MIDWEST ENERGY EMISSIONS CORP. (OTCMKTS:MEEC) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01 Entry into a Material Definitive Agreement.
In a Current Report on Form 8-K filed with the Securities and Exchange Commission on June 19, 2019 (the “Prior 8-K”), Midwest Energy Emissions Corp., a Delaware corporation (the “Company”), reported that on June 18, 2019 it had entered into Subscription Agreements with certain accredited investors (the “Investors”) to which the Company had sold and issued to the Investors 12.0% Unsecured Convertible Promissory Notes (the “2019 Notes”) in the aggregate principal amount of $850,000, together with five-year warrants (the “Warrants”) to acquire 850,000 shares of common stock of the Company. The 2019 Notes were issued in an initial closing of a private placement financing (the “Private Placement”) of up to $2,600,000 12.0% Unsecured Convertible Promissory Notes and Warrants to certain accredited investors. For each dollar invested, the Investors received a Warrant to purchase one share of common stock of the Company at an exercise price of $0.70 per share which Warrants may be exercised on a cash or cashless basis.
On June 27, 2019, the Company completed an additional closing of the Private Placement to which the Company has sold and issued additional 2019 Notes in the aggregate principal amount of $450,000, together with five-year warrants (the “Warrants”) to acquire 450,000 shares of common stock of the Company. Together with the 2019 Notes and Warrants sold in the initial closing, the Company has to date sold and issued to Investors 2019 Notes in the aggregate principal amount of $1,300,000, together with Warrants to acquire 1,300,000 shares of common stock of the Company.
As disclosed in the Prior 8-K, the 2019 Notes have a term of five years, bear interest at 12.0% per annum and are convertible at the option of the holder into one share of common stock of the Company with an initial conversion ratio equal to $0.50 per share. The Company shall have the right to force conversion of the 2019 Notes in the event the stock price of the Company’s common stock closes above $1.50 for ten consecutive trading days. The 2019 Notes shall be entitled to a profit participation preference (the “Profit Share”) equal to 1.0 times the original principal amount of the 2019 Notes. The Profit Share is “non-recourse” and shall only be derived from Net Litigation Proceeds (as defined in the 2019 Notes). The Profit Share, if not paid in full on or before the maturity date of the 2019 Notes, shall remain subject to the terms of the 2019 Notes until full and final payment. Upon conversion of the 2019 Notes, the Company shall have no further liability with respect to the payment of any Profit Share.
The securities have been issued to the exemption from the registration requirements of the Securities Act 1933, as amended (the “1933 Act”), provided under Section 4(a)(2) thereof and to Rule 506 of Regulation D only to “accredited investors” (as defined under Rule 501(a) of the 1933 Act) based in part on the representations and warranties of the Investors.
This Current Report on Form 8-K, along with the Prior 8-K, does not constitute an offer to sell or a solicitation of an offer to buy any of the securities described herein, nor shall there be any sale of the securities in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. The securities described herein have not been registered under the Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration with the SEC or an applicable exemption from such registration requirements.
Item 3.02 Unregistered Sales of Equity Securities.
The information set forth in Item 1.01 of this Current Report on Form 8-K is incorporated by reference into this Item 3.02.
About MIDWEST ENERGY EMISSIONS CORP. (OTCMKTS:MEEC)
Midwest Energy Emissions Corp. is an environmental services company. The Company is focused on mercury emission control technologies, primarily to utility and industrial coal-fired units. The Company’s business is focused on the delivery of mercury capture technologies to power plants in North America, Europe and Asia. The Company develops and deploys technologies to remove mercury emissions from coal-fired power plants. The Company’s customer contracts include designing and installing front-end injection equipment for injection of its front-end product, and in some cases include installation of an additional back-end sorbent injection system. MES, Inc. is a subsidiary of the Company and is engaged in the business of developing and commercializing control technologies relating to the capture and control of mercury emissions from coal fired boilers in the United States and Canada.
