Midwest Energy Emissions Corp. also known as ME2C Environmental (MEEC:OTCQB) has, in a letter to shareholders from CEO Richard MacPherson, reported "an exciting growth period" in the last 12 months. The company predicts it will beat revenue guidance for 2022, as well as 50% anticipated year-over-year growth for 2023.
The latest reports from the company show revenue of US$21.6 million in 2022, which is a 66% growth of revenue from 2021, "supported by expected additional license and supply contracts."
ME2C Environmental specializes in mercury emissions capture technology for coal-powered generation. During the processing of coal, poisonous mercury evaporates into gas form and is released through smokestacks, where it dilutes. ME2C’s technologies remove mercury during this process, reducing the amount of mercury emissions.
According to its website, ME2C utilizes a range of Sorbent Enhancement Additives (SEA®), the system by which it captures mercury emissions. These leading technology systems have been developed as the result of over US$60 million of research and development.
Why Coal?
While the public opinion of coal has waned over the years, the coal market has not taken the same hit. The price of coal reached record highs in 2021 and has consistently risen over the past three years.
According to a 2021 IEA report, "global coal demand may well hit a new all-time high in the next two years."
With lower imports of oil from Russia due to the Russia-Ukraine war, coal demand may accelerate even higher. The Coal Hub also stated earlier this month that "the strengthening of indices was caused by the increase in coal generation and the decline in electricity production from renewable sources, as well as stabilization of gas prices."
Still, consumers would prefer to consume energy that doesn't impact the environment in such a negative way. This is where ME2C comes in, a company that allows consumers to have their cake and eat it too.
Mercury Emissions Capture
Last year, Benzinga referred to mercury pollution as "a matter of international concern." As coal remains the main source of power worldwide, and several markets continue to build new coal plants, the importance of mercury emissions capture technologies has never been greater, and the market for companies like ME2C continues to grow.
The company consistently introduces improvements to its technology each year and expects its full-year guidance for 2023 to be announced before the end of Q2.
Analyst Steven Ralston stated that "ME2C Environmental is positioned to accelerate topline growth and achieve growing profitability by providing a patented mercury capture process," and also noted that it held around a 15% market share.
Upcoming Legal Battle and Other Catalysts
CEO Richard MacPherson mentioned a number of events from the last year, as well as the increased revenues, in his letter to shareholders. He highlighted the "extension of all major debt" through one financial partner, finalizing a three-year agreement. He also mentioned the development and progression of new technologies, the negotiation of a stock buy-back option, positive movement regarding IP, and litigation agreements with several coal-fired utilities, which are "worth potentially millions of new business revenues annually."
Analyst Steven Ralston stated that "ME2C Environmental is positioned to accelerate topline growth and achieve growing profitability by providing a patented mercury capture process," and also noted that it held around a 15% market share.
He also noted the upcoming legal battles with 24 major refined coal companies," that are accused of using ME2C’s patents without technology licenses. The court date is set for November 2023.
There are also several U.S. utility companies that are using ME2C's patents without a license, who at this time, are not a part of this lawsuit.
MacPherson expects the next year to be a positive one overall, predicting growth across the company, and finishing his letter by stating that the company remains "strong, stable, and growing."
Streetwise Ownership Overview*The company receives its revenue from a broader set of sources than its competitors, including technology licenses, consulting fees, and demonstrations, as well as the standard product supply sales. Its year-on-year growth is one of the strongest in the industry, with 50% each year since 2019.
Ownership & Share Structure
According to the company, management and insider participation sits at around 31%, with CEO Richard MacPherson holding 12% or 11.79 million shares.
Senior VP and CTO John Pavlish holds 1.13% or 1.05 million shares, and Independent Chairman of the Board Christopher Greenberg has 5.85%, or 5.43 million.
The company’s main lender, Alterna Capital, owns 12.60% of shares, or 11.70 million.
32.91% of the company is with institutions and strategic investors, according to Reuters.
Headquartered in Corsicana, Texas, ME2C has a market cap of US$39,562,313 as of February 16, and 93 million shares outstanding. The company trades at a 52-week range of between US$0.16 and US$0.53.
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Disclosures:
1) Lauren Rickard wrote this article for Streetwise Reports LLC as an independent contractor. She or members of her household own securities of the following companies mentioned in the article: None. She or members of her household are paid by the following companies mentioned in this article: None.
2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: ME2C Environmental. Click here for important disclosures about sponsor fees. As of the date of this article, an affiliate of Streetwise Reports has a consulting relationship with: None. Please click here for more information.
3) Statements and opinions expressed are the opinions of the author and not of Streetwise Reports or its officers. The author is wholly responsible for the validity of the statements. The author was not paid by Streetwise Reports for this article. Streetwise Reports was not paid by the author to publish or syndicate this article. Streetwise Reports requires contributing authors to disclose any shareholdings in, or economic relationships with, companies that they write about. Streetwise Reports relies upon the authors to accurately provide this information and Streetwise Reports has no means of verifying its accuracy.
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5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the decision to publish an article until three business days after the publication of the article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of ME2C Environmental, a company mentioned in this article.
Disclosures For Zacks Small-Cap Research, Midwest Energy Emissions, February 7, 2023
ANALYST DISCLOSURES
I, Steven Ralston, hereby certify that the view expressed in this research report accurately reflect my personal views about the subject securities and issuers. I also certify that no part of my compensation was, is, or will be, directly or indirectly, related to the recommendations or views expressed in this research report. I believe the information used for the creation of this report has been obtained from sources I considered to be reliable, but I can neither guarantee nor represent the completeness or accuracy of the information herewith. Such information and the opinions expressed are subject to change without notice.
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