Note 11 - Debt Financing

12 Months Ended

Dec. 31, 2020

Notes to Financial Statements

Debt Disclosure [Text Block]

11.

     DEBT FINANCING

On

June 19, 2019,

the Company entered into a Cash Collateral Security agreement with BMO Harris Bank, N.A. (the BMO Harris agreement) to use for the sole purpose of issuing standby letters of credit. The BMO Harris agreement requires us to pledge as cash collateral

105%

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 BMO Harris agreement. At

December 31, 2020

, the Company had outstanding standby letters of credit totaling approximately

$1,873

 under the BMO Harris agreement. As of

December 31, 2020

, the Company held

$1,966

in a separate restricted use designated BMO Harris Bank N.A. deposit account. Fuel Tech is committed to reimbursing the issuing bank for any payments made by the bank under these instruments.

In connection with the transition to BMO Harris Bank N.A., the Company canceled its U.S. Domestic credit facility (the Facility) with JPMorgan Chase Bank, N.A. (JPM Chase) effective on

September 25, 2019.

The Company was previously obligated under the Facility with JPM Chase which provided for maximum revolving credit borrowings of

$5,500.

Fuel Tech used this Facility primarily for standby letters of credit. The Facility was secured by

$5,500

in cash held by the Company in a separate restricted use designated JPM Chase deposit account and has the Company's Italian subsidiary, Fuel Tech S.r.l., as a guarantor. Outstanding borrowings under the Facility bore interest at a rate of LIBOR plus

300

basis points. There were

no

financial covenants set forth in this Facility. The Facility was amended on several occasions during

2019

 and

2018,

most recently

June 19, 2019,

in order to amend the maximum availability under the Facility. We paid a commitment fee of

0.25%

 per year on the unused portion of the revolving credit facility.

Beijing Fuel Tech Environmental Technologies Company, Ltd. (Beijing Fuel Tech), was previously obligated under a revolving credit facility (the China Facility) agreement, as most recently amended on

October 19, 2018,

with JPM Chase which provided for maximum revolving credit borrowings of RMB

2.625

million (approximately

$382

) and matured on

June 30, 2019.

The Facility was secured by

$520

in cash held by the Company in a separate restricted use designated JPM Chase deposit account. As a result of the announcement of the suspension of the Air Pollution Control business in Beijing, the Company did

not

renew the China Facility upon its expiration on

June 30, 2019.

On

April 17, 2020,

the Company received loan proceeds in the amount of approximately

$1,556

 under the Paycheck Protection Program (“PPP”).  The PPP, established as part of the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”), provides for loans to qualifying businesses for amounts up to

2.5

times of the average monthly payroll expenses of the qualifying business. The loans and accrued interest are forgivable after

eight

weeks as long as the borrower uses the loan proceeds for eligible purposes, including payroll, benefits, rent and utilities, and maintains its payroll levels. The amount of loan forgiveness will be reduced if the borrower terminates employees or reduces salaries during the

eight

-week period. The unforgiven portion of the PPP loan is payable over

two

years at an interest rate of

1%,

with a deferral of payments for the

first

six

months.  The Company used the proceeds for purposes consistent with the PPP.  On

January 8, 2021,

the Small Business Administration informed the Company that its PPP loan had been forgiven in full.  The balance of the loan is reflected in the Long-term borrowing line of the balance sheet as of

December 31, 2020.