Note 1 - General

3 Months Ended

Mar. 31, 2021

Notes to Financial Statements

Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block]

1.

     General

Organization

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

The Company's NOx reduction technologies reduce nitrogen oxide emissions from boilers, furnaces and other stationary combustion sources.  To reduce NOx emissions, our technologies utilize advanced combustion modification techniques and post-combustion NOx control approaches including non-catalytic, catalytic and combined systems.  The Company also provides solutions for the mitigation of particulate matter, including particulate control with electrostatic precipitator products and services, and using flue gas conditioning systems which modify the ash properties of particulate for improved collection efficiency. The Company's FUEL CHEM® technology improves the efficiency, reliability, fuel flexibility, boiler heat rate, and environmental status of combustion units by controlling slagging, fouling, corrosion, and opacity. Water treatment technologies include DGI™ Dissolved Gas Infusion Systems which utilize a patented nozzle to 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 industries, including remediation, aeration, biological treatment, and wastewater odor management.

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

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") for interim financial information and with the instructions to Form

10

-Q and Article

10

of Regulation S-

X

of the Exchange Act. Accordingly, they do

not

include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, the financial statements reflect all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation of the statements for the periods presented. All significant intercompany transactions and balances have been eliminated. The results of operations for the 

three

months ended

March 31, 2021

are

not

necessarily indicative of the results to be expected for the full year ending

December 

31,

2021.

For further information, refer to the audited consolidated financial statements and footnotes thereto included in Fuel Tech's Annual Report on Form

10

-K for the year ended 

December 31, 2020

as filed with the Securities and Exchange Commission.

COVID-

19

Pandemic

The emergence of the coronavirus (COVID-

19

) around the world presents significant risks to the Company,

not

all of which the Company is able to fully evaluate or even foresee at the current time. The COVID-

19

pandemic has affected the Company's operations in the

three

months ended

March 31, 2021

, although the impact of the pandemic is difficult to quantify, and

may

continue to do so indefinitely thereafter. The Company has experienced, and

may

continue to experience, reductions in demand for certain of our products due to the delay or abandonment of ongoing or anticipated projects due to our customers', suppliers' and other

third

parties' financial distress or concern regarding the volatility of global markets.

Management cannot predict the full impact of the COVID-

19

pandemic on the Company's sales and marketing channels and supply chain, and as a result, the ultimate extent of the effects of the COVID-

19

pandemic on the Company is highly uncertain and will depend on future developments. Such effects could exist for an extended period of time even after the pandemic might end.

Private Placement Offering

On

February 11, 2021,

Fuel Tech entered into a securities purchase agreement to issue and sell, in a private placement,

5,000,000

shares of Common Stock and

2,500,000

warrants exercisable for a total of

2,500,000

shares of Common Stock with an exercise price of

$5.10

per Warrant Share, at a purchase price of

$5.1625

per Share and associated warrant. The gross proceeds to the Company from the Private Placement were 

$25,812,500,

before deducting placement agent fees and offering expenses of

$1,784,000.

Subject to certain ownership limitations, the Warrants are immediately exercisable upon issuance and expire on the

five

and

one

-half year anniversary of the effective date of the registration statement registering the Warrant Shares for resale.  In addition, the Company issued to the placement agent Warrants to purchase up to

350,000

shares of Common Stock.  The Placement Agent Warrants are exercisable at an exercise price of

$6.45

 per share of Common Stock and expire on the

five

and

one

-half year anniversary of the effective date of the registration statement registering the Shares and the Warrant Shares for resale.