.

On the this for delivering our success in China.

Dr. Donald Kendrick for advancing our <unk> boiler burner technology to enable sub two ppm Nox capability.

And Mr. Jeff <unk> and Dr. Bangladesh.

Baku, a concurrent installation and startup projects in California.

<unk> had a huge progress they have made to the operating capability of our process burner product line.

With that operator.

Can we please open up the line for questions.

We will now begin the question and answer session to ask a question you May Press Star then one on your Touchtone phone.

If youre using a speakerphone please pick up your handset before pressing the keys if at anytime Youre question has been addressed and you would like to withdraw. Your question. Please press Star then two at this time, we will pause momentarily to assemble our roster.

Our first question will come from Amit.

Hell with HV run rate. Please go ahead.

Hey, good afternoon guys.

Congratulations on all of the progress.

Very impressive stuff.

With respect to our revenues.

Revenues from <unk>.

Did you have any revenues in the fourth quarter.

So Matt I can.

Let's start off volume may add.

Details of the.

The infrastructure project.

Alcohol off first.

What will be.

An example of a normal operational projects.

Yes.

That.

That was sold at.

On the pricing it was executed as normal fabricated.

The <unk> shipped to the site and started up as normal and just completed.

But that project was the.

The one that we announced.

Very recently.

And the actual work on the revenues for that will fall into.

Q1 2021.

Okay.

I just was wondering of doing any portion of the.

The fourth quarter of Mo.

Cost of that show up in the first quarter, So I guess that math.

Correct.

Okay.

Yes, yes, yes.

Yes.

Yeah, and then just with all of these developments from a commercialization perspective.

Green share.

More.

High level, if you can like what is in the backlog now and.

These projects.

You are hoping to deploy these all footprint of green one UK globally. Some of these go into credit granting too.

Also.

Yes, So let me.

The restaurant I'm not sure if I can get down to the exact specifics that you asked.

But the.

<unk> debt.

We'll start with the.

The two big product lines of stopped with the process burner.

On the line, obviously, we have the second supermajor.

All of that that we announced.

And the.

That project will ship and be.

Board in Q3 of this year.

At least the.

Current schedules are going to be.

In 2021 project.

But we're really looking at a ramp up from this point that is a.

A demonstration project for that Supermajor oil refinery.

Finally, even though its going to Europe. They are looking at we believe the looking out I should say the.

Multi U S refineries that they have here.

And as part of the peak emissions reduction programs here in the U S of success, there is going to really see the pipeline.

With a major oil company.

With multiple refineries to be addressed here in the USA.

And the situation of similar with the Exxonmobil projects, It's a single project right now.

This juju are going to install the gain in Q3 of this year.

Of the purpose of this project is not a one of sale.

This is all of the technology to be proven our net income.

That is part of the emissions control plans.

For the.

At least the Baytown refinery, we believe multiple refineries for.

Thanks on mobile.

We do we obviously have interest from other clients, but I'm really looking at.

The.

Tejas opportunity and the pipeline to really deliver the the.

The large growth that we expect and thats going to come from the.

Major oil refineries to have the huge plants from really a huge need for bonus and a huge need to control and emissions and the.

Regulated states.

The big strong volume in Texas.

Now we also talked about.

<unk> boilers.

And both in the USA.

Okay.

We do see a.

Imminent opportunity there of the San Joaquin Valley has in December.

Rolled out there.

Specialty <unk> targets, we have recently developed a fire tube boiler burner.

That we believe uniquely can meet those targets without an SCR drive collaboration with California boiler, we have a channel to market. So we are in a position.

To start delivering that product and to rapidly scale of using the rental boilers.

To meet those demands.

It's definitely a a near to midterm sales.

<unk>.

In parallel now with what we expect will be offset the vacation in China.

We will have a.

By product of the certified the sale of that.

Boiler incidentally, the burden that we had in China.

We built by in China that is a Chinese product fabricated with Chinese vendors installed in China tested in China. So we can repeat that we have that process worked out.

And then with the Sean the on group.

With that massive sales team intending to incorporate.

Byrne of into their boilers, we have a very powerful sales channel.

I think of all of those really lead to a a very promising sales expansion.

In the.

And the reason in the future.

Yeah, so with respect to your comments.

<unk>, China the manufacturer.

I was going to be one of my questions were.

These products, which of the Chinese market, we manufacture.

Should we think of our debt in terms of your.

Of the burden on your balance sheet et cetera.

To finance some of those things is this now going to be.

Sure.

Rents on the little bit by some of these partners, where we used to need to make some investments to get some sort of manufacturing set of going over there.

The plan today is to operate very much as we.

In the USA.

The of the fabrication.

All of the burner that we have there and the future we plan to be done.

Yeah.

In the third.

The third party fabricators now.

I want to make a distinction we are not going to a Chinese burner manufacturer.

Of for multiple reasons one.

IP.

What we've done is we have the drawings, we have developed the technology here in the U S. We have the drawings.

And then we will take the different bone of components unless you have been fabricated in indifferent Chinese fabrication shops unrelated to the burden of industry and then we bring those components together.

Being to provide the complete the burner.

But we are doing it with.

The third party shop so.

I won't say never but certainly at this time there are no plans to develop our own fabrication facilities in China, We will work through partners and collaboration.

Yes.

And what.

To do what they do well, which is the fabrication, we would just bring out technology components together to deliver the final product.

Understood and.

With respect to this win in Europe.

The demonstration of the Supermajor entity.

Was this sort of an organic win or was.

We then through a distributor of how did this come about.

What are you doing.

For potential other opportunities in Europe, where you are working towards the distributors are you attacking the market organically.

Yes, great question Amit.

Yes.

Let me explain.

This this product. This particular order is going to a heater in Europe.

The client is a global receive the major refining company.

Along the lines.

It's obviously not exxon, but in the tier.

We.

No the.

Of the senior engineers all of these companies very well.

And it's true our relationships with them.

That they have become obviously very aware of what we have the binding.

And in place on technology out of the progress that we've made in developing our product and getting it to the point is ready.

No.

They wanted to test the products with the mind to the future installation plans and it just so happened.

That the.

The heater and inflation of made the most sense for them to of the stress project happened to be in one of the European refineries.

The point, we did not approach of sales channel in Europe to find the opportunity. It was really a cell to the super major oil company.

They were looking for somewhere to test the technology out as.

Is that first project.

That happened to be full of destination Europe.

So I think further in our plans the.

I hope that there will be opportunities into Europe at this time the emissions legislation there is not.

As Pi test of the USA.

And quite frankly.

I am very interest in that's getting our business going as quickly as possible, we have a very large addressable market in the USA.

And especially from the process been as we all.

No.

Focusing here to get that done put the relevant spreading ourselves thin.

On spreading into Europe at this time.

Okay understood.

Yes, that's all of our for nowadays.

Let's step back and continuing the takeaway for the questions Ofer.

Great. Thank you Amit.

Our next question will come from Robert Sussman with Bentley Capital Management. Please go ahead.

Thank you a.

A few questions can you tell us why Exxon delayed until the third quarter.

And you indicated I think an issue with your installation in California.

Flowing down your.

And testing for the Exxon.

The project can you give us an idea of when the Exxon.

Testing could be done based upon the corrections that you've made in California, NY Exxon did delay it.

The third quarter.

Okay.

No.

Yes.

I don't want to Craig the question, but I think best in the functions at our need to address firstly.

The there is no correlation.

Between the installation in California.

And the testing for Exxon.

Exxon excellent have multiple.

Demo of Downs, it's a very complex refinery and I cant speak for Exelon.

They didn't move that installation to Q3 and and we just very much look forward to getting that product installed.

And that refinery then.

The.

At the burners.

In California, the world oil side.

Yeah.

That project.

Is it.

It's a little frustrating, but that project work really well the the bonus were installed the plant.

The.

They ran out of operating.

They ran out of the maximum fine level for a very sustained period of time.

As of the refinery confidence of that full rates and then finally, just reduce back down to the normal operating rate so ethane.

Was working very well said at some point later there wasn't anomaly.

And the fuel gas supply.

<unk> caused a problem.

The result is we can address if we can go back and take care of of that.

That was of note is not related to Exxon.

And.

Unfortunate stab at it shouldnt diminished the.

Results as the scene in terms of <unk>.

Moving the class line technology up others are running for a long period of time I'm very smooth the Intel has happened.

The reason that I mentioned it.

Is is really just to be transparent.

And if our customers want to go and see the sites we don't see.

That claim to know.

That the vendors, but not all operating as we design them right now, we certainly hope they will be.

As soon as we can get back into.

Two of the Egypt.

But it's not a.

I wouldn't want to take that as a reflection on the state of our technology, Our engineers did an absolutely incredible job.

One of the developing the bonus to the stage and to get these burners running in such a highly fired heater.

And performing a smooth the land as well as they did.

And up to and including the maximum fine right in the seeds of just as designed was absolutely incredible.

Of course, I'm extremely pleased with our result.

But.

Yes.

It's very difficult to bring up.

Type of NAFTA.

Out of concern of will be taken in their own life of this really was a huge success with glass line.

Some of the.

Can you give us some timeframe from when do you think you'd be able to complete the Exxon.

<unk>.

Exxon to approve it.

But the timeframe might be.

Hi.

I cant give an exact date, we don't have a date of arranged with excellent yet with.

Use of football analogy I certainly believe we are at the five the hotline.

Getting the bonus cooperates.

Over fuel gas range from zero to 10 hydrogen to 80% of hydrogen does maybe just numbers to anyone in the industry knows that there is an extreme fuel range.

And it's.

It's a huge achievement for <unk> and the technology.

We've we've been able to show that and we've got the business.

Right over that range, we do have some.

So.

The line of finishing touches to two complete so we're not quite ready to clients upon demonstration yet.

Yes.

I am very pleased the progress we've made and I think it's going to be in the the.

The best onset of raising the near future.

Okay.

Okay.

My last question is what do you think the timeframe.

If things go the optimistic timeframe would be to get the approval.

From the Chinese government to sell your product with your Chinese partner.

Yes.

So in the coal hub.

Just walk.

Within this coming quarter.

Within the within the second quarter is what you mean I assume yes.

Yes, yes.

Yes, the Q1 is pretty much out of it yes.

Okay. Thank you very much of that was very helpful.

Thanks Robert.

Our next question will come from Robert Harvey a private Investor. Please go ahead.

The other.

Thank you.

Jim.

Ryan.

The I believe you said I think of us sometime last year the.

Addressable boiler burner market.

Blake.

7000 meters of 7500 units in California, but if I recall correctly.

350000.

China.

California is one of the.

The most populous states in the U S.

How is it the.

With that.

So many.

Are these like the equivalent the 7500 in California of equivalent to each of the 350000 in China or the Chinese one smaller.

Just a sense of.

Of the addressable market would be.

Helpful. Thank you.

Yes.

Well the answer is the best I can the.

The application of boilers in China.

It is a little different so the the 7000 number is what we is that our estimate of the fire tube boilers.

In California.

The <unk> of typically the.

I'd say the smaller end of the range because these things really get to be quite big but when you get up to what <unk> been steam generation they get.

Absolutely massive.

The 350000 boilers.

Net.

And that's not the total boilers in China, that's just the number that.

We believe need to be converted.

Two ultra low Nox.

Because of the non non attainment regions within China as they have more of one is the map, but this is our immediate.

Market need about 80% of those we believe all of the <unk> type.

Of the remainder of being.

The large of water to the.

The difference.

In China as the northern regions of China, the have a a district heating model.

So, whereas here in the U S. We have personal HVAC systems that heat of houses and offices in China. The district will have a government run.

The boiler plant that will have a whole series of boilers.

And then the heat pump water pipe around the buildings within the district to the by the heating during the cold months and you can imagine in Beijing, and all of the Beijing, It actually gets really cold.

Sure.

So the.

That wasn't very big government.

<unk> organizations in China that run off.

Many many boilers and thats, how the number gets so high.

Also in our past and present, we have formed the very close engagement with the Beijing District heating group, which is the largest of these government organizations.

Government debt provide the heating in Beijing.

And we actually have a collaborative project with them during the call of <unk>.

Mentioned with regards the fire tube boiler burner in China.

Debt thrive.

From a relationship.

And our conversations with them.

But we've taken the Mr. Manny Menendez over.

Has a very close relationship.

They are very interested also in a part of <unk> followed by the project because they have of lots of fire tube boilers in that region and they are in the non attainment region and they need to get that Nox emissions and compliance.

With the requirements of the Chinese government.

So.

So the numbers of correct I think the the.

The fire tube boilers are largely similar but I think the important difference with China.

As the have these massive government organizations of all supplied the district heating.

And they also have a.

A very big pending government requirement, so you get the non.

<unk> from the highly dense.

High density of population areas, where they do have nots.

And lots of time of problems and they've got a.

To get those Nox emissions down.

Got it thank you very much.

Thank you Robert.

And the next question will come from Jim Kennedy from Marathon capital. Please go ahead.

Hi, Jim most of my questions have been answered I just had a quick one on one.

The China market are you aware of competing technologies do they have the an SCR market over there or.

Are you one of the only solutions that you're aware of for that market.

Joe from what we've seen.

There is very little activity from.

Sales in China.

I cant say this number.

Not aware of on the Assembly.

Suddenly believes is very low.

From talking to the operators on my last visit then which was unfortunately of the Covid.

While ago.

The.

Like the simple operation of the Chinese are also very focused on.

<unk>.

So the horsepower required for blowers, and the use of ammonia and the quite large operational costs for NCR.

I believe will be a deterrent to the Chinese deploying that technology.

Technology.

But thats also of relevance.

When we look at.

You asked.

The burden of technologies there.

They are all of the burn is in China.

I don't believe they can get Nox as low as we can they tend to use of lot of flue gas recirculation, which are gaining volume was blowers and complexity of the controls.

And we've actually got similar responses from.

Of the operating companies regarding those the just the efficiency of the extra blows and the complexity of running those.

<unk> systems on the.

Light.

And we believe that is the.

The main driver of between.

The interest of the Beijing District heating group have shown in our technology.

But we offer a burn of that has a simple blower has noted flue gas recirculation of it doesn't require any.

The additional ductwork, all blower to Macy's.

I see what they do is take the flu gas from the stack and blow it background the bonuses.

With the power of an extra the extra construction debt.

So I do believe that we offer the.

Simple solution in China.

And as needs arise.

As we do in the USA I believe with our business, we have the ability to up of <unk>.

The low.

Of the lowest Nox water.

Yes.

It is.

Thank you Jim congratulations on the progress.

Thank you Dan.

Our next question will come from David Brown, a private investor. Please go ahead.

Yes, Thanks, Jim and the great progress so many different fronts. It's just the to me, it's the encouraging as an investor.

Kind of an author who has written about the company I'm thinking of that.

You have so many different.

Fronts that youre working on and finding success my question.

I haven't heard asked yet once I wanted a little more color.

On the parts per million.

<unk>.

Requirements, especially in the more restrictive markets like California, you mentioned a victory in the San Joaquin.

District that.

You were able to get the fire tube boiler down below two five parts per million, which is there.

Milligan of rent.

And future targets I know that those targets of kind of moved from below five to now even lower to below 2.5 in various verticals can you tell us a little bit about.

We're the clear sign core is coming in with the various verticals the different.

Their current types of applications and how you are meeting the regulations.

Yes, and I have all of the best I can.

I think the first thing to note is especially regarding.

Well, the California and Texas.

The San Joaquin Valley did issue there.

The debt targets in the center.

The other regions all.

In the process of.

Developing the new guidelines.

The best indications, we have I believe the other regions of California is going to come out with numbers.

Similar to.

Later.

Of the San Joaquin Valley.

The.

Yes.

Numbers, the Texas at this point.

I truly don't know where I don't know of any kind of end up I don't have as good guidance in tech as I believe the process burners will be targeting a.

The similar number.

But the.

Regulations typically for the process burners.

Asked me was full of oil is also vary by the size of the equipment.

The.

Okay.

The heaters light like the of the water heater and the the infrastructure project with just stores started up.

No.

I believe the other regulation for that type of thing is going to come in around the non.

<unk>.

The best.

No.

Hi, general guidance with that.

We've been the data we've got that we've measured the now mentioned the commissioning date, which is the other one we've seen so far from the infrastructure project is going to be comfortably below that.

Alright.

And the same for flair no flares have of larger ppm, usually I think if I'm remembering correctly youre doing youre doing fine as far as the keeping your customers happy and hopefully the regulators happy as well with the with flares.

Yes, yes, we are.

We are similarly comfortable with the performance to the regulations of led.

Yeah.

Okay excellent and I think all most all of my other questions of pretty much been answered let me just echo a little bit about what I'm thinking I'm hearing from about China, which sounds extremely.

Yes, I think so.

One just one clarifying question about China.

So many members of the only clear signs of staff that's over there for the last.

Significant period of time, so good for him and getting getting this all worked out.

So you have one demonstration project is that.

Ex that or are there more than one of fire tube boilers that you can.

0.2, when China is vetting this and signing off so that you can.

Hopefully very soon get be able to start selling.

A fire tube boilers in China is that is that correct you have one demonstration.

Is that right now.

So Dave if I can.

Let me jump in the zone.

Regarding the the staff of Mr Management of Endesa is a.

One of the place on Asia and spends.

The majority of his time, there we do have a full time.

Chinese national that also who.

Projects each of our business obviously.

The Chinese national It is the full time, so we do have a continuous presence.

Awesome.

In Asia in China in <unk>.

As of Mendez in almost constant touch with China, even when he's not that it's almost like he doesn't come on.

So.

Alright. Thank.

Question, we do yes.

Regarding the <unk> product, we do right now we have one.

Demonstration burner that we have demonstrated.

The the burners and the boiler of the Xiaomi on group debt.

Churn boilers out multiple.

Boilers out daily.

So our expectation is as we scale of this product line as they have the setup and as they have the boilers till the very easy process for us.

Two new.

<unk> into new boilers and to run through the same process in China.

To build out of our product line and that certainly is our intention.

The beauty of our relationship with California boiler is that they also have a fleet of rent of oils here in the USA and the technology is the same.

So as we.

Develop the burn of.

Technology, which we can do here in the USA, we can then basically.

Send those drawings to.

The China.

Have those been is fabricated in the amount of that.

Liberia, and then install in into ever increasingly large boilers with the Xiaomi on group to go through the certification process and build our product line there.

Well, congratulations I think I think to me it sounds.

Like the setup in China is as beautiful as well hopefully no glitches.

And having that.

Non binding collaboration framework agreement with the young Soo Shuang Lang boiler company.

Which is the top number one company in boiler.

And China, that's that's a great victory. So congratulations on that and I'm extremely excited about that news and look forward to further announcements from the company. So thank you so much.

Thank you David.

Our next question will come from Robert <unk> with Los Colinas.

Net capital management. Please go ahead.

Hi, Jim Good to talk to you again and congratulations so many things are really came together on this.

I wanted to focus first on of the California boiler because it seems like the.

The that's probably the fastest already is to go to add.

Yeah, the new installations.

Both of the products in the California market.

So really whether there's 7000 or 3000 publicly as far as timing goes don't you think that's probably the.

The most of the immediate impact as far as generating some cash.

For the company.

Yes.

I think it's a bit of a race to be honest I think that.

The California boiler RNA market, where we are seeing.

The immediate demand very shortly after we had announced that we had the $2 five ppm Nox.

The.

We.

Very quickly became aware of a lot of interest of ours.

<unk> largest send him through California boiler.

So that is very encouraging on this front.

I mentioned the race also in China with <unk>.

I think that we have the company Shanghai on board of a company who manufacture boilers.

We have been discussing with them.

On the integrated boiler burn of package.

Whether they will sell a boiler enabled with a class on coal burn as a package.

That's going to be a unique offering.

Within China.

And when you think of the magnitude of that company when the Sun 700 person sales team I'm not sure which force line going up back in this race I think that both extremely exciting.

Well good.

<unk>.

I was going to say the.

When we think about the boiler burner compared to the.

So the process heater.

The bigger units.

Do you think that again is where.

The the sooner Patrick I'm kind of.

I'm concerned about cash flow and financing down the road is one of them kind of.

I'm talking to.

And so the.

We get cash flow the better off we are.

Shareholders.

And then leaving the thing.

But could you just speak to that.

I kind of again.

I don't think as the.

Eight.

Bethany.

Yep.

Yeah Andrew.

Cost of a major part of it lines of the process heaters.

Oh, no I really believe that that business is it as finely poised to.

Make some huge inroads with the.

But with the with the multi burner installations, but we now have in California.

The center of the.

As a.

The reference point, we've never had before.

Seeing the emissions numbers or at least what we believe will be the emissions numbers on the infrastructure projects can be of great validation for us.

Completing the excellent testing and having installed sites with.

With two supermarket.

And if that is just coming up on demonstrating the operating range that Exxon has put before us.

Is is going to be of great referenced in the industry is not.

Yeah.

These projects are not.

Just being watched by their own is it's a very tight and collaborative industry in general.

The night and.

The.

The tenant of the tender.

Especially as from all of the refineries are.

Watching these projects so with that success I really think is going to.

Essentially going to create a.

A strong growth.

General just by the industry.

So whether that ends up growing faster than the other.

The business is.

Hard to say all.

With the boilers with the of the opportunity before us in China, and the relationship with California boiler here in the U S.

And the.

And if all of the reason we've got the technology developed to fit the.

The new requirements of the <unk>.

More of the size of California.

Okay.

No.

I don't see the walnuts be weighted I think they both got great potential and I think we've gotten most.

The of really.

Angie this business.

Yes, I have to say that.

I think it has to be comforting.

To know that we're just going for that certification now and everything is in their hands.

They like to have that on this call I think it was really significant too.

The current could you just clear up for me on the World oil. So you put in the five burners you random demonstrated for them in the Veeco fab.

I have here in my notes.

Hmm.

And California boiler made the field installation.

But are you saying that.

The theyre not.

Not running the the.

Not actually running those burners now.

No there's not.

Bob Let me clear of that up at the others are in there.

They are all running at maximum rates okay.

Foundry is in normal operation and I believe the other refinery is actually running at very high rates so that in.

In terms of the the productivity from the Caesar.

Is doing everything they could be asked for it the.

The only.

But the only blemish.

I mentioned that has knocked down to the burden of technology is just an unfortunate occurrence.

As the <unk>.

At the mall modify the.

The tech components slightly.

And the burden.

Which basically is what we've done is we've been we've had the day to the <unk>.

Reducing features just because of the.

It's unfortunate incident.

How is the kit and Thats now, we just want to get back.

Back into.

But to get them back to normal, but they ran in that normal configuration as designed for a long time of extra at the maximum firing rates.

So as far as the technology goes it was of great success. It's just unfortunately, it's not a great reference for us.

Just because not all of the bones of running in their house designed for.

Until we can get.

And then just just the switchback.

Okay, and then there was something I've learned of years ago in this industry about the bact the best available control technology in these districts.

Kind of a declaration of the.

The the level of the.

The achievement of the technology is that something still significant that we can look forward to it.

Or is it not the important.

Let me talk.

But a little more general terms and I will be absolutely honest the the very specific.

Requirements to get a form.

<unk> Tech declaration of Bact, I'm, not confident enough about that to talk about it in detail.

We are obviously working closely with the.

South Coast Air quality management districts as part of the Waldorf collaboration.

And we are doing.

Now with them.

Because they basically need to demonstrate to the industry that there is technology available to meet the requirements that they are imposing.

In the industry as far as I'm aware of especially.

Especially with.

Our recently completed reference sites we.

We are the most of it.

Fans and the technology that they have for that.

But in terms of rate.

If you go down the technical details of what goes into the ICT.

I wouldn't want to mislead anyone of them I'm not absolutely confident of the details of that requirement.

Yeah.

It sounds like it sounds great, though from the from the.

The way you just described the tenant.

The fact that can.

Have a real lever.

Four of them for the kind of thing to get more business.

Well.

Can't think of anything else right now maybe call you later.

And congratulations to everybody.

I really appreciate the.

Today Jim.

Great. Thank you Bob good to hear from you.

Due to the time constraints. This concludes our question and answer session I would like to turn the conference back over to Jim Deller for any closing remarks.

Hello, everyone.

I really appreciate your time today and thank you for joining the call.

On behalf of everyone at cliffs on technologies I wish all of the best and thanks for calling in.

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