Q3 2021 Clearsign Technologies Corp Earnings Call

Pardon me, ladies and gentlemen, it's clear sign technologies call will begin shortly so please continue to hold again the clear sign technologies call will begin shortly so please continue to hold.

[music].

Good day and welcome to the clearest sign technologies third quarter 2021 conference call.

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I would now like to turn the conference over to Matthew Selinger Affirm IR group.

Please go ahead.

Good afternoon, and thank you operator, welcome everyone to the <unk> Technologies Corporation third quarter 2021 results conference call.

During this conference call. The company will make forward looking statements any stimulated steam of historical fact is a forward looking statement.

This include 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 risks and uncertainties associated with forward looking statements.

In this conference call include but are not limited to with our field testing and sales of <unk> products will be successfully completed whether it's clear so I won't be successful in expanding the market for its products and other risks that are described in clear sight public periodic filings with the SEC, including the discussion in the risk factors section of the 2020 annual report on form.

<unk> 10-K.

Except as required by law clear sign assumes no responsibility to update these forward looking statements to reflect future events or actual outcomes and does not intend to do so.

So on the call with me today are Jim Deller clear signs, President and Chief Executive Officer, and Brent Hind criticized Vice President of Finance and controller. So at this point I would like to turn the call over to CEO, Jim Deller, Jim. Please go ahead.

Thank you Matthew.

And thank you everyone for joining us today for our third quarter call.

Before we get into the main body of the call today I want to initially introduce you to a new leader of our finance team and principal finance and accounting Officer Brent times.

Brian has been with cliffs I know, but just one month, but has already made great progress taking control of our accounting function.

Brent joined cliffs I'm, most recently from innovation controls ink.

Stand alone subsidiary of Helios technologies.

He served as vice President of finance focused on global sales manufacturing and application engineering operations.

Working directly with original equipment.

Equipment manufacturers.

His responsibilities there, including the consolidation of reporting across four legal entities.

$120 million in revenue.

$600 million and assets and $70 million in net working capital.

Prior to joining innovation controls Brentwood pushed isn't an associates LLC, a professional advisory firm for public and private companies, where he established risk based audit programs to determine adequacy uninfected Miss of internal controls and devised audit reports for executive management and audit committees.

Additionally, Mr. Han said as compliant to enlist a Baker Hughes company.

But the Hines and his Bachelor of Science, and accounting from Oklahoma State University and is a certified public accountant.

With all that said we are very grateful to have found Brent and welcome Brad to the team.

His expertise and experience aligned specifically with our highest priority objectives for our finance function.

In the short time, we have been working together I have enjoyed these energy and enthusiasm.

Forward to building I place on team and class of business with them.

For the first time I will now turn the call over to Brent to cover the financial overview.

Kent.

Thank you Jim.

Excited to be here.

I'm also excited to be a part of the clear sign team well my time here has been sure I see the potential for clear signs and the technology offerings, we bring to the table.

I look forward to putting my passion and my hard work into this business to make it grow and prosper.

My initial focus has been to gain a better understanding of the business. So I can develop smart scalable solutions to strengthen the financial reporting systems.

But with that I'd like to give an overview of the financials for the third quarter.

The company recognized a $190000 of revenues during the three months ended September 32021. This.

This is clearly an improvement compared to the prior quarter. When we reported zero revenues for June 30th.

44% or $82000 of revenues were generated from the completion and delivery of a multi burner product.

64% or $108000 of revenues related to two prior period projects for which we are now able to recognize the revenue.

Now, let's turn our attention to expenses.

Clear sign reported $218000 decrease in cost of goods sold for the three.

Three months ended September 30th.

Per the prior quarter of June 32021.

<unk> reported a $232000 increase of operating expenses for the three months ended September 30, compared to the prior quarter of June 32021.

This increase is largely largely attributable to non cash impairment charge of approximately $200000 of pending patent assets.

This impairment was the result of aligning our current and ongoing patent investment with our core technology.

This is a continuing initiatives to minimize patent spending along with our overall costs where possible while still supporting our most important patents.

Now, let's look at our cash position.

Clear signs consumed $1 8 million in cash for the three months ended September 32021.

And ending balance of approximately $8 8 million.

While this quarter's consumption is higher than typical it was for the purpose of demonstrating our products, which Jim will touch on later on in this call.

Clarifying did not sell any shares through the ATM facility during this quarter and therefore, our outstanding shares had minimal change ending the quarter with approximately 31 5 million shares outstanding.

Yes.

We have confidence in our financial position and balance sheet and with our quarter ending balances we have sufficient working capital available to carry us well into 2022 and that is without income from orders currently in house or projected from our sales funnel.

And now I would like to turn the call back to Jim Deller for our business update Jim.

Thank you Brian.

Before proceeding I do want to acknowledge our extended finance team this past quarter.

As the challenges that began with the untimely death of off price CFO, Brian Fike.

This year.

With that rapid call to action at turnkey was completed and file a seamlessly.

And I am very encouraged by the processes and procedures that the team has put in place to enable this.

For this I want to thank and acknowledge our hardworking temporary staff in Seattle, and Brent for diving in and taking ownership from his very recent stay warm.

And this update today I will start off with an overview of progress in our process burner business, where we have both significant equipment startups and new orders and increasingly positive upfront engagement from customers.

I will then move onto our boiler burner business will be validated our products for both the <unk> boiler and water tube boiler businesses.

And abuse of some very pleasing product launch activities.

Finally, after some more general comments ill open up the call for Q&A.

So turning our attention to process business, we issued a press release last week to announce that we have been awarded an order for the supply of ultimately 16th vendors to be installed into heaters that has eight been as each for.

For the Midwest refinery of a fortune 500 major national Refiner.

As with many orders this is being released in stages.

First stage for engineering.

Developing a computer model about bonus operating in the destination heater.

Building, the first burner and proving the performance in a full scale test furnace.

The second phase is anticipated to be for the additional seven Ben is required to complete the first heated.

And the third for the final eight bonus for the second heater.

There are a few important aspects of this new order to note.

Firstly, one of the key drivers for the project.

Them the desire to reduce emissions by a customer is that this project is being undertaken to enable the process throughput of these heaters to be increased.

And so providing a very tangible and significant return on investment for our customer.

Secondly.

Part of their decision, making they engaged with the owners of our previously installed operating equipment for feedback.

As I am sure some investors have noticed.

As is currently planned this is the largest product to date in the history of clay assigned encompassing two large and very important features for a total of 16 Baroness.

Demonstrating again that we have products and the means to provide them to the mainstream industry and ultimately that we are increasingly getting traction.

We are also in the process of starting up a better project in the heat of a European refinery.

The global Super Major refiners.

This is significant for a number of reasons, obviously is always reassuring when equipment. Finally starts up as while we ran a full scale demonstration of Zika or the technology before we ship from the USA. There are always factors outside of our control that can materially impact the success of our project as we have seen.

Earlier this year.

Of course, assuming a successful startup as projects will provide a good reference for us both in that we understand that this installation is not only meeting the needs of our customer.

But it was also selected to enable the new owner to assess how the technology for use in additional heaters.

With this company being a major global refiner with substantial.

Refining capacity in California, we consider this a big step forward for us.

Additionally.

It will be our first operational equipment in Europe, and will generally provide another validation point for us and the industry at large.

Ultimately by providing unofficial solution for our customers' needs.

Elevating our capabilities, we will consider this a win for the customer pull the industry out of course will play a sign.

Does that and I want to provide an update on the feedback we're getting from the industry and a little color relates to a developing opportunity pipeline.

As you would expect from the two projects discussed earlier and increasing positive operating history from a multi burner infrastructure project in California.

Do you believe we continued to gain credibility and we are therefore being.

Considered for larger and more mainstream projects.

We do not consider the oldest described above to be outliers, but in full transparency I will remind you that this is a very methodical industry with many functions within our clients' organizations that need to become a lines to progress projects, especially when the purchase is not routine.

So while I am optimistic I do not want to be overly so all misleading and will not pretends to be able to give details on dates.

One additional features of note is that we are receiving inquiries not only from end user customers. The refiners, but also from engineering companies, who essentially access packages or intermediaries between us and refiners.

Meanwhile themselves seeking to provide the most appealing project proposals to their prospective customers.

It is also worth noting that all the aforementioned projects have run through Zico, who continues to be a fantastic partner.

They are also engaged as we pursue the opportunities in our pipeline.

I will now move onto boiler business, starting with our <unk> product line.

Some of you may have seen our linkedin posts regarding the demonstration and product launch about 500 horsepower sub $2 five ppm find tube clear sign coal boiler burner that took place at our partner, California borders facility and by failure, California, a couple of weeks ago.

This followed a similar event for the small size of 125 horsepower the same product line.

The reason we chose these sizes is.

The new emissions regulations in the very large San Joaquin Valley Air pollution District.

Required Nox emissions below two five ppm for boilers rated at 500 horsepower and above.

Over the past year, we have developed a boiler burners to be a single piece banner and also to replace these.

The earlier perforated ceramic tile with a lightweight and highly efficient metal flame stabilizing device.

Enabling the easy installation.

And the extreme performance required to meet this new threshold.

But anyone from this field. This was achieved without any SCR ammonia or urea or external flue gas recirculation.

This is not just an aspiration the demonstration we conducted without partly California boiler was a production better operating in a typical commercial boiler in fact, it was one of the California border rental fleets and that boiler is to be deployed back out onto customer science. After we complete.

A formal third party recordings of the bed and border performance and emissions.

Known as a source test for submental to the aforementioned San Joaquin Valley Air pollution control District.

While the importance of this well attended demo yourself evident.

Also want to bring this up impart to say, thank you to California boiler for their all in support of our technology.

But also to emphasize the very important fact G. Today.

Being that being the substantial investments in materials and man hours and the commitment made by California boiler and employee owned company that knows the boiler business in California as well as anyone.

They have made this investment based on their hands on knowledge of the capabilities of the <unk> technology that we have developed and further because they also believe that technology combined with their sales installation and service expertise provides an offering that is both very timely.

And uniquely positioned to serve as very low emissions requiring boiler better market.

Those that have seen our updates we'll know demonstration went very well.

We ran over two days and received a lot of interest.

Both of them attendees in person, including representation from the local air regulatory authority.

And follow up inquiries from people, who did not attend.

Importantly.

The new regulations require plans to be in place shortly after the end of the first quarter next year.

On the installation roughly a year after that.

To give some quantitative reference indication of the customer interest.

We have received approximately 50 inquiries for retrofitting burners into existing boilers operating bonus into new boilers and.

Most of these arrived in the few weeks since our 500 horsepower demonstration.

It is also worth noting that some of these customers operate multiple sites each with a series of boilers.

We have followed a similar technology development path without large awards tube boiler burner.

In our last call. We mentioned that we were fabricating and <unk> boiler burner for testing in a boiler made available to us through our relationship with Zika.

That testing is complete and I am very happy to announce that the very large water tube boiler burner brand with emissions performance closely aligned with <unk> been a range.

We have since also duplicated this burn in China and are making arrangements to demonstrate that banner and get it certified for sale there.

Arrangements and negotiations to enable this are in progress.

It did not have anything further to announce at this time.

On the domestic front, we do have customer interest in place on coal burn is four wall Street boilers. In addition to fire tube boilers.

So while our big opportunity is in China. It is possible, but our first sales and installations for the water tube boiler burner may be in the United States, especially considering the effects of COVID-19 on business and travel to and within China.

One other attribute to note is that by maintaining a consistent design for the <unk> boiler burner range.

Mm 125 horsepower all the way up to 2500 horsepower.

And achieving uniform performance throughout that range, we are very confident in our ability to scale have been designed to the intermediate sciences.

Particularly as a 500 horsepower demonstration burner that was consistent with the same design philosophy brand, so well and the <unk> demonstration.

Before moving.

<unk> owns the concluding section of this update.

Want to refer back to the operating cost numbers that Brent talked through and also presented in our recently filed 10-Q.

As we have discussed here as evidenced in our recent order last week and ongoing.

Activities and as shown in posted on updates on our website, we have completed significant updates.

Burner technologies and conducted full press product line launch activities in California to meet what we see as a significant sales window created by the schedule.

The major new regulations in that state.

To be effective these have to be done with full scale products operating and apparatus that enables our customers to appreciate that we offer are good and reliable solutions for them.

We have been consistently focused on developing products that not only function well.

Patient and practical for our customers to use.

For our customers to have confidence that we have been successful. We believe these large demonstrations needed to be for signs and extent possible in a sense that the customers recognize as representing them.

To this effect, we have developed a process Ben is in a multi burner configuration and a full scale industrial test furnace.

We have built a program a full scale <unk> boiler burner in a test boiler and have a duplicate water tube boiler ready for formal installations certification in China.

And most recently we have completed the demonstration about 500 horsepower <unk> boiler burner in California that are partly California boiler.

We chose to do all these as soon as arrangements could be made.

So we kind of progress our commercial operations rather than delay in an effort to smooth out the costs.

These are all indicators of recurring activities or changing management focus, but rather unnecessary costs and essential push to bring products to market.

We do continue to focus on costs and with a Brent of that financial helm.

We'll continue to do so.

Before recapping the key updates of the past three months I want to elaborate a little on our asset light business philosophy.

We believe this continues to be the right model for <unk>.

This does not mean, a small organization.

As we very much consider partners and collaborators to be publicly assigned.

But it does allow us to leverage our key IP and very talented employees to we believe delivering a much needed products and technology to a national and international industrial and commercial customer base, while minimizing our ongoing capital needs.

It also enables us to deliver our products through established world class manufacturing and customer service operations.

And in particular, allowing us to partner with such well established and respected companies like Zika and California boiler.

And these past few months the strengths of these relationships has been very evident.

Our partnership with Zika has enabled the process been a success in Europe, and the new order announced last week.

Switching product lines and to further illustrate the points I want to spotlight, California, and our engagement with California boiler.

Well, Chris I provided the core burner for that launch demonstration.

California boiler basically built a small plans to enable their rental boiler to run.

Our build out and optimize the fuel gas system.

Two teams work hand in hand to work out the final details for what will be the better control configurations going forwards and ultimately raise the curtain on our fully operational sub $2 five ppm, Nox clear sign core boiler burner technology.

To demonstrate what we jointly bring to market.

Regarding timing this was right on the heels of the San Joaquin Valley finalizing the new regulations and just ahead of the South Coast Air quality Management District, Formalizing that plan on November 5th which affects all of the many refineries and boilers in that region.

California boiler now offer a sub two five ppm Nox cliffs I call Ben a solution.

Which both <unk> and <unk> cell and based on the feedback in the few weeks since I demonstration. These.

Please we'd be very optimistic for our future.

The air emissions regulations I refer to are primarily controlling emissions of Nox, which has notched an oxide.

Or <unk> with a single oxygen and nitrogen dioxide and O two with two auction items attached.

These are essentially the same molecule.

From one to the other depending on the conditions, hence the collective name Nox, where the X represents one or two option atoms being part of the Nox molecule.

Nox is a very toxic and environmentally damaging gaseous molecule and.

In addition to creating acid rain breakdown neogen, la and the presence of sunlight and the high atmosphere and Conversely generates ozone at ground level, where it is toxic.

In regions, where concentrations buildup Los Angeles.

It is also dangerous for a population with breathing difficulties like asthma and is on Ericsson to our eyes.

These are the reasons.

These emissions have been an area of focus worldwide for so long.

And the regulations are in place and being enforced and.

And control of these emissions continue to be increasingly restricted to provide a safe and healthy environment for us all worldwide.

Before turning this call over to Q&A.

I want to give a quick recap of the key elements of our past three months.

We have our first process burner installed and in the process of starting up and the refinery of a major global refining this.

This is also our first installation in Europe, and the first validation product.

This refiner with substantial refining capacity in California.

We have recently received the initial engineering order freights 16 burner multi heater projects for clear sign.

This is <unk>.

Also significant because a key driver for this project is the ROI we.

We expect to deliver to increasing the process throughput copper heaters.

Based on our sales activities, we believe that improved.

The potential is now being recognized as an additional attributes within the refining industry and see this project as being within the mainstream of our expected future business due to its value to our customer and due to the number of <unk> is being considered.

<unk> been a technology is operating and delivering sub two five ppm Nox.

This is being offered for sale in retrofits or new boiler applications through our partner, California boiler.

And of course sales by clear sign.

While this took significant investment by both.

California boiler and clear sign that this is now completed and we believe was timed perfectly.

Considering the schedule of new air emissions regulations in California.

Our <unk> boiler burner has been redesigned and is now configured as a continuation of our <unk> boiler burner technology.

This has been tested and proven to operate with results consistent with the <unk>.

For the bed sizes.

Not only does this enable a much more repeatable product for sale.

Also validates that the technology functions over the entire range from small fire tube boiler sizes up to sizes for large <unk> boilers.

We have a watershed boiler better ready to install in China.

In the process of negotiating arrangements for the demonstration and certification of that the end of that.

With that operator.

Can you. Please open up the line for Q&A.

We will now begin the question and answer session.

Ask a question you May press Star then one on your Touchtone phone.

You are using a speaker phone please pick up the handset before pressing the keys.

To withdraw your question. Please press Star then two.

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

Yes.

Thank you good afternoon, everyone.

Hey, Jim So just to begin with on the operating cost side.

I know theres been some changes.

Maybe how things are being reported.

But the R&D went up quite a bit.

This past quarter.

Could you give us any color on what drove that and how we should think about some of these costs going forward.

Hi, Thank you for calling in.

I appreciate the question.

<unk>.

And we touched on during the KOL there.

It wasn't very significant events that.

Contributing to the.

Increased costs, both this past quarter.

The quarter before.

These were predominantly <unk>.

Very importantly tied to the launch and commercialization of our projects that included both building the.

Large order tube boiler to twin burner to the one that we tested in USA, we built a duplicate of that in China. So that is ready for certification there.

Currently making arrangements for that to be installed and for that process to go ahead.

I also discussed the the launch activities, we just conducted with California boiler.

Because we.

Our goal as always is to get these products to market and to get sales rolling as quickly as quickly as possible.

And as when we get to that point, we pushed ahead and we truly wanted to do that in the most effective way possible as well.

That does involve building full size equipment. It does involve some expenses, but we really prioritize doing this right.

Over.

Doing it for the absolute minimal cost.

The other element as Brent pointed out we as part of <unk>.

Routine cost controlling activities, we do.

Focus on our patent portfolio and our IP spend.

And as our technologies are developing and becoming refined.

It's a necessary process to make sure that we spend money where it needs to be spent.

But also that we.

We focus on making sure that we are truly doing that and where we have Pat.

Patents in progress that are not aligned.

Truly with the products that we're bringing to market.

We've taken great efforts to make sure that we.

Our very efficient with our spending so in all these.

Lease expenses when necessary, but we also believe that they are.

Really isolated to a predominantly to the to these two quarters.

We've not changed our focus on the brand here well I really like about brand. He is a he has really been on target with watching our costs.

<unk>.

We expect to get back down to <unk>.

Normal numbers very quickly.

Okay understood. Thank you for that and then with respect to the <unk> process business.

Alright.

That you received.

How big.

In terms of revenues, what's the total revenues associated with this order.

You said youre going to executed through potentially three fees is that going to take up to a year or less how should we think about it.

We can recognize revenues from this project.

Yes.

Right on point, Amit. Thank you I think the.

Yeah.

We have.

Obviously disclosure requirements by clients. So I cannot give you the exact dollar figures.

But.

I think we can get as long within the ballpark.

We've previously disclosed is public.

Information on the details of the world oil projects that we.

Have taken on so for everyone. Just in mountain numbers that that was an order for the supply of <unk>.

They are actually quite similar in size to this new order.

That project included some engineering and installation just as this project includes some engineering and testing.

That project was valued over $600000.

And included <unk>.

This order.

As for the supply of 16 burners to this job site.

So with.

With some very simple extrapolation that you can get to a very reasonable approximation of the value.

Of this recent order when all the vendors are supplied.

You asked about the.

Timing and the phases of projects so the Avon.

I appreciate we probably got some people who are new to.

And learning about this industry.

It's very normal.

When refiners buy new equipment, especially new bonus two want to validate to make sure.

The emissions performance and the other operating requirements of the technology is going to meet what they need and the refinery because.

Because when they shut a refinery down and replace equipment they need to be very confident that it's going to start up. So this is.

Absolutely normally in my past life working for one of the global.

Major benefit supplies.

And it will be normal for us going forwards.

And that can be done in two ways.

The first is quite common as we have here you get a initial order for the engineering of the testing to be followed by <unk>.

In order for the.

Our production build of the burdens or you will get an order that has the engineering of the first phase with a hold in the contract.

And then the whole will get released once the client is confident that the equipment meets all of their needs.

So I want to give a bit of background, but the first phase that we have right now is the first phase of that process.

The next phase of course, assuming everything goes through is the build of the additional seven burners.

With the first one that will be used for that validation testing will be supplied to.

Fit into the first two.

That.

Supply is an installation is scheduled to take place in 2022.

And then following the startup of our heater decline will then turnaround.

And at least the order for the following eight bonus, which we are expecting to be installed in 2023.

So this is a longer phase because the two heaters are going to be installed sequentially rather than at the same time.

But.

No to be honest that as we're looking at the at the revenue of the company. This has actually given us a very good baseline for the next two years and of course, we expect to be layering on other products or other projects on top of this as we bring more orders into the company.

Okay. Thank you for that Jim just one last one for me.

With respect to deploying these burners.

Other projects etcetera that you might have in your pipeline.

Are you managing through the supply chain issues that the rest of the markets are sort of dealing with.

Sort of.

Comfortable manner.

No.

It's a very good point.

Obviously as we we do work very closely with our partners. So the process has been as we we talk almost daily with with Zika.

We discussed with them of course, how the business is developing but certainly the enquiries and proposals that we're looking to put out.

And the delivery schedule and also going into.

The schedule of the test furnaces because.

All of these performance tests, we need to schedule those through.

In the Zika test bonuses.

So we when we bid these projects, we do bid with a.

A delivery schedule for the product.

We are constant.

Constantly watching the supply times for the materials and that is being factored into the delivery scheduled for.

For the bonus.

From.

Our recent experience, we do see some delays, especially in the supply of the stainless steel materials, but those.

Are being managed by.

Managing the expectations of our customers.

Okay.

Understood. That's all effort, let's take another question. Thank you.

Thank you Amit.

As a reminder, if you'd like to ask a question. Please press Star then one.

Our next question comes from Jeff <unk> private Investor.

Hey, Jim Thank you for taking my question.

First I wanted to clarification when you mentioned.

The sales opportunities.

Spec to the I think it was the San Joaquin Valley did you say 15, one five or 55 O.

Sales presentations that you guys are a part of.

Okay.

That was five zero and that was predominantly just in the last few weeks since the demonstration of about 500 horsepower better than we did.

Gotcha.

The company has taken fast.

What is the size of that market.

Not that you might not get 100% of it but what's the potential size of the total number of burners in that market.

Okay.

Suggest.

I'll give you the numbers, but I think all the.

The most meaningful.

Because obviously, you can slice and dice markets different ways.

But the.

The two regions the South coast Air quality management District, and the time looking valley evolution districts have recently, both put out their new much.

Much tighter nox emission requirements.

The South Coast District is predominantly where the refineries are located and of course, it with that large agricultural base in.

In the San Joaquin Valley, the boilers, often only located up there.

More northern sections.

Yeah. My question was related to the boiler so we.

What we see in that market. The data we have indicates that there is about between 501000, Ben is that all our call low hanging fruit.

That are in regions, where there are new extremely low nox requirements that fit within the sweet spot of the <unk> boilers that we.

Half of that are designed range, which are quite common.

And where the clients are such that the imposition of adding a very expensive SCR along with the inconvenience solve adding ammonia.

Not to mention the concerns they would have over bring an ammonia plant into a a food production business.

No.

Believe it gives us a very strong.

Market advantage, so that that region in the short term on it.

Where do you see this as the opportunity to get this business kicked off.

It's the stronghold of California boiler.

And so we think that market initially while while the other regions and other regions of the country in the world catch up to speed.

So I guess the short answer your questions. We're looking at 500 502 to 1000 vendors on them on that.

Rather the ladder for us.

Gotcha.

Ed mentioned that.

So at the expense of an SCR ive heard numbers thrown around like what is the cost difference between you know kind of a clear sign berner versus using SCR installation and then ongoing cost I think you may have said this in prior calls, but I just wanted some clarification there.

Yes.

Jeff.

The ratio is different from our refineries too.

Two boilers.

In the small boiler.

Business.

I think a good guide I don't have exact numbers for the ongoing operating cost, but the data we have.

Feedback on projects, where <unk> and now our new <unk> solution.

Have been quoted and the price of the STR installation is in the region of 2% to three times the price all of retrofitting the boiler with AE.

Claims like coal burn at that.

Produces the same results regarding Nox emissions.

Yeah.

Got it got it and another question on that.

These regulations, while they are in California, you see other states adopting similar regulations, such as Texas and.

Other oil refinery in production areas.

Yes.

So I.

I don't want to pretend to be able to judge the outcome from the regulators. We know that they have a place you are negotiating with the resident companies within areas.

But we do.

We certainly see the Texas quality.

Functioned.

In Texas, there is a an ongoing process there Tim.

Typically the east coast highly populated regions the east coast of the United States, We would anticipate will.

Look to decrease the debt emission requirements just based on the population density typically Europe is also quite an environmentally conscious.

And we anticipate down the road being a need there as we would in Canada, but the other really big market.

We need to include in the compensation is China.

Where the the pollution and the highly polluted regions of northern China.

It has got to a point that the Chinese government is or hasn't.

Okay Ah continues to impose very.

Strict requirements, reducing nox emissions.

And that's really driving what we see is a very big market opportunity for us there in China.

Got it.

Yes, well thank you for that.

A couple of quick questions on the.

The multi burner order you mentioned that it was not so much for the Nox emission, but the throughput could you give expand on that just a bit.

What you mean by throughput.

Certainly.

Just for April.

The <unk> line.

Coal burn of technology basically provides <unk>, an extremely low nox emitting flame.

But because of the way that playing to structure. It is also.

Light compact, especially compared to the traditional and high Nox Ultra low Nox burners that are available on.

On the market. So the the comparative Ben is the the non class one burn is because of the way they're structured.

Our fuel MBA facing mixes more slowly trading a very long and loose flame, but as flames.

Get to be quite large.

And they will brush against a push against the wars of the heater ultimately requiring the operators to tie the bonus down so they don't damage to equipment or overheat. The process. The result, being that they basically cannot push as much product through that heats up because they've had to turn the heat to put down.

With a clear sign core technology.

By being able to provide.

All of that heat.

And at times more back into the furnace and allowing that furnished on efficiently those operators and go ahead and turn up he's a backup to at least up to his design rate.

So in the case of this.

This project, we're able to increase the throughput or at least the.

Anticipated outcome of the project is that we're going to increase the throughput.

All of these heaters, which.

And these are basically in the to the refinery.

And in doing that.

<unk> affects the.

Amount of a product family can process, which adjusted mass will have a direct and very significant return on investment.

For the customer.

It is flame infringement I know that's been mentioned in the past is that a part of the analysis as well as to why they want to use the theaters versus other types of heaters.

It's.

It's part of the.

Increased throughput calculation, because you don't want to run the heat away you have flames impinging on.

While the process choose obviously that will be the damage the tube or lead to.

A damage or coke build up on these sort of achieve which will ultimately reduce throughput and needed to be shut down for cleaning.

At least for that to be the model more frequently.

So the flame impingement and and tightening the bonus down are really one of them. The same one of them the same issues.

Other customers would turn the flames down to prevent flame flame impeachment from occurring because flame impingement is so problematic.

So these have a sleeping and I'll turn the pipes down which made some smaller all now now it's placed on we can offer them.

A burner that produce a smaller claim in the first place so they no longer would be determined slimmed down.

Gotcha Gotcha.

Yes.

Farming heretofore, we've talked about the close on borrowers that used to look at those numbers as being low Nox emission. But this is this is really just an overall cost benefit even if there were no nox emission regulations.

At play in this.

Yes.

The ability to.

Get the throughput back to normal in an environment, where.

We have clients that want to reduce amongst emissions anyway. It is basically a win win situation for them. It allows them to meet.

Environmental obligations all.

Our desires and produce a return on investment at the same time.

Got it one last question and I don't know if you mentioned it and I missed it any update on the clear Sinai.

Yes.

During the call I appreciate that the other time is precious about very focused on.

On the very significant developments and needle mover to the company.

The <unk> line I is.

Sure.

It is operational we have the demonstration unit up and fully functional in fact, we did give a presentation at a technical conference just a couple of months ago on that product line to the experts in the industry.

So it's.

<unk> is.

Is being promoted as it's out.

I'll turn working but I don't have any really significant use beyond.

Beyond that Jeff that's why I didn't include it in the call today.

Got it.

Got it that's all I have I appreciate your time.

Thanks for your questions Jeff.

Our next question comes from Perry <unk>, a private investor.

Sir Your line is open you may be muted.

Yes can you hear me now.

Yes, we can hear you.

Hey, Jim.

I would say the best thing that happened to clear sign in.

Eight years of Exxon.

Anyway. The question I have is the Exxon.

Exxonmobil they put a hold on further testing.

I Wonder where does that stand right now is there still communication with Exxonmobil on.

Continuing need a project there.

Alright, thank you.

I appreciate the compliment thank you for that as well.

First of all yes so.

At the Exxon project, we developed that Ben I think in the last call that you went through in detail.

The performance that that Ben.

Delivered and that that Sheila assumed with Veeva.

I'm aware they've been very very high performance.

Yes, so they are.

At that point, they informed us that the issue was it takes time for that planning to include the burners in the forthcoming shutdown.

And.

Yes.

How have the time to do that.

We do continue to toll tax on both.

We also have a very big customer they talk to us about their needs going forwards.

We.

We are also in we have ongoing.

Ongoing.

Conversations, but we don't have any finality on right.

On that particular project.

At this time.

I would like to emphasize that while we're talking about I know that the Exxon project had a a lot of engagement.

Largely because we're able to use the Exxon name.

But.

Currently in the process of starting up I've been in Europe, which is another equivalent global Supermajors. So this will actually be our first installation.

And one of these global sea with major companies.

This refiner actually has.

Very significant refining capacity here in the USA and particularly in California. So just revenue on the call. We are restricted from using our customer names at times right.

About want to downplay a missed that.

The significance of what we're doing here and the startup date in Europe and what this really means for that customer just as the <unk>.

The Exxon project was the inquiries does this project in Europe is this company's assessment all of our technology. They wanted to put it into heater to assess it.

Really with AI on the suddenly we believe with the eye on their requirements.

With the new regulations here in the U S.

Excuse me, Joe you know what Bothers me.

Yeah.

Over over the next number of months.

Indicated how easy it is.

Sir your technology in new burner.

It's like a week job to do that.

And now all of a sudden.

Exxon Mobil shell.

We didn't.

<unk> designed it sounds counterintuitive.

And it's so easy to retrofit why why did it have such a problem with that.

I really mean politics.

Okay.

You know.

I don't know.

Okay.

I cant speak Fracs online comparison, what I told to us.

We demonstrated the bonus to meet the requirements of Exxon.

We were told the other part that goes with the shutdowns is extensive and involves manpower involves a lot of other equipment.

Into a shutdown.

<unk> only got limited resources it doesn't always fit so I don't want to speculate as to what was behind that.

I would also I would really encourage everyone not to not read anymore into it than that.

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

Well thank you.

Everyone for your interest in <unk>.

And for taking the time to participate in this.

Core today.

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

The conference has now concluded.

You for attending today's presentation you may now disconnect.