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Equity | 3 Months Ended
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Mar. 31, 2025
Equity |
Equity | Note 7 – Equity Common Stock and Preferred Stock The Company is authorized to issue 87.5 million shares of common stock and 2.0 million shares of preferred stock. Preferences, limitations, voting powers and relative rights of any preferred stock to be issued may be determined by the Board. The Company has not issued any shares of preferred stock. The Company has an At-The-Market (“ATM”) program pursuant to a Sales Agreement with Virtu Americas LLC, as sales agent, dated December 23, 2020 (the “Sales Agreement”), pursuant to which the Company may sell shares of common stock with an aggregate offering price of up to $8.7 million. On March 18, 2024, the Company filed a prospectus supplement suspending the ATM program. The Company will not make any sales of its common stock pursuant to the Sales Agreement unless and until a new prospectus supplement is filed with the SEC; however, the Sales Agreement remains in full force and effect. During the three months ended March 31, 2025, the Company did not issue any shares of its common stock from the ATM program. As of March 31, 2025, the Company has cumulatively issued approximately 1.6 million shares of common stock under the ATM program, at an average price of $3.84 per share. Gross proceeds totaled approximately $6.1 million and net cash proceeds was approximately $5.9 million. ​ The Company is currently subject to the SEC’s “baby shelf rules,” which prohibit companies with a public float of less than $75 million from issuing securities under a shelf registration statement in excess of one-third of such company’s public float in a 12-month period. These rules may limit future issuances of shares by the Company under our “shelf” registration statement on Form S-3, the ATM program or other securities offerings. ​ Warrants and Pre-Funded Warrants ​ The following table summarizes the activity and outstanding balance of our outstanding warrants and pre-funded warrants as of March 31, 2025, along with the associated weighted average exercise price and weighted average remaining life for such warrants and pre-funded warrants. ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Warrants | ​ | Pre-Funded Warrants(1)
(in thousands, except per share data) | ​ | Number | ​ | Wtd. Avg. Exercise Price | ​ | Wtd. Avg. Remaining Life (in years) | ​ | Aggregate Intrinsic Value | ​ | Number | ​ | Wtd. Avg. Exercise Price (2) | ​ | Aggregate Intrinsic Value
Beginning Balance | ​ | 21,295 | $ | 1.0535 | ​ | 4.74 | $ | 8,230 | ​ | 4,499 | $ | 0.0001 | $ | 6,478
Granted | ​ | — | ​ | — | ​ | ​ | ​ | ​ | ​ | — | ​ | — | ​ | ​
Exercised | ​ | (23) | ​ | 1.0500 | ​ | ​ | ​ | ​ | ​ | (1,703) | ​ | 0.0001 | ​ | ​
Forfeited/Expired | ​ | — | ​ | — | ​ | ​ | ​ | ​ | ​ | — | ​ | — | ​ | ​
Outstanding at Period End | ​ | 21,272 | $ | 1.0535 | ​ | 4.49 | $ | — | ​ | 2,796 | $ | 0.0001 | $ | 2,097
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
(1) Pre-funded warrants have no expiration date and only expire when exercised in full. | ​ | ​
​ Refer to the Company’s Annual Report on Form 10-K for the year ended December 31, 2024 for details related to our outstanding warrants and pre-funded warrants. Equity Incentive Plan On June 17, 2021, the Company's stockholders approved and the Company adopted the ClearSign Technologies Corporation 2021 Equity Incentive Plan (the “2021 Plan”) which permits the Company to grant incentive stock options, non-statutory stock options, stock appreciation rights, restricted stock, restricted stock units, performance units, and performance shares, to eligible participants, which includes employees, directors and consultants. The Board’s Human Capital and Compensation Committee (the “Compensation Committee”) is authorized to administer the 2021 Plan. ​ The 2021 Plan provides for an annual increase in available shares equal to the lesser of (i) 10% of the aggregate number of shares of common stock issued by the Company in the prior fiscal year; or (ii) such number provided by the Compensation Committee; provided, however, that the total cumulative increase in the number of shares available for issuance pursuant to this automatic share increase shall not exceed 400 thousand shares of common stock. In 2025, the Board did not exercise their right to limit the automatic increase. Accordingly, the 2021 Plan share reserve increased by 400 thousand shares. ​ Ending balances for the 2021 Plan is as follows: ​
​ | ​ | ​ | ​ | ​
​ | ​ | March 31, | ​ | December 31,
(in thousands) |  | 2025 |  | 2024
Outstanding options and restricted stock units |  | 3,384 |  | 3,316
Reserved but unissued shares under the Plan | ​ | 1,782 | ​ | 1,858
Reserved but unissued shares at end of period |  | 5,166 |  | 5,174
​ Stock Options ​ Under the terms of the 2021 Plan, incentive stock options and nonstatutory stock options must have an exercise price at or above the fair market value on the date of the grant. At the time of grant, the Company will determine the period within which the option may be exercised and will specify any conditions that must be satisfied before the option vests and may be exercised. The Company estimates the fair value of stock options on the date of grant using the Black-Scholes option pricing model. ​ As permitted by SEC Staff Accounting Bulletin (“SAB”) 107, management utilized the simplified approach to estimate the expected term of the options, which represents the period of time that options granted are expected to be outstanding. Expected volatility has been determined through the Company’s historical stock price volatility. The Company has not made an estimate of forfeitures at the time of the grant, but rather accounts for forfeitures at the time they occur. The risk-free rate for periods within the expected life of the option is based on the U.S. Treasury yield in effect at the time of grant. The Company has never declared or paid dividends and has no plans to do so in the foreseeable future. ​ Equity Incentive Plan Options ​ Compensation expense associated with stock option awards for the three months ended March 31, 2025 and 2024 totaled $20 thousand and $22 thousand, respectively. ​ A summary of the Company’s 2011 Equity Incentive Plan and the 2021 Plan stock option activity and changes is as follows: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | March 31,
​ | ​ | 2025
(in thousands, except per share data) | ​ | Options to Purchase Common Stock | ​ | Weighted Average Exercise Price | ​ | Weighted Average Remaining Contractual Life (in years) | ​ | Aggregate Intrinsic Value
Outstanding at beginning of year |  | 2,452 | ​ | $ | 2.04 |  | 4.92 | $ | 496
Granted |  | — | ​ | $ | — |  | ​ | ​ | ​
Exercised |  | — | ​ | $ | — |  | ​ | ​ | ​
Forfeited/Expired |  | (55) | ​ | $ | 2.56 |  | ​ | ​ | ​
Outstanding at end of period |  | 2,397 | ​ | $ | 2.03 |  | 4.36 | $ | 11
Exercisable at end of period |  | 1,872 | ​ | $ | 1.70 |  | 3.95 | $ | 11
​ The intrinsic value is the difference between the Company’s common stock price and the option exercise prices multiplied by the number of in-the-money options. This amount changes based on the fair value of the Company’s common stock. ​ At March 31, 2025, there was $266 thousand of total unrecognized compensation cost related to non-vested stock option-based compensation arrangements. Vesting criteria ranges from time-based to performance-based. The Company records costs for time-based arrangements ratably across the timeframe, whereas performance-based arrangements require management to continually evaluate predetermined goals against actual circumstances. The maximum contractual term for these options are ten years from the grant date. ​ Inducement Options ​ During the year ended December 31, 2023, the Company granted non-qualified stock options to its Chief Technology Officer to purchase an aggregate of 150 thousand shares of common stock with an exercise price of $0.91 as a material inducement to accept employment with the Company. These inducement options vest in three equal installments, with one third of the option vesting on the grant date, and each remaining third vesting on the second and third anniversaries of the grant date, subject to continued employment with the Company. The fair value of these options were estimated on the grant date using the Black-Scholes valuation model, which resulted in $112 thousand. The compensation expense recognized for these awards for the three months ended March 31, 2025 and 2024 was $9 thousand. Total unrecognized compensation expense for these inducement options as of March 31, 2025 was $23 thousand. ​ These inducement options were granted outside of the 2021 Plan and in accordance with the employment inducement exemption provided under Nasdaq Listing Rule 5635(c)(4). ​ A summary of the Company’s inducement option activity and changes is as follows: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | March 31,
​ | ​ | 2025
(in thousands, except per share data) | ​ | Options to Purchase Common Stock | ​ | Weighted Average Exercise Price | ​ | Weighted Average Remaining Contractual Life (in years) | ​ | Aggregate Intrinsic Value
Outstanding at beginning of year |  | 491 | ​ | $ | 1.53 |  | 3.04 | $ | 119
Granted |  | — | ​ | $ | — |  | ​ | ​ | ​
Exercised |  | — | ​ | $ | — |  | ​ | ​ | ​
Forfeited/Expired |  | — | ​ | $ | — |  | ​ | ​ | ​
Outstanding at end of period |  | 491 | ​ | $ | 1.53 |  | 2.80 | $ | —
Exercisable at end of period |  | 441 | ​ | $ | 1.60 |  | 3.04 | $ | —
​ Restricted Stock Units The Company awards employees and directors restricted stock units (“RSUs”) in lieu of cash payment for compensation. These awards are granted from the 2021 Plan. Employee vesting criteria is time based, and compensation expense is recognized ratably across the timeframe. The Company pays payroll withholding taxes on behalf of the employee at vesting, and withholds shares from the employee’s award to cover the taxes payable. The Company accrued taxes for RSU share-based compensation of $8 thousand and $16 thousand for the three months ended March 31, 2025 and 2024, respectively. Total unrecognized compensation expense for employee RSUs as of March 31, 2025 was $304 thousand. Director vesting criteria is contingent upon the occurrence of one of four future events, which the Company cannot predict or control. Therefore, compensation expense for director RSUs is not recognized until one of these four future events occur, which is in accordance with FASB Accounting Standards Codification (“ASC”) Topic 718, “Compensation – Stock Compensation.” Total unrecognized compensation expense for director services as of March 31, 2025 was $658 thousand. Director compensation is earned on a quarterly basis with the target value of compensation set at $79 thousand per quarter, assuming four directors, one lead independent director, one chairperson for each committee and two committee members for each of the three committees. A summary of the Company’s RSUs activity is as follows: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | March 31,
​ | ​ | 2025
(in thousands, except per share data) | ​ | Number of Shares | ​ | Weighted Average Grant Date Fair Value | ​ | Weighted Average Contractual Life (in years) (1)
Nonvested at beginning of period |  | 865 | ​ | $ | 0.99 | ​ | 0.88
Granted |  | 281 | ​ | $ | 0.97 | ​ | ​
Vested |  | (121) | ​ | $ | 0.91 | ​ | ​
Forfeited | ​ | (38) | ​ | $ | 0.93 | ​ | ​
Nonvested at end of period |  | 987 | ​ | $ | 0.99 | ​ | 1.61
​
| 1) | The weighted average contractual life calculation excludes the number of director RSUs that vest upon one of four performance events (refer to discussion above for details).
A summary of the Company’s RSU compensation expense is as follows: ​
​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | For the Three Months Ended
​ | ​ | March 31,
(in thousands, except per share data) | ​ | 2025 |  | 2024
Share-based compensation expense | ​ | $ | 32 | $ | 36 | ​
Weighted average value per share | ​ | $ | 0.89 | $ | 0.93 | ​
​ Stock Awards ​ The Company awards employees stock in lieu of cash payment for compensation, typically to satisfy accrued bonus compensation. The awards are granted from the 2021 Plan. ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | 2025 | ​ | 2024
(in thousands, except per share data) | ​ | Number of Shares |  | Fair Value | ​ | Weighted Average per Share | ​ | Number of Shares |  | Fair Value | ​ | Weighted Average per Share
Fair value of stock payments in accrued compensation | ​ | 326 | ​ | $ | 279 | ​ | $ | 0.85 | ​ | 307 | ​ | $ | 326 | ​ | $ | 1.06
​ ​ Consultant Stock Plan ​ The 2013 Consultant Stock Plan (the “Consultant Plan”) provides for the granting of shares of common stock to consultants who provide services related to capital raising, investor relations, and making a market in or promoting the Company’s securities. The Company’s officers, employees, and Board members are not entitled to receive grants from the Consultant Plan. The Compensation Committee is authorized to administer the Consultant Plan and establish the grant terms. The Consultant Plan provides for quarterly increases in the available number of authorized shares equal to the lesser of 1% of any new shares issued by the Company during the quarter immediately prior to the adjustment date or such lesser amount as the Board shall determine. ​ The Consultant Plan activity is as follows: ​
​ | ​ | ​ | ​ | ​
​ | ​ | March 31, | ​
(in thousands) |  | 2025 |
Reserved but unissued shares at beginning of period | ​ | ​ | 264 | ​
Increases in the number of authorized shares | ​ | ​ | 21 | ​
Grants | ​ | ​ | (4) | ​
Reserved but unissued shares at end of period | ​ |  | 281 | ​
​ The Consultant Plan compensation expense is summarized as follows: ​
​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | For the Three Months Ended
​ | ​ | March 31,
(in thousands, except per share data) |  | 2025 |  | 2024
Share-based compensation expense | ​ | $ | 4 | ​ | $ | 3
Weighted average value per share | ​ | $ | 0.94 | ​ | $ | 0.81
​

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