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Midwest Energy Emissions (MEEC)

Participants
Richard MacPherson Chief Executive Officer
Jami Satterthwaite Chief Financial Officer
John Nobile Taglich Brothers
Jeff Kobylarz Diamond Bridge Capital
Call transcript
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Operator

Good day and welcome to the ME2C Environmental Third Quarter 2021 Earnings Conference Call. [Operator Instructions] This conference is being recorded today, November 15, 2021 and the earnings press release accompanying this conference call was issued earlier today.

On the call today is ME2C President and Chief Executive Officer, Richard MacPherson as well as Chief Financial Officer Jami Satterthwaite.

Before we get started, I will read the disclaimer about forward-looking statements. This conference call may contain in addition to historic information, forward-looking statements within the meaning of the federal securities laws regarding ME2C Environmental.

about underlying goals, that assumptions than facts. statements or future are include historical and performance and statements plans, strategies, objectives, events different Forward-looking other statements

anticipate, identified expressions, risks and uncertainty factors, management’s major operations similar the that the involve conditions these in statements current and disruption of change to general demands, of loss gain the in may and the customer changes key supply electrical based the experience subject in significant forward-looking change results forward-looking words exclusive are to include, words might environmental actual Forward-looking statements. will our those power Investors the or among but demand, litigation power our fluctuations major of by not customer, utilities significant factor expectations regulations, any in of of of are expect, in in intend, coal statements and generally results availability capital forward-looking materially differ that units, from personnel, that such cautioned are statements changes other significant loss on disruption uncertainties plant materials, capacity to management and as to means circumstances. believe, customer’s Matters company. cause of materially supply any a and in are a regarding These of where economic cause regions actual plan, the from could and are statements differ made. using identifying statements

company’s any filings to periodic information date reflect statements this the this be of the does refer as presentation to could any forward-looking Further would Richard revise time-sensitive issues analysis conference please company’s information publicly in call. over Environmental. of that of Exchange conference Officer after that update information affect date time, Chief or to this Commission and industry concerning that obligation contains website or MEXC materially undertake arise reflects and only Executive In company events, more financial contained addition, call. we turn not of go found in this information. like The future circumstances best the with conference the supporting call to statements forward-looking to the to call this for related also the can Sir, would Securities ahead. performance MacPherson, I you At management’s

Richard MacPherson

operator and you, for us you today’s Thank thank everybody call. to joining on

represented our of as X to a MEXC The point highest key to strategy efforts growth third Environmental’s quarter technologies our translated in revenue XXXX suite proprietary our quarter of over in inflection monetize years.

Our proprietary to usage coal-fired business, our heightened litigation demand in numerous moving XXXX the by industry both continue technologies emissions are due be U.S. in part to sorbent value their continues and to significant and increased product energy the We which demands natural rising to benefits. saw power driven expected environmental mercury growing operational due supply through coal XXXX. successes notably through provide gases as our across and

affecting issues on company general. technologies not by continued benefiting to in are our is the and providing but customers growth, a critical our the environment, our As innovative focused shareholders, that we public address motivated only

MEXC this review our to to strategy continue patent and details quarter. approach me to advance take positioned market the benefiting of now team this strength. current some past our Allow in to expanding is continued prompted from before Our litigation position third quickly that why uniquely multi-pronged key portfolio on

plant. if U.S. coal-fired of to plants are you in approach the and efficient technologies very of means or a sorbent enhancement SEA a leading that’s mercury widespread XX% that mercury is over these use capture technologies, adoption the emissions technologies to compliant by the flagship and to the coal-fired reflected additive capture provides Our due fact it. inherent staying This superiority are and running the

were as significantly there were our left through but company XXXX expansion technologies, of in our utilities out and we to of without ahead place that XXXX, some the as systems So, scale able of through suppliers went and up us. out to going with commercialism installed a took know-how we the larger utilizing

to now the that our recognition value now results, numbers. for show plan starting quarter So, to create adoption. shareholders of some defend in which receive these achieving the underway. And order order technology we this litigation are the is property were that of and third we that to as needed in we in for to broad initiate to compelled value adoption, And action are this in reflected

The producers of Program in tax believe also And callout. owners to that was pollutants, a coal level We refined who including financially refined are program this generated a patented years. important defendants, program this a in program. approximately over to coal have off credits tremendously XXXX achieved issue the in program that XX to to of we initiated enabled of XXXX over tax Section refined using Credit XX the and of introduced coal, benefit certain lawsuit technologies in efficiency mercury. a IRS users coal key in including against and annual few factors $X our last operators the There users harmful So, refined Tax for this billion operation operators refined are year XX the entities. coal the this these credit reducing

to of our U.S. against adoption received we from the magistrate September, well now which forward to So discovery to With the District we coal move recommendations certain the resolution. of through entities. this Delaware process this seeing reports of in Court underway, forward the the looking have in are and of refined Judge allows District lawsuit approval judge,

a agreements to litigation, license capture. our with business signed this continue expertise, legal the pursue Caldwell utilities Our patented supported in And licensee, us into last all that believe those counsel, for the continue the entered demonstrated the an in efficacy XXXX & coal-fired the business parties. guidance supply experience discussions first providing into business have we underway than year. to license we with by the major that of of partner we Since X win-win we mercury And the have third process, long-term a to by have aim number grow valuable of outcome rather taking for team’s utilities we approach, through exceptional incremental, approach utility many agreement continued with Curry technology Cassady convert as major agreements our licensees utilities approach and supply multiyear to significant our the customers. an with secured secure existing we the be believe utilities as U.S. seek we other we field. that one commencement supply-side a an allow of to will litigation, this cleanup with having in process to more And the using supply speak. And our we side leads to quarter customers successfully

So coal as patented strong MEXC, replacement in at the replacement places position the importantly, At supplies have and refined natural coal power that that conclude position, the our that refined given very obtained. a of to point that coal the they to been refined emissions us, using plant end with program control program will currently which find of process a a their need mercury XXXX. will

creates And us MEXC in to million first up will plan, be has are side the coal operational paid using Texarkana, previous underway our additional have To for significant our which and part the be that now are quarter in meet as batch XX% $XXX speak. we demand, enables of of and that estimate XXXX. support scale the power by approximately XXXX we So, from our we can batch these plants that refined as not outperform annual increase program users up in to This that non-licensed so technology only potential commissioning expected fully competition. move business refining into production, supply for able plant continue coal to to a in of is to we which supply the forward this revenue. meet to customers, we but we expected capacity to customize

new Now, of are in core to efforts product technology our monetizing materialize forward but which we on and of is that supply, resulted side, see look very very we growth on technology to are begin has to we key working our focused. The several area on us. now course, to stage verticals process next the of new are important encouraged this in of patented our the identification

earth not coal needs, to our processing defense billion industrial as industries, elements to security these are created uses the elements is in healthcare, limited produced a to of applications to earth level. Over Energy extremely heavy well telecommunications, global the the the either of rare growing rapidly. core national coal-fired generation. infrastructure The has Department classified annual we for but sector government mining last at as national and and rare aircraft, X of have market has $XX due Rare been both The the several in various private from in years, earth technologies demand elements working critical widespread in develop the and elements as and including, system. important materials, the

coal countries, ash And these other XX% of be earth sector ash unacceptable. result, in mine of facing as outsourcing unaddressed. in plant these of rare a coming while U.S.’s the the used costly compete the and coal-fired presently has has one imported ponds. environmentally the the leaving proven coal are operations, largest from minerals China. economically, the it and with coal consumed Now, and process the is Importing to to ability environmental U.S. mines concerns ponds U.S. now while is elements from from energy that and rich hindered elements the to And power all

the over scale, energy that Of grow technology by prediction a could for to XXX% clean issue World course, extends highlighted as to by global Bank’s key XXXX. minerals this

announced up element field in this XX% quarter, our State rare So, In technologies we headway their leader and a select of have our efficacy Based making of this this we X they a addressing we setting we testing. in strong technology have development Penn results Earth Phase advancement. from Sciences. fourth completed They issue with field with extracting phase and significant instrumental their moving testing. during second in planned in into in XX% testing believe of and our testing, will this EEEs Mineral that trial State our October we are to earth Department of on year, testing new confirmed phase rate Penn been of our be are of this and the

as this we So continuing are we early to commence move testing into having. will infield critical a the expect to the advise move that technology And course of results step promising commercial we scale. that to we in XXXX, actual the of

now our So capital move I initiatives. will brief a on update to markets provide

a institutional to broaden we positioned fortified exchange. valuation. effort exposure We up-listing will allow and believe simplified are exchange, And we with sheet major – a capital a senior assist investors MEXC’s continue to to to achieving forward both graduate fair us structure analysts to work a ultimately and and achieve the of in the balance which market well in to

the will to turn for our an our So now quarter Jami? call actual of third I over Satterthwaite, overview financials. Jami CFO

Jami Satterthwaite

and you, Thank hello Rick everyone.

in progress going per year. loss returning in make to the sales the Revenue compared loss the $X.X of in in million The net our forward initiating quarter base. product principally of The as a the to last third The years additional quarter and the of share negative in The secure the third the company’s and significant quarter the in XXXX in increased million, or to we same diluted cost margin basic customer over $X.X due to achieved continued same is and $X increased million agreements. cost demand mainly We supply million approximately in $XXX,XXX last Adjusted XXXX the was year. in in $X.X the of from was expansion We prior the defense increase total XXXX just the to per a increased in $X.XX to highest last $XX,XXX supply improved the is continue $X.X compared was to patents. sales. quarter the due by cost growth same over experienced and expect quarter due sorbent well with primarily last year. EBITDA market of sales. zero this coal-fired quarterly increase million increase attributed or of compared diluted and revenue as sales third The to those quarter third expenses quarter to share expenses was driven our in increase $XXX,XXX quarter the as increasing basic growth X were XXXX of on year. to and we decrease sales same primarily XX% of to

expects had XX, September company compared a the XX, company was the balance quarter-over-quarter of higher XXXX, $XXX,XXX, of XX% XXXX. through December cash XXXX As The prior shown year cash growth on period to beyond. than which to has focused quarter. realize on continued in fourth and patented growth of quarter value remain the our see fourth We our moving and XXXX through efforts the technologies into to the

Rick closely our continue cost are ensure next call growth. manage operating Rick? We concluding to his we for With hand for remarks. back that that, of the will to phase over to I well-positioned the

Richard MacPherson

long-term our the and contracts are Jami, point thank monetary inflection you. conclusion, diligently protected for licenses. of we patent reoccurring Folks, and growth strategy in value our are in reaching realize to an supply we working technologies

environmental commercial enable technology market core in business. gained will a and share Our company develop competitive leading relationships to as additional us our position

by coal fourth are to this We leading earth our excited this operator executing will question-and-answer long-term. XXXX to on from remediation. vertical. in communities begin their and the our our rare to shareholders, wastewater customers our the look ash objectives quarter a extraction value focused to back create operational for be our as strategic call are session. sustainable proud I across technologies forward and we over the And and to promising that, progress turn and innovator I over furthering element incredibly we work the in with And into

Operator

Brothers. proceed with question. Taglich your comes Thank Nobile from with Instructions] John Our first Please you. question [Operator

John Nobile

a Hi, good I Thanks related the But my top thanks and litigation. and questions. just patent line. all afternoon Nice wanted for call you taking to about August breakeven and growth significant in ongoing XX taking the to of were questions issued call for about here. call. company couple the that my Rick, had get had this bottom see and to last subpoenas those line just the on said

So, I infringement anything patent was report progress? to your curious new regarding if there was

Richard MacPherson

subpoenas, and John information which that. of thanks for uncover we been nicely. folks question. able discovery is process, are The & with pleased so moving issuance very Cassady with are the Caldwell along we far to the the have Curry included The continuing

We further expect the everything subpoenas, as I it generate are ahead into results as to details is at But expected that on will this time unable that information track. prove – the we get our to need they any am actual moving of the claims. to but

John Nobile

curious And what actually approximately see into you regard on could you us out currently if you agreements agreements with revenue to even Alright. could licensing if see? and into XXXX in details supply the quarter came third maybe where you some which of what that $X your million, give breaking take percentage from I that was versus give

Richard MacPherson

the revenue. we that So, expectation basically this the results about And XX% third going quarter into for that’s point, XXXX. have the supply were forward at

are supply we licensees, well As as more expect operations those I to into of to demonstration chain field, traction licensees. as more clients, the in we going able new convert with gain be

that approach we that expect that very being be going growth. will And I with supply margins solid, likely on our looking the much So, forward. side, are to forward the most

John Nobile

just out was I mean have it blended figured that supply? was Okay. And at XX could actually, I XX-Q, from to I XX% level blended I overall now, with about the from What this Jami, ask I gross could the gross I of get if the just you, I could margin, just was gross what I know margin? I right revenue Q. margin look the mean if the find

Richard MacPherson

up… Jami John, bring back that will why we have on we move don’t and

John Nobile

release, the mean, Technology. to press second on readily get just into Phase available. one up points phase X Earth you you I and thought Okay. just Element that the the mentioned I I have in and Alright, the that let you if trial that’s expected actually, testing could just begin call. here. early Rare moving the field completed quarter other pull in And question testing of are you XXXX. later thought fourth it you this had mean, I it I me ask In

wondering commercialization? you before to So, if would am can guess it this believe is I just ready be actually your as long for how provide best technology you

Richard MacPherson

Well, results. on it again, depends the

However, go to testing. the you technology, things, to these of the you sites, normal have amongst as conditions into as as in our you the real real to identified try we of you many close world, are out so possible track to base, adjustments as events client before that the get before world field, the carry have made

X. of testing actually to Phase go testing X We out Phase rather this we have than a doing directly rounds, three carry that are rounds This decided couple of under done we now, able field, field. could course actual correct we because going into prior to into where materials take wanted with lab, from to more the exactness, the the we be to the field into

a this field. we doing enhance So, that That will what we the the are And to think lead that’s timeline will highly I sort of that quarter. take technologies developed to significantly.

would bumps any third we the we of quarter, final would unless first to are going So, the major the hit a with into say, second end the in then good partner And in the valuation. actually results. we by commercial road, be have working quarter, quarter, some in I very

appropriate would if years time say, would they you of this And I given at of commercialize in evaluation competing commercial technologies, they and to are next these looking the be a any of year, of the did into fourth for year, fifth get the commercially, So half that latter is to at most trying technologies, third, looking types most us. situation.

the second in it or hard of would terms place third take In testing, year.

John Nobile

know possibly earth China, from in elements are you market from United believe. by had second coming the rare very mentioned most see of your that of the mean, I the rare would be States, it, bring in prepared country I to you indeed, XXXX. actually But this are half to comments. much how that encouraging earth Do of it produced I And know Okay. that elements roughly?

Richard MacPherson

exact have number don’t I you, an John. for

productions for that very the got the generate One is of and moving material here administration economic brought propose its continued of capacities that at we will have things of having a the technology We abroad, processing the provide Biden U.S. because the it to material opportunity, to is pace. with our forward environmental competitive raw and finishing.

we And the so the all your answer materials. its exactly. is question in problem focused that country has can’t are But on I earth outsourcing rare of what

And so our technologies we are environmental big and an point can And make dent we focused on way. from extraction actual a processing, into it that the feel of economic view.

John Nobile

Okay. the that you you potential And had market this of could previously, in is? mentioned what size size rehash country that market just

Richard MacPherson

Yes.

thing a So, have of opportunity here. it the through coming U.S., XX% with the the system to from is right create huge which will allow the processing here we China, is, materials them finished what if process we and can to here, us in the product in a got develop

a And point. over over at of number it’s World Bank the years XXX% this prediction XXXX. expected it’s – by the be So, $XX going to it’s by annual market billion that growing is next

what into value definitely to. of can’t Clean coal is do we problem right be to to cleanup, puts which it for that ponds it’s twofold. for area the probably up that country it up pay X,XXX them. that there biggest the cleaned that the these But a add need need because allows nobody because has that problem, ash in done, toxic trying do to over an got be is are pay underwriting now, a which And Clean of right to pond is up. now. to ash So, this we attention fashion

other system we a move up from have we and that figure had. byproduct that, the we if and build rare So, a can country in questions folks. underwrite I we on John, allows earth will value. that other We any can see think the value clean And with fix that problem

John Nobile

Thank you.

Operator

[Operator next with proceed from with Instructions] Jeff Our Capital. Diamond your is Kobylarz question. question Bridge Please

Jeff Kobylarz

of run curious just the just is electricity range given have am can weather I you if for afternoon. a rate give normal high had a forward, gas you give of low us the a you for going annual any demand prices, good revenue far, and and range total wins where kind could natural client Hi, so revenue? of there

Richard MacPherson

of sort go we things one that forward. John out. to we as And is mentioned are Jeff, which previously it, So the continuing

the or We to we utility expect only foreseeable is revenue. utility of difference to remain decides sit of side source give a the the the profitable to does license line of in us that but amount that revenue, or the most take top future. their business a And importantly, that’s whether well in not license whether It affect revenue. makes supply where top us as from line, when now, the significant line right a that decides bottom

what forward coal very longer the able and revenue this the of revenue some outstanding beyond. With are we have of it. more get back been and belt, review and the refined until we ending the infringers expectations look will term projections over give the are hesitant which So, next line to part projections. quarter have percentages the to top under expect be And we and program valid of then a our majority we going settlements make

going in We need our replace significant are XXX XX next to which those potential to very because that of is days coal to chain. the fact that a technology growth operators supply be to process their days, refined all over are been of going period utilizing the have

process side with of patented about So, talking licensing. way supply been like the as acquire of in their to business have we to a position through all would we way mediate this that and our of touch our folks those

position XXX can of we of some you the that reporting forward. forward to as can are we significant growth ahead this months are, what where next to we that these a be expectations to will And see hard us with in we statements so, going us. point, numbers real able have regards the very profitable being go revenue heard to our XX At making that give get and days days the point

Jeff Kobylarz

these Thanks volume Sure, coal just say sense, Can purchased was you that Rick. comments. those refined by makes for how customers? much

Richard MacPherson

the in would side would supply coal the the million after program refined to in million again, But guesstimate. $XX a going the year revenue. customers, represent customers probably Sure, coal a be this refined forward somewhere $XX

Jeff Kobylarz

Okay, And good. of you your in are mentioned how you were lastly, with number said, demonstrating then those say field products of questions, of Alright. one answering you Can demonstrations John’s the you customers. many in SEA you a going through now?

Richard MacPherson

had number The not us is you are answering with would look whatnot, utilities they regards as be to are doing that at our or with problem filings really I it obvious licensing, that negotiations the close that who a in to of about them. we with want are. And publicly different if enough to work do we talk

a we I think fairly we basis just results busy. we to regular on forward. be on will I reporting as do And that. will pass that expect So, say, go Suffice are kept I being

Jeff Kobylarz

Okay. Thanks for your help, Rick.

Operator

would session. like over question-and-answer this to turn for closing Richard to MacPherson time, our At remarks. concludes this his back I call Mr. now the

Richard MacPherson

are with for much staying today. The so thanks folks, numbers Well, strong. They are us joining strong.

We as forward of specific look to announced are growth. listening amount of the We I to market am and that am to we again in concluded. for information part distant allowed to talking add in not you review, to under point in. at more see growth S-X time up-listing continue I our With limited on of course, you continue the process the to as expect too much filed detail see to forward once bringing efforts. but future. Thank with SEC, is very with look this

Operator

thank call. your today’s concludes participation. We for This you

Thank lines. now disconnect You may you. your