ftek20240630

ftek20240630_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

June 30, 2024

☐	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

incorporation of organization)

(I.R.S. Employer

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)

________________________________

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. Yes ☒ 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). Yes ☒ 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). Yes ☐ No ☒

On July 31, 2024 there were outstanding 30,708,273 shares of Common Stock, par value $0.01 per share, of the registrant.

Table of Contents

FUEL TECH, INC.

Form 10-Q for the six-month period ended June 30, 2024

INDEX

		Page
PART I. FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited)	1
	Condensed Consolidated Balance Sheets as of June 30, 2024 and December 31, 2023	1
	Condensed Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2024 and 2023	2
	Condensed Consolidated Statements of Comprehensive Income (Loss) for the Three and Six Months Ended June 30, 2024 and 2023	3
	Condensed Consolidated Statements of Stockholders' Equity for the Three and Six Months Ended June 30, 2024 and 2023	4
	Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2024 and 2023	5
	Notes to Condensed Consolidated Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	15
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	17
Item 4.	Controls and Procedures	17
PART II.	OTHER INFORMATION	18
Item 1.	Legal Proceedings	18
Item 1A.	Risk Factors	18
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	18
Item 6.	Exhibits	18
SIGNATURES		19

Table of Contents

PART I.

FINANCIAL INFORMATION

Item 1.

Financial Statements

FUEL TECH, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

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

	June 30,			December 31,
	2024			2023
ASSETS
Current assets:
Cash and cash equivalents	$	10,404		$	17,578
Short-term investments		9,669			12,136
Accounts receivable, less current expected credit loss of $106 and $111, respectively		8,651			6,729
Inventories, net		462			439
Prepaid expenses and other current assets		1,117			1,439
Total current assets		30,303			38,321
Property and equipment, net of accumulated depreciation of $18,823 and $18,703, respectively		4,571			4,539
Goodwill		2,116			2,116
Other intangible assets, net of accumulated amortization of $499 and $468, respectively		337			358
Right-of-use operating lease assets, net		551			609
Long-term investments		10,360			3,664
Other assets		756			781
Total assets	$	48,994		$	50,388
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	2,938		$	2,421
Accrued liabilities:
Operating lease liabilities - current		94			81
Employee compensation		731			1,252
Other accrued liabilities		719			1,934
Total current liabilities		4,482			5,688
Operating lease liabilities - non-current		495			533
Deferred income taxes, net		172			172
Other liabilities		276			281
Total liabilities		5,425			6,674
Stockholders’ equity:
Common stock, $.01 par value, 40,000,000 shares authorized, 31,767,329 and 31,361,303 shares issued, and 30,708,273 and 30,385,297 shares outstanding, respectively		317			313
Additional paid-in capital		165,077			164,853
Accumulated deficit		(117,669	)		(117,529	)
Accumulated other comprehensive loss		(1,886	)		(1,748	)
Nil coupon perpetual loan notes		76			76
Treasury stock, at cost		(2,346	)		(2,251	)
Total stockholders’ equity		43,569			43,714
Total liabilities and stockholders’ equity	$	48,994		$	50,388

See notes to condensed consolidated financial statements.

Table of Contents

FUEL TECH, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

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

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2024			2023			2024			2023
Revenues	$	7,042		$	5,461		$	11,999		$	12,748
Costs and expenses:
Cost of sales		4,090			3,465			7,018			7,947
Selling, general and administrative		3,245			2,915			6,590			6,160
Research and development		422			413			798			631
		7,757			6,793			14,406			14,738
Operating loss		(715	)		(1,332	)		(2,407	)		(1,990	)
Interest expense		—			(5	)		—			(10	)
Interest income		334			307			645			646
Other (expense) income, net		(34	)		(14	)		1,639			(104	)
Loss before income taxes		(415	)		(1,044	)		(123	)		(1,458	)
Income tax expense		(6	)		—			(17	)		—
Net loss	$	(421	)	$	(1,044	)	$	(140	)	$	(1,458	)
Net loss per common share:
Basic net loss per common share	$	(0.01	)	$	(0.03	)	$	(0.00	)	$	(0.05	)
Diluted net loss per common share	$	(0.01	)	$	(0.03	)	$	(0.00	)	$	(0.05	)
Weighted-average number of common shares outstanding:
Basic		30,482,000			30,324,000			30,434,000			30,310,000
Diluted		30,482,000			30,324,000			30,434,000			30,310,000

See notes to condensed consolidated financial statements.

Table of Contents

FUEL TECH, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(Unaudited)

(in thousands)

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2024			2023			2024			2023
Net loss	$	(421	)	$	(1,044	)	$	(140	)	$	(1,458	)
Other comprehensive (loss) income:
Foreign currency translation adjustments		5			(48	)		(138	)		38
Comprehensive loss	$	(416	)	$	(1,092	)	$	(278	)	$	(1,420	)

See notes to condensed consolidated financial statements.

Table of Contents

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 six months ended June 30, 2023:

										Accumulated			Nil
					Additional					Other			Coupon
	Common Stock				Paid-in		Accumulated			Comprehensive			Perpetual		Treasury
	Shares		Amount		Capital		Deficit			Loss			Loan Notes		Stock			Total
Balance at December 31, 2022		30,296	$	313	$	164,422	$	(115,991	)	$	(1,728	)	$	76	$	(2,251	)	$	44,841
Net loss		—		—		—		(414	)		—			—		—			(414	)
Foreign currency translation adjustments		—		—		—		—			86			—		—			86
Stock compensation expense		—		—		89		—			—			—		—			89
Balance at March 31, 2023		30,296	$	313	$	164,511	$	(116,405	)	$	(1,642	)	$	76	$	(2,251	)	$	44,602
Net loss		—		—		—		(1,044	)		—			—		—			(1,044	)
Foreign currency translation adjustments		—		—		—		—			(48	)		—		—			(48	)
Stock compensation expense		—		—		98		—			—			—		—			98
Exercise of stock options		44		—		42		—			—			—		—			42
Common shares issued upon vesting of restricted stock units		45		—		—		—			—			—		—			—
Balance at June 30, 2023		30,385	$	313	$	164,651	$	(117,449	)	$	(1,690	)	$	76	$	(2,251	)	$	43,650

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

												Accumulated			Nil
						Additional						Other			Coupon
	Common Stock					Paid-in			Accumulated			Comprehensive			Perpetual		Treasury
	Shares			Amount		Capital			Deficit			Loss			Loan Notes		Stock			Total
Balance at December 31, 2023		30,385		$	313	$	164,853		$	(117,529	)	$	(1,748	)	$	76	$	(2,251	)	$	43,714
Net income		—			—		—			281			—			—		—			281
Foreign currency translation adjustments		—			—		—			—			(143	)		—		—			(143	)
Stock compensation expense		—			—		104			—			—			—		—			104
Balance at March 31, 2024		30,385		$	313	$	164,957		$	(117,248	)	$	(1,891	)	$	76	$	(2,251	)	$	43,956
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		30,708		$	317	$	165,077		$	(117,669	)	$	(1,886	)	$	76	$	(2,346	)	$	43,569

See notes to condensed consolidated financial statements.

Table of Contents

FUEL TECH, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(in thousands)

		Six Months Ended
		June 30,

SEC Form 10-Q filed by Fuel Tech Inc.