# Fuel Tech, Inc.: Form 10-K for the period ended Dec 31, 2025 - Company: [Fuel Tech, Inc.](/companies/ftek.md) (CIK 846913) - Form: 10-K - Filed: 2026-03-03 - Accepted by EDGAR: Mar 3, 2026, 16:31 ET - Period: 2025-12-31 - Accession: 0001437749-26-006623 - Inline XBRL: yes - Main document: https://www.sec.gov/Archives/edgar/data/846913/000143774926006623/ftek20251231_10k.htm - All documents and exhibits: https://www.sec.gov/Archives/edgar/data/846913/000143774926006623/ ## Figures reported in this filing Standardized XBRL line items for the period ended 2025-12-31. | Line item | Period | Value | XBRL concept | | --- | --- | ---: | --- | | Revenue | 12 months, 2025-01-01 to 2025-12-31 | $26.7m | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax | | Cost of revenue | 12 months, 2025-01-01 to 2025-12-31 | $14.3m | us-gaap:CostOfRevenue | | Gross profit | 12 months, 2025-01-01 to 2025-12-31 | $12.4m | us-gaap:GrossProfit | | Research and development | 12 months, 2025-01-01 to 2025-12-31 | $2.0m | us-gaap:ResearchAndDevelopmentExpense | | Selling, general and administrative | 12 months, 2025-01-01 to 2025-12-31 | $14.1m | us-gaap:SellingGeneralAndAdministrativeExpense | | Operating income | 12 months, 2025-01-01 to 2025-12-31 | −$3.7m | us-gaap:OperatingIncomeLoss | | Income tax | 12 months, 2025-01-01 to 2025-12-31 | $15.0k | us-gaap:IncomeTaxExpenseBenefit | | Net income | 12 months, 2025-01-01 to 2025-12-31 | −$2.3m | us-gaap:NetIncomeLoss | | Diluted EPS | 12 months, 2025-01-01 to 2025-12-31 | −$0.08 | us-gaap:EarningsPerShareDiluted | | Basic EPS | 12 months, 2025-01-01 to 2025-12-31 | −$0.08 | us-gaap:EarningsPerShareBasic | | Diluted shares (weighted) | 12 months, 2025-01-01 to 2025-12-31 | 30,937,000 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding | | Operating cash flow | 12 months, 2025-01-01 to 2025-12-31 | $3.0m | us-gaap:NetCashProvidedByUsedInOperatingActivities | | Capital expenditure | 12 months, 2025-01-01 to 2025-12-31 | $674.0k | us-gaap:PaymentsToAcquireProductiveAssets | | Cash and equivalents | at 2025-12-31 | $11.9m | us-gaap:CashAndCashEquivalentsAtCarryingValue | | Current assets | at 2025-12-31 | $31.9m | us-gaap:AssetsCurrent | | Total assets | at 2025-12-31 | $47.2m | us-gaap:Assets | | Current liabilities | at 2025-12-31 | $6.3m | us-gaap:LiabilitiesCurrent | | Total liabilities | at 2025-12-31 | $7.2m | us-gaap:Liabilities | | Shareholders' equity | at 2025-12-31 | $39.9m | us-gaap:StockholdersEquity | ## Business As filed, 25,285 characters. As used in this Annual Report on Form 10-K, the terms “we,” “us,” or “our,” refer to Fuel Tech, Inc. and our wholly owned subsidiaries. ### GENERAL We are a leading technology company engaged in the worldwide development, commercialization and application of sustainable state-of-the-art proprietary technologies for air pollution control, process optimization, water treatment and advanced engineering services. These technologies enable our customers to operate efficiently in a cost-effective and environmentally sustainable manner. - The Company’s nitrogen oxide (NOx) reduction technologies include NOxOUT® and Advanced Selective Non-Catalytic Reduction (SNCR) systems and ASCR® Advanced Selective Catalytic Reduction systems. SCR reagent supply systems include the ULTRA® and U2A processes for safe ammonia generation and UDI™ Urea Direct Injection systems, along with aqueous and anhydrous ammonia storage and delivery systems. These technologies have established Fuel Tech as a leader in NOx reduction, with installations on over 2,000 units worldwide. - Fuel Tech’s Air Pollution Control (APC) technologies include particulate control with Electrostatic Precipitator (ESP) products and services with experience on units up to 700 MW. Flue Gas Conditioning (FGC) systems include treatment using sulfur trioxide (SO3) and ammonia-based conditioning agents to improve the performance of ESPs by modifying the properties of fly ash particles. Fuel Tech’s particulate control technologies have been installed on more than 600 units worldwide. - Our FUEL CHEM technologies revolve around the unique application of chemical injection programs which improve the efficiency, reliability, fuel flexibility, boiler heat rate and environmental status of combustion units by controlling slagging, fouling, corrosion, opacity and acid plume, as well as the formation of sulfur trioxide, ammonium bisulfate, particulate matter, sulfur dioxide, and carbon dioxide. We use our proprietary TIFI® Targeted In-Furnace Injection™ processes to apply specialty chemical programs to units burning a wide variety of fuels including coal, heavy oil, biomass, and municipal waste. These TIFI® programs incorporate design, modeling, equipment, reagent, and service to provide complete customized on-site programs designed to improve plant operations and provide a return on investment in addition to helping meet emission regulatory requirements. We have FUEL CHEM experience on more than 100 applications worldwide. - Water treatment technologies include DGI® Dissolved Gas Infusion Systems which utilize a proprietary channel injector and a patented saturator to provide a competitive advantage over conventional water and wastewater treatment by infusing oxygen, carbon dioxide or other gases into water. An innovative alternative to current technologies among other applications, DGI® systems can deliver supersaturated oxygen solutions and other gas-water combinations to target process applications or environmental issues. This infusion process has a variety of applications in the water and wastewater treatment segments, including irrigation, treatment of natural waters, aquaculture, supply of oxygen for biological remediation, wastewater odor management, pH adjustment, re-carbonization, and alkalinity control, etc. DGI® technology benefits include improved treatment performance and reduced treatment time, and the potential for reduced energy consumption, along with lower installation and operating costs. The DGI® technology is currently in the demonstration phase and we expect additional revenue generating demonstrations and opportunities throughout 2026. Third party validation testing of the efficiency of transferring oxygen to a treatment basin has been completed and results have been published. Many of our products and services rely heavily on our Computational Fluid Dynamics (CFD) and Chemical Kinetics Modeling (CKM) capabilities, which are enhanced by internally developed, high-end visualization software. These capabilities, coupled with our innovative technologies and multi-disciplined team approach, enable us to provide practical solutions to some of our customers' most challenging issues. ### AIR POLLUTION CONTROL (APC) #### Regulations and Markets: Domestic The future growth of our APC technology segment is dependent upon the adoption and enforcement of environmental regulations in the United States (U.S.) and globally. In the U.S., federal and state laws regulating the emission of NOx are the primary driver in our APC technology segment. The principal regulatory drivers currently in effect are as follows: *Clean Air Act (CAA):* The CAA requires the U.S. Environmental Protection Agency (EPA) to establish national ambient air quality standards (NAAQS) at levels that are protective of public health with an adequate margin of safety. The six pollutants specified include: Ozone, Particulate Matter, Nitrogen Dioxide, Sulfur Dioxide, Lead, and Carbon Monoxide. The NAAQS provisions require that states comply with ozone and particulate emissions standards. NOx emissions are a precursor to ozone formation and contribute to fine particulate emissions. Since 1990, EPA rules and programs have been established at the regional and federal level to help states in their mission to define and meet their State Implementation Plans for attainment. The NAAQS ground-level ozone standards that were issued in 1997 were made more stringent in 2008 and again in 2015. The EPA kept the 2025 NAAQS ozone standard at 70 parts per billion, the same limit which has been in place since 2015. For ozone NAAQS compliance, upwind states are required by the Good Neighbor obligations as defined in the CAA to not contribute significantly to the ozone levels in downwind states. If downwind states are not able to meet their emission standards due to the contribution of NOx emissions from upwind states, downwind states may challenge upwind states based on their ability to meet regulatory compliance standards. Fuel Tech will monitor the potential impact on these upcoming NOx emission requirements. *New Unit Permits:* New gas fired units for both electricity generation and industrial use will require Best Available Control Technology (BACT) as a permit requirement. SCR technology is very often BACT for NOx, and these permit requirements generate new market opportunities. New unit permits are granted at the state level, and individual state emission requirements can be more stringent than any national standards. *Consent Decrees:* Consent decree activity through the U.S. Department of Justice or EPA may require emission sources to meet individual requirements. Sources may also agree to specific air pollution requirements with states or environmental groups. *State and Local Mandates:* While the EPA sets broad national goals under the CAA, many states exercise their independent authority to impose more aggressive emissions caps, often removing historical exemptions for startup and shutdown periods or mandating Best Available Retrofit Control Technology (BARCT) on existing aging fleets. In regions with persistent air quality challenges, state-specific rules such as California's South Coast AQMD requirements or the Northeast's 'Good Neighbor' SIP provisions effectively transition SCR from a high-tier option to a mandatory operational baseline. Consequently, for our customer base operating in such regions these localized regulations often represent the most stringent and immediate compliance hurdle, dictating the technical specifications and timing of pollution control upgrades. #### Regulations and Markets: International We also sell air pollution control systems outside the U.S., specifically in Europe, South Africa, South America, India (under a license agreement) and in the Pacific Rim. The demand for our technologies comes from specific governmental regulations in NOx and particulate matter emission limits which vary by country. We expect that there will be further opportunities to implement our technologies globally in 2026. The European Union’s Best Available Reference Technology (BREF) emission guidelines continue to be implemented gradually and updated regularly. These guidelines impact all combustion sources from large utility boilers down to small industrial units. The last major update of the BREF guidelines reduced NOx limit values by up to 25% which in some cases required an upgrade of the first-generation NOx abatement systems. That has presented new opportunities for Fuel Tech, especially on biomass and waste incineration plants. New NOx abatement opportunities are also being identified and followed in hydrogen production, chemical production and in petrochemical industries. European engineering companies are supplying power generation and flue gas treatment systems to industrial and utility customers globally. Middle Eastern countries have become a major focus for these companies due to the local initiatives for reducing pollution and improving tourism. Fuel Tech’s NOx control technologies can be integrated into both new and existing combustion systems supplied into this market. In Brazil, there are stricter NOx emission limits in and around large population centers compared to rural areas. Multi-national industrial companies setting up operations in these areas typically specify air pollution abatement systems similar to those installed in Europe and the U.S. New biomass fired power plants in Chile have also started specifying NOx control technologies. We have well-established relationships with engineering companies in the region to be able to supply our proven technologies. In South Africa, the state-owned utility Eskom and metallurgical companies are continuing with refurbishing aging ESPs and adding FGC technology to further improve ESP performance. Fuel Tech is well placed to compete for this business with our local partner Lesedi. The Indian government has prioritized sulfur oxide treatment over NOx abatement in the refurbishment of thermal power units. However, new biomass fired boilers are expected to be outfitted with SNCR technology. Particulate matter emission reductions continue to be an area of focus in the country and that presents an ongoing opportunity for Fuel Tech’s FGC technology. These technologies will be implemented through a collaboration with our local partner ISGEC. #### Products Our NOx reduction and particulate control technologies are installed worldwide on over 2,000 combustion units, including utility, industrial and municipal solid waste applications. Our products include customized NOx control systems and our proprietary ULTRA® technology, which converts urea-to-ammonia on site and provides safe reagent for use in SCR systems. - SCR Systems and Services: Our SCR systems control NOx emissions from industrial and utility sources including boilers, incinerators, kilns, reformers, turbines, engines and many other types of heat recovery equipment firing coal, natural gas, oil, and a variety of process gases and waste fuels. The SCR systems typically include urea or ammonia storage and delivery subsystems, reagent injection systems in the form of an Ammonia Injection Grid (AIG), catalyst reactor vessel and SCR catalyst. In addition, other related services, including start-ups, maintenance support and general consulting services for SCR systems, AIG design and tuning to help optimize catalyst performance, and catalyst management services to help optimize catalyst life, are now offered to customers around the world. We also specialize in CFD models, which simulate fluid and gas flow by generating a virtual replication of real-world geometry and operating inputs. We design flow corrective devices, such as turning vanes, ash screens, static mixers and our GSG™ Graduated Straightening Grid. Our SCR systems utilize urea or ammonia as the SCR catalyst reagent to achieve NOx reductions of up to 95% from industrial combustion sources. - ULTRA® Technology: Our ULTRA® process is designed to convert urea to ammonia safely and economically for use as a reagent in the SCR process for NOx reduction. Recent local objections in the ammonia permitting process have raised concerns regarding the safety of ammonia shipment and storage in quantities sufficient to supply SCR. In addition, the Department of Homeland Security has characterized anhydrous ammonia as a Toxic Inhalation Hazard commodity. The safe conversion of urea to ammonia just prior to injection into the flue gas duct is particularly important near densely populated cities, major waterways, harbors or islands, or where the storage or transport of anhydrous or aqueous ammonia is a safety concern. UDI™ Urea Direct Injection systems utilize direct injection of urea reagent without the need for an ammonia injection grid. - SNCR Systems: Our NOxOUT® SNCR processes use urea or ammonia reagent injected into a variety of combustion furnaces to reduce NOx by up to 25% - 50% for utilities and by potentially significantly greater amounts for industrial units. Capital costs range from $5 - $20/kW for utility boilers, with total annualized operating costs ranging from $1,000 - $2,000/ton of NOx removed. Advanced SNCR (ASNCR) systems are also available to improve performance and minimize reagent costs through in-furnace monitoring and an advanced control system. - ESP and FGC Processes and Services: ESP technologies for particulate control include ESP products and services including ESP Inspection Services, Performance Modeling, and Performance and Efficiency Upgrades, along with engineering capability for ESP retrofits. FGC systems include treatment using sulfur trioxide (SO3) and ammonia-based systems to improve the performance of ESPs by modifying the properties of fly ash particles. Our ULTRA® technology can provide the ammonia system feed requirements for FGC applications as a safe alternative to ammonia reagent-based systems. FGC systems offer a lower capital cost approach to improving ash particulate capture versus the alternative of installing larger ESPs or utilizing fabric filter technology to meet targeted emissions and opacity limits. Fuel Tech’s particulate control technologies have been installed on more than 600 units worldwide. A market factor for the APC product line is the continued use of coal and natural gas and the growth of biomass for global electricity production. The growth of natural gas in the U.S. for industrial applications in support of traditional electricity generation, as well as the increased demand in support of the growth of data centers, which require significant power generation capability, has increased the need for SCR technology since it often meets the definition of BACT and is required on new industrial units. Sales of APC products were $8.9 million and $11.2 million for the years ended December 31, 2025 and 2024, respectively. #### APC Competition Competition with our products may be expected from companies supplying SCR Systems, SNCR systems, ESP retrofits and FGC technologies. In addition, we experience competition in the urea-to-ammonia conversion market. The SCR process is an effective and proven method of control for removal of NOx up to 90%. SCR systems have a high capital cost of $300+/kW on retrofit coal applications. Companies including Babcock Power, Babcock & Wilcox (B&W) Company, CECO Environmental and Mitsubishi are active SCR system and reagent feed system providers. The use of both urea and ammonia as the reagent for the SNCR process can reduce NOx by 30% - 70%, depending on a number of factors. Ammonia can be effective on incinerators and on Circulating Fluidized Bed combustion units, but has limited applicability for most utility boilers, where urea is dominant. The ammonia-based systems utilize either anhydrous or aqueous ammonia, both of which are hazardous substances. Competitors for ammonia based SNCR include CECO Environmental, B&W, and Yara, with CECO Environmental and B&W for urea based SNCR systems. ESP retrofit competitors include B&W and Southern Environmental. FGC competition includes Chemithon, Inc. Lastly, with respect to urea-to-ammonia conversion technologies, our controlled urea decomposition system competes with ammonia-based processes. #### APC Backlog Consolidated APC segment backlog at December 31, 2025 was $7.0 million versus backlog at December 31, 2024 of $6.2 million. The Company expects to recognize revenue on approximately $6.0 million of the backlog over the next 12 months with the remaining recognized thereafter. ### FUEL CHEM #### Product and Markets The FUEL CHEM® technology segment revolves around the unique application of specialty chemicals to improve the efficiency, reliability and environmental status of plants operating in the electric utility, industrial, pulp and paper, waste-to-energy, university and district heating markets. FUEL CHEM programs are currently in place on combustion units in North America, Mexico, Europe, and the Pacific Rim, treating a wide variety of solid and liquid fuels, including coal, heavy oil, black liquor, biomass and municipal waste. Central to the FUEL CHEM approach is the introduction of chemical reagents, such as magnesium hydroxide, to combustion units via in-body fuel application (pre-combustion) or via direct injection (post-combustion) utilizing our proprietary TIFI® technology. By attacking performance-hindering problems, such as slagging, fouling and corrosion, as well as the formation of sulfur trioxide (SO3), and ammonium bisulfate, our programs offer numerous operational, financial and environmental benefits to owners of boilers, furnaces and other combustion units. A key market factor for this product line is the continued use of coal for global electricity production. In 2025, coal accounted for approximately 17% of all U.S. electricity generation and roughly 33% of global electricity generation. Major coal consumers include the U.S., China and India. Additional market dynamics include a growing, worldwide utilization of biomass for both steam and electrical production, and the continued use of heavy fuel oil for power generation. The principal markets for this product line are electric power plants burning coals with slag-forming constituents such as sodium, iron and high levels of sulfur. Sodium is typically found in the Powder River Basin coals of Wyoming and Montana. High sulfur content can give rise to unacceptable levels of SO3 formation especially in plants with SCR systems and flue gas desulphurization units (scrubbers). As coal units strive to compete in electricity supply markets, lower cost, higher slagging fuels can create more operational challenges which TIFI® Programs can help mitigate. The current Mexican government is utilizing more indigenous fuel sources for power generation because the international market for high sulfur fuel oil (what Mexico produces) has been significantly reduced with the adoption of the new International Maritime Organization restrictions. Fuel Tech’s TIFI® systems can help with SO3 mitigation at these oil-fired power generation units. The combination of slagging coals and SO3-related issues, such as “blue plume” formation, air pre-heater fouling and corrosion, SCR fouling and the proclivity to suppress certain mercury removal processes, represents an attractive market potential for Fuel Tech. Sales of the FUEL CHEM products were $17.8 million and $13.9 million, for the years ended December 31, 2025 and 2024, respectively. #### Competition Competition for our FUEL CHEM product line includes chemicals sold by specialty chemical companies, such as Imerys, Environmental Energy Services, Inc., and SUEZ Water Technologies. No technologically comparable substantive competition currently exists for our TIFI® technology, which is designed primarily for slag control and SO3 abatement, but there can be no assurance that such lack of substantive competition will continue. ### INTELLECTUAL PROPERTY We own 32 granted patents worldwide including 12 US patents and 20 non-US patents. We have five patent applications pending: including three in the U.S. and two in non-U.S. jurisdictions. These patents and applications cover some 37 inventions, 23 associated with our NOx reduction business, five associated with the FUEL CHEM business, and nine associated with water treatment. Our granted patents have expiration dates ranging from December of 2028 to August of 2042. Management believes that the protection provided by the numerous claims in the above referenced patents or patent applications is substantial and affords us a significant competitive advantage in our business. Accordingly, any significant reduction in the protection afforded by these patents or any significant development in competing technologies could have a material adverse effect on our business. ### EMPLOYEES At December 31, 2025, we had 77 employees, 72 in North America, and five in Europe. We enjoy good relations with our employees and are not a party to any labor management agreement. ### HUMAN CAPITAL RESOURCES We believe our employees are our most valuable asset and we endeavor to provide a safe, inclusive, high-performance culture where our people can thrive. As such, we continually work to recruit, develop, engage, train and protect our employees. The following are key human capital measures and objectives on which we currently focus. *Employee Total Compensation and Benefits Philosophy.* We provide access to benefits and offer programs that support work-life balance and overall well-being, including financial, physical and mental health resources, such as those listed below. | Financial | Health and Wellness | Work-Life Balance | | --- | --- | --- | | Competitive Base Pay | Medical, Dental and Vision Benefits | Paid time off, paid holidays and jury duty pay | | Corporate Objectives Plan (Potential Annual Bonus Based on Achievement of Qualitative Milestones) | Flexible Spending Accounts and Health Savings Accounts | Paid Parental Leave (maternity, paternity, adoption) | | Corporation Incentive Plan (Potential Annual Bonus Based on Company’s Achievement of Operating Income) | On-site and complimentary Vaccinations | Employee Assistance Program (mental health, legal, financial services) | | 401(k) Retirement Savings Plan with Company Match (Traditional and Roth) | | Flexible Work Arrangements | | Life Insurance | | Tuition Reimbursement | | Short-term and Long-term Disability Insurance | | Complimentary on-line learning and training | *Commitment to Safe Working Environment.* All employees are required to understand and obey local laws, to report any suspected violations, and to act in accordance with our Code of Conduct. *Compensation Equity.* We conduct comprehensive pay equity analyses encompassing all staff members and job levels at appropriate intervals. We believe we have made compensation adjustments to rectify compensation disparities. We have also implemented hiring and promotional practices to support our goal of ensuring offers to new employees or to employees being promoted internally are aligned with the market and equitable on an internal basis. *Talent Acquisition and Retention.* We strive to attract, develop and retain high-performing talent, and we support and reward employee performance. Programs to strengthen our talent include an employee referral program, tuition reimbursement, continued training and development and succession planning. We prioritize employee engagement and transparency by implementing programs and processes to ensure our employees have opportunities to ask questions, voice concerns, and share feedback. This is accomplished in part by conducting employee satisfaction surveys as part of the annual review process, and quarterly town hall meetings. In 2025, our employee turnover rate was approximately 16%. ### AVAILABLE INFORMATION We are a fully integrated company using a suite of advanced technologies to provide boiler optimization, efficiency improvement and air pollution reduction and control solutions to utility and industrial customers worldwide. Originally incorporated in 1987 under the laws of the Netherlands Antilles as Fuel-Tech N.V., we were domesticated in the United States on September 30, 2006, and continue as a Delaware corporation with our corporate headquarters at 27601 Bella Vista Parkway, Warrenville, Illinois, 60555-1617. Fuel Tech maintains an Internet website at www.ftek.com. Our Annual Report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and any amendments to those reports filed or furnished pursuant to Section 13(a) of the Exchange Act are made available through our website as soon as reasonably practical after we electronically file or furnish the reports to the Securities and Exchange Commission. Our website also contains our Corporate Governance Guidelines and Code of Ethics and Business Conduct, as well as the charters of the Audit, Compensation, and Nominating and Corporate Governance committees of the Board of Directors. All of these documents are available in print without charge to stockholders who request them. Information on our website is not incorporated into this report. ## Risk factors As filed, 24,758 characters. The following is a discussion of the material risk factors; however, they may not be the only risks that we may face. The risks described below should not be considered a complete list of potential risks that we face, and additional risks and uncertainties not currently known to us or that we currently consider immaterial may also negatively impact our business. If any of these risks develop into actual or expected events, our business, financial condition, results of operations or cash flows could be materially and adversely affected, and, as a result, the trading price of our common stock could decline. You should carefully consider the risk factors described below, together with the other information included in this Annual Report on Form 10-K, before you decide to invest in our securities. Please read the cautionary notice regarding forward-looking statements under the heading “Forward-Looking Statements.” ### RISKS RELATED TO OUR PRODUCTS AND PRICING ### Our Product Portfolio Lacks Diversification We have two broad technology segments that provide advanced engineering solutions to meet the pollution control, efficiency improvement, and operational optimization needs of coal, biomass and natural gas-fired energy-related facilities worldwide. They are as follows: - The Air Pollution Control technology segment includes technologies to reduce NOx emissions in flue gas generated by the firing of natural gas, coal, or biomass from boilers, incinerators, furnaces and other stationary combustion sources. These include NOxOUT® SNCR systems and SCR systems. Our SCR systems can also include AIG, and GSG™ systems to provide high NOx reductions at significantly lower capital and operating costs than conventional SCR systems. ULTRA® technology creates ammonia at a plant site using safe urea for use with any SCR application. ESP technologies make use of electrostatic precipitator products and services to reduce particulate matter. FGC 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® technology segment which uses chemical processes in combination with advanced CFD and CKM boiler modeling for the control of slagging, fouling, corrosion, opacity and other sulfur trioxide-related issues in coal-fired furnaces and boilers through the addition of chemicals into the furnace using TIFI® Targeted In-Furnace Injection™ technology. An adverse development in our advanced engineering solutions business as a result of competition, technological change, government regulation, customers converting to use natural gas or other fuels, or any other factor could have a significantly greater impact than if we maintained more diverse operations. ### We Face Substantial Competition Competition in the Air Pollution Control market comes from competitors utilizing their own NOx reduction processes, including SCR systems, SNCR systems, ammonia and urea-based delivery systems for SNCR and SCR, which do not infringe our patented or proprietary technologies. Indirect competition will also arise from business practices such as the purchase rather than the generation of electricity, fuel switching, closure or de-rating of units, and sale or trade of pollution credits and emission allowances. Utilization by customers of such processes or business practices or combinations thereof may adversely affect our pricing and participation in the NOx control market if customers elect to comply with regulations by methods other than the purchase of our Air Pollution Control products. See Item 1 “*Products”* and “*APC Competition”* in the *Air Pollution Control* segment overview. Competition for our FUEL CHEM markets include chemicals sold by specialty chemical companies, such as Imerys, Environmental Energy Services, Inc., and SUEZ Water Technologies. ### Our Dependence Upon Fixed-price Contracts Could Adversely Affect our Operating Results The majority of our air pollution control projects are currently performed on a fixed-price basis. Under a fixed-price contract, we agree on the price that we will receive for the entire project, based upon a defined scope, which includes specific assumptions and project criteria. If our estimates of the costs to complete the project are below the actual costs that we incur, our margins will decrease, or we may incur a loss. The revenue, cost and gross profit realized on a fixed-price contract will often vary from the estimated amounts because of unforeseen conditions or changes in job conditions and variations in labor and equipment productivity over the term of the contract. While our fixed-price contracts are typically not individually material to our operating results, if we are unsuccessful in mitigating these risks, we may realize gross profits that are different from those originally estimated and incur reduced profitability or losses on projects. Depending on the size of a project, these variations from estimated contract performance could have a significant effect on our operating results. In general, turnkey contracts to be performed on a fixed-price basis involve an increased risk of significant variations. Generally, our contracts and projects vary in length, depending on the size and complexity of the project, project owner demands and other factors. The foregoing risks are exacerbated for projects with longer-term durations and the inherent difficulties in estimating costs and of the interrelationship of the integrated services to be provided under these contracts whereby unanticipated costs or delays in performing part of the contract can have compounding effects by increasing costs of performing other parts of the contract. ### Customers May Cancel or Delay Projects Customers may cancel or delay projects for reasons beyond our control. Our orders normally contain cancellation provisions that permit us to recover our costs, and, for most contracts, a portion of our anticipated profit in the event a customer cancels an order. If a customer elects to cancel an order, we may not realize the full amount of revenues included in our backlog. Revenue recognition occurs over long periods of time and is subject to unanticipated delays. If projects are delayed, the timing of our revenues could be adversely affected and projects may remain in our backlog for extended periods of time. If we receive relatively large orders in any given quarter, fluctuations in the levels of our quarterly backlog can result because the backlog in that quarter may reach levels that may not be sustained in subsequent quarters. Customer-driven delays may also lead to increased material costs and other adverse financial impacts. ### Our Operating Results May Be Adversely Affected by Product Pricing We typically experience significant competition for both of our technology segments which may require us to lower our product prices in order to remain competitive and have a corresponding adverse impact on our realized gross margins and operating profitability. See the risk factor entitled “We Face Substantial Competition” above. ### Our Customer Base Is Highly Concentrated A small number of customers have historically accounted for a significant portion of our revenues. During 2025, our five largest customers accounted for approximately 58% of our net revenues, with our largest customer accounting for approximately 21% of our net revenues. These five customers contributed revenues to the FUEL CHEM business segment during 2025. There can be no assurance that all significant customers will continue to purchase our products in the same quantities that they have in the past. The loss of any one of our significant customers or a material reduction in sales to a significant customer could have a material adverse effect on our sales and results of operations. ### RISKS RELATED TO OUR BUSINESS ### Our Financial Performance May Vary Significantly From Period to Period Our annual revenues and earnings have varied in the past and are likely to vary in the future. Our contracts generally stipulate customer specific delivery terms and may have contract cycles of a year or more, which subjects these contracts to many factors beyond our control. In addition, contracts that are significantly larger in size than our typical contracts tend to intensify their impact on our annual operating results. Furthermore, as a significant portion of our operating costs are fixed, an unanticipated decrease in our revenues, a delay or cancellation of orders in backlog, or a decrease in the demand for our products, may have a significant impact on our annual operating results. Therefore, our annual operating results may be subject to significant variations and our operating performance in one period may not be indicative of our future performance. ### Energy Transition The strategic priorities and financial performance of our businesses are subject to market and other dynamics related to decarbonization, which can pose risks in addition to opportunities for those businesses. Given the nature of our businesses and the industries we serve, we must anticipate and respond to market, technological, regulatory and other changes driven by broader trends related to decarbonization efforts in response to climate change. These changes present both risks and opportunities for our businesses, many of which provide products and services to customers in sectors like power generation that have historically been carbon intensive and will remain important to efforts globally to lower greenhouse gas emissions for decades to come. For example, the significant decreases in recent years in the levelized cost of energy for renewable sources of power generation (such as wind and solar), along with ongoing changes in government, investor, customer and consumer policies, commitments, preferences and considerations related to climate change, in some cases have adversely affected, and are expected to continue to affect, the demand for and the competitiveness of products and services related to carbonaceous fuel-based power generation, including sales of new air pollution control equipment and the utilization and servicing needs for existing power plants. Continued shifts toward greater penetration by renewables in both new capacity additions and the proportionate share of power generation, particularly depending on the pace and timeframe for such shifts across different markets globally, could have a material adverse effect on our business and our consolidated results. ### Our Manufacturing Operations Are Dependent on Third-party Suppliers Although we are not dependent on any one supplier, we are dependent on the ability of our third-party suppliers to supply our raw materials, as well as certain specific component parts. The third-party suppliers upon which we depend may default on their obligations to us due to bankruptcy, insolvency, lack of liquidity, adverse economic conditions, operational failure, fraud, loss of key personnel, or other reasons. We cannot assure that our third-party suppliers will dedicate sufficient resources to meet our scheduled delivery requirements or that our suppliers will have sufficient resources to satisfy our requirements during any period of sustained demand. Failure of suppliers to supply, or delays in supplying, our raw materials or certain components, or allocations in the supply of certain high demand raw components, for any reason, including, without limitation, disruptions in our suppliers’ business activities due to cybersecurity incidents, terrorist activity, public health crises, fires or other natural disasters could materially adversely affect our operations and ability to meet our own delivery schedules on a timely and competitive basis. Additionally, our third-party suppliers may provide us with raw materials or component parts that fail to meet our expectations or the expectations of our customers, which could subject us to product liability claims, other claims and litigation. ### Our Use of Subcontractors Could Potentially Harm our Profitability and Business Reputation Occasionally we act as a prime contractor in some of the engineered projects we undertake. In our capacity as lead provider and when acting as a prime contractor, we perform a portion of the work on our projects with our own resources and typically subcontract activities such as manufacturing and installation work. In our industry, the lead contractor is normally responsible for the performance of the entire contract, including subcontract work. Thus, when acting as a prime contractor, we are subject to risk associated with the failure of one or more subcontractors to perform as anticipated. We employ subcontractors at various locations around the world to meet our customers’ needs in a timely manner, meet local content requirements and reduce costs. Subcontractors perform all of our manufacturing for customers. The use of subcontractors decreases our control over the performance of these functions and could result in project delays, escalated costs and substandard quality. These risks could adversely affect our profitability and business reputation. In addition, many of our competitors, who have greater financial resources and greater bargaining power than we have, use the same subcontractors that we use and could potentially influence our ability to hire these subcontractors. If we were to lose relationships with key subcontractors, our business could be adversely impacted. ### Operational Execution Operational challenges could have a material adverse effect on our business, reputation, financial position, results of operations and cash flows. The Company’s financial results depend on the successful execution of our businesses’ operating plans across all steps of the engineering and design, manufacture, installation and service lifecycle. We continue working to improve the operations and execution of our businesses and our ability to make the desired improvements will be a significant factor in our overall financial performance. Operational failures in any of our business segments that result in quality problems or potential product, environmental, health or safety risks, could have a material adverse effect on our business, reputation, financial position and results of operations. In addition, for some large-scale projects we may be required by our customer to take on the full scope of engineering, procurement, construction or other services. These types of projects often pose unique risks related to their location, scale, complexity, duration and pricing or payment structure. Performance issues or schedule delays can arise due to inadequate technical expertise, unanticipated project modifications, developments at project sites, environmental, health and safety issues, execution by or coordination with suppliers, subcontractors or consortium partners, financial difficulties of our customers or significant partners or compliance with government regulations, and these can lead to cost overruns, contractual penalties, liquidated damages and other adverse consequences. Operational, quality or other issues at large projects, or across our projects portfolio more broadly, can adversely affect our business, reputation or results of operations. ### We Rely on Several Key Employees Whose Absence or Loss Could Disrupt our Operations or Be Adverse to our Business We are highly dependent on the experience of our management in the continuing development of our operations. The loss of the services of certain of these individuals would have a material adverse effect on our business. Although we have employment and non-competition agreements with certain of our key employees, as a practical matter, those agreements will not assure the retention of our employees, and we may not be able to enforce all of the provisions in any employment or non-competition agreement. Our future success will depend in part on our ability to attract and retain qualified personnel to manage our development and future growth. We cannot guarantee that we will be successful in attracting and retaining such personnel. Our failure to recruit additional key personnel could have a material adverse effect on our financial condition, results of operations and cash flows. ### Increasing Costs for Manufactured Components May Adversely Affect our Profitability Our products utilize a variety of manufactured components, including metallurgical catalysts, storage tanks, pumps and fans. The current economic environment has resulted, and may continue to result, in price volatility and inflation of these costs. Further increases in the price of these items could further materially increase our operating costs and materially adversely affect our profit margins if we are unable to successfully pass such costs on to our customers. ### Cybersecurity Increased cybersecurity requirements, vulnerabilities, threats and more sophisticated and targeted computer crime pose a risk to our systems, networks, products, solutions, services and data. Increased global cybersecurity vulnerabilities, threats, computer viruses and more sophisticated and targeted cyber-related attacks such as ransomware, as well as cybersecurity failures resulting from human error and technological errors, pose a risk to the security of Fuel Tech and its customers', partners', suppliers' and third-party service providers' infrastructure, products, systems and networks and the confidentiality, availability and integrity of Fuel Tech’s and its customers' data. As the perpetrators of such attacks become more capable, and as critical infrastructure is increasingly becoming digitized, the risks in this area continue to grow. There can be no assurance that our efforts to mitigate cybersecurity risks by employing a number of measures, including employee training, monitoring and testing, vulnerability testing and maintenance of protective systems and contingency plans, will be sufficient to prevent, detect and limit the impact of cyber-related attacks, and we remain vulnerable to known or unknown threats. A significant cyber-related attack could result in other negative consequences, including damage to our reputation or competitiveness, remediation, increased digital infrastructure or other costs that are not covered by insurance, litigation or regulatory action. ### We May Not Be Able to Successfully Protect our Patents and Proprietary Rights We hold licenses to or own a number of patents for our products and processes. We also have patent applications pending both in the U.S. and abroad. There can be no assurance that any of our pending patent applications will be granted or that our outstanding patents will not be challenged, overturned or otherwise circumvented by competitors. In foreign markets, the absence of harmonized patent laws makes it more difficult to ensure consistent respect for our patent rights in emerging markets. In addition, certain critical technical information relating to our products which is not patented is held as trade secret, and protected by trade secret laws and restrictions on disclosure contained in our confidentiality and licensing agreements. There can be no assurance that such protections will prove adequate or that we will have adequate remedies against contractual counterparties for disclosure of our trade secrets or other violations of our intellectual property rights. See Item 1 above under the caption “*Intellectual Property.”* ### Our Results May Be Affected By Foreign Operations We currently have foreign operations predominantly in Europe with our office located in Gallarate, Italy. The future business opportunities in this market are dependent on the continued implementation and enforcement of regulatory policies that will benefit our technologies, the acceptance of our engineering solutions in such markets, the ability of potential customers to utilize our technologies on a competitive, cost-effective basis, and our ability to protect and enforce our intellectual property rights. ### We May Not Be Able to Purchase Raw Materials on Commercially Advantageous Terms Our FUEL CHEM technology segment is dependent, in part, upon a supply of magnesium hydroxide. Any adverse changes in the availability of this chemical will likely have an adverse impact on the ongoing operation of our FUEL CHEM programs. On March 4, 2009, we entered into a Restated Product Supply Agreement (PSA) with Martin Marietta Magnesia Specialties, LLC (MMMS) in order to assure the continuance of a stable supply from MMMS of magnesium hydroxide products for our requirements in the U.S. and Canada. The PSA is renegotiated annually. Pursuant to the PSA, MMMS supplies us with magnesium hydroxide products manufactured pursuant to our specifications and we have agreed to purchase from MMMS, and MMMS has agreed to supply, 100% of our requirements for such magnesium hydroxide products for our customers who purchase such products for delivery in the U.S. and Canada. There can be no assurance that we will be able to obtain a stable source of magnesium hydroxide in markets outside the U.S. ### RISKS RELATED TO OUR INDUSTRY ### Demand for Our APC and FUEL CHEM Products is Affected by External Market Factors Reduced coal-fired electricity demand across the U.S. has led to production declines. Contributing factors to this decline in coal-fired generation were: 1) lower natural gas prices which allowed utility operators to increase the amount of power generated from natural gas plants, 2) increased cost of environmental compliance with current environmental regulations, 3) constrained funding for capital projects, and 4) the increased production of electricity from renewable sources, such as wind and solar. ### Our Business Is Dependent on Continuing Air Pollution Control Regulations and Enforcement Our business is significantly impacted by and dependent upon the regulatory environment surrounding the electricity generation market. Our business will be adversely impacted to the extent that regulations are repealed or amended to significantly reduce the level of required NOx or particulate matter reduction, or to the extent that regulatory authorities delay or otherwise minimize enforcement of existing laws. Additionally, long-term changes in environmental regulation that threaten or preclude the use of coal or other fossil fuels as a primary fuel source for electricity production which result in the reduction or closure of a significant number of fossil fuel-fired power plants may adversely affect our business, financial condition and results of operations. See Item 1 above under the caption “*Regulations and Markets”* in the *Air Pollution Control* segment overview. Changes in environmental regulations and enforcement priorities, specifically regarding NOx emissions from small and medium-sized gas turbines, may materially and adversely affect the demand for our Selective Catalytic Reduction (SCR) systems. Our business is significantly driven by federal and state air quality standards that mandate the use of post-combustion emission control technologies. On January 9, 2026, the EPA finalized amendments to the New Source Performance Standards (NSPS) for Stationary Combustion Turbines. Under these new rules, the EPA determined that combustion controls, rather than SCR technology, constitute the 'Best System of Emission Reduction' (BSER) for many new, modified, or reconstructed turbines, particularly those with a heat rating of less than 850 MMBtu/h (typically units of 100MW or less). The relaxation of these standards or the non-enforcement of more stringent state-level requirements could lead current and potential customers to bypass SCR installations in favor of less expensive combustion-only control methods. If our customers are not legally required to achieve the ultra-low NOx levels that our SCR systems provide, our order pipeline for 100MW and smaller units may decline significantly. Furthermore, any further delays in the implementation of stricter NOx standards, or a shift in regulatory focus away from stationary source emissions, could reduce our revenue, increase price competition, and negatively impact our overall financial condition. ### GENERAL RISK FACTORS ### Geopolitical and Unexpected Events May Impact New or Existing Projects and Prices and Availability of Raw Materials, Energy and Other Materials These events may also impact energy and regulatory policy nationally or regionally for the impacted regions. Such disruptions could have a material adverse effect on our business and financial results. ## Cybersecurity As filed, 2,647 characters. ### Risk Assessment and Strategy Fuel Tech regularly evaluates cybersecurity risk from computer viruses and more sophisticated and targeted cyber-related attacks such as ransomware, as well as cybersecurity failures resulting from human error and technological errors. Such risks are reviewed by our Information Technology Steering Committee on a monthly basis, or more frequently if deemed appropriate. Our overall strategy in combatting known cybersecurity risks includes a variety of individual tactics, including: - the use of antivirus software, virtual private networks, email security, as well as other software to prevent and detect data intrusions. - the use of Multi-Factor Authentication (MFA) to add another layer of protection to company accounts and sensitive data. - the deployment of updates and patches as they are available and maintaining the current versions of major software to reduce the exposure to vulnerabilities. - the use of third-party service to conduct quarterly mandatory online training for all employees regarding identifying and avoiding cyber-security risks. - the use of monthly phishing prevention campaigns to stimulate and measure awareness in order to prevent incidents caused by human error. - the review of the security procedures used by third parties that *may* host or otherwise have access to Fuel Tech’s data. - the deployment of *third*-party cyber-security experts to perform annual penetration testing on our internal and external networks and systems in an effort to identify potential vulnerabilities. - if necessary, the use of *third*-party security experts if and when an incident is detected We are not aware of having experienced any material cybersecurity incidents. We are not aware of any existent cybersecurity threats that would materially affect, or are reasonably likely to materially affect, our business strategy, results of operations or financial conditions. For more information, please see “Cybersecurity” under Item *1A “*Risk Factors” above. ### Management Oversight Day-to day management of cybersecurity threats is conducted by our Information Technology department which is charged with identifying and reporting threats to senior management. On a monthly basis, cybersecurity is reviewed by our Information Technology Steering Committee, which is comprised of our Chief Executive Officer, Chief Financial Officer, General Counsel and Head of Information Technology. ### Board Oversight The Audit Committee of our Board of Directors, which is composed of all non-employee directors, is responsible for oversight of management’s efforts to eliminate cybersecurity risks. ## Properties As filed, 825 characters. We own an office building in Warrenville, Illinois, which has served as our corporate headquarters since June 23, 2008. This facility, with approximately 40,000 square feet of office space, is sufficient to meet our requirements for the foreseeable future. We also operate from leased office facilities and we do not segregate any of these leased facilities by operating business segment. The terms of the Company's primary lease arrangements as of December 31, 2025 are as follows: - The Gallarate, Italy building lease, for approximately 1,335 square feet, runs through April 30, 2031. This facility serves as the operating headquarters for our European operations. - The Aurora, IL warehouse lease, for approximately 11,000 square feet, runs through March 31, 2031. This facility serves as an outside warehouse facility. ## Legal proceedings As filed, 532 characters. 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. See Note 9 "Commitments and Contingencies" in the Notes to the Consolidated Financial Statements in this Annual Report on Form 10-K. ## Management's discussion and analysis As filed, 32,632 characters. *Management’s discussion and analysis (“MD&A”) should be read in conjunction with the consolidated financial statements and accompanying notes included in Item 8 of this Annual Report on Form 10-K, which include additional information about our accounting policies, practices and the transactions underlying our financial results. The preparation of our consolidated financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the reported amounts in our consolidated financial statements and the accompanying notes including various claims and contingencies related to lawsuits, taxes, environmental and other matters arising during the normal course of business. We apply our best judgment, our knowledge of existing facts and circumstances and actions that we may undertake in the future in determining the estimates that affect our consolidated financial statements. We evaluate our estimates on an ongoing basis using our historical experience, as well as other factors we believe appropriate under the circumstances, such as current economic conditions, and adjust or revise our estimates as circumstances change. As future events and their effects cannot be determined with precision, actual results may differ from these estimates.* ### Overview In 2025, we achieved revenue growth of over $1.5M compared to 2024. Throughout 2025, we maintained our momentum by successfully fulfilling existing orders while investing in R&D to bring new technologies to the water and wastewater treatment markets. Our financial position remains robust, providing ample liquidity for both immediate operations and long-term growth. Supported by a dedicated workforce and disciplined cost management, we are well positioned to leverage new business opportunities and enhance our overall market standing. ### Key Operating Factors Sales growth for our two reportable business segments is dependent upon the continued utilization of carbon-based fuels, such as natural gas and coal, for the generation of electric power. For our APC market segment, sales are driven primarily by our customers need to comply with federal, state and local regulatory mandates for the reduction or control of emissions of NOx. For our FUEL CHEM market segment, sales are dependent primarily upon our customers usage of our chemical technologies in order to mitigate slagging and fouling on coal or oil fired combustion units in order to enjoy longer run times without the necessity of taking the combustion unit off line for cleaning. We believe continued demand for our products will be led by the increased demand for electricity in emerging markets and new industries that are highly dependent upon electric power, such as the mega-computers required in order to power artificial intelligence and cryptocurrencies. While the market will continue to shift towards alternate forms of power generation, we anticipate natural gas and coal will remain significant sources of electricity generation in the future. Our FUEL CHEM segment showed improved performance in 2025, experiencing an increase in segment revenues compared to 2024. Revenue growth was driven by increased regularity of orders from legacy customers as well as a full year of revenue from a new commercial program which was added in the second half of 2024 following a successful site demonstration. Also contributing to this increase was a new commercial demonstration program which commenced in the fourth quarter of 2025. Our APC business experienced a decline in revenues and segment operating profits in 2025 compared to 2024 primarily due to customer-driven project delays and project timing. Despite this, we are encouraged by the pace and depth of our business development activities, which reflect an increased focus on global emissions protocols across a variety of fuel sources. Our Consolidated APC backlog at year end was $7,047. ### Market Pressures Our senior management team monitors and manages our ability to operate effectively as the result of market pressures. In particular, we are currently experiencing inflationary pressures for certain materials and labor, and long lead times for equipment components embodied in our products such as pumps, fans and SCR catalyst. We continue to monitor the activities of our existing and alternate suppliers and have taken other mitigating actions to mitigate supply disruptions; however, we cannot guarantee that we can continue to do so in the future. In this event, our business, results and financial condition could be adversely affected. ### Background We have two broad technology segments that provide advanced engineered solutions to meet the pollution control, efficiency improvement and operational optimization needs of energy-related facilities worldwide. They are as follows: #### Air Pollution Control Technologies The Air Pollution Control technology segment includes technologies to reduce NOx emissions in flue gas generated by the firing of natural gas, biomass or coal from boilers, incinerators, furnaces and other stationary combustion sources. These include SCR systems along with NOxOUT and Advanced SNCR systems. Our SCR systems can also include AIG, and GSG™ systems to provide high NOx reductions at significantly lower capital and operating costs than conventional SCR systems. ULTRA® technology creates ammonia at a plant site using safe urea for use with any SCR application. Our ammonia storage and delivery systems supply reagent for SCR applications. ESP technologies make use of electrostatic precipitator products and services to reduce particulate matter. FGC 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. We distribute our products through our direct sales force and third-party sales agents. #### FUEL CHEM Technologies The FUEL CHEM technology segment, which uses chemical processes in combination with advanced CFD and CKM boiler modeling, for the control of slagging, fouling, corrosion, opacity and other sulfur trioxide-related issues in coal-fired furnaces and boilers through the addition of chemicals into the furnace using TIFI® Targeted In-Furnace Injection™ technology. Fuel Tech sells its FUEL CHEM program through its direct sales force and agents to industrial and utility power-generation facilities. FUEL CHEM programs have been installed on combustion units in North America, Europe, and the Pacific Rim, treating a wide variety of solid and liquid fuels, including coal, heavy oil, biomass and municipal waste. The FUEL CHEM program improves the efficiency, reliability and environmental status of plants operating in the electric utility, industrial, pulp and paper, waste-to-energy, university and district heating markets and offers numerous operational, financial and environmental benefits to owners of boilers, furnaces and other combustion units. The key market dynamic for both technology segments is the continued use of fossil fuels, especially coal, as the principal fuel source for global electricity production. In 2025, coal accounted for approximately 17% of all U.S. electricity generation and roughly 33% of global electricity generation. Major coal consumers include China, the U.S. and India. ### Critical Accounting Policies and Estimates The consolidated financial statements are prepared in accordance with accounting principles generally accepted in the U.S. (GAAP), which require us to make estimates and assumptions. We believe that certain accounting policies (see Note 1 to the consolidated financial statements) involve a higher degree of judgment, estimates and assumptions and are deemed critical. We routinely discuss our critical accounting policies with the Audit Committee of the Board of Directors. #### Revenue Recognition: Air Pollution Control Technology Fuel Tech’s APC contracts are typically eight to twenty months in length. A typical contract will have three or four critical operational measurements that, when achieved, serve as the basis for us to invoice the customer via progress billings. At a minimum, these measurements will include the generation of engineering drawings, the shipment of equipment and the completion of a system performance test. As part of most of its contractual APC project agreements, Fuel Tech will agree to customer-specific acceptance criteria that relate to the operational performance of the system that is being sold. These criteria are determined based on modeling that is performed by Fuel Tech personnel, which is based on operational inputs that are provided by the customer. The customer will warrant that these operational inputs are accurate as they are specified in the binding contractual agreement. Further, the customer is solely responsible for the accuracy of the operating condition information; typically all performance guarantees and equipment warranties granted by us are voidable if the operating condition information is inaccurate or is not met. Since control transfers over time, revenue is recognized based on the extent of progress towards completion of the single performance obligation. Fuel Tech uses the cost-to-cost input measure of progress for our contracts since it best depicts the transfer of assets to the customer which occurs as we incur costs on our contracts. Under the cost-to-cost input measure of progress, the extent of progress towards completion is measured based on the ratio of costs incurred to date to the total estimated costs at completion of the performance obligation. Revenues are recorded proportionally as costs are incurred. Costs to fulfill include all internal and external engineering costs, equipment charges, inbound and outbound freight expenses, internal and site transfer costs, installation charges, purchasing and receiving costs, inspection costs, warehousing costs, project personnel travel expenses and other direct and indirect expenses specifically identified as project- or product-line related, as appropriate (e.g. test equipment depreciation and certain insurance expenses). Unexpected or unknown costs could affect the timing of revenue recognition and the cumulative profitability of the related projects. Fuel Tech’s APC product line also includes ancillary revenue for post contractual goods and services. Revenue associated with these activities are recognized at a point in time when delivery of goods or completion of the service obligation is performed. Fuel Tech has installed over 2,000 units with APC technology and normally provides performance guarantees to our customers based on the operating conditions for the project. As part of the project implementation process, we perform system start-up and optimization services that effectively serve as a test of actual project performance. We believe that this test, combined with the accuracy of the modeling that is performed, enables revenue to be recognized prior to the receipt of formal customer acceptance. As of December 31, 2025 and 2024, we had no construction contracts in progress that were identified as a loss contract. 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 consolidated balance sheets. In our Air Pollution Control 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 consolidated balance sheet on a contract-by-contract basis at the end of each reporting period. At December 31, 2025, 2024, and 2023 contract assets for APC technology projects were approximately $887, $2,075, and $2,285, respectively, and are included in accounts receivable on the consolidated balance sheets. However, the Company will periodically bill in advance of costs incurred before revenue is recognized, resulting in contract liabilities. These liabilities are reported on the consolidated balance sheet on a contract-by-contract basis at the end of each reporting period. Contract liabilities were $1,026, $721, and $1,279 at December 31, 2025, 2024, and 2023, respectively, and are included in other accrued liabilities on the consolidated balance sheets. #### Assessment of Potential Impairment of Goodwill Goodwill is not amortized but rather is reviewed annually as of the first day of the fourth quarter, or more frequently if indicators arise, for impairment. Such indicators include a decline in expected cash flows, a significant adverse change in legal factors or in the business climate, unanticipated competition, a decrease in our market capitalization to an amount less than the carrying value of our assets, or slower growth rates, among others. We do not have any indefinite-lived intangible assets other than goodwill. Goodwill is allocated among and evaluated for impairment at the reporting unit level, which is defined as an operating segment or one level below an operating segment. We have two reporting units: the FUEL CHEM segment and the APC technology segment. Goodwill is only related to the FUEL CHEM segment. Our evaluation of goodwill impairment involves first assessing qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. We may bypass this qualitative assessment, or determine that based on our qualitative assessment considering the totality of events and circumstances including macroeconomic factors, industry and market considerations, current and projected financial performance, a sustained decrease in our share price, or other factors, that additional impairment analysis is necessary. This additional analysis involves comparing the current fair value of a reporting unit to its carrying value. Fuel Tech uses a discounted cash flow (DCF) model to determine the current fair value of its FUEL CHEM reporting unit as this methodology was deemed to best quantify the present values of our expected future cash flows and yield a fair value that should be in line with the aggregate market value placed on the outstanding common stock as reflected by the current stock price multiplied by the outstanding shares of common stock. A number of significant assumptions and estimates are involved in the application of the DCF model to forecast operating cash flows, including markets and market share, sales volumes and prices, and costs to produce. Events outside our control, specifically market conditions that impact revenue growth assumptions, could significantly impact the fair value calculated. Management considers historical experience and all available information at the time the fair values of its reporting units are estimated. However, actual fair values that could be realized in an actual transaction may differ from those used to evaluate the impairment of goodwill. The application of our DCF model in estimating the fair value of each reporting segment is based on the ‘net asset’ approach to business valuation. In using this approach for each reportable segment, we forecast segment revenues and expenses out to perpetuity and then discount the resulting cash flows to their present value using an appropriate discount rate. The forecast considers, among other items, the current and expected business environment, expected changes in the fixed and variable cost structure as the business grows, and a revenue growth rate that we feel is both achievable and sustainable. The discount rate used is composed of a number of identifiable risk factors, including equity risk, company size, and certain company-specific risk factors such as our debt-to-equity ratio, among other factors, that when added together, results in a total return that a prudent investor would demand for an investment in our Company. In the event the estimated fair value of a reporting unit per the DCF model is less than the carrying value, we would record an impairment charge for the amount by which the carrying value exceeds the estimated fair value of the reporting unit. The Company utilizes Accounting Standards Update (ASU) 2017-04, Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment for the annual goodwill impairment test. Fuel Tech performed its annual goodwill impairment analysis for its FUEL CHEM reporting unit as of October 1, 2025 and determined that no impairment of goodwill existed within the FUEL CHEM technology segment. #### Impairment of Long-Lived Assets Under the guidance set forth in Accounting Standards Update (ASU) 2014-08, Property, Plant and Equipment (Topic 360), long-lived assets, including property and equipment and intangible assets, are reviewed for impairment when events and circumstances indicate that the carrying amount of the assets (or asset group) may not be recoverable. If impairment indicators exist, we perform a more detailed analysis and an impairment loss is recognized when either estimated future undiscounted cash flows expected to result from the use of the asset (or asset group) and its eventual disposition are less than the carrying amount or the determined fair value is less than the carrying amount. This process of analyzing impairment involves examining the operating condition of individual assets (or asset group) and estimating a fair value based upon current condition, relevant market factors and the remaining estimated operational life compared to the asset’s remaining depreciable life. Quoted market prices and other valuation techniques are used to determine expected fair value. We performed a detailed analysis of potential long-lived asset impairment during the fourth quarter of 2025 and determined no impairment exists. There was no impairment recorded during 2025. A significant portion of our property and equipment is comprised of assets deployed at customer locations relating to our FUEL CHEM technology asset group, and due to the shorter-term duration over which this equipment is depreciated, the likelihood of impairment is mitigated. The discontinuation of a FUEL CHEM program at a customer site would most likely result in the re-deployment of all or most of the affected assets to another customer location rather than an impairment. #### Valuation Allowance for Deferred Income Taxes Deferred tax assets represent deductible temporary differences and net operating loss and tax credit carryforwards. A valuation allowance is recognized if it is more likely than not that some portion of the deferred tax asset will not be realized. At the end of each reporting period, management reviews the realizability of the deferred tax assets. As part of this review, we consider if there are taxable temporary differences that could generate taxable income in the future, if there is the ability to carry back the net operating losses or credits, if there is a projection of future taxable income, and if there are any tax planning strategies that can be readily implemented. As required by ASC 740 'Income Taxes', a valuation allowance must be established when it is more likely than not that all or a portion of a deferred tax asset will not be realized. This assessment resulted in a valuation allowance on our deferred tax assets of $14,761 and $13,697 at December 31, 2025 and 2024, respectively. ### Recently Issued Accounting Pronouncements In November 2024, the FASB issued ASU 2024-03, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, which requires public business entities to disclose in the notes to their financial statements disaggregated information about certain costs and expenses in both annual and interim filings. The standard will become effective for the annual reporting period beginning January 1, 2027 for Fuel Tech. The Company is reviewing the impact of this new pronouncement and expects to incorporate the additional disclosures in the relevant footnotes when the ASU is adopted. ### 2025 versus 2024 Highlights for the year ended December 31, 2025, compared to 2024: | | For the years ended December 31, 2025 | 2024 | Change | | --- | ---: | ---: | ---: | | **Revenues** | $26,677 | $25,133 | $1,544 | | **Costs and expenses:** | | | | | Cost of sales | 14,294 | 14,510 | (216) | | Selling, general and administrative | 14,050 | 13,761 | 289 | | Research and development | 2,014 | 1,564 | 450 | | Total costs and expenses | 30,358 | 29,835 | 523 | | **Operating loss** | (3,681) | (4,702) | 1,021 | | Interest income | 1,415 | 1,251 | 164 | | Other (expense) income, net | (43) | 1,585 | (1,628) | | **Loss before income taxes** | (2,309) | (1,866) | (443) | | Income tax expense | (15) | (77) | 62 | | **Net loss** | $(2,324) | $(1,943) | $(381) | ### Revenues Revenues for the years ended December 31, 2025 and 2024 were $26,677 and $25,133, respectively. The year-over-year increase of $1,544 or 6%, was driven by the increase in FUEL CHEM technology segment revenues, partially offset by a decrease in revenue in our APC technology segment. Our U.S. revenues increased by $3,220, or 18%, from $17,802 in 2024 to $21,022 in 2025, and our international revenues decreased by $1,676, or 23%, from $7,331 in 2024 to $5,655 in 2025. Revenues for the APC technology segment were $8,908 for the year ended December 31, 2025, a decrease of $2,334, or 21%, versus fiscal 2024. The decrease in APC revenue for the twelve-month period ending December 31, 2025 in comparison to the prior year amount was principally related to the timing of project execution and customer-driven delays in contract awards. Consolidated APC backlog was $7,047 and $6,175 at December 31, 2025 and 2024, respectively. Our backlog at December 31, 2025 consists of U.S. domestic projects totaling $3,411 and international projects totaling $3,636. Revenues for the FUEL CHEM technology segment for the year ended December 31, 2025 were $17,769, an increase of $3,878, or 28%, versus fiscal 2024. The increase in FUEL CHEM revenue was due primarily to renewed orders from previously dormant customers as well as a full year of revenues from the addition of a new customer in the second half of 2024 following a successful site demonstration. We remain focused on attracting new customers in our FUEL CHEM business for both coal and non-coal applications. Our ability to attract new coal customers continues to be affected by the electric demand market, fuel switching as a result of low natural gas prices, and growth of renewable wind and solar power. ### Cost of sales and gross margin Consolidated cost of sales for the years ended December 31, 2025 and 2024 was $14,294 and $14,510, respectively. Consolidated gross margin percentages for the years ended December 31, 2025 and 2024 were 46% and 42%, respectively. The gross margins for the APC technology segment increased to 43% in 2025 from 37% in 2024. The increase in gross margin in the APC technology segment is primarily due to product and project mix. Gross margin percentage for the FUEL CHEM technology segment increased to 48% from 46% for the years ended December 31, 2025 and 2024. This improvement is primarily due to an increase in revenue generation from accounts that had periods of dormancy due to outages in the prior year. ### Selling, general and administrative Selling, general and administrative expenses for the years ended December 31, 2025 and 2024 were $14,050 and $13,761, respectively. The increase of $289, or 2%, is primarily attributed to the following: - An increase in employee related costs of $257 - An increase in travel expense of $38 - An increase in professional services and other expenses of $26 - An increase in office and administrative costs relating to our foreign subsidiaries of $15 - A decrease in depreciation expense of $49 ### Depreciation and Amortization Depreciation and amortization are calculated using the straight-line method and included in selling, general and administrative expense. For the years ended December 31, 2025 and 2024, the Company recorded depreciation of $663 and $403 and amortization of $36 and $57, respectively. ### Research and development Research and development expenses were $2,014 and $1,564 for the years ended December 31, 2025 and 2024, respectively. The expenditures in our research and development department were 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. Expenditures were mainly attributed to water treatment technologies and more specifically, our DGI® Dissolved Gas Infusion Systems, an innovative alternative to current gas transfer and chemical replacement technologies. This infusion process has a variety of applications in the water and wastewater segments, including irrigation, treatment of natural waters, supply of oxygen for biological remediation, wastewater odor management, pH adjustment, re-carbonization, etc. DGI® technology benefits include improved treatment performance and reduced treatment time, and the potential for reduced energy consumption, along with lower installation and operating costs. Third party validation testing of the efficiency of transferring oxygen to a treatment basin has been completed and results have been published. ### Interest income Interest income was $1,415 for the year ended December 31, 2025 compared to $1,251 for the same period in 2024. Interest income increased primarily due to $263 of interest received during the year ended December 31, 2025 related to the employee retention credit. ### Other (expense) income, net Other expense, net was $43 for the year ended December 31, 2025 compared to Other income, net of $1,585 for the same period in 2024. Other expense for the year ended December 31, 2025 primarily relates to bank fees and foreign currency exchange losses. Other income for the same period in 2024 primarily relates to a $1,677 gain recorded related to the employee retention credit. ### Income tax expense For the year ended December 31, 2025, we recorded an income tax expense of $15 on pre-tax loss of $2,309. Our effective tax rates were (0.7)% and (2.9)% for the years ended December 31, 2025 and 2024, respectively. For the year ended December 31, 2024, we recorded an income tax expense of $77 on pre-tax income of $1,866. The effective tax rate for the year ended December 31, 2025 differed from the federal statutory rate of 21% as a result of establishing a deferred tax liability associated with a certain book-to-tax timing difference. ### Liquidity and Sources of Capital At December 31, 2025, we had cash and cash equivalents of $11,939 (which includes $2,621 of cash equivalents) and working capital of $25,671 versus cash and cash equivalents of $8,510 (which includes $631 of cash equivalents) and working capital of $23,764 at December 31, 2024. 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 $3,016 for the year ended December 31, 2025, primarily due to a decrease in accounts receivable balances of $2,518, the collection of the employee retention credit receivable of $1,677, an increase in accounts payable balances of $258, and adjustments for non-cash items from our net loss from continuing operations for depreciation and amortization of $699 and stock compensation expense of $326, partially offset by an increase in prepaid expenses, other current assets, and other non-current assets of $172. Operating activities used cash of $3,433 for the year ended December 31, 2024, primarily due to the employee retention credit receivable of $1,677, an increase in accounts receivable balances of $1,127, a decrease in accrued liabilities and other non-current liabilities of $312, and adjustments for non-cash items from our net loss from continuing operations for non-cash interest income on held-to-maturity securities of $132, partially offset by a decrease in prepaid expenses, other current assets, and other non-current assets of $292, an increase in accounts payable balances of $519, a decrease in inventory balances of $41, and adjustments for non-cash items from our net loss from continuing operations for depreciation and amortization of $460 and stock compensation expense of $446. Investing activities provided cash of $545 and used cash of $5,443 for the years ended December 31, 2025 and 2024. Investing activities for the years ended December 31, 2025 and 2024 primarily consisted of purchases of HTM debt securities as investments of $12,031 and $18,060, respectively, and the purchases of equipment and patent and other intangible asset related costs of $674 and $378, respectively. Investing activities for the years ended December 31, 2025 and 2024 were partially funded by the maturities of debt securities of $13,250 and $12,995, respectively. Financing activities used cash of $222 and $95 for the years ended December 31, 2025 and 2024, respectively. Financing activities in both periods relate to taxes paid on behalf of 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 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 customer and revenue trends in our APC and FUEL CHEM business segments, current operating structure and expenditure levels, and 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. We expect capital expenditures in 2026 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 (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 the expected business needs. Maturities are between three and thirty-six months. 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 December 31, 2025, the Company had outstanding standby letters of credit totaling approximately $2,437 under the Investment Collateral Security agreement. At December 31, 2025, the investments held as collateral totaled $3,655. Fuel Tech is committed to reimbursing the issuing bank for any payments made by the bank under these instruments. The outstanding standby letters of credit mature as follows: | | Total | 2026 | 2027 | Thereafter | | --- | ---: | ---: | ---: | ---: | | Standby letters of credit and bank guarantees | $2,437 | $1,432 | $969 | $36 | | Total | $2,437 | $1,432 | $969 | $36 | ## Market risk As filed, 629 characters. Our 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 or into foreign currency option contracts to manage this risk due to the nature of the transactions involved. We are also exposed to changes in interest rates primarily due to our debt arrangement (refer to Note 11 to the consolidated financial statements). A hypothetical 100 basis point adverse move in interest rates along the entire interest rate yield curve would not have a materially adverse effect on interest expense during the year ended December 31, 2025. ## Controls and procedures As filed, 2,973 characters. ### Disclosure Controls and Procedures Under the supervision and with the participation of our Chief Executive Officer and Principal Financial Officer, our management evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act), as of the end of the period covered by this Annual Report on Form 10-K (the “Evaluation Date”). Based upon that evaluation, our Chief Executive Officer and Principal Financial Officer concluded that, as of the Evaluation Date, our disclosure controls and procedures are effective to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act is (i) recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms and (ii) accumulated and communicated to our management, including our Chief Executive Officer and Principal Financial Officer, as appropriate to allow timely decisions regarding required disclosure. ### Change in Internal Controls There has been no change in the Company's internal control over financial reporting during the year covered by this report that has materially affected, or is reasonably likely to materially affect, its internal control over financial reporting. ### Management’s Report on Internal Control Over Financial Reporting Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rule 13a-15(f) under the Exchange Act. As required by Rule 13a-15(c) under the Exchange Act, our management has carried out an evaluation, with the participation of the Chief Executive Officer and Principal Financial Officer, of the effectiveness of its internal control over financial reporting as of the end of the last fiscal year. The framework on which such evaluation was based is contained in the report entitled “Internal Control—Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (the “COSO Report”) in 2013. Our system of internal control over financial reporting is designed 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. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Based on its assessment, management has concluded that we maintained effective internal control over financial reporting as of December 31, 2025, based on criteria in “Internal Control - Integrated Framework” issued by the COSO in 2013. Filed Mar 3, 2026. Source: SEC EDGAR, the filing index for accession 0001437749-26-006623. Last ingested by Listed: Nov 3, 2026, 20:38 ET. No prices; not investment advice.