-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, M7cg/eNY9n8Y3GcCea3XzGn4R3mfvQq5SSkK+JkGGx50fgQ5Nz7rc/l2f9RaB5gD D1+KualEXE1ROIiZXiV1/w== 0000950123-01-502739.txt : 20010521 0000950123-01-502739.hdr.sgml : 20010521 ACCESSION NUMBER: 0000950123-01-502739 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20010331 FILED AS OF DATE: 20010518 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MPM TECHNOLOGIES INC CENTRAL INDEX KEY: 0000799268 STANDARD INDUSTRIAL CLASSIFICATION: GOLD & SILVER ORES [1040] IRS NUMBER: 810436060 STATE OF INCORPORATION: WA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: SEC FILE NUMBER: 000-14910 FILM NUMBER: 1643171 BUSINESS ADDRESS: STREET 1: 222 W MISSION AVE STREET 2: STE 30 CITY: SPOKANE STATE: WA ZIP: 99201 BUSINESS PHONE: 5093263443 MAIL ADDRESS: STREET 1: 908 N HOWARD SUITE 100 STREET 2: 908 N HOWARD SUITE 100 CITY: SPOKANE STATE: WA ZIP: 99201 FORMER COMPANY: FORMER CONFORMED NAME: MONTANA PRECISION MINING LTD DATE OF NAME CHANGE: 19920703 10QSB 1 y49458e10qsb.txt MPM TECHNOLOGIES, INC. 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 Form 10-QSB Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange act of 1934 For the quarter ended March 31, 2001 Commission File Number 0-14910 MPM TECHNOLOGIES, INC. (Exact Name of Small Business Issuer as specified in its Charter) Washington 81-0436060 - ------------------------------- ----------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification Number) 222 W. Mission Ave. Suite 30 Spokane, WA 99201 - --------------------------------------- ------------------------------- (Address of principal (Zip Code) executive offices) Issuer's telephone number, including area code: 509-326-3443 As of May 8, 2001, the registrant had outstanding 2,948,795 shares of common stock and no outstanding shares of preferred stock, which are the registrant's only classes of stock. 2 PART I - FINANCIAL INFORMATION Item 1. Financial Statements Financial Statements follow on the next page. 3 MPM TECHNOLOGIES, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS
ASSETS MARCH DECEMBER 31, 2001 31, 2000 ----------- -------- (UNAUDITED) Current assets: Cash and cash equivalents $428,668 $573,974 Accounts receivable, net of allowance for doubtful accounts of $25,000 4,458,706 4,297,089 Inventories 600,029 530,730 Costs and estimated earnings in excess of billings 1,146,655 669,249 Other current assets 822,144 621,145 ----------- ---------- Total current assets 7,456,202 6,692,187 ----------- ---------- Property, plant and equipment, net 220,823 240,201 Mineral properties held for sale 1,086,346 1,086,346 Prepaid royalty 273,000 273,000 Purchased intangible, net of accumulated amortization of $286,875 and $270,000 388,125 405,000 Other assets, net 640,949 825,123 ----------- ---------- $10,065,445 $9,521,857 =========== ========== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $3,348,750 $2,506,121 Accrued expenses 1,142,831 1,452,255 Billings in excess of costs and estimated earnings 2,262,522 2,376,387 Related party debt 272,180 190,000 Current portion of long-term debt 300,000 300,000 ----------- ---------- Total current liabilities 7,326,283 6,824,763 ----------- ---------- Long-term debt, less current portion 510,389 510,389 Negative goodwill, net 15,550 20,158 ----------- ---------- Total liabilities 7,852,222 7,355,310 =========== ========== Commitments and contingencies Stockholders' equity: Preferred stock, no stated value, 10,000,000 shares authorized, no shares issued or outstanding Common stock, $.001 par value, 100,000,000 shares authorized, 2,948,795 and 2,933,291 shares issued and outstanding 2,949 2,933 Additional paid-in capital 11,179,072 11,163,122 Accumulated deficit (8,968,798) (8,999,508) ----------- ---------- Total stockholders' equity 2,213,223 2,166,547 ----------- ---------- $10,065,445 $9,521,857 =========== ==========
4 MPM TECHNOLOGIES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
Three Months Ended March 31, 2001 2000 ---------- ---------- Revenues $4,861,218 $4,260,620 Cost of sales 3,991,087 3,308,733 ---------- ---------- Gross margin 870,131 951,887 Selling, general and administrative expenses 822,528 891,396 ---------- ---------- (Loss) income from operations 47,603 60,491 ---------- ---------- Other income (expense): Interest expense (19,276) (29,360) Interest income 2,383 1,015 ---------- ---------- Net other expense (16,893) (28,345) ---------- ---------- Net income $30,710 $32,146 ========== ========== Income per share - basic and diluted: Net (loss) income $0.01 $0.01 ========== ========== Weighted average shares of common stock outstanding - basic 2,937,857 2,643,502 ========== ========== Weighted average shares of common stock outstanding - diluted 3,936,105 3,622,116 ========== ==========
5 MPM TECHNOLOGIES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
Three Months Ended March 31, 2001 2000 ---------- ---------- CASH FLOWS FROM OPERATING ACTIVITIES Net income $31,710 $32,146 Adjustments to reconcile net income to net cash used in operating activities: Depreciation and amortization 31,645 30,722 Interest imputed on related party debt 2,219 2,867 Change in assets and liabilities: Accounts receivable (161,617) (188,564) Costs and estimated earnings in excess of billings (477,406) (493,546) Inventories (69,299) (5,880) Other assets (16,825) (54,280) Accounts payable and accrued expenses 533,205 198,008 Billings in excess of costs and estimated earnings (113,865) 311,676 ---------- ---------- Net cash used in operating activities (240,233) (166,851) ---------- ---------- Cash flows from investing activities: Acquisition of property, plant and equipment - (7,027) ---------- ---------- Net cash used in investing activities - (7,027) ---------- ---------- Cash flows from financing activities: Proceeds from related party debt 82,180 90,000 Repayment of related party debt - (30,000) Proceeds from stock issues 13,747 - ---------- ---------- Net cash provided by financing activities 95,927 60,000 ---------- ---------- Net decrease in cash and cash equivalents (144,306) (113,878) Cash and cash equivalents, beginning of period 573,974 194,399 ---------- ---------- Cash and cash equivalents, end of period $429,668 $80,521 ========== ========== Supplemental disclosure of cash flow information: Cash paid during the period for: Interest $2,317 $1,838 Income taxes $ - $ - Supplemental disclosure of non cash financing activities: Common stock exchanged for amounts due to related party $ - $63,115
6 MPM TECHNOLOGIES, INC. AND SUBSIDIARIES NOTES TO FINANCIAL STATEMENTS 1. UNAUDITED FINANCIAL STATEMENTS These financial statements should be read in conjunction with the audited financial statements included in the Annual Report on Form 10-KSB for the year ended December 31, 2000. Since certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting standards have been omitted pursuant to the instructions to Form 10-QSB of Regulation S-X as promulgated by the Securities and Exchange Commission, these financial statements specifically incorporate by reference the footnotes to the consolidated financial statements of the Company as of December 31, 2000. In the opinion of management, these unaudited interim financial statements reflect all adjustments necessary for a fair presentation of the financial position and results of operations and cash flows of the Company. Such adjustments consisted only of those of a normal recurring nature. Results of operations for the period ended March 31, 2001 should not necessarily be taken as indicative of the results of operations that may be expected for the entire year 2001. 2. EARNINGS PER SHARE Earnings per share ("EPS") is computed by dividing net income by the weighted average number of common shares outstanding in accordance with Statement of Financial Accounting Standards No. 128, "Earnings Per Share". The following table reconciles the number of common shares used in the basic and diluted EPS calculations:
FOR THE THREE MONTHS ENDED MARCH 31, 2001 ------------------------------------------------- WEIGHTED- NET AVERAGE PER-SHARE (LOSS) SHARES AMOUNT ------ ------ ------ BASIC EPS Income available to common stockholders $ 30,710 2,937,857 $ 0.01 EFFECT OF DILUTIVE SECURITIES Common stock options - 998,248 - --------- --------- ------- DILUTED EPS Income available to common stockholders - assumed conversions $ 69,290 3,936,105 $ 0.01 ========= ========= =======
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FOR THE THREE MONTHS ENDED MARCH 31, 2000 ------------------------------------------------- WEIGHTED- NET AVERAGE PER-SHARE INCOME SHARES AMOUNT ------ ------ ------ BASIC EPS Income available to common stockholders $ 32,146 2,643,502 $ 0.01 EFFECT OF DILUTIVE SECURITIES Common stock options - 978,614 - -------- --------- ------- DILUTED EPS Income available to common stockholders - assumed conversions $ 32,146 3,622,116 $ 0.01 ======== ========= ========
3. SEGMENT INFORMATION The Company's consolidated financial statements include certain reportable segment information. These segments include Huntington Environmental Systems, Inc., a wholly owned subsidiary engaged in designing, engineering, supplying and servicing air pollution control systems which primarily utilize heat and chemicals to control air pollution, and AirPol, Inc., a wholly owned subsidiary engaged in designing, engineering, supplying and servicing air pollution control systems which utilize wet and dry scrubbers, wet electrostatic precipitators and venturi absorbers to control air pollution. The Company evaluates the performance of these segments based upon multiple variables including revenues and profit or loss. The segments' profit and loss components and schedule of assets as of March 31, 2001 are as follows:
AIR AIR POLLUTION POLLUTION CONTROL CONTROL ALL (HEAT) (SCRUBBERS) OTHERS TOTAL ------ ----------- ------ ----- Revenue external $ 2,665,216 $ 2,196,002 $ -- $ 4,761,218 Revenue internal -- -- -- -- Segment profit (loss) 124,913 118,280 (212,483) 30,710 Segment assets 4,560,046 4,783,052 5,901,276 15,244,374
Reconciliation of segment revenues, net income, total assets and other significant items for the three months ended March 31, 2000 are as follows:
REVENUES AMOUNT -------- ------------ Total revenues for reportable segments.............. $ 4,861,218 ------------ Total consolidated revenues.............................$ 4,861,218 ============
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PROFIT OR LOSS -------------- Total profit or loss for reportable segments.........$ 243,193 Other profit or loss................................. (212,483) ------------- Total consolidated profit or loss....................$ 30,710 ============= ASSETS ------ Total assets for reportable segments................. $ 9,343,098 Other assets......................................... 4,814,931 Assets of discontinued operation..................... 1,086,346 Elimination of intersegment assets................... (5,178,930) ------------- Total consolidated assets............................$ 10,065,445 =============
The segments' profit and loss components and schedule of assets as of March 31, 2000 are as follows:
AIR AIR POLLUTION POLLUTION CONTROL CONTROL ALL (HEAT) (SCRUBBERS) OTHERS TOTAL ------ ----------- ------ ----- Revenue external $ 2,042,277 $ 2,218,343 $ -- $ 4,260,620 Revenue internal -- -- -- -- Segment profit (loss) 54,488 128,254 (150,596) 32,146 Segment assets 3,504,216 2,209,209 4,449,049 10,162,474
Reconciliation of segment revenues, net income, total assets and other significant items for the three months ended March 31, 2000 are as follows:
REVENUES AMOUNT -------- ------------ Total revenues for reportable segments.............. $ 4,260,620 ------------ Total consolidated revenues......................... $ 4,260,620 ------------ PROFIT OR LOSS -------------- Total profit or loss for reportable segments.........$ 182,742 Other profit or loss................................. (150,596) ============ Total consolidated profit or loss....................$ 32,146 ============ ASSETS ------ Total assets for reportable segments.................$ 5,713,425 Other assets......................................... 2,747,384 Assets of discontinued operation..................... 1,086,346 Elimination of intersegment assets................... (3,465,857) ------------ Total consolidated assets............................$ 6,081,298 ============
9 PART I Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. Results of Operations - --------------------- This Quarterly Report on Form 10-QSB, including the information incorporated by reference herein, includes "forward looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act") and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). All of the statements contained in this Quarterly Report on Form 10-QSB, other than statements of historical fact, should be considered forward looking statements, including, but not limited to, those concerning the Company's strategies, objectives and plans for expansion of its operations, products and services and growth in demand for the Company's services. There can be no assurance that these expectations will prove to have been correct. Certain important factors that could cause actual results to differ materially from the Company's expectations (the Cautionary Statements") are disclosed in the annual report filed on Form 10-KSB. All subsequent written and oral forward looking statements by or attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by such Cautionary Statements. Investors are cautioned not to place undue reliance on these forward looking statements, which speak only as of the date hereof and are not intended to give any assurance as to future results. The Company undertakes no obligation to publicly release any revisions to these forward looking statements to reflect events or reflect the occurrence of unanticipated events. MPM Technologies, Inc. ("MPM") acquired certain of the assets and assumed certain of the liabilities of a part of a division of FLS miljo, Inc. as of July 1, 1998. MPM formed AirPol, Inc. ("AirPol") to run this air pollution control business. AirPol designs, engineers, supplies and services air pollution control systems for Fortune 500 and other industrial and environmental companies. The technologies of AirPol utilize wet and dry scrubbers, wet electrostatic precipitators and venturi absorbers to control air pollution. AirPol brought over 30 years experience to MPM through its technologies and employees. As of April 1, 1997, MPM acquired certain of the assets and assumed certain of the liabilities of a portion of a division of United States Filter Corporation, and formed Huntington Environmental Systems, Inc. ("HES") to operate this air pollution control business. HES designs, engineers, supplies and services high temperature and chemical air pollution control systems for Fortune 500 and other industrial and environmental companies. HES brought has over 25 years of experience and over 300 installations across the globe to MPM through its technologies and employees. Both HES's and AirPol's engineering staffs are uniquely prepared to address the full scope of customers' process problems. Their policies of handling clients' individual concerns include in-depth analysis and evaluation, followed by complete engineering and design services leading to application-specific engineered solutions. MPM holds a 58.21% interest in Nupower Partnership through its wholly-owned 10 subsidiary, Nupower, Inc. Nupower Partnership is engaged in the development and commercialization of a waste-to-energy process which has been named "Skygas". Skygas is an innovative technology for the disposal and gasification of carbonaceous wastes such as municipal solid waste, municipal sewage sludge, pulp and paper mill sludge, auto fluff, medical waste and used tires. The process converts solid and semi-solid wastes into a clean-burning medium BTU gas that can be used for steam production for electric power generation. The gas may also be a useful building block for downstream conversion into valuable chemicals. MPM controls 32 claims on approximately 1,000 acres in the historical Emery Mining District in Montana through its wholly-owned subsidiary, MPM Mining, Inc. In accordance with the Board of Directors' mandates, MPM's management is actively seeking out mining and other businesses to purchase its mining properties and equipment. HES and AirPol are active continuing concerns. The development of the Skygas process through Nupower Partnership is also an ongoing process. No other operations were conducted. Accordingly, the financial statements for the three months ended March 31, 2001 and 2000 include the operations of HES, AirPol, Skygas and MPM. MPM's consolidated net income for the quarter ended March 31, 2001 was $30,710, or $0.01 per share compared to net income of $32,146, or $0.01 per share for the quarter ended March 31, 2000. This was due to some customers delaying projects at both HES and AirPol, and to less than expected activity at HES. MPM continues to negotiate with interested entities with the goal of building Skygas units. These negotiations are also ongoing, and include entities in the United States, Europe, South America and Asia. Management is hopeful there will be some type of formal agreement in place and that construction of a unit can begin before the end of the year. There can, however, be no assurances that MPM will be successful in its negotiations. Three months ended 3/31/01 compared to three months ended 3/31/00 - ------------------------------------------------------------------ For the three months ended 3/31/01, MPM had net income of $30,710, or $0.01 per share compared to a net income of $32,146, or $0.01 per share for the quarter ended 3/31/00. Revenues increased 14.1% to $4,861,218 for the three months ended 3/31/00 compared to $4,260,620 for the three months ended 3/31/00. This was mainly due to revenues from a large project at AirPol which started shortly after the first quarter 2000, Costs of sales increased 20.6% to $3,991,087 for the three months ended March 31, 2001 compared to $3,308,733 for the three months ended March 31, 2000. This was due to the increased levels of activity at AirPol, and some smaller margins experienced there. Operating expenses were down 7.7% to $822,528 for the three months ended March 31, 2001 compared to $891,396 for the three months ended 3/31/00. This was due to some personnel reductions at HES. Backlog at March 31, 2001 was approximately $11,600,000. Management expects that this will grow during the year. There was a recent Supreme Court ruling that was favorable to pollution control companies. The Court ruled that cost should not be a consideration in enforcement of environmental rules and regulations. While it is unclear how that ruling and future enforcement by the Environmental Protection Agency will impact the industry, it is evident that there is a great deal of activity and interest in the 11 products of both HES and AirPol. Requests for quotations are at unprecedented levels. Financial Condition and Liquidity - --------------------------------- For the three months ended March 31, 2001, the Company relied partly on related party advances to fund the operations of HES and AirPol. Current cash reserves and continuing operations are believed to be adequate to fund MPM's and its subsidiaries' operations for the foreseeable future. Working capital at 3/31/01 was $129,919 compared to $534,489 at 3/31/00. MPM is considering alternative sources of capital such as private placements, stock offerings and loans from shareholders and officers to fund its current business and expand in other related areas through more acquisitions. PART II - OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS The Company knows of no litigation present, threatened or contemplated or unsatisfied judgment against the Company, its officers or directors or any proceedings in which the Company, its officers or directors are a party. ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS The rights of the holders of the Company's securities have not been modified nor have the rights evidenced by the securities been limited or qualified by the issuance or modification of any other class of securities. ITEM 3. DEFAULTS UPON SENIOR SECURITIES There are no senior securities issued by the Company. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS There were no matters presented to the shareholders for vote during the first quarter of 2001. ITEM 5. OTHER INFORMATION None ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K On January 30, 2001, MPM announced the departure of its president, and that it had a dispute with a financial advisor. On January 30, 2001, MPM announced that it had engaged the accounting firm of Rosenberg, Rich, Baker, Berman & Company of Bridgewater, New Jersey, as its independent auditors for the fiscal year ended December 31, 2000. During the last two 12 years, and to the date hereof, MPM did not consult Rosenberg, Rich, Baker, Berman & Company regarding any of the matters or events set forth in Item 304(a)(2)(i) and (ii) of Regulation S-K. SIGNATURES Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. MPM Technologies, Inc. May 15, 2001 /s/ Robert D. Little - --------------------- ------------------------------------- (date) Robert D. Little Corporate Secretary -----END PRIVACY-ENHANCED MESSAGE-----