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Item 1. Business

2025-03-31 compared with 2024-04-16 · 104 added, 56 removed, 104 unchanged (61% of the section changed)

We are an environmental services and technologies company developing and delivering patented and proprietary solutions to the global power industry, specializing in mercury emissions removal technologies.

We are a provider of specialty activated carbon technologies, delivering innovative solutions for air and water purification.

We provide patented and proprietary technologies for mercury emissions capture to the coal-fired utility sector, and are developing disruptive water purification technologies with a specialization on forever chemicals such as PFAS and PFOS.

Products and Services

Mercury Emissions

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

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Ongoing research toward improved technology for mercury capture and rapid-response scientific support for emission or combustion issues as operations and regulations change.

We are in the process of developing and testing other business opportunities which include the extracting and processing of rare earth elements (REEs) in North America, remediation technologies for wastewater and coal ash from coal-fired power plants, as well as drinking water treatment technologies.

See “ Description of the Business -Additional Business Opportunities” below.

Patents and Trademarks

Our SEA® technology was originally developed by the University of North Dakota’s Energy and Environmental Research Center.

It was tested and refined on numerous operating coal-fired EGUs, with the founder of our wholly owned subsidiary participating with the Energy and Environmental Research Center on these tests since 2008.

The Energy and Environmental Research Center Foundation, a non-profit entity, obtained patents on this technology.

Between 2009 and 2017, we maintained an exclusive worldwide license with respect to this patented technology, which applied to various domestic and foreign patents and patent applications.

Such formed the basis of our mercury control technology.

On April 24, 2017, we acquired from The Energy and Environmental Research Center Foundation all such patent rights, including all patents and patents pending, domestic and foreign, relating to the foregoing technology.

We have a patent portfolio consisting of 36 active patents throughout the U.S., Canada, Europe, and China and 2 patents pending applications.

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

Industry Background

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

Water Treatment

In April 2024, we announced the introduction of our new division to address the potable (drinking) water market with new sorbent technologies under development.

These new technologies involve less use of activated carbon and are a much more environmentally friendly approach to water treatment.

AC is a form of carbon that has been processed to have a large surface area and a high degree of porosity.

This gives it the ability to adsorb a wide range of substances, making it highly effective at removing particles, toxins and impurities.

GAC and similar agglomerated activated carbons (or shaped activated carbons) are a form of activated carbon that is specifically produced in a granular, coarse form, as opposed to powdered or pelletized forms.

This granularity allows for better flow through filtration systems, which makes it ideal for use in applications that require a continuous flow of air, water or liquids.

GAC is commonly used in water filtration systems, including municipal water treatment plants.

It is particularly effective at removing chlorine, organic compounds, pesticides, heavy metals, and other contaminants.

Reactivated GAC is spent GAC that has been restored for reuse, making it more sustainable and cost-effective.

Utilizing renewal raw materials allows us to develop and provide shaped activated carbon that can compete with other commercially available GAC options, and provide a superior activated carbon technology to remove contaminants (including PFAS) from potable water.

While pending PFAS regulations are projected to significantly increase overall GAC demand, our products are expected to be successfully applied regardless of PFAS regulations reflecting significant competitive advantages (i.e., renewable raw material sources, low arsenic content, and overall performance) to presently available GAC products for the water market.

In addition, our product(s) may provide inherent performance advantages such as lower pressure drop relative to existing carbon products in the marketplace today.

We continue to improve our product line with the development of new technologies, supported with two new state of the art laboratories which we opened in 2024, one located in Pennsylvania and the other located in North Dakota.

Both locations were selected to be near our research and development team members.

In addition to supporting the development of new technologies, the laboratories will be able to offer other services such as carbon activation, thermal reactivation, and regeneration, contaminant analysis and carbon evaluations and recommendations.

These labs will enable us to tailor and optimize products for our customers’ needs and assist water utilities in implementing strategies to lower compliance costs, as well as provide a continued path to commercialization of our technologies.

Industry Background and Governmental Regulations

The market for mercury removal from power plant emissions in the United States have largely been driven by federal regulations.

On December 21, 2011, the EPA announced MATS for power plants in the U.S.

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The exact level of mercury emission reductions depends on the designs of these systems, the types of coal being burned and the operations of the power plant.

We believe that the large majority of the coal-fired EGUs in the U.S.

We believe that a large percentage of the coal-fired EGUs in the U.S.

employ some sort of sorbent injection system to achieve the very low mercury emission levels required by the MATS rule, with either the sorbent injection system as the primary removal method or such a system being employed as a supplemental system to SCR/scrubber combinations to achieve the emission limits.

Growth Strategy for Mercury Emissions

North American Markets for Our Mercury Technologies

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

In the United States, potable water treatment is regulated primarily by the EPA under the Safe Drinking Water Act (“SDWA”), which establishes standards to ensure that water is safe for human consumption.

The SDWA was originally passed by Congress in 1974 to protect public health by regulating the nation’s public drinking water supply.

The law was amended in 1986 and 1996 and requires many actions to protect drinking water and its sources—rivers, lakes, reservoirs, springs, and ground water wells.

(The SDWA does not regulate private wells which serve fewer than 25 individuals.) The SDWA authorizes the EPA to set national health-based standards for drinking water to protect against both naturally-occurring and man-made contaminants that may be found in drinking water.

The SDWA covers water quality standards, treatment processes, and monitoring requirements for public water systems.

The EPA has set maximum contaminant levels (“MCLs”) for specific contaminants in drinking water.

These include:

microbial contaminants like bacteria, viruses, and protozoa (e.g., E.

coli, cryptosporidium);

inorganic contaminants like lead, arsenic, and nitrates;

organic contaminants like pesticides and solvents;

radionuclides like radon and uranium;

and, disinfectants and disinfection by-products like chlorine and trihalomethanes (THMs).

Water systems must treat water to meet these MCLs or achieve a level that minimizes the risk to public health.

In April 2024, the EPA issued the first-ever national, enforceable drinking water standard to protect communities from exposure to harmful per-and polyfluoroalkyl substances (“PFAS”), also known as “forever chemicals”.

The Rule sets limits for five individual PFAS:

PFOA, PFOS, PFNA, PFHxS, and HFPO-DA (known as GenX Chemicals).

The Rule also sets a hazard index level for two or more of four PFAS as a mixture:

PFNA, PFHxS, HFPO-DA, and PFBS.

Under the Rule, public water systems must monitor these PFAS and will have three years to complete initial monitoring (by 2027), followed by ongoing compliance monitoring.

Water systems must also provide the public with information on the levels of these PFAS in their drinking water beginning in 2027.

Public water systems will have five years (by 2029) to implement solutions that reduce these PFAS if monitoring shows that drinking water levels exceed the MCLs set forth in the Rule.

Beginning in five years (2029), public water systems that have PFAS in drinking water which violates one or more of these MCLs must take action to reduce levels of these PFAS in their drinking water and must provide notification to the public of the violation.

The EPA has indicated that once implemented, these limits will reduce tens of thousands of PFAS-attributable illnesses or deaths and will reduce PFAS exposure for approximately 100 million Americans served by public drinking water systems.

The EPA has indicated that compliance with this Rule is estimated to cost approximately $1.5 billion annually.

The Infrastructure Investment and Jobs Act has dedicated $9 billion to help communities impacted by PFAS pollution in drinking water.

In addition, another $12 billion in Infrastructure Investment and Jobs Act funding is available to communities to make general drinking water improvements, including addressing PFAS chemicals.

Estimated costs include water system monitoring, communicating with customers, and – if necessary – installing treatment technologies.

In addition to the national standards established by the EPA which states are required to implement and enforce, individual states have the authority to impose stricter regulations than those set by the EPA.

Many states have already set their own standards for PFAS, often more stringent than federal standards, in response to the growing public health concerns.

States also run their own monitoring programs and inspections to ensure compliance with federal and state regulations.

Marketing and Our Growth Strategy

Mercury Emissions

Our marketing efforts have principally focused on the North American market to date, and particularly the United States.

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

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We believe that we have the most effective technology for the EGUs and that we maintain a strong patent position for our mercury emissions technologies in Canada.

In 2010, we were awarded our first commercial contract to design, build, and install our solution on two large (670MW each) coal units in the western part of the U.S.

This was a multimillion-dollar, three year renewable contract, which was awarded as a result of a competitive demonstration process.

We invested more than $1.4 million in the capital equipment for this project.

Our systems out-performed the contract guarantees in all operational areas during startup and testing and went into commercial operation at the start of 2012.

The system has successfully kept the plant in compliance since 2012.

Our marketing strategy is designed to grow our mercury capture solutions in the North American region by building and maintaining the reputation and trust of our work among its customers – specifically by carrying out successful demonstrations performed with utility customers and the resulting contract awards to meet the MATS requirements in the long-term period and sustaining our operational performance with EGUs under contract – and developing new, and refining our existing, unique emissions technologies.

We believe that by offering proven and innovative service offerings, we can attract more customers and partners to our services, creating a network growth effect.

We expect that the continuing pursuit of infringers of our patented technologies will yield further licensing and supply agreements (see “Patent Enforcement” below).

We believe that these targeted marketing initiatives are the most efficient and cost-effective strategy to sustain the growth of both new and existing customers.

At the present time, there are 16 EGUs in the U.S.

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

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

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

Beginning in 2019, we began to actively enforce our patent rights against unauthorized use of our patented technologies, and have since initiated patent litigation in various jurisdictions against multiple infringers, claiming infringement of our patents related to our two-part process for mercury removal from coal-fired power plants.

See Part I, Item 3.

“Legal Proceedings”.

We are in the process of pursuing various other infringers and have communicated our position to a significant number of them, which process is ongoing.

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

We view such litigation as a last resort.

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

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Nevertheless, we are optimistic of the prospects for mercury emissions regulations in China and Southeast Asia in the coming years.

Sales and Marketing

We believe that by offering proven and innovative service offerings, we can attract more customers and partners to our services, creating a network growth effect.

We expect that the continuing pursuit of infringers of our patented technologies will yield further licensing and supply agreements.

We believe that these targeted marketing initiatives are the most efficient and cost-effective strategy to sustain the growth of both new and existing customers.

Water Treatment

Initially, we intend to focus our marketing efforts on municipalities that have limited resources and engineering experience and offer shaped activated carbons (including reactivated GAC), testing and consulting services.

While the initial focus for our water treatment technologies will be on the potable water market, we expect that our technologies will also be valuable for industrial wastewater remediation.

Industrial wastewater is the liquid waste generated by industrial activities, including manufacturing, processing, and production facilities.

It often contains pollutants such as organic matter, heavy metals, chemicals, oils, and other contaminants that must be treated before being discharged into the environment or reused.

We believe our water treatment technologies will be well suited to treat such industrial wastewater in an optimal and cost-effective manner.

Additional Business Opportunities

We believe the market for water treatment is large and significantly growing both in the United States and abroad.

This expansion in water treatment and wastewater remediation will allow us to support the growing needs of the energy sector, as well as provide vital technologies for considerable environmental concerns.

There can be no assurance that we will be successful in the development of these technologies.

We also maintain a license with respect to certain intellectual property owned by Dakin Holdings Ltd.

consisting of a proprietary compound of materials engineered to treat a boiler to improve the combustion process and thereby reduce overall emissions, while improving boiler efficiency during the combustion of all types of fuels at power plants (the “Dakin IP”).

We believe the Dakin IP can be an effective supplement to our core business of mercury emissions removal at coal-fired power plants and provide an additional revenue stream utilizing our present infrastructure.

We believe the Dakin IP can be an effective supplement to our mercury emissions removal business at coal-fired power plants and provide an additional revenue stream utilizing our present infrastructure.

However, there can be no assurance that such license will lead to any significant revenues.

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“Certain Relationships and Related Transactions, and Director Independence”.

Our major competitors in the U.S.

and Canada include companies such as Arq, Inc.

(formerly Advanced Emissions Solutions, Inc.), Norit Activated Carbon, Calgon Carbon Corporation, and Nalco Company.

Some of these companies employ large sales staff and are well positioned in the market.

However, in most head-to-head tests with competitor products, our SEA technology has consistently performed better in mercury removal, at lower projected costs.

We believe that our SEA technology is superior to offerings of our competitors and, with its highly experienced staff, we have shown that we can compete effectively in these markets.

Patents and Trademarks

Our SEA® technology was originally developed by the University of North Dakota’s Energy and Environmental Research Center.

The Energy and Environmental Research Center Foundation, a non-profit entity, obtained patents on this technology.

Between 2009 and 2017, we maintained an exclusive worldwide license with respect to this patented technology, which applied to various domestic and foreign patents and patent applications.

Such formed the basis of our mercury control technology.

We have a patent portfolio relating to mercury removal of 34 granted patents worldwide, consisting of 26 U.S.

patents and 8 foreign patents (Canada, Germany, European Patent Office and China) with expiration dates ranging from August 2025 to September 2034.

We believe that our patent position for mercury removal is strong in the U.S.

and such other foreign countries.

In addition, in 2024, we filed 2 provisional patent applications in the U.S.

relating to water treatment.

We operate in highly competitive industries that are characterized by a diverse range of participants, including companies that operate in both the mercury capture and water treatment industries.

Our major competitors in the mercury capture and water treatment markets includes companies such as Arq, Inc.

(formerly Advanced Emissions Solutions, Inc.), Norit Activated Carbon, Calgon Carbon Corporation, and Nalco Company LLC (also known as Nalco Water, an Ecolab company).

Many of our competitors employ larger sales staff and are well established in the market with greater financial and operational resources.

However, in most head-to-head tests with competitor products in the mercury capture market, our SEA® technology has consistently performed better in mercury removal, at lower projected costs.

We believe that our SEA® technology is superior to offerings of our competitors and, with our highly experienced staff, we have shown that we can compete effectively in this market.

In the water treatment market, our competitive strategy will focus on delivering tailored and cost-effective water treatment solutions, innovative technologies, and exceptional customer service to meet the specific needs of our clients.

While the industry faces ongoing regulatory and technological advancements, we believe our industry expertise and focus on customer relationships will position us to effectively compete and grow within the water treatment market.

Raw Materials

We buy all the raw materials needed to implement our technologies and provide uniquely formulated products for effective mercury removal from third-party suppliers.

We buy all the raw materials needed to implement our technologies and provide our formulated products from third-party suppliers.

Suppliers of our raw materials include large companies that have provided materials for decades and have an international presence.

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If such suppliers cannot meet our demand for such raw materials on a timely basis or at acceptable prices or if we are unable to offset any such increases that might occur with price adjustments to our customers, such could have a negative effect on our operations.

Our products and services are connected to the power market.

Our products and services for mercury capture are connected to the power market.

This market has changed over recent years, creating a greater proportional residential load demand.

With this shift in demand and load, we have experienced some seasonal changes in billing cycles as our current customer concentration is in the Southwestern United States, where many of our customers decrease capacity in such winter months.

The price and availability of natural gas can also influence the amount of generation provided by coal-fired plants.

The price and availability of natural gas and renewables can also influence the amount of generation provided by coal-fired plants.

In the water treatment market, we expect there will be a greater demand for our products and services in the summer months when higher temperatures lead to more water usage and warmer temperatures tend to promote algae growth and create ideal conditions for bacteria, viruses and parasites to thrive.

We currently have 12 full-time and 3 part-time employees.

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

We changed our name to Midwest Energy Emissions Corp.

effective on October 7, 2011.

ME2C Environmental is a trade name of Midwest Energy Emissions Corp.

Effective on October 17, 2024, as part of our rebranding, we changed our corporate name from Midwest Energy Emissions Corp.

to Birchtech Corp.

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

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

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

As a result of the Merger, our business began to focus on the delivery of mercury capture technologies to power plants.

Our mercury emissions business is sometimes referred to and known as “ME 2 C”® which is a trademark of the Company.

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

As of December 2019, we relocated our corporate headquarters to such address which corporate headquarters prior thereto were maintained in Lewis Center, Ohio.

Our telephone number is (614) 505-6115.

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

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

Available Information

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

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

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

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

We are a “smaller reporting company” as defined in the Exchange Act.

We may take advantage of certain of the scaled disclosures available to smaller reporting companies until the fiscal year following the determination that the aggregate market price of our voting and non-voting common stock held by non-affiliates is more than $250 million measured on the last business day of our second fiscal quarter, or our annual revenues are less than $100 million during the most recently completed fiscal year and the aggregate market price of our voting and non-voting common stock held by non-affiliates is more than $700 million measured on the last business day of our second fiscal quarter.

We are a “smaller reporting company” as defined in the Exchange Act and may take advantage of certain of the scaled disclosures available to smaller reporting companies.

A company will qualify as a smaller reporting company if either (i) its public float is less than $250 million, or (ii) its revenues as of its most recently completed fiscal year for which audited financial statements are available were less than $100 million and it has no public float or a public float of less than $700 million.

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

What changed 10-K

Item 1. Business