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Item 9A. Controls and Procedures

2021-04-05 compared with 2020-05-14 · 26 added, 408 removed, 114 unchanged (79% of the section changed)

3 unchanged sentences

Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuer’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

Under the supervision and with the participation of our management, including the principal executive officer and principal financial officer, we have evaluated the effectiveness, the design and operations of our disclosure controls and procedures as of the end of the period covered by this report.

Under the supervision and with the participation of our management, including the principal executive officer and principal financial officer (who is the same person), we have evaluated the effectiveness, the design and operations of our disclosure controls and procedures as of the end of the period covered by this report.

Based on that evaluation, the principal executive officer and principal financial officer determined that as of December 31, 2020, the Company’s disclosure controls and procedures were ineffective as a result of material weaknesses in our internal control over financial reporting.

30 unchanged sentences

Certain actions have been taken to address certain aspects of the material weaknesses disclosed above.

Although we no longer have a full-time CFO, we hired a new full-time Controller at our Corsicana, Texas location, closed our Lewis Center, Ohio office and moved our corporate headquarters to our Corsicana, Texas address which has allowed us to consolidate our manufacturing and distribution activities, bookkeeping and accounting at one location.

We have also recently hired a financial consulting firm to assist us in bookkeeping and preparing financial statements for our SEC filings, assist us in evaluating our internal controls over financial reporting and assist us in other related matters.

As of January 1, 2020, we have replaced our previous accounting software with a more efficient software package to manage our business activities and accounting needs.

All of this should help us achieve a more effective internal control environment with the necessary segregation of duties, continued to document necessary internal control policies and continued with the appropriate training of our personnel on our internal controls and procedures.

As of January 1, 2020, we replaced our previous accounting software with a more efficient software package to manage our business activities and accounting needs.

Although we no longer have a full-time CFO, during the fourth quarter of 2019 we hired a new full-time Controller at our Corsicana, Texas location, closed our Lewis Center, Ohio office and moved our corporate headquarters to our Corsicana, Texas address which has allowed us to consolidate our manufacturing and distribution activities, bookkeeping and accounting at one location.

As of October 21, 2020, our Controller was appointed and promoted to Chief Accounting Officer and Principal Accounting Officer of the Company.

Also, in the fourth quarter of 2019, we hired a financial consulting firm to assist us in bookkeeping and preparing financial statements for our SEC filings, assist us in evaluating our internal controls over financial reporting and assist us in other related matters.

Although we believe that these efforts effectively strengthen our disclosure controls and procedures as well as our internal control over financial reporting, our management team intends to continue to actively plan for and implement additional control procedures to improve our overall control environment and expect these efforts to continue throughout 2021 and beyond.

2 unchanged sentences

Directors, Executive Officers and Corporate Governance.

Directors and Executive Officers

Set forth below are our present directors and executive officers.

Note that there are no other persons who have been nominated or chosen to become directors nor are there any other persons who have been chosen to become executive officers.

There are no arrangements or understandings between any of the directors, officers and other persons pursuant to which such person was selected as a director or an officer.

Directors are elected to serve until the next annual meeting of stockholders and until their successors are elected and qualified or until their earlier removal or resignation.

Officers are elected annually by the Board of Directors to hold such office until an officer’s successor has been duly appointed and qualified, unless an officer sooner dies, resigns or is removed by the Board.

Present Position and Offices

of the Company Since

Richard MacPherson

President and Chief Executive Officer, Director

Christopher Greenberg

Chairman of the Board, Director

Senior Vice President and Chief Technology Officer

James Trettel

Vice President of Operations

Secretary and Director

Richard MacPherson has been a Director of the Company since June 2011 and has served as President and Chief Executive Officer of the Company since March 2015.

MacPherson is the founder of MES, Inc.

(current subsidiary and operating company of the Company) and had been its Chief Executive Officer from 2008 until 2011.

From 2011 to March 2015, Mr.

MacPherson served as Vice President of Business Development of the Company.

Over the past 10 years, Mr.

MacPherson has worked with industry leading scientists and engineers to bring the Company’s technology from the R&D phase, through multiple product development stages, to the final commercialization phase, acting as the lead on all required initiatives and activities.

He has been a senior-level executive in the services industry for over 25 years.

MacPherson brings extensive start-up and business development knowledge, applied and proven through his corporate experience throughout the United States and Canada.

He has worked in multiple industries, such as electric utilities, communications, marketing, as well as several entrepreneurial ventures in the communications, hospitality, geological and real estate development industries.

Christopher Greenberg has been a Director of the Company since June 2013 and Chairman of the Board since December 2014.

Greenberg is a founder of, and since 2003, has been the Chief Executive Officer of Global Safety Network, Inc., a company which provides employment screening and safety compliance services.

He is also the owner of multiple Express Employment Professionals franchises located in North Dakota and South Dakota.

Express Employment Professionals is a staffing agency that provides full time and temporary job placement, human resources services and consulting.

Greenberg is a highly experienced Operations Executive who has demonstrated the ability to lead diverse teams of professionals to new levels of success in a variety of highly competitive industries, cutting-edge markets, and fast-paced environments.

Greenberg has strong technical and business qualifications with an impressive track record of more than 24 years of hands-on experience in strategic planning, business unit development, project and product management, and proprietary software development.

He also has the proven ability to successfully analyze an organization’s critical business requirements, identify deficiencies and potential opportunities, and develop innovative and cost-effective solutions for enhancing competitiveness, increasing revenues, and improving customer service offerings.

John Pavlish has been Senior Vice President and Chief Technical Officer of the Company since November 2014.

Prior to joining the Company, Mr.

Pavlish was a Senior Research Advisor and the Director of the Center for Air Toxic Metals at the Energy & Environmental Research Center in Grand Forks, North Dakota.

He has over 25 years of mercury-related experience and is regarded as an international expert on the topic of mercury.

His primary areas of interest and expertise include research, technical consultation, and development of mercury control technologies, in particular, for coal combustion and gasification systems.

He is an inventor of a number of patented mercury control technologies and has years of experience in development and testing of these technologies for commercial application.

Over the last 20 years, he has spent much of his time evaluating the efficacy of a number of different mercury control technologies/approaches and their cost-competitiveness in the commercial market.

Pavlish also has years of power plant experience and has worked for engineering/consulting company Black & Veatch, where he served as Unit Leader/System Engineer.

Pavlish is a professional engineer, a member of the American Society of Mechanical Engineers, and a member of the Air & Waste Management Association.

He serves on numerous professional and technical committees and is a U.S.

Representative on the Mercury Emissions from Coal International Experts Working Group on Reducing Emissions from Coal and a member of the United Nations Environment Programme Global Mercury Partnership, Reduction of Mercury Releases from Coal Combustion.

Pavlish has published over 200 papers, articles, and reports on various mercury-related topics and issues.

James Trettel has been Vice President of Operations since January 2014.

Trettel possesses 28 years of experience in the dry bulk material handling industry.

During 2012 and 2013, he was the owner and operator of Solid Foundation Services, LLC, a firm specializing in deep foundation installations for the gas and oilfield industry, while providing technical consulting services to MEEC.

Prior to 2012, he provided project management and engineering duties for numerous multi-million dollar turn-key contracts while employed at Advanced Bulk and Conveying Inc.

starting in 2004.

Additionally, Mr.

Trettel has overseen day to day operations for 14 years as the VP of J&B Industrial Sales Company Inc., a sales, systems, and engineering organization specializing in bulk material handling.

Trettel has extensive field experience with systems operating in a large variety of industry sectors including coal fired utilities.

Trettel graduated Cum Laude with a B.S.

degree in Mechanical Engineering.

Kaye has been a Director of the Company since June 2019 and Secretary since December 2019.

Kaye is an attorney and has been a partner in the law firm of Kaye Cooper Kay & Rosenberg, LLP, located in Roseland, New Jersey, since the firm’s inception in February 1996.

Since 1980, Mr.

Kaye has been a practicing attorney in the New York City metropolitan area specializing in business, corporate and securities matters.

From March 2006 to June 2011, Mr.

Kaye was a director of China Youth Media, Inc., resigning from such position effective with the merger between the Company with MES, Inc which was completed in June 2011.

From December 2000 to October 2009, Mr.

Kaye also served on the Board of Directors of Dionics, Inc.

Kaye received his B.A.

from George Washington University (1976) and his J.D.

from the Benjamin N.

Cardozo School of Law, Yeshiva University (1979).

There are no family relationships between any of the directors and executive officers of the Company.

Effective as of June 2016, the Board of Directors established (i) an Audit Committee, (ii) a Compensation Committee, and (iii) a Nominating and Corporate Governance Committee.

Upon being established, each of these Committees had only independent directors appointed as members.

In addition, effective as of June 2016, the Board established a Finance Committee for which it has not imposed any membership rules regarding director independence.

Each of the Committees operates under a written charter that is available on the Company’s website:

http://www.midwestemissions.com.

Due to the resignation of certain independent directors since then, and due to the current small size of the Board, the current Board of Directors as a whole now acts as such Committees.

Each of the Committees shall meet as often as its members deem necessary to perform such Committee’s responsibilities.

Audit Committee

The Audit Committee’s charter requires that such Committee shall consist of no fewer than three directors, each of whom shall be an independent director of the Company satisfying the independence requirements of the NASDAQ Stock Market (“NASDAQ”) or any exchange on which the Company’s securities may be listed and any other applicable regulatory requirements.

The Audit Committee is appointed by the Board of Directors to assist the Board in fulfilling its oversight responsibility by reviewing the accounting and financial reporting processes of the Company and its subsidiaries, the Company’s internal control and disclosure control system, and the audits of the Company’s financial statements.

In this regard, the Audit Committee shall approve the Company’s retention of independent auditors and pre-approve any audit or non-audit services performed by them.

It shall review with such accountants the arrangements for, and the scope of, the audit to be conducted by them.

It also shall review with the independent accountants and with management the results of audits and various other financial and accounting matters affecting the Company.

From June 2016 to April 2017, the Audit Committee consisted of three directors, Christopher Greenberg and two other directors of the Company each of whom resigned in April 2017.

As a result of such resignations, and since April 2017, the Board of Directors as a whole has acted and shall continue to act as an Audit Committee until such time, if any, that the number of authorized and elected directors is increased or the Audit Committee is otherwise reconfigured.

Compensation Committee

The Compensation Committee’s charter requires that such Committee shall consist of no fewer than two directors, each of whom shall (i) be an independent director of the Company satisfying the independence requirements of NASDAQ or any exchange on which the Company’s securities may be listed and any other applicable regulatory requirements, (ii) qualify as an “outside director” under Section 162(m) of the Internal Revenue Code, as amended;

and (iii) meet the requirements of a “non-employee director” for purposes of Section 16 of the Securities Exchange Act of 1934, as amended.

The Compensation Committee is appointed by the Board to review and approve the Company’s compensation and benefits programs, including annual base salary;

annual incentive opportunity;

stock option or other equity participation plans;

profit-sharing plans;

long-term incentive opportunity;

the terms of employment agreements, severance agreements, and change in control agreements, in each case as, when and if appropriate;

any special or supplemental benefits;

and any other payments that are deemed compensation under applicable rules of the SEC.

In this regard, the Compensation Committee shall evaluate the performance of the CEO in light of the Company’s goals and objectives and determine and approve the CEO’s compensation based on this evaluation and such other factors as the Committee shall deem appropriate.

The Committee shall also determine and approve the compensation of all other executive officers of the Company, which determination may be based upon recommendations of the CEO.

The Board of Directors can exercise its discretion in modifying any amount presented by our CEO.

From June 2016 to April 2017, the Compensation Committee consisted of Christopher Greenberg (chairperson), Allan T.

Grantham and one other director of the Company who resigned in April 2017.

As of April 2017, the Compensation Committee consisted of two members, Messrs.

Greenberg and Grantham, which remained in place until Mr.

Grantham’s resignation in June 2019.

Since then, the Board of Directors as a whole has acted and shall continue to act as the Compensation Committee until such time, if any, that the number of authorized and elected directors is increased or the Compensation Committee is otherwise reconfigured.

Our policies and overall compensation practices for all employees do not create risks that are reasonably likely to have a material adverse effect on the Company.

In addition, incentive compensation (in the past generally in the form of stock options) is not designed to create, and does not create, risks that are reasonably likely to have a material adverse effect on the Company.

During 2019, the Board of Directors did not retain the services of a compensation consultant.

Nominating and Corporate Governance Committee

The Nominating and Corporate Governance Committee’s charter requires that such Committee shall consist of no fewer than two directors, each of whom shall be an independent director of the Company satisfying the independence requirements of NASDAQ or any exchange on which the Company’s securities may be listed and any other applicable regulatory requirements.

The Nominating and Corporate Governance Committee is appointed by the Board to determine the identity of director nominees for election to the Board and to assist the Board in discharging the Board’s responsibilities in the area of corporate governance.

The Committee shall review, at least annually, the composition and size of the Board and make recommendations to the Board regarding the criteria for Board membership including issues of character, judgment, diversity, expertise, corporate experience and the like.

At a minimum, directors should share the values of the Company and should possess the following characteristics:

high personal and professional integrity;

the ability to exercise sound business judgment;

an inquiring mind;

and the time available to devote to Board of Directors’ activities and the willingness to do so.

The Board or the Committee does not have a formal policy specifically focusing on the consideration of diversity;

however, diversity is one of the many factors that the Committee shall consider when identifying candidates.

In addition to the foregoing considerations, generally with respect to nominees recommended by stockholders, the Committee will evaluate such recommended nominees considering the additional information regarding the nominees provided to the Committee.

When seeking candidates for the Board of Directors, the Committee may solicit suggestions from incumbent directors, management and third-party search firms.

Ultimately, the Committee will recommend prospective nominees who the Committee believes will be effective, in conjunction with the other members of the Board of Directors, in collectively serving the long-term interests of the Company’s stockholders.

The Committee will review any candidate recommended by stockholders of the Company in light of its criteria for selection of new directors.

From June 2016 to April 2017, the Nominating and Corporate Governance Committee consisted of four directors:

Christopher Greenberg (chairperson), Allan T.

Grantham and two other directors of the Company each of whom resigned in April 2017.

As of April 2017, the Nominating and Corporate Governance Committee consisted of two members, Messrs.

Greenberg and Grantham, which remained in place until Mr.

Grantham’s resignation in June 2019.

Since then, the Board of Directors as a whole has acted and shall continue to act as the Nominating and Corporate Governance Committee until such time, if any, that the number of authorized and elected directors is increased or the Nominating and Corporate Governance Committee is otherwise reconfigured.

Finance Committee

The Finance Committee is appointed by the Board to oversee all areas of corporate performance and finance, and advise and assist the Board with respect to the financial and investment policies, risks, and objectives of the Company, including specific actions required to achieve those objectives.

From June 2016 to April 2017, the Finance Committee consisted of three directors, Christopher Greenberg (chairperson) and two other directors of the Company each of whom resigned in April 2017.

As a result of such resignations, and since April 2017, the Board of Directors as a whole has acted and shall continue to act as the Finance Committee until such time, if any, that the number of authorized and elected directors is increased or the Finance Committee is otherwise reconfigured.

Financial Experts

The Board of Directors has not appointed any directors as “audit committee financial experts” as defined under Item 407 of Regulation S-K promulgated pursuant to the Securities Exchange Act of 1934, as amended, insofar that it is not a listed security.

Code of Ethics

The Company has adopted a Code of Ethics and Business Conduct that applies to all employees, officers and directors, including the Chief Executive Officer and Principal Financial Officer.

A copy of the Code of Ethics and Business Conduct is available free of charge to any person on written or telephone request to Midwest Energy Emissions Corp., 1810 Jester Drive, Corsicana, Texas 75109 or (614) 505-6115.

Delinquent Section 16(a) Reports

Section 16(a) of the Securities Exchange Act of 1934 requires the Company’s directors and executive officers, and owners of more than ten percent of the Company’s Common Shares (“10% stockholders”), to file with the Securities and Exchange Commission (the “SEC”) initial reports of ownership and reports of changes in ownership of Common Shares of the Company.

Executive officers, directors and 10% stockholders are required by SEC regulations to furnish the Company with copies of all forms they file pursuant to Section 16(a).

To the Company’s knowledge, based on review of the copies of such reports furnished to the Company, and with respect to the officers and directors, representations that no other reports were required, during the year ended December 31, 2019, all Section 16(a) filing requirements applicable to its executive officers, directors and 10% stockholders were complied with.

The information required by this Item 10 is hereby incorporated by reference to our definitive proxy statement for the 2021 Annual Meeting of Stockholders which we intend to file with the Securities and Exchange Commission within 120 days after the end of the fiscal year covered by this report.

Executive Compensation.

Summary Compensation Table

The following table sets forth for each of the Company’s last two fiscal years the compensation for the Company’s Principal Executive Officer and each of the Company’s other two most highly compensated officers (collectively, our “named executive officers”):

Name, Position

Stock Options ($) (4)

All Other Compensation ($) (5)

Richard MacPherson, CEO & President (1)

John Pavlish, Senior Vice President (2)

James, Trettel, Vice President (3)

MacPherson was appointed Chief Executive Officer and President in March 2015.

Since January 1, 2017, Mr.

MacPherson’s annual base salary has been $395,000.

MacPherson is currently employed pursuant to a three-year employment letter agreement which was entered into on January 29, 2019, and effective January 1, 2019, which after such three-year term will automatically renew for successive one-year periods unless otherwise terminated by either party prior to the next applicable renewal period.

As of December 31, 2019, $38,508 of Mr.

MacPherson’s 2018 salary and $49,375 of Mr.

MacPherson’s 2019 salary remained unpaid.

MacPherson shall also be entitled to participate in all corporate 401(k) programs and health benefit plans instituted by the Company and be eligible to receive bonus compensation, if any, as the Company shall from time to time determine.

MacPherson shall also be entitled to participate in any stock option and incentive plans adopted by the Company.

During 2018, Mr.

MacPherson was granted five year, nonqualified stock options to acquire a total of 340,519 shares of common stock exercisable at prices ranging from $0.17 to $0.33 per share.

During 2019, Mr.

MacPherson was granted a five-year nonqualified stock option to acquire 1,500,000 shares of common stock exercisable at $0.27 per share.

In addition, during 2019, the expiration dates of (i) an option held by Mr.

MacPherson and granted in 2016 to acquire 250,000 shares of common stock exercisable at $0.81 per share, and (ii) option held by Mr.

MacPherson and granted in 2016 to acquire 750,000 shares of common stock exercisable at $1.20 per share, were extended to June 28, 2024.

Pavlish was appointed Senior Vice President in November 2014.

The Company and Mr.

Pavlish entered into an employment agreement effective as of November 16, 2014.

Pursuant to his employment agreement, Mr.

Pavlish agreed to be employed by the Company as Senior Vice President.

Effective as of January 1, 2017, Mr.

Pavlish’s annual base salary was increased to $330,000.

As of December 31, 2019, $30,938 of Mr.

Pavlish’s 2018 salary and $41,250 of Mr.

Pavlish’s 2019 salary remained unpaid.

Pavlish shall also be entitled to participate in all corporate 401(k) programs and health benefit plans instituted by the Company and be eligible to receive bonus compensation, if any, as the Company shall from time to time determine.

Pavlish shall also be entitled to participate in any stock option and incentive plans adopted by the Company.

During 2018, Mr.

Pavlish was granted five year, nonqualified stock options to acquire a total of 153,125 shares of common stock exercisable at prices ranging from $0.17 to $0.33 per share.

During 2019, Mr.

Pavlish was granted a five-year nonqualified stock option to acquire 600,000 shares of common stock exercisable at $0.27 per share.

In addition, during 2019, the expiration dates of (i) an option held by Mr.

Pavlish and granted in 2014 to acquire 2,000,000 shares of common stock exercisable at $0.74 per share, and (ii) option held by Mr.

Pavlish and granted in 2015 to acquire 1,000,000 shares of common stock exercisable at $0.45 per share, were extended to June 28, 2024.

Trettel was appointed Vice President of Operations in January 2014.

As of January 1, 2014, the Company and James Trettel entered into a two-year employment agreement, pursuant to which Mr.

Trettel agreed to be employed by the Company as Vice President of Operations.

Trettel is also entitled to participate in all corporate 401(k) programs and health benefit plans instituted by the Company and is eligible to receive bonus compensation, if any, as the Company shall from time to time determine.

Trettel is also entitled to participate in any stock option and incentive plans adopted by the Company.

Following the end of the two year term, Mr.

Trettel continues in such capacity.

Effective as of January 1, 2017, Mr.

Trettel’s annual base salary was increased to $300,000.

As of December 31, 2019, $28,125 of Mr.

Trettel’s 2018 salary and $37,500 of Mr.

Trettel’s 2019 salary remained unpaid.

During 2018, Mr.

Trettel was granted five-year nonqualified stock options to acquire a total of 143,750 shares of common stock exercisable at prices ranging from $0.17 to $0.33 per share.

During 2019, Mr.

Trettel was granted a five-year nonqualified stock option to acquire 1,000,000 shares of common stock exercisable at $0.27 per share.

In addition, during 2019, the expiration date of an option held by Mr.

Trettel and granted in 2015 to acquire 250,000 shares of common stock exercisable at $0.42 per share was extended to June 28, 2024.

Represents the dollar amount recognized for consolidated financial statement reporting purposes of shares to be issued to the executive officers computed in accordance with FASB ASC Topic 718.

For a discussion of valuation assumptions, see Note 10 to our consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2019.

There can be no assurance the amounts determined in accordance with FASB ASC Topic 718 will ever be realized.

The following table provides information concerning the stock options issued to the executive officers:

Stock Options (#)

FASB ASC Topic 718 Value

Richard MacPherson

James Trettel

The amounts shown for 2019 and 2018 in the “All Other Compensation” column are comprised of the following:

Group Term Life Insurance

Auto Allowance

Richard MacPherson

James Trettel

OUTSTANDING EQUITY AWARDS AT FISCAL YEAR END

The following table sets forth certain information about the number of unexercised nonqualified stock options and unearned stock awards held as of December 31, 2019 by each executive named in the Summary Compensation Table.

There were no stock options exercised during fiscal 2019 by such executives.

Number of securities underlying unexercised options (#) exercisable

Number of securities underlying unexercised options (#) unexercisable

Option Exercise Price

Option Expiration Date

Richard MacPherson

June 28, 2024

Richard MacPherson

June 28, 2024

Richard MacPherson

February 5, 2023

Richard MacPherson

July 31, 2023

Richard MacPherson

August 31, 2023

Richard MacPherson

September 30, 2023

Richard MacPherson

October 31, 2023

Richard MacPherson

June 28, 2024

February 10, 2022

February 23, 2023

June 30, 2023

July 31, 2023

August 31, 2023

September 30, 2023

October 31, 2023

November 30, 2023

December 31, 2023

June 28, 2024

James Trettel

June 28, 2024

James Trettel

February 10, 2022

James Trettel

February 23, 2023

James Trettel

June 30, 2023

James Trettel

July 31, 2023

James Trettel

August 31, 2023

James Trettel

September 30, 2023

James Trettel

October 31, 2023

James Trettel

November 30, 2023

James Trettel

December 31, 2023

James Trettel

June 28, 2024

Retirement and Savings Plan - 401(k)

Since November 1, 2011, the Company has maintained a Retirement and Savings Plan under IRS Code Section 401(k) (“the 401(k) Plan”).

The 401(k) Plan allows eligible employees to defer a portion of their compensation before federal income tax to a qualified trust.

All employees who are at least 21 years of age are eligible to participate in the 401(k) Plan.

The participants may choose from nineteen investment options for the investment of their deferred compensation.

In addition, the Company matches 100% of each participant’s salary deferral, for the first 4% of their salary, with a cash contribution.

For the years ended December 31, 2019 and 2018, the Company contributed $47,898 and $62,729, respectively, to the 401(k) Plan.

Director Compensation

The following table sets forth information regarding the compensation for 2019 of each non-executive member of the Board of Directors:

Fees earned or paid in cash

Stock Awards (1)

Option Awards (1)

All Other Compensation

Christopher Greenberg

Allan Grantham

Frederick Van Zijl

Represents the aggregate grant date fair value computed in accordance with FASB ASC Topic 718.

For a discussion of valuation assumptions, see Note 10 to our consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2019.

There can be no assurance the amounts determined in accordance with FASB ASC Topic 718 will ever be realized.

The following table provides information concerning the stock awards and stock options granted to the Directors for 2019:

Stock Awards (#)

FASB ASC Topic 718 Value

Stock Options (#)

FASB ASC Topic 718 Value

Christopher Greenberg

Allan Grantham

Frederick Van Zijl

Effective as of January 1, 2017, the Chairman began to be paid $100,000 per year.

As of December 31, 2019, $41,667 of Mr.

Greenberg’s 2019 cash fee remained unpaid.

Van Zijl resigned as a director effective as of May 14, 2019, and Mr.

Grantham resigned as a director effective as of June 4, 2019.

Kaye was appointed director effective as June 5, 2019.

In connection with Mr.

Van Zijl’s resignation, the Company issued an aggregate of 235,184 shares of common stock in full and complete payment for service on the Board since his appointment in October 2018.

Van Zijl had not been paid any cash director fees since his appointment to the Board.

In connection with Mr.

Grantham’s resignation, the Company issued an aggregate of 229,333 shares of common stock in full and complete payment for director fees due to him for 2018 and 2019.

Grantham had been paid a monthly cash director fee of $6,000 per month for the months of January through April 2018, but had not since been paid any additional cash director fees.

Kaye was not paid any compensation for service on the Board in 2019.

All directors are reimbursed for their reasonable out-of-pocket expenses incurred in connection with their duties to the Company.

The information required by this Item 11 is hereby incorporated by reference to our definitive proxy statement for the 2021 Annual Meeting of Stockholders which we intend to file with the Securities and Exchange Commission within 120 days after the end of the fiscal year covered by this report.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

The following table sets forth certain information regarding the beneficial ownership of our shares of common stock as of May 14, 2020, by:

(a) our directors;

(b) each other person who is known by us to own beneficially more than 5% of our outstanding shares of common stock;

and (d) all of our executive officers and directors as a group.

The percentages in the table are calculated on the basis of the amount of outstanding securities plus securities deemed outstanding pursuant to Rule 13d-3(d)(1) under the Exchange Act.

Beneficial Owner

Richard MacPherson (1)

Christopher Greenberg (2)

John Pavlish (3)

James Trettel (4)

Alterna Core Capital Assets Fund II, L.P., et al (6)

All Executive Officers and Directors as a Group (5 persons)

Less than one percent of the outstanding shares of common stock of the Company.

Includes 11,237,826 shares owned by Mr.

MacPherson and 2,840,519 shares which Mr.

MacPherson has the right to acquire upon exercise of options.

MacPherson’s address is 1810 Jester Drive, Corsicana, Texas 75109.

Includes 2,064,000 shares owned by Mr.

Greenberg, 5,000 shares owned by Mr.

Greenberg with his wife, and 1,666,664 shares which Mr.

Greenberg has the right to acquire upon exercise of options.

Includes 1,035,945 shares owned by Mr.

Pavlish and 3,803,125 shares which Mr.

Pavlish has the right to acquire upon exercise of options.

Pavlish’s address is 1810 Jester Drive, Corsicana, Texas 75109.

Includes 136,935 shares owned by Mr.

Trettel, 200,000 owned by Mr.

Trettel’s wife and 1,893,750 shares which Mr.

Trettel has the right to acquire upon exercise of options.

Includes 50,000 shares which Mr.

Kaye has the right to acquire upon exercise of options.

Represents 11,700,000 shares owned and based solely upon and according to information reported in filings made to the SEC, jointly filed by and on behalf of certain reporting persons identified below (the “Reporting Persons”).

The Reporting Persons are Alterna Core Capital Assets Fund II, L.P., Alterna Capital Partners LLC, Alterna General Partner II LLC, AC Midwest Energy LLC, Harry V.

Toll, Eric M.

Press, Roger P.

Miller and Earle Goldin.

The address for the Reporting Persons is 15 River Road, Suite 230, Wilton CT 06897.

Applicable percentage ownership for each stockholder is based on 77,747,750 shares of common stock outstanding as of May 14, 2020 plus any securities that stockholder has the right to acquire within 60 days of May 14, 2020 pursuant to options, warrants, conversion privileges or other rights.

Beneficial ownership is determined in accordance with the rules of the Securities and Exchange Commission and generally includes voting or investment power with respect to securities.

Shares of common stock that a person has the right to acquire beneficial ownership of upon the exercise or conversion of options, convertible stock, warrants or other securities that are currently exercisable or convertible or that will become exercisable or convertible within 60 days of May 14, 2020 are deemed to be beneficially owned by the person holding such securities for the purpose of computing the percentage of ownership of such person, but are not treated as outstanding for the purpose of computing the percentage ownership of any other person.

The information required by this Item 12 is hereby incorporated by reference to our definitive proxy statement for the 2021 Annual Meeting of Stockholders which we intend to file with the Securities and Exchange Commission within 120 days after the end of the fiscal year covered by this report.

Certain Relationships and Related Transactions, and Director Independence.

Except as set forth below, since January 1, 2019, there has not been, nor is there currently proposed, any transaction or series of similar transactions to which we were or will be a party required to be disclosed under Item 404 of Regulation S-K promulgated pursuant to the Securities Exchange Act of 1934, as amended:

(i) in which the amount involved exceeds the lesser of $120,000 or one percent of the average of our total assets at year-end for the last two completed fiscal years;

and (ii) in which any director, executive officer, shareholder who beneficially owns 5% or more of our common stock or any member of their immediate family had or will have a direct or indirect material interest.

Kaye Cooper Kay & Rosenberg, LLP provides certain legal services to the Company and was paid $329,729 in 2019 for legal services rendered and disbursement incurred.

Kaye, a Director and Secretary of the Company, is a partner of the law firm.

On February 25, 2019, the Company entered into an Unsecured Note Financing Agreement (the “Unsecured Note Financing Agreement”) with AC Midwest Energy LLC (“AC Midwest”), pursuant to which AC Midwest exchanged a previously issued subordinated unsecured note in the principal amount of $13,000,000 (the “AC Midwest Subordinated Note”), together with all accrued and unpaid interest thereon, for a new unsecured note in the principal amount of $13,154,931 (the “New AC Midwest Unsecured Note”).

The New AC Midwest Unsecured Note, which has been issued in exchange for the AC Midwest Subordinated Note which has now been cancelled, will mature on August 25, 2022 (the “Maturity Date”).

It bears a zero cash interest rate.

If the original principal amount is paid in full on or before August 25, 2020 (18 months from issuance), AC Midwest shall be entitled to a profit participation preference equal to 0.5 times the original principal amount, and if the original principal amount is paid in full after August 25, 2020, AC Midwest shall be entitled to a profit participation preference equal to 1.0 times the original principal amount (the “Profit Share”).

The Profit Share is “non-recourse” and shall only be derived from and computed on the basis of, and paid from, Net Litigation Proceeds from claims relating to the Company’s intellectual property, Net Revenue Share and Adjusted Free Cash Flow (as such terms are defined in the Unsecured Note Financing Agreement).

If the Profit Share is not paid in full on or before the Maturity Date, it shall remain subject to Unsecured Note Financing Agreement until full and final payment.

As of December 31, 2019, total principal of $13,154,931 was outstanding on the New AC Midwest Unsecured Note.

In addition, on February 25, 2019, and effective as of December 15, 2018, the Company entered into Amendment No.

3 (“Amendment No.

3”) to the Amended and Restated Financing Agreement with AC Midwest which was entered into on November 1, 2016 (the “Restated Financing Agreement”) in connection with the issuance of a secured note in the original principal amount of $9,646,686 (the “AC Midwest Secured Note”).

Pursuant to Amendment No.

3, the parties agreed that the maturity date for the remaining principal balance of $271,686 due under the AC Midwest Secured Note (which prior to Amendment No.

3 was due on December 15, 2018) shall be extended to August 25, 2022.

In addition, AC Midwest agreed to waive the minimum EBITDA covenant contained in the Restated Financing Agreement and further to strike such covenant from the Restated Financing Agreement in its entirety as of the effective date of Amendment No.

As of December 31, 2019, total principal of $271,686 was outstanding on the AC Midwest Secured Note.

AC Midwest beneficially owns 5% or more of the common stock of the Company.

Director Independence

The Board of Directors consists of three members.

They are Richard MacPherson, Christopher Greenberg and David M.

Christopher Greenberg is an “independent director” as defined by the listing standards of The NASDAQ Stock Market.

The information required by this Item 13 is hereby incorporated by reference to our definitive proxy statement for the 2021 Annual Meeting of Stockholders which we intend to file with the Securities and Exchange Commission within 120 days after the end of the fiscal year covered by this report.

Principal Accounting Fees and Services.

The aggregate fees billed for professional services rendered by Marcum LLP, our principal accountants effective as of December 17, 2018, for the audit of our consolidated financial statements included in our annual report on Form 10-K and review of our interim consolidated financial statements included in quarterly reports, and other services normally provided in connection with statutory and regulatory filings were $138,697 and $90,000 for the years ended December 31, 2019 and 2018, respectively.

The aggregate fees billed for professional services rendered by Schneider Downs & Co., Inc.

(“Schneider Downs”), our former principal accountants, for the audit of our consolidated financial statements included in our annual report on Form 10-K and review of our interim consolidated financial statements included in quarterly reports, and other services normally provided in connection with statutory filings and fees in connection with our Annual Meeting of Stockholders was $75,579 for the year ended December 31, 2018.

Audit-Related Fees

For the year ended December 31, 2018, we received professional services in the amount rendered by Schneider Downs totaling $2,500 for professional services rendered by our former principal accountants that are reasonably related to the performance of the audit or review of our consolidated financial statements and not included in “Audit Fees.”

For the year ended December 31, 2019, we received professional services rendered by Marcum LLP in the amount of $17,860 in connection with the preparation of our tax returns and other tax compliance services.

For the year ended December 31, 2018, we received professional services rendered by Schneider Downs in the amount of $16,105 in connection with the preparation of our tax returns and other tax compliance services.

All Other Fees

For the years ended December 31, 2019 and 2018, all other fees incurred for professional services rendered by our principal accountants were $0 and $0, respectively.

Audit Committee Pre-Approval Policies and Procedures

The Audit Committee has not set any pre-approval policies and procedures as of December 31, 2019.

The information required by this Item 14 is hereby incorporated by reference to our definitive proxy statement for the 2021 Annual Meeting of Stockholders which we intend to file with the Securities and Exchange Commission within 120 days after the end of the fiscal year covered by this report.

Exhibits and Financial Statement Schedules.

(a) The financial statements identified below and required by Part II, Item 8 of this Form 10-K are set forth above.

The financial statements identified below and required by Part II, Item 8 of this Form 10-K are set forth above.

(1) Financial Statements

40 unchanged sentences

Senior Secured Note dated November 29, 2016

Form of 2018-Unsecured Convertible Promissory Notes

Unsecured Note Financing Agreement among Midwest Energy Emissions Corp., MES, Inc.

7 unchanged sentences

Subsidiaries of the registrant

Certification by Chief Executive Officer, required by Rule 13a-14(a) or Rule 15d-14(a) of the Exchange Act

Certification by Chief Financial Officer, required by Rule 13a-14(a) or Rule 15d-14(a) of the Exchange Act

Certification by Chief Executive Officer, required by Rule 13a-14(b) or Rule 15d-14(b) of the Exchange Act and Section 1350 of Chapter 63 of Title 18 of the United States Code

Certification by Chief Financial Officer, required by Rule 13a-14(b) or Rule 15d-14(b) of the Exchange Act and Section 1350 of Chapter 63 of Title 18 of the United States Code

Certification by Principal Executive Officer and Principal Financial Officer, required by Rule 13a-14(a) or Rule 15d-14(a) of the Exchange Act

Certification by Principal Executive Officer and Principal Financial Officer, required by Rule 13a-14(b) or Rule 15d-14(b) of the Exchange Act and Section 1350 of Chapter 63 of Title 18 of the United States Code

XBRL Instance Document

7 unchanged sentences

MIDWEST ENERGY EMISSIONS CORP.

May 14, 2020 By:

April 5, 2021

/s/ Richard MacPherson

3 unchanged sentences

/s/ Richard MacPherson

Richard MacPherson

President, Chief Executive Officer

April 5, 2021

Richard MacPherson

and Director (Principal Executive Officer and

Principal Financial and Accounting Officer)

Principal Financial Officer)

Satterthwaite

Chief Accounting Officer

April 5, 2021

Satterthwaite

(Principal Accounting Officer)

/s/ Christopher Greenberg

Christopher Greenberg

Chairman of the Board and Director

April 5, 2021

Christopher Greenberg

Secretary and Director

April 5, 2021

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 9A. Controls and Procedures