Mercury Emissions Control Co. Reports Positive Financial Results

ME2C Environmental (MEEC:OTCQB), also known as Midwest Energy Emissions Corp., has reported financial results for the end of quarter one (Q1), ending March 31, 2023. The reports detail several financial improvements compared to December 31, 2022, including a cash-on-hand increase of US$1 million and Technology Licensing Revenues increasing by approximately US$400,000. 

The company also reported a total revenue of US$3 million for Q1 and a working capital of US$1.8 million as of March 31, 2023. 

In a news release, ME2C Environmental CEO Richard MacPherson stated that the company "continues to operate from the solid industry position that we are establishing in our core business, mercury emissions capture technologies." 

He explained the company had "slightly lower" revenues due to several large utility customers taking earlier than usual maintenance shutdowns but gave reassurance that it "gained significant new supply business during this first quarter."

Technical Analyst Clive Maund wrote, "We stay long for the intermediate uptrend just starting" and that the MACD indicator shows "it has plenty of room to run."

Looking forward, he went on to say, "As we move further into 2023, we expect that our technology licensing revenues will continue to grow, and with a stable coal-fired power market, we expect the second quarter of this year to show increased supply revenues as our customers meet growing energy demands. Our revenues remain on track to yield significant year-over-year improvements as we have experienced consistently during the last few years."

ME2C Environmental develops and provides technology to control mercury emissions for coal-powered generation. As coal is processed, it releases poisonous mercury gas through evaporation, which is released through smokestacks, where it dilutes. Technology developed by ME2C Environmental captures this harmful gas during the process, significantly and efficiently reducing the amount of mercury emission. 

According to its website, the company is the "commercial extension of US$60 million of research and development" and has "worked with the DOE, EPA and dozens of utilities across the U.S.A. to develop the best mercury emissions capture process available, known as the SEA® System or Sorbent Enhancement Additive system."

Zacks Small-Cap Research analyst Steven Ralston also wrote that ME2C "should achieve strong double-digit topline growth in this year" and that he expects "revenues to increase by at least 35% in 2023."

The SEA® System continues to improve and develop each year. It is the result of the company's total focus on gaining a complete understanding of the science behind mercury capture and can be tailored to each application as required. 

The company has a global stake in coal power with strong international market growth potential bolstered by a rampant increase in coal fire power capacity across Southeast Asia and parts of Europe.  Much of this area has initiated interest in emissions reduction technology while stricter emissions regulations are already in place in the EU and forthcoming in China. Consistently over the last couple of years, ME2C has shown at least 50% growth year–on–year, which is one of the strongest in the industry. 

Its stock is currently trading at 1.5 times lower than its expected valuation, with an increased stock value expected to be driven by numerous upcoming catalysts. 

Before the end of Q2, full-year guidance for 2023 is due to be announced, as well as any additional licensing and supply contracts.

In advance of a court date regarding patent litigation against major refined coal companies in November of this year, a potential outcome includes additional settlements to be made with defendants, as well as the potential for significant increases in direct supply business with utilities currently using the company's technology outside of either a license and/or supply agreement. A listing onto a major international exchange is expected to occur before the end of Q2 laying the groundwork to potentially uplist onto a major U.S. exchange during 2024.

Concern for Growing Mercury Emissions

The United States Environmental Protection Agency explains that mercury exposure can threaten our health and is harmful to wildlife and ecosystems. 

Though a portion of mercury emissions can be attributed to natural occurrences in the earth's crust, human activity such as mining and the retrieval of fossil fuels has led to "widespread global mercury pollution."

Once mercury has been disturbed and emitted into the air, it either lands in water or on land, where it's then washed into the water. At this point, certain microorganisms can turn it into the highly toxic form, methylmercury, which is then consumed by fish and other marine life. Most mercury exposure in humans comes from eating contaminated fish and shellfish.

In 2018, the highest source of mercury globally was artisanal and small-scale mining, followed by the stationary combustion of coal.

As the world continues to use coal as a primary source of energy, it will become increasingly important to control mercury emissions to avoid an even greater risk of contamination and poisoning. 

A recent report from Barron's stated that coal power is 35% of the global power mix, thus creating a larger market for mercury emissions capture for the foreseeable future. In February, the Environmental Protection Agency reaffirmed the need for a rule that would limit the level of mercury and other harmful pollutants being emitted from power plants. ME2C's technology directly supports efforts of mercury emission capture.

Technical Analyst Clive Maund wrote, "We stay long for the intermediate uptrend just starting" and that the MACD indicator shows "it has plenty of room to run."

Zacks Small-Cap Research analyst Steven Ralston also wrote that ME2C "should achieve strong double-digit topline growth in this year" and that he expects "revenues to increase by at least 35% in 2023."

Ownership and Share Structure

Insiders own 32% of the company. The CEO owns 16%, the Senior Vice President owns 6.8%, Chris Greenberg owns 6%, and other managers and directors own less than 5%.

Alterna Capital, the company's primary lender, owns 12%. 

ME2C has a market cap of US$26.74 million. It trades at a 52-week range of US$0.1800 and US$0.5268.

Important Disclosures:

1. Midwest Energy Emissions Corp. is a billboard sponsor(s) of Streetwise Reports and has paid SWR a sponsorship fee between US$3,000 and US$5,000.
2. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Midwest Energy Emissions Corp.
3. Lauren Rickard wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor.
4. The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.

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