Source: Streetwise Reports
May 2, 2023 (Investorideas.com Newswire) Keeping coal technology as clean as possible is an important mission. One nascent player in this field has just been rewarded with conditional approval for listing on a major international stock exchange.
ME2C Environmental (MEEC:OTCQB), aka Midwest Energy Emissions Corp., is an environmental technologies firm developing and delivering patented and proprietary solutions to the global power industry. The company's leading-edge mercury emissions technologies achieve emissions removal at a significantly lower cost than currently-used methods, lessening operational impact while increasing power plant output and preserving the marketability of byproducts.
ME2C is engaged in developing and commercializing control technologies for capturing and controlling mercury emissions from coal-fired boilers in the United States and Canada. The firm provides mercury capture solutions driven by a patented two-part Sorbent Enhancement Additive (SEA) technology process.
The company's SEA technology provides mercury control solutions based on a scientific understanding of actual and probable interactions involved in mercury capture in coal-fired flue gas. This double-edged solution consists of a front-end sorbent injected directly into the boiler in minimal amounts combined with a back-end sorbent injection solution to ensure maximum mercury capture.
With commercialization beginning in 2010 and representing over US$60 million in research and development, the patented SEA system is now the leading mercury control technology used by the coal-fired utility fleet across the USA.
During the company's recent investor conference call held on April 17, 2023, Richard MacPherson, CEO of ME2C Environmental, announced the company's foray into new technologies under development for water treatment, particularly addressing PFOA and PFOS under pending EPA regulation and an update on the company's rare earth element extraction technologies that are currently in final stages of lab testing and development. The company's move into water treatment will provide a boost to its current core business in mercury emissions, which utilizes activated carbon.
ME2C is working to produce activated carbon to benefit their existing technologies, as well as to develop new technologies to clean water from these "forever chemicals" under EPA's review. The company is working to expand these technologies into several areas that affect the energy sector, including wastewater and coal ash remediation.
The Catalyst: TSX-V Listing
On April 24, ME2C announced that it had received conditional approval to list shares of its common stock on the TSX Venture Exchange (TSX-V). Upon completing the final listing requirements, the Company expects to be listed on the TSX-V as a Tier 1 Industrial, Technology, or Life Sciences Issuer under the symbol "MEEC."
ME2C has appointed a new Chief Financial Officer, Greg Powell, to support the pending listing, effective March 1, 2023. Powell is a Chartered Professional Accountant, Certified General Accountant, and Certified Fraud Examiner who has been a Fellow of the Association of Chartered Certified Accountants since 2012. He brings experience with both large and small-scale international operations in multiple sectors, including mining and technology
ME2C CEO Richard MacPherson explains, "Enhancing [ME2C's] financial profile is a strategic enterprise that has been long underway."
"This pending listing onto the TSX Venture Exchange in Canada, one of the largest in North America, is an exciting milestone for our company and our shareholders. ME2C's listing with the TSX-V will allow the expansion of our strong Canadian shareholder base and attract new investors both across North America and beyond."
"This international growth is a key component of corporate initiatives that are now in progress. Our Company is excited to welcome Mr. Powell during this auspicious time within our company's growth. With our pending listing on the TSX-V, the appointment of a Toronto-based
CFO reinforces our position in the Canadian marketplace. Mr. Powell's expertise in both the Canadian financial market and with major stock exchanges will provide the necessary financial leadership as we work toward increasing shareholder value."
Why This Sector? Coal Continues To Be an Energy Workhorse
Although governments worldwide are pursuing "greener" alternatives, coal-burning power stations in the U.S.A. continue to provide about 20% of the country's base energy needs. Countries like China and India are even more dependent on coal to meet their base energy needs.
Market Data Forecast states, "The global clean coal technology market was worth US$3.86 billion in 2022 and is predicted to exceed US$4.89 billion by 2028."
Coal-powered electricity generation isn't going anywhere soon, but its traditionally "dirty" image behooves those who must use it to do so in the most environmentally-friendly manner possible. ME2C's tech offers the best way to do so.
Why This Company? Unique Tech, Unique Revenue Model
While ME2C's competitors, such as ADA, Calgon, and Cabot, are limited to revenue from the sale of product supplies, ME2C also enjoys revenue from technology licenses, consulting fees, and demonstrations.
This flexibility should make it easier for the company to expand its foothold in Europe (where some strict regulations are already in place) and China (where clean coal regulation is currently pending.
The upshot of this market-leading position is 50% year-over-year growth since 2019, with no sign of slowing down in the foreseeable future.
Why Now? Undervalued, Impending Ruling
Analyst Clive Maund has been bullish on the stock for a while. On April 20, he wrote, "We got the breakout yesterday in ME2C we have been looking for as recently as last Friday, and it was spectacular."
"This breakout was due to the news announced yesterday that ME2C Environmental Announces New Three-Year Supply Business Estimated up to US$3 million Annually. I did not know about this development, and the assessment that it would break higher was purely the result of a technical analysis of the stock."
"We stay long for the intermediate uptrend just starting," he advised, "and we can see on our chart the MACD indicator showing that it has plenty of room to run."
In addition, ME2C is sitting on a potentially lucrative lawsuit win. In 2021, the company was approved to seek redress from 16 key refined coal process defendants violating the company's patent protections.
In a shareholder letter issued in January, CEO MacPhearson wrote, "ME2C may become a very different company by 2024. We expect to have our day in court this November against several major refined coal companies, the culmination of three years of litigation proceedings that began with our initial July 2019 filing. The damage claims put forth by our legal team to the defendants and the court to date are substantial, and we are confident in our position."
Ownership and Share Structure
As of the last quarterly filing, the company had 93 million shares outstanding, 4.3 million warrants, and 19 million options. Insider participation is 31%, with President and CEO Richard MacPherson owning 12.70%, with 11.79 million shares, according to Reuters. Chairman Chris Greenberg owns 5.85%, with 5.43 million. Senior VP/CTO John Pavlish owns 1.13%, with 1.05 million shares. Vice President of Operations James Trettel owns 0.36%, with 0.34 million, and Director David M. Kaye owns 0.27%, with 0.26 million.
Reuters reports 12.60% of the stock is with institutional investors, with primary lender Alterna Capital owning 12%, with 11.70 million shares. Alterna provides the option for ME2C to buy back a significant amount of stock (~7.5M shares at CA$0.50/share) at an appropriate time to be determined by ME2C.
The rest is held by retail investors.
Cash on hand was US$1.5 million as of January 31, with a monthly burn rate of US$1.1 million to US$1.2 million.
According to Market Watch, ME2C has a market cap of CA$43.65 million and trades in the 52-week range between CA$0.1600 and CA$0.5268.
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