FUEL TECH, INC.
For the period ended Dec 31, 2025. Filed Mar 3, 2026.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2025 · Filed Mar 3, 2026
FTEK$1.35+1.5%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2024-12-31; filed 2025-03-04.
0001437749-25-006116
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2025-12-31; filed 2026-03-03.
0001437749-26-006623
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 76 previous paragraphs and 72 current paragraphs.
41 unchanged; 28 reworded; 3 added; 7 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 5 previous and 5 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (3)
Current report
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.
Current report
Other (expense) income, net
Current report
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.
Removed paragraphs (7)
Previous report
In 2024, the Company continued to successfully execute on existing orders. We continue to invest in development of new technologies to expand our product offerings into the water and waste-water treatment market. Our capital resources are sufficient for our immediate and longer-term needs, and we continue to enjoy the services and support of a dedicated workforce. We expect that our cost control efforts will maintain our existing levels of operating expenditures and the diminishing effects of the pandemic should lead to an improved market outlook.
Previous report
Stock-Based Compensation
Previous report
We recognize compensation expense for employee equity awards ratably over the requisite service period of the award, adjusted for estimated forfeitures.
Previous report
We utilize the Black-Scholes option-pricing model to estimate the fair value of stock option awards. Determining the fair value of stock options using the Black-Scholes model requires judgment, including estimates for (1) risk-free interest rate - an estimate based on the yield of zero-coupon treasury securities with a maturity equal to the expected life of the option; (2) expected volatility - an estimate based on the historical volatility of our common stock for a period equal to the expected life of the option; and (3) expected life of the option - an estimate based on historical experience including the effect of employee terminations.
Previous report
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which provides guidance for additional disclosures around the tax rate reconciliation and other tax disclosures. The standard will become effective for the annual reporting period beginning on January 1, 2025 for Fuel Tech. Application of the amendments should be applied prospectively but retrospective application is permitted. The Company is reviewing the impact of this new pronouncement and expects to incorporate the additional disclosures prospectively in the Tax note when the ASU is adopted.
Previous report
Interest income was $1,251 for the year ended December 31, 2024 compared to $1,300 for the same period in 2023. Interest income decreased due to a decrease in the balance held in money market funds.
Previous report
Other income (expense), net
Reworded paragraphs (28)
Previous wording
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 based combustion units in order to enjoy longer run times without the necessity of taking the combustion unit off line for cleaning.
Current wording
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.
Previous wording
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 continues, we anticipate natural gas and coal will remain significant sources of electricity generation in the future.
Current wording
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.
Previous wording
Our FUEL CHEM segment showed improved performance in 2024, experiencing an increase in segment revenues compared to 2023. Revenue growth was driven by the return of previously dormant customers as well as a new commercial program which was added following a successful site demonstration.
Current wording
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.
Previous wording
Our APC business experienced a decline in revenues and segment operating profits in 2024 compared to 2023 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 $6,175.
Current wording
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.
Previous wording
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 catalysts. 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.
Current wording
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.
Previous wording
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 and NOxOUT and HERT™ 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. 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.
Current wording
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.
Previous wording
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 2024, coal accounted for approximately 15% of all U.S. electricity generation and roughly 35% of global electricity generation. Major coal consumers include China, the U.S. and India.
Current wording
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.
Previous wording
Fuel Tech’s APC contracts are typically six to eighteen 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.
Current wording
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.
Previous wording
Fuel Tech has installed over 1,300 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.
Current wording
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.
Previous wording
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, 2024,2023, and 2022 contract assets for APC technology projects were approximately$2,075,$2,285, and $3,082, respectively, and are included in accounts receivable on the consolidated balance sheets.
Current wording
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.
Previous wording
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$721,$1,279, and $372 at December 31, 2024,2023, and 2022, respectively, and are included in other accrued liabilities on the consolidated balance sheets.
Current wording
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.
Previous wording
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, costs to produce and working capital changes. 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.
Current wording
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.
Previous wording
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 $13,697 and $15,699 at December 31, 2024 and 2023, respectively.
Current wording
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.
Previous wording
Revenues for the years ended December 31, 2024 and 2023 were $25,133 and $27,081, respectively. The year-over-year decrease of $1,948 or 7%, was driven by the decrease in revenue in our APC technology segment in our U.S. operations, partially offset by an increase in our FUEL CHEM technology segment revenues. Our U.S. revenues decreased by $3,595, or 17%, from $21,397 in 2023 to $17,802 in 2024, and our international revenues increased by $1,647, or 29%, from $5,684 in 2023 to $7,331 in 2024.
Current wording
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.
Previous wording
Revenues for the APC technology segment were $11,242 for the year ended December 31, 2024, a decrease of $2,241, or 17%, versus fiscal 2023. The decrease in APC revenue for the twelve-month period ending December 31, 2024 in comparison to the prior year amount was principally related to the timing of project execution and customer driven delays. Consolidated APC backlog was $6,175 and $7,458 at December 31, 2024 and 2023, respectively. Our backlog at December 31, 2024 consists of U.S. domestic projects totaling $1,877 and international projects totaling $4,298.
Current wording
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.
Previous wording
Revenues for the FUEL CHEM technology segment for the year ended December 31, 2024 were $13,891, an increase of $293, or 2%, versus fiscal 2023. The increase in FUEL CHEM revenue was due primarily to renewed orders from previously dormant customers as well as the addition of a new customer 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.
Current wording
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.
Previous wording
Consolidated cost of sales for the years ended December 31, 2024 and 2023 was $14,510 and $15,425, respectively. Consolidated gross margin percentages for the years ended December 31, 2024 and 2023 were 42% and 43%, respectively. The gross margins for the APC technology segment decreased to 37% in 2024 from 38% in 2023. The overall decrease 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 decreased to 46% from 48% for the years ended December 31, 2024 and 2023. This decrease is primarily due to demonstration costs and other administrative costs associated with new and previously dormant accounts.
Current wording
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.
Previous wording
Selling, general and administrative expenses for the years ended December 31, 2024 and 2023 were $13,761 and $12,803, respectively. The increase of $958, or 7%, is primarily attributed to the following:
Current wording
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:
Previous wording
Depreciation and amortization are calculated using the straight-line method and included in selling, general and administrative expense. For the years ended December 31, 2024 and 2023, the Company recorded depreciation of $403 and $281 and amortization of $57 and $61, respectively.
Current wording
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.
Previous wording
Research and development expenses were $1,564 and $1,511 for the years ended December 31, 2024 and 2023, respectively. The expenditures in our research and development expenses 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.
Current wording
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.
Previous wording
Other income, net was $1,585 for the year ended December 31, 2024 compared to Other expense, net of $90 for the same period in 2023. The increase of $1,675 is due primarily to the employee retention credit.
Current wording
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.
Previous wording
For the year ended December 31, 2024, we recorded an income tax expense of $77 on pre-tax loss of $1,866. Our effective tax rates were (2.9)% and (4.8)% for the years ended December 31, 2024 and 2023, respectively. For the year ended December 31, 2023, we recorded an income tax expense of $69 on pre-tax income of $1,469. The effective tax rate for the year ended December 31, 2024 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.
Current wording
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.
Previous wording
At December 31, 2024, we had cash and cash equivalents of$8,510 (which includes $631 of cash equivalents) and working capital of$23,764 versus cash and cash equivalents of$17,578 (which includes $5,083 of cash equivalents) and working capital of$32,633 at December 31, 2023. 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.
Current wording
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.
Previous wording
Operating activities provided cash of$696 for the year ended December 31, 2023, primarily due to a decrease in accounts receivable balances of $1,039 and an increase in accrued expenses and other non-current liabilities of $1,239, partially offset by an increase in accounts payable balances of $295 and adjustments for non-cash items from our net loss from continuing operations for interest income on held-to-maturity securities of $433, depreciation and amortization of $342 and stock compensation expense of $389.
Current wording
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.
Previous wording
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.
Current wording
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.
Previous wording
Investing activities used cash of $5,443 and $6,444 for the years ended December 31, 2024 and 2023, respectively. Investing activities for the years ended December 31, 2024 and 2023 primarily consisted of purchases of HTM debt securities as investments of $18,060 and $14,026, respectively, and the purchases of equipment and patent related costs of $378 and $418, respectively. Investing activities for the years ended December 31, 2024 and 2023 were partially funded by the maturities of debt securities of $12,995 and $8,000, respectively.
Current wording
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.
Previous wording
Financing activities used cash of$95 and provided cash of$42 for the years ended December 31, 2024 and 2023. In 2024, the financing activity was related to taxes paid on behalf of equity award participants on the vesting of restricted stock units. In 2023, the finan cing activity was related to proceeds from the exercise of stock options.
Current wording
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.
Previous wording
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, 2024, the Company had outstanding standby letters of credit totaling approximately$1,860 under the Investment Collateral Security agreement. At December 31, 2024, the investments held as collateral totaled$2,790. Fuel Tech is committed to reimbursing the issuing bank for any payments made by the bank under these instru ments. The outstanding standby letters of credit mature as follows:
Current wording
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 instru ments. The outstanding standby letters of credit mature as follows: