ClearSign Technologies Corp Revenue Disclosure

Note 5 – Revenue and Contract Liabilities

The Company’s contracts with customers generally have performance obligations and a schedule of non-refundable cancellation obligations. Performance obligations typically fall into one of four categories, product shipment, customer witness tests, and engineering services, such as delivery of CFD studies, engineering documents, and engineering consultation. Customer payment milestones are unique to individual contracts and may occur prior to completion of performance obligations. Customer payment terms typically range between thirty and sixty days from the date of billing. Our customer contracts typically have a duration of less than twelve months. Delays in contract performance, if any, typically occur as a result of customer onsite project delays outside of our control.

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The Company recognized $5,234 thousand of revenues and $3,810 thousand of cost of goods sold during the year ended December 31, 2025. The revenue and cost of goods sold relate to the Company’s fulfillment of product orders for process burners, mid-stream burners, flares, spare parts, burner performance tests, and engineering services including CFD studies, engineering design documents, and engineering consultation. These products and services constitute performance obligations.

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The Company recognized $3,596 thousand of revenues and $2,478 thousand of cost of goods sold during the year ended December 31, 2024. The revenue and cost of goods sold predominantly related to the Company’s process burner product line. The Company delivered multiple burners for different customers, successfully completed engineering studies including the CFD analysis, and fulfilled multiple spare parts orders. These products and services constitute performance obligations.

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The Company had contract liabilities of $100 thousand and $441 thousand at December 31, 2025 and 2024, respectively. Of the $441 thousand contract liability balance as of December 31, 2024, the Company recognized revenue of $421 thousand during the year ended December 31, 2025.

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