Q1 2024 ClearSign Technologies Corp Earnings Call

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Operator: Good afternoon, and welcome to Clearsign Technology's first quarter 2024 conference call. All participants will be in a listen-only mode.

Speaker Change: Good afternoon, and welcome to the career signed Technologies' first quarter two.

Speaker Change: For the conference call.

Operator: Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then the number one on your touchtone phone. To withdraw your question, please press star, then the number two. Please note this event is being recorded. I would now like to turn the conference over to Mr. Matthew Selinger of Firm IR Group. Thank you. Please go ahead.

Speaker Change: All participants will be in a listen only mode should you need assistance. Please signal a conference specialist by pressing the Sparky followed by zero. After today's presentation, there will be an opportunity to ask questions to ask a question. You May Press Star then the number one on your Touchtone phone to withdraw your question B, especially starting.

Speaker Change: Please note. This event is being recorded and I would now like to turn the conference over to Mr. Matt yourselves enjoy a fun I group. Thank you. Please go ahead.

Speaker Change: Good afternoon, and thank you operator welcome everyone to the criticized Technologies Corporation first quarter 2024 results Conference call. During this conference call. The company will make forward looking statements.

Matthew Selinger: Good afternoon. Thank you, Operator.

Matthew Selinger: Welcome everyone to the Clearsign Technologies Corporation first quarter 2024 results conference call. 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.

Speaker Change: No that is not a statement of historical fact is a forward looking statement.

Matthew Selinger: This includes remarks about the company's projections, expectations, plans, beliefs, and prospects. These statements are based on judgments and analysis as of the date of this conference call and are subject to numerous important risks and uncertainties that can cause actual results to differ materially from those described in the forward-looking statement. 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 Clearsign's products will be successfully completed, whether Clearsign will be successful in expanding the market for its products, and other risks that are described in Clearsign's public periodic filings with the SEC, including the discussion in the risk factors section of the 2023 annual report on Form 10-K for the period ending December 31, 2023

Speaker Change: This includes remarks about the company's projections expectations plans beliefs and prospects. These statements are based on judgments and analysis as of the date of this conference call and I said it to numerous important risks and uncertainties that could cause actual results to differ materially from those described in the forward looking statements the risks and uncertainties associated with the forward looking statements made it is.

It's called include but are not limited to whether field testing and sales of Christians products will be successfully completed whether Christian will 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 'twenty two 'twenty three annual report on Form 10-K.

For the period ended December 31 2023.

Matthew Selinger: Unless required by law, Clearsign 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, Clearsign's Chief Executive Officer, and Brent Hinds, Clearsign's Chief Financial Officer. So at this point in the call, I would like to turn the call over to CFO Brent Hinds. So, Brent, please.

Speaker Change: Except as required by law, Chris that assumes no responsibility to update these forward looking statements to reflect future events or actual outcomes and does not intend to do so.

Speaker Change: On the call with me today are Jim Deller Chief.

Chief Executive Officer, and Fred Hite, Chief Financial Officer.

Speaker Change: So at this point in the call I would like to turn the call over to CFO, Brett Heinz So Brett.

Brent Hinds: Please go ahead.

Brent Hinds: Thank you, Matthew. And thank you to everyone joining us here today.

Brent Hinds: You Matthew and thank you to everyone joining us here today.

Brent Hinds: Before I begin I'd like to note that our financial results on Form 10-Q filed with the SEC on may 15th.

Brent Hinds: With that I'd like to give an overview of the financials for the first quarter of 2024.

Brent Hinds: Before I begin, I'd like to note that our financial results on Form 10-Q will be filed with the SEC on May 15. With that, I'd like to give an overview of the financials for the first quarter of 2024. For the first quarter of 2024, the company recognized approximately 1.1 million in revenue, compared to approximately $900,000 for the same comparable period in 2023. The increase over the prior year was predominantly driven by two separate performance obligations for two separate customers. One was a shipment of multiple process burners to a California refinery. The other was a sign-off of a CFD study.

Brent Hinds: For the first quarter of 2024, the company recognized approximately $1 1 million in revenues compared to approximately $900000 for the same comparable periods in 2023.

Brent Hinds: The increase over the prior year was predominantly driven by two separate performance obligations for two separate customers.

Brent Hinds: One was a shipment of multiple process first California refinery.

Brent Hinds: The other was a sign off of our CMT study CFT stands for computational fluid dynamics.

Speaker Change: Gross margin for the current quarter was 39, 7% compared to 11, 9% in the same comparable quarter in 2023.

Brent Hinds: CFD stands for Computational Fluid Dynamics. Gross margin for the current quarter was 39.7% compared to 11.9% in the same comparable quarter 2023. The gross margin increase was primarily driven by the margin on a product ship to California, specifically on process permanent. Now recall, in the prior year comparable quarter, our margins were primarily driven by a burner performance test, which typically earned lower margins compared to product sales. Now, let's shift our focus to the income statement as a whole.

Speaker Change: The gross margin increase was primarily driven by the margin on our products shipped to California.

Speaker Change: Specifically our process burners.

Speaker Change: I recall in the prior year comparable quarter, our margins were primarily driven by a burner performance test, which typically are lower margins compared to product sales.

Speaker Change: Now, let's shift our focus to the income statement as a whole.

Brent Hinds: Our net loss for the first quarter of 2024 was approximately 1.1 million, which is a favorable decrease of approximately $300,000 compared to the prior year comparable quarter. The decrease is directly correlated to our overall increase in gross profit and increased sales volume.

Speaker Change: Our net loss for the first quarter of 2024 was approximately $1 1 million.

Speaker Change: With a favorable decrease of approximately 300000 compared to the prior year comparable quarter.

Speaker Change: The decrease is directly correlated to overall increase in gross profit and increased sales volume.

Speaker Change: Yeah.

Brent Hinds: Now I'd like to change the topic to our balance, but more specifically, cash. Our net cash used in operations for the quarter ended March 31st, 2024 was approximately $1 billion, compared to approximately 500,000 for the same comparable quarter in 2023. The difference is driven by customer collections and the current year's order. Now, for clarification, our customers are current on their payment schedules. It's just the natural lumpiness in our customer billings that caused the difference.

Speaker Change: Now I'd like to change the topic to our balance sheet.

More specifically cash.

Speaker Change: Our net cash used in operations for the quarter ended March 31, 2024 was approximately $1 billion compared to approximately 500000 for the same comparable quarter in 2023.

Speaker Change: The difference is driven by customer collections in the current year quarter.

Speaker Change: Clarity our customers are current on their payment schedules. It's just the natural lumpiness in our customer billings, that's what's caused the difference.

Speaker Change: The cash balances at March 31, 'twenty 'twenty four it was approximately $4 6 million.

Brent Hinds: The cash balance of March 31, 2024 was approximately $4.6 million. Please note our recent equity offerings are not included in our March 31st 2024 cash balance. The net cash raised in our recent equity offerings amounts to approximately $8.7 million, including the over allotment option that was exercised in full on May 10. If you are interested in learning more about our recent equity offerings, we have outlined more specific details in the Subsequent Events section within our Recently Filed Team Queue. With that, I'd like to turn the call over to our CEO, Jim Geller. Jim.

Speaker Change: Please note our recent equity offerings are not included in our March 31, 'twenty 'twenty four cash balance.

Speaker Change: Net cash raised in our recent equity offerings amounts to approximately $8 7 million, including the over allotment option that was exercised in full on may 10th.

Speaker Change: If you are interested in learning more about our recent equity offerings, we have outlined more specific details in the subsequent events section within our recently filed 10-Q.

Speaker Change: With that I'd like to turn the call over to our CEO, Jim Deller Jim.

Colin James Deller: Thank you, Brent, for the financial overview. As always, I'd like to thank everyone for joining us on the call today and for your interest in Clearsign. Before I start, I'd like to welcome David Malley, and use him in addition to the Clearsign Board of Directors. David joined us just days after our last call one month ago.

Speaker Change: Thank you Brian for the financial overview.

Speaker Change: As always I'd like to thank everyone for joining us on the call today and for your interest in clear side.

Colin James Deller: David is a seasoned investment executive with broad experience, specializing in micro-cap business, finance, and compliance. I welcome David to the board at this exciting time for the company, and I look forward to working with him in collaboration with the other directors.

Speaker Change: Before I start I'd like to welcome David Mali.

Speaker Change: The newest addition to the place I'm board of directors.

Speaker Change: David joined US just days after our last call one month ago.

Speaker Change: David is a seasoned investment executive with broad experience specializing in Microcap business finance and compliance.

Speaker Change: I welcome David to the board at this exciting time for the company I look forward to working with him in collaboration with the other directors.

Speaker Change: On the call today, I will review our business segments, starting with our process business and then move onto boarder bed is.

Colin James Deller: On the call today, I will review our business segment, starting with our process burners, and then move on to boiler burners. I have some comments relating to our sensing partnership with Narayan Corporation, and we'll then discuss the outlook for the rest of the year. I'll also note that our last call was not that long ago, back on April 24th.

Speaker Change: I have some comments relating to our sensing partnership with Dorian cooperation.

Speaker Change: Well then discuss the outlook for the rest of the year.

Speaker Change: I'll also note about last call was not that long ago back on April 24th.

Colin James Deller: And I do suggest that anyone not familiar with our last 2023 year-end call also refer back to what was presented then. I will now turn to the development and our process plan alignment. Yesterday, we announced the final source test results for the second heater from the Two Heater Order at Kern Energy, which until now we have not been able to name. As I stated previously, these are our two most significant processes of retrofits to date. They are the two largest and also have fuel gas that varies significantly, with a hydrogen content ranging from zero to 80% of the fuel's volume.

Speaker Change: Do suggest that anyone not familiar with our last 2023 year end call, which I refer back to what was presented then.

Speaker Change: I will now turn to developments that process better aligned.

Speaker Change: Yesterday, we announced the final source test results for the second pizza.

Speaker Change: From it to heat the order I can energies, who until now we have not been able to name.

Speaker Change: As I stated previously these are our two most significant processes of retrofits to date.

Speaker Change: They are the two largest and also have fuel gas very significantly into the hygiene content ranging from zero to 80% of the fuels volumes.

Speaker Change: These heaters are side by side.

Colin James Deller: These heaters are side by side, one fitted with eight burners, which was completed first and included in our press release on January 17th, announcing the successful third-party performance test. And the second heater, which is fitted with five burners, was retrofitted in late March and was tested in April. On the last call, we noted that we were waiting for the official report from that source desk.

Speaker Change: On the pitch it with eight bed is which is completed first and included in our press release on January 17th announcing the successful third party performance test.

Speaker Change: And the second pizza, which is fitted with five vendors those retrofitted in late March it was tested in April.

Speaker Change: On the last call. We noted there'll be waiting for the official report from that source test.

Colin James Deller: That has now been received, and the successful performance of Advernis confirmed. A few days after our last call, on April 30th, we received and announced two additional purchase orders from this same customer. These orders were for detailed engineering burners to be installed in two more heaters at the Kern Energy Refinery. As we have discussed before, it is quite common for projects to be released in phases, with initial engineering being the first. These two heaters are smaller than the previous two, one with a single burner, and the other with three.

Speaker Change: That has now been received and the successful performance of I've been is confirmed.

A few days after our last call on April 30, we received and announced two additional purchase orders from the same customer.

Speaker Change: These orders were for the detailed engineering of bonus to be installed in two more heaters, indicating energy refinery.

Speaker Change: As we have discussed before it is quite common for projects to be released in phases with the initial engineering being the first.

Colin James Deller: But nonetheless, they will provide revenue and valuable references for Clearsign, especially in the refining industry. It is encouraging to receive repeat orders for our technology. Kern Energy has been an early customer of Clearsign and has ongoing experience with the operation and performance of Clearsign's burner technology. Kern Energy prioritises their clean air and clean fuel initiatives and actively seeks technologies that go beyond established emissions limits and further reduce their environmental footprint.

Speaker Change: These two heaters are smaller than the previous two more with a single banner and the other with three but nonetheless, they will provide revenue and valuable references for clear signs, especially in the refining industry.

Speaker Change: It is encouraging to receive repeat orders for our technology.

Speaker Change: <unk> energy has been an early customer with clear sign has ongoing experience for the operation and performance of K assigns burner technology.

Speaker Change: Ken Energy prioritizes, they clean air and clean fuel initiatives actively seek technologies that go beyond established emissions limits and to further reduce their environmental footprint.

Speaker Change: We believe that the increased inclusion of clear signs technology into their refinery is evidence of a significant step towards these objectives.

Colin James Deller: We believe that the increasing inclusion of Clearsign's technology in their refinery is evidence of and a significant step towards these objectives. Beyond this, we have the 20 burner order for the Los Angeles refinery in production. As we previously stated, the final witness testing of these burners went as planned.

Speaker Change: Beyond this we have the 20 by an order for Los Angeles refinery in production.

Speaker Change: As we previously stated the final witness testing of baseband as went as planned.

Colin James Deller: These burners are now being fabricated by our partners ECO and are scheduled to be shipped to our client in the Los Angeles area of California late in the third quarter this year. When up and running, these will be another two heaters, this time with eight and 12 burners, which will provide an additional and very significant reference for us, especially given their location in the large refining hub in the Los Angeles area. Shipping these burners will enable us to recognize revenue from the production phase of this project. This past month has included significant activity from a sales perspective.

Speaker Change: As of now being fabricated by partners. He goes and are scheduled to be shipped to our client in Los Angeles area of California late in the third quarter. This year.

Speaker Change: But up and running these will be another two heaters. This time with eight and 12 out of this with.

Speaker Change: Could you provide an additional and very significant reference for us, especially given their location and the large refining hub in the Los Angeles area.

Speaker Change: Shipping these partners will enable us to recognize revenue from the production phase of this project.

Speaker Change: This past month has included significant activity from a sales perspective.

Speaker Change: Well the last call I mentioned, we have end user refiners request that the engineering companies working for them contact play assigned to include US in the evaluation of solutions for their projects and the support of those inquiries has continued through this past month and is ongoing.

Colin James Deller: On the last call, I mentioned that end user refiners requested that the engineering companies working for them contact Clearsign to include us in the evaluation of solutions for their projects, and the support of those inquiries has continued through this past month and is ongoing. New inquiries include some interest from Europe, also, which is encouraging and a development we are pleased to support. On our previous call, I mentioned the development of a product line developed for enhancement of our current boiler burner technology that has enabled an efficient and effective ultra-low knock solution for a particular type of horizontally fired process heater, which is widely used in the midstream. That is, the fuel processing, storage, and transfer industry.

Speaker Change: New inquiries includes some interest from Europe, also which is encouraging and a development we are pleased to support.

Speaker Change: On our previous call I mentioned the development of a product line developed for enhancement of our current boiler burner technology that has enabled inefficient unaffected ultra low Nox solution for a particular type of puzzles me fired process heater, which is widely used in the midstream that is the fuel processing storage and transfer <unk>.

Speaker Change: History.

Speaker Change: This new product line has been the subject of multiple different customer engagements in the past few weeks.

Colin James Deller: This new product line has been the subject of multiple different customer engagements in the past few weeks. As with the refining process burners, many of these opportunities have been brought to us by third-party engineering companies seeking the best solutions for their clients. This is a distinct difference and a significant development from only a short time ago, when most of the opportunities were limited to those resulting directly from our own outreach.

Speaker Change: But they were finding process been as many of these opportunities brought to us by third party engineering companies seeking the best solutions for their clients.

Speaker Change: This is a distinct difference and a significant development from only a short time ago. When most of all the opportunities will limit to those resulting directly from us and outreach. We are still doing that but the addition of inquiries from clients, where they need reaching out to us is significant.

Colin James Deller: We are still doing that, but the addition of inquiries from clients where they need to reach out to us is significant. On the last call, we noted that we are about to install the first commercial version of our Department of Energy-funded hydrogen burner development project into a test furnace on the site of our partner, Zico. Since that update, we have run that burner, and I am happy to report that the results exceeded our expectations, especially for the first version of a new burner.

Speaker Change: Well the last call. We noted that we were about to install the first commercial vision about department of energy funded hydrogen found a development project.

Speaker Change: Intuit test furnace on the scientific partner Zika.

Speaker Change: Since that update we have run that better and I'm happy to report that our results exceeded our expectations, especially for first vision often you bet.

Speaker Change: Some of you may have seen a post on Linkedin Shona photographs of the flame and some of the initial results with.

Colin James Deller: Some of you may have seen our post on LinkedIn showing a photograph of the flame and some of the initial results with NOx numbers at 4 parts per million with 100% hydrogen fuel. Due to the results we have already achieved, we anticipate that we will be able to accelerate the commercial availability of this new burner design. This new technology has gained significant interest amongst a customer base with whom we have been able to discuss the program.

Speaker Change: But the Nox numbers at four parts per million with 100% hydrogen fuel.

Speaker Change: Due to the results we have already achieved we anticipate that we will be able to accelerate the commercial availability of this new Bern are designed.

Speaker Change: This new technology has gained significant interest amongst our customer base with whom we have been able to discuss the program.

Colin James Deller: Of particular interest to the clients we have talked to is the prospect of being able to upgrade our current burner technology to a future 100% hydrogen-capable burner while maintaining the same emissions profile. Turning to boiler burners, we, or our partner Rogue, have a steady cadence of customer inquiries to quote and pursue, and accordingly, a growing sales funnel. The opportunities since our last call cover a wide range of industries, from high-tech production facilities to education facilities to food and beverage producers to industrial production.

Speaker Change: The interest of the clients, we have talked to is the prospect of being able to upgrade our current burner technology to a future, 100% hydrogen capable bennett, while maintaining the same emissions profile.

Speaker Change: Turning to all of that as we or upon arrays have a steady cadence of customer inquiries to quote in tissue and accordingly, our growing sales funnel.

Speaker Change: Do your opportunities since our last call will cover a wide range of industries from high Tech production facilities to education facilities to food and beverage producers in industrial production.

Colin James Deller: We also have in production the first in a series of four burners for a juice processing company in Central California. We also have a large 1200 horsepower boiler burner for a recycling company in Central California. This spoiler is on that customer site and is scheduled to start up in the next few weeks.

Speaker Change: We also have in production the first in a series of fault that as free juice processing company in Central California.

Speaker Change: We also have a large 1200 horsepower boiler burner fried recycling company in Central California.

Speaker Change: This boiler is all net customer site is scheduled to start up in the next few weeks.

Colin James Deller: This is especially meaningful because it will be our first burner in the larger size range requiring a 2.5 parts per million NOx guarantee. We anticipate that this will provide a very meaningful reference in the industry and a powerful demonstration of the capabilities of our Clearsign Core technology. A few words regarding our China operations. We had a lot of topics to cover on the four-year end and fourth quarter call last month. Now the need to prioritize. We did not give an update on operations in China because there's not a lot to report.

Speaker Change: This is especially meaningful because it won't be at first but in the larger size range, requiring a 2.5 parts per million Nox guarantee.

Speaker Change: We anticipate that this will provide a very meaningful reference in the industry and a path for demonstration of the capabilities of a class on course technology.

A few words regarding our China operations, we had a lot of topics to cover the full year in the fourth quarter call last month.

Speaker Change: Now to the need to prioritize we did not give an update on operations in China, because theres not a lot to report.

Colin James Deller: A project there has had some delays, particularly an urgent need on the part of Shuangliang to provide a boiler to one of their customers that resulted in our test boiler being needed and shipped to that customer. A new boiler for us to use in the burners certification process is in production, and we look forward to being able to reinstall our burner and resume our preparation for certification. We expect our general sales and promotional activities to continue in parallel with our burner certification process at this phase of Clearsign's commercial development.

A project that has had some delays, particularly in urgent need on the potash swung liana to provide a boiler to one of their customers that resulted.

And our test boiler being needed and shipped to that customer.

Speaker Change: And you bought it for us to use in a better certification process is in production.

Speaker Change: And we look forward to being able to reinstall that Ben and resume our preparation for certification.

Speaker Change: We expect our general sales and promotional activities to continue in parallel with our burner certification process.

Speaker Change: At this phase of clear signs of commercial development.

Colin James Deller: Now that we have proven technology and reference installations operating at customer sites, our priority is developing sales. A big part of this is getting engaged with customers who have projects either now or in the future that will benefit from the capabilities of Clearsign's technology. As you would expect, we have many initiatives ongoing to this end. On a particular note, since our last call, we have engaged our first third-party sales consultant. This consulting firm is based in the Houston area but brings valuable connections nationwide in addition to the industrialized Gulf Coast area of Texas and Louisiana.

Speaker Change: Now that we have proven technology breakfasts installations operating and customer sites, our priority is developing sales.

Speaker Change: A big part of this is getting engaged with customers who have projects either now or in the future that will benefit from the capabilities of <unk> technology.

Speaker Change: As you would expect we have many initiatives ongoing to this end.

Speaker Change: A particular note since our last call we have engaged at this third party sales consultant.

This consultant is based in Houston area, but brings valuable connections nationwide. In addition to the industrialized Gulf Coast area of Texas and Louisiana.

Colin James Deller: He also has connections with many environmental consulting companies working in our field and local and federal environmental regulators. In this industry, a typical sales agent or manufacturer's representative will have a small portfolio of clients who provide products or services in a similar industry or to a customer group, and they will specialize in our target market.

Speaker Change: He also has connections with many environmental consulting companies working in the field at a local and federal environmental regulators.

Speaker Change: In this industry, a typical sales agent or manufacturers representative will have a small portfolio of clients. We provide products will serve says in a certain industry or to a customer groups and.

Speaker Change: And they will specialize in that target market.

Speaker Change: This enables them to develop extensive contacts and relationships and as a result of the multiple products or services that they represent to keep them in frequent contact with our customer base.

Colin James Deller: This enables them to develop extensive contacts and relationships and, as a result of the multiple products or services that they represent, keep them in frequent contact with their customer base. In our case, in addition to this, our sales consultant is engaged with many consulting firms to get involved when end users are planning and approving environmental projects or have new requirements to accomplish. He is also engaged with local regulators, which we anticipate will help provide information related to future client needs and regulatory drivers.

In that case. In addition to this SaaS consult is engaged with many consulting firm. So you get involved with and use as a planning permitting and.

Environmental projects will have new requirements to accomplish.

Speaker Change: He is also engaged with local regulators, which we anticipate will help provide information related to future client needs and regulatory drivers.

Speaker Change: In a similar market related topic, we have been watching the development of air regulations in Texas.

Colin James Deller: In a similar market-related topic, we have been watching the development of air regulations in Texas, which are driven by the increasing severity of nonattainment within the National Ambient Air Quality Standards for ozone in the Greater Houston, Dallas, and San Antonio regions. However, the changes to these regions' non-attainment status were identified before the COVID years.

Speaker Change: Which are driven by the increase in severity of non attainment within the national ambient air quality standards for ozone in the greater Houston, Dallas, San Antonio regions.

Speaker Change: While the changes to these regions non attainment status for identified before the Covid years.

Colin James Deller: Not much progress was made until recently when the governor of the state of Texas accepted these findings at the end of 2023. As a result, state regulators are now working with the federal EPA to develop a mutually acceptable plan to improve air quality in these regions. However, these developments are still at the high-level planning stage between the state of Texas and the federal EPA; detailed revisions to air quality regulations are expected to follow.

Speaker Change: Not much progress was made until recently when the governor of the state of Texas accepted these findings at the end of 2023.

Speaker Change: As a result, the state regulators and are working with the federal EPA to develop a mutually acceptable planned to improve air quality in these regions.

Speaker Change: While these developments are still at the high level planning stage between the state of Texas Southern Federal EPA.

Speaker Change: Detailed revisions to air quality regulations are expected to fall that they.

Colin James Deller: These will provide the mechanism to achieve the yet to be agreed air quality improvement plan. We believe this is an important development for two reasons. First, we believe that future and new clean air regulations in Texas will create demand for our products, especially because the Gulf Coast region of Texas has the highest concentration of refining petrochemical industry in the United States. And secondly, our experience suggests that just the anticipation of NOx reduction requirements for the region will initiate studies and planning by and on behalf of the industries in the affected areas.

Speaker Change: These will provide the mechanism to achieve to be agreed at quality improvement plan.

Speaker Change: We believe this is an important development for two reasons, because we believe that future and you clean air regulations in Texas will create demand for our products, especially because the Gulf Coast region of Texas.

Speaker Change: Hi, its concentration of refining of petrochemical industry in the United States.

Speaker Change: And secondly are.

Speaker Change: Experience suggests that just the anticipation of Nox reduction requirements for the region will initiate studies and planning by and on behalf of the industries and the effective areas.

Colin James Deller: We of course expect that the resulting evaluation of possible solutions by our customers will result in increased opportunities for Clearsign. It is also worth noting that just the anticipation of NOx reduction requirements in the future, in addition to the initiative for decarbonization, is creating an increased interest in Clearsign Technologies. One indication of this was the measured attention and engagement attracted by a simple LinkedIn post showing Clearsign's new 100% hydrogen burners, which is significantly higher than the attention and engagement with respect to any other subjects posted by Clearsign this year. I want to also give a quick update on some developments by our partner Narion Corporation. Well, we do talk mostly about Aberner technology, but Clearsign does have unique sensor technology.

Speaker Change: We of course expect that the resulting evaluation of possible solutions by our customers will result in increased opportunities for cliffs.

Speaker Change: It is also worthy of note that just the anticipation of Nox reduction requirements in the future.

Speaker Change: In addition to the initiative of Decarbonization is crazy on increased interesting players aren't technologies.

Speaker Change: One indication of this was the major attention and engagement attracted by a simple linkedin posts showing clear signs of new 100% Hudson business.

Speaker Change: Which is significantly higher than the attention and engaged with respect to any of the subjects posted by clear sign this year.

I wanted to also give a quick update on some developments by a partner now around cooperation.

Speaker Change: Well, we do talk mostly about our burner technology place on does have unique sensor technology that.

Colin James Deller: And we have partnered with Narion to develop that technology into commercial applications in markets outside Clearsign's expertise. Eddie Kwon, the owner and CEO of Narion, recently gave a presentation at KAUST, that's the King Abdullah University of Science and Technology in Saudi Arabia, the Aerospace Propulsion and Energy Systems Conference. His presentation was about the implementation of sensors to increase efficiency and safety of aircraft. One exciting capability of our sensing technology that Naran is developing is the ability to measure the flammability or propensity to ignite or burn a gas mixture. A second advantage is the ability to measure the presence of a flame at very high speeds, enabling the detection of a flame front and the rate at which it travels.

Speaker Change: We have part of it but not around to develop that technology into commercial applications in markets outside clear signs expertise.

Colin James Deller: The former has extensive applications in the transport sector, particularly aircraft, both commercial and military. The second has received great interest from entities involved in rotating detonation engines, a technology with significant military applications. If you're not already doing so, I encourage you to pay attention to NARION.

Speaker Change: Eddie Combed, the owner and CEO of <unk> recently gave a presentation at the cost that's the King Abdullah University of Science and technology in Saudi Arabia, the aerospace propulsion of energy systems Conference.

Speaker Change: His presentation was about the implementation of sensors to increase efficiency and safety are accurate.

Speaker Change: One exciting capability of our sensing technology that nor in this developing is the ability to measure the flammability.

Speaker Change: Tennessee to ignite or bad all the gas mixture.

Speaker Change: The second is the ability to measure the presence of a flame and at very high speeds enable the detection of a flame front and the rate at which it travels.

Speaker Change: The former has extensive applications in the transport sector.

Speaker Change: Particular, the aircraft both commercial and military.

Speaker Change: The second has received great interest from entities involved in rotating destination engines, a technology with significant military applications.

Speaker Change: If you have not already doing so I encourage you to pay attention to in Ireland. They have some very exciting technology development projects our collaboration opportunities.

Colin James Deller: They have some very exciting technology development projects and collaboration opportunities. In closing, it has just been four weeks since our last call, and I encourage anyone who is not aware of what we said then to refer back to that call also, as the information here is especially relevant given the short time period between these two calls. We believe that our business is in a good position. We've now had two consecutive quarters with revenues above $1 million, and we have more orders in both process and boiler product lines to start up and others that are shipping in the coming quarters. These initial installations are helping establish our technology in the industry. As an example, I was at the American Petroleum Industry spring refining and equipment standards meeting in St. Louis earlier this week.

Speaker Change: In closing it has just been four weeks since our last call and I encourage anyone who is not aware of what we said then to refer back to that call. So.

Speaker Change: As the information here is especially relevant given the short time periods between these two calls.

Speaker Change: We believe that that business is really good position.

Speaker Change: We've now had two consecutive quarters with revenues above $1 million.

Speaker Change: Have more orders in both process and boiler product lines to start up and others that are shipping in the coming quarters.

Speaker Change: These initial installations are helping establish that technology in the industry.

Speaker Change: As an example, I was at the American Petroleum industry Spring refining Unequipped newsstand is meeting in St. Louis earlier this week.

Colin James Deller: This is a conference where subject matter experts from across the industry gather to review and update the API equipment design and operating guidelines. From my conversations at that conference, it was evident that our operating installations have a major influence on how Clearsign is perceived and the openness of our potential customers to consider Clearsign solutions. This is resulting in customers approaching us to discuss projects and possible new business opportunities. For Balance, it was also apparent that while our progress is noticed and influential with those who are familiar with it, there is still a portion of our industry that is not familiar with Clearsign. We are not aware of the progress we have made over the last five years, and this is something we will continue to address.

Speaker Change: As a confidence with subject matter experts from across the industry gather to review and update the API equipment design and operating guidelines.

Speaker Change: From my conversations I conference. It was evident that our operating installations have a major influence on how clear sign is perceived and the openness about potential customers to consider cliticize installations.

Speaker Change: This is resulting in customers approaching us to discuss projects a possible new business opportunities.

Speaker Change: Full balance who's also a parent.

Speaker Change: While our progress is noticed and influential with those who are familiar with it there's still a portion of our industry theres not familiar with clear sign one other with all the progress we've made over the last five years and this is something we will continue to address.

Speaker Change: As I stated on our last call again here today, that's top priority at this time as growing our sales.

Colin James Deller: As I stated on our last call, and again here today, our top priority at this time is growing our sales. We now have technology developed, first installations operational, and client sites in all our major product lines. Please provide valuable references for prospective customers.

Speaker Change: We now have technology developed and first installations are operational and client sites in all our major product lines.

Speaker Change: These provide valuable references for prospective customers.

Colin James Deller: This is critical as our customers do look for the experience of others operating our technology to validate what we offer. We do not yet have enough installations or runtime of those installations to be considered fully mainstream in the industry, so every new installation or startup is especially valuable for us. We do also have some other significant wins, including the two Best Available Control Technology determinations that we received earlier this year based on the South Coast Air Quality Management District's review of our Process Burner installations.

Speaker Change: This is critical as our customers do look for the experience of others operating out technology to validate won't be off it.

Speaker Change: We did not yet have enough installations or run time of those installations to be considered fully mainstream in the industry. So every new installation that startup is especially valuable for us.

Speaker Change: We do also have some other significant wins, including the two best available control technology determinations that we received this year based on the South Coast Air quality management districts review quite process burner installations.

Colin James Deller: Our goal is to leverage these determinations to increase awareness and acceptance of Clearsign in the market, to ultimately increase the number of customers and projects that we get to engage in and quote, and to generally build confidence that we offer the most economical and efficient solution for our customers. Earlier, I mentioned the engagement of a third-party sales consultant that is also part of this prioritization.

Speaker Change: Our goal is to leverage these determinations to increase awareness and acceptance of clear signs in the market.

Speaker Change: Ultimately increase the number of customers and projects that we get to engage in a quote and that generally build confidence that we offer the most economical and efficient solution for our customers.

Speaker Change: Eddie I mentioned engagement of a third party sales consultant. That's also part of this prioritization.

Speaker Change: Additionally, our goal is the constant development of our technology and product lines. We continue to focus on the development of our technology.

Colin James Deller: Additionally, as our goal is the constant development of our technology and product lines, we continue to focus on the development of our technology. In the past four weeks, the progress in our hydrogen burner project and the interest that we have already received in the industry have been significant. All three have made significant progress in the ongoing development of our new horizontally fired process burner product line, building on what was discussed in more detail in our last call.

Speaker Change: In the past four weeks the progress in our hygiene better project and the interest that we have already received and the industry has been significant.

Speaker Change: We have made significant progress in the ongoing development of venue horizontally five across the span of product line.

Speaker Change: Building on what was discussed in more detail in our last call.

Speaker Change: So people would noteworthy items on our horizon will be the anticipated to start up about 12% of the tallest tower 2.5 ppm Nox guaranteed boiler burner cause recycling company in California, which will be a very significant referenced for us in that part of the road combustion in California, you bought it.

Colin James Deller: Looking forward, noteworthy items on our horizon will be the anticipated startup of our 1200 horsepower, 2.5 ppm NOx guaranteed boiler burner for the recycling company in California, which will be a very significant reference for us and our partner Rogue Combustion and California Boilers, and also in the Boiler Burner product line, the shipping of the first Boiler Burner in the series of four for the few fruit and vegetable multi-use processing companies in California We also have some significant technology projects underway, including our hydrogen burner project, which has shown great and early promise, and it will be added to our horizontal forced draft burner, as used in horizontally fired process heaters, and potentially to enhance our boiler burner product line.

Speaker Change: And also in the board about a product line the shifting of the first part about it in the series of fall a few.

Speaker Change: Baseball multi juice processing company in California.

Speaker Change: We also have some significant technology projects underway, including our hygiene better project, which is showing great promise and almost a revision to our horizontal core strapped on it as using horizontal five process heaters and potentially to enhance boiler burner product line.

Colin James Deller: We anticipate that both of these technology projects will result in products with enhanced performance and reduced production costs, and that will be less unique in the appearance as perceived by our customers. All of these we expect to enhance the growth of the Clearsign business. And with that, I'd like to open up the call for questions. Please operate it. Thank you.

Speaker Change: We anticipate that both of these technology projects will result in products with enhanced performance and reduce production costs and that will be less unique and the appearance is perceived by our customers.

Speaker Change: All of these we expect to enhance the growth of the class one business.

Speaker Change: And with that.

I'd like to open up the call for questions. Please.

Speaker Change: Please operator.

Speaker Change: Thank you.

Operator: Thank you. We will now begin the question and answer session. To ask a question, you may press star, then the number one on your touchtone phone. If you are using a speakerphone, please pick up your handset before pressing the keys.

Speaker Change: I will begin the question and answer session. Jesse question You May Press Star then the number one on you touched on funding if youre using a speakerphone. Please pick up your handset before pressing the keys.

Operator: To withdraw your question, please press star, then the number two. Once again, that is star and one to ask a question. We will pause momentarily to assemble our roster.

Speaker Change: Your question. Please press Star then the number two.

Speaker Change: Once again that is star one chassis question, we will pause momentarily to assemble our roster.

Speaker Change: Once again that is star and wanted to ask a question.

Speaker Change: Great operator comment of I'm, not seeing any questions I'm going to go and read a couple that we receive from email earlier.

Operator: Great. Operator, I'm not seeing any questions. I'm going to go ahead and read a couple that we received in an email earlier. Jim, you mentioned in your comments the sensor technology, and Naryon in particular. Could you kind of give us an overview of where that project's at and what it might look like for a commercial product for the company?

Speaker Change: Jim.

Speaker Change: You mentioned in your comments the sensor technology an area in particular could you kind of give us an overview of where that where that project.

Speaker Change: What it might look like for a commercial project.

Speaker Change: So the product for the company.

Colin James Deller: Yes, certainly, and to whoever sent that in. I appreciate that question.

Speaker Change: Yes, certainly and it's yeah.

Speaker Change: And all of a sudden that and it's not I appreciate the question.

Colin James Deller: I think it makes sense to take a step back initially, you know, and for Narayan to explain how we engage with them. So we, as Clearsign, have a unique sensing technology that we have promoted and developed as a flame sensor for use in burners and especially burner pilots. We're also aware that it has applications outside of our core strengths as Clearsign, and it makes sense to work with someone who has expertise in other areas to develop the technology for them.

Speaker Change: It makes sense to take a step back initially.

Speaker Change: All right.

Speaker Change: Could you explain how we engage with them. So we have as clear so we have a unique sensing technology.

Speaker Change: Have most of it and developed as a flame sensor for use in bed isn't especially Ben of pilots.

But we're also aware that it has applications outside of our core strengths as criticized and it makes sense to work with someone who has expertise in other areas.

Speaker Change: To develop the technology for them.

Colin James Deller: Eddie Kwon, the owner and CEO of Narion, has expertise in the aviation industry and very good connections in fields and research that support that. The relationship with Narion is that they are basically right; they are with us, and they are developing technologies that use the Clearsign sensor. They're working with partners and industries and also research organizations to develop that technology, and at the point they have a commercial offering, we will work out a licensing arrangement with Narion for the sale of those products or the ongoing licensing of those products.

Speaker Change: And equally the owner and CEO Alban Dorion has expertise in the Avon at aviation industry.

Speaker Change: Hey, good connections and.

Speaker Change: Fields and in research.

Speaker Change: That's right.

Speaker Change: Support that.

Speaker Change: The relationship with now around that is that they all basically right.

Speaker Change: With us they are all developing.

Speaker Change: Technologies that use the class I sense that.

They are working with partners and industries and also research organizations to develop that technology.

And at the point they have a commercial offering we will work out a licensing arrangement with knowing on but for the sale of those products all the licensing.

Speaker Change: Those products.

Speaker Change: Back to the.

Colin James Deller: Back to the timeline question, basically, you'd appreciate developing technologies for industries like aircraft is a long-term process. There's a lot of vetting, and the path to development has many hurdles to pass. So it is a long-term prospect. What's interesting to Clearsign is that while we understand that this is a longer-range product development path, the potential market is absolutely vast. If you think of aviation, commercial jets, industrial jets, or military applications, and Eddie's working on a lot of other projects as well. So this isn't a technology that we're going to be seeing revenue from in the next 24 months. You know, we need to be clear about that.

Speaker Change: The timeline question basically the.

Speaker Change: He had appreciated developing technologies all industries like aircraft is a.

Speaker Change: Longtime process, there's a lot of vetting the.

Speaker Change: Past the development has many hurdles to pass.

Speaker Change: So it is a it's a long term prospect, but what's interesting to clear sign.

Colin James Deller: But the interest is that right, The work that Eddie is doing is self-funded or funded through grants. It's not funded by Clearsign. And it is a potential path for Clearsign to have a licensing interest in some highly valuable products into an extremely big market at some time in the future.

Speaker Change: Is that whilst we understand that this is a a longer range product development paths.

Speaker Change: The potential market is absolutely you've asked if you think of the <unk>.

Speaker Change: Aviation the commercial jets, the industrial jets or military applications and that he's working on a lot of other projects as well. So this is a it's not a technology that we're going to be seeing revenue in the next 24 months, we need to be clear about that but the interest is that right.

Speaker Change: The work that Eddie is doing is self funded all funded through grants, it's not funded by clear sign and it has a potential pass the clay assigned to have a licensing interest in some highly valuable products into an extremely big market.

I have some time in the future.

Speaker Change: Great. He has another question Kim.

Colin James Deller: Here's another question, Jim. You know, in terms of projects in queue, we have there been a bunch of projects announced. Could you kind of walk us through what is left in queue? And then, secondly, beyond that, what it looks like potentially kind of going forward? It's almost like a backlog, you're currently in, and then if you talk about kind of the pipeline, so a two-phased question. Yes,

Speaker Change: In terms of projects in queue.

Speaker Change: There's been a bunch of projects announced could you kind of walk us through what is left in queue and then secondly beyond that what it looks like potentially kind of going forward, it's almost like a backlog.

Speaker Change: Currently and then if you could talk about kind of the pipeline. It's a two phased question.

Speaker Change: Yes, I can and I saw obviously, when we get to the right looking at future orders we need to.

Colin James Deller: Yes, I can. And so obviously, when we get to looking at future orders, we need to be careful; they're not one until they're one. So I'm not able to give specific numbers or timing, but let me fill in that question the best that I can. So regarding walking forward, we have just a couple of weeks ago announced the receipt of an engineering order for burners going into Kern Energy for two additional heaters on that site. So bear in mind, this is a repeat order; they already have two heaters now working with Clearsign Technology. And now they're rolling out the next two.

Speaker Change: To be careful there not one until that one so I'm not able to give specific numbers or timing, but let me fill.

Speaker Change: Filling that question the best I can.

Speaker Change: So regarding I won't keep from now forwards we have just a couple of weeks ago, we announced the receipt of.

Speaker Change: <unk> engineering order full bed is going into care and energy for two additional heaters on that site. So bear in mind. This is a repeat order they already have to he does not working with placement technology and now they are rolling out the next two.

Colin James Deller: While it is an engineering order, it's quite normal to release orders in that way and for those to progress to the full testing, manufacture, and supply of burners for that project. We have the very large 2.5 BPM NOx boiler burner starting up in the next few weeks. And in California, that's going to be a big milestone for us. And we have on the boiler side, while we're talking about that, we also have the first of four. All the burden is going out for the juice processor. Processing Company, in California, on the The new technology that I've talked about is the horizontally fired process heater.

Speaker Change: While it is an engineering or whether that is it's quite normal to release orders in that way.

And for those to progress to the full by testing and manufacturing and supply.

Speaker Change: Oh, Ben is for that project.

Speaker Change: We have the very large 2.5 ppm Nox boiler burner, starting up in the next few weeks, adding California, that's going to be a big milestone for us and we have on the boiler side when you're talking about that we also have the first all four.

Speaker Change: All the burden is going out for the juice processing processing company.

Speaker Change: In California.

Speaker Change: On the.

Speaker Change: The new technology that I've talked about the horizontally Piet process heater.

Speaker Change: We do have.

Colin James Deller: We do have, you know, significant interest in that. This is on the sales side, so I cannot go into details, but we're really encouraged about the engagement we have, and I really believe that is going to be a significant product line for us going forward based on the interest that we have. I talked about the two current orders that we have recently received on the process burn. We do have some significant interest.

Speaker Change: Significant interest in that this is on the sales side. So I cannot go into details, but we're.

Speaker Change: Really encouraged about engagement we have.

Speaker Change: And I really believe that it's going to be a significant product line for us going forward based on the interest that we have.

Speaker Change: I talked about the two current orders that we have recently received on the process, but we do have some significant interest I mentioned, we also have interest for a project out in Europe again, a cost on this as I say it was interest is by no means in order to be half.

Colin James Deller: I mentioned we also have an interest in a project out in Europe. Again, our caution on this is that this is a sales interest and by no means an order that we have. So at this point, we can't say if we're going to win it or not. But the interest is certainly significant rather than just a casual inquiry. And we also have some other engagements on that same front here domestically, which we believe are very exciting. Good.

Speaker Change: So at this point, because they have they're going to win or not but the.

Speaker Change: At this point in the interest is certainly significant Robin just casually inquiry and we also have some other engagements on that same front here domestically, which.

Speaker Change: We believe a very exciting.

Great.

Speaker Change: Last question.

Colin James Deller: Last question, and you touched on this in some of your prepared remarks, but could you give me an overview of kind of the commercialization of the hydrogen project slash burner? And then what is SoCal's gas? Is there still their involvement in that?

Speaker Change: You did touch on this in some of your prepared remarks, but could you give maybe an overview of kind of the commercialization of the hydrogen project Slash burner and then what is socal gas is there still their involvement in that.

Speaker Change: Suddenly.

Speaker Change: So.

Yeah.

Colin James Deller: If anyone's not aware, we have a $2 million Department of Energy SBIR grant that is funding the development of a hydrogen burner. We had a phase one grant initially, under which we proved the technology and demonstrated that the burner concept worked. This later grant is to take that and develop it into a full range of commercial burners. We're in the early stages of that second phase of work; we have designed and manufactured the first version of our commercial burner and installed that in the test furnace at Zco. The results of that were very pleasing to the extent that, That's as it is.

If anyone not aware we have a.

Speaker Change: A $2 million of the department of Energy S. P&L grant that is.

Speaker Change: Funding the development of our Hudson, but we had a phase one.

Speaker Change: Brian initially.

Speaker Change: On the wage we prove the technology and demonstrated that the burden of concept what does lay the ground is to take that and develop it into a full range of commercial business.

We're in the early stages of that second phase of what we have designed and manufactured the first version all that commercial Bennett and install that in the test furnace at Zika.

Speaker Change: The results of that well.

Speaker Change: Very pleasing to the extent.

Speaker Change: That's.

Speaker Change: As it is.

Colin James Deller: I believe the version of burner is actually a usable burner and can actually be a good solution for some of our customers today. We are continuing to work on that burner. There are further refinements that we've envisioned and things that we've learned about this burner, both from the fire testing and from the computational modeling that we're carrying out internally. We believe we have a path to make it much less costly to reduce the size of the burner in the client's furnace and to actually improve the operation of that burner further.

Speaker Change: I believe the vision that button is actually a usable button and could actually be a good solution for some of our customers today.

Speaker Change: We are continuing to work on that burden of this further refinements that we envision and things that we've learned about this burden of both from the fire testing.

Speaker Change: And from the column computational modelling the accounting I internally, we believe we have a path to.

Speaker Change: Make it much less in cost to reduce the size of the burner.

And the clients fairness and talks you through the operational all that bad a further.

Speaker Change: But even as I talked about the schedule for that banner, given what we've seen today.

Colin James Deller: But even as I talked about the schedule for that burner, given what we've seen today, I think it's a good solution, as I said, for opportunities. And the main reason for that is, you know, the big project of introducing hydrogen to plants is really a very big chicken and egg conundrum, right? Our clients do not have hydrogen as a fuel gas to burn today yet. They cannot introduce hydrogen as a fuel gas until they have the technology to burn it.

Speaker Change: I think it's a good solution as I've said for opportunities and the main reason for that is the.

Speaker Change: The Big project of introducing hydrogen two plans. If you like is really at a very big chicken and egg conundrum right clients did not have hydrogen as a fuel gas.

Speaker Change: The burn today yet.

Speaker Change: They cannot introduce hydrogen as a fuel gas until they have the technology to burn it.

Colin James Deller: So what we have here is a burner that will run well in the current conditions our clients have with the fuels that they're currently working with and is ready and able to burn hydrogen when that hydrogen is introduced. So it's a way to bridge that gap, which is why I'm really seeing a big interest in that burner today and why I believe we can actually accelerate the deployment of this technology given the market need.

Speaker Change: So what we have here is a benefit that will run well in the current conditions our clients have with the fuels that currently working with.

Speaker Change: And he is ready and able to bed Hudson when the hydrogen is introduced.

Speaker Change: So it's a it's a way to bridge that gap, which is why I'm really seeing a big interest for that vendor today and why I believe we can actually accelerate the deployment of this technology.

Speaker Change: Given that market need.

Colin James Deller: And the other valuable attribute that I believe we've developed is that it's not only a very flexible burner, but we've developed it in such a way that a client that has current burner technology will be able to upgrade the burners that they have to a new 100% hydrogen-capable burner technology by changing out some components. What is important is that a big part of the time it takes to install burners in the field is the time the heater is shut down and all the rework to mount new burners in the field.

Speaker Change: The other valuable attribute that I believe we've developed as it is not only a very flexible burner, but we've developed it in such a way.

Speaker Change: That a client that has a current burden of technology will be able to upgrade the buttons that they have to a new 100% hygiene cable burner technology by changing out some.

Speaker Change: Patents.

As important is that a big part of the time it takes to it.

Install badness in the field is the time to either shut down in all of the rework to mountainy bonus that field. If you can switch a button as function by just changing out some of the key key components, but to keep the connection points and all of the installation that's connected to the butter in place. It allows you to make that upgrade and a much more efficient manner.

Colin James Deller: If you can switch a burner's function by just changing out some of the key components but keeping the connection points and all of the installation that's connected to the burner in place, it allows you to make that upgrade in a much more efficient manner.

Colin James Deller: Did you mention SoCalGas's involvement? Yes.

Speaker Change: Did you mentioned socal gas his involvement.

Speaker Change: Yes.

Colin James Deller: Thank you, Matt. Going back, I guess I mentioned the Department of Energy grant; that grant is for the development of that technology or that product line. The interest of SoCalGas and their commitment was to sponsor the deployment of that resulting technology to their client base in Southern California, part of the Los Angeles link or Angeles link hydrogen hub. So as part of deploying that hub, they need their clients to be able to burn hydrogen.

Matt: Thank you Matt.

Speaker Change: But going back I guess.

Speaker Change: I mentioned the department of Energy Grant that grant is for the development of that technology all of that product line.

Speaker Change: The interests of Socal gas and that commitment was to sponsor the deployment of that resulting technology into their client base and saw the southern California part of the Los Angeles Link engine is link hydrant hub.

Speaker Change: As part of deploying that hub they need their clients to be able to been constant.

Colin James Deller: To get our technology installed, always getting those first installations is the hardest. So having basically a sponsorship behind those installations to accelerate the adoption or the first adopters of this new technology into their client base is extremely valuable for us. And that is the basis of the commitment from SoCalGas.

Speaker Change: To get technology installed always getting that first installations is the hardest so having a basically a sponsorship behind those installations to accelerate the adoption or the first adopters. All this new technology into their client base is extremely valuable for us and that is the basis of the commitment from socal gas.

Speaker Change: Okay operator.

Operator: Operator. I'm seeing no more questions. Thanks.

Speaker Change: Seeing no more questions.

Speaker Change: Thank you there are no further questions over the phone I would like to turn the conference back over to Mr. Jim Deller for any closing remarks.

Operator: Thank you. There are no further questions over the phone. I would like to turn the conference back over to Mr. Jim Deller for any closing remarks.

Colin James Deller: Thank you operator.

Colin James Deller: And thank you everyone for your interest and taking the time to participate today. We look forward to updating you regarding our developments and speaking with you on our next call.

Speaker Change: And thank you everyone for your interest I'm, taking the time to participate today.

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

Speaker Change: Yeah.

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

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

Speaker Change: Okay.

Speaker Change: Yeah.