3 unchanged sentences
Additionally, our business is subject to the same general risks and uncertainties that affect many other companies, such as but not limited to the overall economic conditions, changes in laws or accounting rules, fluctuations in interest and exchange rates or other disruptions of expected economic and business conditions.
−Removed: Risks Related to our Business
+Added: Risks Related to Our Company
Demand for our services and products is largely driven by coal consumption by North American electricity power generating plants.
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North American coal-fired electricity generating units comprise the basis of the market for our services and products.
−Removed: Regulations mandating or incentivizing the purchase of power from renewable energy sources (e.g.
−Removed: wind, solar, hydroelectric, geothermal) and/or the phasing out of coal-fired power plants could lessen the demand for electricity from such plants and overall reduce the number of coal-fired electricity generating units and the amount of coal burned, thereby decreasing the demand for our services and products which could adversely affect our business.
+Added: Regulations mandating or incentivizing the purchase of power from renewable energy sources (e.g., wind, solar, hydroelectric, geothermal) and/or the phasing out of coal-fired power plants could lessen the demand for electricity from such plants and overall reduce the number of coal-fired electricity generating units and the amount of coal burned, thereby decreasing the demand for our services and products which could adversely affect our business.
The phasing out of coal-fired plants has already had a negative effect on our results of operations.
Continued promulgation of these regulations in North America is affected by, among other things, politics, perceived environmental impact, and public favor.
−Removed: Our business focus has predominately been mercury removal from power plant emissions, which is driven primarily by regulation.
−Removed: Any significant changes in mercury emission regulation could have a major impact on the Company.
−Removed: Our business focus has predominately been mercury reduction in flue gas emissions from large coal-fired utility and industrial boilers.
−Removed: This market is primarily based on air pollution control regulations and enforcement of those regulations.
−Removed: Any significant change in these regulations would have a dramatic effect on the Company, especially in North America (and primarily the United States) which is currently the largest market for our technology.
−Removed: Specifically, on December 16, 2011, the EPA published the Mercury and Air Toxics Standards (MATS), which sets forth federal mercury emission levels.
−Removed: Power plants were required to begin complying with MATS on April 16, 2015, unless they were granted a one-year extension to begin to comply.
−Removed: The MATS regulation has been subject to legal challenge since being enacted.
−Removed: In June 2015, the U.S.
−Removed: Supreme Court held that the EPA unreasonably failed to consider costs in determining whether it is “appropriate and necessary” to regulate hazardous air pollutants, including mercury, from power plants, but left the rule in place.
−Removed: On remand, following the Supreme Court’s instructions to consider costs, the EPA in April 2016 issued a final supplemental finding reaffirming the MATS rule on the ground that it is supported by the cost analysis the Supreme Court required.
−Removed: That supplemental finding remains under review by the D.C.
−Removed: In April 2017, the EPA asked the court to place that litigation in abeyance, stating that the Agency then under the Trump Administration was reviewing the supplemental finding to determine whether it should be reconsidered in whole or in part.
−Removed: The court granted EPA’s abeyance request which has remained in place.
−Removed: In April 2020, the EPA concluded that the 2016 supplemental finding was flawed in part due to its reliance on co-benefits to justify MATS and withdrew EPA’s 2016 “appropriate-and-necessary” determination as erroneous, but left the 2011 MATS rule in place pursuant to D.C.
−Removed: Circuit case law holding that a source category may only be removed from the list of categories to be regulated through a rigorous delisting process that cannot currently be satisfied by EPA.
−Removed: Upon taking office, the Biden Administration in January 2021 directed the EPA to review the previous Administration’s actions on various environmental matters including the withdrawal of the “appropriate and necessary” determination, for conformity with Biden Administration environmental policy.
−Removed: Nevertheless, legal challenges may continue with respect to the MATS regulation which could extend uncertainty over the status of MATS for a number of years.
−Removed: Investors should note that any changes to the MATS rule could have a negative impact on our business.
−Removed: The risks associated with technological change may make the Company’s products and services less marketable.
+Added: The risks associated with technological change may make our products and services less marketable.
The market into which we sell our products and services is characterized by periodic technological change as well as evolving industry standards and regulations.
4 unchanged sentences
Our major competitors in the U.S.
−Removed: and Canada include companies such as Advanced Emissions Solutions, Inc., Albemarle Corporation, Cabot Corporation, Calgon Carbon Corporation, Carbonxt, Inc., Environmental Energy Services Inc.
−Removed: and Nalco Company.
+Added: and Canada include companies such as Advanced Emissions Solutions, Inc., Albemarle Corporation, Cabot Corporation, Calgon Carbon Corporation, Carbonxt, Inc., Environmental Energy Services Inc., and Nalco Company.
These companies employ large sales staff and are well positioned in the market.
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Although we already entered into agreements with each of the four major utility defendants in this litigation, such action will continue with respect to the other defendants still involved.
−Removed: There is no assurance that the continuing litigation with the remaining defendants, or any future patent litigation which the Company may commence, will be successful.
+Added: In fact, we recently received approval from the District Judge of the U.S.
+Added: District Court in Delaware of the adoption of the report and recommendation of the Magistrate Judge to allow us to proceed with litigation claims against certain refined coal entities as named in the 2019 lawsuit.
+Added: There is no assurance that the continuing litigation with the remaining defendants, or any future patent litigation which we may commence, will be successful.
In addition, in an infringement proceeding, a court may decide that one or more of our patents are not valid or enforceable, or a court may refuse to stop the other party from using the technology at issue on the grounds that our patents do not cover the technology in question.
2 unchanged sentences
We depend on third-party suppliers for materials needed to implement our emissions technologies;
+Added: availability of raw materials and volatility in price could impact our results of operations.
We buy all the raw materials needed to implement our technologies and provide uniquely formulated products for effective mercury removal from third-party suppliers.
2 unchanged sentences
We believe that we have excellent relationships with our current suppliers.
−Removed: If any of our suppliers should become unavailable to us for any reason, there are a number of other suppliers that we believe can be contracted with expeditiously to supply the raw materials that we need, ensuring a continued supply of our products to our customers.
−Removed: However, the possibility exists that we may not be able to secure such arrangements on terms acceptable to the Company which could negatively impact our business.
+Added: If any of our suppliers should become unavailable to us for any reason, there are a number of other suppliers that we believe can be contracted with to supply the raw materials that we need.
+Added: However, the availability and price of those raw materials can be impacted by factors beyond our control.
+Added: If such suppliers cannot meet our demand for such raw materials on a timely basis or at acceptable prices, such could have a negative effect on our operations.
We are dependent on key customers.
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Our lack of diversification increases the risk of an investment in the Company.
−Removed: Our business lacks significant diversification and is dependent on the success of our mercury emission control technologies.
+Added: Our business lacks significant diversification and to date has been dependent on the success of our mercury emission control technologies.
As a result, we are impacted more acutely by factors affecting our industry or the regions in which we operate than we would if our business were more diversified, enhancing our risk profile.
−Removed: Low gas prices could negatively impact our results of operations;
+Added: While we are in the process of developing new technologies, such as in the area of improving the processing of REEs, no assurance can be made that any such new technologies currently under development will be commercialized or result in a significant revenue stream.
+Added: Low gas prices can negatively impact our results of operations;
mild weather could also have corresponding effects on the demand for coal.
2 unchanged sentences
Gas prices can be very volatile and are influenced by numerous factors beyond our control.
−Removed: For example, market prices for natural gas have recently been low which has caused, and will likely continue to cause, a weaker demand for our products until such time that such prices increase.
+Added: Although market prices for natural gas have increased substantially in the last twelve months, such prices were relatively low in recent years which likely caused a weaker demand for our products.
In addition, mild winter months in the U.S.
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Business interruptions, including any interruptions resulting from COVID-19, could significantly disrupt our operations and could have a material adverse impact on us.
−Removed: The ongoing coronavirus outbreak which began in China at the beginning of 2020 has impacted various businesses throughout the world, including travel restrictions and the extended shutdown of certain businesses in impacted geographic regions.
−Removed: If the coronavirus situation does not improve during 2021 or should worsen, we may experience disruptions to our business including, but not limited to, the availability of raw materials, equipment, to our workforce, or to our business relationships with other third parties.
−Removed: Also, it may hamper our efforts to comply with our filing obligations with the Securities and Exchange Commission.
−Removed: The extent to which the coronavirus impacts our operations in other areas or those of our third-party partners will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the duration of the outbreak, new information that may emerge concerning the coronavirus and the actions to contain the coronavirus or treat its impact, among others.
+Added: The ongoing coronavirus disease (COVID-19) outbreak which began in China at the beginning of 2020 has impacted various businesses throughout the world, including the implementation of travel bans and restrictions and the extended shutdown of certain businesses in impacted geographic regions.
+Added: During this time, we have continued to conduct our operations while responding to the pandemic with actions to mitigate adverse consequences to our employees, business, supply chain, and customers.
+Added: Nevertheless, the duration and scope of the COVID-19 pandemic continues to be uncertain.
+Added: If the coronavirus situation does not improve during 2022 or should worsen, we may experience disruptions to our business including, but not limited to, the availability of raw materials and equipment, to our workforce, or to our business relationships with other third parties.
+Added: The extent to which the coronavirus impacts our operations in other areas or those of our third-party partners will depend on future developments, which are highly uncertain and cannot be predicted with confidence.
Any such disruptions or losses we incur could have a material adverse effect on our financial results and our ability to conduct business as expected.
−Removed: Delays in enactment of foreign regulations could restrict our ability to reach our strategic growth targets in Europe and Asia.
−Removed: Our strategic growth initiatives are reliant upon more restrictive environmental regulations being enacted for the purpose of mercury control from power plant emissions in Europe and in China and other Asian countries.
−Removed: In May 2017, the European Union and seven of its member states ratified the Minamata Convention on Mercury, which triggered its entry into force with implementation starting in 2021.
−Removed: The Minamata Convention on Mercury is a global treaty to protect human health and the environment from the adverse effects of mercury.
−Removed: 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.
−Removed: China is the largest producer and consumer of coal in the world.
−Removed: Nevertheless, we are hopeful that as a result of the Minamata Convention, China as well as other countries will follow the U.S.
−Removed: in regulating mercury emissions.
−Removed: If stricter regulations are delayed or are not enacted, our sales growth targets in Europe and Asia could be adversely affected.
Maintaining and improving our financial controls may divert management’s attention and increase costs.
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In this regard, our management concluded our internal control over financial reporting was not effective as of December 31, 2021.
−Removed: While certain remedial actions have been completed, we 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.
+Added: While certain remedial actions have been completed, we continue to actively plan for and implement additional control procedures to improve our overall control environment and expect these efforts to continue throughout the rest of 2022 and beyond.
As a result of this and similar activities, management’s attention may be diverted from other business concerns, which could have a material adverse effect on our business, financial condition, and results of operations.
+Added: Further, investors could lose confidence in our financial reports, and our stock price may be adversely affected, if our internal controls over financial reporting continue to be found not to be effective by management or if we make disclosure of existing or potential significant deficiencies or material weaknesses in those controls in the future.
+Added: Relatedly, if we fail to remediate any such material weakness in the future, we may not be able to accurately report our financial condition or results of operations.
Our board of directors concluded in 2020 that we needed to restate previously issued financial statements as a result of a change in accounting for a certain debt restructuring.
−Removed: On April 13, 2020, our board of directors of the Company (which currently acts as our audit committee) concluded, after consultation with management and the Company’s financial consulting firm, that our previously issued unaudited financial statements for the periods ended March 31, 2019, June 30, 2019 and September 30, 2019, included in the Company’s Quarterly Reports of Form 10-Q for the periods ended March 31, 2019, June 30, 2019 and September 30, 2019, respectively, should no longer be relied upon as a result of the change in accounting for a certain debt restructuring.
+Added: On April 13, 2020, our board of directors (which currently acts as our audit committee) concluded, after consultation with management and our financial consulting firm, that our previously issued unaudited financial statements for the periods ended March 31, 2019, June 30, 2019, and September 30, 2019, included in our Quarterly Reports of Form 10-Q for the periods ended March 31, 2019, June 30, 2019, and September 30, 2019, respectively, should no longer be relied upon as a result of the change in accounting for a certain debt restructuring.
We concluded that a gain on debt restructuring recognized during the first quarter of 2019 should have been accounted for as a capital transaction.
−Removed: Specifically, on February 25, 2019, we entered into an 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, together with all accrued and unpaid interest thereon, for a new unsecured note in the principal amount of $13,154,931.
+Added: Specifically, on February 25, 2019, we entered into an Unsecured Note Financing Agreement with AC Midwest, pursuant to which AC Midwest exchanged a previously issued subordinated unsecured note in the principal amount of $13,000,000, together with all accrued and unpaid interest thereon, for a new unsecured note in the principal amount of $13,154,931.
We recorded a gain of $3,412,402 on this exchange which we concluded in April 2020 should have been recorded as an equity transaction capital contribution.
5 unchanged sentences
As a result, such liquidity risk could impair our ability to funds operations and jeopardize our financial condition.
−Removed: Possible inability of the Company to continue as a going concern.
−Removed: The accompanying consolidated financial statements as of December 31, 2020 have been prepared assuming the Company will continue as a going concern.
−Removed: As reflected in the consolidated financial statements, the Company had an accumulated deficit of $63 million and a negative working capital of $984,112 at December 31, 2020.
−Removed: Additionally, the Company had a net loss in the amount of $5.8 million and cash used by operating activities of $1.2 million for the year ended December 31, 2020.
−Removed: These factors raise substantial doubt about the Company’s ability to continue as a going concern for the next twelve months from the issuance of these consolidated financial statements within the Company’s Annual Report on Form 10-K.
−Removed: Although we anticipate continued significant revenues for products used in MATS compliance activities and from licensing of our technologies, no assurances can be given that the Company can obtain sufficient working capital through these activities and additional financing may be needed to meet its obligations.
−Removed: In February 2020, we closed on a one-year secured loan with a bank in the principal amount of $200,000 and in April 2020, we received loan proceeds in the amount of $299,300 pursuant to the Paycheck Protection Program under the CARES Act which was enacted on March 27, 2020 as a result of the COVID-19 pandemic.
−Removed: Such PPP loan was forgiven in January 2021 and the one-year secured loan was repaid in full in February 2021.
−Removed: In February 2021, the Company received second draw loan proceeds in the amount of $299,380 pursuant to the Paycheck Protection Program.
−Removed: In January and February 2021, certain warrant holders exercised warrants for cash and the Company received proceeds of approximately $246,808.
−Removed: Also, in January and February 2021, the Company substantially reduced the aggregate principal amount outstanding on various debt obligations.
−Removed: In this regard, $940,000 of the outstanding principal amount of convertible promissory notes issued in 2013 was converted to common stock, leaving $50,000 remaining outstanding on such notes issued in 2013.
−Removed: In February and March 2021, the Company eliminated $860,000 of outstanding convertible notes issued in 2018 by force converting all of such notes based on the terms thereof.
−Removed: Nevertheless, the Company may need to raise additional equity or debt financing.
−Removed: While the Company believes in its ability to raise additional funds, no assurances can be given that the Company can maintain sufficient working capital through these efforts, or that the continued implementation of its business plan will generate sufficient revenues in the future to sustain ongoing operations.
−Removed: The accompanying consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result from the possible inability of the Company to continue as a going concern.
−Removed: Risks Related to our Common Stock
−Removed: Current stockholders may suffer dilution.
−Removed: In recent prior years, we have raised funds through the sale of convertible notes and restricted stock to qualified investors, and have under certain circumstances issued warrants to investors and options to employees and others.
−Removed: As of December 31, 2020, we have 78,096,326 shares of common stock outstanding of a total of 150,000,000 shares authorized by the Company.
−Removed: Approximately 109,199,230 shares of common stock are outstanding on a fully diluted basis as of December 31, 2020, taking into account shares issuable upon conversion of outstanding notes, and exercise of outstanding warrants and options.
−Removed: Any such conversion and/or exercise of such securities will have a dilutive effect on existing stockholders.
−Removed: In this regard, investors should note that multiple issuances of common stock were made in the first quarter of 2021, due to such conversions and exercises, along with other matters.
−Removed: In addition, if we were to raise additional funds through further issuances of equity or convertible debt securities in the future, our stockholders would suffer additional dilution.
−Removed: We do not currently intend to pay dividends on our common stock and, consequently, your ability to achieve a return on your investment will depend on appreciation in the price of our common stock .
−Removed: We have never declared or paid any cash dividends on our common stock and do not currently intend to do so for the foreseeable future.
−Removed: We currently intend to invest our future earnings, if any, to fund our growth.
−Removed: In addition, until such time that the AC Midwest Energy, LLC promissory notes are paid in full, we are not permitted to issue any dividends.
−Removed: Therefore, you are not likely to receive any dividends on your common stock for the foreseeable future and the success of an investment in shares of our common stock will depend upon any future appreciation in its value.
−Removed: There is no guarantee that shares of our common stock will appreciate in value or even maintain the price at which our stockholders have purchased their shares.
−Removed: If our internal control over financial reporting is found not to be effective or if we make disclosure of existing or potential significant deficiencies or material weaknesses in those controls, investors could lose confidence in our financial reports, and our stock price may be adversely affected.
−Removed: Section 404 of the Sarbanes-Oxley Act of 2002 requires us to include an internal control report with our Annual Report on Form 10-K.
−Removed: That report must include management’s assessment of the effectiveness of our internal control over financial reporting as of the end of the fiscal year.
−Removed: We evaluate our existing internal control over financial reporting based on the framework issued in 2013 by the Committee of Sponsoring Organizations (COSO) of the Treadway Commission.
−Removed: During the course of our ongoing evaluation of the internal controls, we may identify areas requiring improvement, and may have to design enhanced processes and controls to address issues identified through this review.
−Removed: Remedying any deficiencies, significant deficiencies or material weaknesses that we identify may require us to incur significant costs and expend significant time and management resources.
−Removed: Based on such evaluation, our management concluded our internal control over financial reporting was not effective as of December 31, 2020.
−Removed: The ineffectiveness of our internal control over financial reporting was due to the following material weaknesses which are indicative of many small companies:
−Removed: (i) lack of a sufficient complement of personnel commensurate with the Company’s reporting requirements;
−Removed: and (ii) insufficient written documentation or training of our internal control policies and procedures which provide staff with guidance or framework for accounting and disclosing financial transactions.
−Removed: While certain remedial actions have been completed, we 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.
−Removed: Nevertheless, we cannot assure you that any of the measures we implement to remedy any such deficiencies will effectively mitigate or remedy such deficiencies.
−Removed: Due to the nature of the remediation process, the need to have sufficient resources (cash or otherwise) to devote to such efforts, and the need to allow adequate time after implementation to evaluate and test the effectiveness of the controls, no assurance can be given as to the timing of achievement of remediation.
−Removed: Investors could lose confidence in our financial reports, and our stock price may be adversely affected, if our internal controls over financial reporting continue to be found not to be effective by management or if we make disclosure of existing or potential significant deficiencies or material weaknesses in those controls in the future, investors could lose confidence in our financial reports and our stock price may be adversely affected.
−Removed: The trading price of our common stock may be volatile.
−Removed: The trading price of our shares has, from time to time, fluctuated widely and in the future may be subject to similar fluctuations.
−Removed: The trading price may be affected by a number of factors including the risk factors set forth in this report as well as our operating results, financial condition, announcements of innovations or new products by us or our competitors, general conditions in the market place, and other events or factors.
−Removed: Although we believe a number of registered broker dealers currently make a market in our common stock, we cannot assure you that any of these firms will continue to serve as market makers or have the financial capability to stabilize or support our common stock.
−Removed: A reduction in the number of market makers or the financial capability of any of these market makers could also result in a decrease in the trading volume of and price of our shares.
−Removed: In recent years, broad stock market indices in general have experienced substantial price fluctuations.
−Removed: Such broad market fluctuations may adversely affect the future trading price of our common stock.
−Removed: The trading market for securities quoted on the OTCQB is less liquid.
−Removed: Our common stock currently trades on the OTCQB.
−Removed: The trading market for securities of companies quoted on the OTCQB or other quotation systems is substantially less liquid than the average trading market for companies listed on a national securities exchange.
−Removed: The quotation of our shares on the OTCQB or other quotation system may result in a less liquid market available for existing and potential shareholders to trade shares of our common stock, could depress the trading price of our common stock and could have a long-term adverse impact on our ability to raise capital in the future.
−Removed: Potential future sales pursuant to Rule 144.
−Removed: Many of the shares of our common stock presently held by management and others are “restricted securities” as that term is defined in Rule 144, promulgated under the Securities Act of 1933, as amended.
−Removed: Under Rule 144, a person (or persons whose shares are aggregated) who has satisfied a certain holding period, may, under certain circumstances sell such shares or a portion of such shares.
−Removed: Such holding periods have already been satisfied in many instances.
−Removed: Therefore, actual sales or the prospect of sales of such shares under Rule 144 in the future may depress the prices of the Company’s securities.
−Removed: Our common stock may be characterized as a “penny stock” under applicable SEC regulations.
−Removed: Our common stock may be characterized as “penny stock” under SEC regulations.
−Removed: As such, broker-dealers dealing in our common stock may be subject to the disclosure rules for transactions involving penny stocks, which generally require that, prior to a purchase, the broker-dealer has approved the proposed purchaser’s account for transactions in penny stocks and has received from the purchaser an agreement to the transaction setting forth the identity and quantity of the common stock to be purchased.
−Removed: In order to approve a person’s account for transactions in penny stocks, the broker-dealer must obtain from the person information concerning the person’s financial situation, investment experience and investment objectives, and reasonably determine that transactions in penny stocks are suitable for the person.
−Removed: These additional burdens imposed upon broker-dealers may discourage them from effecting transactions in our common stock, which could make it difficult for an investor to sell his, her or its shares at any given time.
−Removed: Except as required by the Federal Securities Law, the Company does not undertake any obligation to release publicly any revisions to any forward-looking statements to reflect events or circumstances after the date of this report or for any other reason.
+Added: Doubt regarding our ability to continue as a going concern.
+Added: The accompanying consolidated financial statements as of December 31, 2021 have been prepared assuming we will continue as a going concern.
+Added: As reflected in the consolidated financial statements, we had $1,388,000 in cash at December 31, 2021, along with cash provided by operating activities of $206,000 for the year ended December 31, 2021.
+Added: However, we had a working capital deficit of $11,692,000 and an accumulated deficit of $67.1 million at December 31, 2021, and we also had a net loss in the amount of $3.6 million for the year ended December 31, 2021.
+Added: In addition, all existing secured and unsecured debt held by our principal lender in the principal amount of $13.4 million matures on August 25, 2022, other than the profit share liability, which is within one year from the issuance of these consolidated financial statements.
+Added: These factors raise substantial doubt about our ability to continue as a going concern for the next twelve months from the issuance of these consolidated financial statements.
+Added: We have taken steps to alleviate such doubt.
+Added: During the year ended December 31, 2021, we eliminated $4,440,000 of convertible notes through conversions to shares of common stock and repaid $10,000 of convertible notes, leaving no convertible notes outstanding as of December 31, 2021.
+Added: In addition, in June 2021, we announced that we had entered into a Debt Repayment and Exchange Agreement with our principal lender which, subject to various closing conditions, including but not limited to the completion of an offering of equity securities resulting in net proceeds of at least $12.0 million by December 31, 2021, which has been extended to June 30, 2022, will repay all existing secured and unsecured debt obligations held by such lender.
+Added: Although we anticipate continued significant revenues in our business operations and that we will be able to raise the funds necessary to complete the transaction contemplated by the Debt Repayment and Exchange Agreement, no assurances can be given that we can obtain sufficient working capital through our business operations or that we will be able to raise the funds necessary to close under the Debt Repayment Agreement by June 30, 2022, or at all, in order to sustain ongoing operations.
+Added: In November 2021, we filed a registration statement on Form S-1 with the SEC for a proposed offering of common stock.
+Added: Such registration statement has not yet become effective.
+Added: The accompanying consolidated financial statements do not include adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result from the possible inability of us to continue as a going concern.
+Added: Risks Related to Regulation
+Added: Our business focus has predominantly been mercury removal from power plant emissions, which is driven primarily by regulation.
+Added: Any significant changes in mercury and other emission regulation could have a major impact on us.
+Added: Our business focus has predominantly been mercury reduction in flue gas emissions from large coal-fired utility and industrial boilers.
+Added: This market is primarily based on air pollution control regulations and enforcement of those regulations.
+Added: Any significant change in these regulations would have a dramatic effect on us, especially in North America (and primarily the United States) which is currently the largest market for our technology.
+Added: Specifically, on February 16, 2012, the EPA published the final Coal- and Oil-Fired Electric Utility Steam Generating Units National Emission Standards for Hazardous Air Pollutants, known as MATS, which sets forth federal mercury emission levels.
+Added: Power plants were required to begin complying with MATS on April 16, 2015, unless they were granted a one-year extension to begin to comply.
+Added: The MATS regulation has been subject to legal challenge since being enacted.
+Added: In June 2015, the U.S.
+Added: Supreme Court held that the EPA unreasonably failed to consider costs in determining whether it is “appropriate and necessary” to regulate hazardous air pollutants, including mercury, from power plants, but left the rule in place.
+Added: On remand, following the Supreme Court’s instructions to consider costs, the EPA in April 2016 issued a final supplemental finding reaffirming the MATS rule on the ground that it is supported by the cost analysis the Supreme Court required.
+Added: That supplemental finding remains under review by the D.C.
+Added: In April 2017, the EPA asked the court to place such judicial review in abeyance, stating that the Agency then under the Trump Administration was reviewing the supplemental finding to determine whether it should be reconsidered in whole or in part, which abeyance request was granted.
+Added: In April 2020, the EPA concluded that the 2016 supplemental finding was flawed in part due to its reliance on co-benefits to justify MATS and withdrew the EPA’s 2016 “appropriate-and-necessary” determination as erroneous, but left the 2011 MATS rule in place pursuant to D.C.
+Added: Circuit case law holding that a source category may only be removed from the list of categories to be regulated through a rigorous delisting process that cannot currently be satisfied by the EPA.
+Added: Upon taking office, the Biden Administration in January 2021 directed the EPA to review the previous Administration’s actions on various environmental matters including the withdrawal of the “appropriate and necessary” determination, for conformity with Biden Administration environmental policy.
+Added: In February 2021, the Biden Administration requested that the judicial review of the supplemental finding withdrawal be held in abeyance which was granted by the court and remains in place.
+Added: On January 31, 2022, the EPA issued a proposal to revoke the reconsideration step made by the EPA in April 2020 and affirm that it is appropriate and necessary to regulate hazardous pollutants for coal and oil-fired EGUs.
+Added: Nevertheless, legal challenges may continue with respect to the MATS regulation which could extend uncertainty over the status of MATS for a number of years.
+Added: Investors should note that any changes to the MATS rule could have a negative impact on our business.
+Added: Delays in enactment of foreign regulations could restrict our ability to reach our strategic growth targets in Europe and Asia .
+Added: Our strategic growth initiatives are reliant upon more restrictive environmental regulations being enacted for the purpose of mercury control from power plant emissions in Europe and in China and other Asian countries.
+Added: In May 2017, the European Union and seven of its member states ratified the Minamata Convention on Mercury, which triggered its entry into force with implementation starting in 2021.
+Added: The Minamata Convention on Mercury is a global treaty to protect human health and the environment from the adverse effects of mercury.
+Added: 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.
+Added: China is the largest producer and consumer of coal in the world.
+Added: Nevertheless, we are hopeful that as a result of the Minamata Convention, China as well as other countries will follow the U.S.
+Added: in regulating mercury emissions.
+Added: If stricter regulations are delayed or are not enacted, our sales growth targets in Europe and Asia could be adversely affected.
+Added: Risks Associated with our Common Stock
+Added: Our common stock has a limited trading market, which could affect your ability to sell shares of our common stock and the price you may receive for our common stock.
+Added: Our common stock is currently traded in the over-the-counter market on the OTCQB maintained by OTC Markets Group Inc.
+Added: under the symbol “MEEC.” However, as the OTCQB is an unorganized, inter-dealer, over-the-counter market that provides significantly less liquidity than Nasdaq or other national securities exchanges, there has been only limited trading activity in our common stock, and we have a relatively small public float compared to the number of our shares outstanding.
+Added: Further, while we have applied to list our common stock on the Nasdaq Capital Market, even if our common stock is listed on the Nasdaq Capital Market, we cannot predict the extent to which investors’ interest in our common stock will provide an active and liquid trading market.
+Added: Our ability to raise capital to continue to fund operations by selling shares of our common stock and our ability to acquire other companies or technologies by using shares of our common stock as consideration may also be impaired.
+Added: Our stock price may be volatile, which could result in substantial losses to investors and litigation.
+Added: In addition to changes to market prices based on our results of operations and the factors discussed elsewhere in this “Risk Factors” section, the market price of and trading volume for our common stock may change for a variety of other reasons, not necessarily related to our actual operating performance.
+Added: The capital markets have experienced extreme volatility that has often been unrelated to the operating performance of particular companies.
+Added: These broad market fluctuations may adversely affect the trading price of our common stock.
+Added: In addition, the average daily trading volume of the securities of small companies can be very low, which may contribute to future volatility.
+Added: Factors that could cause the market price of our common stock to fluctuate significantly include:
+Added: the results of operating and financial performance and prospects of other companies in our industry;
+Added: strategic actions by us or our competitors, such as acquisitions or restructurings;
+Added: announcements of innovations, increased service capabilities, new or terminated customers, or new, amended, or terminated contracts by our competitors;
+Added: the public’s reaction to our press releases, other public announcements, and filings with the SEC;
+Added: lack of securities analyst coverage or speculation in the press or investment community about us or market opportunities in our industry or about the market for coal-fired power in the U.S.
+Added: changes in government policies in the United States and, as our international business increases, in other foreign countries;
+Added: changes in earnings estimates or recommendations by securities or research analysts who track our common stock or failure of our actual results of operations to meet those expectations;
+Added: market and industry perception of our success, or lack thereof, in pursuing our growth strategy;
+Added: changes in accounting standards, policies, guidance, interpretations, or principles;
+Added: any lawsuit involving us, our services, or our products;
+Added: arrival and departure of key personnel;
+Added: sales of common stock by us, our investors or members of our management team;
+Added: changes in general market, economic and political conditions in the United States, and global economies or financial markets, including those resulting from natural or man-made disasters.
+Added: Any of these factors, as well as broader market and industry factors, may result in large and sudden changes in the trading volume of our common stock and could seriously harm the market price of our common stock, regardless of our operating performance.
+Added: This may prevent you from being able to sell your shares at or above the price you paid for your shares of our common stock, if at all.
+Added: In addition, following periods of volatility in the market price of a company’s securities, stockholders often institute securities class action litigation against that company.
+Added: Our involvement in any class action suit or other legal proceeding could divert our senior management’s attention and could adversely affect our business, financial condition, results of operations, and prospects.
+Added: Shares eligible for future sale may have adverse effects on our share price.
+Added: Sales of substantial amounts of shares or the perception that such sales could occur may adversely affect the prevailing market price for our shares.
+Added: We may issue additional shares in subsequent public offerings or private placements to make new investments or for other purposes.
+Added: We are not required to offer any such shares to existing shareholders on a preemptive basis.
+Added: Therefore, it may not be possible for existing shareholders to participate in such future share issuances, which may dilute the existing shareholders’ interests in us.
+Added: We do not anticipate paying any cash dividends on our capital stock in the foreseeable future.
+Added: We currently intend to retain all of our future earnings to finance the growth and development of our business, and therefore, we do not anticipate paying any cash dividends on our capital stock in the foreseeable future.
+Added: We believe it is likely that our board of directors will continue to conclude that it is in the best interests of the Company and its shareholders to retain all earnings (if any) for the development of our business.
+Added: In addition, the terms of any future debt agreements may preclude us from paying dividends.
+Added: As a result, capital appreciation, if any, of our common stock will be your sole source of gain for the foreseeable future.
+Added: We may need to raise additional capital in the future.
+Added: Additional capital may not be available to us on commercially reasonable terms, if at all, when or as we require.
+Added: If we issue additional shares of our common stock or other securities that may be convertible into, or exercisable or exchangeable for, our common stock, our existing stockholders would experience further dilution and could trigger anti-dilution provisions in outstanding warrants.
+Added: In November 2021, we filed a registration statement on Form S-1 with the SEC for a proposed offering of common stock.
+Added: Such registration statement has not yet become effective and no assurances can be given that the contemplated offering will be completed.
+Added: Even if completed, we may need to raise additional capital in the future.
+Added: Future financings may involve the issuance of debt, equity, and/or securities convertible into or exercisable or exchangeable for our equity securities.
+Added: These financings may not be available to us on commercially reasonable terms or at all when and as we require funding.
+Added: If we are able to consummate such financings, the trading price of our common stock could be adversely affected and/or the terms of such financings may adversely affect the interests of our existing stockholders.
+Added: Any failure to obtain additional working capital when required would have a material adverse effect on our business and financial condition and may result in a decline in our stock price.
+Added: Any issuances of our common stock, preferred stock, or securities such as warrants or notes that are convertible into, or exercisable or exchangeable for, our capital stock would have a dilutive effect on the voting and economic interest of our existing stockholders.
+Added: Our officers and directors are entitled to indemnification from us for liabilities under our articles of incorporation, which could be costly to us and may discourage the exercise of stockholder rights.
+Added: Our articles of incorporation provide that we possess and may exercise all powers of indemnification of our officers, directors, employees, agents, and other persons and our bylaws also require us to indemnify our officers and directors as permitted under the provisions of the Delaware General Corporate Law.
+Added: The foregoing indemnification obligations could result in our Company incurring substantial expenditures to cover the cost of settlement or damage awards against directors and officers.
+Added: These provisions and resultant costs may also discourage our Company from bringing a lawsuit against directors, officers, and employees for breaches of their fiduciary duties, and may similarly discourage the filing of derivative litigation by our stockholders against our directors, officers, and employees even though such actions, if successful, might otherwise benefit our Company and stockholders.
+Added: Our common stock is currently characterized as a “penny stock” under SEC rules.
+Added: It may be more difficult to resell securities classified as “penny stock.”
+Added: Our common stock is currently characterized as a “penny stock” under applicable SEC rules (generally defined as non-exchange traded stock with a per-share price below $5.00).
+Added: These rules impose additional sales practice requirements on broker-dealers that recommend the purchase or sale of penny stocks to persons other than those who qualify as “established customers” or “accredited investors.” For example, broker-dealers must determine the appropriateness for non-qualifying persons of investments in penny stocks.
+Added: Broker-dealers must also provide, prior to a transaction in a penny stock not otherwise exempt from the rules, a standardized risk disclosure document that provides information about penny stocks and the risks in the penny stock market.
+Added: The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, disclose the compensation of the broker-dealer and its salesperson in the transaction, furnish monthly account statements showing the market value of each penny stock held in the customer’s account, provide a special written determination that the penny stock is a suitable investment for the purchaser, and receive the purchaser’s written agreement to the transaction.
+Added: Legal remedies available to an investor in “penny stocks” may include the following:
+Added: If a “penny stock” is sold to the investor in violation of the requirements listed above, or other federal or states securities laws, the investor may be able to cancel the purchase and receive a refund of the investment.
+Added: If a “penny stock” is sold to the investor in a fraudulent manner, the investor may be able to sue the persons and firms that committed the fraud for damages.
+Added: These requirements may have the effect of reducing the level of trading activity, if any, in the secondary market for a security that becomes subject to the penny stock rules.
+Added: The additional burdens imposed upon broker-dealers by such requirements may discourage broker-dealers from effecting transactions in our securities, which could severely limit the market price and liquidity of our securities.
+Added: These requirements may restrict the ability of broker-dealers to sell our common stock and may affect your ability to resell our common stock.
+Added: Many brokerage firms will discourage or refrain from recommending investments in penny stocks.
+Added: Most institutional investors will not invest in penny stocks.
+Added: In addition, many individual investors will not invest in penny stocks due, among other reasons, to the increased financial risk generally associated with these investments.
+Added: For these reasons, penny stocks may have a limited market and, consequently, limited liquidity.
+Added: We can give no assurance at what time, if ever, our common stock will not be classified as a “penny stock” in the future.
+Added: If we cannot satisfy the initial listing standards, or continue to satisfy the continued listing standards, of the Nasdaq Capital Market, our securities may not be listed or may be delisted, which could negatively impact the price of our securities and your ability to sell them.
+Added: We have applied to list our common stock on the Nasdaq Capital Market.
+Added: There can be no assurance that the Nasdaq Capital Market will approve our application for listing.
+Added: Even if approved and our securities are listed on the Nasdaq Capital Market, we cannot assure you that our securities will continue to be listed on the Nasdaq Capital Market.
+Added: In order to maintain our listing on the Nasdaq Capital Market, we will be required to comply with certain rules of the Nasdaq Capital Market, including those regarding minimum shareholders’ equity, minimum share price, minimum market value of publicly held shares, and various additional requirements.
+Added: Even if we initially meet the listing requirements and other applicable rules of the Nasdaq Capital Market, we may not be able to continue to satisfy these requirements and applicable rules.
+Added: If we are unable to satisfy the Nasdaq Capital Market criteria for maintaining our listing, our securities could be subject to delisting.
+Added: If the Nasdaq Capital Market subsequently delists our securities from trading, we could face significant consequences, including:
+Added: a limited availability for market quotations for our securities;
+Added: reduced liquidity with respect to our securities;
+Added: a determination that our common stock is a “penny stock,” which will require brokers trading in our common stock to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our common stock;
+Added: limited amount of news and analyst coverage;
+Added: a decreased ability to issue additional securities or obtain additional financing in the future.
+Added: The proposed reverse stock split could cause our stock price to decline relative to its value before the split and decrease the liquidity of shares of our common stock.
+Added: At a special meeting of stockholders held on February 24, 2022, our stockholders approved a proposal which authorizes our board of directors, in its sole and absolute discretion, to effect a reverse stock split of our common stock at a ratio to be determined by the board, ranging from one-for-two to one-for-seven, at such time and date, if at all, as determined by the board in its sole discretion, but no later than December 31, 2023.
+Added: In the event a reverse stock split is implemented, there is no assurance that that the reverse stock split will not cause an actual decline in the value of our outstanding common stock.
+Added: The liquidity of the shares of our common stock may be affected adversely by the reverse stock split given the reduced number of shares that will be outstanding following the reverse stock split, especially if the market price of our common stock does not increase as a result of the reverse stock split.
+Added: In addition, the reverse stock split may increase the number of stockholders who own odd lots (less than 100 shares) of our common stock, creating the potential for such stockholders to experience an increase in the cost of selling their shares and greater difficulty effecting such sales.
+Added: Except as required by the Federal Securities Law, we do not undertake any obligation to release publicly any revisions to any forward-looking statements to reflect events or circumstances after the date of this report or for any other reason.
Unresolved Staff Comments.
We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.
+Added: We lease a warehouse in Corsicana, Texas consisting of approximately 20,000 square feet which we use for manufacturing and distribution of our products.
+Added: As of December 2019, we relocated our corporate headquarters to such location which corporate headquarters prior thereto were maintained in Lewis Center, Ohio.
+Added: Such lease in Corsicana, Texas expires March 31, 2024.
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.