# EDGAR Filing Document

**Accession Number:** 0000846913
**File Stem:** 0001437749-25-033043
**Filing Date:** 2025-11
**Character Count:** 89902
**Document Hash:** 5956ea5b8a02106c18ab3cd262a0a6c7
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001437749-25-033043.hdr.sgml**: 20251104

**ACCESSION NUMBER**: 0001437749-25-033043

**CONFORMED SUBMISSION TYPE**: 10-Q

**PUBLIC DOCUMENT COUNT**: 78

**CONFORMED PERIOD OF REPORT**: 20250930

**FILED AS OF DATE**: 20251104

**DATE AS OF CHANGE**: 20251104

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** FUEL TECH, INC.
- **CENTRAL INDEX KEY:** 0000846913
- **STANDARD INDUSTRIAL CLASSIFICATION:** INDUSTRIAL & COMMERCIAL FANS & BLOWERS & AIR PURIFYING EQUIP [3564]
- **ORGANIZATION NAME:** 06 Technology
- **EIN:** 205657551
- **STATE OF INCORPORATION:** DE
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 10-Q
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-33059
- **FILM NUMBER:** 251449765

**BUSINESS ADDRESS:**
- **STREET 1:** 27601 BELLA VISTA PARKWAY
- **CITY:** WARRENVILLE
- **STATE:** IL
- **ZIP:** 60555
- **BUSINESS PHONE:** 6308454431

**MAIL ADDRESS:**
- **STREET 1:** 27601 BELLA VISTA PARKWAY
- **CITY:** WARRENVILLE
- **STATE:** IL
- **ZIP:** 60555

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** FUEL TECH N V
- **DATE OF NAME CHANGE:** 19930510

?xml version='1.0' encoding='ASCII'? ftek20250930_10q.htm

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

**FORM 10-Q**

(Mark One)

☒ **QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**

**For the quarterly period ended** 

**September 30, 2025**

**or**

☐ **TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**

**For the transition period from ______ to______.**

**Commission file number: 001-33059**

## FUEL TECH, INC.
**(Exact name of registrant as specified in its charter)**

---

| | |
|:---|:---|
| **Delaware** | **20-5657551** |
| **(State or other jurisdiction of**<br> **incorporation of organization)** | **(I.R.S. Employer**<br> **Identification Number)** |

---

**Fuel Tech, Inc.**

**27601 Bella Vista Parkway**

**Warrenville, IL 60555-1617**

**630-845-4500**

**www.ftek.com**

**(Address and telephone number of principal executive offices)**

&nbsp;&nbsp;&nbsp;&nbsp;________________________________

Securities registered pursuant to Section 12(b) of the Act:

---

| | | |
|:---|:---|:---|
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
| Common Stock | FTEK | NASDAQ |

---

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.&nbsp;&nbsp;&nbsp;&nbsp;Yes ☒&nbsp;&nbsp;&nbsp;&nbsp;No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).&nbsp;&nbsp;&nbsp;&nbsp;Yes ☒&nbsp;&nbsp;&nbsp;&nbsp;No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

---

| | | | |
|:---|:---|:---|:---|
| Large accelerated filer | ☐ | Accelerated filer | ☐ |
| Non-accelerated filer | ☒ | Smaller reporting company | ☒ |
|  |  | Emerging growth company | ☐ |

---

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).&nbsp;&nbsp;&nbsp;&nbsp;Yes ☐&nbsp;&nbsp;&nbsp;&nbsp;No ☒

On October 31, 2025 there were outstanding 31,074,438 shares of Common Stock, par value $0.01 per share, of the registrant.

------

[**Table of Contents**](#toc)

**FUEL TECH, INC.**

Form 10-Q for the nine-month period ended September 30, 2025

**INDEX**

---

| | | |
|:---|:---|:---|
|  |  | Page |
| [PART I. FINANCIAL INFORMATION](#pibs) | [PART I. FINANCIAL INFORMATION](#pibs) |  |
| [Item 1.](#pibs) | [Financial Statements (Unaudited)](#pibs) | [1](#pibs) |
|  | [Condensed Consolidated Balance Sheets as of September 30, 2025 and December 31, 2024](#bs) | [1](#bs) |
|  | [Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2025 and 2024](#income) | [2](#income) |
|  | [Condensed Consolidated Statements of Comprehensive Income (Loss) for the Three and Nine Months Ended September 30, 2025 and 2024](#compinc) | [3](#compinc) |
|  | [Condensed Consolidated Statements of Stockholders' Equity for the Three and Nine Months Ended September 30, 2025 and 2024](#she) | [4](#she) |
|  | [Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2025 and 2024](#cf) | [5](#cf) |
|  | [Notes to Condensed Consolidated Financial Statements](#notes) | [6](#notes) |
| [Item 2.](#mda) | [Management's Discussion and Analysis of Financial Condition and Results of Operations](#mda) | [15](#mda) |
| [Item 3.](#qq) | [Quantitative and Qualitative Disclosures about Market Risk](#qq) | [17](#qq) |
| [Item 4.](#cp) | [Controls and Procedures](#cp) | [17](#cp) |
| [PART II.](#pii) | [OTHER INFORMATION](#pii) | [18](#pii) |
| [Item 1.](#legal) | [Legal Proceedings](#legal) | [18](#legal) |
| [Item 1A.](#risk) | [Risk Factors](#risk) | [18](#risk) |
| [Item 2.](#equitysales) | [Unregistered Sales of Equity Securities and Use of Proceeds](#equitysales) | [18](#equitysales) |
| [Item 5.](#otherinfo) | [Other Information](#otherinfo) | [18](#otherinfo) |
| [Item 6.](#exhibits) | [Exhibits](#exhibits) | [18](#exhibits) |
| [SIGNATURES](#sigs) | [SIGNATURES](#sigs) | [19](#sigs) |

---

------

[**Table of Contents**](#toc)

---

| | |
|:---|:---|
| **PART I.**  | **FINANCIAL INFORMATION** |

---

### Item 1. Financial Statements
**FUEL TECH, INC.**

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)(in thousands, except share and per share data)

---

| | | |
|:---|:---|:---|
|  | *September 30,* | *December 31,* |
|  | *2025* | *2024* |
| **ASSETS** |  |  |
| Current assets: |  |  |
| Cash and cash equivalents | $13677 | $8510 |
| &nbsp;&nbsp;&nbsp; Short-term investments | 12183 | 10184 |
| Accounts receivable, less current expected credit loss of $108 and $106, respectively | 4828 | 9368 |
| Inventories, net | 402 | 397 |
| Prepaid expenses and other current assets | 864 | 1160 |
| Total current assets | 31954 | 29619 |
| Property and equipment, net of accumulated depreciation of $19,312 and $18,958, respectively | 4820 | 5084 |
| Goodwill | 2116 | 2116 |
| Other intangible assets, net of accumulated amortization of $552 and $525, respectively | 306 | 327 |
| Right-of-use operating lease assets, net | 558 | 585 |
| Long-term investments | 7969 | 10875 |
| Other assets | 190 | 191 |
| Total assets | $47913 | $48797 |
| **LIABILITIES AND STOCKHOLDERS' EQUITY** |  |  |
| Current liabilities: |  |  |
| Accounts payable | $2402 | $2915 |
| Accrued liabilities: |  |  |
| Operating lease liabilities - current | 87 | 77 |
| Employee compensation | 748 | 1248 |
| Other accrued liabilities | 2674 | 1615 |
| Total current liabilities | 5911 | 5855 |
| Operating lease liabilities - non-current | 514 | 548 |
| Deferred income taxes, net | 176 | 176 |
| Other liabilities | 303 | 263 |
| Total liabilities | 6904 | 6842 |
| Stockholders' equity: |  |  |
| Common stock, $.01 par value, 40,000,000 shares authorized, 32,281,179 and 31,767,329 shares issued, and 31,074,438 and 30,708,273 shares outstanding, respectively | 322 | 317 |
| Additional paid-in capital | 165559 | 165295 |
| Accumulated deficit | (120597) | (119472) |
| Accumulated other comprehensive loss | (1783) | (1915) |
| Nil coupon perpetual loan notes | 76 | 76 |
| Treasury stock, at cost | (2568) | (2346) |
| Total stockholders' equity | 41009 | 41955 |
| Total liabilities and stockholders' equity | $47913 | $48797 |

---

See notes to condensed consolidated financial statements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 1

------

[**Table of Contents**](#toc)

**FUEL TECH, INC.**

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(in thousands, except share and per-share data)

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | *Three Months Ended* | *Three Months Ended* | *Nine Months Ended* | *Nine Months Ended* |
|  | *September 30,* | *September 30,* | *September 30,* | *September 30,* |
|  | *2025* | *2024* | *2025* | *2024* |
| **Revenues** | $7490 | $7851 | $19430 | $19850 |
| **Costs and expenses:** |  |  |  |  |
| Cost of sales | 3829 | 4444 | 10281 | 11462 |
| Selling, general and administrative | 3207 | 3225 | 9895 | 9815 |
| Research and development | 450 | 361 | 1510 | 1159 |
|  | 7486 | 8030 | 21686 | 22436 |
| **Operating income (loss)** | 4 | (179) | (2256) | (2586) |
| Interest income | 311 | 323 | 1127 | 968 |
| Other (expense) income, net | (5) | (63) | 15 | 1576 |
| **Income (loss) before income taxes** | 310 | 81 | (1114) | (42) |
| Income tax expense | (7) | (1) | (11) | (18) |
| **Net income (loss)** | $303 | $80 | $(1125) | $(60) |
| **Net income (loss) per common share:** |  |  |  |  |
| **Basic net income (loss) per common share** | $0.01 | $0.00 | $(0.04) | $(0.00) |
| **Diluted net income (loss) per common share** | $0.01 | $0.00 | $(0.04) | $(0.00) |
| **Weighted-average number of common shares outstanding:** |  |  |  |  |
| Basic | 31074000 | 30708000 | 30890000 | 30526000 |
| Diluted | 31293000 | 30848000 | 30890000 | 30526000 |

---

See notes to condensed consolidated financial statements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 2

------

[**Table of Contents**](#toc)

**FUEL TECH, INC.**

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(Unaudited)

(in thousands)

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | *Three Months Ended* | *Three Months Ended* | *Nine Months Ended* | *Nine Months Ended* |
|  | *September 30,* | *September 30,* | *September 30,* | *September 30,* |
|  | *2025* | *2024* | *2025* | *2024* |
| Net income (loss) | $303 | $80 | $(1125) | $(60) |
| Other comprehensive income (loss): |  |  |  |  |
| Foreign currency translation adjustments | (14) | 106 | 132 | (32) |
| Comprehensive income (loss) | $289 | $186 | $(993) | $(92) |

---

See notes to condensed consolidated financial statements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 3

------

[**Table of Contents**](#toc)

**FUEL TECH, INC.**

CONDENSED STATEMENTS OF STOCKHOLDERS' EQUITY

(Unaudited)(in thousands of dollars or shares, as appropriate)

The following summarizes the changes in total stockholders' equity for the three and nine months ended September 30, 2024:

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  |  |  |  |  | *Accumulated* | Nil |  |  |
|  |  |  | *Additional* |  | *Other* | *Coupon* |  |  |
|  | *Common Stock* | *Common Stock* | *Paid-in* | *Accumulated* | *Comprehensive* | *Perpetual* | *Treasury* |  |
|  | *Shares* | *Amount* | *Capital* | *Deficit* | *Loss* | *Loan Notes* | *Stock* | *Total* |
| **Balance at December 31, 2023** | **30385** | $**313** | $**164853** | $**(117529)** | $**(1748)** | $**76** | $**(2251)** | $**43714** |
| Net income | *—* |  |  | 281 |  |  |  | 281 |
| Foreign currency translation adjustments | *—* |  |  |  | (143) |  |  | (143) |
| Stock compensation expense | *—* |  | 104 |  |  |  |  | 104 |
| **Balance at March 31, 2024** | **30385** | $**313** | $**164957** | $**(117248)** | $**(1891)** | $**76** | $**(2251)** | $**43956** |
| Net loss | *—* |  |  | (421) |  |  |  | (421) |
| Foreign currency translation adjustments | *—* |  |  |  | 5 |  |  | 5 |
| Stock compensation expense | *—* |  | 124 |  |  |  |  | 124 |
| Common shares issued upon vesting of restricted stock units | 406 | 4 | (4) |  |  |  |  |  |
| Taxes paid on behalf of equity award participants | (83) |  |  |  |  |  | (95) | (95) |
| **Balance at June 30, 2024** | **30708** | $**317** | $**165077** | $**(117669)** | $**(1886)** | $**76** | $**(2346)** | $**43569** |
| Net income | *—* |  |  | 80 |  |  |  | 80 |
| Foreign currency translation adjustments | *—* |  |  |  | 106 |  |  | 106 |
| Stock compensation expense | *—* |  | 109 |  |  |  |  | 109 |
| **Balance at September 30, 2024** | **30708** | $**317** | $**165186** | $**(117589)** | $**(1780)** | $**76** | $**(2346)** | $**43864** |

---

The following summarizes the changes in total stockholders' equity for the three and nine months ended September 30, 2025:

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  |  |  |  |  | *Accumulated* | Nil |  |  |
|  |  |  | *Additional* |  | *Other* | *Coupon* |  |  |
|  | *Common Stock* | *Common Stock* | *Paid-in* | *Accumulated* | *Comprehensive* | *Perpetual* | *Treasury* |  |
|  | *Shares* | *Amount* | *Capital* | *Deficit* | *Loss* | *Loan Notes* | *Stock* | *Total* |
| **Balance at December 31, 2024** | **30708** | $**317** | $**165295** | $**(119472)** | $**(1915)** | $**76** | $**(2346)** | $**41955** |
| Net loss | *—* |  |  | (739) |  |  |  | (739) |
| Foreign currency translation adjustments | *—* |  |  |  | 135 |  |  | 135 |
| Stock compensation expense | *—* |  | 110 |  |  |  |  | 110 |
| Common shares issued upon vesting of restricted stock units | 85 | 1 | (1) |  |  |  |  |  |
| Taxes paid on behalf of equity award participants | (24) |  |  |  |  |  | (24) | (24) |
| **Balance at March 31, 2025** | **30769** | $**318** | $**165404** | $**(120211)** | $**(1780)** | $**76** | $**(2370)** | $**41437** |
| Net loss | *—* |  |  | (689) |  |  |  | (689) |
| Foreign currency translation adjustments | *—* |  |  |  | 11 |  |  | 11 |
| Stock compensation expense | *—* |  | 102 |  |  |  |  | 102 |
| Common shares issued upon vesting of restricted stock units | 429 | 4 | (4) |  |  |  |  |  |
| Taxes paid on behalf of equity award participants | (123) |  |  |  |  |  | (198) | (198) |
| **Balance at June 30, 2025** | **31075** | $**322** | $**165502** | $**(120900)** | $**(1769)** | $**76** | $**(2568)** | $**40663** |
| Net income | *—* |  |  | 303 |  |  |  | 303 |
| Foreign currency translation adjustments | *—* |  |  |  | (14) |  |  | (14) |
| Stock compensation expense | *—* |  | 57 |  |  |  |  | 57 |
| **Balance at September 30, 2025** | **31075** | $**322** | $**165559** | $**(120597)** | $**(1783)** | $**76** | $**(2568)** | $**41009** |

---

See notes to condensed consolidated financial statements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 4

------

[**Table of Contents**](#toc)

**FUEL TECH, INC.**

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(in thousands)

---

| | | |
|:---|:---|:---|
|  | *Nine Months Ended* | *Nine Months Ended* |
|  | *September 30,* | *September 30,* |
|  | *2025* | *2024* |
| **Operating Activities** |  |  |
| Net loss | $(1125) | $(60) |
| Adjustments to reconcile net loss to net cash provided by (used in) operating activities: |  |  |
| Depreciation | 490 | 248 |
| Amortization | 27 | 42 |
| Non-cash interest income on held-to-maturity securities | (91) | (109) |
| Stock-based compensation, net of forfeitures | 269 | 337 |
| Changes in operating assets and liabilities: |  |  |
| Accounts receivable | 3066 | (845) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Employee retention credit receivable | 1677 | (1677) |
| Inventory | (4) | (3) |
| Prepaid expenses, other current assets and other non-current assets | 318 | 655 |
| Accounts payable | (560) | 842 |
| Accrued liabilities and other non-current liabilities | 516 | (1215) |
| Net cash provided by (used in) operating activities | 4583 | (1785) |
| **Investing Activities** |  |  |
| Purchases of equipment and patents | (231) | (316) |
| Purchases of debt securities | (10004) | (14072) |
| Maturities of debt securities | 11000 | 11000 |
| Net cash provided by (used in) investing activities | 765 | (3388) |
| **Financing Activities** |  |  |
| Taxes paid on behalf of equity award participants | (222) | (95) |
| Net cash used in financing activities | (222) | (95) |
| Effect of exchange rate fluctuations on cash | 41 | (36) |
| **Net increase (decrease) in cash and cash equivalents** | 5167 | (5304) |
| Cash and cash equivalents at beginning of period | 8510 | 17578 |
| **Cash and cash equivalents at end of period** | $13677 | $12274 |

---

See notes to condensed consolidated financial statements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 5

------

[**Table of Contents**](#toc)

**FUEL TECH, INC.**

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2025

(Unaudited)

(in thousands, except share and per-share data)

***1.*&nbsp;&nbsp;&nbsp;&nbsp; General**

**Organization**

Fuel Tech, Inc. and subsidiaries ("Fuel Tech", the "Company", "we", "us" or "our") develops and provides proprietary technologies for air pollution control, process optimization, water treatment, and advanced engineering services. These technologies enable customers to operate in a cost-effective and environmentally sustainable manner.

The Company's nitrogen oxide (NOx) reduction technologies reduce nitrogen oxide emissions from boilers, furnaces, and other stationary combustion sources. To reduce NOx emissions, our technologies utilize advanced combustion modification techniques and post-combustion NOx control approaches including non-catalytic, catalytic, and combined systems. The Company also provides solutions for the mitigation of particulate matter, including particulate control with electrostatic precipitator products and services, and using flue gas conditioning systems which modify the ash properties of particulate for improved collection efficiency. The Company's FUEL CHEM® technology improves the efficiency, reliability, fuel flexibility, boiler heat rate, and environmental status of combustion units by controlling slagging, fouling, corrosion, and opacity. Water treatment technologies include DGI® Dissolved Gas Infusion Systems which utilize a patented gas-infusing saturator vessel and a patent-pending channel injector to deliver supersaturated oxygen-water solutions and potentially other gas-liquid combinations to target process applications or environmental issues within the municipal and industrial water sectors. The infusion process has a variety of potential applications in the water and wastewater treatment sector, including aquaculture, agriculture/horticulture, pulp & paper, tanneries, landfill leachate, irrigation, treatment of natural waters, wastewater odor management as well as supplying oxygen or other gases for biochemical reactions and pH adjustment.

Many of Fuel Tech's products and services rely heavily on the Company's computational fluid dynamics modeling capabilities, which are enhanced by internally developed, high-end visualization software.

**Basis of Presentation**

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP) for interim financial information and with the instructions to Form *10*-Q and Article *10* of Regulation S-*X* of the Exchange Act. Accordingly, they do *not* include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, the financial statements reflect all adjustments (consisting of normal recurring accruals) considered necessary for the fair statement of Fuel Tech's financial position, cash flows, and results of operations for the periods presented. All significant intercompany transactions and balances have been eliminated. The results of operations for the *three* and *nine* months ended *September 30, 2025* are *not* necessarily indicative of the results to be expected for the full year ending *December 31, 2025*. For further information, refer to the audited consolidated financial statements and footnotes thereto included in Fuel Tech's Annual Report on Form *10*-K for the year ended *December 31, 2024* as filed with the Securities and Exchange Commission.

**CARES Act**

On *March 27, 2020,* the U.S. government enacted the Coronavirus Aid, Relief, and Economic Security Act (the "CARES Act") to provide certain relief as a result of the COVID-*19* pandemic. The CARES Act provides tax relief, along with other stimulus measures, including a provision for an Employee Retention Credit ("ERC"), which allows for employers to claim a refundable tax credit against the employer share of Social Security tax for qualifying periods in *2020* and *2021.* Under the provisions of the CARES Act, the Company is eligible for a refundable employee retention credit subject to certain criteria.

As there is *no* authoritative guidance under U.S. GAAP on accounting for government assistance to for-profit business entities, we account for the ERC by analogy to International Accounting Standard ("IAS") *20,* Accounting for Government Grants and Disclosure of Government Assistance. In accordance with IAS *20,* management determined it had reasonable assurance for receipt of the ERC and recorded the ERC benefit of $1,677 as other income on the Statement of Operations for the *nine* months ended *September 30, 2024*. We received full payment of this benefit during the *nine* months ended *September 30, 2025*.

***2.*&nbsp;&nbsp;&nbsp;&nbsp; Summary of Significant Accounting Policies**

**Investments**

The Company's investment policy provides for $20,000 in funds at BMO Harris Bank, N.A. (BMO Harris) to be invested in debt securities. The funds are held in money market funds until they are invested in those securities. A portion of the funds invested are restricted as collateral under the Investment Collateral Security agreement (see Note *10*). At *September 30, 2025*, the amount of funds collateralized under the Investment Collateral Security agreement is $4,711 relating to existing standby letters of credit that is comprised of $2,879 with varying maturity dates that expire *no* later than *September 30, 2026* and $1,832 with a latest maturity date of *October 8, 2028.*

We consider all highly liquid debt investments with original maturities from the date of purchase of *three* months or less as cash equivalents. Cash equivalents include investments in money market funds. Carrying value of cash equivalents approximates fair value due to the maturities of *three* months or less.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *6*

------

[**Table of Contents**](#toc)

Our investments in debt securities consist of United States (US) Treasury securities, including Notes, Bonds, and Bills, and US Government Agency securities, which are designated as held-to-maturity (HTM) and stated at amortized cost. The Company has the positive intent and ability to hold these investments to maturity and does *not* expect to sell any debt securities before maturity to settle an obligation under the Investment Collateral Security agreement. The original maturities of our HTM investments range from three to thirty-six months. HTM debt investments with original maturities of approximately *three* months or less from the date of purchase are classified within cash and cash equivalents. HTM debt investments with original maturities at the date of purchase greater than approximately *three* months and remaining maturities of less than *one* year are classified as short-term investments. HTM debt investments with remaining maturities beyond *one* year are classified as long-term investments. Interest income, including amortization of premium and accretion of discount, is included on the Condensed Consolidated Statements of Operations in Interest income under the effective yield method. Accrued interest is included in Prepaid expenses and other current assets on the Condensed Consolidated Balance Sheets. Due to the creditworthiness of the entities issuing these securities, there is *no* impairment recorded related to the unrealized losses.

The following table provides the amortized cost, gross unrealized gains and losses, and fair value of our HTM debt securities:

---

| | | |
|:---|:---|:---|
|  | *As of* | *As of* |
| Held-to-maturity debt securities: | *September 30, 2025* | *December 31, 2024* |
| Amortized cost | $20152 | $21059 |
| Gross unrecognized gains | 66 | 50 |
| Gross unrecognized losses | (1) | (33) |
| Fair value | $20217 | $21076 |

---

The following table provides the amortized cost and fair value of debt securities by maturities at *September 30, 2025*:

---

| | | |
|:---|:---|:---|
|  | *Amortized Cost* | *Fair Value* |
| Within one year | $12183 | $12217 |
| After one year through two years | 6985 | 7003 |
| After two years through three years | 984 | 997 |
| Total | $20152 | $20217 |

---

**Inventories**

Inventories consist primarily of equipment constructed for resale and spare parts and are stated at the lower of cost or net realizable value, using the weighted-average cost method. At *September 30, 2025* and *December 31, 2024*, inventory included equipment constructed for resale of $176 and spare parts, net of reserves, of $226 and $221, respectively. Usage is recorded in cost of sales in the period that parts were issued to a project, used to service equipment, or sold to customers. Equipment constructed for resale that is in process is recorded in Other assets. In process equipment for inventory recorded as Other assets was $32 and $44 as of *September 30, 2025* and *December 31, 2024*, respectively. Inventories are periodically evaluated to identify obsolete or otherwise impaired parts and are written off when management determines usage is *not* probable. The Company estimates the balance of excess and obsolete inventory by analyzing inventory by age using the last used and original purchase dates and existing sales pipeline for which the inventory could be used.

**Allowance for Credit Losses**

The Company accounts for expected credit losses under Financial Accounting Standards Board (FASB) Accounting Standards Update (ASU) ASU *2019*-*10,* Financial Instruments - Credit Losses (Topic *326*), Derivatives and Hedging (Topic *815*), and Leases (Topic *842*). This guidance requires the measurement of all expected losses based on historical experience, current conditions and reasonable and supportable forecasts. For trade receivables and other financial instruments, we are required to use a forward-looking expected loss model rather than the incurred loss model for recognizing credit losses which reflects losses that are probable.

For the general risk categories, the Company uses historical losses over a fixed period, excluding certain write-off activity that was *not* considered a credit loss event, to determine the historical credit loss. Historical loss rates are then adjusted to consider current economic conditions and past, current, and future events and circumstances when determining expected credit losses. Investments in financial assets issued by US Government and Government Agency are considered as having *zero* expected credit losses and are excluded from the allowance for credit loss calculation.

The following table provides the roll forward of the allowance for credit losses:

---

| | |
|:---|:---|
| At January 1, 2024 | $111 |
| Provision charged to expense |  |
| (Write-offs) / Recoveries | (5) |
| At December 31, 2024 | $106 |
| Provision charged to expense |  |
| (Write-offs) / Recoveries | 2 |
| At September 30, 2025 | $108 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *7*

------

[**Table of Contents**](#toc)

***3.*&nbsp;&nbsp;&nbsp;&nbsp; Revenue**

*Disaggregated Revenue by Product Technology*

The following table presents our revenues disaggregated by product technology:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | *Three Months Ended* | *Three Months Ended* | *Nine Months Ended* | *Nine Months Ended* |
|  | *September 30,* | *September 30,* | *September 30,* | *September 30,* |
|  | *2025* | *2024* | *2025* | *2024* |
| **Air Pollution Control** |  |  |  |  |
| Technology solutions | $1227 | $2554 | $3443 | $6837 |
| Spare parts | 840 | 424 | 1516 | 1428 |
| Ancillary revenue | 640 | 246 | 1556 | 1226 |
| **Total Air Pollution Control technology revenues** | 2707 | 3224 | 6515 | 9491 |
| **FUEL CHEM** |  |  |  |  |
| FUEL CHEM technology solutions | 4783 | 4627 | 12915 | 10359 |
| **Total Revenues** | $7490 | $7851 | $19430 | $19850 |

---

*Disaggregated Revenue by Geography*

The following table presents our revenues disaggregated by geography, based on the location of the end-user:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | *Three Months Ended* | *Three Months Ended* | *Nine Months Ended* | *Nine Months Ended* |
|  | *September 30,* | *September 30,* | *September 30,* | *September 30,* |
|  | *2025* | *2024* | *2025* | *2024* |
| United States | $5626 | $5453 | $15427 | $13519 |
| **Foreign Revenues** |  |  |  |  |
| Latin America | 166 | 208 | 579 | 816 |
| Europe | 698 | 785 | 1882 | 1627 |
| Africa | 68 | 741 | 262 | 2443 |
| Asia | 932 | 664 | 1280 | 1445 |
| **Total Foreign Revenues** | 1864 | 2398 | 4003 | 6331 |
| **Total Revenues** | $7490 | $7851 | $19430 | $19850 |

---

*Timing of Revenue Recognition*

The following table presents the timing of our revenue recognition:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | *Three Months Ended* | *Three Months Ended* | *Nine Months Ended* | *Nine Months Ended* |
|  | *September 30,* | *September 30,* | *September 30,* | *September 30,* |
|  | *2025* | *2024* | *2025* | *2024* |
| Products transferred at a point in time | $6263 | $5297 | $15987 | $13013 |
| Products and services transferred over time | 1227 | 2554 | 3443 | 6837 |
| **Total Revenues** | $7490 | $7851 | $19430 | $19850 |

---

*Contract Balances*

The timing of revenue recognition, billings, and cash collections results in billed accounts receivable, unbilled receivables (contract assets), and customer advances and deposits (contract liabilities) on the Condensed Consolidated Balance Sheets. In our Air Pollution Control (APC) technology segment, amounts are billed as work progresses in accordance with agreed-upon contractual terms. Generally, billing occurs subsequent to revenue recognition, resulting in contract assets. These assets are reported on the Condensed Consolidated Balance Sheets on a contract-by-contract basis at the end of each reporting period. At *September 30, 2025*, *December 31, 2024*, and *December 31, 2023*, contract assets for APC technology projects were approximately $1,300, $2,075, and $2,285, respectively.

The Company will periodically bill in advance of costs incurred before revenue is recognized, resulting in contract liabilities. These liabilities are reported on the Condensed Consolidated Balance Sheets on a contract-by-contract basis at the end of each reporting period. Contract liabilities were $2,200, $721, and $1,279 at *September 30, 2025*, *December 31, 2024*, and *December 31, 2023*, respectively, and are included in other accrued liabilities on the Condensed Consolidated Balance Sheets.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *8*

------

[**Table of Contents**](#toc)

Changes in the contract asset and liability balances during the *nine*-month period ended *September 30, 2025* were *not* materially impacted by any other items other than amounts billed and revenue recognized as described previously. Revenue recognized that was included in the contract liability balance at the beginning of the period was $1 and $544 for the *three* and *nine* months ended *September 30, 2025*, respectively, and $20 and $1,241 for the *three* and *nine* months ended *September 30, 2024*, respectively, which represented revenue from progress towards completion of our APC technology contracts.

As of *September 30, 2025* and *December 31, 2024*, we had no construction contracts in progress that were identified as a loss contract.

*Remaining Performance Obligations*

Remaining performance obligations represents the transaction price of APC technology booked orders for which work has *not* been performed. As of *September 30, 2025*, the aggregate amount of the transaction price allocated to remaining performance obligations was $9,472. The Company expects to recognize revenue on approximately $7,134 of the remaining performance obligations over the next 12 months with the remaining recognized thereafter.

 

*Accounts Receivable*

 

The components of accounts receivable are as follows:

---

| | | |
|:---|:---|:---|
|  | *As of* | *As of* |
|  | *September 30, 2025* | *December 31, 2024* |
| Trade receivables | $3315 | $5375 |
| Unbilled receivables | 1300 | 2075 |
| Receivable for employee retention credit |  | 1677 |
| Other short-term receivables | 321 | 347 |
| Allowance for credit losses | (108) | (106) |
| Total accounts receivable | $4828 | $9368 |

---

***4.*&nbsp;&nbsp;&nbsp;&nbsp; Restructuring Activities**

 ****

On *January 18, 2019,* the Company announced a planned suspension of its APC business operation in China. This action was part of Fuel Tech's ongoing operational improvement initiatives designed to prioritize resource allocation, reduce costs, and drive profitability for the Company on a global basis. The transition associated with the suspension of the APC business which has taken place through *September 30, 2025* includes staff rationalization and reduction, supplier and partner engagement, and the monetization of certain assets. The remaining transition activities include the execution of the activities to satisfy the requirements for the remaining APC projects in China (with a backlog totaling approximately $*3*) and those related to subsidiary closure.

The following table presents our revenues and net loss for the *three* and *nine* months ended *September 30, 2025* and *2024* in China as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | *Three Months Ended* | *Three Months Ended* | *Nine Months Ended* | *Nine Months Ended* |
|  | *September 30,* | *September 30,* | *September 30,* | *September 30,* |
|  | *2025* | *2024* | *2025* | *2024* |
| Total revenues | $— | $— | $— | $— |
| Net loss | (12) | (13) | (42) | (41) |

---

The following table presents net assets in China as of *September 30, 2025* and *December 31, 2024*:

---

| | | |
|:---|:---|:---|
|  | *As of* | *As of* |
|  | *September 30, 2025* | *December 31, 2024* |
| Total assets | $800 | $788 |
| Total liabilities | 107 | 84 |
| Total net assets | $693 | $704 |

---

Total assets primarily consist of cash and other receivables. Total liabilities consist of accounts payable and certain accrued liabilities.

***5.*&nbsp;&nbsp;&nbsp;&nbsp; Accumulated Other Comprehensive Loss**

The changes in accumulated other comprehensive loss by component were as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | *Three Months Ended* | *Three Months Ended* | *Nine Months Ended* | *Nine Months Ended* |
|  | *September 30,* | *September 30,* | *September 30,* | *September 30,* |
|  | *2025* | *2024* | *2025* | *2024* |
| **Foreign currency translation** |  |  |  |  |
| Balance at beginning of period | $(1769) | $(1886) | $(1915) | $(1748) |
| Other comprehensive income (loss): |  |  |  |  |
| Foreign currency translation adjustments (1) | (14) | 106 | 132 | (32) |
| **Total accumulated other comprehensive loss** | $(1783) | $(1780) | $(1783) | $(1780) |

---

(*1*) In all periods presented, there were *no* tax impacts related to rate changes and *no* amounts were reclassified to earnings.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *9*

------

[**Table of Contents**](#toc)

***6.*&nbsp;&nbsp;&nbsp;&nbsp; Treasury Stock**

Common stock held in treasury totaled 1,206,741 and 1,059,056 with a cost of $2,568 and $2,346 at *September 30, 2025* and *December 31, 2024*, respectively. These shares were withheld from employees to settle personal tax withholding obligations that arose as a result of restricted stock units that vested.

***7.*&nbsp;&nbsp;&nbsp;&nbsp; Earnings per Share**

Basic earnings per share excludes the dilutive effects of stock options, restricted stock units (RSUs), warrants, and the *nil* coupon non-redeemable convertible unsecured loan notes. Diluted earnings per share includes the dilutive effect of the *nil* coupon non-redeemable convertible unsecured loan notes, RSUs, warrants, and unexercised in-the-money stock options, except in periods of net loss where the effect of these instruments is anti-dilutive. Out-of-money stock options and warrants are excluded from diluted earnings per share because they are unlikely to be exercised and would be anti-dilutive if they were exercised. For the *three* months ended *September 30, 2025* and *2024,* basic earnings per share has been adjusted to include dilutive options and RSUs. For the *nine* months ended *September 30, 2025* and *2024,* basic earnings per share is equal to diluted earnings per share because all outstanding stock awards, warrants, and convertible loan notes are considered anti-dilutive during periods of net loss.

The following table sets forth the weighted-average shares used in calculating the earnings per share for the *three* and *nine* months ended *September 30, 2025* and *2024*:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | *Three Months Ended* | *Three Months Ended* | *Nine Months Ended* | *Nine Months Ended* |
|  | *September 30,* | *September 30,* | *September 30,* | *September 30,* |
|  | *2025* | *2024* | *2025* | *2024* |
| Basic weighted-average shares | 31074000 | 30708000 | 30890000 | 30526000 |
| Unexercised options and unvested RSUs | 219000 | 140000 |  |  |
| Diluted weighted-average shares | 31293000 | 30848000 | 30890000 | 30526000 |

---

For the *three* and *nine* months ended *September 30, 2025*, Fuel Tech had warrants of 2,850,000 which were antidilutive for the purpose of the calculation of diluted earnings per share. For the *nine* months ended *September 30, 2025*, Fuel Tech also had weighted-average outstanding equity awards of 73,800 which were antidilutive or represent out-of-the-money options for the purpose of the calculation of diluted earnings per share. For the *nine* months ended *September 30, 2025*, Fuel Tech had incremental equity awards of 297,300 that were excluded from the computation of diluted earnings per share as the inclusion of such would have been anti-dilutive due to a net loss in the period. These equity awards could potentially dilute basic earnings per share in future years.

For the *three* and *nine* months ended *September 30, 2024*, Fuel Tech had weighted-average outstanding equity awards of 132,000 and 283,700, respectively, and warrants of 2,850,000 in both periods, which were antidilutive or represent out-of-the-money options for the purpose of the calculation of diluted earnings per share. For the *nine* months ended *September 30, 2024*, Fuel Tech had incremental equity awards of 279,000 that were excluded from the computation of diluted earnings per share as the inclusion of such would have been anti-dilutive due to a net loss in the period. These equity awards could potentially dilute basic earnings per share in future years.

***8.*&nbsp;&nbsp;&nbsp;&nbsp; Stock-Based Compensation**

Fuel Tech's *2024* Long-Term Incentive Plan (*2024* Plan) was adopted in *June 2024* and replaced our prior incentive plan which was approved by our stockholders in *2014* (LTIP). No further grants will be made from the LTIP. The *2024* Plan and LTIP are referred to collectively as the Incentive Plans.

Under the Incentive Plans, awards *may* be granted to participants in the form of Non-Qualified Stock Options, Incentive Stock Options, Stock Appreciation Rights, Restricted Stock, RSUs, Performance Awards, Bonuses or other forms of share-based or non-share-based awards or combinations thereof. Participants in the Incentive Plans *may* be our directors, officers, employees, consultants, or advisors (except consultants or advisors in capital-raising transactions) as the directors determine are key to the success of our business. There are a maximum of 2,883,057 shares that *may* be issued or reserved for awards to participants under the Incentive Plans. As of *September 30, 2025*, Fuel Tech had 2,668,885 shares available for issuance under the Incentive Plans.

We did not record any excess tax benefits within income tax expense for the *three* and *nine* months ended *September 30, 2025* and *2024*. Given the Company has a full valuation allowance on its deferred tax assets, there were *no* excess tax benefits to record for the *three* and *nine* months ended *September 30, 2025* and *2024*. In addition, we account for forfeitures of awards based on an estimate of the number of awards expected to be forfeited and adjust the estimate when it is *no* longer probable that the employee will fulfill the service condition.

Stock-based compensation is included in selling, general, and administrative costs in our Condensed Consolidated Statements of Operations. The components of stock-based compensation for the *three* and *nine* months ended *September 30, 2025* and *2024* were as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | *Three Months Ended* | *Three Months Ended* | *Nine Months Ended* | *Nine Months Ended* |
|  | *September 30,* | *September 30,* | *September 30,* | *September 30,* |
|  | *2025* | *2024* | *2025* | *2024* |
| Stock options and restricted stock units, net of forfeitures | $57 | $109 | $269 | $337 |
| After-tax effect of stock-based compensation | $57 | $109 | $269 | $337 |

---

**Stock Options**

Stock options granted to employees under the Incentive Plans have a 10-year life and they vest as follows: 50% after the *second* anniversary of the award date, 25% after the *third* anniversary, and the final 25% after the *fourth* anniversary of the award date. Fuel Tech calculates stock compensation expense for employee option awards based on the grant date fair value of the award, less expected annual forfeitures, and recognizes expense on a straight-line basis over the *four*-year service period of the award. Stock options granted to members of our board of directors vest immediately. Stock compensation for these awards is based on the grant date fair value of the award and is recognized in expense immediately.

Fuel Tech uses the Black-Scholes option pricing model to estimate the grant date fair value of employee stock options. The principal variable assumptions utilized in valuing options and the methodology for estimating such model inputs include: (*1*) risk-free interest rate – an estimate based on the yield of zero–coupon treasury securities with a maturity equal to the expected life of the option; (*2*) expected volatility – an estimate based on the historical volatility of Fuel Tech's Common Stock for a period equal to the expected life of the option; and (*3*) expected life of the option – an estimate based on historical experience including the effect of employee terminations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *10*

------

[**Table of Contents**](#toc)

Stock option activity for Fuel Tech's Incentive Plans for the *nine* months ended *September 30, 2025* was as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  |  |  | *Weighted- Average* |  |
|  | *Number* | *Weighted-* | *Remaining* | *Aggregate* |
|  | *of* | *Average* | *Contractual* | *Intrinsic* |
|  | *Options* | *Exercise Price* | *Term* | *Value* |
| Outstanding on January 1, 2025 | 176000 | $1.94 |  |  |
| Granted |  |  |  |  |
| Exercised |  |  |  |  |
| Expired or forfeited | (105000) | 2.44 |  |  |
| Outstanding on September 30, 2025 | 71000 | $1.20 | 1.60 | $128 |
| Exercisable on September 30, 2025 | 71000 | $1.20 | 1.60 | $128 |

---

As of *September 30, 2025*, there was no unrecognized compensation cost related to non-vested stock options granted under the Incentive Plans.

**Restricted Stock Units**

RSUs granted to employees vest over time based on continued service (typically vesting over a period between two to four years), and RSUs granted to directors vest after a *one* year vesting period based on continued service. Such time-vested RSUs are valued at the date of grant based on the closing price of the Common Shares on the grant date. Compensation cost, adjusted for estimated forfeitures, is amortized on a straight-line basis over the requisite service period.

In addition to the time vested RSUs, in *2025* the Company entered into an Executive Performance RSU Award Agreement (the "Agreement") with certain officers, including its President and Chief Executive Officer, Chief Financial Officer and Senior Vice President, Sales (each a "Participating Executive") pursuant to which each Participating Executive will have the opportunity to earn a specified amount of restricted stock units (RSUs) based on Fuel Tech's performance in *2025* and *2026.* The target amount of RSUs for each of *four* possible RSU award components is set for each Participating Executive for *2025* and *2026.* The amount of actual RSU awards to be issued is contingent on performance by the Participating Executive and the Company in the performance areas and for the measurement periods set forth in the Agreement as determined by the Company.

The Agreement provides for *four* possible RSU awards: "Look-Back RSUs," "Total Revenue RSUs," "New Business Revenue RSUs," and "Operating Income" RSUs. If the Look-Back RSU's are awarded, these RSUs will follow a vesting schedule that provides for vesting of one-*third* of the granted Look-Back RSUs after the *first* anniversary of the grant determination date, one-*third* after the *second* anniversary date and one-*third* after the *third* anniversary date. If the Total Revenue RSUs, New Business Revenue RSUs, or Operating Income RSUs targets are achieved, these RSU's will follow a vesting schedule whereby 100% of the granted RSUs will vest *one* year following the grant determination date. All RSUs are valued at the date of grant based on the closing price of the Company's common stock on the grant date.

At *September 30, 2025*, there is $1,064 of unrecognized compensation cost related to all non-vested share-based compensation arrangements granted under the Incentive Plan. That cost is expected to be recognized over the remaining requisite service period of 1.87 years.

A summary of restricted stock unit activity for the *nine* months ended *September 30, 2025* is as follows:

---

| | | |
|:---|:---|:---|
|  |  | *Weighted Average* |
|  |  | *Grant Date* |
|  | *Shares* | *Fair Value* |
| Unvested restricted stock units at January 1, 2025 | 1082122 | $1.26 |
| Granted | 966050 | 1.04 |
| Vested | (513850) | 1.27 |
| Forfeited | (425100) | 1.26 |
| Unvested restricted stock units at September 30, 2025 | 1109222 | $1.06 |

---

The fair value of restricted stock that vested during the *nine*-month period ended *September 30, 2025* was $654.

**Deferred Directors Fees**

In addition to the Incentive Plans, Fuel Tech has a Deferred Compensation Plan for Directors (Deferred Plan). Under the terms of the Deferred Plan, Directors can elect to defer Directors' fees for shares of Fuel Tech Common Stock that are issuable at a future date as defined in the agreement. In accordance with Accounting Standards Codification (ASC) *718,* Fuel Tech accounts for these awards as equity awards as opposed to liability awards. During the *nine*-month periods ended *September 30, 2025* and *2024*, Fuel Tech recorded no stock-based compensation expense under the Deferred Plan.

***9.* Warrants**

The following table summarizes information about warrants outstanding and exercisable at *September 30, 2025*:

---

| | | | |
|:---|:---|:---|:---|
| Exercise Price | Number Outstanding/Exercisable | Weighted Average Remaining Life in Years | Weighted Average Exercise Price |
| $5.10 | 2500000 | 0.87 | $5.10 |
| $6.45 | 350000 | 0.87 | $6.45 |
|  | 2850000 |  |  |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *11*

------

[**Table of Contents**](#toc)

***10.*&nbsp;&nbsp;&nbsp;&nbsp; Debt Financing**

The Company's Investment Collateral Security Agreement with BMO Harris is used for the sole purpose of issuing standby letters of credit and requires us to pledge our investments as collateral for 150% of the aggregate face amount of outstanding standby letters of credit. The Company pays 250 basis points on the face values of outstanding letters of credit. There are *no* financial covenants set forth in the Investment Collateral Security agreement. At *September 30, 2025*, the Company had outstanding standby letters of credit totaling approximately $3,141 under the Investment Collateral Security agreement. At *September 30, 2025*, the investments held as collateral totaled $4,711. Fuel Tech is committed to reimbursing the issuing bank for any payments made by the bank under these instruments.

***11.*&nbsp;&nbsp;&nbsp;&nbsp; Business Segment and Geographic Financial Data**

**Business Segment Financial Data**

We segregate our financial results into two reportable segments representing *two* broad technology segments as follows:

• The Air Pollution Control technology segment includes technologies to reduce NOx emissions in flue gas generated by the firing of natural gas or coal from boilers, incinerators, furnaces, and other stationary combustion sources. These include Over-Fire Air systems, NOxOUT<sup>®</sup> and HERT™ Selective Non-Catalytic Reduction systems, and Selective Catalytic Reduction (SCR) systems. Our SCR systems can also include Ammonia Injection Grid, and Graduated Straightening Grid GSG™ systems to provide high NOx reductions at significantly lower capital and operating costs than conventional SCR systems. ULTRA<sup>®</sup> technology creates ammonia at a plant site using safe urea for use with any SCR application. Electrostatic Precipitator (ESP) technologies make use of electrostatic precipitator products and services to reduce particulate matter. Flue Gas Conditioning systems are chemical injection systems offered in markets outside the U.S. and Canada to enhance electrostatic precipitator and fabric filter performance in controlling particulate emissions.

• The FUEL CHEM<sup>®</sup> technology segment, which uses chemical processes in combination with advanced Computational Fluid Dynamics and Chemical Kinetics Modeling boiler modeling, for the control of slagging, fouling, corrosion, opacity and other sulfur trioxide-related issues in furnaces and boilers through the addition of chemicals into the furnace using TIFI<sup>®</sup> Targeted In-Furnace Injection™ technology.

The "Other" classification includes those profit and loss items *not* allocated to either reportable segment. There are *no* inter-segment sales that require elimination.

Our Chief Executive Officer (CEO) serves as our Chief Operating Decision Maker (CODM) and is responsible for reviewing segment performance and making decisions regarding resource allocation. We evaluate performance and allocate resources based on reviewing gross margin by reportable segment. We do *not* allocate selling, general and administrative expenses, interest, other non-operating income or expense items, or taxes to segments. The accounting policies of the reportable segments are the same as those described in the summary of significant accounting policies (Note *1* in our annual report on Form *10*-K). We do *not* review assets by reportable segment, but rather, in aggregate for the Company as a whole.

Information about reporting segment net sales and gross margin from continuing operations is provided below:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | *Air Pollution* | *FUEL CHEM* |  |  |
| Three months ended September 30, 2025 | *Control Segment* | *Segment* | *Other* | *Total* |
| Revenues from external customers | $2707 | $4783 | $— | $7490 |
| Cost of sales | (1428) | (2401) |  | (3829) |
| Gross margin | 1279 | 2382 |  | 3661 |
| Selling, general and administrative |  |  | (3207) | (3207) |
| Research and development |  |  | (450) | (450) |
| Operating income (loss) from operations | $1279 | $2382 | $(3657) | $4 |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | *Air Pollution* | *FUEL CHEM* |  |  |
| Three months ended September 30, 2024 | *Control Segment* | *Segment* | *Other* | *Total* |
| Revenues from external customers | $3224 | $4627 | $— | $7851 |
| Cost of sales | (2095) | (2349) |  | (4444) |
| Gross margin | 1129 | 2278 |  | 3407 |
| Selling, general and administrative |  |  | (3225) | (3225) |
| Research and development |  |  | (361) | (361) |
| Operating income (loss) from operations | $1129 | $2278 | $(3586) | $(179) |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | *Air Pollution* | *FUEL CHEM* |  |  |
| Nine months ended September 30, 2025 | *Control Segment* | *Segment* | *Other* | *Total* |
| Revenues from external customers | $6515 | $12915 | $— | $19430 |
| Cost of sales | (3713) | (6568) |  | (10281) |
| Gross margin | 2802 | 6347 |  | 9149 |
| Selling, general and administrative |  |  | (9895) | (9895) |
| Research and development |  |  | (1510) | (1510) |
| Operating income (loss) from operations | $2802 | $6347 | $(11405) | $(2256) |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | *Air Pollution* | *FUEL CHEM* |  |  |
| Nine months ended September 30, 2024 | *Control Segment* | *Segment* | *Other* | *Total* |
| Revenues from external customers | $9491 | $10359 | $— | $19850 |
| Cost of sales | (5927) | (5535) |  | (11462) |
| Gross margin | 3564 | 4824 |  | 8388 |
| Selling, general and administrative |  |  | (9815) | (9815) |
| Research and development |  |  | (1159) | (1159) |
| Operating income (loss) from operations | $3564 | $4824 | $(10974) | $(2586) |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *12*

------

[**Table of Contents**](#toc)

**Geographic Segment Financial Data**

Information concerning our operations by geographic area is provided below. Revenues are attributed to countries based on the location of the end-user. Assets are those directly associated with operations of the geographic area.

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | *Three Months Ended* | *Three Months Ended* | *Nine Months Ended* | *Nine Months Ended* |
|  | *September 30,* | *September 30,* | *September 30,* | *September 30,* |
|  | *2025* | *2024* | *2025* | *2024* |
| Revenues: |  |  |  |  |
| United States | $5626 | $5453 | $15427 | $13519 |
| Foreign | 1864 | 2398 | 4003 | 6331 |
|  | $7490 | $7851 | $19430 | $19850 |

---

---

| | | |
|:---|:---|:---|
|  | *September 30,* | *December 31,* |
|  | *2025* | *2024* |
| Assets: |  |  |
| United States | $44917 | $44430 |
| Foreign | 2996 | 4367 |
|  | $47913 | $48797 |

---

***12.*&nbsp;&nbsp;&nbsp;&nbsp; Accrued Liabilities**

The components of other accrued liabilities are as follows:

---

| | | |
|:---|:---|:---|
|  | *As of* | *As of* |
|  | *September 30, 2025* | *December 31, 2024* |
| Contract liabilities (Note 3) | $2200 | $721 |
| Deferred revenue | 83 | 360 |
| Warranty reserve (Note 13) | 159 | 159 |
| Accrued professional fees | 16 | 86 |
| Other accrued liabilities | 216 | 289 |
| Total other accrued liabilities | $2674 | $1615 |

---

***13.*&nbsp;&nbsp;&nbsp;&nbsp; Commitments and Contingencies**

Fuel Tech is subject to various claims and contingencies related to, among other things, workers compensation, general liability (including product liability), and lawsuits. The Company records liabilities where a contingent loss is probable and can be reasonably estimated. If the reasonable estimate of a probable loss is a range, the Company records the most probable estimate of the loss or the minimum amount when *no* amount within the range is a better estimate than any other amount. The Company discloses a contingent liability even if the liability is *not* probable or the amount is *not* estimable, or both, if there is a reasonable possibility that a material loss *may* have been incurred.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *13*

------

[**Table of Contents**](#toc)

From time to time we are involved in litigation with respect to matters arising from the ordinary conduct of our business. In the opinion of management, based upon presently available information, either adequate provision for anticipated costs have been accrued or the ultimate anticipated costs will *not* materially affect our consolidated financial position, results of operations, or cash flows. We do *not* believe we have any pending loss contingencies that are probable or reasonably possible of having a material impact on our consolidated financial position, results of operations or cash flows.

Fuel Tech issues a standard product warranty with the sale of its products to customers. Our recognition of warranty liability is based primarily on analyses of warranty claims experienced in the preceding years as the nature of our historical product sales for which we offer a warranty are substantially unchanged. This approach provides an aggregate warranty accrual that is historically aligned with actual warranty claims experienced.

There was no change in the warranty liability balance included in the other accrued liabilities line of the Condensed Consolidated Balance Sheets during the *nine* months ended *September 30, 2025* and *2024*. The warranty liability balance was $159 at *September 30, 2025* and *December 31, 2024*.

***14.*&nbsp;&nbsp;&nbsp;&nbsp; Income Taxes**

The Company's effective tax rate is approximately 1.0% and 42.9% for the *nine*-month periods ended *September 30, 2025* and *2024*, respectively. The Company's effective tax rate differs from the statutory federal tax rate of 21% for the *nine*-month periods ended *September 30, 2025* and *2024* primarily due to a full valuation allowance recorded on our United States, China and Italy deferred tax assets since we cannot anticipate when or if we will have sufficient taxable income to utilize the deferred tax assets in the future. Further, our effective tax rate differs from the statutory federal tax rate due to state taxes, differences between U.S. and foreign tax rates, foreign losses incurred with *no* related tax benefit, non-deductible commissions, and non-deductible meals and entertainment expenses for the *nine*-month periods ended *September 30, 2025* and *2024*.

On *July 4, 2025,* the One Big Beautiful Bill Act was signed into law. This act includes changes to the U.S. corporate income tax system. The Company is currently evaluating the full effect of the legislation, but does *not* expect it to have a material impact on our Consolidated Financial Statements.

***15.* Subsequent Events**

On *October 3, 2025* the Company purchased certain intellectual property assets of Wahlco, Inc., a leading environmental equipment and services company, for a purchase price of $350. The intellectual property assets consist of technology rights, patents, and trademarks relating to Wahlco, Inc.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *14*

------

[**Table of Contents**](#toc)

**FUEL TECH, INC.**

Item 2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Management's Discussion and Analysis of Financial Condition and Results of Operations&nbsp;&nbsp;&nbsp;&nbsp;

***Overview***

The Company experienced a return to profitable operations during the current quarter, brought on by strong margin contributions from both the FUEL CHEM and Air Pollution Control (APC) operating segments. Improved performance from the FUEL CHEM segment was bolstered by the commercialization of a demonstration program in the second half of 2024, and the APC segment margins were positively impacted by the increase in contributions from ancillary revenues. The Company continues to execute on existing project backlog and support our legacy accounts while actively pursuing additional market opportunities. We continue to invest in development of new technologies to expand our product offerings into the water and waste-water treatment market. Our capital resources are sufficient for our immediate and longer-term needs, and we continue to enjoy the services and support of a dedicated workforce. We expect that our cost control efforts will maintain our existing levels of operating expenditures and that new business opportunities will lead to an improved financial and market outlook.

**Key Operating Factors**

Our FUEL CHEM segment experienced an increase in revenue and segment operating profits in the current quarter as compared to 2024. The FUEL CHEM segment continues to thrive from operational demand from our client base and the contribution of a new account added in the second half of 2024.

Our APC business experienced a decrease in revenue in the current quarter as compared to 2024, primarily due to timing of project execution and customer driven delays. We are encouraged by the depth of our business development activities, which reflects an increased focus on global emissions protocols across a variety of fuel sources. Our Consolidated APC backlog at September 30, 2025 was $9,472 and our global sales pipeline is in the $75 -100 million range.

***Results of Operations***

**Revenues**

Revenues for the three-month periods ending September 30, 2025 and 2024 were $7,490 and $7,851, respectively, representing a decrease of $361, or 5%, versus the same period last year. Revenues for the nine-month periods ending September 30, 2025 and 2024 were $19,430 and $19,850, respectively, representing a decrease of $420, or 2%, versus the same period last year.

The APC technology segment generated revenues of $2,707 for the three-month period ended September 30, 2025, representing a decrease of $517, or 16%, from the prior year amount of $3,224. The APC technology segment generated revenues of $6,515 for the nine-month period ended September 30, 2025, representing a decrease of $2,976, or 31%, from the prior year amount of $9,491. This decrease in APC revenue was primarily related to timing of project execution on existing contracts. Consolidated APC backlog at September 30, 2025 was $9,472 versus backlog at December 31, 2024 of $6,175. Our current backlog consists of U.S. domestic delivered projects totaling $3,989 and international delivered projects totaling $5,483.

The FUEL CHEM technology segment generated revenues of $4,783 and $4,627 for the three-month periods ended September 30, 2025 and 2024, respectively, representing an increase of $156, or 3%, versus the same period last year. The FUEL CHEM technology segment generated revenues of $12,915 and $10,359 for the nine-month periods ended September 30, 2025 and 2024, respectively, representing an increase of $2,556, or 25%. This increase in FUEL CHEM revenue for the three and nine months ended September 30, 2025 as compared to the same period in the prior year was primarily due to outage completions and increased operation dispatch at legacy accounts, as well as sustained business from a new customer account added midyear in 2024.

**Cost of sales and gross margin**

Consolidated gross margin percentage for the three-month periods ended September 30, 2025 and 2024 was 49% and 43%, respectively. For the three-month periods ended September 30, 2025 and 2024 the FUEL CHEM operating segment gross margin was 50% and 49%, respectively. FUEL CHEM gross margin increased from the prior year primarily due to an increased volume of sales activity combined with relatively flat segment administrative expenses. APC segment gross margin increased to 47% from 35% primarily due to product and project mix.

Consolidated gross margin percentage for the nine-month periods ended September 30, 2025 and 2024 was 47% and 42%, respectively. For the nine-month periods ended September 30, 2025 and 2024 the FUEL CHEM operating segment gross margin was 49% and 47%, respectively. FUEL CHEM gross margin increased from the prior year primarily due to an increased volume of sales activity combined with relatively flat segment administrative expenses. APC segment gross margin increased to 43% from 38% primarily due to product and project mix.

**Selling, general and administrative**

Selling, general and administrative expenses (SG&A) were $3,207 and $3,225 for the three-month periods ended September 30, 2025 and 2024, respectively. For the three-month period ended September 30, 2025, the decrease of $18 is primarily the result of a decrease in administrative expenses. For the three-month periods ending September 30, 2025 and 2024, SG&A as a percentage of revenues increased to 43% from 41%. The increase versus the comparable period is primarily due to the decrease in revenues compared to prior quarter.

Selling, general and administrative expenses (SG&A) were $9,895 and $9,815 for the nine-month periods ended September 30, 2025 and 2024, respectively. For the nine-month period ended September 30, 2025, the increase of $80 is primarily the result of an increase in domestic and international administrative expenses. For the nine-month periods ending September 30, 2025 and 2024, SG&A as a percentage of revenues increased to 51% from 49%. The increase versus the comparable period is primarily due to the decrease in revenues compared to prior year.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 15

------

[**Table of Contents**](#toc)

**Research and development**

Research and development expenses were $450 and $361 for the three-month periods ended September 30, 2025 and 2024, respectively. Research and development expenses were $1,510 and $1,159 for the nine-month periods ended September 30, 2025 and 2024, respectively. The expenditures in our research and development expenses are focused on new product development efforts in the pursuit of commercial applications for technologies outside of our traditional markets, and in the development and analysis of new technologies that could represent incremental market opportunities. This includes water treatment technologies and more specifically, our DGI® Dissolved Gas Infusion Systems, an innovative alternative to current aeration technology. This infusion process has a variety of applications in the water and wastewater industries, including remediation, treatment, biological activity, and wastewater odor management. DGI® technology benefits include reduced energy consumption, installation costs, and operating costs, while improving treatment performance.

**Interest income**

Interest income was $311 for the three-month period ended September 30, 2025 compared to $323 for the same period in 2024. Interest income was $1,127 for the nine-month period ended September 30, 2025 compared to $968 for the same period in 2024. Interest income primarily relates to interest received on the held-to-maturity debt securities and money market funds. Interest income for the nine-month period ended September 30, 2025 included $263 in interest income related to collection of our ERC benefit.

**Other income (expense), net**

Other expense, net was $5 for the three-month period ended September 30, 2025 compared to Other expense, net of $63 for the same period in 2024. Other income, net was $15 for the nine-month period ended September 30, 2025 compared to Other income, net of $1,576 for the same period in 2024. Other income and expense in 2025 and Other expense for the three-month period ended September 30, 2024 was mainly due to transactional foreign exchange gains and losses recognized from repayment of intercompany balances. Other income for the nine-month period ended September 30, 2024 primarily relates to the employee retention credit of $1,677 recorded in the first quarter of 2024.

***Liquidity and Sources of Capital***

We have losses from operations during the nine-month period ended September 30, 2025 totaling $2,256. Our cash provided by operations for this same period totaled $4,583.

Our cash and cash equivalent balance as of September 30, 2025 totaled $13,677, which includes $2,221 of cash equivalents, and our working capital totaled $26,043. We have no outstanding debt other than our outstanding letters of credit, under our Investment Collateral Security agreement with BMO Harris Bank, N.A. (the Investment Collateral Security agreement), which does not have any financial covenants. We expect to continue operating under this arrangement for the foreseeable future.

Operating activities provided cash of $4,583 for the nine-month period ended September 30, 2025, primarily due to a decrease in accounts receivable of $3,082, collections of the ERC receivable of $1,677, an increase in accrued liabilities and other noncurrent liabilities of $516, a decrease in prepaid expenses, other current assets, and other non-current assets of $302, and removals of non-cash items from our net loss from continuing operations of depreciation and amortization of $517 and stock-based compensation, net of forfeitures of $269, offset by a decrease in accounts payable of $560.

Operating activities used cash of $1,785 for the nine-month period ended September 30, 2024, primarily due to an increase in accounts receivable of $2,522 (including the impact of $1,677 for the employee retention credit receivable) and a decrease in accrued expenses and other current liabilities of $1,215, offset by an increase in accounts payable of $842, a decrease in prepaid expenses, other current assets and other non-current assets of $655, and removals of non-cash items from our net income from continuing operations of stock-based compensation of $337, depreciation and amortization of $290, and interest income on held-to-maturity securities of $108.

Investing activities provided cash of $765 and used cash of $3,388 for the nine-month periods ended September 30, 2025 and 2024, respectively. Investing activities for the nine-month periods ended September 30, 2025 and 2024 primarily consisted of purchases of debt securities as investments of $10,004 and $14,072, respectively. Investing activities for the nine-month periods ended September 30, 2025 and 2024 were funded by the maturities of debt securities of $11,000 in both periods.

Financing activities used cash of $222 and $95, respectively, for the nine months ended September 30, 2025 and 2024 due to taxes paid on behalf of the equity award participants on the vesting of restricted stock units.

We continue to monitor our liquidity needs and in response to our recent periods of declines in revenue and net losses have taken measures to reduce expenses and restructure operations which we feel are necessary to ensure we maintain sufficient working capital and liquidity to operate the business and invest in our future. We have evaluated our ongoing business needs and considered the cash requirements of our base business of Air Pollution Control and FUEL CHEM. This evaluation included consideration of the following: a) customer and revenue trends in our APC and FUEL CHEM business segments, b) current operating structure and expenditure levels, and c) other research and development initiatives. Based on this analysis, management believes that currently we have sufficient cash and working capital to operate our base APC and FUEL CHEM businesses. We believe our current cash position and net cash flows expected to be generated from operations are adequate to fund planned operations of the Company for the next 12 months.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 16

------

[**Table of Contents**](#toc)

We expect additional capital expenditures during the fourth quarter of 2025 for the DGI business, maintenance of field equipment, computer and systems, and general office equipment. We expect to fund our capital expenditures with cash from operations or cash on hand.

The Company's investment policy provides for $20,000 in funds at BMO Harris Bank, N.A. (BMO Harris) to be invested in held-to-maturity debt securities of United States (US) Treasuries, including Notes, Bonds, and Bills, or US Government Agency securities. The funds are held in money market funds until they are invested in those securities. The investments are structured to create a maturity "ladder" where the proceeds from maturities are re-invested to maintain a balance of short- and long-term investments based on expected business needs. Maturities are between three and thirty-six months. This strategy allows the Company to provide returns on excess cash, while managing liquidity and minimizing exposure to interest rate fluctuations.

The Company's Investment Collateral Security agreement is used for the sole purpose of issuing standby letters of credit and requires us to pledge our investments as collateral for 150% of the aggregate face amount of outstanding standby letters of credit. The Company pays 250 basis points on the face values of outstanding letters of credit. There are no financial covenants set forth in the Investment Collateral Security agreement. At September 30, 2025, the Company had outstanding standby letters of credit totaling approximately $3,141 under the Investment Collateral Security agreement. At September 30, 2025, the investments held as collateral totaled $4,711. Fuel Tech is committed to reimbursing the issuing bank for any payments made by the bank under these instruments.

***Contingencies and Contractual Obligations***

Fuel Tech issues a standard product warranty with the sale of its products to customers as discussed in Note 13. There was no change in the warranty liability balance during the nine months ended September 30, 2025.

***Forward-Looking Statements***

This Quarterly Report on Form 10-Q contains "forward-looking statements," as defined in Section 21E of the Securities Exchange Act of 1934, as amended, which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and reflect Fuel Tech's current expectations regarding future growth, results of operations, cash flows, performance and business prospects, and opportunities, as well as assumptions made by, and information currently available to, our management. Fuel Tech has tried to identify forward-looking statements by using words such as "anticipate," "believe," "plan," "expect," "estimate," "intend," "will," and similar expressions, but these words are not the exclusive means of identifying forward-looking statements. These statements are based on information currently available to Fuel Tech and are subject to various risks, uncertainties, and other factors, including, but not limited to, those discussed in Fuel Tech's Annual Report on Form 10-K for the year ended December 31, 2024 in Item 1A under the caption "Risk Factors," which could cause Fuel Tech's actual growth, results of operations, financial condition, cash flows, performance and business prospects and opportunities to differ materially from those expressed in, or implied by, these statements. Fuel Tech undertakes no obligation to update such factors or to publicly announce the results of any of the forward-looking statements contained herein to reflect future events, developments, or changed circumstances or for any other reason. Investors are cautioned that all forward-looking statements involve risks and uncertainties, including those detailed in Fuel Tech's filings with the Securities and Exchange Commission.

Item 3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Quantitative and Qualitative Disclosures about Market Risk

Fuel Tech's earnings and cash flow are subject to fluctuations due to changes in foreign currency exchange rates. We do not enter into foreign currency forward contracts nor into foreign currency option contracts to manage this risk due to the immaterial nature of the transactions involved.

Item 4.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Controls and Procedures

***Evaluation of Disclosure Controls and Procedures***

Fuel Tech maintains disclosure controls and procedures and internal controls designed to ensure (a) that information required to be disclosed in Fuel Tech's filings under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms, and (b) that such information is accumulated and communicated to management, including the principal executive and financial officer, as appropriate to allow timely decisions regarding required disclosure. Fuel Tech's Chief Executive Officer and principal financial officer have evaluated the Company's disclosure controls and procedures, as defined in Rules 13a – 15(e) and 15d -15(e) of the Exchange Act, as of the end of the period covered by this report, and they have concluded that these controls and procedures are effective.

***Changes in Internal Control over Financial Reporting***

There has been no change in the Company's internal control over financial reporting during the quarter covered by this report that has materially affected, or is reasonably likely to materially affect, its internal control over financial reporting.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 17

------

[**Table of Contents**](#toc)

**PART II. OTHER INFORMATION**

Item 1.&nbsp;&nbsp;&nbsp;&nbsp; Legal Proceedings

We are from time to time involved in litigation incidental to our business. We are not currently involved in any litigation in which we believe an adverse outcome would have a material effect on our business, financial conditions, results of operations, or prospects.

Item 1A. Risk Factors

The risk factors included in our Annual Report on Form 10-K for fiscal year ended December 31, 2024 have not materially changed.

Item 2.&nbsp;&nbsp;&nbsp;&nbsp; Unregistered Sales of Equity Securities and Use of Proceeds

None

Item 5.&nbsp;&nbsp;&nbsp;&nbsp; Other Information.

*Rule 10b5-1 Trading Arrangements*

During the three months ended August 31, 2025, none of the directors or executive officers of the Company adopted or terminated any contracts, instructions, or written plans for the purchase or sale of the Company's securities that were intended to meet the affirmative defense conditions of Rule 10b5-1(c) or any other "non-Rule 10b5-1 trading arrangement."

Item 6.&nbsp;&nbsp;&nbsp;&nbsp; Exhibits

---

| | | |
|:---|:---|:---|
| a. | Exhibits (all filed herewith) | Exhibits (all filed herewith) |
|  | 31.1 | [Certification of CEO pursuant to Section 302 of Sarbanes-Oxley Act of 2002](ex_855959.htm) |
|  | 31.2 | [Certification of principal financial officer pursuant to Section 302 of Sarbanes-Oxley Act of 2002](ex_855960.htm) |
|  | 32 | [Certification of CEO and principal financial officer pursuant to Section 906 of Sarbanes-Oxley Act of 2002](ex_855961.htm) |
|  | 101.1 | Inline INSXBRL Instance Document - The Instance Document does not appear in the Interactive Data File because its Inline XBRL tags are embedded within the Inline XBRL document. |
|  | 101.2 | Inline SCHXBRL Taxonomy Extension Schema Document |
|  | 101.3 | Inline CALXBRL Taxonomy Extension Calculation Linkbase Document |
|  | 101.4 | Inline DEFXBRL Taxonomy Extension Definition Linkbase Document |
|  | 101.5 | Inline LABXBRL Taxonomy Extension Label Linkbase Document |
|  | 101.6 | Inline PREXBRL Taxonomy Extension Prevention Linkbase Document |
|  | 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 18

------

[**Table of Contents**](#toc)

**FUEL TECH, INC.**

**Signatures**

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

---

| | | |
|:---|:---|:---|
| Date: November 4, 2025 | By: | /s/ Vincent J. Arnone |
|  |  | Vincent J. Arnone |
|  |  | President and Chief Executive Officer |
|  |  | (Principal Executive Officer) |

---

---

| | | |
|:---|:---|:---|
| Date: November 4, 2025 | By: | /s/ Ellen T. Albrecht |
|  |  | Ellen T. Albrecht |
|  |  | Vice President, Chief Financial Officer and Treasurer |
|  |  | (Principal Financial Officer) |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 19

## Exhibit 31.1

**Exhibit 31.1**

I, Vincent J. Arnone, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Fuel Tech, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15 (e) and 15d-15 (e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

---

| | | |
|:---|:---|:---|
| Date: November 4, 2025 | By: | /s/ Vincent J. Arnone |
|  |  | Vincent J. Arnone |
|  |  | President and Chief Executive Officer |
|  |  | (Principal Executive Officer) |

---

## Exhibit 31.2

**Exhibit 31.2**

I, Ellen T. Albrecht, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Fuel Tech, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15 (e) and 15d-15 (e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

---

| | | |
|:---|:---|:---|
| Date: November 4, 2025 | By: | /s/ Ellen T. Albrecht |
|  |  | Ellen T. Albrecht |
|  |  | Vice President, Chief Financial Officer and Treasurer |
|  |  | (Principal Financial Officer) |

---

## Ex-32

**Exhibit 32**

The undersigned in their capacities as Chief Executive Officer and Principal Financial Officer of the Registrant do hereby certify that:

(i) this report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(ii) information contained in the report fairly presents, in all material respects, the financial condition and results of operations of the Registrant as of, and for, the periods presented in the report.

---

| | | |
|:---|:---|:---|
| Date: November 4, 2025 | By: | /s/ Vincent J. Arnone |
|  |  | Vincent J. Arnone |
|  |  | President and Chief Executive Officer |
|  |  | (Principal Executive Officer) |
| Date: November 4, 2025 | By: | /s/ Ellen T. Albrecht |
|  |  | Ellen T. Albrecht |
|  |  | Vice President, Chief Financial Officer and Treasurer |
|  |  | (Principal Financial Officer) |

---

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (the "Act") this certification accompanies the Report and shall not, except to the extent required by the Act, be deemed filed by the Registrant for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to Fuel Tech, Inc. and will be retained by Fuel Tech, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.