ClearSign Technologies Corp 8-K, filed Sep 10, 2021
ClearSign Technologies Corp (CLIR)
About this 8-K
ClearSign Technologies Corp filed this 8-K on September 10, 2021, reporting on events of September 8, 2021.
Items reported
- Item 2.02: Financial results
- Item 5.03: Charter or bylaw amendment, or fiscal year change
- Item 7.01: Regulation FD disclosure
- Item 9.01: Financial statements and exhibits
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of report (Date of earliest event reported):
(Exact name of registrant as specified in Charter)
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(State or other jurisdiction of incorporation or organization) |
(Commission File No.) | (IRS Employee
Identification No.) |
(Address of Principal Executive Offices)
(Issuer Telephone number)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the Registrant under any of the following provisions (see General Instruction A.2 below).
| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR240.14a-12) |
| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)). |
| Pre-commencement communications pursuant to Rule 13e-(c) under the Exchange Act (17 CFR 240.13(e)-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
| 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. ¨
| Item 2.02 | Results of Operations and Financial Condition. |
On September 8, 2021, ClearSign Technologies Corporation (the “Company”) issued a press release announcing the results of operations for the six months ended June 30, 2021 (the “Second Quarter Results”). The press release is included as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated by reference in its entirety into this Item 2.02.
Also on September 8, 2021, the Company held a conference call discussing the Second Quarter Results and other business related information provided by the Company’s Chief Executive Officer. A transcript of this conference call is attached as Exhibit 99.2 to this Current Report on Form 8-K and is incorporated by reference in its entirety into this Item 2.02.
The information furnished with this Item 2.02, including Exhibits 99.1 and 99.2, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference into any other filing under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act, except as expressly set forth by specific reference in such a filing.
The statements in this Current Report on Form 8-K include forward-looking statements regarding the intent, belief or current expectations of the Company and members of its management team, as well as the assumptions on which such statements are based, and generally are identified by the use of words such as “may,” “will,” “seeks,” “strives,” “anticipates,” “believes,” “estimates,” “expects,” “plans,” “intends,” “should” or similar expressions. Actual results may differ materially from those contemplated by such forward-looking statements, including as a result of those factors set forth in the Risk Factors section of the Company’s most recent Annual Report on Form 10-K and all other filings with the Securities and Exchange Commission after that date. Forward-looking statements speak only as of the date they are made, and the Company undertakes no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results over time, or revise forward-looking unless required by law.
| Item 5.03 | Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year. |
Effective as of September 8, 2021, the Board of Directors of the Company (the “Board”), following an annual review of its governing documents, amended the Company’s bylaws, as amended (the “Bylaws”), to (i) reflect the Company’s current name of ClearSign Technologies Corporation; (ii) ensure that the Bylaws permit the Board to designate a successor to the office of the President other than a Vice-President; and (iii) specify that special meetings of shareholders may be called by the Board acting together rather than in any individual capacity. A redline copy of the Bylaws marked to show the aforementioned changes is attached herewith as Exhibit 3.2 and is incorporated herein by reference.
The foregoing description of the Bylaws does not purport to be complete and is qualified by reference to the full text of the Bylaws, which is attached as Exhibit 3.1 to this Current Report on Form 8-K and incorporated herein by reference.
| Item 7.01 | Regulation FD Disclosure. |
The information set forth in Item 2.02 of this Current Report on Form 8-K is incorporated by reference into this Item 7.01.
The information furnished with this Item 7.01, including Exhibits 99.1 and 99.2, shall not be deemed “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference into any other filing under the Securities Act or the Exchange Act, except as expressly set forth by specific reference in such a filing.
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| Item 9.01 | Financial Statements and Exhibits |
| Exhibit 3.1 | Bylaws, as amended, effective September 8, 2021 |
| Exhibit 3.2 | Redline of Bylaws, as amended, effective September 8, 2021 |
| Exhibit 99.1 | Press Release issued September 8, 2021 |
| Exhibit 99.2 | Transcript of Conference Call held on September 8, 2021 |
| Exhibit 104 | Cover Page Interactive Data File (the cover page XBRL tags are embedded within the inline XBRL document) |
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Current Report to be signed on its behalf by the undersigned hereunto duly authorized.
Dated: September 10, 2021
| CLEARSIGN TECHNOLOGIES CORPORATION | ||
| By: | /s/ Colin James Deller | |
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Name: Title: |
Colin James Deller Chief Executive Officer | |
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Exhibit 3.1
BYLAWS
OF
CLEARSIGN TECHNOLOGIES CORPORATION
(Amended as of September 8, 2021)
SECTION 1. DEFINITIONS
As used in these Bylaws, the following terms shall have the following meanings:
"Articles of Incorporation" means the corporation's Articles of Incorporation and all amendments as filed with the Washington Secretary of State.
"Board" means the Board of Directors of the corporation.
"Electronic transmission" means an electronic communication not directly involving the physical transfer of a record in a tangible medium that may be retained, retrieved and reviewed by the sender and the recipient and that may be directly reproduced in a tangible medium by the sender and recipient.
"Execute," "executes" or "executed" means signed with respect to a written record or electronically transmitted along with sufficient information to determine the sender's identity with respect to an electronic transmission.
"RCW" means the Revised Code of Washington and "RCW 23B" means Title 23B of the Revised Code of Washington (also known as the Washington Business Corporation Act).
"Record" means information inscribed on a tangible medium or contained in an electronic transmission.
"Tangible medium" means a writing, copy of a writing or facsimile, or a physical reproduction, each on paper or on other tangible material.
"Washington Business Corporation Act" means the Washington Business Corporation Act, as it exists now or may be amended.
"Writing" or "written" means embodied in a tangible medium, and excludes an electronic transmission.
SECTION 2. SHAREHOLDERS
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2.1 |
Annual Meeting |
The annual meeting of the shareholders to elect directors and transact other business as may properly come before the meeting shall be held on a date not more than 180 days after the end of the corporation's fiscal year, the date and time to be determined by the Board. Shareholders may act by consent set forth in a record in accordance with Section 2.13 of these Bylaws to elect directors in lieu of holding an annual meeting.
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2.2 |
Special Meetings |
Special meetings of the shareholders for any purpose or purposes shall be called only by the Board.
A special meeting of the shareholders shall be held if the holders of at least 20% of all the votes entitled to be cast on any issue proposed to be considered at the special meeting have delivered to the Secretary one or more demands for the meeting, describing the purpose or purposes for which it is to be held, which demands shall be set forth either (i) in an executed written record, or (ii) if the corporation has designated an address, location or system to which the demands may be electronically transmitted and the demands are electronically transmitted to that designated address, location or system, in an executed electronically transmitted record. The record date for determining shareholders entitled to demand a special meeting is the date of delivery of the first shareholder demand in compliance with this Section 2.2.
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2.3 |
Meetings by Communications Equipment |
Shareholders may participate in any meeting of the shareholders by any means of communication by which all persons participating in the meeting can hear each other during the meeting, and participation in this manner shall constitute presence in person at a meeting.
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2.4 |
Date, Time and Place of Meeting |
Except as otherwise provided in these Bylaws, all meetings of shareholders, including those held pursuant to demand by shareholders, shall be held on a date and at a time and place designated by or at the direction of the Board.
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2.5 |
Notice to Shareholders |
Any notice to shareholders required or permitted under these Bylaws, the Articles of Incorporation or the Washington Business Corporation Act shall be provided in accordance with this section 2.5.
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2.5.1 Type of Notice |
(a) Notice Provided in a Tangible Medium. Notice may be provided in a tangible medium and may be transmitted by mail, private carrier, personal delivery, telegraph, teletype, telephone or wire or wireless equipment that transmits a facsimile of the notice.
(b) Notice Provided in an Electronic Transmission. Notice may be provided in an electronic transmission and be electronically transmitted.
(1) Consent to Receive Notice by Electronic Transmission. Notice to shareholders in an electronic transmission is effective only with respect to shareholders that have consented, in the form of a record, to receive electronically transmitted notices and designated in the consent the address, location or system to which these notices may be electronically transmitted. Notice provided in an electronic transmission includes material required or permitted to accompany the notice by the Washington Business Corporation Act or other applicable statute or regulation.
(2) Revocation of Consent to Receive Notice by Electronic Transmission. A shareholder that has consented to receipt of electronically transmitted notices may revoke the consent by delivering a revocation to the corporation in the form of a record. The consent of a shareholder to receive notice by electronic transmission is revoked if the corporation is unable to electronically transmit two consecutive notices given by the corporation in accordance with the consent, and this inability becomes known to the Secretary of the corporation, the transfer agent or any other person responsible for giving the notice. The inadvertent failure by the corporation to treat this inability as a revocation does not invalidate any meeting or other action.
(3) Posting Notice on an Electronic Network. Notice to shareholders that have consented to receipt of electronically transmitted notices may be provided by posting the notice on an electronic network and delivering to the shareholder a separate record of the posting, together with comprehensible instructions regarding how to obtain access to the posting on the electronic network.
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2.5.2 Effectiveness of Notice |
(a) Notice by Mail. Notice given by mail is effective when deposited in the United States mail, first-class postage prepaid, properly addressed to the shareholder at the shareholder's address as it appears in the corporation's current record of shareholders.
(b) Notice by Telegraph, Teletype or Facsimile Equipment. Notice given by telegraph, teletype or facsimile equipment that transmits a facsimile of the notice is effective when dispatched to the shareholder's address, telephone number or other number appearing on the records of the corporation.
(c) Notice by Air Courier. Notice given by air courier is effective when dispatched, if prepaid and properly addressed to the shareholder at the shareholder's address as it appears in the corporation's current record of shareholders.
(d) Notice by Ground Courier or Other Personal Delivery. Notice given by ground courier or other personal delivery is effective when received by a shareholder.
(e) Notice by Electronic Transmission. Notice provided in an electronic transmission, if in comprehensible form, is effective when it (i) is electronically transmitted to an address, location or system designated by the recipient for that purpose, or (ii) has been posted on an electronic network and a separate record of the posting has been delivered to the recipient together with comprehensible instructions regarding how to obtain access to the posting on the electronic network.
(f) Notice by Publication. Notice given by publication is effective five days after first publication.
| 2.5.3 | Notice of Meeting |
Notice stating the place, day and hour of the meeting and, in the case of a special meeting, the purpose or purposes for which the meeting is called shall be provided in the form of a record by or at the direction of the Board, the Chairperson of the Board, the President or the Secretary to each shareholder entitled to notice of or to vote at the meeting, as provided below.
| 2.5.3.1 Number of Days' Notice |
(a) Normal Business. Except as provided in paragraph (b) of this Section 2.5.3.1, notice of the meeting shall be provided not less than 10 or more than 60 days before the meeting.
(b) Amendment to Articles of Incorporation; Merger or Share Exchange; Sale of Assets or Dissolution. Notice of a meeting held for the purpose of considering an amendment to the Articles of Incorporation, a plan of merger or share exchange, the sale, lease, exchange or other disposition of all or substantially all of the corporation's assets other than in the regular course of business or the dissolution of the corporation shall be provided not less than 20 or more than 60 days before the meeting.
| 2.5.3.2 Adjourned Meeting |
If an annual or special meeting of shareholders is adjourned to a different date, time or place, no notice of the new date, time or place is required if they are announced at the meeting before adjournment. If a new record date for the adjourned meeting is or must be fixed, notice of the adjourned meeting must be provided to shareholders entitled to notice of or to vote as of the new record date.
| 2.5.3.3 Notice of Special Meeting Called by Shareholders |
In accordance with Section 2.2 of these Bylaws, the shareholders may request that the corporation call a special meeting of shareholders. Within 30 days of a request, it shall be the duty of the Secretary to provide notice of a special meeting of shareholders to be held on a date and at a place and hour as the Secretary may fix.
| 2.5.4 | Waiver of Notice |
| 2.5.4.1 By Delivery of a Record |
A shareholder may waive any notice required by these Bylaws, the Articles of Incorporation or the Washington Business Corporation Act, before or after the date and time of the meeting that is the subject of the notice or, in the case of notice required to be given to nonconsenting or nonvoting shareholders in connection with action taken by less than unanimous consent of the shareholders, before or after the action to be taken by executed consent is effective. The waiver must be (i) delivered by the shareholder entitled to notice to the corporation for inclusion in the minutes or filing with the corporate records, and (ii) set forth either in an executed and dated written record or, if the corporation has designated an address, location or system to which the waiver may be electronically transmitted and the waiver is electronically transmitted to the designated address, location or system, in an executed and dated electronically transmitted record.
| 2.5.4.2 Waiver by Attendance |
Notice of the time, place and purpose of any meeting will be waived by any shareholder by attendance in person or by proxy, unless the shareholder at the beginning of the meeting objects to holding the meeting or transacting business at the meeting.
| 2.5.4.3 Waiver of Objection |
A shareholder waives objection to consideration of a particular matter at a meeting that is not within the purpose or purposes described in the notice of the meeting unless the shareholder objects to considering the matter when it is presented.
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2.6 |
Fixing of Record Date for Determining Shareholders Entitled to Notice of or to Vote at a Meeting or to Receive Payment of a Dividend |
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2.6.1 Record Date for Meeting of Shareholders |
For the purpose of determining shareholders entitled to notice of or to vote at any meeting of shareholders or any adjournment of the meeting, the Board may fix a future date as the record date for the determination. The record date shall be not more than 70 days and not less than 10 days, prior to the date of the meeting. If no record date is fixed for the determination of shareholders entitled to notice of or to vote at a meeting, the record date shall be the day immediately preceding the date on which notice of the meeting is first given to shareholders. The determination of the record date shall apply to any adjournment of the meeting unless the Board fixes a new record date, which it shall do if the meeting is adjourned to a date more than 120 days after the date fixed for the original meeting.
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2.6.2 Record Date to Receive Payment of Dividend or Distribution |
For the purpose of determining shareholders entitled to receive payment of any dividend or distribution (including a dividend or distribution in connection with a stock split), the Board may fix a future date as the record date for the dividend or distribution. The record date shall be not more than 70 days prior to the date on which the dividend or distribution is payable. If no record date is set for the determination of shareholders entitled to receive payment of any dividend or distribution (other than one involving a purchase, redemption or other acquisition of the corporation's shares) the record date shall be the date the Board authorizes the dividend or distribution.
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2.7 |
Voting Record |
At least 10 days before each meeting of shareholders, an alphabetical list of the shareholders entitled to notice of the meeting shall be made, arranged by voting group and by each class or series of shares, with the address of and number of shares held by each shareholder. This record shall be kept at the principal office of the corporation or at a place identified in the meeting notice in the city where the meeting will be held for 10 days prior to the meeting, and shall be kept open at the meeting, for the inspection of any shareholder or any shareholder's agent or attorney.
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2.8 |
Quorum |
A majority of the votes entitled to be cast on a matter by the holders of shares that, pursuant to the Articles of Incorporation or the Washington Business Corporation Act, are entitled to vote on the matter, represented in person or by proxy, shall constitute a quorum of those shares at a meeting of shareholders, including a majority of those shares entitled to vote as a separate voting group. If less than a quorum of votes are represented at a meeting, a majority of the votes so represented may adjourn the meeting from time to time without further notice if the new date, time and place are announced at the meeting before adjournment. Any business may be transacted at a reconvened meeting that might have been transacted at the meeting as originally called, if a quorum is present or represented at the meeting. Once a share is represented for any purpose at a meeting other than solely to object to holding the meeting or transacting business, it is deemed present for quorum purposes for the remainder of the meeting and any adjournment (unless a new record date is or must be set for the adjourned meeting) notwithstanding the withdrawal of enough shareholders to leave less than a quorum.
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2.9 |
Manner of Acting |
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2.9.1 Matters Other than the Election of Directors |
If a quorum is present, action on a matter other than the election of directors shall be approved if the votes cast in favor of the action by shares entitled to vote on the matter exceed the votes cast against the action by shares entitled to vote thereon, unless the Articles of Incorporation or the Washington Business Corporation Act requires a greater number of affirmative votes or approval by separate voting groups.
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2.9.2 Election of Directors |
Directors shall be elected in the manner set forth in Section 2.12 of these Bylaws.
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2.10 |
Proxies |
A shareholder or the shareholder's agent or attorney-in-fact may appoint a proxy to vote or otherwise act for the shareholder by an executed writing or by a recorded telephone call, voice mail or other electronic transmission.
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2.10.1 Written Authorization |
Execution of a writing authorizing another person or persons to act for the shareholder as proxy may be accomplished by the shareholder or the shareholder's authorized officer, director, employee or agent signing the writing or causing his or her signature to be affixed to the writing by any reasonable means including, but not limited to, by facsimile signature.
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2.10.2 Recorded Telephone Call, Voice Mail or Other Electronic Transmission |
Authorizing another person or persons to act for the shareholder as proxy may be accomplished by transmitting or authorizing the transmission of a recorded telephone call, voice mail or other electronic transmission to the person who will be the holder of the proxy or to a proxy solicitation firm, proxy support service organization or like agent duly authorized by the person who will be the holder of the proxy to receive the transmission, provided that the transmission must either set forth or be submitted with information, including any security or validation controls used, from which it can reasonably be determined that the transmission was authorized by the shareholder. If it is determined that the transmission is valid, the inspectors of election or, if there are no inspectors, any officer or agent of the corporation making that determination on behalf of the corporation shall specify the information upon which he or she relied. The corporation shall require the holders of proxies received by transmission to provide to the corporation copies of the transmission and the corporation shall retain copies of the transmission for a reasonable period of time after the election provided that they are retained for at least 60 days.
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2.10.3 Effectiveness of Appointment of Proxy |
An appointment of a proxy is effective when a signed appointment form or telegram, cablegram, recorded telephone call, voicemail or other transmission of the appointment is received by the inspectors of election or the officer or agent of the corporation authorized to tabulate votes. An appointment is valid for 11 months unless a longer period is expressly provided in the appointment. A proxy with respect to a specified meeting shall entitle its holder to vote at any reconvened meeting following adjournment of the meeting but shall not be valid after the final adjournment.
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2.10.4 Revocability of Proxy |
An appointment of a proxy is revocable by the shareholder unless the appointment indicates that it is irrevocable and the appointment is coupled with an interest. Appointments coupled with an interest include the appointment of a pledgee, a person who purchased or agreed to purchase the shares, a creditor of the corporation who extended it credit under terms requiring the appointment, an employee of the corporation whose employment contract requires the appointment or a party to a voting agreement created under RCW 23B.07.310. An appointment made irrevocable is revoked when the interest with which it is coupled is extinguished. A transferee for value of shares subject to an irrevocable appointment may revoke the appointment if the transferee did not know of its existence when the transferee acquired the shares and the existence of the irrevocable appointment was not noted conspicuously on the certificate representing the shares or on the information statement for shares without certificates.
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2.10.5 Death or Incapacity of Shareholder Appointing a Proxy |
The death or incapacity of the shareholder appointing a proxy does not affect the right of the corporation to accept the proxy's authority unless notice of the death or incapacity is received by the officer or agent of the corporation authorized to tabulate votes before the proxy exercises the proxy's authority under the appointment.
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2.10.6 Acceptance of Proxy's Vote or Action |
Subject to RCW 23B.07.240 and to any express limitation on the proxy's authority stated in the appointment form or recorded telephone call, voice mail or other electronic transmission, the corporation is entitled to accept the proxy's vote or other action as that of the shareholder making the appointment.
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2.10.7 Meaning of Sign or Signature |
For the purposes of this Section, "sign" or "signature" includes any manual, facsimile, conformed or electronic signature.
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2.11 |
Voting of Shares |
Unless otherwise provided in the Articles of Incorporation, each outstanding share entitled to vote with respect to a matter submitted to a meeting of shareholders shall be entitled to one vote upon the matter.
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2.12 |
Voting for Directors |
Each shareholder entitled to vote at an election of directors may vote, in person or by proxy, the number of shares owned by the shareholder for as many persons as there are directors to be elected and for whose election the shareholder has a right to vote. Unless otherwise provided in the Articles of Incorporation, the candidates elected shall be those receiving the largest number of votes cast, up to the number of directors to be elected. Directors may be elected by consent in lieu of an annual or special meeting in accordance with Section 2.13 of these Bylaws.
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2.13 |
Action by Shareholders Without a Meeting |
Any action that may or is required to be taken at a meeting of the shareholders may be taken without a meeting or a vote, pursuant to the provisions of this Section 2.13.
| 2.13.1 | Unanimous Written Consent |
Action may be taken by unanimous consent if (i) one or more consents, each in the form of a record, describing the action taken are executed by all the shareholders entitled to vote with respect to the matter, and (ii) the executed consents are delivered to the corporation for filing with the corporate records.
| 2.13.2 | Less Than Unanimous Written Consent |
If authorized by a general or limited authorization in the Articles of Incorporation, action may be taken by less than unanimous consent if (i) one or more consents, each in the form of a record describing the action taken, are executed by shareholders holding of record or otherwise entitled to vote in the aggregate not less than the minimum number of votes that would be necessary to authorize or take the action at a meeting at which all shares entitled to vote on the action were present and voted, (ii) the period of advance notice required by the Articles of Incorporation to be given to any nonconsenting shareholders and, if applicable, nonvoting shareholders, has been satisfied and (iii) the executed consents are delivered to the corporation for filing with the corporate records.
| 2.13.3 | General Provisions |
(a) Form of Consent. The consent shall be set forth either in an executed written record or, if the corporation has designated an address, location or system to which the consent may be electronically transmitted and the consent is electronically transmitted to the designated address, location or system, in an executed electronically transmitted record.
(b) Record Date. If not otherwise fixed by the Board, the record date for determining shareholders entitled to take action without a meeting is the date the first shareholder consent is executed.
(c) Withdrawal of Consent. A shareholder may withdraw a consent only by delivering a notice of withdrawal in the form of a record to the corporation prior to the time that consents sufficient to authorize taking the action have been delivered to the corporation.
(d) Date of Signature. Every consent shall bear the date of execution of each shareholder that executes the consent.
(e) Time Allowed to Complete Execution of Consents. A consent is not effective to take the action referred to in the consent unless, within 60 days of the earliest dated consent delivered to the corporation, consents executed by a sufficient number of shareholders to take action are delivered to the corporation.
(f) Effective Date of Consent Action. Unless the consent specifies a later effective date, actions taken by consent of the shareholders are effective when (a) consents sufficient to authorize taking the action are in possession of the corporation and (b) if action is taken by less than unanimous consent, the period of advance notice required by the Articles of Incorporation to be given to any nonconsenting or nonvoting shareholders has been satisfied.
(g) Inclusion in Corporate Records. The consent shall be inserted in the minute book as if it were the minutes of a meeting of the shareholders.
SECTION 3. BOARD OF DIRECTORS
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3.1 |
General Powers |
All corporate powers shall be exercised by or under the authority of, and the business and affairs of the corporation shall be managed under the direction of, the Board, except as may be otherwise provided in these Bylaws, the Articles of Incorporation or the Washington Business Corporation Act.
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3.2 |
Number and Tenure |
The Board shall be composed of not less than 1 or more than 7 directors, the specific number to be set by resolution of the Board. The indefinite number of directors may be changed, or a definite number may be fixed without provision for an indefinite number, by an amendment to this Bylaw. No decrease in the number of authorized directors shall have the effect of shortening the term of any incumbent director. Unless a director dies, resigns, or is removed, his or her term of office shall expire at the next annual meeting of shareholders but a director shall continue to serve until his or her successor is elected or until there is a decrease in the authorized number of directors. Directors need not be shareholders of the corporation or residents of the State of Washington.
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3.3 |
Regular Meetings |
By resolution, the Board, or any committee designated by the Board, may specify the time and place for holding regular meetings without notice other than the resolution.
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3.4 |
Special Meetings |
Special meetings of the Board or any committee designated by the Board may be called by or at the request of the Chairperson of the Board, the President, the Secretary or, in the case of special Board meetings, any director and, in the case of any special meeting of any committee designated by the Board, by its Chairperson. The person or persons authorized to call special meetings may fix any place for holding any special Board or committee meeting called by them.
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3.5 |
Meetings by Communications Equipment |
Members of the Board or any committee designated by the Board may participate in a meeting of the Board or committee by, or conduct the meeting through the use of, any means of communication by which all directors participating in the meeting can hear each other during the meeting, and participation in this manner shall constitute presence in person at a meeting.
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3.6 |
Notice of Special Meetings |
Notice of a special Board or committee meeting stating the place, day and hour of the meeting shall be provided to each director in the form of a record or orally, as provided below. Neither the business to be transacted at nor the purpose of any special meeting need be specified in the notice of the meeting.
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3.6.1 Number of Days' Notice |
Notice of the meeting shall be given at least two days before the meeting.
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3.6.2 Type of Notice |
(a) Oral Notice. Oral notice may be communicated in person, by telephone, wire or wireless equipment that does not transmit a facsimile of the notice, or by any electronic means that does not create a record.
(b) Notice Provided in a Tangible Medium. Notice may be provided in a tangible medium and may be transmitted by mail, private carrier, personal delivery, telegraph, teletype, telephone or wire or wireless equipment that transmits a facsimile of the notice.
(c) Notice Provided in an Electronic Transmission. Notice may be provided in an electronic transmission and be electronically transmitted.
(1) Consent to Receive Notice by Electronic Transmission. Notice to directors in an electronic transmission is effective only with respect to directors who have consented, in the form of a record, to receive electronically transmitted notices and designated in the consent the address, location or system to which these notices may be electronically transmitted. Notice provided in an electronic transmission includes material required or permitted to accompany the notice by the Washington Business Corporation Act or other applicable statute or regulation.
(2) Revocation of Consent to Receive Notice by Electronic Transmission. A director who has consented to receipt of electronically transmitted notices may revoke the consent by delivering a revocation to the corporation in the form of a record. The consent of a director to receive notice by electronic transmission is revoked if the corporation is unable to electronically transmit two consecutive notices given by the corporation in accordance with the consent, and this inability becomes known to the Secretary of the corporation or any other person responsible for giving the notice. The inadvertent failure by the corporation to treat this inability as a revocation does not invalidate any meeting or other action.
(3) Posting Notice on an Electronic Network. Notice to directors who have consented to receipt of electronically transmitted notices may be provided by posting the notice on an electronic network and delivering to the director a separate record of the posting, together with comprehensible instructions regarding how to obtain access to the posting on the electronic network.
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3.6.3 Effectiveness of Written Notice |
(a) Notice by Mail. Notice given by mail is effective five days after its deposit in the United States mail, as evidenced by the postmark, if mailed with first-class postage prepaid and correctly addressed to the director at his or her address shown on the records of the corporation.
(b) Notice by Registered or Certified Mail. Notice is effective on the date shown on the return receipt, if sent by registered or certified mail, return receipt requested, and the receipt is signed by or on behalf of the addressee.
(c) Notice by Telegraph, Teletype or Facsimile Equipment. Notice sent to the director's address, telephone number or other number appearing on the records of the corporation is effective when dispatched by telegraph, teletype or wire or wireless equipment that transmits a facsimile of the notice.
(d) Notice by Private Carrier. Notice given by private carrier is effective when received by the director.
(e) Personal Notice. Notice given by personal delivery is effective when received by the director.
(f) Notice by Electronic Transmission. Notice provided by electronic transmission, if in comprehensible form, is effective when it (i) is electronically transmitted to an address, location or system designated by the recipient for that purpose, or (ii) has been posted on an electronic network and a separate record of the posting has been delivered to the recipient together with comprehensible instructions regarding how to obtain access to the posting on the electronic network.
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3.6.4 Effectiveness of Oral Notice |
(a) Notice in Person or by Telephone. Oral notice is effective when received by the director.
(b) Notice by Wire or Wireless Equipment. Notice given by wire or wireless equipment that does not transmit a facsimile of the notice or by any electronic means that does not create a record is effective when communicated to the director.
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3.7 |
Waiver of Notice |
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3.7.1 By Delivery of a Record |
A director may waive any notice required to be given to any director under the provisions of these Bylaws, the Articles of Incorporation or the Washington Business Corporation Act, before or after the date and time stated in the notice and the waiver shall be equivalent to the giving of notice. The waiver must be delivered by the director entitled to the notice to the corporation for inclusion in the minutes or filing with the corporate records. The waiver shall be set forth either in an executed written record or, if the corporation has designated an address, location or system to which the waiver may be electronically transmitted and the waiver has been electronically transmitted to the designated address, location or system, in an executed electronically transmitted record. Neither the business to be transacted at nor the purpose of any regular or special meeting of the Board or any committee designated by the Board need be specified in the waiver of notice of the meeting.
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3.7.2 By Attendance |
A director's attendance at or participation in a Board or committee meeting shall constitute a waiver of notice of the meeting, unless the director at the beginning of the meeting, or promptly upon his or her arrival, objects to holding the meeting or transacting business at the meeting and does not vote for or assent to action taken at the meeting.
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3.8 |
Quorum |
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3.8.1 Board of Directors |
A majority of the number of directors fixed by or in the manner provided in these Bylaws shall constitute a quorum for the transaction of business at any Board meeting but, if less than a quorum are present at a meeting, a majority of the directors present may adjourn the meeting from time to time without further notice.
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3.8.2 Committees |
A majority of the number of directors composing any committee of the Board, as established and fixed by resolution of the Board, shall constitute a quorum for the transaction of business at any meeting of the committee but, if less than a quorum are present at a meeting, a majority of the directors present may adjourn the committee meeting from time to time without further notice.
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3.9 |
Manner of Acting |
If a quorum is present when the vote is taken, the act of the majority of the directors present at a Board or committee meeting shall be the act of the Board or the committee, unless the vote of a greater number is required by these Bylaws, the Articles of Incorporation or the Washington Business Corporation Act.
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3.10 |
Presumption of Assent |
A director of the corporation who is present at a Board or committee meeting at which any action is taken shall be deemed to have assented to the action taken unless (a) the director objects at the beginning of the meeting, or promptly upon his or her arrival, to holding the meeting or transacting any business at the meeting, (b) the director's dissent or abstention from the action taken is entered in the minutes of the meeting, or (c) the director delivers notice of the director's dissent or abstention to the presiding officer of the meeting before its adjournment or to the corporation within a reasonable time after adjournment of the meeting. The right of dissent or abstention is not available to a director who votes in favor of the action taken.
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3.11 |
Action by Board or Committees Without a Meeting |
Any action that could be taken at a meeting of the Board or of any committee created by the Board may be taken without a meeting if one or more consents setting forth the action so taken are executed by all the directors or by all the members of the committee either before or after the action is taken and delivered to the corporation, each of which shall be set forth in an executed written record or, if the corporation has designated an address, location or system to which the consent may be electronically transmitted and the consent is electronically transmitted to the designated address, location or system in an executed electronically transmitted record. Action taken by consent of directors without a meeting is effective when the last director executes the consent, unless the consent specifies a later effective date. The consent shall be inserted in the minute book as if it were the minutes of a Board or a committee meeting.
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3.12 |
Resignation of Directors and Committee Members |
Any director may resign from the Board or any committee of the Board at any time by delivering an executed notice to the Chairperson of the Board, the President, the Secretary or the Board. The resignation is effective upon delivery unless the notice of resignation specifies a later effective date and, unless otherwise specified, the acceptance of the resignation shall not be necessary to make it effective.
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3.13 |
Removal of Directors and Committee Members |
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3.13.1 Removal of Directors |
At a meeting of shareholders called expressly for that purpose, one or more members of the Board, including the entire Board, may be removed with or without cause (unless the Articles of Incorporation permit removal for cause only) by the holders of the shares entitled to elect the director or directors whose removal is sought if the number of votes cast to remove the director exceeds the number of votes cast to not remove the director.
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3.13.2 Removal of Committee Members |
The Board may remove any member of any committee elected or appointed by it by the affirmative vote of the greater of a majority of the directors then in office and the number of directors required to take action in accordance with these Bylaws.
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3.14 |
Vacancies |
Unless the Articles of Incorporation provide otherwise, any vacancy occurring on the Board may be filled by the shareholders, by the Board or, if the directors in office constitute less than a quorum, by the affirmative vote of a majority of the remaining directors. Any vacant office to be held by a director elected by the holders of one or more classes or series of shares entitled to vote thereon shall be filled only by the vote of the holders of such class or series of shares. The term of a director elected to fill a vacancy expires at the next election of directors by the shareholders.
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3.15 |
Executive and Other Committees |
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3.15.1 Creation of Committees |
The Board, by resolution, may create standing or temporary committees, including an Executive Committee, and appoint members from its own number and invest the committees with powers as it may see fit, subject to conditions as may be prescribed by the Board, the Articles of Incorporation, these Bylaws and applicable law. The resolution must be adopted by the greater of a majority of all the directors then in office or the number of directors required to take action in accordance with these Bylaws. Each committee must have two or more members, who shall serve at the pleasure of the Board.
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3.15.2 Authority of Committees |
Each committee shall have and may exercise all the authority of the Board to the extent provided in the resolution of the Board creating the committee and any subsequent resolutions adopted in like manner, except that no committee shall have the authority to: (a) authorize or approve a distribution except according to a general formula or method prescribed by the Board, (b) approve or propose to shareholders actions or proposals required by the Washington Business Corporation Act to be approved by shareholders, (c) fill vacancies on the Board or any committee of the Board, (d) amend the Articles of Incorporation pursuant to RCW 23B.10.020, (e) adopt, amend or repeal Bylaws, (f) approve a plan of merger not requiring shareholder approval, or (g) authorize or approve the issuance or sale or contract for sale of shares, or determine the designation and relative rights, preferences and limitations of a class or series of shares except that the Board may authorize a committee or a senior executive officer of the corporation to do so within limits specifically prescribed by the Board.
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3.15.3 Minutes of Meetings |
All committees shall keep regular minutes of their meetings and shall cause them to be recorded in books kept for that purpose.
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3.16 |
Compensation of Directors and Committee Members |
By Board resolution, directors and committee members may be paid for their service as directors and committee members in such amounts and form as specified in such resolution, which may include, without limitation, their expenses, if any, of attendance at each Board or committee meeting, a fixed sum for attendance at each Board or committee meeting or a stated salary as director or a committee member, and such other compensation as the Board may determine (including, without limitation, stock options or other equity compensation). No payment for expenses or compensation as a director or committee member shall preclude any director or committee member from serving the corporation in any other capacity and receiving compensation for his or her services.
SECTION 4. OFFICERS
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4.1 |
Appointment and Term |
The officers of the corporation shall be those officers appointed from time to time by the Board or by any other officer empowered to do so. The Board shall have sole power and authority to appoint any executive officer and shall have the authority to appoint any other officers and to prescribe the respective terms of office, authority and duties of the executive officers or other officers. As used in these Bylaws, the term "executive officer" shall mean the President, any Vice President in charge of a principal business unit, division or function or any other officer who performs a policy-making function. The Board may delegate to any executive officer the power to appoint any subordinate officers and to prescribe their respective terms of office, authority and duties. Any two or more offices may be held by the same person. Unless an officer dies, resigns or is removed from office, he or she shall hold office until his or her successor is appointed.
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4.2 |
Resignation of Officers |
Any officer may resign at any time by delivering an executed notice to the corporation. The resignation is effective upon delivery, unless the notice of resignation specifies a later effective date, and, unless otherwise specified, the acceptance of the resignation shall not be necessary to make it effective.
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4.3 |
Removal of Officers |
Any officer may be removed by the Board at any time, with or without cause. An officer or assistant officer, if appointed by another officer, may be removed by any officer authorized to appoint officers or assistant officers.
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4.4 |
Contract Rights of Officers |
The appointment of an officer does not itself create contract rights.
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4.5 |
Chairperson of the Board |
If appointed, the Chairperson of the Board shall perform the duties assigned to him or her by the Board from time to time, and shall preside over meetings of the Board and shareholders unless another officer is appointed or designated by the Board as Chairperson of the meetings.
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4.6 |
President |
If appointed, the President shall be the chief executive officer of the corporation unless some other officer is so designated by the Board, shall preside over meetings of the Board and shareholders in the absence of a Chairperson of the Board, and, subject to the Board's control, shall supervise and control all of the assets, business and affairs of the corporation. In general, the President shall perform all duties incident to the office of President and other duties prescribed by the Board from time to time. If no Secretary has been appointed, the President shall have responsibility for the preparation of minutes of meetings of the Board and shareholders and for authentication of the records of the corporation.
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4.7 |
Vice President |
In the event of the death of the President or a vacancy in the office of the President, or his or her inability to act, the Vice President shall perform the duties of the President, except as may be limited or otherwise determined by resolution of the Board, with all the powers of and subject to all the restrictions upon the President. If there is more than one Vice President, the Vice President who was designated by the Board as the successor to the President, or if no Vice President is so designated, the Vice President first elected to the office of Vice President, shall perform the duties of the President, except as may be limited by resolution of the Board, with all the powers of and subject to all the restrictions upon the President. Vice Presidents shall perform other duties as from time to time may be assigned to them by the President or by or at the direction of the Board.
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4.8 |
Secretary |
If appointed, the Secretary shall be responsible for preparation of minutes of the meetings of the Board and shareholders, maintenance of the corporation records and stock registers, and authentication of the corporation's records and shall in general perform all duties incident to the office of Secretary and other duties as from time to time may be assigned to him or her by the President or by or at the direction of the Board. In the absence of the Secretary, an Assistant Secretary may perform the duties of the Secretary.
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4.9 |
Treasurer |
If appointed, the Treasurer shall have charge and custody of and be responsible for all funds and securities of the corporation, receive and give receipts for funds due and payable to the corporation from any source whatsoever, and deposit funds in the name of the corporation in banks, trust companies or other depositories selected in accordance with the provisions of these Bylaws, and in general perform all duties incident to the office of Treasurer and other duties as from time to time may be assigned to him or her by the President or by or at the direction of the Board. In the absence of the Treasurer, an Assistant Treasurer may perform the duties of the Treasurer.
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4.10 |
Salaries |
The salaries of the officers shall be fixed from time to time by the Board or by any person or persons to whom the Board has delegated authority to set salaries of officers. No officer shall be prevented from receiving a salary by reason of the fact that he or she is also a director of the corporation.
SECTION 5. CERTIFICATES FOR SHARES AND THEIR TRANSFER
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5.1 |
Issuance of Shares |
No shares of the corporation shall be issued unless authorized by the Board, or by a committee designated by the Board to the extent the committee is empowered to do so.
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5.2 |
Certificates for Shares |
Certificates representing shares of the corporation shall be signed, either manually or in facsimile, (i) by any two officers designated by the Board, or (ii) if no specific designation is made, by the Chairperson of the Board, the President or any Vice President and by the Treasurer or any Assistant Treasurer or the Secretary or any Assistant Secretary and shall include on their face written notice of any restrictions that may be imposed on the transferability of the shares. All certificates shall be consecutively numbered or otherwise identified.
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5.3 |
Issuance of Shares Without Certificates |
The Board may authorize the issuance of some or all of the shares of any or all of the corporation's classes or series without certificates. The authorization does not affect shares already represented by certificates until they are surrendered to the corporation. Within a reasonable time after the issuance or transfer of shares without certificates, the corporation shall send the shareholder a complete record containing the information required on certificates by applicable Washington law.
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5.4 |
Stock Records |
The stock transfer books shall be kept at the principal office of the corporation or at the office of the corporation's transfer agent or registrar. The name and address of each person to whom certificates for shares are issued, together with the class and number of shares represented by the certificate and the date of issuance of the certificate shall be entered on the stock transfer books of the corporation. The person in whose name shares stand on the books of the corporation shall be deemed by the corporation to be the owner for all purposes.
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5.5 |
Restriction on Transfer |
Except to the extent that the corporation has obtained an opinion of counsel acceptable to the corporation that transfer restrictions are not required under applicable securities laws, or has otherwise satisfied itself that transfer restrictions are not required, all certificates representing shares of the corporation shall bear a legend on the face of the certificate, or on the reverse of the certificate if a reference to the legend is contained on the face, which reads substantially as follows or that substantially effects the same purpose:
The securities evidenced by this certificate have not been registered under the Securities Act of 1933, as amended (the "Act"), or applicable state securities laws, and no interest may be sold, distributed, assigned, offered, pledged or otherwise transferred unless (a) there is an effective registration statement under the Act and applicable state securities laws covering the transaction involving these securities, (b) the corporation receives an opinion of legal counsel for the holder of these securities satisfactory to the corporation stating that the transaction is exempt from registration, or (c) the corporation otherwise satisfies itself that the transaction is exempt from registration.
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5.6 |
Transfer of Shares |
The transfer of shares of the corporation shall be made only on the stock transfer books of the corporation pursuant to authorization or document of transfer made by the holder of record or by the holder's legal representative, who shall furnish proper evidence of authority to transfer, or by the holder's attorney-in-fact authorized by power of attorney duly executed and filed with the Secretary of the corporation. All certificates surrendered to the corporation for transfer shall be canceled and no new certificate shall be issued until the former certificates for a like number of shares have been surrendered and canceled.
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5.7 |
Lost or Destroyed Certificates |
In the case of a lost, destroyed or damaged certificate, a new certificate may be issued in its place upon terms and indemnity to the corporation as the Board may prescribe.
SECTION 6. INDEMNIFICATION
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6.1 |
Right to Indemnification |
Each person who was, is or is threatened to be made a party to or is otherwise involved (including, without limitation, as a witness) in any threatened, pending or completed action, suit, claim or proceeding, whether civil, criminal, administrative or investigative and whether formal or informal (a "proceeding"), by reason of the fact that he or she is or was a director or officer of the corporation or, that being or having been a director or officer of the corporation, he or she is or was serving at the request of the corporation as a director, officer, partner, trustee, employee or agent of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise (an "indemnitee"), whether the basis of a proceeding is alleged action in an official capacity or in any other capacity while serving as a director, officer, partner, trustee, employee or agent, shall be indemnified and held harmless by the corporation against all losses, claims, damages (compensatory, exemplary, punitive or otherwise), liabilities and expenses (including attorneys' fees, costs, judgments, fines, ERISA excise taxes or penalties, amounts to be paid in settlement and any other expenses) actually and reasonably incurred or suffered by the indemnitee in connection with the proceeding, and the indemnification shall continue as to an indemnitee who has ceased to be a director or officer of the corporation or a director, officer partner, trustee, employee or agent of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise and shall inure to the benefit of the indemnitee's heirs, executors and administrators. Except as provided in Section 6.4 with respect to proceedings seeking to enforce rights to indemnification, the corporation shall indemnify the indemnitee in connection with a proceeding (or part of a proceeding) initiated by the indemnitee only if a proceeding (or part of a proceeding) was authorized or ratified by the Board. The right to indemnification conferred in this Section shall be a contract right.
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6.2 |
Restrictions on Indemnification |
No indemnification shall be provided to any indemnitee for acts or omissions of the indemnitee finally adjudged to be intentional misconduct or a knowing violation of law, for conduct of the indemnitee finally adjudged to be in violation of RCW 23B.08.310, for any transaction with respect to which it was finally adjudged that the indemnitee personally received a benefit in money, property or services to which the indemnitee was not legally entitled or if the corporation is otherwise prohibited by applicable law from paying indemnification. Notwithstanding the foregoing, if RCW 23B.08.560 is amended, the restrictions on indemnification set forth in this Section 6.2 shall be as set forth in the amended statutory provision.
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6.3 |
Advancement of Expenses |
The right to indemnification conferred in this Section shall include the right to be paid by the corporation the expenses incurred in defending any proceeding in advance of its final disposition (an "advancement of expenses"). An advancement of expenses shall be made upon delivery to the corporation of an undertaking (an "undertaking"), by or on behalf of the indemnitee, to repay all amounts so advanced if it shall ultimately be determined by final judicial decision from which there is no further right to appeal that the indemnitee is not entitled to be indemnified.
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6.4 |
Right of Indemnitee to Bring Suit |
If a claim under Section 6.1 or 6.3 of these Bylaws is not paid in full by the corporation within 60 days after a written claim has been received by the corporation, except in the case of a claim for an advancement of expenses, in which case the applicable period shall be 20 days, the indemnitee may at any time thereafter bring suit against the corporation to recover the unpaid amount of the claim. If successful in whole or in part, in any such suit or in a suit brought by the corporation to recover an advancement of expenses pursuant to the terms of an undertaking, the indemnitee shall be entitled to be paid also the expense of litigating the suit. The indemnitee shall be presumed to be entitled to indemnification under this Section upon submission of a written claim (and, in an action brought to enforce a claim for an advancement of expenses, when the required undertaking has been tendered to the corporation) and thereafter the corporation shall have the burden of proof to overcome the presumption that the indemnitee is so entitled.
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6.5 |
Procedures Exclusive |
Pursuant to RCW 23B.08.560(2) or any successor provision, the procedures for indemnification and the advancement of expenses set forth in this Section are in lieu of the procedures required by RCW 23B.08.550 or any successor provision.
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6.6 |
Nonexclusivity of Rights |
Except as set forth in Section 6.5 of these Bylaws, the right to indemnification and the advancement of expenses conferred in this Section shall not be exclusive of any other right that any person may have or hereafter acquire under any statute, provision of the Articles of Incorporation or Bylaws of the corporation, general or specific action of the Board or shareholders, contract or otherwise. Notwithstanding any amendment or repeal of this Section, or of any amendment or repeal of any of the procedures that may be established by the Board pursuant to this Section, any indemnitee shall be entitled to indemnification in accordance with the provisions of these Bylaws and those procedures with respect to any acts or omissions of the indemnitee occurring prior to the amendment or repeal.
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6.7 |
Insurance, Contracts and Funding |
The corporation may maintain insurance, at its expense, to protect itself and any director, officer, partner, trustee, employee or agent of the corporation or another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise against any expense, liability or loss, whether or not the corporation would have the authority or right to indemnify the person against the expense, liability or loss under the Washington Business Corporation Act or other law. The corporation may enter into contracts with any director, officer, partner, trustee, employee or agent of the corporation in furtherance of the provisions of this Section and may create a trust fund, grant a security interest or use other means (including, without limitation, a letter of credit) to ensure the payment of the amounts as may be necessary to effect indemnification as provided in this Section.
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6.8 |
Indemnification of Employees and Agents of the Corporation |
In addition to the rights of indemnification set forth in Section 6.1, the corporation may, by action of the Board, grant rights to indemnification and advancement of expenses to employees and agents or any class or group of employees and agents of the corporation (a) with the same scope and effect as the provisions of this Section with respect to indemnification and the advancement of expenses of directors and officers of the corporation; (b) pursuant to rights granted or provided by the Washington Business Corporation Act; or (c) as are otherwise consistent with law.
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6.9 |
Persons Serving Other Entities |
Any person who, while a director or officer of the corporation, is or was serving (a) as a director, officer, employee or agent of another corporation of which a majority of the shares entitled to vote in the election of its directors is held by the corporation or (b) as a partner, trustee or otherwise in an executive or management capacity in a partnership, joint venture, trust, employee benefit plan or other enterprise of which the corporation or a wholly owned subsidiary of the corporation is a general partner or has a majority ownership, shall conclusively be deemed to be so serving at the request of the corporation and entitled to indemnification and the advancement of expenses under Sections 6.1 and 6.3.
SECTION 7. GENERAL MATTERS
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7.1 |
Accounting Year |
The accounting year of the corporation shall be the calendar year, but if a different accounting year is at any time selected by the Board for purposes of federal income taxes, or any other purpose, the accounting year shall be the year so selected.
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7.2 |
Amendment or Repeal of Bylaws |
These Bylaws may be altered, amended or repealed and new Bylaws may be adopted by the Board, except that the Board may not amend or repeal any Bylaw that the shareholders have expressly provided, in amending or repealing the Bylaw, may not be amended or repealed by the Board. The shareholders may also alter, amend and repeal these Bylaws or adopt new Bylaws. All Bylaws made by the Board may be amended, repealed, altered or modified by the shareholders.
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7.3 |
Books and Records |
The corporation shall:
(a) Keep as permanent records minutes of all meetings of its shareholders and the Board, a record of all actions taken by the shareholders or the Board without a meeting, and a record of all actions taken by a committee of the Board exercising the authority of the Board on behalf of the corporation.
(b) Maintain appropriate accounting records.
(c) Maintain or hire an agent to maintain a record of its shareholders, in a form that permits preparation of a list of the names and addresses of all shareholders, in alphabetical order by class of shares showing the number and class of shares held by each.
(d) Maintain its records in written form or in another form capable of conversion into written form within a reasonable time.
(e) Keep a copy of the following records at its principal office:
(i) the Articles of Incorporation and all amendments thereto as currently in effect;
(ii) these Bylaws and all amendments thereto as currently in effect;
(iii) the minutes of all meetings of shareholders and records of all action taken by shareholders without a meeting, for the past three years;
(iv) the financial statements described in RCW 23B.16.200(1), for the past three years;
(v) all communications in the form of a record to shareholders generally within the past three years;
(vi) a list of the names and business addresses of the current directors and officers; and
(vii) the most recent annual report delivered to the Washington Secretary of State.
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7.4 |
Contracts, Loans, Checks and Deposits |
| 7.4.1 | Contracts |
The Board may authorize any officer or officers, or agent or agents, to enter into any contract or execute and deliver any instrument in the name of and on behalf of the corporation. The authority may be general or confined to specific instances.
| 7.4.2 | Loans to the Corporation |
No loans shall be contracted on behalf of the corporation and no evidences of indebtedness shall be issued in its name unless authorized by a resolution of the Board. The authority may be general or confined to specific instances.
| 7.4.3 | Checks, Drafts, Etc. |
All checks, drafts or other orders for the payment of money, notes or other evidences of indebtedness issued in the name of the corporation shall be signed by the officer or officers, or agent or agents, of the corporation and in the manner from time to time determined by resolution of the Board.
| 7.4.4 | Deposits |
All funds of the corporation not otherwise employed shall be deposited from time to time to the credit of the corporation in banks, trust companies or other depositories selected by the Board.
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7.5 |
Corporate Seal |
The Board may provide for a corporate seal that shall consist of the name of the corporation, the state of its incorporation and the year of its incorporation.
Exhibit 3.2
BYLAWS
OF
CLEARSIGN COMBUSTION
TECHNOLOGIES CORPORATION
SECTION 1. DEFINITIONS
As used in these Bylaws, the following terms shall have the following meanings:
"Articles of Incorporation" means the corporation's Articles of Incorporation and all amendments as filed with the Washington Secretary of State.
"Board" means the Board of Directors of the corporation.
"Electronic transmission" means an electronic communication not directly involving the physical transfer of a record in a tangible medium that may be retained, retrieved and reviewed by the sender and the recipient and that may be directly reproduced in a tangible medium by the sender and recipient.
"Execute," "executes" or "executed" means signed with respect to a written record or electronically transmitted along with sufficient information to determine the sender's identity with respect to an electronic transmission.
"RCW" means the Revised Code of Washington and "RCW 23B" means Title 23B of the Revised Code of Washington (also known as the Washington Business Corporation Act).
"Record" means information inscribed on a tangible medium or contained in an electronic transmission.
"Tangible medium" means a writing, copy of a writing or facsimile, or a physical reproduction, each on paper or on other tangible material.
"Washington Business Corporation Act" means the Washington Business Corporation Act, as it exists now or may be amended.
"Writing" or "written" means embodied in a tangible medium, and excludes an electronic transmission.
SECTION 2. SHAREHOLDERS
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2.1 |
Annual Meeting |
The annual meeting of the shareholders to elect directors and transact other business as may properly come before the meeting shall be held on a date not more than 180 days after the end of the corporation's fiscal year, the date and time to be determined by the Board. Shareholders may act by consent set forth in a record in accordance with Section 2.13 of these Bylaws to elect directors in lieu of holding an annual meeting.
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2.2 |
Special Meetings |
Special meetings of
the shareholders for any purpose or purposes shall be called only by Tthe
Chairperson of the Board, the President or the Board may
call special meetings of the shareholders for any purpose.
A special meeting of the shareholders shall be held if the holders of at least 20% of all the votes entitled to be cast on any issue proposed to be considered at the special meeting have delivered to the Secretary one or more demands for the meeting, describing the purpose or purposes for which it is to be held, which demands shall be set forth either (i) in an executed written record, or (ii) if the corporation has designated an address, location or system to which the demands may be electronically transmitted and the demands are electronically transmitted to that designated address, location or system, in an executed electronically transmitted record. The record date for determining shareholders entitled to demand a special meeting is the date of delivery of the first shareholder demand in compliance with this Section 2.2.
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2.3 |
Meetings by Communications Equipment |
Shareholders may participate in any meeting of the shareholders by any means of communication by which all persons participating in the meeting can hear each other during the meeting, and participation in this manner shall constitute presence in person at a meeting.
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2.4 |
Date, Time and Place of Meeting |
Except as otherwise provided in these Bylaws, all meetings of shareholders, including those held pursuant to demand by shareholders, shall be held on a date and at a time and place designated by or at the direction of the Board.
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2.5 |
Notice to Shareholders |
Any notice to shareholders required or permitted under these Bylaws, the Articles of Incorporation or the Washington Business Corporation Act shall be provided in accordance with this section 2.5.
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2.5.1 Type of Notice |
(a) Notice Provided in a Tangible Medium. Notice may be provided in a tangible medium and may be transmitted by mail, private carrier, personal delivery, telegraph, teletype, telephone or wire or wireless equipment that transmits a facsimile of the notice.
(b) Notice Provided in an Electronic Transmission. Notice may be provided in an electronic transmission and be electronically transmitted.
(1) Consent to Receive Notice by Electronic Transmission. Notice to shareholders in an electronic transmission is effective only with respect to shareholders that have consented, in the form of a record, to receive electronically transmitted notices and designated in the consent the address, location or system to which these notices may be electronically transmitted. Notice provided in an electronic transmission includes material required or permitted to accompany the notice by the Washington Business Corporation Act or other applicable statute or regulation.
(2) Revocation of Consent to Receive Notice by Electronic Transmission. A shareholder that has consented to receipt of electronically transmitted notices may revoke the consent by delivering a revocation to the corporation in the form of a record. The consent of a shareholder to receive notice by electronic transmission is revoked if the corporation is unable to electronically transmit two consecutive notices given by the corporation in accordance with the consent, and this inability becomes known to the Secretary of the corporation, the transfer agent or any other person responsible for giving the notice. The inadvertent failure by the corporation to treat this inability as a revocation does not invalidate any meeting or other action.
(3) Posting Notice on an Electronic Network. Notice to shareholders that have consented to receipt of electronically transmitted notices may be provided by posting the notice on an electronic network and delivering to the shareholder a separate record of the posting, together with comprehensible instructions regarding how to obtain access to the posting on the electronic network.
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2.5.2 Effectiveness of Notice |
(a) Notice by Mail. Notice given by mail is effective when deposited in the United States mail, first-class postage prepaid, properly addressed to the shareholder at the shareholder's address as it appears in the corporation's current record of shareholders.
(b) Notice by Telegraph, Teletype or Facsimile Equipment. Notice given by telegraph, teletype or facsimile equipment that transmits a facsimile of the notice is effective when dispatched to the shareholder's address, telephone number or other number appearing on the records of the corporation.
(c) Notice by Air Courier. Notice given by air courier is effective when dispatched, if prepaid and properly addressed to the shareholder at the shareholder's address as it appears in the corporation's current record of shareholders.
(d) Notice by Ground Courier or Other Personal Delivery. Notice given by ground courier or other personal delivery is effective when received by a shareholder.
(e) Notice by Electronic Transmission. Notice provided in an electronic transmission, if in comprehensible form, is effective when it (i) is electronically transmitted to an address, location or system designated by the recipient for that purpose, or (ii) has been posted on an electronic network and a separate record of the posting has been delivered to the recipient together with comprehensible instructions regarding how to obtain access to the posting on the electronic network.
(f) Notice by Publication. Notice given by publication is effective five days after first publication.
| 2.5.3 | Notice of Meeting |
Notice stating the place, day and hour of the meeting and, in the case of a special meeting, the purpose or purposes for which the meeting is called shall be provided in the form of a record by or at the direction of the Board, the Chairperson of the Board, the President or the Secretary to each shareholder entitled to notice of or to vote at the meeting, as provided below.
| 2.5.3.1 Number of Days' Notice |
(a) Normal Business. Except as provided in paragraph (b) of this Section 2.5.3.1, notice of the meeting shall be provided not less than 10 or more than 60 days before the meeting.
(b) Amendment to Articles of Incorporation; Merger or Share Exchange; Sale of Assets or Dissolution. Notice of a meeting held for the purpose of considering an amendment to the Articles of Incorporation, a plan of merger or share exchange, the sale, lease, exchange or other disposition of all or substantially all of the corporation's assets other than in the regular course of business or the dissolution of the corporation shall be provided not less than 20 or more than 60 days before the meeting.
| 2.5.3.2 Adjourned Meeting |
If an annual or special meeting of shareholders is adjourned to a different date, time or place, no notice of the new date, time or place is required if they are announced at the meeting before adjournment. If a new record date for the adjourned meeting is or must be fixed, notice of the adjourned meeting must be provided to shareholders entitled to notice of or to vote as of the new record date.
| 2.5.3.3 Notice of Special Meeting Called by Shareholders |
In accordance with Section 2.2 of these Bylaws, the shareholders may request that the corporation call a special meeting of shareholders. Within 30 days of a request, it shall be the duty of the Secretary to provide notice of a special meeting of shareholders to be held on a date and at a place and hour as the Secretary may fix.
| 2.5.4 | Waiver of Notice |
| 2.5.4.1 By Delivery of a Record |
A shareholder may waive any notice required by these Bylaws, the Articles of Incorporation or the Washington Business Corporation Act, before or after the date and time of the meeting that is the subject of the notice or, in the case of notice required to be given to nonconsenting or nonvoting shareholders in connection with action taken by less than unanimous consent of the shareholders, before or after the action to be taken by executed consent is effective. The waiver must be (i) delivered by the shareholder entitled to notice to the corporation for inclusion in the minutes or filing with the corporate records, and (ii) set forth either in an executed and dated written record or, if the corporation has designated an address, location or system to which the waiver may be electronically transmitted and the waiver is electronically transmitted to the designated address, location or system, in an executed and dated electronically transmitted record.
| 2.5.4.2 Waiver by Attendance |
Notice of the time, place and purpose of any meeting will be waived by any shareholder by attendance in person or by proxy, unless the shareholder at the beginning of the meeting objects to holding the meeting or transacting business at the meeting.
| 2.5.4.3 Waiver of Objection |
A shareholder waives objection to consideration of a particular matter at a meeting that is not within the purpose or purposes described in the notice of the meeting unless the shareholder objects to considering the matter when it is presented.
|
2.6 |
Fixing of Record Date for Determining Shareholders Entitled to Notice of or to Vote at a Meeting or to Receive Payment of a Dividend |
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2.6.1 Record Date for Meeting of Shareholders |
For the purpose of determining shareholders entitled to notice of or to vote at any meeting of shareholders or any adjournment of the meeting, the Board may fix a future date as the record date for the determination. The record date shall be not more than 70 days and not less than 10 days, prior to the date of the meeting. If no record date is fixed for the determination of shareholders entitled to notice of or to vote at a meeting, the record date shall be the day immediately preceding the date on which notice of the meeting is first given to shareholders. The determination of the record date shall apply to any adjournment of the meeting unless the Board fixes a new record date, which it shall do if the meeting is adjourned to a date more than 120 days after the date fixed for the original meeting.
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2.6.2 Record Date to Receive Payment of Dividend or Distribution |
For the purpose of determining shareholders entitled to receive payment of any dividend or distribution (including a dividend or distribution in connection with a stock split), the Board may fix a future date as the record date for the dividend or distribution. The record date shall be not more than 70 days prior to the date on which the dividend or distribution is payable. If no record date is set for the determination of shareholders entitled to receive payment of any dividend or distribution (other than one involving a purchase, redemption or other acquisition of the corporation's shares) the record date shall be the date the Board authorizes the dividend or distribution.
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2.7 |
Voting Record |
At least 10 days before each meeting of shareholders, an alphabetical list of the shareholders entitled to notice of the meeting shall be made, arranged by voting group and by each class or series of shares, with the address of and number of shares held by each shareholder. This record shall be kept at the principal office of the corporation or at a place identified in the meeting notice in the city where the meeting will be held for 10 days prior to the meeting, and shall be kept open at the meeting, for the inspection of any shareholder or any shareholder's agent or attorney.
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2.8 |
Quorum |
A majority of the votes entitled to be cast on a matter by the holders of shares that, pursuant to the Articles of Incorporation or the Washington Business Corporation Act, are entitled to vote on the matter, represented in person or by proxy, shall constitute a quorum of those shares at a meeting of shareholders, including a majority of those shares entitled to vote as a separate voting group. If less than a quorum of votes are represented at a meeting, a majority of the votes so represented may adjourn the meeting from time to time without further notice if the new date, time and place are announced at the meeting before adjournment. Any business may be transacted at a reconvened meeting that might have been transacted at the meeting as originally called, if a quorum is present or represented at the meeting. Once a share is represented for any purpose at a meeting other than solely to object to holding the meeting or transacting business, it is deemed present for quorum purposes for the remainder of the meeting and any adjournment (unless a new record date is or must be set for the adjourned meeting) notwithstanding the withdrawal of enough shareholders to leave less than a quorum.
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2.9 |
Manner of Acting |
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2.9.1 Matters Other than the Election of Directors |
If a quorum is present, action on a matter other than the election of directors shall be approved if the votes cast in favor of the action by shares entitled to vote on the matter exceed the votes cast against the action by shares entitled to vote thereon, unless the Articles of Incorporation or the Washington Business Corporation Act requires a greater number of affirmative votes or approval by separate voting groups.
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2.9.2 Election of Directors |
Directors shall be elected in the manner set forth in Section 2.12 of these Bylaws.
|
2.10 |
Proxies |
A shareholder or the shareholder's agent or attorney-in-fact may appoint a proxy to vote or otherwise act for the shareholder by an executed writing or by a recorded telephone call, voice mail or other electronic transmission.
| 2.10.1 Written Authorization |
Execution of a writing authorizing another person or persons to act for the shareholder as proxy may be accomplished by the shareholder or the shareholder's authorized officer, director, employee or agent signing the writing or causing his or her signature to be affixed to the writing by any reasonable means including, but not limited to, by facsimile signature.
| 2.10.2 Recorded Telephone Call, Voice Mail or Other Electronic Transmission |
Authorizing another person or persons to act for the shareholder as proxy may be accomplished by transmitting or authorizing the transmission of a recorded telephone call, voice mail or other electronic transmission to the person who will be the holder of the proxy or to a proxy solicitation firm, proxy support service organization or like agent duly authorized by the person who will be the holder of the proxy to receive the transmission, provided that the transmission must either set forth or be submitted with information, including any security or validation controls used, from which it can reasonably be determined that the transmission was authorized by the shareholder. If it is determined that the transmission is valid, the inspectors of election or, if there are no inspectors, any officer or agent of the corporation making that determination on behalf of the corporation shall specify the information upon which he or she relied. The corporation shall require the holders of proxies received by transmission to provide to the corporation copies of the transmission and the corporation shall retain copies of the transmission for a reasonable period of time after the election provided that they are retained for at least 60 days.
| 2.10.3 Effectiveness of Appointment of Proxy |
An appointment of a proxy is effective when a signed appointment form or telegram, cablegram, recorded telephone call, voicemail or other transmission of the appointment is received by the inspectors of election or the officer or agent of the corporation authorized to tabulate votes. An appointment is valid for 11 months unless a longer period is expressly provided in the appointment. A proxy with respect to a specified meeting shall entitle its holder to vote at any reconvened meeting following adjournment of the meeting but shall not be valid after the final adjournment.
| 2.10.4 Revocability of Proxy |
An appointment of a proxy is revocable by the shareholder unless the appointment indicates that it is irrevocable and the appointment is coupled with an interest. Appointments coupled with an interest include the appointment of a pledgee, a person who purchased or agreed to purchase the shares, a creditor of the corporation who extended it credit under terms requiring the appointment, an employee of the corporation whose employment contract requires the appointment or a party to a voting agreement created under RCW 23B.07.310. An appointment made irrevocable is revoked when the interest with which it is coupled is extinguished. A transferee for value of shares subject to an irrevocable appointment may revoke the appointment if the transferee did not know of its existence when the transferee acquired the shares and the existence of the irrevocable appointment was not noted conspicuously on the certificate representing the shares or on the information statement for shares without certificates.
| 2.10.5 Death or Incapacity of Shareholder Appointing a Proxy |
The death or incapacity of the shareholder appointing a proxy does not affect the right of the corporation to accept the proxy's authority unless notice of the death or incapacity is received by the officer or agent of the corporation authorized to tabulate votes before the proxy exercises the proxy's authority under the appointment.
| 2.10.6 Acceptance of Proxy's Vote or Action |
Subject to RCW 23B.07.240 and to any express limitation on the proxy's authority stated in the appointment form or recorded telephone call, voice mail or other electronic transmission, the corporation is entitled to accept the proxy's vote or other action as that of the shareholder making the appointment.
| 2.10.7 Meaning of Sign or Signature |
For the purposes of this Section, "sign" or "signature" includes any manual, facsimile, conformed or electronic signature.
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2.11 |
Voting of Shares |
Unless otherwise provided in the Articles of Incorporation, each outstanding share entitled to vote with respect to a matter submitted to a meeting of shareholders shall be entitled to one vote upon the matter.
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2.12 |
Voting for Directors |
Each shareholder entitled to vote at an election of directors may vote, in person or by proxy, the number of shares owned by the shareholder for as many persons as there are directors to be elected and for whose election the shareholder has a right to vote. Unless otherwise provided in the Articles of Incorporation, the candidates elected shall be those receiving the largest number of votes cast, up to the number of directors to be elected. Directors may be elected by consent in lieu of an annual or special meeting in accordance with Section 2.13 of these Bylaws.
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2.13 |
Action by Shareholders Without a Meeting |
Any action that may or is required to be taken at a meeting of the shareholders may be taken without a meeting or a vote, pursuant to the provisions of this Section 2.13.
| 2.13.1 | Unanimous Written Consent |
Action may be taken by unanimous consent if (i) one or more consents, each in the form of a record, describing the action taken are executed by all the shareholders entitled to vote with respect to the matter, and (ii) the executed consents are delivered to the corporation for filing with the corporate records.
| 2.13.2 | Less Than Unanimous Written Consent |
If authorized by a general or limited authorization in the Articles of Incorporation, action may be taken by less than unanimous consent if (i) one or more consents, each in the form of a record describing the action taken, are executed by shareholders holding of record or otherwise entitled to vote in the aggregate not less than the minimum number of votes that would be necessary to authorize or take the action at a meeting at which all shares entitled to vote on the action were present and voted, (ii) the period of advance notice required by the Articles of Incorporation to be given to any nonconsenting shareholders and, if applicable, nonvoting shareholders, has been satisfied and (iii) the executed consents are delivered to the corporation for filing with the corporate records.
| 2.13.3 | General Provisions |
(a) Form of Consent. The consent shall be set forth either in an executed written record or, if the corporation has designated an address, location or system to which the consent may be electronically transmitted and the consent is electronically transmitted to the designated address, location or system, in an executed electronically transmitted record.
(b) Record Date. If not otherwise fixed by the Board, the record date for determining shareholders entitled to take action without a meeting is the date the first shareholder consent is executed.
(c) Withdrawal of Consent. A shareholder may withdraw a consent only by delivering a notice of withdrawal in the form of a record to the corporation prior to the time that consents sufficient to authorize taking the action have been delivered to the corporation.
(d) Date of Signature. Every consent shall bear the date of execution of each shareholder that executes the consent.
(e) Time Allowed to Complete Execution of Consents. A consent is not effective to take the action referred to in the consent unless, within 60 days of the earliest dated consent delivered to the corporation, consents executed by a sufficient number of shareholders to take action are delivered to the corporation.
(f) Effective Date of Consent Action. Unless the consent specifies a later effective date, actions taken by consent of the shareholders are effective when (a) consents sufficient to authorize taking the action are in possession of the corporation and (b) if action is taken by less than unanimous consent, the period of advance notice required by the Articles of Incorporation to be given to any nonconsenting or nonvoting shareholders has been satisfied.
(g) Inclusion in Corporate Records. The consent shall be inserted in the minute book as if it were the minutes of a meeting of the shareholders.
SECTION 3. BOARD OF DIRECTORS
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3.1 |
General Powers |
All corporate powers shall be exercised by or under the authority of, and the business and affairs of the corporation shall be managed under the direction of, the Board, except as may be otherwise provided in these Bylaws, the Articles of Incorporation or the Washington Business Corporation Act.
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3.2 |
Number and Tenure |
The Board shall be composed of not less than 1 or more than 7 directors, the specific number to be set by resolution of the Board. The indefinite number of directors may be changed, or a definite number may be fixed without provision for an indefinite number, by an amendment to this Bylaw. No decrease in the number of authorized directors shall have the effect of shortening the term of any incumbent director. Unless a director dies, resigns, or is removed, his or her term of office shall expire at the next annual meeting of shareholders but a director shall continue to serve until his or her successor is elected or until there is a decrease in the authorized number of directors. Directors need not be shareholders of the corporation or residents of the State of Washington.
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3.3 |
Regular Meetings |
By resolution, the Board, or any committee designated by the Board, may specify the time and place for holding regular meetings without notice other than the resolution.
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3.4 |
Special Meetings |
Special meetings of the Board or any committee designated by the Board may be called by or at the request of the Chairperson of the Board, the President, the Secretary or, in the case of special Board meetings, any director and, in the case of any special meeting of any committee designated by the Board, by its Chairperson. The person or persons authorized to call special meetings may fix any place for holding any special Board or committee meeting called by them.
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3.5 |
Meetings by Communications Equipment |
Members of the Board or any committee designated by the Board may participate in a meeting of the Board or committee by, or conduct the meeting through the use of, any means of communication by which all directors participating in the meeting can hear each other during the meeting, and participation in this manner shall constitute presence in person at a meeting.
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3.6 |
Notice of Special Meetings |
Notice of a special Board or committee meeting stating the place, day and hour of the meeting shall be provided to each director in the form of a record or orally, as provided below. Neither the business to be transacted at nor the purpose of any special meeting need be specified in the notice of the meeting.
| 3.6.1 Number of Days' Notice |
Notice of the meeting shall be given at least two days before the meeting.
| 3.6.2 Type of Notice |
(a) Oral Notice. Oral notice may be communicated in person, by telephone, wire or wireless equipment that does not transmit a facsimile of the notice, or by any electronic means that does not create a record.
(b) Notice Provided in a Tangible Medium. Notice may be provided in a tangible medium and may be transmitted by mail, private carrier, personal delivery, telegraph, teletype, telephone or wire or wireless equipment that transmits a facsimile of the notice.
(c) Notice Provided in an Electronic Transmission. Notice may be provided in an electronic transmission and be electronically transmitted.
(1) Consent to Receive Notice by Electronic Transmission. Notice to directors in an electronic transmission is effective only with respect to directors who have consented, in the form of a record, to receive electronically transmitted notices and designated in the consent the address, location or system to which these notices may be electronically transmitted. Notice provided in an electronic transmission includes material required or permitted to accompany the notice by the Washington Business Corporation Act or other applicable statute or regulation.
(2) Revocation of Consent to Receive Notice by Electronic Transmission. A director who has consented to receipt of electronically transmitted notices may revoke the consent by delivering a revocation to the corporation in the form of a record. The consent of a director to receive notice by electronic transmission is revoked if the corporation is unable to electronically transmit two consecutive notices given by the corporation in accordance with the consent, and this inability becomes known to the Secretary of the corporation or any other person responsible for giving the notice. The inadvertent failure by the corporation to treat this inability as a revocation does not invalidate any meeting or other action.
(3) Posting Notice on an Electronic Network. Notice to directors who have consented to receipt of electronically transmitted notices may be provided by posting the notice on an electronic network and delivering to the director a separate record of the posting, together with comprehensible instructions regarding how to obtain access to the posting on the electronic network.
| 3.6.3 Effectiveness of Written Notice |
(a) Notice by Mail. Notice given by mail is effective five days after its deposit in the United States mail, as evidenced by the postmark, if mailed with first-class postage prepaid and correctly addressed to the director at his or her address shown on the records of the corporation.
(b) Notice by Registered or Certified Mail. Notice is effective on the date shown on the return receipt, if sent by registered or certified mail, return receipt requested, and the receipt is signed by or on behalf of the addressee.
(c) Notice by Telegraph, Teletype or Facsimile Equipment. Notice sent to the director's address, telephone number or other number appearing on the records of the corporation is effective when dispatched by telegraph, teletype or wire or wireless equipment that transmits a facsimile of the notice.
(d) Notice by Private Carrier. Notice given by private carrier is effective when received by the director.
(e) Personal Notice. Notice given by personal delivery is effective when received by the director.
(f) Notice by Electronic Transmission. Notice provided by electronic transmission, if in comprehensible form, is effective when it (i) is electronically transmitted to an address, location or system designated by the recipient for that purpose, or (ii) has been posted on an electronic network and a separate record of the posting has been delivered to the recipient together with comprehensible instructions regarding how to obtain access to the posting on the electronic network.
| 3.6.4 Effectiveness of Oral Notice |
(a) Notice in Person or by Telephone. Oral notice is effective when received by the director.
(b) Notice by Wire or Wireless Equipment. Notice given by wire or wireless equipment that does not transmit a facsimile of the notice or by any electronic means that does not create a record is effective when communicated to the director.
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3.7 |
Waiver of Notice |
| 3.7.1 By Delivery of a Record |
A director may waive any notice required to be given to any director under the provisions of these Bylaws, the Articles of Incorporation or the Washington Business Corporation Act, before or after the date and time stated in the notice and the waiver shall be equivalent to the giving of notice. The waiver must be delivered by the director entitled to the notice to the corporation for inclusion in the minutes or filing with the corporate records. The waiver shall be set forth either in an executed written record or, if the corporation has designated an address, location or system to which the waiver may be electronically transmitted and the waiver has been electronically transmitted to the designated address, location or system, in an executed electronically transmitted record. Neither the business to be transacted at nor the purpose of any regular or special meeting of the Board or any committee designated by the Board need be specified in the waiver of notice of the meeting.
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3.7.2 By Attendance |
A director's attendance at or participation in a Board or committee meeting shall constitute a waiver of notice of the meeting, unless the director at the beginning of the meeting, or promptly upon his or her arrival, objects to holding the meeting or transacting business at the meeting and does not vote for or assent to action taken at the meeting.
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3.8 |
Quorum |
| 3.8.1 Board of Directors |
A majority of the number of directors fixed by or in the manner provided in these Bylaws shall constitute a quorum for the transaction of business at any Board meeting but, if less than a quorum are present at a meeting, a majority of the directors present may adjourn the meeting from time to time without further notice.
| 3.8.2 Committees |
A majority of the number of directors composing any committee of the Board, as established and fixed by resolution of the Board, shall constitute a quorum for the transaction of business at any meeting of the committee but, if less than a quorum are present at a meeting, a majority of the directors present may adjourn the committee meeting from time to time without further notice.
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3.9 |
Manner of Acting |
If a quorum is present when the vote is taken, the act of the majority of the directors present at a Board or committee meeting shall be the act of the Board or the committee, unless the vote of a greater number is required by these Bylaws, the Articles of Incorporation or the Washington Business Corporation Act.
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3.10 |
Presumption of Assent |
A director of the corporation who is present at a Board or committee meeting at which any action is taken shall be deemed to have assented to the action taken unless (a) the director objects at the beginning of the meeting, or promptly upon his or her arrival, to holding the meeting or transacting any business at the meeting, (b) the director's dissent or abstention from the action taken is entered in the minutes of the meeting, or (c) the director delivers notice of the director's dissent or abstention to the presiding officer of the meeting before its adjournment or to the corporation within a reasonable time after adjournment of the meeting. The right of dissent or abstention is not available to a director who votes in favor of the action taken.
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3.11 |
Action by Board or Committees Without a Meeting |
Any action that could be taken at a meeting of the Board or of any committee created by the Board may be taken without a meeting if one or more consents setting forth the action so taken are executed by all the directors or by all the members of the committee either before or after the action is taken and delivered to the corporation, each of which shall be set forth in an executed written record or, if the corporation has designated an address, location or system to which the consent may be electronically transmitted and the consent is electronically transmitted to the designated address, location or system in an executed electronically transmitted record. Action taken by consent of
directors without a meeting is effective when the last director executes the consent, unless the consent specifies a later effective date. The consent shall be inserted in the minute book as if it were the minutes of a Board or a committee meeting.
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3.12 |
Resignation of Directors and Committee Members |
Any director may resign from the Board or any committee of the Board at any time by delivering an executed notice to the Chairperson of the Board, the President, the Secretary or the Board. The resignation is effective upon delivery unless the notice of resignation specifies a later effective date and, unless otherwise specified, the acceptance of the resignation shall not be necessary to make it effective.
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3.13 |
Removal of Directors and Committee Members |
| 3.13.1 Removal of Directors |
At a meeting of shareholders called expressly for that purpose, one or more members of the Board, including the entire Board, may be removed with or without cause (unless the Articles of Incorporation permit removal for cause only) by the holders of the shares entitled to elect the director or directors whose removal is sought if the number of votes cast to remove the director exceeds the number of votes cast to not remove the director.
| 3.13.2 Removal of Committee Members |
The Board may remove any member of any committee elected or appointed by it by the affirmative vote of the greater of a majority of the directors then in office and the number of directors required to take action in accordance with these Bylaws.
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3.14 |
Vacancies |
Unless the Articles of Incorporation provide otherwise, any vacancy occurring on the Board may be filled by the shareholders, by the Board or, if the directors in office constitute less than a quorum, by the affirmative vote of a majority of the remaining directors. Any vacant office to be held by a director elected by the holders of one or more classes or series of shares entitled to vote thereon shall be filled only by the vote of the holders of such class or series of shares. The term of a director elected to fill a vacancy expires at the next election of directors by the shareholders.
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3.15 |
Executive and Other Committees |
| 3.15.1 Creation of Committees |
The Board, by resolution, may create standing or temporary committees, including an Executive Committee, and appoint members from its own number and invest the committees with powers as it may see fit, subject to conditions as may be prescribed by the Board, the Articles of Incorporation, these Bylaws and applicable law. The resolution must be adopted by the greater of a majority of all the directors then in office or the number of directors required to take action in accordance with these Bylaws. Each committee must have two or more members, who shall serve at the pleasure of the Board.
| 3.15.2 Authority of Committees |
Each committee shall have and may exercise all the authority of the Board to the extent provided in the resolution of the Board creating the committee and any subsequent resolutions adopted in like manner, except that no committee shall have the authority to: (a) authorize or approve a distribution except according to a general formula or method prescribed by the Board, (b) approve or propose to shareholders actions or proposals required by the Washington Business Corporation Act to be approved by shareholders, (c) fill vacancies on the Board or any committee of the Board, (d) amend the Articles of Incorporation pursuant to RCW 23B.10.020, (e) adopt, amend or repeal Bylaws, (f) approve a plan of merger not requiring shareholder approval, or (g) authorize or approve the issuance or sale or contract for sale of shares, or determine the designation and relative rights, preferences and limitations of a class or series of shares except that the Board may authorize a committee or a senior executive officer of the corporation to do so within limits specifically prescribed by the Board.
| 3.15.3 Minutes of Meetings |
All committees shall keep regular minutes of their meetings and shall cause them to be recorded in books kept for that purpose.
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3.16 |
Compensation of Directors and Committee Members |
By Board resolution, directors and committee members may be paid for their service as directors and committee members in such amounts and form as specified in such resolution, which may include, without limitation, their expenses, if any, of attendance at each Board or committee meeting, a fixed sum for attendance at each Board or committee meeting or a stated salary as director or a committee member, and such other compensation as the Board may determine (including, without limitation, stock options or other equity compensation). No payment for expenses or compensation as a director or committee member shall preclude any director or committee member from serving the corporation in any other capacity and receiving compensation for his or her services.
SECTION 4. OFFICERS
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4.1 |
Appointment and Term |
The officers of the corporation shall be those officers appointed from time to time by the Board or by any other officer empowered to do so. The Board shall have sole power and authority to appoint any executive officer and shall have the authority to appoint any other officers and to prescribe the respective terms of office, authority and duties of the executive officers or other officers. As used in these Bylaws, the term "executive officer" shall mean the President, any Vice President in charge of a principal business unit, division or function or any other officer who performs a policy-making function. The Board may delegate to any executive officer the power to appoint any subordinate officers and to prescribe their respective terms of office, authority and duties. Any two or more offices may be held by the same person. Unless an officer dies, resigns or is removed from office, he or she shall hold office until his or her successor is appointed.
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4.2 |
Resignation of Officers |
Any officer may resign at any time by delivering an executed notice to the corporation. The resignation is effective upon delivery, unless the notice of resignation specifies a later effective date, and, unless otherwise specified, the acceptance of the resignation shall not be necessary to make it effective.
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4.3 |
Removal of Officers |
Any officer may be removed by the Board at any time, with or without cause. An officer or assistant officer, if appointed by another officer, may be removed by any officer authorized to appoint officers or assistant officers.
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4.4 |
Contract Rights of Officers |
The appointment of an officer does not itself create contract rights.
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4.5 |
Chairperson of the Board |
If appointed, the Chairperson of the Board shall perform the duties assigned to him or her by the Board from time to time, and shall preside over meetings of the Board and shareholders unless another officer is appointed or designated by the Board as Chairperson of the meetings.
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4.6 |
President |
If appointed, the President shall be the chief executive officer of the corporation unless some other officer is so designated by the Board, shall preside over meetings of the Board and shareholders in the absence of a Chairperson of the Board, and, subject to the Board's control, shall supervise and control all of the assets, business and affairs of the corporation. In general, the President shall perform all duties incident to the office of President and other duties prescribed by the Board from time to time. If no Secretary has been appointed, the President shall have responsibility for the preparation of minutes of meetings of the Board and shareholders and for authentication of the records of the corporation.
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4.7 |
Vice President |
In the event of the death of the President or a vacancy in the office of the President, or his or her inability to act, the Vice President shall perform the duties of the President, except as may be limited or otherwise determined by resolution of the Board, with all the powers of and subject to all the restrictions upon the President. If there is more than one Vice President, the Vice President who was designated by the Board as the successor to the President, or if no Vice President is so designated, the Vice President first elected to the office of Vice President, shall perform the duties of the President, except as may be limited by resolution of the Board, with all the powers of and subject to all the restrictions upon the President. Vice Presidents shall perform other duties as from time to time may be assigned to them by the President or by or at the direction of the Board.
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4.8 |
Secretary |
If appointed, the Secretary shall be responsible for preparation of minutes of the meetings of the Board and shareholders, maintenance of the corporation records and stock registers, and authentication of the corporation's records and shall in general perform all duties incident to the office of Secretary and other duties as from time to time may be assigned to him or her by the President or by or at the direction of the Board. In the absence of the Secretary, an Assistant Secretary may perform the duties of the Secretary.
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4.9 |
Treasurer |
If appointed, the Treasurer shall have charge and custody of and be responsible for all funds and securities of the corporation, receive and give receipts for funds due and payable to the corporation from any source whatsoever, and deposit funds in the name of the corporation in banks, trust companies or other depositories selected in accordance with the provisions of these Bylaws, and in general perform all duties incident to the office of Treasurer and other duties as from time to time may be assigned to him or her by the President or by or at the direction of the Board. In the absence of the Treasurer, an Assistant Treasurer may perform the duties of the Treasurer.
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4.10 |
Salaries |
The salaries of the officers shall be fixed from time to time by the Board or by any person or persons to whom the Board has delegated authority to set salaries of officers. No officer shall be prevented from receiving a salary by reason of the fact that he or she is also a director of the corporation.
SECTION 5. CERTIFICATES FOR SHARES AND THEIR TRANSFER
|
5.1 |
Issuance of Shares |
No shares of the corporation shall be issued unless authorized by the Board, or by a committee designated by the Board to the extent the committee is empowered to do so.
|
5.2 |
Certificates for Shares |
Certificates representing shares of the corporation shall be signed, either manually or in facsimile, (i) by any two officers designated by the Board, or (ii) if no specific designation is made, by the Chairperson of the Board, the President or any Vice President and by the Treasurer or any Assistant Treasurer or the Secretary or any Assistant Secretary and shall include on their face written notice of any restrictions that may be imposed on the transferability of the shares. All certificates shall be consecutively numbered or otherwise identified.
|
5.3 |
Issuance of Shares Without Certificates |
The Board may authorize the issuance of some or all of the shares of any or all of the corporation's classes or series without certificates. The authorization does not affect shares already represented by certificates until they are surrendered to the corporation. Within a reasonable time after the issuance or transfer of shares without certificates, the corporation shall send the shareholder a complete record containing the information required on certificates by applicable Washington law.
|
5.4 |
Stock Records |
The stock transfer books shall be kept at the principal office of the corporation or at the office of the corporation's transfer agent or registrar. The name and address of each person to whom certificates for shares are issued, together with the class and number of shares represented by the certificate and the date of issuance of the certificate shall be entered on the stock transfer books of the corporation. The person in whose name shares stand on the books of the corporation shall be deemed by the corporation to be the owner for all purposes.
|
5.5 |
Restriction on Transfer |
Except to the extent that the corporation has obtained an opinion of counsel acceptable to the corporation that transfer restrictions are not required under applicable securities laws, or has otherwise satisfied itself that transfer restrictions are not required, all certificates representing shares of the corporation shall bear a legend on the face of the certificate, or on the reverse of the certificate if a reference to the legend is contained on the face, which reads substantially as follows or that substantially effects the same purpose:
The securities evidenced by this certificate have not been registered under the Securities Act of 1933, as amended (the "Act"), or applicable state securities laws, and no interest may be sold, distributed, assigned, offered, pledged or otherwise transferred unless (a) there is an effective registration statement under the Act and applicable state securities laws covering the transaction involving these securities, (b) the corporation receives an opinion of legal counsel for the holder of these securities satisfactory to the corporation stating that the transaction is exempt from registration, or (c) the corporation otherwise satisfies itself that the transaction is exempt from registration.
|
5.6 |
Transfer of Shares |
The transfer of shares of the corporation shall be made only on the stock transfer books of the corporation pursuant to authorization or document of transfer made by the holder of record or by the holder's legal representative, who shall furnish proper evidence of authority to transfer, or by the holder's attorney-in-fact authorized by power of attorney duly executed and filed with the Secretary of the corporation. All certificates surrendered to the corporation for transfer shall be canceled and no new certificate shall be issued until the former certificates for a like number of shares have been surrendered and canceled.
|
5.7 |
Lost or Destroyed Certificates |
In the case of a lost, destroyed or damaged certificate, a new certificate may be issued in its place upon terms and indemnity to the corporation as the Board may prescribe.
SECTION 6. INDEMNIFICATION
|
6.1 |
Right to Indemnification |
Each person who was, is or is threatened to be made a party to or is otherwise involved (including, without limitation, as a witness) in any threatened, pending or completed action, suit, claim or proceeding, whether civil, criminal, administrative or investigative and whether formal or informal (a "proceeding"), by reason of the fact that he or she is or was a director or officer of the corporation or, that being or having been a director or officer of the corporation, he or she is or was serving at the request of the corporation as a director, officer, partner, trustee, employee or agent of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise (an "indemnitee"), whether the basis of a proceeding is alleged action in an official capacity or in any other capacity while serving as a director, officer, partner, trustee, employee or agent, shall be indemnified and held harmless by the corporation against all losses, claims, damages (compensatory, exemplary, punitive or otherwise), liabilities and expenses (including attorneys' fees, costs, judgments, fines, ERISA excise taxes or penalties, amounts to be paid in settlement and any other expenses) actually and reasonably incurred or suffered by the indemnitee in connection with the proceeding, and the indemnification shall continue as to an indemnitee who has ceased to be a director or officer of the corporation or a director, officer partner, trustee, employee or agent of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise and shall inure to the benefit of the indemnitee's heirs, executors and administrators. Except as provided in Section 6.4 with respect to proceedings seeking to enforce rights to indemnification, the corporation shall indemnify the indemnitee in connection with a proceeding (or part of a proceeding) initiated by the indemnitee only if a proceeding (or part of a proceeding) was authorized or ratified by the Board. The right to indemnification conferred in this Section shall be a contract right.
|
6.2 |
Restrictions on Indemnification |
No indemnification shall be provided to any indemnitee for acts or omissions of the indemnitee finally adjudged to be intentional misconduct or a knowing violation of law, for conduct of the indemnitee finally adjudged to be in violation of RCW 23B.08.310, for any transaction with respect to which it was finally adjudged that the indemnitee personally received a benefit in money, property or services to which the indemnitee was not legally entitled or if the corporation is otherwise prohibited by applicable law from paying indemnification. Notwithstanding the foregoing, if RCW 23B.08.560 is amended, the restrictions on indemnification set forth in this Section 6.2 shall be as set forth in the amended statutory provision.
|
6.3 |
Advancement of Expenses |
The right to indemnification conferred in this Section shall include the right to be paid by the corporation the expenses incurred in defending any proceeding in advance of its final disposition (an "advancement of expenses"). An advancement of expenses shall be made upon delivery to the corporation of an undertaking (an "undertaking"), by or on behalf of the indemnitee, to repay all amounts so advanced if it shall ultimately be determined by final judicial decision from which there is no further right to appeal that the indemnitee is not entitled to be indemnified.
|
6.4 |
Right of Indemnitee to Bring Suit |
If a claim under Section 6.1 or 6.3 of these Bylaws is not paid in full by the corporation within 60 days after a written claim has been received by the corporation, except in the case of a claim for an advancement of expenses, in which case the applicable period shall be 20 days, the indemnitee may at any time thereafter bring suit against the corporation to recover the unpaid amount of the claim. If successful in whole or in part, in any such suit or in a suit brought by the corporation to recover an advancement of expenses pursuant to the terms of an undertaking, the indemnitee shall be entitled to be paid also the expense of litigating the suit. The indemnitee shall be presumed to be entitled to indemnification under this Section upon submission of a written claim (and, in an action brought to enforce a claim for an advancement of expenses, when the required undertaking has been tendered to the corporation) and thereafter the corporation shall have the burden of proof to overcome the presumption that the indemnitee is so entitled.
|
6.5 |
Procedures Exclusive |
Pursuant to RCW 23B.08.560(2) or any successor provision, the procedures for indemnification and the advancement of expenses set forth in this Section are in lieu of the procedures required by RCW 23B.08.550 or any successor provision.
|
6.6 |
Nonexclusivity of Rights |
Except as set forth in Section 6.5 of these Bylaws, the right to indemnification and the advancement of expenses conferred in this Section shall not be exclusive of any other right that any person may have or hereafter acquire under any statute, provision of the Articles of Incorporation or Bylaws of the corporation, general or specific action of the Board or shareholders, contract or otherwise. Notwithstanding any amendment or repeal of this Section, or of any amendment or repeal of any of the procedures that may be established by the Board pursuant to this Section, any indemnitee shall be entitled to indemnification in accordance with the provisions of these Bylaws and those procedures with respect to any acts or omissions of the indemnitee occurring prior to the amendment or repeal.
|
6.7 |
Insurance, Contracts and Funding |
The corporation may maintain insurance, at its expense, to protect itself and any director, officer, partner, trustee, employee or agent of the corporation or another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise against any expense, liability or loss, whether or not the corporation would have the authority or right to indemnify the person against the expense, liability or loss under the Washington Business Corporation Act or other law. The corporation may enter into contracts with any director, officer, partner, trustee, employee or agent of the corporation in furtherance of the provisions of this Section and may create a trust fund, grant a security interest or use other means (including, without limitation, a letter of credit) to ensure the payment of the amounts as may be necessary to effect indemnification as provided in this Section.
|
6.8
|
Indemnification of Employees and Agents of the Corporation |
In addition to the rights of indemnification set forth in Section 6.1, the corporation may, by action of the Board, grant rights to indemnification and advancement of expenses to employees and agents or any class or group of employees and agents of the corporation (a) with the same scope and effect as the provisions of this Section with respect to indemnification and the advancement of expenses of directors and officers of the corporation; (b) pursuant to rights granted or provided by the Washington Business Corporation Act; or (c) as are otherwise consistent with law.
|
6.9 |
Persons Serving Other Entities |
Any person who, while a director or officer of the corporation, is or was serving (a) as a director, officer, employee or agent of another corporation of which a majority of the shares entitled to vote in the election of its directors is held by the corporation or (b) as a partner, trustee or otherwise in an executive or management capacity in a partnership, joint venture, trust, employee benefit plan or other enterprise of which the corporation or a wholly owned subsidiary of the corporation is a general partner or has a majority ownership, shall conclusively be deemed to be so serving at the request of the corporation and entitled to indemnification and the advancement of expenses under Sections 6.1 and 6.3.
SECTION 7. GENERAL MATTERS
|
7.1 |
Accounting Year |
The accounting year of the corporation shall be the calendar year, but if a different accounting year is at any time selected by the Board for purposes of federal income taxes, or any other purpose, the accounting year shall be the year so selected.
|
7.2 |
Amendment or Repeal of Bylaws |
These Bylaws may be altered, amended or repealed and new Bylaws may be adopted by the Board, except that the Board may not amend or repeal any Bylaw that the shareholders have expressly provided, in amending or repealing the Bylaw, may not be amended or repealed by the Board. The shareholders may also alter, amend and repeal these Bylaws or adopt new Bylaws. All Bylaws made by the Board may be amended, repealed, altered or modified by the shareholders.
|
7.3 |
Books and Records |
The corporation shall:
(a) Keep as permanent records minutes of all meetings of its shareholders and the Board, a record of all actions taken by the shareholders or the Board without a meeting, and a record of all actions taken by a committee of the Board exercising the authority of the Board on behalf of the corporation.
(b) Maintain appropriate accounting records.
(c) Maintain or hire an agent to maintain a record of its shareholders, in a form that permits preparation of a list of the names and addresses of all shareholders, in alphabetical order by class of shares showing the number and class of shares held by each.
(d) Maintain its records in written form or in another form capable of conversion into written form within a reasonable time.
(e) Keep a copy of the following records at its principal office:
(i) the Articles of Incorporation and all amendments thereto as currently in effect;
(ii) these Bylaws and all amendments thereto as currently in effect;
(iii) the minutes of all meetings of shareholders and records of all action taken by shareholders without a meeting, for the past three years;
(iv) the financial statements described in RCW 23B.16.200(1), for the past three years;
(v) all communications in the form of a record to shareholders generally within the past three years;
(vi) a list of the names and business addresses of the current directors and officers; and
(vii) the most recent annual report delivered to the Washington Secretary of State.
|
7.4 |
Contracts, Loans, Checks and Deposits |
| 7.4.1 | Contracts |
The Board may authorize any officer or officers, or agent or agents, to enter into any contract or execute and deliver any instrument in the name of and on behalf of the corporation. The authority may be general or confined to specific instances.
| 7.4.2 | Loans to the Corporation |
No loans shall be contracted on behalf of the corporation and no evidences of indebtedness shall be issued in its name unless authorized by a resolution of the Board. The authority may be general or confined to specific instances.
| 7.4.3 | Checks, Drafts, Etc. |
All checks, drafts or other orders for the payment of money, notes or other evidences of indebtedness issued in the name of the corporation shall be signed by the officer or officers, or agent or agents, of the corporation and in the manner from time to time determined by resolution of the Board.
| 7.4.4 | Deposits |
All funds of the corporation not otherwise employed shall be deposited from time to time to the credit of the corporation in banks, trust companies or other depositories selected by the Board.
|
7.5 |
Corporate Seal |
The Board may provide for a corporate seal that shall consist of the name of the corporation, the state of its incorporation and the year of its incorporation.
Exhibit 99.1
ClearSign Technologies Corporation Provides Second Quarter 2021 Update
SEATTLE, September 8, 2021 -- ClearSign Technologies Corporation (Nasdaq: CLIR) ("ClearSign" or the "Company"), an emerging leader in industrial combustion and sensing technologies that improve energy, operational efficiency and safety while dramatically reducing emissions, today provides an update on operations for the second quarter ended on June 30, 2021.
“This last quarter has been a mix of great progress and encouragement as we move multiple product lines through the technical stages of commercialization and customer engagement,” Jim Deller, Ph.D., Chief Executive Officer of ClearSign. “Admittedly, the past days have not been without some frustration. What continues to bring me confidence are the developments in the strategic alliances we have made and the technical and commercial maturing of both our major product lines, both of which feed the strengthening of our proposal pipeline,” concluded Dr. Deller.
Recent strategic and operational highlights during and subsequent to the second quarter of 2021 include:
Advanced process burner performance capabilities to meet or exceed normal refinery requirements: On fuel gas blends ranging from natural gas to blends with 80% hydrogen content, including in extremely tight multi burner settings, the Company’s burners operate over a turn-down range from 100% of design firing rate down to 20%. The burners can light off on any fuel in that range, including from a cold start when the furnace is full of fresh air. Depending on heater conditions, ClearSign can make NOx guarantees typically between 5ppm and 9ppm.
Performed witness test and shipped process burner to Super Major’s refinery in Europe: The burner has been installed and awaits startup which is expected early in the fourth quarter this year. This project will be the first Super Major process burner installation, and the first in Europe.
Received, commissioned and held customer demonstrations with a newly fabricated 125hp ClearSign Core fire tube boiler burner: Burner demonstrates sub 2.5ppm NOx. This was the first product demonstration as part of the agreement with California Boiler for the sale and installation of "ClearSign Core™" enabled ultra-low NOx boiler burners into the U.S. market. The boiler has been deployed in recent days for use at a customer site.
500hp burner designed and delivered to California: Burner is being commissioned and readied for customer demonstrations.
Joined the Russell Microcap® Index: The Company was added to the index at the conclusion of the 2021 Russell indexes annual reconstitution which became effective after the US market opened on June 28th.
Completed the Performance Testing and Application for Firetube Boiler Burner Certification in China and subsequently received certification: With this certification, the Company can produce, market and sell its 125hp fire tube boiler burners throughout China.
Cash, cash equivalents and short term investments were approximately $10,600,000 on June 30, 2021.
There were 31,479,454 shares of our common stock issued and outstanding as of June 30, 2021.
The Company will be hosting a call at 5:00 PM ET today. Investors interested in participating on the live call can dial 1-866-372-4653 within the U.S. or 1-412-902-4217 from abroad. Investors can also access the call online through a listen-only webcast at https://www.webcaster4.com/Webcast/Page/987/42573 or on the investor relations section of the Company's website at http://ir.clearsign.com/overview.
The webcast will be archived on the Company's investor relations website for at least 90 days and a telephonic playback of the conference call will be available by calling 1-877-344-7529 within the U.S. or 1-412-317-0088 from abroad. Conference ID 10159749. The telephonic playback will be available for 7 days after the conference call.
About ClearSign Technologies Corporation
ClearSign Technologies Corporation designs and develops products and technologies for the purpose of improving key performance characteristics of industrial and commercial systems, including operational performance, energy efficiency, emission reduction, safety and overall cost-effectiveness. Our patented technologies, embedded in established OEM products as ClearSign Core™ and ClearSign Eye™ and other sensing configurations, enhance the performance of combustion systems and fuel safety systems in a broad range of markets, including the energy (upstream oil production and down-stream refining), commercial/industrial boiler, chemical, petrochemical, transport and power industries. For more information, please visit www.clearsign.com.
Cautionary note on forward-looking statements
All statements in this press release that are not based on historical fact are “forward-looking statements.” You can find many (but not all) of these statements by looking for words such as “approximates,” “believes,” “hopes,” “expects,” “anticipates,” “estimates,” “projects,” “intends,” “plans,” “would,” “should,” “could,” “may,” “will” or other similar expressions. While management has based any forward-looking statements included in this press release on its current expectations on the Company’s strategy, plans, intentions, performance, or future occurrences or results, the information on which such expectations were based may change. These forward-looking statements rely on a number of assumptions concerning future events and are subject to a number of risks, uncertainties and other factors, many of which are outside of our control, that could cause actual results to materially differ from such statements. Such risks, uncertainties and other factors include, but are not limited to, general business and economic conditions, the performance of management and our employees, our ability to obtain financing, competition, whether our technology will be accepted and adopted and other factors identified in our Annual Report on Form 10-K filed with the Securities and Exchange Commission and available at www.sec.gov and other factors that are detailed in our periodic and current reports available for review at www.sec.gov. Furthermore, we operate in a competitive environment where new and unanticipated risks may arise. Accordingly, investors should not place any reliance on forward-looking statements as a prediction of actual results. We disclaim any intention to, and, except as may be required by law, undertake no obligation to, update or revise forward-looking statements to reflect events or circumstances that subsequently occur or of which we hereafter become aware.
For further information:
Investor Relations:
Matthew Selinger
Firm IR Group for ClearSign
+1 415-572-8152
mselinger@firmirgroup.com
Exhibit 99.2
ClearSign Technologies Corporation [CLIR]
Second Quarter 2021 Conference Call
Wednesday, September 8, 2021, 5:00 PM ET.
Company Participants:
Matthew Selinger, Firm IR Group
Jim Deller, President and Chief Executive Officer
Analysts and Private Investors:
Amit Dayal, H.C. Wainwright
Robert Kecseg, Las Colinas Capital Management
Jeff Feinglass, Private Investor
Robert Harvey, Private Investor
Robert Kecseg, Las Colinas Capital Management
Marshall Crowe, Private Investor
Presentation
Operator: Good day, and welcome to the ClearSign Technologies Second Quarter 2021 Conference Call. (Operator Instructions). After today's presentation, there will be an opportunity to ask questions. (Operator Instructions). Please note this event is being recorded.
I would now like to turn the conference over to Matthew Selinger of Firm IR Group. Please go ahead.
Matthew Selinger: Good afternoon, and thank you, operator. Welcome, everyone, to the ClearSign Technologies Corporation second quarter 2021 results conference call.
During this conference call, the Company will make forward-looking statements. Any statement that is not a statement of historical fact is a forward-looking statement. This includes remarks about the Company's projections, expectations, plans, beliefs and prospects. These statements are based on judgments and analysis as of the date of this conference call, and are subject to numerous important risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements.
The risks and uncertainties associated with the forward-looking statements made in this conference call include, but are not limited to, whether field testing and sales of ClearSign's products will be successfully completed, whether ClearSign will be successful in expanding the market for its products, and other risks that are described in ClearSign's public periodic filings with the SEC, including the discussion in the Risk Factors section of the 2020 Annual Report on the Form 10-K.
Except as required by law, ClearSign assumes no responsibility to update these forward-looking statements to reflect future events or actual outcomes and does not intend to do so.
On the call with me today are Jim Deller, ClearSign's President and Chief Executive Officer. So at this point, I would like to turn the call over to CEO Jim Deller. Jim, please go ahead.
Jim Deller: Thank you, Matthew, and thank you, everyone, for joining us today for ClearSign's second quarter 2021 investor update call. This last quarter has been a mix of great progress and encouragement, as we moved multiple product lines through the technical stages of commercialization and customer engagement. Admittedly, I will say though, the past weeks have not been without some frustration and separately, some sadness.
Before I start and review the financial data reported in our second quarter 10-Q, I want to remember the passing of our CFO, Brian Fike. I'm sure that many of you saw the announcement that Brian Fike passed away at the end of July. Collectively, we are deeply saddened by Brian's passing, and the entire ClearSign community continues to mourn his loss. And on behalf of our Board of Directors and employees, we extend our sincerest condolences to his family. Brian gave many years to this company and I want to recognize his contribution. Brian was a great colleague and friend to all at ClearSign. We will all miss him.
For reassurance regarding succession, we have engaged some very competent professional temporary staff to maintain our finance function and further develop and strengthen our systems. However at the same time, we are working with a nationwide recruitment firm to find a next permanent leader of our finance team.
On the call today, I will provide our financial overview. I will then move on to our operational update. In that, regarding the major topics, I will start off with an overview of our process burner business, giving an update on our projects for the 2 international super-major refiners and also the performance and developments with our operational installations. I'll then move the discussion to our boiler burner business, where we have made significant developments since our last call. In my remarks, I will address North America and China, as well as the advances we have made in both our firetube and watertube products. After some general business-related and closing remarks, we will open up the call for questions and answers.
Reviewing our financial data, as reported in our recently filed 10-Q, our net cash used in operations for quarter ended June 30, 2021, was $2.16 million, compared to $1.65 million for the same period in 2020. I will go into detail on this temporary increase shortly.
Our cash and cash equivalents were approximately $10.6 million at the end of the second quarter of 2021, compared to approximately $10.7 million at the end of the first quarter 2021.
I want to give some details behind these numbers because we do continue to be very conscious of our expenditures. Plus, we also has certain key projects and technologies to prove, and to be meaningful, this has to be done at the industrial scale. As these testing activities are a necessary step in the commercialization and adoption of our technology in the industry, we are pushing ahead to complete them. These tests will not be a permanent activity, so this will pass, but we are seeing increased cash consumption while these product-proving activities are in progress.
Primary among these is the expansion of our process burner capability and secondly, the proving of our new firetube and watertube boiler burner technology. I will go into more detail regarding these product lines later on this call. The key point is that the increased operating expenses are not a change in our management philosophy for the short term, nonetheless, a necessary activity that will pass.
As stated in our recent 10-Q filing, our operating expenses for the second quarter increased by 28% or just under $450,000 compared to the same period last year.
In addition to the increased testing cost referred to earlier, during the second quarter, we made payments and accruals for the recruitment of a new leader for our finance team, and additional costs required for temporary staff to maintain our finance function until the position is filled. And finally, an accrual for a severance payment agreed with Mr. Fike as part of his separation agreement. To clarify timing, these payments were agreed to in April and therefore, are included as an accrual in the second quarter.
As of June 30, 2021, the company has sold an aggregate of 1,092,570 shares of common stock under its ATM program at an average price of $5.03 per share. Gross proceeds totaled approximately $5.5 million and net cash proceeds approximated $5.3 million. Shares sold in the ATM program in the 3 months ended June 30, 2021, totaled 151,822 at an average price of $5.56.
It should be noted that cash received from our ATM program in the second quarter included approximately $1.1 million from shares sold in the last 2 days of the first quarter, but settled in Q2.
There were 31,479,454 shares of our common stock issued and outstanding as of June 30, 2021. We have confidence in our financial position and balance sheet, and with our quarter-ending balances, we have sufficient working capital available to carry us well into 2022 and that is without revenue from any other sources.
I will now change focus and address our major product lines. And we'll start with our process burner technology. As you will have seen from a press release issued September 3, on a call the day before on which we were expecting to make arrangements for the final stakeholder performance demonstrations for ExxonMobil, and possibly discuss the schedule for the delivery of the burners, we were given verbal notification to put our testing on hold because the time window to include the burners in the early 2022 turnaround ended in August, and all the details required had not been finalized.
This news of the project hold was both very disappointing and a surprise to all at ClearSign. Upon reflection, despite this change in plans, we have a lot to be encouraged about. We have given the development of our process burner technology great emphasis, to the point that our burners are now capable of running on virtually any fuel blend required by refineries, including up to an 80% hydrogen content. We have demonstrated that our burners can run when situated so close together that they are almost touching each other, a challenge in itself, as refinery engineers know. They have turn-down capabilities that match or exceed the usable operating range of most traditional burners, and can modulate up and down without human input based on the demands of our refinery operating systems and all with our unique 5 ppm-capable NOx control.
For those in the industry, especially customers and engineering companies, and to enable everyone to be aware of what this means, I want to take a minute and go into the quantitative details of these capabilities because they are important. ClearSign Core process burners now run on fuel gases ranging from natural gas to blends with up to 80% hydrogen content and operate over a turn-down range of 5 to 1, or non-industry terminology, from 100% of design firing rate down to 20% of design firing rate. The burners can light off smoothly on any fuel in that range, including from a cold start when the furnace is full of fresh air. Depending on the heater operating conditions, we will make NOx guarantees typically between 5 ppm and 9 ppm, including under the conditions just described.
Regarding proven operational site NOx performance, the formal third-party emissions report from our multi-burner infrastructure project has not yet been released. But we did take our own measurements at the same time, which were consistent with those of the outside measurement company. For that project, we guaranteed 7 ppm NOx, and our measurements indicated just over 6 ppm of full rate with a heavy hydrocarbon, low-pressure waste stream flowing in addition to the normal fuel gas. We believe that were these burners to run on normal fuel gas alone, the NOx performance would be even better.
As our testing is run in the test facility of our partner Zeeco, they are very familiar with the development and capabilities of our technology. We believe that our relationship with Zeeco remains strong, and that we are both looking forward to developing this business. We have attracted great interest in our technology, both due to its NOx control and ability to function at high intensity and enclosed confines, and are in discussions with major multi-site and global refiners seeking our burners for both attributes.
We have other significant process burner projects ongoing and in place. The burner for the super-major global refining customer in Europe has been shipped, is onsite and ready to fire up, which is scheduled to occur early in the fourth quarter of this year. This project will be the first installation of the super-major global refiner for the company and also the first in Europe. While solving a need for our customer in Europe, it is our understanding that this is also a trial opportunity for this client to assess our technology for inclusion in their NOx reduction plans, particularly for their refineries in California. We do look forward to completing this installation and start-up, and I'll make an announcement when this has been achieved.
Our installation for the Fortune 500 infrastructure company continues to run seamlessly. The data that we recorded and the results of the independent testing, to the extent that we are aware of them, have shown the heater operating below the groundbreaking emissions guarantee, some news of which I gave earlier in my technical digression. The full report is still within the review period required by the South Coast Air Quality Management District, and we do not know if any formal announcement will be made by them at the end of this period. If we learn anything official, we will pass that on.
It is quite normal for respective customers to seek referrals from existing customers. And we do know that the engineering company involved in this project has provided good references for us when requested by prospective new customers.
The burners installed at World Oil continue to operate at full rate and consistently. We are in regular contact with Oil. As we mentioned previously, 3 of the burners need to be optimized, as they were hindered by control issues during the original start-up earlier this year. And we are planning to return to modify those burners to their original condition when the refinery shuts down. And this is anticipated to be early in the first quarter next year.
In general, we are seeing more and more interest in our technology. This is a mix of clients with different needs, and who are looking to address an active project, as well as those assessing technical and commercial options as part of future planning, budgeting processes or feasibility studies. As we have said before, I believe there's a great awareness of ClearSign’s capabilities in the eyes of the industry. But we also need to recognize that we need success to breed success, and that we anticipate being able to provide knowledge of successful installations, case studies and similar references will be one of our most powerful sales attributes, especially considering the conservative nature of our industry.
It is also worth noting that all the aforementioned projects have been supplied through our collaboration with Zeeco, who continue to be a very supportive and proficient partner. In fact, this relationship has provided benefits in other verticals, one of which I will touch on coming up later in my commentary.
Turning to boiler burners, at the time of our last call, we were awaiting a new USA-fabricated 125-horsepower burner to shift to the California Boiler site in Visalia, California, in the center of the San Joaquin Valley. That has been completed; the burner arrived and California Boiler installed the burner, fabricated the fuel gas supply system and burner controls. We worked together to fine-tune the burner and finally conducted our first firetube customer demonstration event with California Boiler. The demonstration went very well, attracting over 20 visitors from a wide range of industries including the local regulatory authority.
The gas analyzer screen showing performance of the burner at well below 2.5 ppm NOx and some other photographs from the event were posted on LinkedIn, where we share many company updates. The operation of this burner has since been independently verified by a third-party source testing firm as meeting the local regulatory requirements. Ultimately, this demonstration also led to multiple requests for proposals.
The boiler into which our burners are installed is a rental unit owned by California Boiler. And since the demonstration, the boiler has been relocated, and is being set up for service in a milk processing plant, providing a great reference for us and a collaboration with California Boiler, and giving a customer first-hand experience of a ClearSign Core burner. This also provides the ability to obtain ongoing operational data, which we will be able to share in support of future sales and marketing efforts.
To expand our product range, we now have fabricated and delivered a much larger 500-horsepower firetube boiler burner to California Boiler’s Visalia site. This burner is currently being installed in a second, much bigger rental boiler. We are anticipating holding a customer demonstration event with substantially larger audience to show this burner in operation in October of this year. This 500-horsepower size is critical to our plans, as regulations for new and existing boilers of this size and above in the California San Joaquin Valley require NOx emissions below 2.5 ppm. And we believe that there are no other burner technologies with the capability to operate near this level.
Even outside of the San Joaquin Valley region, the capability to provide a burner that could control NOx emissions comfortably below burner requirements, and avoid the cost of installing and maintaining selective catalytic reduction units, a/k/a SCRs, in addition to the operational demands handling the ammonia or urea required to operate them has great value and interest from potential customers. As environmental emission regulations are enforced and deadlines for compliance get closer, we expect the demand for this technology to grow. It also helps that our partner, California Boiler, has a well-established operation and a long client list in this region.
Aside from the favorable market traction for these burners in California, rolling out this technology in the USA also enables us to provide and optimize the burners where we have our own technical resources to work on them, and to then build and test similar burners in China for certification. This allows us to maintain overall progress despite experiencing severe limitations in our ability to work in China, as Covid makes it difficult to get personnel into China. As I speak here today, however, our President of ClearSign Asia, Manny Menendez, has been able to enter the country, but is subject to a 3-week confinement as he goes through the quarantine process that is a mandatory precursor to working on the ground in China during these times of Covid travel restrictions.
Following the finalization of our 500-horsepower burner and optimization of fuel gas controls equipment, our plan is to manufacture a copy of that burner in China, and to repeat the certification process that we completed for our 125-horsepower burner. We do not have the schedule for this to be finalized to date, as we need our President of ClearSign Asia to work out logistics with our boiler manufacturer partner there, Jiangsu Shuang Liang Boiler Company Limited.
The situation is similar regarding our 125-firetube boiler burner. We announced the formal certification of this product for sale in China in May of this year. Our next steps are to find first-adopter customers, but as we mentioned before, we want to be both strategic and careful in the way that we go about this. Primarily, we seek customers in areas we have relationships with third-party contractors, who can provide service and also installations where we can control access to our technology, or at least, where we have a high degree of confidence that we can maximize the protection of our intellectual property. Especially in these early stages of our product rollout in China, we want to be able to verify these credentials in person.
We also have developments of our watertube boiler burner I would like to report. For anyone not familiar with the technology, these are much bigger, where the small end of our boiler burner range is 125-horsepower burner we discussed earlier, this watertube boiler burner is 20 times the firing rate. This is a legacy product that we have slated for redesign following the same process as conducted when we developed the commercial design of our firetube boiler burners. The objective of a redesign is to provide a product that is supplied as a single piece, and once designed can be repeated, rather than having to custom-engineer significant components for every product sold, which we believe will enable the product to reproduce and is stored in significant quantities.
While discussing this, I want to recognize the great efforts of our CTO, Dr. Donald Kendrick, for the development of this new burner configuration and the scaling of the new design, up to and including a watertube product. The first one of this new watertube boiler burner design has been manufactured in Tulsa, and is in the final stages of installation into a watertube boiler that makes up part of a test facility at Zeeco. Switching the initial activities of this project to Tulsa has again enabled us to keep momentum despite the Covid restrictions in China.
In addition, operating this burner for the first time in the Zeeco test facility will enable us to optimize any elements of the design, if required, and to efficiently validate the operating sequence for the various fuel circuits involved in this large burner. Upon completion, this will provide a new generation watertube boiler product burner line.
It is pertinent to note at this point that Zeeco also has an operation including fabrication facility in Shanghai, and we are underway producing a twin burner there. Our plan is to arrange for the installation of that burner in China and to proceed with the necessary certifications. However -- and I caution -- we need to obtain an agreement with the Beijing District Heating Group, and coordinate a schedule before this can happen, and with Mr. Menendez just arriving in China and still with some quarantine time ahead of him before he can make any in-person meetings; and considering the volume of activity that is required to complete this installation and Covid travel work limitation, scheduling and timeline is an ongoing work in progress and yet to be defined.
While it has not received much coverage here, we are actively promoting our sensor technology. Our mobile ClearSign Eye demonstration unit is in use to the extent our clients are allowed to meet external visitors in person. We are presenting our sensor technology at the American Flame Research Committee Conference in Houston this October, as well as our ClearSign Core burner technology, emphasizing the performance of our recent installations in a second presentation.
Before ending and moving on to questions, I want to provide a quick review of recent activities and events on the horizon. We are happy that our first super-major process burner is installed in Europe. I look forward to the start-up which is expected in the fourth quarter this year. We believe our process burner technology is developed to the point it provides full functionality of standard burners, in addition to operating in tight quarters and delivering game changing, low NOx emissions; and in cases where heaters are constrained by the size of traditional burner flames, increased throughput. Our process burner opportunity pipeline continues to evolve and we look forward to being able to make future announcements.
Our firetube product, in collaboration with our partner California Boiler, has been demonstrated and well received in California. This has led to significant customer interest and quotation activity on our part. We look forward to moving this business to the truly commercial phase.
We have been able to return to China, and look forward to reengaging with the heating districts and developing our product lines, alliances and sales channels. We anticipate confirming the design and operating protocol for our new advanced and redesigned one-piece ClearSign Core watertube boiler burner product, which we anticipate will open up opportunities like replacing burners for the heating districts in China.
We continue to stick to our asset-light business model, which also means we do not have excess personnel. I do believe we have quality, rather than quantity. Over the past few months, the employees of ClearSign have demonstrated nimbleness and dedication, as we have been pushing our technology in multiple areas to bring it fully to market. As we experience Covid restrictions affecting our ability to push forward full pace in China, our domestic boiler program, in conjunction with California Boiler, was accelerated, and this in a similar timeframe to us getting access to the watertube test boiler in Tulsa, enabling us to put the scaling and final design of that product into high gear.
In parallel, we have developed our process burner technology to meet any normal firing processes of demand. In addition to the above, we have a progression of new inquiries requiring engineering and design input which, of course, we have been pleased to address.
I want to thank the ClearSign employees for what they have done this past quarter, especially our engineers, designers and project managers. It has taken a lot of personal accountability and dedication to do what they have done; and for myself, and on behalf of the Board of Directors, want to acknowledge and thank them for it.
That concludes my prepared remarks at this time. Operator, can you please open up the call for questions?
Questions and Answers
Operator: We will now begin the question-and-answer session. (Operator Instructions). Amit Dayal with H.C. Wainwright.
Amit Dayal: Sorry to hear about Brian. It's been a pretty eventful quarter for you guys. Just starting with this Exxon news, did Exxon go with somebody else? I don't know if you know the answer to that, but did Exxon go with somebody else, rather than you guys? And is that relationship pretty much done?
Jim Deller: So Amit, first of all, the news that we received from Exxon was just a request on their part to put the testing on hold because the time required for the engineering to include our burners into that heater in the upcoming shutdown, basically, the window had passed, so it was a miss on timing. We don't believe there are any other burner technologies being offered on the market today that can get close to what we offer. So I cannot speak for Exxon of our own knowledge of the market and what we're seeing. There is no other burner technology out there.
So what we've got is what we've been told by Exxon, that this was purely a timing miss and the window had passed. Obviously, we're very disappointed, and we are really looking forward to demonstrating those burners. Looking at the -- you asked about the relationship. Exxon, like all refineries, they're a very big potential customer. This is a speed bump in the road for us right here. We were looking to get -- us getting this demonstration in the field. We have made huge and accelerated the development of our process burner technologies to get it ready for the wide range of operating requirements that Exxon presents us with.
But the result is that we are in a much better position now, and we have a burner that will meet, as I said in the remarks, especially any operation or any normal operational or process burner in the industry. They are -- like all refineries, they -- we do foresee NOx reduction requirements, especially being imposed by the air regulation authorities, and first among those being California and the TCEQ in the Texas Gulf Coast area. Exxon is a very big client, and we really look forward to a lot of future business with them. This is just an unfortunate timing, and one reference that we were [looking] to get in the field that, at least from what we told, is not scheduled for the current turnaround next year.
Amit Dayal: Okay. So should we assume that you are still in touch with Exxon, and there is some level of dialogue still ongoing with Exxon?
Jim Deller: Oh, of course, yes, we are touch with the team. And long term, again, Exxon is a big refiner; they have a lot of assets in the Gulf Coast region. We believe that there's going to be emission requirements there, so we actually see them as a very big and very important customer. And we truly value the opportunity of business with them down the road.
Amit Dayal: Okay. Understood. I'll move on to sort of the associated relationship with Zeeco. At least initially, the understanding was that the Zeeco partnership was somewhat dependent on Exxon coming through and that deployment coming through for you guys. I know you've commented that the partnership with Zeeco is still supportive, etc. But do you now need maybe sort of a new agreement with Zeeco that is independent a little bit of the Exxon qualifier, or is that not necessary?
Jim Deller: No, Exxon passed the news onto us late Thursday last week. We do have a very good and close relationship with Zeeco. And in fact, the first call I made was to only just to explain the call we had and that Exxon was running out of time for their turnaround. We confirmed that that relationship remains strong. There, (indiscernible), the testing that we're doing is being done at the Zeeco test facility. Our engineers and the Zeeco engineers are working hand-in-hand, and in that testing, they're firing our burners with us. So they are intimately familiar with the developments we've made to the technology and the capability of our technology, but also the interactions we have with customers and of inquiries and quotations that we're sending out.
Those quotations are typically needing, obviously, the burners we fabricated at Zeeco. And there will be testing for scheduled in the Zeeco test facilities. So obviously, it's kind of an internal relationship, but they have knowledge of the traction and the market interest in our burners as well. So the Exxon agreement was referenced, as we set our initial collaboration up with Zeeco, but they are very much engaged with us. I believe we are both looking forward to growing this business.
And just as an aside, I mentioned the watertube boiler burner as well. That boiler burner is being tested at the Zeeco facilities. They've expanded their other product lines that we are working with them on, at least for testing. They manufacture the burner in Tulsa, but also because the very big market for that watertube boiler burner is in China, and they have a fabrication facility, in fact, a very active office in Shanghai, they're actually fabricating a twin burner for us over there. So we have ongoing and expanding engagements with Zeeco.
Amit Dayal: Okay. Understood. And then maybe just one last one for me. With respect to the China opportunity, is expecting any deployments or revenues from China in 2021 a bit aggressive, or is that still possible?
Jim Deller: It's still possible, Amit. As I said, the Covid travel restrictions have persisted much longer and much more strongly regarding Covid in China than we ever expected. We do want to make sure primarily that we protect our IP. And so where we do make our first sales, we want to make sure that we do those or select those customers carefully. And I do want to make sure that our Manny Menendez, the ClearSign President in Asia, gets to visit those sites, and just to make sure that we are installing these burners for the first units into the right facilities.
And because of that caution, no, it's possible we'll get some sales this year. But I really want to prioritize safeguarding our IP over just rushing to make a sale. I know everyone is waiting for a sale, but we've really got to look at the long-term business. So I guess the short answer is it's possible, but it's -- I'm certainly not wanting to give an impression that it should be expected.
Amit Dayal: Okay. Understood. I'll take my other questions (inaudible). That's all I have for now, thank you.
Operator: Jeff Feinglass, a private investor.
Jeff Feinglass: Jim, I think you just touched on this, but I just want to follow up with it. Given the news from Exxon and their delay, do you think that this has thwarted or any way reversing the traction you have with other super-majors or refiners and process burners inside those refineries?
Jim Deller: Jeff, the short answer is no, but let me give a little bit of background. Obviously, we're very disappointed to hear from Exxon, and we're looking forward to getting those burners demonstrated. But as we -- we need to take a step back and look at what this really means in the big picture of our strategy. And the reality is that we continue to execute the strategy that we started when I first joined ClearSign back in early 2019; and that was develop a technology that would make it easy to use and easy to incorporate in our customers, our refineries and their business, and then to engage with collaborative partners who are well established in the industry to provide a channel to market and help us conduct that business. And that has not changed.
I don't want to belittle the disappointment, but the Exxon asking us to put the testing on hold affects the timing of one installation. The bigger outcome is through the engagement. As I mentioned really with Amit, we have accelerated the development of our process burner technology to the point that it meets virtually all refinery needs and matches the operation of regular burners. And in addition, of course, we've maintained our NOx control and the value we can offer to enable our customers to avoid having to install SCRs.
Our first super-major installation, when we're talking of references, is installed and ready to be started up in Europe. I'm not aware of a single comment from customers, or for that matter of fact, anyone in the industry, regarding the ExxonMobil request to put our testing on hold. What we have seen is a notable uptick in customer engagement based on the operating capabilities that we've been able to develop for our process burner over the past few months.
Jeff Feinglass: Got it, yes. Thank you for that. I just wanted -- thank you for clarifying that, appreciate it.
Operator: (Operator Instructions). Robert Harvey, a private investor.
Robert Harvey: Thank you for your earlier comments, and sorry that you had to deal with the two big issues you had in one quarter here. Can you say a little bit more about the demonstration that Exxon has to use the language put on hold? This was going to be -- this is not further testing at the Zeeco facility; this was to be a partial install or something at an Exxon facility? Like what additional evidence did they need?
And it just seems surprising that -- I believe that earlier, we were talking about an installation possibly to one of their refineries in 2021 that was delayed to have further testing to demonstrate broader capability. But how can it be a surprise that suddenly, at the end of August, and they didn't have the data they needed? It sounds like with Zeeco, you demonstrated all the capabilities that they needed. Is this the hurricane that has like switched manpower at Exxon to Baton Rouge from Baytown, or it's just -- it seems like suddenly, the deadline snuck up. These things are done very carefully with long lead times. I'm having a problem understanding this was suddenly a surprise. And put on hold means that they're coming back to do it, what, in Jan of 2023, or like what can you say about what you think their thinking is?
Jim Deller: Well, thanks for the question. I'm not going to [presume] to -- it's not my place to speculate as to Exxon's thinking. What we know, we were looking forward to demonstrating these burners. The operating criteria that I went through, we believe, met all of the requirements. We were looking -- we expected on the call that we were going to be able to arrange for their final witness, and hopefully, for the -- how to transport the burners down to the site (indiscernible) expect to talk about logistics. We were extremely surprised when they asked us to put the testing on hold.
I don't believe the details were from our side. There is a -- I'm speculating a little bit here. There's a lot of engineering that goes into a turnaround that obviously takes some time, and if they -- there is a time window that you have to commit. And we were just told that that time window had passed.
Robert Harvey: Okay. Got it. In terms of emissions requirements, and you mentioned the California requirements for refineries and the Texas requirements. And I'm just -- there's an awful lot of talk and effort and so on going on in responding to climate change, it's in the air. My understanding that nitrous oxide is 300 times more damaging to the environment than carbon dioxide. If you had extra funds, is there lobbying that you would do, or are there more regulations coming from others or whatever? What can pressure the marketplace to purchase your product sooner rather than later?
Jim Deller: I could go on at length. I think to be honest, we all care about the environment; we all want -- we'd all like things to move faster in that regard. As a burner manufacturer, we try and solve the need. We have customers that need our products to meet the emissions requirements, and we believe what we have here in ClearSign is a very special opportunity to enable them to do that in a very cost-effective manner. I think there's always politics, but I really need to stay focused on our customers, to be honest. We're very aware of the regulations. We share information with the regulators because that helps us understand what they're looking at. We think it helps them improve their plans. So we actually engage with them, as we have on the World Oil project. That was an active participation with the South Coast Air Quality Management District in California.
But, yes, from my side, running the business and especially appreciating that at the end of the day, the oil refineries are our customers, our goal is to help them meet their needs, and to be good environmental stewards in the most efficient and effective ways that they can.
Robert Harvey: Thank you.
Operator: Robert Kecseg with Las Colinas Capital Management.
Robert Kecseg: I'm going to ask you something about these process heaters. If we come into a customer with a 10-foot flame to replace their 2-inch flame, I would think you'd need to redesign the heater. But we're coming to them with a 2-inch flame from -- but I understand many, many feet (indiscernible) 10 feet or not, but this is a considerably large flame. Won't that work in any of these existing heaters as far as any kind of design changes goes? Do you see where I'm going with this --
Jim Deller: Yes.
Robert Kecseg: -- that there's no particular product. It should be easier to fit, just to me, in my little brain.
Jim Deller: Bob, no, you are right on the money. There's two big advantages that ClearSign does, especially ClearSign process burners offer into the market. And we tend to -- we do talk a lot, and very rightly so. We talk a lot about NOx emissions, but the other attribute is our flames are significantly smaller. They're not 2 inches, but they are significantly shorter than the flames of traditional low and ultra-low NOx burners. And the flames of those traditional burners do cause problems because when the flames are long, they overheat the inside surface of the heater.
And the result is that the operator has to turn the firing rate down to avoid damaging their equipment. So you have a situation where, for example, the heaters, we're talking about are a crude charge heater, which restricts the flow through an entire refinery. If the throughput of those heaters has to be turned down, it reduces the capacity of that refinery to make product.
So the other advantage that we have in having much more -- or much more confined flames is that we can actually go back and fit our technology into those heaters, usually improve the NOx emissions. But more importantly, for those refiners is we can actually grate or enable them to increase the firing rates and the throughput of those heaters. So that has a very immediate -- obviously, the value for refineries is very easy to calculate in those circumstances.
But Bob, to your point, that is exactly a very real opportunity for us and one that we are -- we do have a significant traction on. So we're talking to customers, not just about NOx emissions, but we are talking about throughput increases in addition to that.
Robert Kecseg: Okay. Okay. And kind of following with the same line of thinking, this shipment that just went to Europe or the other super-major, they're going to be operating one of these burners. I assume, since you and I talked before about each one of these designs of these heaters, can be 3 burners, 4 burners, whatever, and then the configuration. Are they going to put that one burner with other burners in that heater to -- that's going to be next to it? I trying to understand how they would operate that. Does it seem like you're really be getting real information if it's combined with --
Jim Deller: Yes, Bob, so I can't -- Bob, we have -- we're not allowed to disclose the details of our process equipment, so let me talk in general terms. There are -- certainly, there are -- there's what we call cabin heaters, which are square boxes and then vertical cylindrical heaters that, as the name suggests, that are basically [white cans]. Those vertical cylindrical heaters have burners that range typically in a circular pattern in the floor, whether it's 12 burners, 8 burners, 5 burners, 3 burners. And the very small ones have a single burner in them, okay? So based on that, this is -- we also find a complete burner for this heater. So it's a very small heater in Europe that this burner is going to, but it will enable the customer to get a very good appreciation for what our burners can do. It will not be mixed with other burners.
Robert Kecseg: All right. And then kind of again, on the same line of thinking, when you made these installations at these newest customers on the West Coast -- I think you call it the transportation and storage customer -- in that case, the configuration of the burners that you were putting in was replacing other burners with basically the same configuration. So there really wasn't a big engineering task for them to do, is that correct?
Jim Deller: That's correct. And that goes back to our strategy right from the start, the objective being that we need to develop our technology to the point that it is easy to deploy; and in terms of functionality and putting into a heater, it just plugs right into the hole of the old existing burner. That cuts down the engineering cost and it makes the turnarounds very simple. So those burners just -- or the California Boiler team dropped the old burners out, plugged the new burners in, reconnected the fuel gas piping. They had some minor modifications on the control system for some different unrelated details and just fired them up. So it's a very easy like for like change-out.
Robert Kecseg: Right. And could you give us -- since on this call, it seemed like everybody was very excited about the name ExxonMobil and that kind of accomplishment, could you just -- aside from that, could you just kind of give us some idea of pipeline for, or inquiries, or however you want to characterize, whatever you're comfortable with, as far as for burners for that part of the business?
Jim Deller: I think, Bob, obviously, this is something that we watch and are very encouraged about. Just by their nature, we don't control our customers, so I really can't go into names and dates. I can say that we have customers that we're engaged with that range from global super-majors through to smaller local refineries and some national scale refineries still with multiple heaters. The applications include NOx reduction and capacity expansion, so it's a growing pipeline, Bob. I really -- unfortunately, I can't go into details just because it's so speculative and I don't want to be misleading.
Robert Kecseg: No, no, I understand that. I'm just trying to say that everything was laser-focused on this big name ExxonMobil, and all of a sudden at those proofs. So I'm just saying that there has to be other business out there. And I would imagine -- I think you've alluded to in past conversations, but just the fact that we were able to do this demonstration for that company, open the door to a lot more inquiry. Am I right in that?
Jim Deller: Yes. Bob, I think what's happened is we've used ExxonMobil's name to really describe the project. I think more accurately, we reported the process burner development project. And what the industry has been watching is the capabilities and the performance that we've been able to achieve because we're out actively talking to our customers and the industry experts. So as we've been able to improve and achieve this performance by process burners, that's the news that we are passing on. And that's what's leading to the interest and the engagement that we're getting. So whilst we have the Exxon name associated with it because it's what everyone recognized, I think the reality in terms of the actual benefits and where we are -- and we probably need to refer to it as the process burner development project.
Robert Kecseg: And then over on the California Boiler, I suppose that the 500 horsepowers get like a bigger portion of the market compared to the smaller 125s to now, we have a larger market to address. Is that fair to say?
Jim Deller: Yes. And Bob the key -- really the key to that 500 size and up is the San Joaquin Valley is the one region to formalize their NOx emission regulations revamp that was done quite recently. But the 500 horse power, the NOx emission requirements dropped down to [2.5] ppm at that 500 horsepower size and above. So that puts us in a very special position, obviously, showing success in this demonstration. But we obviously believe that that's to be expected. If we can do that, we are in a very unique position.
And the only alternative that we're aware of is for customers to put a selective kind of reduction unit on their boilers, which if you think of a food processing plant or something of that nature, going to the extra complexity, one, the cost of installing such a piece of equipment and then maintaining ammonia and handling the deliveries, that is extremely burdensome. So we really believe that we have an extraordinary value at that 500 horsepower and above. So that's one of the reasons that we've really picked that size.
In addition, California Boiler has a rental boiler of that size that we can work together to fit this burner into and then to deploy into the field to give customers firsthand experience using that burner. So you're certainly right (inaudible) for us.
Robert Kecseg: Yes, thank you. I want to say one other thing maybe to connect the dots; from what I understand, (indiscernible) Zeeco is connected in both the process burners and also potentially now with the watertube because they are in both of those businesses. But they're not in the firetube, is that right, Zeeco?
Jim Deller: Yes, so yes, we're in ongoing discussions with Zeeco regarding the firetube burner, but that opportunity for us to test there and have Zeeco fabricate that burner is really based on the strength of the process burner collaboration that we have developed. But it is also the -- the firetube boiler burners, we have a formal agreement in place, and I'm very pleased with the agreement in place with California Boiler.
Robert Kecseg: Great, okay. (Indiscernible) thank you, Jim.
Operator: Marshall [Crowe], a private investor.
Marshall Crowe: So you had mentioned earlier, I believe it was the World Oil facility, that a correction had been made because it started up cold. The burner started up cold, and so you had to go in and you will have to make repairs, I believe, or readjust it, is that right? Are you familiar with what I am speaking of?
Jim Deller: Yes, I am. There was a --
Marshall Crowe: I'm just wondering how often that happens. Is that --
Jim Deller: No, this is a one-off. There's basically a couple of valves in the control system, just the way it was configured, that didn't fire at the right time. And it led to some minor damage, but damage that we just want to take the opportunity to repair. So this is not a -- not [an all]; this is just one of those one-off things that happens.
Marshall Crowe: Okay, right, very good. (Inaudible) going forward, looking forward to tomorrow. Thank you.
Operator: This concludes our question-and-answer session. I'd like to turn the call back over to Jim Deller for any closing remarks.
Jim Deller: Thank you very much. This concludes the investor update call for the second quarter 2021. I look forward to speaking to you all in the future.
Operator: The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.