ClearSign Technologies Corporation (NASDAQ:CLIR) Q4 2022 Earnings Call Transcript

Robert Kecseg: Sure. I appreciate that answer a lot. And I was going to say on the boiler burners, now that it’s going to a couple of different customers, I guess with combustion, it’s kind of an automatic process for them to basically make the sale with such and such type of boiler in this runner? And is there a lot of difference between the different boiler companies and are they different from burner companies and the boiler burner business?

Jim Deller: Hope I heard you correctly, the — there are differences between the boilers in the details. But generally, the configuration of the boilers and the way that they operate is very similar. But that leads to one of the most notable differences between our process burner and boiler burner product lines and one of the reasons that we have a different type of partner. The boiler burners very much lead themselves to a standard product that is basically off the shelf. And once right designed, we will pretty much supply exactly the same burner over and over again, four different heaters, so it makes it very efficient. They require very few man hours. And it’s something that we can scale very easily by outsourcing ourselves.

The detailed work on that product line is the installation and the service and that’s the work that’s being handled by California Boiler, compared to the process burners, those orders tend to be very large. But because of the complex nature of the oil refineries, the burners are while there are a standard technology, they are a boutique and customized forage application. That’s the reason they have to go through the test furnaces such as the recent testing we have mentioned regarding the California Refinery order. But I think back to your original question, Bob, I guess the short answer was yes, the boilers are while there are differences and the boiler manufacturers all claim that there’s the best other reality is that from our perspective there is little that is significantly different about them that would affect the design of the burners.

Robert Kecseg: Okay. Yes. And the R&D change was pretty significant, which I guess, kind of, also gives us a lot more optimism going forward that a lot of that money has already been spent. Do you think will be at the level that we saw in 2022, is something to project out or is there somewhere in between, as far as the expenditures for R&D?

Jim Deller: Bob? Brent, you get that?

Brent Hinds: Yes. Bob, thank you for the question. It looks like you’re looking at the financials. Our net loss improvement year-over-year is $2.1 million, the driver for that was our reduction in R&D cost as we shift from R&D activities to commercialization activities. As far as projecting expenses 2022 was an exceptional year. We can’t keep a trend of cutting $2 million out year-over-year without cutting into the meat too deep. But I would expect, if you look back the past two years, the run rate for the past two years and not to be materially off from that.

Robert Kecseg: Are you talking about overall expenditures or R&D (ph)?

Brent Hinds: Sorry, I was talking about overall expenditures operate — total operating expenses. R&D expenditures will remain low.

Robert Kecseg: Okay. Got it. I was just simply kind of looking at the R&D line by itself. And I didn’t know whether this was a maintainable level in the current future $0.5 million a year in R&D. I was just simply looking at that instead of the overall expenses?

Brent Hinds: Yes. Bob also, we did talk about the government grants those are directed to product development. So I think there’s a difference between the R&D expenditures that would show up as direct expenditures from the company versus those that are part of a government funded project.

Robert Kecseg: Okay.

Brent Hinds: I mean, I think the underlying point is, yes, we are very determined to continue to progress our technology. And as we see opportunities in the market, we do intend to develop the technology to meet those needs.

Robert Kecseg: Okay. Great. Well, again, thanks very much for bringing us this kind of progress. It really looks great. Thanks, Jim.

Jim Deller: Thanks for the questions, Bob.

Operator: The next question comes from (ph), Private Investor. Please go ahead.

Unidentified Analyst: Yes. Hey, Jim. Thank you and congrats on a number of levels, especially with respect to the burger test, that was significant for you, guys. And hopefully, the gentleman who made the remark that it’s the best burner that he’s seen or best burner in the world will be a voice to the industry for you guys. Amit covered, I guess, my first couple of questions. But one other point I wanted to ask was recently I saw something come out, I guess, from EPA, they call it, the good neighbor letter, which was the first time I’ve seen anything that really focused on NOx emission, the whole environmental mantra has been C02, but this is the first time I’ve seen anything really where it looked like the EPA maybe on a national level was focused on NOx submission? Are you familiar with what I’m talking about in that regard?

Jim Deller: Yes, I am. But not in great detail, but I am familiar with the neighboring and the NOx transport issue.

Unidentified Analyst: Yes, I mean, I was just wondering if that has brought up any new inquiries. It looked like it was focused on a lot of Midwest related industries. Does ClearSign have products that can address it for these other industries other than oil and gas and the combustion industry that focused on now. But — and has it shown — has anybody been any contacting us been only a few weeks? Has it brought about any new interest or inquiries to you guys?