CLEARSIGN COMBUSTION CORPORATION (NASDAQ:CLIR) Files An 8-K Entry into a Material Definitive Agreement

Item 1.01

On December 7, 2016, ClearSign Combustion Corporation (the
Company) commenced a rights offering to its shareholders whereby
they will have the opportunity to purchase additional securities
in the Company (Rights Offering). to the Rights Offering, the
Company will distribute, at no charge to holders of record of the
Companys common stock as of December 19, 2016, non-transferable
subscription rights to purchase up to 2,594,082 units (Units),
with each Unit consisting of one share of the Companys common
stock and a two year warrant to purchase one share of the
Companys common stock (the Rights Offering), at a purchase price
of $4.00 per Unit, all as set forth in a prospectus supplement
filed on December 7, 2016 with the Securities and Exchange
Commission (the Prospectus Supplement).

In connection with the rights offering, the Company entered into
a Dealer Manager and Placement Agent Agreement (the Agreement)
with MDB Capital Group, LLC (MDB).

Dealer Manager Services

to the Agreement, the Company engaged MDB as the exclusive
dealer-manager in connection with the Companys planned
shareholder Rights Offering. Under the terms and subject to the
conditions contained in the Agreement, MDB will provide market
assistance in connection with the conduct of the Rights Offering,
financial advice to the Company in connection with the Rights
Offering, respond to requests for information and materials
relating to the Rights Offering in coordination with the
information agent and, in accordance with customary practice,
solicit the exercise of the subscription rights and subscriptions
for the Units. As compensation for its dealer manager services,
the Company will either (i) pay a cash fee equal to 6.0% of the
gross proceeds from the sale of Units to the Companys
shareholders in the Rights Offering or (ii) with the agreement of
MDB, issue to MDB and its designees that number of Units equal to
6.0% of the number of Units sold to the Companys shareholders in
the Rights Offering.

Placement Agent Services

Under the terms and subject to the conditions contained in the
Agreement, MDB has agreed to arrange for the Company to sell, on
a best efforts, no minimum basis, those Units (Offered Units) not
subscribed for by the Companys shareholders in the Rights
Offering. The Offered Units will be identical to the Units
offered in the Rights Offering. The offering of the Offered Units
will be made through MDB on behalf of the Company to both retail
and institutional investors. The offering of the Offered Units
will be completed no later than January 31, 2017. As compensation
for MDBs placement agent services, the Company will either (i)
pay a cash fee equal to 6.0% of the gross proceeds from the sale
of Offered Units or (ii) with the agreement of MDB, issue to MDB
and its designees that number of Units equal to 6.0% of the
number of Offered Units sold by MDB as placement agent.

The sale by the Company of the Offered Units and the Agreement in
general is subject to customary closing conditions, including the
absence of any material adverse effect on the business, general
affairs, management, financial position, stockholders equity or
results of operations of the Company.

to the Agreement, the Company has also agreed to indemnify MDB
and its affiliates against certain liabilities arising under the
Securities Act of 1933, as amended. MDB will not underwrite and
is not otherwise obligated to purchase any of the securities to
be issued in the Rights Offering or any of the Offered Units and
does not make any recommendation with respect to such securities.

If all of the Units and the Offered Units are sold, the Company
expects the net proceeds from the offering to be approximately
$9.6 million, after deducting dealer manager and placement agent
cash commissions, fees and estimated offering expenses. The
Company intends to use the net proceeds from this offering for
general corporate and working capital purposes.

A copy of the Agreement is attached as Exhibit 10.1 hereto and
incorporated herein by reference. The foregoing description of
the Agreement is not complete and is qualified in its entirety by
reference to Exhibit 10.1.

On December 7, 2016, the Company issued a press release
announcing the commencement of the Rights Offering. The press
release is included as Exhibit 99.9 to this Current Report on
Form 8-K and is incorporated by reference herein, and the
description of the press release is qualified in its entirety by
reference to such Exhibit.

The press release is furnished under this Item 7.01 and shall not
be deemed filed with the U.S. Securities and Exchange commission
for purposes of Section 18 of the Securities Exchange Act of
1934, as amended. The information contained in the press release
shall not be incorporated by reference into any filing we make
regardless of general incorporation language in the filing,
unless expressly incorporated by reference in such filing.

In connection with the Rights Offering, the Company is filing
items included as Exhibits 4.1, 4.2, 5.1, 10.1, and 99.1 through
99.8 to this Current Report on Form 8-K for the purpose of
incorporating such items as exhibits to the Companys Registration
Statement on Form S-3 (Registration No. 333-208784), to which the
prospectus supplement dated December 7, 2016 relating to the
Rights Offering and the placement of the Offered Units is a part.

About CLEARSIGN COMBUSTION CORPORATION (NASDAQ:CLIR)

ClearSign Combustion Corporation is engaged in designing and developing technologies for managing various performance characteristics of combustion systems, such as emission and operational performance, and energy efficiency. The Company’s Duplex and Electrodynamic Combustion Control (ECC) platform technologies are used to manage the performance of combustion systems in a range of markets, including the refinery, petrochemical, chemical, power and commercial boiler industries. The Duplex burner technology typically consists of a traditional industrial burner and a porous ceramic tile. The ECC technology includes various components, such as a computer, standard software delivering algorithms to a power amplifier (resident outside the combustion chamber) and electrodes inside the combustion chamber. The ECC technology introduces a computer-controlled high voltage electric field into a combustion volume in order to control gas-phase chemical reactions.

CLEARSIGN COMBUSTION CORPORATION (NASDAQ:CLIR) Recent Trading Information

CLEARSIGN COMBUSTION CORPORATION (NASDAQ:CLIR) closed its last trading session up +0.15 at 4.00 with 41,274 shares trading hands.