ClearSign Technologies Corporation (CLIR) Q3 2025 Earnings Report, Transcript and Summary

Greetings. Welcome to the ClearSign Technologies 3Q '25 Earnings Conference Call. [Operator Instructions] Please note, this conference is being recorded. I will now turn the conference over to your host, Matthew Selinger. You may begin.

Good afternoon, and thank you, operator. Welcome, everyone, to the ClearSign Technologies Corporation Third Quarter 2025 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. 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 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 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 filings with the SEC, including those discussed under the Risk Factors section of the annual report on the Form 10-K for the period ended December 31, 2024. Except as 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. 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 Brent Hinds. So with that, Brent, please go ahead.

Thank you, Matthew, and thank you to everyone joining us here today. Before I begin, I'd like to note that our financial results on Form 10-Q were filed with -- last week with the SEC. And with that, I'd like to give an overview of the financials for the third quarter of 2025. For the third quarter of 2025, the company recognized approximately $1 million in revenues compared to approximately $1.9 million in the same period in 2024. This year-over-year decrease in revenues was driven by our activities in the prior year. Recall, during the third quarter of 2024, we shipped a large order with multiple burners to a California refinery customer. Aside from the comparison and revenue numbers, I believe it's also important to note the difference in the year-over-year order volume. Last year's Q3 revenue was predominantly driven by one large order. And recall, this order accounted for approximately 50% of our 2024 annual revenue. Whereas juxtapose this with this year's quarterly revenue, this year's Q3 revenue was driven by our execution of several orders from our backlog, which has also grown year-over-year. To be more specific, our Q3 2025 revenue was generated predominantly by delivering multiple spare parts orders, delivering a midstream order, delivering a flare order, finalizing a CFD analysis for another flare order, providing engineering services and completing a customer witness test at the Zeeco test facility for our large 26 burner order. This also highlights the fact that our diversification strategy is adding incremental revenue to our top line. Now for the full income statement. Our net loss increased by approximately $274,000 compared to the same period in 2024. This year-over-year increase was predominantly driven by the decrease in sales volume discussed earlier. However, I'd like to point out a silver lining in this year-over-year change. Our Q3 2025 gross margin increased approximately 6.1 percentage points compared to the same period in 2024. And it's not just an isolated event to Q3. Our year-to-date Q3 2025 gross profit margin increased 5.3 percentage points compared to the same period in 2024. We believe this year-over-year increase in margin reinforces our overall long-term strategy to target margins between 40% and 45%. Now I'd like to shift the focus to cash. Our net cash used in operations for the third quarter was approximately $1.8 million compared to approximately $1.4 million for the same period in 2024. This $400,000 unfavorable year-over-year change was predominantly driven by our change in net loss discussed earlier. As of September 30, 2025, we had approximately $10.5 million in cash and cash equivalents with approximately 52.5 million shares of common stock outstanding. From an overall financial perspective, we believe our current working capital positions us well to scale our business while also providing our customers and suppliers a level of confidence to do business with us for the long term. And with that, I'd like to turn the call over to our CEO, Jim Deller. Jim?

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 ClearSign. For the call today, Matthew will lead a question-and-answer session, where he'll go through the different business units much like our previous calls. We will end with an outlook for the remainder of 2025 and into 2026. We will then open up the call for Q&A from our investors. Many of you may have seen this, but you can send in questions ahead of time to our investor relations at mselinger@firmirgroup.com. So Matthew?

All right, Jim, let's get started. We've got a lot of exciting developments to cover. So Jim, there's been an uptick in order flow in the last quarter leading up to recent days. The orders are not just with one product line as we've seen orders across process burners, flares and even the new M series line. So from a macro or kind of high level, what do you believe is fueling this?

Yes. Thank you. I think that's right. It is very pleasing to see that the increase is coming across our major product lines. I think there are some high-level drivers that are behind this and playing to our favor. The key one, I think we've said this for a long time, just getting equipment out in the field, getting the customers to trust what we do is very important. We are getting equipment out. And in particular, we've got some very large orders that are well in progress, and those are being seen. And I think that, that is playing into this uptick, especially in the process burner orders where we've seen orders and many inquiries from major customers that are watching our projects. There are ongoing regulatory pressure. There's new regulations being worked on in the Texas Gulf Coast area, a key market for us. And in the California regions where there's a lot of industry South Coast and San Joaquin Valley, those regulations have been in place for some time, but the due dates are coming up, and we are seeing inquiries from customers to meet their obligations under those. And I think finally, as we've got more products out there, we spend more time our products are evolving, they're maturing. And I think the same initiative I just getting installations out there. We're getting a lot more interest from our clients because they are becoming much more acceptable and usable for them.

But I want to ask almost the same question. Thank you for the answer on the macro level. How about then more specifically with the product lines. How about -- let's start with process burners.

Yes. I mean the macro play across these, especially on the process burners, getting the major orders that we have, getting the progress through the testing, having the industry see the products develop and hearing about how that work is going, I really think is influential work spreads very quickly throughout this quite closely community. Definitely, the regulations in Texas, the orders we just announced, one is from California and one is from Texas, they're right in the regions where the regulatory pressure is playing a part. And on the process burners, we have a very big financial driver for our clients. The cost of installing an SCR is multiples of a burner solution. As the clients come to trust our solution, it is by far the most efficient choice, at least in our opinion. I mean just a point of reference, the -- what we've heard in the industry for an SCR installation on a major heater is probably going to be in the region of $40 million to $60 million, somewhere around that range. ClearSign is going to be significantly less than that. So that's a very big financial driver for the customers in choosing -- we believe ClearSign as a solution for emission requirements.

And how about in flares?

So flares, I mean one -- again, down to the client experience, this is actually our fourth order with this customer for flares. So they have knowledge of our flares. They've seen what we do. So then I mean, clearly, their experience is playing into this. And we believe they have potentially more orders to come. The -- also regulations in California. They do regulate NOx emissions, which is not the same in every region, but California, we're seeing in Texas and now requires NOx regulations that means that ClearSign has a very valuable product.

And lastly, what are the drivers that on the M Series, a bit different. Isn't it?

The M Series is different, especially the market that we've sold into with these last couple of orders. The M Series burners are really targeted on the gas industry and the midstream gas. This is a very big growth sector of the energy industry, especially with export LNG. So there's a lot of new equipment being manufactured and sold in this area. And for us, what's particularly interesting is a lot of the equipment that's out and installed is being upgraded, bought into compliance, minimize the downtime. So that leads to a very strong retrofit market. We developed that M25 burner based on that feedback. We've got a client that does that retrofit work wanting a good burner product. Based on their input, we develop this burner. There's a lot of proposals out there, but these 2 orders are great examples of why we developed that burner. So that's a more unique driver for the [ M Series ] and the gas business in general.

Okay. Great. Jim, let's dive into and dissect some of these orders if we can. I'd like to start with an order that seemed a little bit out of the ordinary, not a Core equipment or engineering order, rather testing. And I'm going to read a couple of things here, the headline. The headline read, ClearSign Technologies Corporation announced its order for comprehensive testing of 100% hydrogen capable burner. And then with the subhead, petrochemical client requesting performance mapping for future deployment. What's this all about?

Yes. This was a very interesting order. This is not a typical order for us. There was no product sale with this order. The customer is a repeat customer of ours. They paid significant money for us to conduct a demonstration of our technology working in -- or working with fuel gas is that they picked to represent the operations of their global facilities. That includes up to 100% hydrogen. So looking at the future options that they may need and being global, the use of hydrogen is very much a consideration for the international market, even if it's slowed down here in U.S. at present. The work was to be conducted at Zeeco test facility. And it was truly an expansive testing, I think, forward-looking on the part of our client.

Okay. I'm going to unpack a couple of different things here, Jim. You say repeat customer. So are we safe to assume a, this is an existing customer. And let me also say it's referred to as a petrochemical customer. So the only other customer that's referred to as petrochemical customer is the customer that has a 26 burner order going to the Gulf Coast. So is it safe to assume it's the same customer?

Yes. I mean this client has a very good understanding of our technology. They've been engaged with us on major testing and demonstration of our burner as part of that project. That's important because the -- this work is not usual. With that background, this is a major customer, we believe that they have a genuine interest in the potential use of ClearSign technology throughout their fleet going forward. And that was a major consideration when we agreed to do this particular project. It's not something we would do for everyone, but this was a very specific case. And that relationship and their understanding of our technology was a very big factor in us undertaking this work, and it is complete and went very well.

Okay. There's another thing you just said right there, Jim. You said it's been completed, right? So past -- so this project was announced, and this testing project has already been completed. Is that correct?

It is virtually correct. The demonstration is completed. We still have -- we're still formalizing a test report, but the work is done. And the background to this burner, just to take a little segue, we've undertaken a very significant project funded by the DOE and the SBIR program to develop a new burner technology capable of running from 100% natural gas to 100% hydrogen. We've been working on this now for almost 2 years. It's gone extremely well. The final product of that testing was going through its last physical testing at the Zeeco test facility. That burner was then in place and able to be demonstrated to this Gulf Coast chemical plant. For us, the really appealing thing of having a burner that runs from 100% natural gas to 100% hydrogen is you really hit the extremes of the burner operations. So this chemical client, when they came with a wide-ranging global fuel requirements, that burner is already there to do it. So we're able to demonstrate that burner, which is the product of the DOE SPR program, and it just worked amazingly across all of those product lines, completing every requirement. So it was a very efficient and effective way wanted to show our new technology to this very high-profile client and a very good demonstration of the value of that SBIR program.

So let me just parse this a little bit. The petrochemical client testing is virtually complete. You did mention the DOE SBIR testing project, where is that project?

So that project is almost complete. Let me explain that a little bit. The technology development and the engineering is complete. That burner met all of the DOE requirements. It met all our requirements, which I'd argue were probably more stringent than the DOEs. It showed its versatility and robustness and ease of use in being able to develop -- demonstrate it to the Gulf Coast chemical client, which really is the big opportunity for us. What is left to do with the DOE project is our objectives and the DOE expectations are not that we develop a single burner to demonstrate this capability, but we develop a range of burners for future deployment. We are in the process of running a much smaller version of that burner through its paces. That's in the early phases at Zeeco at this point. The reason we're doing this is we need to validate the scaling criteria so we can have a complete range of burners of that DOE design. So this -- I think the -- in easy terms, the hard part is done, the burner technology is developed. We are able to just validate in the scaling criteria. So we can put a bow on this and have a brand-new product line and seeing the way this performs, the way this burner operates. I'm very excited about what this can both do for us and the potential for further applications and different technologies going forward.

So it's partially complete. We've got more to do, but that will be executed and we'll announce that when that's complete. It's gone very well.

Absolutely.

That's great. So let's move ahead, I'm going to talk about another order here that was recently announced, Jim, and it was announced -- you called it a new, super major ordered an engineering for a retrofit of 2 process heaters,at a California refinery for a total of 32 ClearSign Core burners. Can you give a little more color on this order?

Yes. So this was announced on October 23, right? This is a new super major customer for us. The order that was announced was for the engineering order. I think to put this in perspective and help explain what this is, when we work with the client and we put the proposal together for these projects, we look at the scope of the entire project. And that proposal covers the initial engineering, also any computer modeling and the testing and the fabrication and the delivery of the burners and anything that goes beyond it. So we deliver a proposal for the complete scope of work.

So we're bidding on the comprehensive project...

On the whole thing. That's what the client assesses. As we've seen with other projects, they often -- the initial step is often just to -- they purchase this step by step. So this order is that very first engineering phase based on our proposal for the entire delivery of this business.

Right? So this is just like other orders we've announced in the past where, again, just to parse this, we're bidding on the full project. They basically look at it and they say, we want to move forward, they release the PO, the initial PO for the engineering order. Is that correct?

That's correct. And that's the way that we're seeing many of our previous orders being released.

Fantastic. And this is for, again, we're calling it a new super major customer and going to California. Is that correct?

That's correct. Yes. When we say new, it's -- we know the customer, we know the people. This is our first purchase order from this super major customer.

And it's been a direct relationship from ClearSign and the customer.

That's correct. Yes.

Fantastic. Let's talk about another one. There's another larger process burner order, and we call this from an integrated petroleum producer. And this is for 36 ClearSign Core burners. And this is to be installed in the U.S. Gulf Coast refinery.

That's correct.

How about a little more detail on this order?

So this one was announced September 17. As you said, it's the same structure. We bid the entire project, the entire scope. And again, the client as I've done here, has given us the initial order for the engineering to kick this project off. The drivers behind this are a little different. NOx is definitely a part and a consideration of this project. This is also an unusual mechanically structured heater and standard burners would not fit. So we believe that a significant part of selecting ClearSign for this project were also our engineering capabilities, our ability to develop a burner to fit into this heater and deliver the right frame profile and with the CfD modeling and the engineering to make right to show the customer and to simulate that working in a heater. I think this speaks to the strength of the engineering that we have here at ClearSign in addition to the technology.

Okay. And that order was in the press release, we called it a name brand petroleum company. So this brings up a point, Jim, I'd like to move into kind of take a side bar here that one topic I get asked frequently is naming customers, right? Jim, why don't we name them in releases?

Yes. Great questions. We would love to name the customers, too. The reality is that in the purchase order contracts that we have with most of these customers, there are strict disclosure requirements, and it prohibits the release of the client's name. So this is -- whether we have ClearSign in my product, this is quite typical, but that is the reason that we don't. Now what we do, do in the press release is we do describe the companies quite carefully. So that description that you've mentioned, whether it's a global super major or...

Any brand petroleum company.

A global chemical company. We choose that name and descript it carefully to at least try and give the investors a good understanding of the prominence and the status of that customer. So while we cannot name them, if it's a global super major, you've got a good idea of what that customer is like if you don't know specifically.

And how many super majors are there?

Customers? There's various descriptions, but 5 to 7 seems to be the general consensus.

And we're working with how many...

So we now, as a company, since I've been with the company, we've received purchase orders from 3 of those global super majors. So give it just over or just under 50% depending on what description of global super major you use.

Right. And again, if they're not a super major, like you said, they're also a name brand petroleum company, a multinational energy company. These aren't in a sense, mom-and-pop operations. We're dealing with bigger and bigger companies that...

Yes. If it's a global chemical company or -- yes, you will recognize that is a household and then we try and describe them and their breath as accurately as we can.

Okay. I'm going to get back to the order topic. Thank you for that side bar. Let's shift to the M Series. We've seen 2 separate orders just 1 week apart for this new product, and both were through our heater manufacturing partner, Devco. And you did touch on this in some of your early comments, Jim, but could you talk about the M Series and kind of what's going on with that product line?

Yes. So this is -- it's primarily targeted into the midstream industry. We have different levels of technology. We have the M1, which is capable of delivering well below 5 ppm, so beating any emission requirements we have heard of. And then since then, with the feedback from the customer, we have developed an M25 specifically for retrofit applications. Both burners are great reception. These orders are the M25. So this enables our customers to go out and to have a very effective burner product to retrofit heaters. So to go out and to come up with a more reliable burner to reduce the emissions. But this is designed to take out an existing burner and have a ClearSign burner to plug back in the hole and to upgrade that heater. That's proven to be very successful. There are a number of proposals still out there. And we actually believe that there are more projects being quoted with our burners that we know about because once we provided a proposal for a certain size of burner, our clients are free to go ahead and use that proposal in other projects that they're chasing that would require that same burner. So it's quite common for us to jump on a conversation with a customer for a project that they're working on that we didn't even know about and include our technology as that project gets close to fruition.

So these sales channels are kind of operating in the sense are bidding on their own.

That's the goal, especially in cases like this, where it's not a customized product, it's a standard product that give them the tools to allow them to go and then to run with it and to use that product more as they get traction that way, it's very efficient on our resources. It cuts our clients free to go and sell them and chase whatever projects they can without having to come back to us for every detail in the early phases of that project.

And because it's a more standardized size as then, Jim, I'm assuming then the sales process might be quicker and then even the sales to delivery, is that correct?

The whole process is more efficient, right, especially with a -- with this type of client, we typically got standard purchase order conditions. The order to delivery cycle is much quicker once we've already build that burner, once we've got the drawings. So we'll turn these orders in typically 10 to 12 weeks from quote to delivery. So it's -- while it's the same ClearSign technology at the Core is a very different order process to the previous orders we talked about where there are engineering and testing and multiple stages and also a very bespoke product for all the process heaters. These are very much designed to be standard burners that we can turn quickly and let our clients run and go and chase a larger volume of opportunities.

Okay. Great. Well, keeping with the theme of multiple orders, and you didn't touch on this in the very early comments, though. We did receive our fourth order for flare and this is for our California who's a -- California customer, who's a producers there. What's driving this? And what's going on kind of with the flare product?

Yes. I think 2 major points on the drivers. First is there are certain regions of the country that we have a NOx emissions limit on continuous flare and California is one of them in at least most regulated areas of California, especially where the oil fields are. And the second is just the clients' needs. So this is an oil-producing customer. As part of that process, there is an off gas that comes out from the wells that client has to dispose off responsibly. If they cannot dispose off that gas, it actually can limit the production rates from the field. So they need more flaring capacity that they have to do in a manner that meets the regulatory requirements to enable them to maximize their oil production. So this could potentially limit their oil production if they don't have the flaring capacity to meet their needs.

Interesting. Okay. Very interesting there. And this -- and I think you talked about this in the past on previous calls, Jim, that this isn't just a simple kind of dumb flare, right? Is that correct? This is a more complex kind of project and product?

Yes, 2 parts. I mean our flares are quite sophisticated because we do maintain the emission regulations that is normal across most players. We're quite unique in that field. For this one, in particular, I have talked about systems projects and expanding the ClearSign scope on previous calls and our ambition to get into bigger projects where we can leverage our technology and then include the vessels and the equipment that surrounds that burner basically to multiply the size of our scope. This order is actually a long way of that process. This is not truly 100% of the supply of the flare, but we are replacing major components of an existing flare. And we're probably up in the 75% to 80% of that flare range. I don't normally give revenue numbers, but to emphasize the point here, a typical flare burner will be $150,000 to $200,000, somewhere in that range. With the other parts for the flare that we're able to sell here, we're up in the region of $0.5 million for this 1 particular order. Thinking more generally for the systems projects, this is probably the bottom end of what a systems project will be, and they've certainly got a scope to go up above $1 million per piece. But the intention is to take a special ClearSign burner and then leverage that to supply the scope of the product that, that burner fits into rather than just selling the burner have somebody else build that scope. There are certain products where it makes sense for us to actually sell the whole thing, which allows us to expand our revenue significantly.

Interesting. So again, for us, it's very interesting because it's not only an emissions product, but then it's also helping the customer maximize their production.

Yes.

Okay. is a new -- I think it's a new kind of reasoning that I don't think our customers fully -- excuse me, our investors fully understand.

It's certainly a very valuable lever for the customers as well.

Let's turn to the sensor product, if we could, Jim, the ClearSign Eye. On the last call, we had a previous update about a pilot installation going to a super major. Can you give an update on this product line?

Certainly. So that has -- as we expected, this project is going ahead. The sensors were shipped and installed and are operating in the clients team. We've had some very beneficial feedback from that client. We also have further opportunities to quote those sensors now to this client actually for a sister refinery, which is very encouraging, I think, speaks to their experience to date. Incidentally, we also have a another site that we are installing the sensors on ClearSign burners, which will be a first for us. So there's -- I'm actually very encouraged to actually getting some traction on the sensing technology.

Great. More to come there. On the last couple of calls, we have spent a long time talking about our partner, Zeeco, right? So can you give an update on the relationship? How is that going with Zeeco?

It's going really well. I mean just going back through what we've talked about here today, the DOE testing and the testing for the Gulf Coast chemical company is a fantastic example. That testing was extensive, right? They have limited -- they have the world's biggest test facility I have to say, but they have given us extensive access to develop our products in that testing. I think to emphasize, if we look at the project that we recently talked about, the validation of the demonstration project for the chemical company, that wide range of fuels was the most extensive range of fuel that I think I tested in my career, and I've seen a lot of burner testing. They had to move in fuel tanks and actually rearrange the fuel system for the test burners to do that, which they willingly did. They took the ball around with it and put -- they had everything in place. And that testing went smoothly, both the burner performed wonderfully, but also my house off of the Zeeco team, they did an incredible job running that furnace and getting set up and making sure that everything was running consistently in the lead up to and throughout the testing. On the -- right, the other major thing they do for us is fabrication of burners. We have, I think, our biggest burner production brand going through the Zeeco shop right now. They're building those burners. The updates and the interaction, we are obviously the shop that the clients inspect us. So they have been extremely supportive of the ClearSign business. If I can, just one is, we've actually started receiving proposals now or request for proposals from Zeeco sales team. So we've had a couple to address as well. It was nice to see.

It's great to see. I think that's what a lot of investors are interested to hear. So Jim, we have the year-end insight mid-November. What do you see for the rest of the year and then moving into 2026?

Yes. Well, there's not a lot of the year left, but there's some very specific things this year. The big one is we have 26 burners being manufactured at Zeeco. Those are on schedule. We're looking to get those shipped by the end of the year. We also have a flare in California that's starting up. But really for this year, shipping those 26 burners is a big focus. Looking forward, there's a lot of quotes out there, a lot of the M Series that we said, also a lot of flare and process burners. I'm very much looking forward to further traction and orders coming in from those. We've got the 2 process burners we've talked about so far, the engineering phase. I look forward to those projects progressing, rolling in through testing and ultimately, the equipment orders. Speaking personally for me, the burner that came out of the SBIR program is very exciting. I mean this burner is subtly different from our previous burner, but what it does and the way that it does it, I think, is going to be extremely significant in the industry. I think it delivers -- it provides a platform for us to develop into new areas and to really develop that burner and getting that news out to the clients is going to be very important. So for everyone looking out, look out for a lot more promotion. We'll be engaging with the key technical people with our customers. We expect to be putting news out on social media, especially, but a lot of promotion around the burner. b think that's got a great potential for ClearSign's future.

All right. Referring back to the first time you mentioned there, Jim, the 26 burner order. I know we don't give guidance, but if that shifts, I'm going to go and lever what could that Q4 -- what could our Q4 look like?

Yes. Thank you. I think we answered this. We talked about sales before, but we've given ability to do back of the envelope math, and maybe stick with that, I think, conservative pricing for our burners we stated it's 100,000 per burner. There's 26 burners in this order. We've recognized a little bit of this revenue from perhaps testing, but very much the vast majority is still left to be recognized. So I'm not going to go through the math. But basically, it's comfortable easy to say, I think that shipping these burners will be well north of $2 million in revenue to be recognized by year-end when they ship.

That would be a great quarter, Jim. So with that, I'm done with my questions. Operator, we're going to turn back to you, and we're going to open up the call for some questions, please.

[Operator Instructions] The first question comes from Sameer Joshi with H.C. Wainwright.

Congrats on a great quarter and it looks like the next quarter will also be good. I think Matthew asked a lot of the questions that I had. But just I would like to step back and look at the type of orders that you're receiving. You have the M Series, the flare product, the sensor product upcoming. It seems that the process of receiving these orders and deploying these particular products is quite different from the process burners where it would be -- you would have to wait for a substantial period of time before a burner would be deployed. Does this help you in like understanding your 2026 expected revenues better and timing and cadence of quarterly revenues over the next 4, 5 quarters?

Sameer that is a great question. I think the -- the key point is, obviously, the process burner orders are substantially bigger than the M Series or even the flare orders. The 2 that we talked about on this call, 32 and 36 burners, but mean a lot more meaningful in terms of total revenue. But as you point out, the duration of those projects is significantly longer. So the way that I see it, the long-term process burner orders and that business is based on my expectations going to be the -- clearly, the biggest product line for ClearSign, especially in the stage of development we're at right now, the revenue flow is going to be lumpy. We are chasing those orders, but there's going to be a significant duration before the total revenue comes in. That's where -- from a revenue perspective, we're really looking to and promoting products like the M Series and the midstream and even the flares and the sensor will be the same, that they are projects that turn much more quickly through the sales process and especially through the execution process. So they -- as I see it, they will fill in the gaps of the -- in revenue while we build up the pipeline of those big process orders in time. I expect to have a significantly greater number of process orders in various stages of completion so that, that revenue from those process orders will smooth out. We will still continue to get the quick turn orders and the spare parts and everything else that we do. I think as we go through this growth transitioned, the 2 different types of product, the quick turn and those longer orders, right, both fill in different parts of our revenue picture.

Yes, understood. So given the success of these products that sort of fill in the revenue build up while the process burners are chugging along. Are there new opportunities for new -- other kind of products? I think the sensor product is one of those, which you probably would talk about. But are there other products that could be developed by the company or are under development by the company?

I certainly believe that there is potential. Obviously, we -- if we roll something out, we will bringing that to the front. But I think especially, I'll go back to my comments on the outcome of the SBIR program. The underlying burner structure that we developed in that program is extremely versatile. And I think that 4 different process applications gives us great opportunity to expand into other applications in the process field. And always, as we develop the M25, we're always talking for our customers, we're trying to understand their needs and the gaps in the market and looking for opportunities that play to ClearSign's strengths. And can both be -- provide for good products for our customers and, of course, good products for ClearSign. So I certainly expect to develop more products in it and is a great focus of ours.

Understood. And then just one last one on the regulatory front. Of course, it seems the California and Texas regulatory action or pending deadlines are beneficial for the company. But at the federal level, is there any risk of headwinds as a result of EPA reducing or walking back some of its requirements. Do you have any visibility on what steps the EPA might take over the next year that could result in some headwind for your sales process?

Yes. So it's difficult to talk in absolute what could possibly happen. But from what we have seen and going back over my career, the regulation of NOx emissions is a criteria. It's fundamental to the EPA regulations. And we've not seen that be subject to political pressure to the same extent as more recently in the United States, we can point to decarbonization. So we're seeing increased regulations in Texas coming out now that's being driven by the EPA. So I do not expect any headwinds on the NOx side. And then when we look at carbon, I mean, that was always a long-term development, especially when we start looking at things like hydrogen as a fuel, we are seeing inquiries now that are very interested in the optionality and our burner's capability to burn hydrogen as a fuel. I think part because it's a longer-term need and also because our clients are global. And while there may be short-term political deemphasis of decarbonization in the United States, that is not the case in other countries around the world and our clients are global.

[Operator Instructions]

Great. Operator, while we wait, I'm going to go ahead and read a couple of questions. I thank you to our investors for sending questions in ahead of time. We do -- we very appreciate that, and those also help us with the messaging of the actual content of the call. We hope to be able to address every question that was sent in. Jim, one question I have is it dovetails a bit into what you were talking previously there with Sameer. We do see a potential reduction in larger scale hydrogen projects, will this or could this affect the development of, let's say, the 100% hydrogen burner?

I mean -- okay. So I think there's a few parts. First, the quick answer is that burner development from our side is done, especially from the development of the technology, as I described earlier. But I think importantly for ClearSign and even the big consideration when we embarked on this project, developing a burner that runs across that fuel range is extremely valuable in the market today. On an oil refinery, they have a wide range of gas mixtures that make up their fuel gas. The off gases that come off the refinery process get pushed into the field gas stream. And even today, we have burners that run on oil refinery fuel gases that are in excess of 80% hydrogen. So the burner we've developed under the DOE program specifically is extremely robust. And as we showed the chemical client that we've talked about, I think the industry knowing that a burner will operate on 100% hydrogen and 100% natural gas gives them great confidence that that's a very robust and reliable product for use in their refineries no matter what the fuel gas composition they run in. So from my perspective, I'm actually not concerned about the -- or not concerned from a business sense about the deemphasis of decarbonization for our burner business because my primary interest in developing that burner was to develop a burner that was going to be an excellent product for the refining and chemical industry in its form today. And if we've got the optionality for the future of hydrogen, then that is icing on the cake.

Here's another one. And thank you to the investors who sent this in because you're obviously an astute listener. It was mentioned that spare parts were part of the revenues this quarter, and I believe spare parts were mentioned as the chunk of the revenue last quarter. Can you talk about what this might mean for the business -- this portion of the business going forward?

I can. So just in general for everyone in the burner business, the spare parts is a very important part of the business. It's based on the installed equipment. And as you get more equipment out, it will become an increasingly large part of our business. The nice thing is it's also very consistent. It tends to turn very quickly, and it tends to run with a high profit margin, which, of course, we like. Just to put some perspective, Brent, the -- this last quarter, we had -- what was the spare part in that mix? Do you remember the...

We had about $300,000 of a $1 million.

All right. So even now, we're getting a very significant steady income from spare part sales with the equipment we have out in stores right now. And as we get more income out there, that is only going to increase, and we'd expect it to increase proportionately to the amount of equipment that we have out in the field. So I look for this to be a very meaningful and high-margin revenue stream for ClearSign as we grow.

Great. Okay. One more question here. We're now hearing more and more orders from Texas and the Gulf Coast. What do you believe has led to this shift? And is this a general shift to that region?

It's a good point and a good observation. When you say shift that region, I define that differently. I don't see the business in California dropping off. And in fact, with the process burner order we talked about today, I think the California business remains strong. I do think what we're seeing, though, is a significant pickup in what is our -- the largest refining and petrochemical market in the U.S., which is the U.S. Gulf Coast. We've got the 26 burner orders shipping down there. We talked about the 36 order going down there today. I think there's a number of factors behind that. One is just our acceptance in the industry. This is where a lot of those users are based. We've also talked about the regulations. The California regulations have been -- the new regulations have been in place for some time. The Texas regulations are almost complete. We believe the formal proposal has been submitted by the Texas Board. It's just waiting on the EPA to approve it, but the industry is aware that there are new regulations and potentially more fees on the near horizon. So we believe -- I don't know that, that is the driver, but we think that, that is also possibly playing into the uptick in interest that we are seeing. And we are seeing interest beyond these 2 orders. We do have significant interest across the U.S. Gulf Coast expanding actually beyond Texas.

I have no more questions. Operator, I'll put it back to you.

There are no further questions in the queue. We've reached the end of the question-and-answer session, and I will now turn the call over to ClearSign's CEO, Jim Deller for closing remarks.

Thank you, operator. And thank you, everyone, for your continued interest in ClearSign and for taking the time to participate today. Look forward to updating you regarding our developments and speaking with you on our next call. In the meantime, please keep checking for development on our websites. And for more behind the scenes updates, please follow us on LinkedIn, and we have also recently reengaged our ClearSign X accounts, so there's another social media post to check. Thank you all for your time.

This concludes today's conference, and you may disconnect your lines at this time. Thank you for your participation.