Friday, June 24, 2022

Midwest Energy Emissions Corp (OTCMKTS:MEEC) Pops on Improved Top Line Data and Outlook

Midwest Energy Emissions Corp (OTCMKTS:MEEC) is a cheap play in the industrial goods space that has started to garner attention as the stock bounces up the chart. The latest move appears to be in direct response to the company’s earnings announcement this week, so we will focus our attention there.

First off, it’s important to point out that the company is seeing huge top line growth, but it’s also seeing a widening net loss as a result of an unclarified issue with the valuation of “certain warrants”, an issue that was not clarified on the conference call. In any case, it’s important to bear that in mind. Otherwise, in raw terms, total revenues in the fourth quarter of 2016 increased 29% to $7.8 million, compared to $6.1 million in the fourth quarter of 2015. According to company notes, this growth is primarily attributed to the Company ending the fourth quarter of 2016 with 20 fully-operational Mercury and Air Toxics Standard (MATS) compliant electric generating units (EGUs) utilizing ME2C’s technologies, compared to four fully-operational EGUs in the fourth quarter of 2015.

Midwest Energy Emissions Corp (OTCMKTS:MEEC) trumpets itself as an environmental services company. It focuses on the delivery of mercury capture technologies to coal-fired power plants in the United States, Canada, Europe, and Asia.

Headquartered in Lewis Center, Ohio, MEEC delivers patented and proprietary solutions to the global coal-power industry to remove mercury from power plant emissions, providing performance guarantees, and leading-edge emissions services.

The U.S. Environmental Protection Agency MATS rule, which has been subject to legal challenges, requires that all coal- and oil-fired power plants in the U.S., larger than 25 mega-watts, must remove roughly 90% of mercury from their emissions starting April 15, 2015.

ME 2 C has developed patented technology and proprietary products that have been shown to achieve mercury removal levels compliant with MATS at a significantly lower cost and with less operational impact than currently used methods, while preserving the marketability of fly-ash for beneficial use.

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“We expect the momentum we established in 2016 as it relates to customer acquisition, cash flow and revenue growth, to carry forward into 2017,” said Richard MacPherson, President and CEO of ME2C. “2016 was a pivotal year for our Company, marked by several successful strategic initiatives, first of which was an improved balance sheet due to a $13.5 million equity private placement and debt restructuring. During the year we also continued the build-out of our core infrastructure to support a large increase in customer activity, and announced our intent to acquire our core IP from the University of North Dakota Energy & Environmental Research Center. Finally, we expect new product introductions, such as our recently announced mercury control product for preventing scrubber reemission events, will ultimately help further position our technology as best available mercury control offering on the market.”

MacPherson, continued: “As we have noted, we continue to experience some seasonal decline in winter months when our clients — who are predominately based in the Southwest — decrease capacity. That said, we expect this seasonality to smooth out as we secure customers in various geographic regions, such as Canada and other areas of the U.S., which we are aggressively pursuing. To this point, we currently have the most robust pipeline in the Company’s history, with over 20 new units in varying stages of the sales process, and are actively focused on penetrating existing customer fleets, both of which present us with significant growth opportunities.

“We have not experienced any slowdown in interest at the utility level for our proprietary SEA Technology,” continued MacPherson. “In fact, we believe coal-fired EGUs are progressively recognizing our technology as a necessary solution that will immediately improve operational and economic efficiencies. As we move through 2017, we will continue to serve our current customers, further build our sales pipeline as a result of our growing line of products, and penetrate new markets, which we expect ultimately will allow us to deliver another record year for our shareholders.”

Now commanding a market cap of $88.4M, MEEC has a store ($2M) of cash on the books, which is balanced by about $4M in total current liabilities. MEEC is pulling in trailing 12-month revenues of $30.6M. In addition, the company is seeing major top line growth, with y/y quarterly revenues growing at 224.7%. This is an exciting story, and we look forward to a follow-up chapter as events transpire. For continuing coverage on shares of $MEEC stock, as well as our other hot stock picks, sign up for our free newsletter today and get our next hot stock pick!

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