ClearSign Technologies Corp

ITEM 1A.RISK FACTORS

We incorporate herein by reference the risk factors included under Part I - Item 1A. Risk Factors of our Annual Report on Form 10-K for the year ended December 31, 2024 which we filed with the SEC on March 31, 2025. There are no material changes from the risk factors set forth in such prior filing, except as set forth below.

Our ability to utilize our common stock to finance future capital needs, or for other purposes, is limited by the number of authorized shares of common stock currently available for issuance.

We have authority to issue a total of 87,500,000 shares of common stock, of which 52,426,282 shares of common stock have been issued and approximately 30,000,000 shares of common stock are reserved for issuance in connection with certain securities issued under our equity incentive plans and other outstanding securities, including stock options and warrants.

We have historically financed our operations primarily through issuances of equity securities. With the limited shares of common stock presently available for issuance, our ability to secure additional financing through the sale of common stock, to the extent needed, is limited. Absent an increase in the shares of common stock authorized to be issued under our certificate of incorporation, we will be limited to other financing structures in the event additional financing is required. Such alternative structures may be less favorable or unavailable in which case we may be forced to forego opportunities or required to downsize operations due to lack of funding.

If we fail to comply with Nasdaqs continued minimum closing bid requirements by September 29, 2025 or other requirements for continued listing, including stockholder equity requirements, our common stock may be delisted and the price of our common stock and our ability to access the capital markets could be negatively impacted.

Our common stock is listed for trading on Nasdaq, therefore, we must satisfy Nasdaqs continued listing requirements, including, among other things, a minimum closing bid price requirement of $1.00 per share for 30 consecutive business days. On April 1, 2025, the Staff notified us that we did not comply with the minimum bid price requirement for continued listing, as set forth in Nasdaq Listing Rule 5550(a)(2), during the 30 consecutive business day period beginning on February 18, 2025, and ending March 31, 2025. We have been granted 180 calendar days, or until September 29, 2025, to regain compliance. In the event that we do not regain compliance within this 180 period, we may be eligible to seek an additional compliance period of 180 days if we meet certain requirements.

There can be no assurance that we will be able to regain compliance with Nasdaqs listing rules. If we are unable to regain compliance with the minimum bid price requirement or if we fail to meet any of the other continued listing requirements, including stockholder equity requirements, our securities may be delisted from Nasdaq, which could

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reduce the liquidity of our common stock materially and result in a corresponding material reduction in the price of our common stock. In addition, delisting could harm our ability to raise capital on terms acceptable to us, or at all, and may result in the potential loss of confidence by investors, employees and business development opportunities.

We are subject to risks associated with proxy contests and other actions of activist stockholders.

On February 10, 2025, the Companys boaBoard of directors forformed the Special Committee for the purpose of responding to, managing,to review and and otherwise addressing attemptalyze purported director nominations by several certain of our stockholders to submit director, and nomination

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notin-stoceskholders, in connection with the Companysour 2025 aAnnual mMeeting of stockholders. Although several stockholders attempted to, and to manage communications and to negotiate and agree settlements with submitch purported nomination notices, due to the circumstances of those notices, ng individuals. On May 22, 2025, the Special Committee does not believe that any lawfully and qualifying stockholder nominentered into the Cooperation notice has been or can at this time be received in connection with the Companys 2025 annual meetingAgreements, which agreements required, among other things, the appointment of stockholdeMessrs. The Special Committees engagement with certain stockholders who had attemptedDiGiandomenico and Basenese to deliver nomination notices in connection with the Companys the Board. Following the 2025 aAnnual mMeeting of stockholders remains ongoing., the Special Committee was dissolved.

Any legal challenges or other actions by stockholders could result in costly and time-consuming litigation, interfere with our ability to execute our business plan, give rise to perceived uncertainties as to our future direction, adversely affect our relationships with customers, suppliers, investors, prospective and current team members and others, result in the loss of potential business opportunities, or make it more difficult to attract and retain qualified personnel, any of which could materially and adversely affect our business and operating results. The market price of our common stock could be subject to significant fluctuation or otherwise be adversely affected by the events, risks and uncertainties related to any such stockholder activism.