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Cautionary note on forward-looking statements

This press release includes forward-looking information and statements within the meaning of the Private Securities Litigation Reform Act of 1995 and the provisions of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Except for historical information contained in this release, statements in this release may constitute forward-looking statements regarding our assumptions, projections, expectations, targets, intentions or beliefs about future events that are based on management's belief, as well as assumptions made by, and information currently available to, management. While we believe that our expectations are based upon reasonable assumptions, there can be no assurances that our goals and strategy will be realized. Numerous factors, including risks and uncertainties, may affect our actual results and may cause results to differ materially from those expressed in forward-looking statements made by us or on our behalf. Some of these factors include the acceptance of existing and future products, the impact of competitive products and pricing, general business and economic conditions, and other factors detailed in our Annual Report on Form 10-K and other periodic reports filed with the SEC. We specifically disclaim any obligation to update or revise any forward-looking statement whether as a result of new information, future developments or otherwise.

ClearSign Combustion Corporation(a Development Stage Company)Balance Sheets                                                        December 31,                                                     2012          2011                                                 ------------  ------------ASSETSCurrent Assets:  Cash and cash equivalents                      $  8,027,000  $    930,000  Prepaid expenses                                     60,000       437,000                                                 ------------  ------------    Total current assets                            8,087,000     1,367,000Fixed assets, net                                     400,000       162,000Patents and other intangible assets                   618,000        87,000Other assets                                           10,000        20,000                                                 ------------  ------------    Total Assets                                 $  9,115,000  $  1,636,000                                                 ============  ============LIABILITIES AND STOCKHOLDERS' EQUITYCurrent Liabilities:  Accounts payable                               $    276,000  $    443,000  Promissory note                                           -        47,000  Accrued compensation                                168,000       254,000                                                 ------------  ------------    Total current liabilities                         444,000       744,000Deferred rent                                          35,000        18,000                                                 ------------  ------------    Total liabilities                                 479,000       762,000                                                 ------------  ------------Stockholders' Equity:  Common stock, 8,752,015 and 5,153,216 shares   issued and outstanding at December 31, 2012   and 2011, respectively                               1,000             -  Additional paid-in capital                       17,314,000     5,364,000  Deficit accumulated in the development stage     (8,679,000)   (4,490,000)                                                 ------------  ------------    Total stockholders' equity                      8,636,000       874,000                                                 ------------  ------------  Total Liabilities and Stockholders' Equity     $  9,115,000  $  1,636,000                                                 ============  ============ClearSign Combustion Corporation(a Development Stage Company)Statements of Operations                                                                 For the                                                               Period from                                                                Inception                                                               (January 23,                                       For the year ended       2008) to                                          December 31,         December 31,                                        2012         2011          2012                                    -----------  -----------  -------------Operating expenses:  Research and development          $ 1,184,000  $   463,000  $   1,708,000  General and administrative          3,026,000    2,516,000      6,996,000                                    -----------  -----------  -------------  Total operating expenses            4,210,000    2,979,000      8,704,000                                    -----------  -----------  -------------Loss from operations                 (4,210,000)  (2,979,000)    (8,704,000)Other income (expense)                   21,000        3,000         25,000                                    -----------  -----------  -------------Net Loss                            $(4,189,000) $(2,976,000) $  (8,679,000)                                    ===========  ===========  =============Net Loss per share                  $     (0.55) $     (0.67) $       (2.30)                                    ===========  ===========  =============Weighted average number of shares outstanding                          7,596,962    4,435,763      3,773,881                                    ===========  ===========  =============