What changed in this filing

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Item 1. Business

2021-04-05 compared with 2020-05-14 · 56 added, 53 removed, 133 unchanged (45% of the section changed)

As used in this Annual Report on Form 10-K, the terms “we”, “us”, “our”, “the Company”, “ME 2 C”, and “Midwest Energy Emissions Corp.” refer to Midwest Energy Emissions Corp.

and our wholly owned subsidiaries.

Midwest Energy Emissions Corp., a Delaware corporation, is an environmental services and technology company specializing in mercury emission control technologies, primarily to utility and industrial coal-fired units.

We deliver 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.

We have developed patented technology and proprietary products that have been shown to achieve mercury removal at a significantly lower cost and with less operational impact than currently used methods, while maintaining and/or increasing unit output and preserving the marketability of fly-ash for beneficial use.

As used in this Annual Report on Form 10-K, the terms “we”, “us”, “our”, “the Company”, “ME 2 C Environmental”, and “Midwest Energy Emissions Corp.” refer to Midwest Energy Emissions Corp.

and our wholly owned subsidiary.

Midwest Energy Emissions Corp., a Delaware corporation, is an environmental services and technologies company developing and delivering patented and proprietary solutions to the global power industry.

Our leading-edge services have been shown to achieve mercury emissions removal at a significantly lower cost and with less operational impact to coal-fired power plants than currently used methods, while maintaining and/or increasing power plant output and preserving the marketability of byproducts for beneficial use.

Our principal place of business is located at 1810 Jester Drive, Corsicana, Texas 75109, which location we have maintained for manufacturing and distribution of our products since 2015.

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Our telephone number is (614) 505-6115.

Our corporate website address is http://www.midwestemissions.com .

Our corporate website address is http://www.me2cenvironmental.com .

Our common stock is quoted on the OTCQB under the symbol “MEEC”.

We originally incorporated under the name Digicorp on July 19, 1983 in the State of Utah.

We subsequently domesticated as a Delaware corporation in February 2007;

changed our name to China Youth Media, Inc.

in October 2008;

and changed our name to Midwest Energy Emissions Corp.

We were originally incorporated on July 19, 1983 in the State of Utah and subsequently domesticated as a Delaware corporation in February 2007.

We changed our name to Midwest Energy Emissions Corp.

in October 2011.

Our wholly owned subsidiary, MES, Inc., was originally incorporated under the name RLP Energy, Inc.

in December 2008 in the State of North Dakota;

changed its name to Grunergy Technologies USA Inc.

in December 2010;

and changed its name to Midwest Energy Emissions Corp.

(“Midwest”) in January 2011.

Midwest was engaged in the business of developing and commercializing state-of-the-art control technologies relating to the capture and control of mercury emissions from coal-fired boilers in the United States and Canada.

On June 21, 2011, we completed a merger transaction (the “Merger”) whereby Midwest became our wholly owned subsidiary and changed its name to MES, Inc.

For accounting purposes, the Merger was treated as a reverse merger and a recapitalization of the Company.

As a result of the Merger, our business is now focused on the delivery of mercury capture technologies to power plants in North America, Europe and Asia.

Our prior business, which focused on youth marketing and media in China, terminated.

ME 2 C Environmental is a trade name of Midwest Energy Emissions Corp.

Our wholly owned subsidiary, MES, Inc., was originally incorporated in December 2008 in the State of North Dakota.

On June 21, 2011, we completed a merger transaction (the “Merger”) whereby MES, Inc.

(then called Midwest Energy Emissions Corp.) became our wholly owned subsidiary.

As a result of the Merger, our business began to focus on the delivery of mercury capture technologies to power plants in North America, Europe and Asia.

Prior to relocating our corporate headquarters to Corsicana, Texas, we maintained our corporate headquarters in Lewis Center, Ohio from March 2015 to December 2019, and in Worthington, Ohio from November 2011 to March 2015.

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Regulations and Markets

The markets for mercury removal from plant emissions are largely driven by regulations.

Changes in regulations have profound effects on these markets and the companies that compete in these markets.

This is especially true for smaller companies such as ME 2 C.

The markets for mercury removal from power plant emissions have largely been driven by federal regulations.

On December 21, 2011 the EPA issued its Mercury and Air Toxics Standards (“MATS”) for power plants in the U.S.

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See “North American Markets for Our Technology” below for information on mercury control standards in Canada and “Other Markets for Our Technology” below for information on mercury control in Europe and Asia.

ME 2 C’s Technology

ME 2 C Environmental’s Technology

Background and Acquisition of Patent Rights

We provide customer-focused mercury capture solutions driven by our patented two-part Sorbent Enhancement Additive (SEA ® ) process using a powerful combination of science and engineering.

We provide mercury capture solutions driven by our patented two-part Sorbent Enhancement Additive (SEA ® ) process using a powerful combination of science and engineering.

We design systems and materials tailored and formulated specifically to each customer’s coal-fired units.

Our mercury removal technology and systems will achieve mercury removal levels which meet or exceed the MATS requirements and to do so with lower cost and plant systems impacts than typical PAC or BAC sorbent injection systems.

Our mercury removal technologies and systems will achieve mercury removal levels which meet or exceed the MATS requirements with lower cost and plant systems impacts than typical PAC or BAC sorbent injection systems.

Our products have been shown to be successful across a myriad of fuel and system types, tunable to any configuration, and environmentally friendly, allowing for the recycling of fly ash for beneficial use.

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A complete understanding of the complexity of mercury–sorbent–flue gas interactions and chemisorption mechanisms allows for optimal control strategy and product formulation, resulting in effective mercury capture.

Combined with a thorough proprietary audit of the plant and its configuration and instrumentation, we believe our complete science and engineering approach for mercury–sorbent–flue gas interactions is well-understood, highly predictive, and critical to delivering total mercury control.

The SEA ® approach to mercury capture is specifically tailored for each application to match a customer’s fuel type and boiler configuration for optimal results.

Combined with a thorough proprietary audit of the plant and its configuration and instrumentation, we believe our complete science and engineering approach for mercury–sorbent–flue gas interactions are well-understood, highly predictive, and critical to delivering total mercury control.

The SEA ® approach to mercury capture is specifically tailored for each application to match a customer’s coal type and boiler configuration for optimal results.

Our two-pronged solution consists of a front end sorbent injected directly into the boiler in minimal amounts combined with a back end sorbent injection solution to insure maximum mercury capture.

We believe our two-part process uses fewer raw materials than other mercury capture systems and causes less disruption to plant operations.

We believe our sorbent line, which are designed to meet or exceed the mercury mitigation requirements of our customers, offers superior performance and the lowest possible feed rates when compared to other solutions on the market.

We believe our sorbent line, which is designed to meet or exceed the mercury mitigation requirements of our customers, offers superior performance and the lowest possible feed rates when compared to other solutions on the market.

Our processes also preserve fly ash which can be sold and recycled for beneficial use.

Scrubber Reemissions Additive Technology

We have also added a scrubber reemission additive to our product offering for use in wet flue gas desulfurization systems which reduces mercury reemissions from wet flue gas desulfurization systems by preventing scrubber reemission events.

Our scrubber reemissions additive technology provides another mercury control solution in addition to our SEA technology for plants that are equipped with wet scrubbers.

Depending on the level of mercury oxidation (discussed above), we can use one of our mercury oxidation additives to increase the amount of mercury oxidation in the flue gas and thereby increase the amount of mercury that is removed in the wet scrubber, often resulting in the plant achieving MATS compliance.

Should the power plant encounter mercury reemission or desire a lower mercury emissions, we can provide a scrubber reemissions additive that is introduced into the scrubber to prevent mercury remissions resulting in lower mercury emissions from the plant.

Customized Emissions Services

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Intellectual Property

We have a patent portfolio consisting of 50 patents throughout the U.S., Canada, Europe and China and 18 patents pending.

We have a patent portfolio consisting of 42 active patents throughout the U.S., Canada, Europe and China and 20 patents pending applications.

We believe that our patent position is strong in the U.S., Canada, and Europe.

Patent Enforcement

We believe that a significant percentage of coal-fired power plants in the United States have adopted and are infringing upon our two-part Sorbent Enhancement Additive (SEA ® ) process for mercury removal from coal-fired power plants.

Since 2018, we have engaged a Dallas-based intellectual property and business litigation firm to oversee and spearhead our efforts to protect our intellectual property.

Beginning in 2019, we began to actively enforce our patent rights against unauthorized use of our patented technologies (i.e.

In July 2019, we initiated our first patent litigation against four major owners and/or operators of coal-fired power plants in the United States and certain of their affiliates, along with certain other third parties in which we have claimed infringement of our patents related to our two-part process for mercury removal from coal-fired power plants.

We have entered into agreements with four of the major defendants.

Such litigation is continuing against the other parties.

See Part I, Item 3 Legal Proceedings.

In 2021 and beyond, we expect to pursue other infringers and have already communicated with some.

Although additional litigation may be necessary to enforce our intellectual property rights, we view this as a last resort.

Our goal and overall strategy is to convert infringers to our supply chain of sorbent products for mercury removal, or otherwise license our patents to them on a non-exclusive basis in connection with their respective coal-fired power plants.

North American Markets for Our Technologies

North America is currently the largest market for our technologies.

North America is currently the largest market for our emissions technologies.

market, our success depends, in part, on the success of demonstrations performed with utility customers and the resulting contract awards to meet the MATS requirements in the long-term period and our operational performance with EGUs under contract.

In Canada, there is a Canada-Wide Standard among all the provinces which was initially implemented in 2010, and which provides for increasingly stricter emissions control through 2020, although individual provinces may move faster to more stringent levels.

In Canada, there is a Canada-wide Standard for Mercury Emissions among all the provinces which was initially implemented in 2010, with caps in mercury emissions for each of the provinces.

We believe we have the most effective technology for the EGUs in Canada and a strong patent position there.

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At the present time, there are 14 EGUs in the U.S.

which currently use our technologies.

In Canada, we have 3 EGUs which currently use our technologies, with 2 more expected in the near term.

that currently use our SEA ® technologies.

In Canada, there are 5 EGUs that have our systems installed and are used when necessary to comply with their annual emissions requirements in Canada.

We expect to continue to conduct numerous demonstrations on prospective customer units throughout 2021 and thereafter.

Other Markets for Our Technology

Other Markets for Our Emissions Technologies

In March 2018, we entered into an agreement for a term of ten years with one of the Company’s primary suppliers to commercialize our technology throughout Europe.

Under the terms of the agreement, we have granted such supplier an exclusive, non-transferable license to make, use, sell and market the Company’s technology during the term throughout Europe (which includes Germany and Poland which currently have the largest coal fleets in Europe).

We believe such arrangement will make our technology more saleable throughout Europe and which will benefit the Company from such supplier’s knowledge and operations in this region.

We have agreed to provide certain technical support throughout the term and shall continue to have the right to market and seek customers for our technology throughout Europe provided any opportunities are turned over to the supplier.

Although we do not expect to generate significant revenues from such agreement for several years, we believe it positions us to make inroads in the European market sooner than we could achieve otherwise as Europe appears to be moving ahead with mercury emissions controls.

Under the terms of the agreement, we had granted such supplier an exclusive, non-transferable license to make, use, sell and market the Company’s technology during the term throughout Europe (which included Germany and Poland which currently have the largest coal fleets in Europe).

Under the terms of the agreement, such supplier had the right to terminate at any time on no less than 30 days prior written notice.

Pursuant to notice provided to us by such supplier on November 6, 2020, the supplier advised us that it had undertaken a review of its strategy in the mercury control market and had decided to terminate the agreement effective as of December 6, 2020.

Prior to its termination, no revenues had been generated from such agreement.

We intend to continue to pursue the European market although no assurance can be made that any such efforts will be successful.

The European market is significant although not as large as the market in the U.S.

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As a result of the EU’s adoption of these BREF conclusions, specific emissions limits are currently being developed.

With regard to business opportunities in China and other Asian countries, there currently exists no specific mandate for mercury capture that requires specific control technology, such as we offer.

Nevertheless, we are optimistic of the prospects for mercury emissions regulations in China in the coming years, and because we have very broad patent rights in China, this has the potential to become a large business opportunity for us in future years.

With regard to business opportunities in China and other Asian countries, there currently exists no specific mandate for mercury capture that requires specific control technology.

Nevertheless, we are optimistic of the prospects for mercury emissions regulations in China and Southeast Asia in the coming years, and because we have very broad patent rights in China, this has the potential to become a large business opportunity for us in future years.

It is estimated that China represents 47% of the world’s coal power usage compared to the United States which represents 14%*.

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Additional Business Opportunities

Our acquisition of all the patent rights, including all patents and patents pending, domestic and foreign, which forms the basis of our mercury control technology, which acquisition was completed on April 24, 2017 (see “ME 2 C’s Technology” above) positions us to license systems using a two-part mercury control process.

In this regard, we anticipate being able, and have begun efforts, to license our technologies to utilities and others across North America and elsewhere.

In October 2019, we entered into a license and development agreement with an unaffiliated entity located in Alabama pursuant to which the parties will work together to develop a plan to commercialize and market certain technology owned by such unaffiliated entity related to the removal of mercury from air and water emissions generated by coal burning power plants.

In October 2019, we entered into a license and development agreement with a nonrelated third party entity located in Alabama pursuant to which the parties have been developing a plan to commercialize and market certain technology owned by such entity related to the removal of mercury from air and water emissions generated by coal burning power plants.

Although no assurance can be given, we are optimistic that this arrangement will lead to a new revenue stream for us in the future.

During the first quarter of 2021, we announced that we are in the process of developing a proprietary methane gas emissions control technology which we believe can be adopted within the oil and gas industry.

Methane is emitted from oil and gas operations worldwide and is believed to be a contributor to global warming.

Methane is considered a greenhouse gas, like carbon dioxide.

While we have not established a timeline for the introduction of our technology, we hope to be able to commercialize our efforts in 2022 and thereafter.

In addition, during the first quarter of 2021, we announced new technologies under development intended to improve the processing of rare earth elements (REEs) in North America.

Currently, most of the demand for REEs in the United States is purchased from China.

REEs are commonly used today in automobile catalysts and petroleum refining catalysts, televisions, magnets, batteries and medical devices.

Our new technologies are under development in conjunction with our collaboration with the Alabama third party entity mentioned above and its affiliates.

Such technologies focus on improving the cost of extracting rare earth minerals along with improving the environmental footprint of extracting those rare earth elements from their solvent state.

While there is no established timeline for the introduction of these technologies after further testing is performed, we hope that if such further testing is successful, these technologies can be commercialized in 2022 and thereafter.

Raw Materials

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We file with or submit to the SEC annual, quarterly and current periodic reports, proxy statements and other information meeting the informational requirements of the Exchange Act.

The SEC maintains an Internet website that contains reports, proxy and information statements and other information regarding issuers that file electronically with the SECat www.sec.gov .

Our SEC filings are also available on our website at www.midwestemissions.com .

The SEC maintains an Internet website that contains reports, proxy and information statements and other information regarding issuers that file electronically with the SEC at www.sec.gov.

Our SEC filings are also available on our website at www.me2cenvironmental.com.

Information on or connected to our website is neither part of, nor incorporated by reference into, this Form 10-K or any other report filed with or furnished to the SEC.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business