-----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, G99HX6PUrZmALKmiNIS6Vm5iWxXYvtzP7FuC6GeMrwleSmrebHpq/r9GJ40qfYGR A+8WKjBGi45Kwbs4xT7v/g== /in/edgar/work/20000822/0001004522-00-000023/0001004522-00-000023.txt : 20000922 0001004522-00-000023.hdr.sgml : 20000922 ACCESSION NUMBER: 0001004522-00-000023 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20000630 FILED AS OF DATE: 20000822 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MPM TECHNOLOGIES INC CENTRAL INDEX KEY: 0000799268 STANDARD INDUSTRIAL CLASSIFICATION: [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: 707483 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 0001.txt 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 June 30, 2000 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) Issuers's telephone number, including area code: 509-326-3443 As of August 18, 2000, the registrant had outstanding 2,787,493 shares of common stock and no outstanding shares of preferred stock, which are the registrant's only classes of stock. PART I _ FINANCIAL INFORMATION Item 1. Financial Statements Financial Statements follow on the next page.
MPM TECHNOLOGIES, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS JUNE DECEMBER 30, 2000 31, 1999 (UNAUDITED) ------------- -------------- Current assets: Cash and cash equivalents $62,696 $194,399 Accounts receivable, net of allowance for doubtful accounts of $25,000 2,717,555 1,993,792 Inventories 334,216 313,298 Costs and estimated earnings in excess of billings 998,176 535,252 Other current assets 299,171 168,516 ------------- -------------- Total current assets 4,411,814 3,205,257 ------------- -------------- Property, plant and equipment, net 275,521 302,150 Mineral properties held for sale 1,086,346 1,086,346 Note receivable 273,000 275,000 Purchased intangible, net of accumulated amortization of $236,250 and $202,500 438,750 472,500 Other assets, net 147,013 139,957 ------------- -------------- $6,632,444 $5,481,210 ------------- -------------- Current liabilities: Accounts payable $2,539,301 $1,412,097 Accrued expenses 203,885 239,624 Billings in excess of costs and estimated earnings 1,179,782 245,564 Related party debt 190,000 665,000 Current portion of long-term debt 225,000 225,000 ------------- -------------- Total current liabilities 4,337,968 2,787,285 ------------- -------------- Long-term debt, less current portion 537,054 537,054 Negative goodwill, net 29,375 38,593 ------------- -------------- Total liabilities 4,904,397 3,362,932 ------------- -------------- Commitments and contingencies Stockholders' equity: Common stock, $.001 par value, 100,000,000 shares authorized, 2,787,493 and 2,641,961 shares issued and outstanding 2,787 2,642 Additional paid-in capital 10,469,046 9,950,148 Accumulated deficit (8,743,786) (7,834,512) ------------- -------------- Total stockholders' equity 1,728,047 2,118,278 ------------- -------------- $6,632,444 $5,481,210 ------------- --------------
MPM TECHNOLOGIES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) Quarter Ended Six Months Ended June 30, June 30, 2000 1999 2000 1999 ------------ ------------ ------------ ------------- Revenues $3,410,618 $6,647,177 $7,671,238 $10,724,089 Cost of sales 3,083,711 5,348,764 6,132,444 8,460,614 ------------ ------------ ------------ ------------- Gross margin 326,907 1,298,413 1,538,794 2,263,475 Selling, general and administrative expenses 1,228,889 975,388 2,380,286 1,902,962 ------------ ------------ ------------ ------------- Income from operations (901,982) 323,025 (841,492) 360,513 ------------ ------------ ------------ ------------- Other income (expense): Interest expense (39,663) (318,151) (69,023) (350,834) Other income, net 226 12,643 1,241 49,414 ------------ ------------ ------------ ------------- Net other income (expense) (39,437) (305,508) (67,782) (301,420) ------------ ------------ ------------ ------------- Net (loss) income ($941,419) $17,517 ($909,274) $59,093 ------------ ------------ ------------ ------------- Basic earnings per share: Net (loss) income ($0.35) $0.01 ($0.34) $0.03 ------------ ------------ ------------ ------------- Diluted earnings per share: Net (loss) income ($0.35) $0.00 ($0.34) $0.02 ------------ ------------ ------------ ------------- Weighted average shares of common stock outstanding - basic 2,664,834 2,537,668 2,654,168 2,342,883 ------------ ------------ ------------ ------------- Weighted average shares of common stock outstanding - diluted 2,664,834 3,516,282 2,654,168 3,321,497 ------------ ------------ ------------ -------------
MPM TECHNOLOGIES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) Six Months Ended June 30, 2000 1999 ----------- ------------ CASH FLOWS FROM OPERATING ACTIVITIES Net (loss) income ($909,274) $59,093 Adjustments to reconcile net (loss) income to net cash used in operating activities: Depreciation and amortization 64,085 66,062 Interest imputed on related party debt 5,727 7,408 Interest imputed on issue of stock - 266,666 Change in assets and liabilities: Accounts receivable (723,763) (2,570,358) Costs and estimated earnings in excess of billings (462,924) (1,577,748) Inventories (20,918) 157,553 Other assets (138,982) (74,151) Accounts payable and accrued expenses 1,154,581 2,109,913 Billings in excess of costs and estimated earnings 934,218 (1,608,083) ----------- ------------ Net cash used in operating activities (97,250) (3,163,645) ----------- ------------ Cash flows from investing activities: Acquisition of property, plant and equipment (11,653) (28,883) ----------- ------------ Net cash used in investing activities (11,653) (28,883) ----------- ------------ Cash flows from financing activities: Repayment of related party debt (50,000) (40,000) Repayment of note receivable 2,000 - Repurchase and retirement of common stock - (4,348) Proceeds from stock issues 25,200 700,000 Proceeds from related party debt - 400,000 ----------- ------------ Net cash provided by (used in) financing activities (22,800) 1,055,652 ----------- ------------ Net decrease in cash and cash equivalents (131,703) (2,136,876) Cash and cash equivalents, beginning of period 194,399 2,634,570 ----------- ------------ Cash and cash equivalents, end of period $62,696 $497,694 ----------- ------------ Supplemental disclosure of cash flow information: Cash paid during the period for: Interest $31,909 $28,304 Income taxes $ - $ - Supplemental disclosure of non cash financing activities: Common stock exchanged for amounts due to related parties $488,115 $ -
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, 1999. 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 refer to the footnotes to the consolidated financial statements of the Company as of December 31, 1999. 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 June 30, 2000 should not necessarily be taken as indicative of the results of operations that may be expected for the entire year 2000. 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 Six Months Ended June 30, 2000 Weighted- Net Average Per-Share (Loss) Shares Amount ---------- ----------- ------------ Basic EPS Loss available to common stockholders ($909,274) 2,654,168 ($ 0.34) Effect of Dilutive Securities Common stock options - - - ---------- ----------- ------------ Diluted EPS Loss available to common stockholders - assumed conversions ($909,274) 2,654,168 ($ 0.34) ---------- ----------- ------------ For the Three Months Ended June 30, 2000 Weighted- Net Average Per-Share (Loss) Shares Amount ---------- ----------- ------------ Basic EPS Income available to common stockholders ($941,419) 2,664,834 ($ 0.35) Effect of Dilutive Securities Common stock options - - - ---------- ----------- ------------ Diluted EPS Income available to common stockholders - assumed conversions ($941,419) 2,664,834 ($ 0.35) ---------- ----------- ------------ For the Six Months Ended June 30, 1999 Weighted- Net Average Per-Share (Loss) Shares Amount ---------- ----------- ------------ Basic EPS Income available to common stockholders $ 59,093 2,342,883 $ 0.03 Effect of Dilutive Securities Common stock options - 978,614 ( 0.01 ) ---------- ----------- ------------ Diluted EPS Income available to common stockholders - assumed conversions $ 59,093 3,321,497 $ 0.02 ---------- ----------- ------------ For the Three Months Ended June 30, 1999 Weighted- Net Average Per-Share (Loss) Shares Amount ---------- ----------- ------------ Basic EPS Income available to common stockholders $ 17,517 2,537,668 $ 0.01 Effect of Dilutive Securities Common stock options - 978,614 ( 0.01 ) ---------- ----------- ------------ Diluted EPS Income available to common stockholders - assumed conversions $ 17,517 3,516,282 $ - 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 June 30, 2000 are as follows: Air Air Pollution Pollution Control Control All (Heat) (Scrubbers) Others Total -------------- ------------- --------- ------------- Revenue external $ 5,129,402 $ 2,541,836 $ - $ 7,671,238 Revenue internal - - - - Segment profit (loss) (72,049) (536,540) (300,685) ( 909,274) Segment assets 4,176,640 2,124,188 331,616 6,632,444 Reconciliation of segment revenues, net income, total assets and other significant items for the six and three months ended June 30, 2000 are as follows: Six Months Three Months Ended Ended June 30, 2000 June 30, 2000 Revenues Total revenues for reportable segments $ 7,671,238 $ 3,410,618 Other revenues - - ------------- -------------- Total consolidated revenues $ 7,671,238 $ 3,410,618 ------------- -------------- Profit or loss Total profit or loss for reportable segments $ (608,589) $ (791,332) Other profit or loss (300,685) (150,087) ------------- -------------- Total consolidated profit or loss $ (909,274) $ (941,419) ------------- -------------- At June 30, 2000 Assets Total assets for reportable segments $ 6,300,828 Other assets 3,602,463 Assets of discontinued operation 1,086,346 Elimination of intersegment assets (4,357,193) ------------- Total consolidated assets $ 6,632,444 ------------- The segments' profit and loss components and schedule of assets as of June 30, 1999 are as follows: Air Air Pollution Pollution Control Control All (Heat) (Scrubbers) Others Total -------------- ------------- ----------- ------------- Revenue external $ 4,436,328 $ 6,287,761 $ - $10,724,089 Revenue internal - - 66,000 66,000 Segment profit (loss) 133,199 388,733 (462,839) 59,093 Segment assets 4,439,946 5,328,314 4,930,525 14,698,785 Reconciliation of segment revenues, net income, total assets and other significant items for the six and three months ended June 30, 1999 are as follows: Six Months Three Months Ended Ended June 30, 1999 June 30, 1999 Revenues Total revenues for reportable segments $10,724,089 $ 6,647,177 Other revenues 66,000 33,000 Elimination of intersegment revenues (66,000) (33,000) ------------ ------------ Total consolidated revenues $10,724,089 $ 6,647,177 ------------ ------------ Profit or loss Total profit or loss for reportable segments $ 521,932 $ 384,610 Other profit or loss (462,839) (367,093) ------------ ------------ Total consolidated profit or loss $ 59,093 $ 17,517 ------------ ------------ At June 30, 1999 Assets Total assets for reportable segments $ 9,768,260 Other assets 3,844,179 Assets of discontinued operation 1,086,346 Elimination of intersegment assets (3,387,087) ------------- Total consolidated assets $ 11,311,698 ------------- 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 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 six and three months ended June 30, 2000 and 1999 include the operations of HES, AirPol, Skygas and MPM. MPM's consolidated net loss for the six months ended June 30, 2000 was $909,274 or $0.34 per share compared to net income of $59,093, or $0.03 per share for the six months ended June 30, 1999. In June 2000, MPM entered into an agreement with Alumex Minerals Corporation to form a joint venture for the development of a commercial Skygas unit. Under the terms of the agreement, Alumex would own 15% and MPM would own 85% of the venture. MPM contributes its Skygas technology and related experience, and Alumex contributes cash. Alumex is to pay MPM $1,000,000 cash as a license fee for the initial Skygas unit, and place an additional $10,000,000 in escrow to pay for engineering, fabrication and construction costs associated with building a Skygas unit. Construction of the first plant to be located in Pennsylvania is expected to begin in the third quarter. The companies are currently in the process of getting the permits and other needed details to proceed with the construction of this unit. MPM will recognize the $1,000,000 in revenues in the period it is earned. When the joint venture is funded, MPM will also recognize its 85% interest in the capital of the venture. This is expected to occur in the third quarter 2000. MPM has also entered into a Memorandum of Understanding with ONYX P.M., Inc., an environmental engineering and technology development company, for the purpose of establishing joint venture companies in China to produce and market synthetic wood made from organic waste and plastic. MPM and an investment group headed by ONYX will jointly fund the new operation. ONYX will also provide the proprietary processes and technologies for the manufacturing machinery and production. MPM has not yet closed its acquisition of Environmental Consulting and Characterization, Inc. ("EC&C"). Negotiations are continuing and are expected to be finalized in the next two to three weeks. EC&C has patented processes for concentrating large volumes of air required to evacuate solvent laden air, and convert them to a smaller volume stream with a higher volatile organic compound content. This allows for treating these streams in a more efficient and cost effective manner. MPM has also not completed the sale of its mining properties as the potential buyer has not completed its due diligence reviews. 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 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. Six and three months ended 6/30/00 compared to six and three months ended 6/30/99 For the six months ended 6/30/00, MPM had a net loss of $909,274, or $0.34 per share compared to net income of $59,093, or $0.03 per share for the six months ended 6/30/99. Revenues decreased 28.5% to $7,671,238 for the six months ended 6/30/00 compared to $10,724,089 for the six months ended 6/30/99. Revenues increased at HES by approximately 16%, but revenues at AirPol were down approximately 60%. Revenues at AirPol are expected to recover as work continues on the $6.4 million job in Utah. Increased revenues at HES were due to the continued improvements in sales from the increased sales staff. Decreases at AirPol were due largely to the postponement of the enforcement of some clean air legislation by the Environmental Protection Agency. Costs of sales decreased 23.4% to $6,132,444 for the six months ended June 30, 2000 compared to $8,460,614 for the six months ended June 30, 1999. This was due to the decreases in revenues. Operating expenses increased 6.7% to $2,380,286 for the six months ended June 30, 2000 compared to $1,902,962 for the six months ended 6/30/99. Operating expense increases were due primarily to the addition of four employees and the related costs, and to increases in rent and occupancy costs at AirPol. For the three months ended 6/30/00, MPM had a net loss of $941,419, or $0.35 per share compared to net income of $17,517, or $0.01 per share for the three months ended 6/30/99. Revenues decreased 48.7% to $3,410,618 for the three months ended 6/30/00 compared to $6,647,177 for the three months ended 6/30/99. This was largely due to the postponement of the enforcement of some clean air legislation by the Environmental Protection Agency. Costs of sales decreased 42.3% to $3,083,711 for the three months ended June 30, 2000 compared to $5,348,764 for the three months ended June 30, 1999 due to the decrease in revenues. Operating expenses increased 26.0% to $1,228,889 for the three months ended June 30, 2000 compared to $975,388 for the three months ended 6/30/99. These increases were due to additional staffing and related costs, and to increases in rent and occupancy costs at AirPol. The Company currently has a backlog of approximately $15,500,000. This includes $10.5 million at AirPol and $5 million at HES. Financial Condition and Liquidity For the six months ended June 30, 2000, the Company relied partly on related party advances to fund the operations of HES and AirPol. Current cash reserves and cash from continuing operations are believed to be adequate to fund MPM's and its subsidiaries' operations for the foreseeable future. Working capital at 6/30/00 was $73,846 compared to $417,972 at 12/31/99. AirPol recently received a progress payment of approximately $700,000 on its large contract in Utah. MPM is actively investigating 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 MPM's Annual Meeting of Shareholders was held on June 12, 2000. Following are the results of the shareholders' voting: Proposal 1 - Election of Directors Name For Withheld Richard E. Appleby 2,089,686 7,587 Richard Kao 2,092,440 4,587 L. Craig Cary Smith 2,092,468 4,805 Proposal 2 - Approval of Amendment to the 1989 Stock Option Plan For Against Abstain Not Voted 1,629,087 50,147 8,276 409,763 ITEM 5. OTHER INFORMATION None ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K No reports on Form 8-K were filed for the quarter ended June 30, 2000. 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. August 18, 2000 /s/ Robert D. Little --------------------- ------------------------ (date) Robert D. Little Corporate Secretary EX-27 2 0002.txt
5 6-MOS DEC-31-2000 JUN-30-2000 62696 0 2742555 25000 334216 5411814 526276 250755 6632444 4337968 0 0 0 2787 1725260 6632444 7671238 7671238 6132444 2380286 0 0 67782 (909274) 0 (909274) 0 0 0 (909274) (0.34) (0.25)
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