HispanicBusiness

Rutkowski continued, "We believe that this combination of features may be unprecedented and may yield dramatic gains in both production capacity and energy efficiency, while setting new standards for environmental performance for a broad range of industrial and commercial combustion system types. We are targeting multiple applications including boiler burners and process heaters such as those used for very high value processes in oil refineries and petrochemical plants. Our analysis and discussions with prospective partners and customers suggest that the operating improvements may be compelling and in some cases may lead to tens of millions of dollars a year in savings and/or increased production output.

"In other developments in Q1, we reported that we have constructed, installed and operated a solid fuel system to begin the process of scaling up our earlier successful demonstrations of important effects for solid fuel systems. Capable of firing at a commercially-referenceable rate of over 1.2 million Btu/h per square foot, this continuous-feed furnace will expand the company's development and testing capabilities to include biomass fuels such as wood pellets and chips (biomass), solid waste and various types of coal at a scale that will enable the company to demonstrate the effectiveness of ECC™ technology to prospective partners and customers.

"We also achieved an important milestone in the development and protection of our intellectual property with the announcement that we filed our 100th patent application in Q1. In fact, the patents filed may represent substantially more than 100 individual inventions, and ClearSign currently has over 50 additional inventions in process for additional patent filings. Over the coming quarters, we will continue to aggressively innovate and protect our most valuable innovations.

"We were also grateful to receive the acknowledgement of an independent panel of judges at the CleanEquity conference in Monaco, who selected ClearSign from over 20 finalists as 'Best in Class in the Field of Environmental Technology Research.'

"Following the end of the quarter we were able to report that we had entered into a letter of intent with Grandeg, a 20-year old European market leader in commercial wood pellet boiler systems, noted for their leadership in the development and marketing of high quality biomass pellet boilers. We intend to enter into a definitive agreement with Grandeg in the coming weeks, under which they will provide up to $500,000 in funding to support the initial phases of development for both retrofit solutions and new pellet boiler designs featuring our ECC technology and related improvements to environmental performance and energy efficiency. We look forward to sharing our technical progress with solid fuel scale up effort during the weeks and months ahead.

"We have identified significant launch opportunities in several large market segments including:

•Refinery heaters,

•Ultra Low NOx burners for a broad range of commercial and industrial applications including package boiler and process heaters,

•Commercial and industrial solid fuels, including biomass, waste to energy, and coal.



"In these cases we have defined and validated with prospective customers, partners and third party subject matter experts, system requirements and related benefits.

"Our technology and technology demonstrations have been well received, and we are actively engaged in discussions and/or negotiations with several global enterprises in these market segments. We are determining how we can most effectively collaborate, in each of these categories, to advance and deploy ClearSign technology."