ClearSign Technologies Corp 10-Q/A, filed Dec 23, 2021
ClearSign Technologies Corp (CLIR)
About this 10-Q/A
ClearSign Technologies Corp filed this 10-Q/A on December 23, 2021, covering the quarter ended September 30, 2021.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
Amendment No. 1
(Mark One)
| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
OR
| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from ______________ to _______________
Commission File Number
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
(Address of principal executive offices)
(Zip Code)
(
(Registrant’s telephone number, including area code)
No change
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
| The |
Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days.
Indicate
by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to
Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period than the
registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer ¨ | Accelerated filer ¨ | |
| Smaller
reporting company | ||
| Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
As of August 19, 2021, the issuer has shares of common stock, par value $0.0001, issued and outstanding.
EXPLANATORY NOTE
This Amendment No. 1 on Form 10-Q/A (this “Amendment”) amends our original Quarterly Report on Form 10-Q for the quarter ended September 30, 2021 filed with the U.S. Securities and Exchange Commission (the “SEC”) on November 12, 2021 (the “Original Filing”).
The purpose of this Amendment is to amend and restate Part I, Item 4 – Disclosure Controls and Procedures to (i) revise the disclosure to reflect management’s conclusion that the Company’s disclosure controls and procedures were not effective as of September 30, 2021; (ii) remove the references to an assessment of the effectiveness of our internal control over financial reporting; and (iii) update Part II, Item 6 – Exhibits to reflect the exhibits filed with this Amendment.
Other than as set forth herein, this Amendment does not modify or update the Original Filing in any way, and the parts or exhibits of the Original Filing which have not been modified or updated are not included in this Amendment. This Amendment continues to speak as of the date of the Original Filing and the Company has not updated the disclosure contained herein to reflect events that have occurred since the filing of the Original Filing. Accordingly, this Amendment should be read in conjunction with the Company’s other filings made with the Securities and Exchange Commission since the filing of the Original Filing, including amendments to those filings, if any.
ITEM 4. CONTROLS AND PROCEDURES
Disclosure Controls and Procedures
Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Securities Exchange Act of 1934, as amended, is accumulated and communicated to the issuer’s management, including our principal executive and principal financial officers, or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure.
As of September 30, 2021, we carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer (principal executive officer) and Vice President and Controller (principal financial and accounting officer), of the effectiveness of the design and operation of our disclosure controls and procedures. Based on the foregoing, our Chief Executive Officer and Vice President and Controller concluded that our disclosure controls and procedures were not effective as of the end of the period covered by this report due to the material weakness described below.
Changes in Internal Controls over Financial Reporting
Identification of a Material Weakness
Subsequent to the filing of our Annual Report on Form 10-K for the year ended December 31, 2020, our management, with the participation of our Chief Executive Officer/Interim Chief Financial Officer (our principal executive, financial and accounting officer), identified a material weakness in the Company’s internal control over financial reporting related to the ability to record transactions in the accounting records and preparation of financial statements that are in compliance with accounting principles generally accepted in the United States of America (“US GAAP”). A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statement will not be prevented or detected on a timely basis. Management arrived at such conclusion after numerous adjustments were recorded after the close of the Company’s books of record and preparation of the financial statements for the purposes of the Company’s Quarterly Report for the period ended June 30, 2021. These adjustments related to misstatements of prepaid and accrued expenses, stock-based compensation, revenue contracts, and construction in progress assets.
As of September 30, 2021, the aforementioned material weakness still existed. This conclusion was reached by our management, with participation of our Chief Executive Officer (principal executive officer) and Vice President and Controller (principal financial and accounting officer).
Management’s Remediation Initiatives
In response to the above identified weaknesses in our internal control over financial reporting, we are taking the following remediation measures:
● Identified and hired a Vice President and Controller who is qualified to lead our Accounting and Finance functions. This role now serves as our principal financial and accounting officer.
● Reassessed our accounting procedures and, as part of the financial reporting process, are implementing the use of supplementary checklists as well as conducting additional reviews and evaluations of transactions to improve the accuracy and reliability of our financial information.
● Replaced existing financial personnel with appropriate qualified resources in the current quarter to ensure that procedures are implemented, adequate reviews are performed, and financial information as presented is accurate.
Our Chief Executive Officer, along with other key members of management, have been active participants in these remediation processes and such processes have been, and will continue to be, subject to audit committee oversight. We believe these steps have improved the effectiveness of our internal control over financial reporting during the three months ended September 30, 2021. We will continue to strengthen and oversee our financial close and reporting processes. While we are confident that the above actions have resulted in good progress towards the remediation of these identified weaknesses, we cannot assure you that a full remediation is complete at this time, which could impair our ability to accurately and timely meet our public company reporting requirements.
Other than as noted above, during the nine months ended September 30, 2021, there was no change in our internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
PART II – OTHER INFORMATION
ITEM 6. EXHIBITS
| Exhibit | ||
| Number | Document | |
| 31.1* | Rule 13a-14(a)/15d-14(a) Certification of Principal Executive Officer | |
| 31.2* | Rule 13a-14(a)/15d-14(a) Certification of Principal Financial Officer | |
| 32.1+ | Section 1350 Certification of Principal Executive Officer | |
| 32.2+ | Section 1350 Certification of Principal Financial Officer | |
| 104* | Cover Page Interactive Data File (formatted as inline XBRL) |
* Filed herewith
+ Furnished herewith
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| CLEARSIGN TECHNOLOGIES CORPORATION | ||
| Date: December 23, 2021 | By: | /s/ Colin James Deller |
| Colin James Deller | ||
| Chief Executive Officer | ||
| (Principal Executive Officer) |
| By: | /s/ Brent Hinds | |
| Brent Hinds | ||
|
Vice President and Controller (Principal Financial and Accounting Officer) |
Exhibit 31.1
CERTIFICATION
I, Colin James Deller, certify that:
| 1. | I have reviewed this quarterly report on Form 10-Q/A of ClearSign Technologies Corporation; |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3. | [Omitted] |
| 4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15-d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
| a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including any consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
| b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
| c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
| d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
| 5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
| a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
| b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
| Date: December 23, 2021 | |
| /s/ Colin James Deller | |
| Colin James Deller | |
| Chief Executive Officer | |
| (Principal Executive Officer) | |
Exhibit 31.2
CERTIFICATION
I, Brent Hinds, certify that:
| 1. | I have reviewed this quarterly report on Form 10-Q/A of ClearSign Technologies Corporation; |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3. | [Omitted] |
| 4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15-d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
| a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including any consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
| b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
| c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
| d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
| 5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
| a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
| b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
| Date: December 23, 2021 | |
| /s/ Brent Hinds | |
| Brent Hinds | |
| Vice President and Controller | |
| (Principal Financial and Accounting Officer) | |
Exhibit 32.1
CERTIFICATION
In connection with the periodic report of ClearSign Technologies Corporation (the “Company”) on Form 10-Q/A for the quarterly period ended September 30, 2021 as filed with the Securities and Exchange Commission (the “Report”), I, Colin James Deller, Chief Executive Officer (Principal Executive Officer) of the Company, hereby certify as of the date hereof, solely for purposes of Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and Title 18, Chapter 63, Section 1350 of the United States Code, that to the best of my knowledge:
(1) The Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Exchange Act, and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company at the dates and for the periods indicated.
| Date: December 23, 2021 | |
| /s/ Colin James Deller | |
| Colin James Deller | |
| Chief Executive Officer | |
| (Principal Executive Officer) | |
This certification accompanies the Form 10-Q/A to which it relates, is not deemed filed with the Securities and Exchange Commission and is not to be incorporated by reference into any filing of ClearSign Technologies Corporation under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended (whether made before or after the date of the Form 10-Q/A), irrespective of any general incorporation language contained in such filing.
Exhibit 32.2
CERTIFICATION
In connection with the periodic report of ClearSign Technologies Corporation (the “Company”) on Form 10-Q/A for the quarterly period ended September 30, 2021 as filed with the Securities and Exchange Commission (the “Report”), I, Brent Hinds, Vice President and Controller (Principal Financial and Accounting Officer) of the Company, hereby certify as of the date hereof, solely for purposes of Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and Title 18, Chapter 63, Section 1350 of the United States Code, that to the best of my knowledge:
(1) The Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Exchange Act, and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company at the dates and for the periods indicated.
| Date: December 23, 2021 | |
| /s/ Brent Hinds | |
| Brent Hinds | |
| Vice President and Controller | |
| (Principal Financial and Accounting Officer) | |
This certification accompanies the Form 10-Q/A to which it relates, is not deemed filed with the Securities and Exchange Commission and is not to be incorporated by reference into any filing of ClearSign Technologies Corporation under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended (whether made before or after the date of the Form 10-Q/A), irrespective of any general incorporation language contained in such filing.