Q1 2021 Clearsign Technologies Corp Earnings Call

[music].

Good day and welcome to the clear sign Technologies' first quarter 2021 conference call all participants will be on listen only mode.

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After today's presentation there'll be an opportunity to ask the questions to ask a question you May Press Star then 1 on your Touchtone phone to withdraw your question. Please press Star then 2.

Please note this event is being recorded.

I would now like 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 <unk> Technologies Corporation first quarter 2021 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 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.

The risks and uncertainties associated with the forward looking statements made on this conference call include but are not limited to where the field testing sales of crews on products will be successfully completed 1 of the Christian on will be successful on excuse me of the market for its products. All of the risks that are described in clear signs of a periodic filings with the SEC, including the discussion in the risk factors section of the 2020.

The report on form 10-K.

As required by law closer of assumes no responsibility to update these forward looking statements to reflect future events or actual outcomes and does not intend to do so.

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

Chris <unk> Chief Financial Officer.

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

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

Our financial results on the form 10-Q were filed with the SEC back on May 17th of 2021.

The company recognized revenue of $363000 during the 3 months ending March 31 of 2021 from the completion and delivery of 3 burgers under our product contract with an infrastructure company.

Jim will be providing further details on this.

The cash burn for the quarter ended March 31.2021.

It was approximately $1.5 million compared to approximately $1.4 million in the same period of 2020.

Our cash and investment resources were approximately $10.7 million at the end of the first quarter of 2021 compared to approximately $8.8 million at the end of the fourth quarter of 2020.

As of March 31 of which 21 the company sold 940748 shares of our common stock under our ATM program.

On an average price of $4 of 93 per share.

Those proceeds totaled approximately $4.6 million and net cash proceeds approximated $4.5 million.

Of these the mountains. There are 190748 additional shares representing net proceeds of approximately $1.1 million that were sold as of March 31, 2021, but subtle during April of 2020.1.

Shares outstanding on March 31, 2021.

The $31 million 137498.

It is important to note that with our quarter ending balances, we have sufficient working capital available to carry us well into 2020 true 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.

Hello, everyone and welcome.

Thank you for joining us the clear signs of 2021 Q1 update conference call.

We have had a long line of all of these past few months.

Particularly in the last few weeks.

As an aside is.

As the encouraging to see the consequences of the restrictions imposed to control the coronavirus start to be relaxed in the United States.

And signs of our industry of market. He is starting to return to more normal operations.

I will start the call today discussing the across the spread of product line.

I've been in some key developments and achievements in this area.

I will then move on the <unk> boiler burners with some very significant progress there also.

After my prepared remarks, we will open up the call for questions.

We havent used on multiple projects and the cost has been opponent line.

The last call, we announced the recent startup of 2 multi burner heater projects in California, I'm pleased to update the both continue to operate well just as reported in our last call.

I do appreciate that.

It's multibillion of projects for Exxonmobil is most prominent so I will start with that.

At this time, we believe the Abbott does meet the operating requirements of the Exxonmobil the.

Importantly, including operation with up to 80 per cent hydrogen in the field gas over the 2 of them range in Nox below the guarantee.

It's Exxon Mobil fuel gas range requirement and our accomplishment presents on extreme range of fuel gas composition for process then.

We believe developing on proving on technology to handle the spectrum.

Enabled into before with the fuel best mentioned is it almost all foreseeable refining and petrochemical processes.

Including consideration of upsets caused by extreme weather <unk> and other operational emergencies.

We are currently scheduling on the formal preview of the performance demonstration on.

Closing out a punch list of non core gun of technology related items required as part of our deliverables.

Mainly relate to some ancillary instrumentation that used to be included with the balance of supply.

Well the just completed we believe we will be to the point of a range of the formal performance demonstration.

All of which will take place of the size of our process been of partner Zika, Inc. The broken Arrow, Oklahoma, which borders Tulsa.

Ultimately.

While the as soon as possible the timing of this formal performance demonstration will be down to the scheduling and logistics all of the 2 teams.

I do want to point out again as.

As we have previously said.

This has not been a run of the middle of order.

As the test in the operating range of client by the spin as was selected to come out of the standards and extremes of Exxonmobil is anytime of Gulf Coast operations.

To get to this point is the culmination of multiple years R&D.

And so on mobile remains fully engaged in this product on it.

It is included in the plans for the net shutdown of the relevant sanctioned the baytown refinery, which was originally slated to be late this year.

The latest status of that 10 of them is it that has been a small delay nothing today with cliffs line.

Which has pushed the turnaround into the early part of next year.

We will of course, the buys and update as we get clarification of the confirmation of the timing.

This upcoming test is also of pivotal to our relationship the Zika Inc.

Our agreement with them is contingent on the completion of this test on our engagement to this point as accordingly be restricted to collaboration between our engineering teams on the use of the extensive CECO test facility.

In addition, CCAR has been manufacturing up and the orders since on engagement.

On completion of the Exxonmobil demonstration, we will be in a position to phone lines of our agreement.

A pivotal event for clear signs of on that we believe the veto in addition to clear sign on very much looking forward to.

On that point forwards.

We expect to engage with the full <unk>, the sales and marketing teams and Zika unclear assigned we will be able to promote the new zico place on coal the product line.

Yeah.

That being said we are open for business and have been in the market selling as our announcements have indicated.

To fulfill these orders we have been very busy working with the CECO team and in addition to getting the Exxon Mobil bends to this point, we also successfully setup and completed the form of a demonstration of the benefits of our European sweep of major projects.

This formal wins performance test was completed on June the 11th.

While the is the normal review of the data has to be conducted by a client before the process is entirely complete all of it.

Indications from the demonstration indicated the client was very pleased and impressed with the advent of performance.

As said.

Volume standard procedure. The data is currently being reviewed by our clients. We believe everything went very well and we look forward to install in the spun out and get.

The AGM. This projects later this year.

We believe this will establish the place on core process business as a proven on 5 will technology for any of us.

The global Supermajor refiner with significant need for what we provide and the Nox challenged regions of the United States.

This project on great significance for players line.

Not only will it be a finished installation fly refining supermajor scheduled for installation later this year and that first installation in Europe. The demonstrates the extreme flexibility a lot of technology.

It is interesting to note that on the main motivation for this project is the need to control carbon monoxide emissions and the flame volume in the very cool fun is a distinct advantage of our deployment on premix flame structure in place on flame stabilization technology.

Up to this point most orders and interest has come from our best in class Ultra low Nox emissions and all of the issue of flame impingement.

With this operator, the issues of controlling the carbon monoxide, the emissions and keeping the claimant short while minimizing nox emissions in the furnace with a very low in terms of temperature.

The combination that we believe of technology is uniquely suited for.

The place on this project provided the opportunity to deploy and demonstrate on mobile technology to a second the global refining.

While this project installation is in Europe, I've said to the customer how significant refining capacity net target regions of the United States.

My last update for this product line today relates to a modem.

California infrastructure project.

At this time, we are still waiting on the form of third party report of the operating data from the site.

The information.

That we do have indicates that the banner missions, but below of guarantees and this is consistent with our own measurements taken while on site at the same time the testing was done.

This nox emissions level was achieved even including the effects of the waste guests. The this pushed through the Spanish as a byproduct of the operating process.

We will issue a press release when the formal report has provided confirming the actual numbers.

As we have stated before but worth repeating these burners for a retrofit of the existing heated as being essential element of the Nox reduction project managed by Engineering company are in Nichols and the stored on the turnkey basis by a channel partner with California boiler.

The cycle business was selected as the ultimate to the SCR technology that was originally slated for this Nox reduction project.

Assuming you just received.

This formal emissions confirmation will validate the substantial capital and ongoing cost savings.

The reduced energy consumption and avoidance of talks of the ammonia transportation storage and processing on signed that cliffs on coal burner technology can deliver to our customers and that led to the environment.

Incidentally this part of it is much more representative of a typical burn on water regarding complexity unscheduled.

This order is now complete fully invoiced and importantly patent pool.

Representing the revenue booked in Q1.

I will now move on to buoy the bad news.

1 of the notable announcements since our last call was the receipt of the official certification of our 125 horsepower fire tube boiler burner.

Certified per sale in China.

This gives us the ability to produce market and sell at 125 horsepower punchy boy the vendors throughout China.

This was on the heels of our announcement the previous quarter of a collaboration with California boiler to sell install and service are punchy boiler business in North America.

Enabling us to jointly take.

Take advantage of tightening regulations regarding Nox emissions on fire tube boiler burners, especially in California.

I mentioned these 2 together as they form part of our holistic client tube boiler burner business development strategy.

Ultimately, we plan to offer a range of <unk> boiler business, California boiler has a fleet of rental boilers of varying sizes. The Atlantis for many of the different by the sciences to the program.

The beauty of this arrangement is the after installing the case on cold vendors. These rental boilers can then be deployed into the field publicly demonstrating new vendors and given the operational experience to customers and most importantly, providing expecting nox emissions that are compliant with the new and upcoming California regulation.

<unk>.

In addition, we can highlight of technology as an alternate to S geos and the competitions and risks of handling of ammonia that they entail.

In parallel we will demonstrate and certified these different bend of sizes in China to expand our product line there.

Since this whole product line is new we won't be able to build and Brian. The next signs of business in the California market and transfer the designs to China to replicate the fabrication of the approval process, we took with 125 horsepower of better.

A newly USA fabricated the 125 horsepower Ben 1 of the smallest of the range is scheduled to ship to California boiler nature of this week, which will be the first of the series.

A significantly large of 500 horsepower, the and I'm, just being fabricated to be shipped to California boiler. The installation following the setup and final check out of 125 horsepower.

The 350 holes by the will follow shortly thereafter.

As part of on an asset light strategy, we are working with the others to actually fabricate the vendors, which is in our scope of our agreement with California boiler.

We have made arrangements for these first few beds to be fabricated by nationally known find cheap oil of the company on the exploratory basis.

This provides access to some of the most efficient manufacturing resources available to us.

That's what we need is well matched by the existing capabilities.

It is worth noting the relationship with California boiler has opened up several new market verticals to us, including dairy milk and cheese, agriculture and food processing.

As 1 can imagine these industries are especially low to install the SCR systems has potential for health and safety incidents or operational complications, resulting from the storage and handling of ammonia present significant risks.

We are also pursuing sales in China. Although admittedly. This is early time, we're being cautious to find customers, who will enable us to get some run time in China and that track record of established while we have a lead the single band of size of available.

We're also being tapped the to find customers, who we expect to the longtime clients and have an interest in protecting our IP and say worthwhile first adopter customers.

Strongly on boiler company, who we discussed in the last call.

The China's largest <unk> boiler.

The manufacturer and with whom we have an mou to develop an integrated boiler burn of package.

They have provided the resources for <unk> type testing in China, and therefore as you would expect they support this approach and are working with us to identify suitable customers to receive either of the first integrated boiler bed in the package.

Or the possibly retrofit of existing strongly on boiler and a Chinese critical amongst region.

The process burner boiler product lines of always been and continues to be our main business, but as reported we also have a range of players kind of saying.

The potential for increased opportunities in these products as the new California emissions regulations on completed.

This includes potential opportunities for landfill players.

We have some final product verification schedule to ensure upgrade technology is developed to handle these different waste streams.

I go with the flow of products similar to the fire tube boiler burner line.

To develop a standard range of high performing hardware and to the end part of the company expecting sales site installation on service, who kind of <unk>.

The mines provide or quantify the clients control systems to accommodate their specific needs.

Fortunately for our flavor on the line, we already have such a partner in California boiler. So the expansion of our capabilities into the landfill market allows us both the leverage our relationship and grow our respective businesses.

Just as a reminder, California boiler installed on provided the controls and service for a full wellhead flares in southern California, which continues to run effectively 4 on mutual clients.

We also continued to promote a pilot of center the clear signs of high.

And as our customer base transitions back to normal working arrangements, we are getting more traction which is good news.

Most recently and as we have on suitcase mobile of demonstration units, we were able to bringing the Tulsa and to include a demonstration of a super major refinery customer who was visiting the Zika test facility for the process been the demonstration.

This demonstration of went well and was positively received.

The place on Ni is functioning blindly, both as a demonstration model, which is frequently assembled and dismantled and the continuous operation of the observed on a model we have revenue around the call in a facility of Seattle.

While we have work ongoing for the next upgrade in this case to the juice of Slim line vision to enable a wide application.

Basically so it fits seamlessly into burners with smaller pilot kind of ups.

We have today is ready for commercial deployment.

We also have the longer term growth opportunity, while providing the sense of a major clients on the transportation sector.

Yes.

The progress as effectively and efficiently and to enable expansion into.

Into the many adjacent possible applications, we have formed an agreement with a private company based in Seattle based on expert in this particular field.

The needs of the transportation industry, both technically and product certifications and testing criteria on the core competencies of class line and to develop these technologies and bring them to market ourselves would require a lot of the capital time learning of networking on our pumps.

Whereas the opportunity to join the company had been developed this technology and the all the necessary background greatly increase the probability of success and greatly reduce the consumption of our valuable cash reserves.

If successful of specialized sense of will be part of a system and that system will be the products sold to the transportation OEM.

The partner has the expertise to bring the entire system together and to navigate the approval and certification process required.

This arrangement also enables our partners to deploy the technology in other industries, which will be beneficial for both parties.

Assuming this venture is successful we plan to hold licensing contracts with that partner for the use of the place on my sense of it in these new products.

I do want to caution you the while the markets these products on a global and extremely exciting.

Anticipated period to bring a new technology to market and commercial deployment in the sectors is multiple years.

So while we are very excited about this opportunity and what the company placed on long term. It is a long term adventure on the anticipated income is multiple years into the future.

I do have a few more general business related comments.

Tens of sales inquiries on prospects, especially if the process beds. While it's just certainly anecdotal all seeing on increased engagement from the main players in the industry and for mainstream projects.

We believe that this is at least in part the result of our progress both in the testing of Z total Exxon mobile and also the installation we now have performing in the field.

As we continue to build on installation list on the performance of those installations is confirmed and that technology is validated we expect this trend to accelerate.

Essentially we believe we are approaching the point that we are no longer considered experimental and commercial engagement with the <unk> line is viewed as being of less risks.

In short.

The industry at large we believe is starting to consider us more mainstream and the conversations reflect that.

For anyone who missed on our press release issued June 7 please.

On the has been added to the Russell Microcap index.

We anticipate that this will bring more visibility to the company and we expect that it will broaden out of the ship when we take it as an encouraging sign of the company maturing and becoming mainstream.

A quick review.

Before proceeding to on Q&A.

We believe we are on the cusp of finally, completing the process of expanding our process by the capability to perform all of the broad operational functions required by Exxon mobile for their product validation the project.

The formal concluding event will be a witness demonstration on client and the Zika premises, where we have the been the setup and a multibillion the configuration spaced exactly as they will be in the destination of heated.

The next stage of this program will then be for the beds to be installed into the destination either in the Baytown, Texas refinery.

The scheduled now for early next year.

The successful completion of this test will allow our partnership with Zika to be put into full operation as we integrate our technology into the vast of experience CECO team and align our resources to promote sell and deliver a new unique and unmatched zico <unk> coal process, but on a product line.

We are very excited about the prospects of the success as we believe on LIFO.

On a fire tube boiler burner product line is being expanded rapidly.

Greatly enhanced by our partnership with California boiler.

This effort can then be leveraged to expand the <unk> boiler burner pilot line in China.

We look forward to the deployment of the California boiler fleet on rent the boilers, giving customers.

1 of our most valuable markets hands on experience operating place on coal banners and incredible emissions performance because we believe they can deliver.

Finally, with I'd say, it's on I sense of product, we are seeing restrictions loosen up allowing us to facilitate some demonstrations with key operators.

And all of our product lines, we are able to stay true to our asset light business model and develop alliances and partnerships to enhance our core intellectual property technical and business management assets with the World class order processing infrastructure and capabilities of our partners and intend to continue to do so.

We have many milestones to look forward to in the foreseeable future and when the shoe press releases and keep everyone informed.

I encourage anyone interested in clear signs of followers on maintained as we post more informal updates combined the unite.

Mine of news items there on.

Please check our website as we do post new material and updates as we progress. In addition to that the website is a great resorts for the whole company information.

The developments of milestones as I have discussed reps.

The represent significant developments not only in technology, but combustion technology in general.

We are running lean that play assigned generally believe that we will be more successful focusing on talent and attitude and building the bigger team.

On the progress we have made as a result of great focus on the hardwoods of our employees.

Progress is never smooth and ran the easy.

And I want to acknowledge the grit and dedication of our team that has enabled the progress that we have made and that gives us confidence in our success.

Thank you everyone of your interest and taking the time to participate today.

We look forward to updating you regarding the development and speaking with you on our next call.

I will now hand, the call over to our operator for Q&A.

We will now begin the question and answer the question to ask the question you May Press Star then 1 on your Touchtone phone.

If you are using a speakerphone please pick up your handset before pressing the keys.

So we're talking a question. Please press Star then 2.

Our first the question today comes from Amit Dayal with H C Wainwright.

Thank you congrats on guys.

<unk>.

Congratulations on all of the progress on it looks like you guys out on a lot of conversations with different partners.

None of the companies that have already been highlighted previously.

Just wanted to get a sense of what the actual pipeline right now is looking like.

How much is in the actual backlog that potentially could be deployed by the end of the of course, the 3 units that were installed in California.

Hi, good afternoon.

Good to hear from you and Ken.

Again, thank you for joining us.

No you're correct, we are as we highlighted we.

We all are getting engaged in I E.

So a lot more.

High quality of.

Opportunities.

Im seeing inquiries on.

The the major uses of most of the engineering companies that support them.

Which we have not seen in the past and net.

That is very encouraging and I really tight balance being a niche.

Indication of the company being considered.

As more mainstream.

And that's 1 of them on the process been side on the.

All of the bonds, particularly defined cheap on the burdens.

Essentially made the announcements as an example of making the announcement with California boiler.

And all of our intention to develop a product line, reflecting the sub $2.5 ppm Nox that we've achieved the.

125 horsepower Vernon.

We've seen a lot of inquiries from the other vertical as Doug referenced in the coal.

So it was.

A great interest and also we are.

Working with California boiler to push through the the Additionally, bonafide Z in in that range to get them to market.

Yes.

Obviously just to reflect on the opportunities we have there on California boiler, having a net.

The series of rental boilers that we can use to prove those been the sizes.

And that those men. The boilers can then be deployed to benefit customers gives us the immediate ability to actually get these buttons out into the field.

And to let on Prospected customers get the hands on the technology get used to seeing it.

Okay.

And the base you see what <unk> can do.

And the nice so we yes.

We do see things picking up the CAE.

No.

The great development team and the opportunities that we are getting exposed to.

Through these partnerships.

Alright understood. Thank you and then.

With the excellent I guess.

We should just hum.

Expect us to invest in and play.

But just wanted to confirm your commentary on the call.

Everything that was supposed to probably happen in the first half of.

Turning to anyone now of being shifted to first half of 2022 in terms of <unk>.

When you could actually get.

Some of these demonstrations.

Out of the way.

Some of it.

This will the.

Let me address the axon because we we've actually made great progress of Exxon. This was a this was more of a project, but this is not we talked about the other day.

So it may.

Supermajor budget.

Just referenced that as a as a comparison.

This was a more typical scope with a standard specification.

The order was received late January.

We demonstrated as we complete the the testing for that the in the last week.

And it is now.

It will ship very early in Q3 with an installation also later on this year.

In Europe, the Exxon project has a very wide operational scope.

The.

We believe the conversation with banks on we believe the we have met all of the operating requirements.

The punch of the supply references has nothing to do with the coal burn of technology. It really is instrumentation.

I appreciate the bonus that we have in test all of the burden is that will be shipped down to the baytown sites. So the there's some tightening up on polishing the due to get those ready to go.

We are in active conversations with the excellent engineers on the process from just an idea of where we on the process to complete this project. We're in active conversations with the Exxon engineer.

About having him come up to Tulsa to do a personal witness of the button on and to check out of the performance of make sure. The he is comfortable with it at.

At which point he will then.

Engage the rest of the stakeholders with the next on the will be part of the formal witness test.

And instead of just down to making travel plans and have them coming up the tolls of to complete the process.

So the.

Yes the.

Changing the schedule is just a couple of weeks. Unfortunately, the installation day I referenced it's moved into the year 2020 twos the wall of that's of milestone.

In terms of actual time is not that significant of the special considering the magnitude of all of this project.

Okay understood.

On.

And with China.

You guys made a lot of progress.

The early part of this year already.

Of our efforts to commercialize over there.

So I would just on sort of a little bit of a.

The development period, I guess on do you see maybe orders materialize for you on where they're like Oh, what about what is happening on the ground actually you the and is there anything that would come up.

In terms of deployment opportunities for that market.

So in the.

1 thing I want to highlight is we have a a 5 <unk> boiler burner in the plan and China is.

By far the big market for that.

Oh.

But in terms of.

The <unk> successfully in China of festival means developing the product line.

And especially with the restrictions of Covid, we had to come up with another way of doing that.

And have really focused our efforts on <unk>.

Working with California, boiler and developing a product line of burdens. These are exactly the same buttons that we will then be deploying in China.

Proven that we can get the product certified day, we've proven we can manufacture in China.

We have developed a very strong relationship with truly.

Truly of massive company in China.

Non Bob 1 of the company.

We are carefully.

Seeking the first adult to customers I will emphasize carefully.

Because while we were at this early stage of launching on entire product line.

We don't want to miss debt by rushing justifying made the sales. So we do look forward of that fare sales done don't get me wrong.

But it is much more important for the folks on the big picture and the dull day of us.

Is to launch a comprehensive product line into the mainstream industry of China.

Okay.

And that's all I've.

Taking all of the questions off line. Thank you.

Great. Thank you of it.

Our next question comes from David Brown, a private investor.

Hi, Jim and congratulations for all of the milestones that are being met and continuing.

New business opportunities.

My question was mainly a follow up on.

The fire tube boiler with China.

On the different sizes.

<unk> what I'm hearing is that you are developing with California boiler some much larger fire tube boilers of 500 horsepower and the 350 horsepower.

Your current product line is the 125 horsepower fire tube boiler that is ready for market in both.

The U S and in China.

Just wanted to get some clarification on the.

The process with China, I know I think if I'm remembering correctly from the last call.

You will have to get.

Chinese government approval.

For different sizes. So if you perfect of 500 horsepower on the 350 horsepower I would assume that you're going to be going through a process could you give us the more color on that process on how it would play out.

Suddenly.

The observations on good day and correct.

We've.

We believe the hub of them is the first in China. So getting that 125 of course that buy and also on that we had to work on the process, we have to form the agreement with strongly on boiler.

And basically look at everything that was required by the Chinese authority to complete that certification process.

As we develop the burn of sizes.

In California, we will.

Manufactured assist of bonus in China.

And then basically repeat that process, so what that entails is.

Building a.

Just complete with a control system.

Installing that in a boiler and although on a stress not.

Not confirmed at this point, but we fully expect that to be with strong young.

We will then go through exactly the same steps all of.

Building on Ben of installing it.

Ensuring it runs correctly and then we basically both of the government agencies they come.

And.

The spend a on the.

Last time it was a.

A couple of days, we expect the process to get shorter as they get more familiar with us.

On a checkout in the strength and the implementation the checkout, but then they make sure it runs on meats.

The requirements.

The inspector of them basically submit their days of banks.

To the.

I guess, the senior people within the Chinese authority, who then.

Give it an issue the certificate.

But having done this.

Or do you believe having done this the first time on worked on the process and all of the contacts.

We are now just falling on the on exactly the same footsteps with the repeat sizes as we sequence through the through the different board of size in California.

Okay very good thank you for that.

1 follow up on.

The dairy.

<unk> dairy and the.

The story.

I imagine that would be something to do with the.

How much of the heating of imagination of of.

No of course something of that nature.

You mentioned that obviously theyre not real comfortable with the SCR with the ammonia.

As complications with the food products. So could you give a little more color on exactly what the kind of what the opportunity is on the dairy industry.

And what the what the what the heater would be.

David.

I think the fact that I cannot give you all of the details youre asking is actually the strength we do.

We are building on our asset light company.

And part of that is the working with very strong channel partners.

That is a.

Clearly the question I would love to put to California boiler the law expert in the area of work with these guys day in day out because the.

You could appreciate the.

The industry, just thought we'd probably do without hvac's into the home Youll have a.

So this company the use the lively the the industry do the same thing in California boiler on provides that service to them.

And they know these plans intimately and the needs and provide the <unk>.

<unk> service and Thats, 1 of the reasons that we really select them and work with Amazon as a channel partner.

I don't want the claim knowledge of some of them really no a reliable solution.

The information flow.

The.

On the ones you also take that as the strength because of that.

The strategic model of all of this business is defined and work with the channel bonds of salmon agents can do.

Okay, great Yeah that helps because that means that if an opportunity that's come up through your partner basically.

On your partner recognize Hey, this is the <unk>.

This is a good fit here.

That's the appreciate it I think that you have many partners now on the asset asset light.

Model and.

They are paying off now for you it sounds like so that's exciting.

Alright, Thank you David.

And again, if you have a question. Please press Star then 1.

Our next question will come from Robert catch on with Las Colinas Capital management.

Yeah.

Thank you Hi, Jim.

Hi, Bob Good afternoon, Alright, alright.

Yeah. Good afternoon, I wanted to ask you about the fire tube since you were able to achieve even a lower nox and the fire to the application.

I wanted to know if there was any <unk>.

<unk> difference in the industry.

And the couple of areas both the theme.

Operating oxygen and the turndown ratio because I know the industry is used to certain levels on those 2 things and I just like you to comment about how this compares to what the industry is used to.

Certainly I mean, there is a.

A wide range of different products in the industry.

The.

I turned down range meets the requirements of on the standard bonus.

And you have taken the step our goal has been to develop products that provide the trulia a superior performance.

The easy to operate and as normal as possible for the.

The only companies.

1 of bonus meet the the normal tend on range.

The <unk>.

The low Nox the we're achieving is.

At a.

Okay.

At least equivalent balance and lower oxygen level than the typical lowest nox alternatives.

On the market.

I am, particularly comparing to the debt on.

The metal mesh stabilized burn of 1 of the variants.

Alberta, but bear in mind the lot of the other bonus that get down to very low nox of other complications such as recirculating flue gas.

On the extra blowers, and the extra and utilized.

And so pulling the flu gas from the stack and blowing the PACU through the downturn as well.

So in terms of all of the utilities that we would acquire.

We are.

It was certainly in line I would actually playing to be slightly better than that.

I'm not saying, we have any peers the been the other vendors the claim the on the lowest nox on the market.

Yeah.

Okay and the.

The.

Can you talk about the level of oxygen.

For operation usage on it.

The the oxygen concentration.

I can I mean the.

So the numbers.

So just a clarification of having on talked about numbers here, we have a 125 horsepower of commercial boiler.

In our facility in Seattle.

Where we run most of the testing on development of all of that bad debt.

So.

Our GAAP numbers from.

Testing here they actually exceed.

The.

The numbers that we've posted we've run of.

On the data coming to mind that.

Also the capital hit but the.

In general terms of the data coming to mind, we run the auction numbers, we got knocked down.

Low tpa to BPM.

And I think we have we.

We've mentioned that in the past and the oxygen levels up to achieve that have been.

In the.

The 7% to 8% on 2 region, but as we.

If we allow ourselves to get up to the north of 2.2 ppm Nox, obviously the option levels can be reduced and as we continue to develop the product we're actually.

Working out how.

How low you told the options still meet that critical mass level.

Okay and then.

The the other area is <unk>.

You mentioned the.

The shipment.

The back I'm talking about the process.

Berners, though.

Yes, he said install this year the European client.

Should be completed shipping in the third quarter.

So.

If we if we look at that transaction because everyone's concerned about the length of time before we get cash flow and don't have to continue to get new financing of push the company forward.

So that's really the level of.

The risk that people are looking at I think on the call.

That 1 as you said with the order or.

I guess in January.

And expect to get it shipped in the third quarter and I guess that would probably be for the process.

Peter type thing.

It's probably more conventional if you are already in business line.

The veeco or another another.

So.

Seller of the same product.

Is that kind of a normal type of thing of the order to shipment of of <unk>.

6 to 9 months typically.

It is.

We've actually got 2 good data points for a.

What I suggest is a more normal operation I think the.

The excellent project because of the magnitude of the development has.

Hum.

Has somewhat skewed the perception, but we have both the infrastructure projects. So I just remind that when the infrastructure projects.

Free bonus we received the all the mid October.

2020.

We did test that Ben on that Ben of shipped in February of this year.

<unk> has started up and in the quarter.

And basically said the we are.

Imminently expecting the formal release of the test data on that Ben.

But the.

The second Super major is actually not first week of May just because this is going to be the first installation in place a suite of major refinery.

The order was received right at the end of January this year, I think Michigan announced it by the end of February.

It is it's scheduled to ship.

The testing was complete a completed last week.

And it is scheduled to ship at the.

Start of the third quarter, this year and to be installed.

Later on the share of installation base can move a little bit of knowing that controls. So I cant give an exact date of the actual installation, but it is.

Is comfortably inside of this year.

Most of our projects, we generally measure of that Pompeo day to shifting.

The window.

That really drives our business and that finances.

And then jumping back to the the burner boilers on the California boiler relationship.

I tried to look up something about them being a private company and it seems like their services that they provide their customers is beyond.

What most of us think as a.

At the manufacturer's rep.

I'm, saying the manufacturer's rep.

As more of the sales force. So you like the elaborate a little bit on the.

On the capabilities of California boiler and the relationship they have with these customers.

Yes.

It is important we do choose out of.

Partners carefully.

And the.

The objective is to leverage <unk>.

What we have the special so we have a very special but on the technology.

And we aim.

We are staying asset line.

No.

Our role is to provide the technology and to the buyback in a form the AIDS repeatable and scalable.

While California boiler brings to the table is the rest of the picture they have the relationships with the customers.

They have the expertise and experience to the by the.

The customization and engineering.

To modify the control system. So on the boiler burner is the control systems are typically the customized part of the project that is exactly what California boiler do they.

They will specify if it needs to be new it will modify whats the if it needs to be reworked they would take the standard coal product we will provide.

And then David day will handle the installation they will handle the controls that will handle the startup on.

They will handle the service in addition, because of the network and location and ongoing business in California. They also on how the customer relationships.

So they will actually bring in the inquiries on the orders, which will lead to that business.

And then really beyond that looking at it for me.

I'd call it line Rollouts.

They have the rental fleet and they have the market knowledge.

To help us get this product line from a great technology to a commercial business through the deployment of the event the boilers.

Looking at the size of the boilers and deployment of rental boilers and getting the of the marketing and the experience outside of customers in the field.

Okay, Great and then 1 of the thing just to clear up you mentioned on the other 2 sizes on the.

On the fire to the.

500 horse in the 350 horsepower.

Of those already been designed and built or are you still on the kind of of the process of doing that before you can send them to California boiler.

So.

First of all Bob there are more sciences those all.

Just the 2 that we are knocking out quickly. If you look at a bought a bunch of Paul line, we will continue to fill in the rest of the sizes as well.

The the 500 is is designed and in manufacturing the 350 is.

It is designed the actual manufacturing has not initiated yet, but they are we sequence that because.

You can only work on.

1 boiler at the time, so we basically line these up to flow back to back to get the markdown as quickly as possible, but also.

Efficiently considering the resources that we in California for the half.

Because running.

And the <unk>.

People would have a fleet of different size of orders just ready to run.

Concurrently all the all of the band pads, we optimized the amount the same time. So we're doing these back to back in series.

Okay, and then lastly, I just wanted to say thank you for the.

On the effort to keep the cash burn of about 1.

On a half million dollars again, I think that's really great and the whole.

All of the people on the company deserve credit for that because that's really our that's really important to the to the shareholders I think thanks very much Jim.

Thank you Paul I appreciate the questions.

Our next question comes from Robert Harvey a private investor.

Thank you Jim.

You're only allowed to take questions from people named Robert the it appears.

The strength.

The.

Actually I have 3 questions.

What.

I believe you said the last time the.

Call that 1 of the reasons the Exxon was taking longer was because they were asking for.

More of potential configurations.

And I just wonder if the.

If you.

Has the market opportunity.

It's taken longer to beat the or the test these different configurations and I just wonder you can say a little bit more about whether or not that has expanded the market opportunity with them, though the we've been delayed but.

The market opportunity.

Larger than what was originally expected the question 1.

Certainly.

The the.

The breadth of the operating requirements. The excellent have requested is.

I believe the most extreme that I have experienced working in this industry.

496.

The the fuel gas range is.

The.

Having said Nicole.

Through multiple processes of multiple different upset conditions going back looking through all of the data the breadth of all of the different operating units on the plant had taken the highest malaise.

And after sort of asked us to accommodate everything they've.

And they've done that for a reason and that was the reason that we have.

Really persistent to meet all of these requirements as the reason is the same reason that they gave US all of these requirements as the Exelon is doing this out of the validation projects.

We did not want to eliminate the.

Limit.

The applications that they are considering in any way.

So while it has taken some time and certainly considerable efforts.

It is a very worthwhile endeavor.

And.

I think we need to also look of the bigger picture of that while these positives for Exxon.

It is being launched I think we believed by all of the of the Super majors in the industry. So the.

This really is truly a.

The varying launch.

The validation projects getting these bonus through these tests demonstrating all of these requirements.

<unk>.

Of this country of price Big achievement on the huge milestone for us.

Great. Thank you.

Along the lines of the other majors who are interested.

And maybe this is just the.

I'm inferring in correctly here, but you mentioned that you had an increase in engineering inquiries.

As the lay person looking at the shell Court decision.

In the the Dutch court and so on it seems the politics of <unk>.

In your direction.

Are you are you share that everyone who needs to know about.

Clear sign.

The knows about them those about U a E.

Is there you know.

Rather than waiting for engineering inquiries are you doing.

Within the scope.

The finance restrictions.

Do you feel you're doing everything you can't as this environment I think is coming in your direction.

Politically to make sure that all of the potential buyers of your product or getting in line correctly.

That's hard to quantify at the I think there's a few a few people I mean, we.

We do not rely on the inquiries coming in on the inquiries that come in or the.

The ultimate if you look back all the.

Income from outreach and emotion and 1 of the big activities will be going through right now is.

Making sure the word gets out we need the world to know that we are open for business.

Especially within the the.

The engineering and <unk>.

Operating community around the refiners.

And 1 of the companies.

On a personal standpoint, I would never believes that we are doing all of the average debt that we should be I mean, you can never rest on the laurels.

You've always got to be thinking what else.

Can we do on him.

Whilst I think we have.

On a.

A good jumbo all promotion in the place on the is truly becoming an established brand.

Oh.

Okay.

On.

On never going to say that we don't need to do anymore, we absolutely do.

True to would have of channels, but also the new channels, whether it's conferences.

The applications 1 of the big events the him.

Really looking forward to is.

Being able to talk more about the installations that we have because having an established case study.

And references from the industry on being able to use the names and the statements from the operating companies.

Is very powerful.

Getting through the excellent test and getting those bonus into the field is going to move this forward in terms of listed greatly.

We've talked about the infrastructure projects and the seconds.

Global Supermajor on now the first leg received the major that we've just tested for.

Getting to the point that we can discuss the details of those projects and as you talk about who that really is and get their testimony. All of these are the same.

Things that we do.

And we take very seriously.

There is a lot to the marketing is extremely important.

And I'm not sure you can have a second.

You've done it all.

Great.

It's always the goal.

Great. Thank you My final question is I noticed that the.

Do you have the change in how Youre looking I guess for a CFO.

And.

Your I believe the headquarters or Youre moving to Oklahoma is that.

The can.

At least temporarily disruptive how's that going.

Will that be completed.

So.

The.

Our business is.

And has steadily been transitioning to Tulsa.

Tulsa.

Of.

And it has been now for some time. So we are doing this in the way not to be disruptive.

We have 2 active offices.

The.

I made the upon the Zika is.

In Tulsa as all of the.

It's 1 of the industry space, just when the customers come for combustion equipment, where the supply is all is where the workforce the experience in the industry are based.

And to be successful.

We do need to.

On the onsite locations everything in the industry, but it's.

It's certainly very important.

But we have migrated their more than.

Shut down 1 of its.

And moving we all continuing.

Activities in.

In Seattle, and we certainly need support the west coast.

We are being very careful for it not to be disruptive and we are.

Yes.

Not doing that roughly.

Got it thank you.

Thank you Robert.

Our next question comes from Jeff Stein got a private investor.

Hi, Jim Yeah. Thanks for taking the question can you expand a little bit you mentioned this earlier, what how will your relationship with Veeco change once the Exxon.

The personal witness testing is completed.

Yes, Jeff. Thank you this is a.

It's actually.

A really big milestone for class line.

And it's.

It's what we've worked on or at an asset light strategy the.

So it <unk> just the constant Zika is the second biggest fastest spend on manufacturer in the world.

The.

The process then of industry, which requires customized projects the clients.

Very conservative and rely on name.

And reputation.

And.

We need the sales team as well.

We have salespeople, but we need a.

Okay.

The much broader platform Zika has.

So all of those resources and the agreement we have with them.

Is that we will basically integrates.

Lindsay go on.

And on what sort.

So the.

To explain the debt.

What will come out of this is that there will be a new CECO placed on coal.

So on a product line.

We've always strive to be the Intel inside.

We will work with Zika, we will benefit from may of infrastructure. They.

They will benefit from having a truly best in class of unique but on.

On the product line.

And together, we will market that product line and meet the needs of all of the customers. What we've been doing up till now is.

Is basically proving out our product to the industry to get placed on the established to get the on the brand recognized.

But the.

But the really big step is 1 leveraging the the resources and combining the Zika. So so we then all of working through the assets of truly a global company.

And secondly that global company will then be carrying class on coal.

As the.

The.

Very much the the unique ultra low Nox burner.

In the industry.

Got it got it well thank you Paul.

Thank you Jeff.

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

Thank you everyone that does conclude on.

Call for this quarter.

I do appreciate the time and I really appreciate your questions and your interest in following the close on.

And I look forward to talking to you all in the near future.

The conference has now concluded.

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