Name: Midwest Energy Emissions Corp. Q4 2022 Earnings Call
Start: 2023-04-17T16:31:04.000Z

Executive Summary

Q4 2022 revenue was $5.7M, up 110% year over year; full‑year 2022 revenue reached $21.6M, up 66% YoY .
Sequentially, Q4 revenue declined from Q3’s $7.5M due to normal seasonality in coal-fired supply, with management reiterating the sector remains strong into 2023 .
Bold positive: FY22 revenue exceeded prior guidance ($20M) to $21.6M; management expects 50–60%+ annual growth to continue in 2023 though audited EPS was pending at the time of the call .
Balance sheet/catalysts: Company deferred all major debt to August 2025 and secured an option to repurchase ~7–7.5M shares at $0.50, enhancing flexibility ahead of IP litigation milestones and expansion initiatives in water remediation and rare earths .

What Went Well and What Went Wrong

“Q4 Revenue for 2022 increased to $5.7M from $2.7M for Q4 2021…110%” and FY22 revenue grew 66% to $21.6M, reflecting strong core product sales and recurring contracts .
Strategic progress: “We expect this rate of 50–60%+ annual growth to continue…based on the strength of our core business…more stringent federal regulations for emissions controls” .
Financial flexibility: Debt deferral to Aug 2025 and buyback option (~7–7.5M shares at $0.50) supports capital allocation and potential uplisting catalysts .

Limited disclosure: Audited Q4 EPS and net income were not yet available at the time; adjusted EBITDA commentary indicated improvement but specifics were deferred pending year‑end audit .
Seasonality/Sequential decline: Q4 revenue ($5.7M) trailed Q3 ($7.5M), consistent with Q3 being historically highest due to coal-fired demand patterns, which may temper near‑term momentum optics .
Litigation/OpEx drag: Ongoing legal costs continue through trial and can weigh on profitability near term, though management has largely funded these out of pocket and expects stability in legal spend into trial .

Metric	Q2 2022	Q3 2022	Q4 2022
Revenue ($USD Millions)	$5.1	$7.5	$5.7
Primary EPS ($USD)	$0.00	$0.01	N/A – not disclosed pending audit
Adjusted EBITDA ($USD Millions)	$0.468	$1.2	N/A – not disclosed pending audit
YoY Revenue Growth (%)	+125%	+50%	+110%

Metric	Q4 2021	Q4 2022
Revenue ($USD Millions)	$2.7	$5.7

KPI	Q2 2022	Q3 2022	Q4 2022
Cash ($USD Millions)	$0.509	$1.3	$1.5
Working Capital ($USD Millions)	N/A	$2.2	$2.3
Accounts Receivable ($USD Millions)	$2.9	$3.3	N/A
Licensed Utilities Added (FY22)	—	—	+2 utilities (licenses), +2 supply contracts
Debt Maturity & Options	—	Debt deferred to Aug 2025; share repurchase option ~$7–7.5M shares at $0.50	Maintained

Note: Segment breakdown not provided; growth attributed to sorbent product sales and customer base expansion .

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue	FY 2022	~$20M expected	$21.6M (unaudited)	Raised/Beat
Revenue Growth Rate	FY 2023	50%+ YoY anticipated	50–60%+ annual growth expected, supported by core business and initiatives	Maintained/Clarified
Adjusted EBITDA	FY 2022	Not provided	“Substantial improvement” expected; details to follow with audited results	New commentary
OpEx, OI&E, Tax Rate, Dividends	FY 2022/2023	Not provided	Not provided	No guidance

Topic	Previous Mentions (Q2 & Q3 2022)	Current Period (Q4 2022)	Trend
Coal-fired demand/seasonality	Strong demand; Q3 historically highest; supply chain renegotiations and ramp capability	Sequential Q4 decline vs Q3; sector remains strong into 2023	Stable–Positive
IP litigation	Discovery concluded; trial scheduled; potential settlements; outreach to unlicensed users	Trial mid-November; court denied motions; targeting more license agreements; May 17 hearing	Advancing
Rare earth elements (REE)	Testing at Penn State/Florida; refining protocols	Breakthrough in solution capture; moving toward field trials in 2023	Accelerating
Water remediation/PFAS	Emerging opportunity noted; planning	Entering production; target ~$50M plant revenue potential; activated carbon production	Scaling
International expansion	Early-stage discussions	Asia Pacific consultant engaged; anticipate on-the-ground activity in 2023	Expanding
Capital structure/uplisting	Debt extension discussions	Debt deferred to 2025; buyback option; uplisting update expected within a week	Positive momentum

“Q4 Revenue for 2022 increased to $5.7M from $2.7M…110%. FY22 Revenue increased to $21.6M from $13M…66%” .
“We expect this rate of 50–60%+ annual growth to continue…based on the strength of our core business…with increased energy demands from coal power and more stringent federal regulations” .
“During the fourth quarter 2022, we…defer[red] all major debt through August of 2025…[and] option to buy back…roughly 7M to 7.5M shares…at $0.50 a share” .
“We continue to work toward introducing a commercially viable [REE] technology to the market in 2023…moving into commercial field trials this year” .
“We expect to expand our core business into…water treatment…become a producer of activated carbons…[with] margins…much better than where we are right now” .

Contract cycle visibility: Utilities typically purchase on 1‑year cycles with cancellation options; multi‑plant expansions expected as renewals roll .
Asia Pacific strategy: Combination of mercury tech and new licensed technologies; working with international groups to uplift plants with limited controls .
REE and PFAS monetization: REE field tests targeted in coming quarters; water remediation plant could generate ~$50M annual revenue with higher margins .
Uplisting timing: Management expected a material update within a week of the call .
Legal spend: Majority funded out of pocket; spend expected stable into trial; potential settlements would directly benefit enterprise value .

S&P Global consensus estimates for Q4 2022 EPS and revenue were unavailable for MEEC at the time of this analysis due to missing CIQ mapping; we attempted retrieval but could not obtain coverage. Where estimates are unavailable, comparisons to Street consensus cannot be made [GetEstimates error noted; no values available].

Bold beat on FY22 revenue vs guidance ($21.6M vs ~$20M) and strong Q4 YoY growth (+110%), validating recurring product demand and contract base .
Sequential Q4 revenue decline vs Q3 reflects normal seasonality; management indicates coal-fired demand strength persists into 2023, supporting continued growth .
Balance sheet flexibility (debt deferral to 2025; buyback option at $0.50) provides levers ahead of litigation milestones and strategic expansions—potential catalysts for enterprise value and float reduction .
Emerging adjacencies (PFAS/activated carbon, REE extraction) introduce higher‑margin opportunities with sizable TAM; near‑term field trials and partnership execution are critical proof points .
Litigation trajectory (trial scheduled mid‑Nov) plus outreach to unlicensed users could unlock licenses/supply transitions; management asserts core growth is independent of litigation outcomes .
Disclosure gap: Q4 EPS/net income pending audit; expect adjusted EBITDA “substantial improvement”—update timing matters for estimate resets and credibility of margin trajectory .
Tactical implication: Watch for audited 10‑K numbers, uplisting communication, PFAS/REE milestones, and additional license/supply wins; each could drive re‑rating and liquidity events .