When companies see their shares double in a single trading day, most investors probably assume it is news of a buyout or some other major change inside a company. That does not have to be the case in micro-cap cult stocks. Fuel Tech Inc. (NASDAQ: FTEK) is a tiny stock that was rekindled as a cult stock on Friday as its shares were up more than 100% shortly after the opening bell, with an exponential volume spike and a market cap that was still less than $30 million.

Fuel Tech issued a press release showing that it has secured two FUEL CHEM demonstration orders that are using the company’s proprietary TIFI Bio technology, which represents the Targeted In-Furnace Injection.

Before getting into the size of the combined orders, note that Fuel Tech’s revenue was almost $30.5 million in 2019 and $56.5 million in 2018. According to the press release, the demonstrations are for new domestic industrial renewable power customers that are utilizing biomass as the source of fuel.

The company indicated that one program will be conducted on two small biomass-fired boilers at one plant site. The second order is for a small biomass-fired unit at another site. The demonstrations have a goal of improving boiler availability, reliability and heat rate, while also reducing greenhouse gas emissions. The company further noted that the chemical injection for all three units is scheduled to start during the current (second) quarter of 2020.

While the orders announced here were smaller in nature, Fuel Tech indicated that successful demonstrations at both plants would lead to ongoing commercial programs that would start in the third quarter of 2020. Those would represent estimated annual revenue of $500,000 to $750,000 per site when (and if) the units at the site are operational and if they utilize its technology on a continual basis throughout the year.

Shares of Fuel Tech were last seen up 130% from the prior day’s close $0.47 at a new higher price of $1.10 on Friday morning, on more than 17 million shares in less than 30 minutes of trading. Its intraday high was up a $1.40, and the 52-week trading range is $0.30 to $2.60. Fuel Tech’s average trading volume is generally under 100,000 shares on any given day.

Vincent J. Arnone, board chair, president and chief executive officer, said:

We are pleased to announce these demonstrations. Our TIFI technology has been successfully used on a wide range of boiler types firing different fuels. Our patented TIFI Bio™ approach uses multiple chemicals working together, and offers significant operational improvements including reduced downtime, lower corrosion rates, increased time between cleaning cycles, and the opportunity to fire a wider variety of biomass waste fuels. TIFI Bio™ has been successfully demonstrated on several units in the US and Europe, and biomass as a renewable fuel source continues to provide opportunities. For the current demonstrations, we have already conducted Computational Fluid Dynamic modeling studies on both units, which uses our proprietary modeling to guide our design of the injection strategy.

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