Q3 2023 ClearSign Technologies Corp Earnings Call
Good day and welcome to the clarify technologies third quarter 2023 conference call.
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I would now like to turn the conference over to Matthew Selinger Affirm IR group. Please go ahead Sir.
Good afternoon, and thank you operator.
Everyone to clear signs Technologies Corporation third quarter 2023 results conference call during.
During this conference call. 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.
Numerous important risks and uncertainties that could cause actual results to differ materially from those described in the forward looking statements.
The risks and uncertainties associated with the forward looking statements made in this conference call include but are not limited to whether field testing and sales of <unk> products will be successfully completed whether Christian will be successful in expanding the market for its products and other risks that are described to clear signs of public periodic filings with the SEC.
Including the discussion in the risk factors section of the 2022 and a report on Form 10-K, and a quarterly report on the Form 10-Q for the quarterly period ended September 30th 2023.
As required by law Christian assumes no responsibility to update these forward looking statements to reflect future events or actual outcomes and does not intend to do so.
On the call with me today are Jim Deller.
<unk>, Chief Executive Officer, and Fred Hite, Chris Nines, Chief Financial Officer.
So at this point I would like to turn the call over to CFO French hives Brent. Please go ahead. Thank.
Thank you Matthew.
And thank you everyone for joining us here today.
I begin I'd like to note that our financial results on Form 10-Q filed.
File with the SEC earlier today after the market close.
With that I'd like to give an overview of the financials for the third quarter of 2023.
The company recognized $85000 in revenue during the third quarter of 2023 compared to $324000 for the comparable period in 2022.
Revenues recognized year to date 2023 were $1 1 million compared to 320 for the same periods in 2022.
The increase in year over year revenues are driven in large part by our two ongoing California process burner refinery projects.
Now I'd like to shift our focus from revenue to cash.
Our net cash used in operations.
Quarter ended September 32023.
Proximately, one 3 billion compared to approximately 900000 for the same periods in 2022.
It's $400000 year over year increase was driven by project execution costs related to our California refinery projects.
As noted in prior conference calls.
Many of our contracts are set up so as to allow us to collect meaningful amounts of cash before we recognize revenues.
As we continue to work through these contracts, we will hit contract milestones in the coming months that will allow us to collect more cash from our customers.
Now turning focus from cash to the income statement.
Our net loss for the third quarter in 2023 was approximately one 3 million, which was essentially the same for the comparable period in 2022.
Our year to date net loss for 2023 was approximately $4 2 million, which is approximately $200000 decrease year over year compared to the prior year.
This year year over year decrease was predominantly due to a change in gross profit.
Which improved its sales volume.
As of September 30th 'twenty, 'twenty, three we have $7 2 million in cash and cash equivalents.
With 30, $38 6 million shares of common stock outstanding.
And with that I'd like to turn the call over to our CEO Jim Deller.
Yep.
Thank you Brent for the financial overview.
As always I'd like to thank everyone for joining us on the call today and your interest in play assigned.
On today's call I will review our business segments changing unusual order I will start with Bluebird as fast this time.
And at the end of this I will touch on China since boiler Ben is fine I can follow up on that.
Following that I'll move on to process business, which would include both what I would call a typical process applications.
So an update on high hydrogen projects and developments.
Before I start I have a couple of more general so I'd like to address.
Firstly I want to personally extend my thanks to Paul met the Guy to LLC, who has just stepped down.
Very cool early Thursday last week to passengers regrets that he has had some unavoidable timetable survives and unfortunately, he will not be able to continue to serve as a clear sign of a director.
On behalf of myself and the other doctors want to passenger gratitude for his engagement.
And advisory.
And helps and.
And we do wish him the best in the future.
The second item is to make you aware of some what completed by a third.
That will be of interest.
This report was published by the consulting company Ics.
The California state gas emerging technologies will get tight.
Titled Market assessment, or the emerging ultra low Nox burner technologies. They did what we said that in 2023 and that gives US a comparison with the latest technologies and features cliffs permanently.
What was the process burner boiler burner technologies.
Our boiler Ben has also identified under the brand name.
So a few quotes to report findings include.
Unlike other manufacturers, who have tweets are making a bet as to get ultra low nox levels.
Ben is purpose in Pepsi develops to be Ultralow Nox from the beginning and therefore have tremendous operational flexibility.
And then secondly, given the place on both boiler burner quote.
This boiler been using the same core technology as exceptional flexibility to control the Nox emissions. During the site visits we were able to tweak the better to operate close to sub one P P and Knox.
We have put a link to this report on the homepage of our website.
Now I'm sure each of our product lines I will start with boiler business first I'll say it on this call because we have completed subsequent difficult but behind the scenes.
Want to give this some extra attention.
We have previously discussed our first three water bed sales two into California, I'm wanted to Texas.
These are meaningful as.
They will be our first commercial deployments field.
We actually have four deployments as the first sale, we deployed 500 horsepower rental boiler, California boiler.
Rental boiler was set up and some of you may have seen that posting on Linkedin regarding this.
The first one of the better sale, what's the global medical and business waste services company that was in conjunction with our partner, California boiler.
The San Joaquin Valley Appellation control district of California.
This spend was shipped out to California.
Now his stored and after some delays outside the scope of caisson, California boiler finally started up last week.
This unit is now in operation.
Formal third party verification of the Nox performance has not yet been completed.
Numbers indicate unless the ballpark familiar.
Ill being achieved.
Have the capability to reduce it further if needed.
The second boiler been sold into the California market was towards national provider recycling services to the seed production and restaurant industries.
We installed in combination with a new board.
This was sold as a package in that part of the California border into the San Joaquin Valley Appellation control districts in California.
Installations path of recycling on upgrade that will increase energy efficiency once this customers nationwide sites.
The new better and you boil all those ships I mean, California awaiting installation.
This new board I'm done as part of an upgrade at this customer's operations. These are understanding that the new building, which this boiler will be installed is currently under construction.
We believe we are truly resetting the bar for boiler business.
It's been as larger at 1200 horsepower.
The size range, requiring sub 2.5 parts per million Nox emissions. The capability that we believe is unique to place my bet as well the solutions required by U S steel and associated capital costs and pneumonia.
With that.
It's also worth noting that the new boiler. This site is being supplied by first the largest manufacturer of fire tube boilers in the United States.
The third bullet the sale was into Texas, where after California, We anticipate the Texas Gulf Coast region with a lot next large market for us.
This sale was to a chemicals company the first into the industrial chemical sector.
This is unique in the fact that this is the first applications of our boiler burner technology into a non boiler heater and very importantly, our first sale to a heater manufacturer who has incurred.
And I bet, they chosen solution to meet their customers' needs.
It's been has been installed and actually run enabling us to collect preliminary knock state are significantly below the required level.
The unit is not yet in full operation, but we anticipate that it will be in the coming weeks.
Doing so will provide a valuable reference for us in the important Texas Gulf Coast region.
This installation in particular is receiving significant attention.
Specifically, we believe this opportunity will enable us to quote you. He just wants to spend it is fully operational.
They say this is rohit the manufacturer who was also appointed the boiler burner boiler package to our end user customer in Texas, but we'll now have firsthand experience of the efficacy.
Okay assign business and the competitive advantage that they provide.
Which we believe will result in even more sales faithful to each manufacturer and us.
In fact, just this past week, we were asked to quote for two other projects that this customer is chasing.
Over the last couple of months, we've made some significant albeit subtle changes to marketing a friendly quite roadbed or product line.
For those of you who follow US closely you will stop see references to road MTN.
S Fives and Reg S nine beds.
This is the result of market segmentation.
In assessing what is needed to be competitive in different regions.
I'm excited about is developing an offering that we believe will be competitive threat in the United States and beyond significantly expanding the customer base that we can pursue today.
But you want to you and to.
To avoid confusion Rogue is the name given to the board of that built that play a song called then our body.
The August controls and equipment, which all provided by road combustion a subsidiary on the California border.
Rogue ANZ in an abbreviation as everyone else is a high end fully capable that was provided with nox emission guarantees cheap won't find possible but.
Neither in boilers. It was 500 horsepower Valley district of California.
We anticipate other regions of California, you played in the Los Angeles region in the future.
In this segment and competition is a cassidy units back into clean up system, which is a much more capital and operationally expensive alternatives.
The S. Five version is a simplified kit liaison coalbed and a simpler control system modified to provide a superior offering and a segment, but it also tells a bed is available, albeit with hitting this results low operating efficiency and high maintenance needs.
It's been up and the sales materials, all focused on California customers in particular are defined Qi bought smaller than 500 horsepower.
The S mindset shouldn't just targeted at all regions outside of California.
The main difference between the S. Five S. Nine is the sales channel promotional strategy.
It's a competitive landscape is different.
I appreciate that these distinctions Macy's subtle, but it's approach leads to the development of sales channels targeted please distinctly different markets and customers.
On our last call we introduced Tina on the Chip you had just joined US as director of customer relations and business development.
He was instrumental in orchestrating the aforementioned rebrand segmentation.
Driving changes lightens through it takes focus management and experience and I'm very pleased to have teams that work with us.
And with California boiler.
That brings our vision into practice together.
This has truly been a collaborative projects.
Well I do not have any actual orders to report today, we already have seen traction with customers in two states outside of California and Texas.
And in addition have been notified that we have been identified as the favorite supplier freight you all keep on a project in California.
Some detail one of the attributes identified segmentation projects with the ability to provide sub five ppm or sub 90 P. M.
And then provide simple upgrade to enable our customers to comply with a future 2.5 P. P M to climate.
Should that be needed without major China change out their equipment.
This capability was specifically referenced can have a puzzle and also in the feedback aspect to this by this customer when explaining why they selected the <unk> offering.
I look forward to letting you know at least opportunities brought to fruition.
Now a quick update on our work in China.
We are in the commissioning phase about five minutes horsepower demonstration unit there in China.
It has admittedly taken longer than we originally anticipated due to the time required to get some final components fabricated, but we do believe we are at in final stages, I look forward to being able to coordinate the formal visit from the Chinese officials to demonstrate the operating quit school performance range.
I anticipate that this will be around the end of the year or very early 2024.
Please note all boiler burner companies domestic and foreign need to go through this government better certification process in order to be allowed to sell downs in China.
The regulations in China continue to push the reduction of emissions.
China's National Development and Reform Commission shoot guidance in 2023 to accelerate the retrofit equipment to further improve energy savings C O two at home food initiatives.
We continue to have good engagements with governments at local levels.
Particular, we continued to work with administration in Shenzhen.
And promote our joint capabilities with Shuang Miao.
We have some engagements in tangshan and in general have engaged strategic outreach to major industrial parks in Suzhou Nantong and Tianjin.
Now switching to process business.
Last time, we spoke.
In stock this quarter, we had just received the award, but $1 6 million.
Well the phase two S. B I L Grant from the department of energy for 100% Huntington looks better.
It's grant follows the previous phase one grant for $250000.
Which was for the proof of concept work.
As we discussed the second grant is for up to two years and will fund the development and commercialization for Cobra in Japan are still unable to control Nox emissions to the levels required to control ground level ozone critical due to the areas.
These banners will coincide with the adoption of the new hydrogen economy.
Use of hydrogen fuel for industrial heating.
The anticipated outcome of the strategic reductions in industrial nations, both cotton by outside nitrogen oxides.
Or to enable our customers to transition to hydrogen hydrogen fuels within the constraints of writing patents.
As we have highlighted previously the current available solutions are able to reduce C O T.
Through the banning of hydrogen in place of hydrocarbon fuels, but the byproduct is much higher nox.
Our novel better enable us down to zero C O two bed Epo hydrogen.
Nox emissions, so lungs that they compete with SCR in the low single digit positive range.
Phase one sold the completion of demonstration of our product design process burner to successfully integrate as hydrogen and hydrogen blending while maintaining nox below five possibly.
Phase two will entail scaling up the size of the bed 2 million Btu per hour up to eight months beach and deploying it real world commercial industrial settings, but high heat just required over the next two years.
The design of the first than the second phase.
He has done and we are.
In the process of scheduling application testing.
Anticipated early 'twenty 'twenty four.
We did mention on the last call that we are seeing interest from additional parties regarding hydrogen technology.
The heels of this we announced on September 20th a collaboration with Southern California gas company, well Socal gas.
For additional funding as well as other support this project.
So Comcast has pledged $500000 to the project with the objective of promoting the installation of our hygiene capable they assign call band technology teams they find space in southern California.
There's lots of parts to support the field demonstration is vital because they will help us find and select demonstration sites from their client list.
We can get the technology into the field.
And of course, the socal gas so they can prepare their customers to see hygiene fuels.
Infrastructure, the Socal gas is developing and continue to operate within their environmental permits.
So Cal gas is an exciting partner because they have focused on clean energy innovations designed to decarbonize hot to electrify sectors of the economy.
It's the segment that is the focus of most hydrogen projects and in this case, a key component of the assets to help California achieve net zero by 2045.
So that's and so gas is what keeps it up Andrew This link.
Post green hydrogen pipeline system that could deliver hydrogen to the Los Angeles region.
A project, which could be in the nation's largest green hydrogen pipeline system.
I'll come back to focus on hydrogen fuel process been we have been able to present to them.
Existing products in our portfolio like our Ultralow Nox or the bad news.
Intent. So how gas is set up meetings made introductions labeling to percent technology and business opportunities to not only a significant number of their customers.
So that P. S from other regions and other technology development organizations largely funded by these large utilities.
It is an exciting opportunity to be able to leverage our collaborative relationships with Comcast and getting front of the customers that rely on them for their fuel.
We hope to grow and foster this relationship by bringing products into the market and help companies like Socal gas meet their forward looking mandates by providing customers access to a boiler and process heater technology.
Turning to the projects in our pipeline, we have two multi heater multi been orders they'll be all processing.
The second of these two orders is actually tied to schedule.
As a quick reminder, this order is for the business to fit into two different existing heaters.
The order, which we received back in May of this year includes 13 banners in time.
The factory performance tests. The first of these two heaters went very smoothly and was completed in October.
He's been so now in the manufacturing process led you to be shipped and installed this year.
The performance test for the second of these heaters is underway this week.
These beds are scheduled to be installed early after the media.
If you recall excuse that contract stretches.
These are the events that will trigger significant revenue recognition.
We are anxious to get this order completed because of some of you may recollect. This order is a repeat order from a customer who was an early adopter about technology in southern California.
Additionally, as we have mentioned that it's very important this customer came back to clear sign after initiating an alternative option to install traditional selected catalytic reduction SCR Nox control system and the inherent complexities associated with such a system.
We believe that successfully completing this project will make it powerful statements clear sign significant about that customer base and also the regional megabytes.
One feature of this installation is that the business will operate fuels, a very high concentration of partnership.
This feature is included in the factory testing protocol.
Yeah.
The other 20 bed in the California project is also progressing well and less tight timeline.
As we indicated previously the final witness testing went as planned.
At this time, we do not have confirmation, whether the site shutdown during which the spends will be installed will be undertaken in 2024 or 2025.
Our clients plans and scheduling.
Bear in mind that there are a lot of activities included in this refinery shutdowns in our planning process is complex and dependent on many factors.
We will be able to invoice and receive payment upon delivery of the business.
Part of the purchase order remains until installation.
As we have stated before the bonus use this witness demonstration on not part of the final production run but will not be included in the shipment to California.
These studies will be kept for demonstration purposes potential customers and stakeholders.
We have customer demonstration events planned for.
The coming months.
Beyond these projects, we do see a growing pipeline and encourage you to see growing interest from customers and Texas Gulf Coast region.
As we have said in the past, we very much believe that a lot of the industry is watching these large multi band orders when the field operation, we anticipate that the amateur thirdly operational units will get other customers, who may be on the fence, while not fully considering at this time the confidence that they need to include clay assignment.
Necessity than auctions feature banner upgrades by.
For a more cost efficient alternative to installing Vanessa.
Most recently.
On November 7th just last week, we issued a press release announcing Matti Martin has joined <unk> as Chief Technology Officer.
I want to give some insight into who he is in his role a clear sign.
I'm sure if anyone in the fight equipment industry, Matthew Martin needs No introduction.
For those who are not Matthew is one of the leading and recognized.
Technical experts in this field.
He has spent his entire career in the field of final equipment and energy systems.
The technical development of Pam and the pools.
Particularly computer based Molly predictions with quite the dataset.
He also has a strong background in assessing their refining and related LNG equipment markets and opportunities to deliver each customers to improve the technology available.
I have known Matt for over 20 years and worked with him for most of that time has.
This combination of technical excellence and creativity combined with as market and business acumen is exceptional.
While Honeywell he has the rare distinction of being appointed and engineering fellow in recognition of his extraordinary contributions.
There are more details of his background and accomplishments in the press release for anyone who did not see it.
I am very excited to have Matt join us.
It is very encouraging to have someone of his stature in the industry, we direct that Korea and join us that clear sign.
We already have very strong technical team a clear assigned with World class talent supporting all our product lines. So I want to talk a little about his new role.
Everyone actually assigned with multiple hats and Azure.
Would expect in the company by signs at working protocols is very collaborative and responsive as opposed to being formed and Richard some mass input and expertise will be a crosswalk products and projects.
Mass objectives is to focus on the growth side.
As an example, taking that takes us chemicals installation, while we have a boiler burner successfully installed new process heater.
And extrapolating that capability to applications different types of heaters.
And adapting the business operate and more diverse operating basins.
At a high level objectives is to efficiently stimulate the customers' needs.
Since opportunities and technical possibilities to meaningful expand that business.
And to achieve these outcomes takes focus resources and in particular talent.
Take a step back and look at closer and more generally the recent additions of pizza on a trip you bring a considerable sales management and business development talent to clear sign now Matthew Martin, but these options. He focused technical expertise. In addition to I believe is a truly world.
<unk> talent, we already have typically assign what's clear sign with a very strong capability to expand our offerings beyond the progression.
Current low emission technologies.
I am very optimistic I'm truly looking forward to the future opportunities for <unk>.
Looking forward, they're all key events on the horizon.
The most immediate will be the installations and startups.
Moving to our sales growth.
We have a 300 horsepower pumps coming to embed it in California.
And last week now awaiting independent emissions applications.
You have the 500 horsepower more dependent in a process heater on the chemicals plant in the Texas Gulf Coast, just waiting on a replacement of a component of the piping system outside of that supply.
And the opportunities to quote.
Loss expense weighting on that performance fabrications.
I'm very significantly the installation and startup of the 1200 horsepower sub 2.5 parts per million.
All of that in the summer He valley Air pollution control district of California.
And the installation and startup to process heaters.
California refinery anticipated next month at <unk>.
24.
These startups will transform our installed base and reference list.
We have sales opportunities to progress.
The better process better product lines, and both in and out of California, and I am, particularly eager to develop our opportunities enabled by our recent boarder better product line segmentation project.
Longer term I'm very much looking forward to working with Matthew Martin engaging with his extensive industry network.
Voting app products each time this find opportunities.
With that I'd like to open up the call for questions.
Please operator.
We will now begin the question and answer session to ask a question you May Press Star then one on your Touchtone phone.
If youre using a speakerphone please pick up your handset before pressing the keys and if you would like to withdraw a question. Please press Star then two.
At this time, we will pause momentarily to assemble our roster.
And our first question here will come from Eric Griskin, a private investor. Please go ahead.
Alright, Good day Doctor Deller.
You've talked a lot about.
You've talked a lot of our process burners and boiler burners.
But can you also talk about the prospects for the fire tube.
Product the <unk>.
<unk> cameras, and new a new hydrogen fuel burners, and perhaps you could rank those in terms of sales capacity.
Suddenly and.
I can give some more color around those up.
And some clarification.
I'll start with the at the boiler burners, you mentioned the fire tube defined Szuba is the smaller range off the boiler products basically the boilers or the boilers that we address fit institute into two types, there's water chew, which tend to be the larger end to the range.
And the fire tube boilers, which are typically on the smaller end of the range and they are the main focus of our sales at this time.
The route the boiler burner products all sold in collaboration with our partner, California burner boiler.
And branded as the roadbed those rushee the brought the subject of the segmentation project that I referenced that we worked with California boiler.
So in terms of the immediate sales opportunities I think that has to be the one that I would focus on most from the outside.
The risk.
In response, we have to that segmentation projects are making these products are relevant.
To now all areas of the United States, both within California and outside.
And the response that we've seen today in the very short time snapshot.
Project was rolled out.
No.
Definitely make that a.
A major focus for US we have had two major product lines. One is that boiler burner line and secondly is the process business.
Yeah.
The <unk>.
Immediate startup so I referenced the one that was started last week there is another.
Just waiting a one component down at Texas, that's actually in a process heater.
And a much larger boiler burner choose to be started up around the end of the of those all of that up.
Fire tube boiler burner product line.
And then the.
Okay.
The.
But the indications we got from customers following the segmentation all al.
Class I'm being favorably seen amongst the other bids for other projects in California also resulting from that segmentation. So although.
Although Jim mentioned I really would focus on the fire tube boiler burners.
Longer term, obviously, we're all watching the so what Hajj economy, and the development of the hydrogen pipelines of the introduction of hydrogen in fuel gas systems.
And that has got enormous potential and just to emphasize that one of course is the customer's Bernie Hodgkin and <unk> needing equipment to ban hydrogen.
But what may be the bigger influence for us.
It's whenever you add hydrogen to atypical fuel gas even at a smaller percentage range in there in the in the region of 15% to 20% that's being discussed.
That has a very large influence on the Nox created it he.
He may put the Nox up by 42, doubling the Knox. So if a client is operating currently just under that knocks permit.
Introducing the hydrogen fuel gas is going to put them over that private labels and require them to address that.
And we really believe the most efficient way to address that is to put in a new much lower nox, creating better which we have in multi asset class arm products that is the focus.
Oh.
Not just the project, we mentioned, but the Spi I'll grant, but also the right reasons.
The reasons for promoting the.
So I'm boiler badness.
The last topic you are you mentioned was the other class one since I know you referenced has a camera well what we have is a sensing technology that's unique.
The.
Biggest prospects for that we are we have a public company called now round based out in Seattle.
<unk> was the recipient of the government Grant recently, which we announced the $250000 to develop a sensor.
That will control the steam flow to industrial flares, that's a very big need in that market.
<unk> is also pursuing many of the opportunities. These all.
Longer range and further out but that already.
I really believe there's great potential in <unk> and the work that noise completing as well.
Okay. Thank you very much.
Thank you Eric.
Again, if you have a question you May press Star then one to join the queue.
Our next question will come from Robert <unk> with Las Colinas Capital Management. Please go ahead.
Yes, I was wondering about the.
Our cash flow and the dilution.
With the $7 million, that's shown on the balance sheet at the end of the quarter.
And the anticipation of these orders flowing some cash and do you believe that will get into the next year before.
At the.
And then the next calendar year before.
If you need any more public financing.
Yes, thank you for the questions.
Our balance sheet, we thought is healthy right now we're comfortable with it.
We have projects that we're working on and cash coming in from those projects cash too to come from those projects.
Yeah.
Bob just to add some color to that but the.
Everyone's watching the revenue the bi specific to the projects that drive their revenue are exactly the ones. We're talking about the other revenue as you.
Recognized on significant milestones.
But typical milestones will be the route of delivery and the startup of badness.
We've got a free boiler Budd as we talked about today.
Also the testing on the installation of the process by the state. There are some significant projects that are happening in these next few months that that will trigger the month, rather milestones typical too.
Leads the revenue recognition.
Good good so that'll give us some runway to go with that sounds good okay. Thank you.
Thank you Bob.
And our next question will come from Jeff <unk>, a private investor. Please go ahead.
Hey, Jim I was hoping you could expand a bit on China, and specifically you mentioned the prospects of relatively soon getting certification for the fire tube boiler, but what are the next steps after that as far as sales I mean can you maybe it's too speculative at this point, but can you speak on that.
Sure.
Hey, Jeff Yeah, So suddenly I cannot I appreciate the question.
Prefacing that all of US at this time I will.
Tell you what I see but this is very speculative.
We are you know as I mentioned, we are in the process of completing the right. The run in soon to be followed by the government certification up 500 horsepower fire tube boiler burner.
In California.
But.
Jeff I know you'd be following but for others or haven't one of that.
Our key strengths in China is our partnership with what May be the biggest fire tube boiler manufacturer in China called Shuang Liana. This is a truly enormous company.
And Theyre interesting play assigned and what we've agreed to.
Aligns with them.
Is to provide what we're calling an integrated boiler burner package into the Chinese market. So we have a a.
Truly national scale Chinese boiler manufacturer.
<unk> devote.
Developing a product incorporating the clay assigned burner.
To Ah.
Cheese, the new low Nox requirements that are being rolled out by the Chinese government.
In recent years, we've seen a shift in China and the regulations.
Uh huh.
Being rolled out now in the heavily industrialized regions of China, whereas previously the focus was on the northern regions, especially around Beijing, where the air is notoriously bad.
And focus on the district heating that is still in place.
So this new development is in the industrial cities and Nicola I mentioned Shenzhen.
And.
Hmm Soochow Nantong in Tangier, and these are all very large industrial regions within China.
These industrial regions are heavily populated with fire tube boilers and they are not a seasonal heating. This is industrial heating that's used.
Year round.
The local governments are driving the March levels down in these regions.
And being able to partner with a Chinese company like shrunk beyond these very prominent within the Chinese market.
Then along with them the outreach to the local governments in those areas and to the industrial parks.
It's a really exciting opportunity I don't have any details to report, but that is the path that we're following and the sales machine that we are undertaking as we complete the certification of this large of 500.
Wholesale boiler bedroom.
Alright. Thank you on that thank you for that I appreciate it.
Thank you Jeff.
And our next question will come from Brad Van <unk>, a private investor. Please go ahead.
Hi, Dr Deller.
Mike quite Brad.
Hi.
My question is as a long term investor is the market cap of the company and the fact that the stock prices remain really low and we can't seem to turned the corner on it or maintain anything with it.
What are your thoughts on on.
Getting the stock price up the shares up and the interest up where investment is up.
Yeah.
I really cant comment on it.
Share price and what people pay that's not really in our control but I.
We don't see it in control of the progress of the company.
And the new news that flows out.
Yeah.
I can reinforce my excitement for everyone, the but that the absolute importance.
Getting the reference projects out into the market and having the equipment in the field for our customers too.
C and to give them confidence in placing that.
Those orders and I know I've said that before but let me give you a bit of color.
Just this past week, we started up the 300 horsepower fire tube boiler projects.
In California.
In that same week, we have already had one customer contact to our sales team with California boiler and go and visit that ball, let's look at it as a reference.
Separation for them, making plans.
For their Nox control equipment in California say is absolutely critical to get this equipment outs we have.
To boil is starting up in California. This year, while the big one maybe rolling slide into next year, We've got one down in Texas that's.
We have process burner quotes.
The request for quote being waiting to come to us on that Ben or stop it up.
And in addition, the heater manufacturer who manufactured that he too has already come back to us and asked for quotes for two more bonus for projects that they are chasing.
So when you ask.
No one's looking forwards and looking at the development I just kind of a stretch from my perspective, how important getting these units out into the field and that is absolutely our job to leave reach that's right to do exercised all like we have with the segmentation.
To get.
Right.
People like Ciena amount onboard and to really focus on the growth of clear signs. So we can leverage that installed base.
And finally show the world what.
Placement of products can do.
Yeah, I can remember when the boilers first came out that there was.
I think he quoted in the Fifty's the number of inquiries into it but we didn't have any out and installed. So you think now that we're getting installation that we'll start seeing.
No thanks come across the finish line with the orders.
I truly believe so Brad and based on the based.
Based on what we've seen just say.
Past few months, both with the segmentation project that I talked about and the targeting of the interest in that and then just see the right just seeing people want to see to see the equipment installed.
You know just examples the reference that I quoted this past week all of our customers immediately coming and asking to see the 300 horse ive been in operation.
And my background my previous background in the process been industry well declines always asked what was your reference list.
So for us to get finally be putting a restaurant just together I believe is absolutely key for us.
Okay. Thank you I think the encouraging thing for me is that I have not seen a failure in a product that once it's been installed that a customer has had to withdraw or anything everything's been successful, but I think as an investor and a long term believer in the country. Our company, it's just a frustration.
Is that thanks.
Things aren't picking up faster, but I understand patients. Thank you.
Thank you Brad.
And this concludes our question and answer session I would like to turn the conference back over to Jim Deller for any closing remarks.
Thank you everyone as always for interest and taking the time to participate today.
We look forward to updating you regarding our developments and speaking with you at our next call.
The conference has now concluded. Thank you for attending today's presentation. You may now disconnect your lines.
Okay.