What changed in this filing

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Item 1A. Risk Factors

2025-03-31 compared with 2024-04-16 · 72 added, 45 removed, 181 unchanged (39% of the section changed)

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Risks Related to Our Company

Demand for our services and products is largely driven by coal consumption by North American electricity power generating plants.

Demand for our mercury emissions services and products is largely driven by coal consumption by North American electricity power generating plants.

Any significant changes that diminish the use of coal as a primary fuel source for electricity production may adversely affect our business.

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If we are unable to compete effectively with competitors having greater resources than we do, our financial results could be adversely affected.

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.

These companies employ large sales staff and are well positioned in the market.

Our ability to compete successfully depends in part upon our ability to offer superior technology, including a superior team of sales and technical staff.

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.

Our ability to compete successfully depends in part upon our ability to offer superior technology, including a superior team of technical personnel.

If we are unable to maintain our competitive position, we could lose market share to our competitors which is likely to adversely impact our financial results.

We may not be able to successfully protect our intellectual property rights.

We own a number of significant patents and patents pending covering the U.S., Canada, Europe, and China for our technology.

Certain critical technology related to our systems and products is protected by trade secret laws and confidentiality and licensing agreements.

There can be no assurance that outstanding patents will not be challenged or circumvented by competitors, or that such other protection provided by trade secret laws and confidentiality and licensing agreements will prove adequate.

We cannot assure you that we will have adequate remedies against contractual counterparties for disclosure of our trade secrets or violation of ME2C’s intellectual property rights.

As a result, we may not be able to successfully defend our patents or protect proprietary aspects of our technology.

We have a patent portfolio relating to mercury removal of 35 granted patents worldwide, consisting of 27 U.S.

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

While we actively pursue new patents and technological advancements to replace expiring patents, there is no guarantee that future patents will be granted, or that they will be able to provide and/or allow us to maintain the same level of market protection.

As a result, we may not be able to successfully protect proprietary aspects of our technology.

With regard to our water treatment technologies, we have to date filed two provisional patent applications in the U.S.

relating to water treatment.

However, provisional applications do not provide enforceable patent rights unless they are converted into non-provisional applications and successfully granted by the U.S.

Patent and Trademark Office.

There is no assurance that our pending provisional applications will result in issued patents, or that any patents granted will provide meaningful protection against competitors.

We may not be successful in patent litigation.

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An adverse result in any litigation could put one or more of our patents at risk of being invalidated, held unenforceable, or interpreted narrowly and could put our patent applications at risk of not issuing.

In July 2019, we initiated patent litigation against various defendants in the U.S.

District Court for the District of Delaware for infringement of certain patents which relate to our two-part Sorbent Enhancement Additive (SEA ® ) process for mercury removal from coal-fired power plants.

Between July 2020 and January 2021, we entered into agreements with each of the four major utility defendants in this litigation, and in November 2023, we settled such matter with two other major groups in the litigation.

In addition, following a five-day trial, on March 1, 2024, a federal jury in the U.S.

District Court for the District of Delaware awarded a $57.1 million patent infringement verdict in favor of the Company against the remaining group of defendants.

Nevertheless, the ultimate success in this litigation against the remaining group of defendants still remains uncertain due to other possible factors including, but not limited to, the results of any post-trial motions and applications, appeals and any collectability issues.

We depend on third-party suppliers for materials needed to implement our emissions technologies;

On March 1, 2024, following a five-day jury trial, a federal jury in the U.S.

District Court for the District of Delaware awarded a $57.1 million patent infringement verdict in our favor against a group of defendants.

Nevertheless, the ultimate success in this litigation against this group of defendants still remains uncertain due to other possible factors including, but not limited to, the results of any post-trial motions and applications, appeals and any collectability issues.

We depend on third-party suppliers for materials needed to implement our technologies;

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.

We buy all the raw materials needed to implement our technologies and provide uniquely 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.

When we use PAC as one component of our sorbent material, we buy it in the market from large activated carbon manufacturers.

We believe that we have excellent relationships with our current suppliers.

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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.

While we are in the process of developing new technologies, no assurance can be made that any such new technologies currently under development will be commercialized or result in a significant revenue stream.

While we are in the process of developing new technologies, particularly in the water treatment market, no assurance can be made that any such new technologies currently under development will be commercialized or result in a significant revenue stream.

Low gas prices can negatively impact our results of operations;

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Revenues are generated under contracts or blanket purchase orders that must be renegotiated periodically.

Substantially all of our revenues are generated under contracts or blanket purchase orders which expire periodically or which must be frequently renegotiated, extended, or replaced.

Substantially all of our revenues to date have been generated under contracts or blanket purchase orders which expire periodically or which must be frequently renegotiated, extended, or replaced.

Whether these contracts or blanket purchase orders are renegotiated, extended, or replaced is often subject to factors that may be beyond our control, including an extremely competitive marketplace for the services we offer.

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Business interruptions could significantly disrupt our operations and could have a material adverse impact on us.

Our operations, and those of our suppliers, and other contractors and consultants, could be subject to geopolitical events, natural disasters, power and other infrastructure failures or shortages, public health pandemics or epidemics, and other natural or man-made disasters or business interruptions.

In the event of any of these occurrences, we may experience disruptions to our business including, but not limited to, the availability of raw materials and equipment, disruptions to our workforce, or to our business relationships with other third parties.

Our operations, and those of our suppliers, and other contractors and consultants, could be subject to geopolitical events, natural disasters, power and other infrastructure failures or shortages, public health pandemics or epidemics, extreme weather events, including hurricanes, wildfires and prolonged droughts, and other natural or man-made disasters or business interruptions.

Any of such occurrences may disrupt our operations, damage our facilities, affect our supply chains, disrupt our workforce, and impact our business relationships with other third parties.

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.

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Stockholders may not agree with the manner in which management chooses to allocate and spend our available funds.

Possible inability to continue as a going concern.

Based on our current cash levels and burn rate, amongst other things, we believe our cash and financial resources may be insufficient to meet our anticipated needs for the next twelve months, which raises substantial doubt about our ability to continue as a going concern within one year from the issuance date of the financial statements included elsewhere in this Annual Report.

The financial statements included elsewhere in this Annual Report have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.

The financial statements do not include any adjustments relating to the recoverability and classification of asset amounts or the classification of liabilities that might be necessary should we be unable to continue as a going concern within one year after the date the financial statements are issued.

In addition to maintaining the revenue stream from our legacy mercury emissions control business, our plans and expectations over the next twelve months to mitigate such financial condition include receiving additional cash inflows from the judgment expected in connection with the $57.1 million jury verdict awarded to us in March 2024, additional licensing revenues and product sales from the other patent litigation recently commenced, and revenues from our entry into the water treatment business.

During 2024, we opened two new state of the art laboratories and have added personnel to support our entry into the water business which we believe will lead to a vibrant new revenue stream.

In addition, management is exploring additional financing opportunities.

While management believes these plans will alleviate substantial doubt, there is no assurance that they will be successfully realized or implemented.

Our board of directors concluded in 2025 that we needed to restate previously issued financial statements as a result of a change in accounting for a certain license agreement.

On March 28, 2025, our board of directors, along with our audit committee and with management and, following dialogue with our auditors, concluded that our previously issued financial statements for the periods ended December 31, 2023 and 2022 included in the Company’s Annual Reports of Form 10-K, March 31, 2024, June 30, 2024, and September 30, 2024, March 31, 2023, June 30, 2023, and September 30, 2023, included in the Company’s Quarterly Reports of Form 10-Q, should no longer be relied upon as a result of the change in accounting for a certain license agreement.

We concluded that the Company should have recognized the entire proceeds receivable pursuant to the agreement as revenue during the year ended December 31, 2022.

The Company should also have recognized the financing component of the licensing agreement during the fiscal years ended December 31, 2023 and 2024.

Such restatement could cause uncertain sentiment in the investment community.

Risks Related to Regulation

Our business focus has predominantly been mercury removal from power plant emissions, which is driven primarily by regulation.

Any significant changes in mercury and other emission regulation could have a major impact on us.

Our business focus has predominantly been mercury reduction in flue gas emissions from large coal-fired utility and industrial boilers.

This market is primarily based on air pollution control regulations and enforcement of those regulations.

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.

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.

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.

The MATS regulation has been subject to legal challenge since being enacted.

Any significant changes in environmental regulations related to mercury emissions and potable water treatment could have a major impact on us.

Our business relies heavily on environmental regulations governing emissions from coal-fired power plants and regulations related to water treatment.

In the United States, the Mercury and Air Toxics Standards (MATS) rule, issued by the U.S.

Environmental Protection Agency (EPA) in 2011, is intended to reduce air emissions of heavy metals, including mercury (“Hg”), from all major U.S.

power plants burning coal or oil, which are the leading source of non-natural mercury emissions in the U.S.

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.

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).

Any changes, rollbacks or delays in these regulations could significantly impact the Company’s financial performance and growth prospects.

Since being enacted, the MATS Rule has been subject to legal challenges which may continue.

Since being enacted in 2011, the MATS regulation has been subject to legal challenge.

In June 2015, the U.S.

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In April 2016, the EPA issued a supplemental finding in response to the Michigan decision and found that, after a consideration of costs, it remained appropriate and necessary to regulate such emissions from coal- and oil-fired power plants.

In May 2020, the EPA, then under the Trump Administration, reversed the determination, finding that, after weighing the costs of compliance against certain benefits of the regulation, the 2016 supplemental finding was erroneous but left the MATS rule in place.

In May 2020, the EPA, then under the first Trump Administration, reversed the determination, finding that, after weighing the costs of compliance against certain benefits of the regulation, the 2016 supplemental finding was erroneous but left the MATS rule in place.

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 May 2020 “appropriate and necessary” determination, for conformity with Biden Administration environmental policy.

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On April 3, 2023, the EPA issued a proposal to strengthen and update MATS.

This proposal is currently pending.

Nevertheless, legal challenges may continue in the future with respect to the MATS regulation.

Uncertainty and lack of international environmental regulations could restrict our ability to attract business in Europe and Asia .

In order to expand our business internationally, we would expect that more restrictive international environmental regulations will need to be enacted for the purpose of mercury control from power plant emissions in Europe and in China and other Asian countries.

The newly inaugurated second Trump Administration has indicated potential shifts in environmental policies, which may include revisiting existing regulations such as MATS.

In this regard, on March 12, 2025, the newly appointed EPA administrator under the Trump Administration announced plans to roll back dozens of environmental regulations including the reconsideration of the MATS regulation.

The results of the 2024 United States presidential election has created regulatory uncertainty.

The outcome of the 2024 U.S.

presidential election has introduced significant uncertainty regarding future environmental regulations, particularly those affecting mercury emissions from power plants.

The newly inaugurated administration has signaled potential shifts in environmental policy, including possible rollbacks of existing regulations and changes in enforcement priorities.

For instance, if the administration weakens or repeals the MATS Rule, such regulatory changes could materially impact our operations.

In addition, any weakening, rollback, or delayed implementation of PFAS-related regulations could reduce demand for our water treatment technologies, testing services, or remediation solutions, negatively impacting our growth prospects.

Uncertainty of and variability in international environmental regulations could restrict our ability to expand outside of the United States .

While the focus of our business has been North America, and particularly the United States, in order to expand our business internationally, we would expect that more restrictive international environmental regulations will need to be enacted for the purpose of mercury control from power plant emissions.

In May 2017, the European Union and seven of its member states ratified the Minamata Convention on Mercury.

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Any delay in enactment of more restrictive international regulations or the lack thereof could restrict any efforts and our ability to attract business in Europe and Asia for our emissions technologies.

With regard to our water treatment technologies, we intend to focus on the U.S.

In the event we seek to expand our water treatment business internationally, we will face a complex array of international water treatment regulations, which vary significantly across countries and may be subject to frequent changes.

This regulatory variability introduces uncertainty and potential compliance challenges should we seek to expand globally.

Risks Associated with our Common Stock

There is a limited trading market for our common stock.

Our common stock is currently traded in Canada on the TSX Venture Exchange (“TSXV”) under the symbol “MEEC” and is quoted in the United States on the OTCQB operated by OTC Markets Group Inc.

under the symbol “MEEC”.

Our common stock is currently traded in Canada on the Toronto Stock Exchange (“TSX”) under the symbol “BCHT” and is quoted in the United States on the OTCQB operated by OTC Markets Group Inc.

under the symbol “BCHT”.

Historically, the trading volume for our common stock has been limited.

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We can give no assurance at what time, if ever, our common stock will not be classified as a "penny stock" in the future.

If we cannot continue to satisfy the continued listing requirements, of the TSXV, our securities may be delisted from the TSXV, which could negatively impact the price of our securities and your ability to sell them.

On July 20, 2023, our shares of common stock began to trade on the TSXV.

We cannot assure you that our securities will continue to be listed on the TSXV.

In order to maintain our listing on the TSXV, we will be required to comply with certain rules of the TSXV, including those regarding a minimum public float, and various additional requirements.

If we cannot continue to satisfy the continued listing requirements, of the TSX, our securities may be delisted from the TSX, which could negatively impact the price of our securities and your ability to sell them.

On July 20, 2023, our shares of common stock began to trade on the TSX Venture Exchange (“TSXV”).

On October 9, 2024, we received conditional approval to list our shares on the TSX and graduate from the TSXV to the TSX, and on November 12, 2024, our shares commenced trading on the TSX.

We cannot assure you that our securities will continue to be listed on the TSX.

In order to maintain our listing on the TSX, we will be required to comply with certain rules of the TSX, including those regarding a minimum public float, and various additional requirements.

We may not be able to continue to satisfy these requirements and applicable rules.

If we are unable to satisfy the TSXV criteria for maintaining our listing, our securities could be subject to delisting from the TSXV.

If the TSXV subsequently delists our securities from trading, we could face significant consequences, including:

If we are unable to satisfy the TSX criteria for maintaining our listing, our securities could be subject to delisting from the TSX.

If the TSX subsequently delists our securities from trading, we could face significant consequences, including:

a limited availability for market quotations for our securities;

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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 1A. Risk Factors