-----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, QGArfRw3uOsR5/OH5Rz5G0D8640G8NxAOLr5kf9Ha0KW9ugcZnTDV2hFN/VBKVzG 9kQvF7UaGtJ9uygCMU6lCQ== 0001004522-98-000026.txt : 19980817 0001004522-98-000026.hdr.sgml : 19980817 ACCESSION NUMBER: 0001004522-98-000026 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980630 FILED AS OF DATE: 19980814 SROS: NASD 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: 98688137 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 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, 1998 Commission File Number 0-14910 MPM TECHNOLOGIES, INC. (Exact Name of Registrant 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) Registrant's telephone number, including area code: 509-326-3443 Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities and Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No --- --- As of August 5, 1998, the registrant had outstanding 1,837,569 shares of common stock. The registrant has authorized 10,000,000 preferred shares, but has no preferred shares outstanding. PART I - FINANCIAL INFORMATION Item 1. Financial Statements Financial Statements follow on the next page.
MPM TECHNOLOGIES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF FINANCIAL POSITION AS OF JUNE 30, 1998 AND DECEMBER 31, 1997 (UNAUDITED) JUNE DECEMBER 30, 1998 31, 1997 ASSETS ----------- ----------- CURRENT ASSETS Cash and cash equilavents $1,150,763 $2,010,596 Receivables, net of allowance for doubtful accounts 834,719 603,925 Costs and estimated earnings in excess of billings 385,226 445,205 Inventories 523,830 718,434 Other current assets 94,429 28,814 ----------- ----------- Total current assets 2,988,967 3,806,974 ----------- ----------- PROPERTY, PLANT AND EQUIPMENT Land and buildings 203,005 203,005 Mining property 54,047 54,047 Equipment and machinery 549,062 539,413 Software 3,258 3,258 ----------- ----------- Total property, plant and equipment 809,372 799,723 Less accumulated depreciation 490,392 470,450 ----------- ----------- Net property, plant and equipment 318,980 329,273 ----------- ----------- OTHER ASSETS Deferred exploration and development costs 1,195,465 1,195,465 Investment 1,200,000 1,200,000 Notes receivable 275,000 275,000 Licenses, net of accumulated amortization of $6,099 and $5,598, respectively 27,989 28,490 Advance minimum royalties 50,750 50,750 ----------- ----------- Total other assets 2,749,204 2,749,705 ----------- ----------- TOTAL ASSETS $6,057,151 $6,885,952 =========== ===========
MPM TECHNOLOGIES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF FINANCIAL POSITION AS OF JUNE 30, 1998 AND DECEMBER 31, 1997 (UNAUDITED) JUNE DECEMBER 30, 1998 31, 1997 ----------- ----------- LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Accounts payable $333,341 $419,625 Accounts payable - related party 55,116 55,116 Accrued expenses 260,500 273,959 Billings in excess of costs and estimated earnings 352,032 760,224 Interest payable 69,322 43,601 Interest payable - related parties 130,310 129,997 Advance from officer 200,000 200,000 Notes payable 221,764 282,369 Notes payable - related parties 314,765 314,765 Customer deposits - 27,000 Long-term debt - current portion 67,634 67,634 Other current liabilities - 8,692 ----------- ----------- Total current liabilities 2,004,784 2,582,982 ----------- ----------- LONG-TERM DEBT, net of current portion 583,961 583,961 ----------- ----------- MINORITY INTEREST IN CONSOLIDATED ENTITIES (772,537) (753,748) ----------- ----------- COMMITMENTS STOCKHOLDERS' EQUITY Preferred stock, no par value, 10,000,000 shares authorized, none issued Common stock, $.001 par value, 100,000,000 shares authorized, 1,837,569 and 1,831,156 shares issued at June 30, 1998 and December 31, 1997, respectively 1,838 1,831 Additional paid-in capital 9,374,443 9,374,398 Accumulated deficit (5,135,338) (4,903,472) ----------- ----------- Total stockholders' equity 4,240,943 4,472,757 ----------- ----------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY 6,057,151 6,885,952 =========== ===========
MPM TECHNOLOGIES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE PERIODS ENDED JUNE 30, 1998 AND 1997 (UNAUDITED) Quarter Ended Six Months Ended June 30, June 30, 1998 1997 1998 1997 ------------ ----------- ----------- ----------- REVENUES $2,431,531 $2,894,335 $4,201,129 $2,894,335 COSTS OF REVENUES 1,732,317 2,406,618 3,297,735 2,406,618 ------------ ----------- ----------- ----------- GROSS PROFIT 699,214 487,717 903,394 487,717 OPERATING EXPENSES Marketing 197,568 203,760 338,912 203,760 Operating overhead 317,557 127,031 635,401 206,014 Depreciation and amortization 10,614 36,087 19,150 47,347 Other operating expenses 95,703 93,536 142,852 96,641 ------------ ----------- ----------- ----------- Total operating expenses 621,442 460,414 1,136,315 553,762 ------------ ----------- ----------- ----------- LOSS BEFORE NON-OPERATING ITEMS 77,772 27,303 (232,921) (66,045) NON-OPERATING INCOME (EXPENSE) Interest income 11,791 2,026 29,365 2,717 Interest expense (25,274) (13,930) (47,100) (27,567) ------------ ----------- ----------- ----------- Total non-operating income (expense) (13,483) (11,904) (17,735) (24,850) ------------ ----------- ----------- ----------- INCOME (LOSS) BEFORE MINORITY INTEREST 64,289 15,399 (250,656) (90,895) MINORITY INTEREST IN SUBSIDIARY LOSS 9,128 7,244 18,790 16,927 ------------ ----------- ----------- ----------- NET INCOME (LOSS) $73,417 $22,643 ($231,866) ($73,968) ============ =========== =========== =========== NET INCOME (LOSS) PER SHARE - PRIMARY $0.04 $0.01 ($0.13) ($0.04) ============ =========== =========== =========== NET INCOME (LOSS) PER SHARE - FULLY DILUTED $0.04 $0.01 ($0.12) ($0.04) ============ =========== =========== ===========
MPM TECHNOLOGIES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE SIX MONTHS ENDED JUNE 30, 1998 AND 1997 (UNAUDITED) Six Months Ended June 30, 1998 1997 ---------- ---------- CASH FLOWS FROM OPERATING ACTIVITIES Net loss (231,866) (73,968) Add items not requiring the use of cash: Depreciation and amortization 20,443 47,348 Minority interest in subsidiary loss (18,789) (16,927) (Increase) decrease in receivables (230,794) 1,252,599 Decrease (Increase) in costs and estimated earnings in excess of billings 59,979 (257,510) Decrease (increase) in inventory 194,604 (84,227) (Increase) in other assets (65,615) (53,409) (Decrease) increase in accounts payable (86,284) 742,869 (Decrease) increase in accrued expenses (13,407) 25,114 (Increase) decrease in billings in excess of costs and estimated earnings (408,192) (66,076) (Decrease) in customer deposits (27,000) 0 Increase (decrease) in interest payable 26,034 (5,819) (Decrease) in other current liabilities (8,692) 0 ---------- ---------- NET CASH FLOWS USED IN OPERATING ACTIVITIES (789,579) 1,509,994 ---------- ---------- CASH FLOWS FROM INVESTING ACTIVITIES Purchase of equipment and machinery (9,649) (43,173) ---------- ---------- NET CASH FLOWS USED IN INVESTING ACTIVITIES (9,649) (43,173) ---------- ---------- CASH FLOWS FROM FINANCING ACTIVITIES Payments on notes payable (60,605) (28,093) ' Issuance of common stock - 2,060 Contributed capital - 157,940 ---------- ---------- NET CASH FLOWS (USED IN) PROVIDED FINANCING ACTIVITIES (60,605) 131,907 ---------- ---------- NET (DECREASE) INCREASE IN CASH (859,833) 1,598,728 CASH AT BEGINNING OF PERIOD 2,010,596 40,566 ---------- ---------- CASH AT END OF PERIOD 1,150,763 1,639,294 ========== ========== Supplemental disclosure of cash flow information and non cash financing activities: Cash paid for interest: $20,410 During the six months ended June 30, 1998, the Company issued 5,556 shares of its common stock under the terms of an agreement with a unrelated entity. During the six months ended June 30, 1997, the Company issued 146,667 shares of its common stock for the purchase of its wholly-owned subsidiary, Huntington Environmental Systems, Inc.
MPM TECHNOLOGIES, INC. AND SUBSIDIARIES NOTES TO FINANCIAL STATEMENTS NOTE 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, 1997. 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 rules and regulations of 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, 1997. 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, 1998 should not necessarily be taken as indicative of the results of operations that may be expected for the entire year 1998. All common stock information has been adjusted to reflect a one for nine reverse stock split which was effected on June 12, 1998. MPM Technologies, Inc. acquired certain of the assets and assumed certain of the liabilities of a part of a division of United States Filter Corporation on April 1, 1997. In connection with the acquisition, the Company formed a wholly-owned subsidiary, Huntington Environmental Systems, Inc. ("HES") which assumed the assets and liabilities acquired. United States Filter Corporation had acquired HES as part of a large group of divisions known collectively as "Wheelabrator Clean Air Systems" from Waste Management in November 1996. Because of this, and the fact that HES was also a part of a division when it was owned by Waste Management, the Company was unable to obtain sufficient historical data to determine the pro forma results for prior periods to make the required disclosures assuming the purchase of HES had been consummated as of January 1, 1997. As a result, these disclosures have been omitted. Certain reclassifications have been made to the December 1997 amounts to conform to the June 1998 presentation. PART I Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. Huntington Environmental Systems, Inc. - --------------------------------------- Since Huntington Environmental Systems, Inc. ("HES") was acquired April 1, 1997, the three months ended June 30, 1998 is the first quarter for which comparative results are available. HES designs, engineers, supplies and services air pollution control systems for Fortune 500 and other environmental and industrial companies worldwide. Through the technologies and employees acquired, HES has over 25 years of experience and over 300 installations across the globe. HES is a leader in the design, fabrication, installation, start-up and maintenance of high temperature pollution control equipment. For the three months ended June 30, 1998, HES had revenues of $2,431,531, compared to $2,894,335 for the three months ended June 30, 1997. For the six months ended June 30, 1998, revenues were $4,151,129 compared to $2,894,335 for the six months ended June 30, 1997. Since the HES was a portion of a division and had only been owned by United States Filter Corporation since November 1996, and was formerly a part of a division of Waste Management prior to that, comparative sufficient detailed data was not available to determine prior comparative balances. HES has been working to increase its sales and marketing efforts. Requests for quotations continue at high levels, both for firm quotations and for budget quotations. Quotations for repeat customers are high for both new and replacement equipment. HES was recently awarded a contract in the United Kingdom amounting to approximately $3.6 million. Quotations for new projects abroad include installations in Canada, the United Kingdom, Australia and India. Market conditions continued to be highly competitive during the quarter. While this is expected to continue for the upcoming quarters, management believes that its sales and marketing efforts will prove successful in improving its revenues and profits in subsequent quarters. Nupower, Inc. (Skygas process) - ------------------------------ Skygas venture partner USF Smogless moved forward with obtaining permits pursuant to the 1996 agreement with a consortium of European companies. That agreement includes, among other things, the utilization of the Skygas technology with USF Smogless' proprietary Flotherm technology for the destruction of selected wastes and for the creation of fuel gas. The project is estimated to be in excess of $10 million of capital investment. Management expects to obtain all the necessary permits by the end of the year. The Company is working on the engineering which will lead to the construction of a prototype commercial demonstration Skygas facility in the United States. The Company is working with the assistance of the Institute of Gas Technology ("IGT") on the project. IGT will also be doing the testing of the unit. Skygas is a patented process for converting carbonaceous materials into clean- burning medium BTU fuel gas which can be used for electrical power generation or for conversion into a variety of valuable chemicals. The Company has an agreement with USF Smogless and Unitel Technologies, Inc. of Mount Prospect, Illinois for the purpose of commercializing the Skygas process. Under the terms of the agreements, USF Smogless is to finance, engineer, build, test and operate a commercial demonstration facility. Unitel Technologies, Inc. has agreed to handle the promotional, public relations, advertising and marketing of the process. USF Smogless is owned by United States Filter Corporation (NYSE-USF) of Palm Desert, California. Interests in the Skygas process are Nupower (which the Company owns 58.21%) - 70%; USF Smogless - 15%; MPM Technologies, Inc. - 15%. Mining - ------- On March 11, 1998, the Company's Board of Directors mandated the sale of the Company's mining property, equipment and mill in accordance with its continuing restructuring plans. It is anticipated that this sale will be concluded during the current fiscal year. The Company owns or controls 32 patented and unpatented lode claims amounting to approximately 750 acres of land in the Emery mining district of Montana. The Company has expended over $1.3 million on exploration and development, lease payments and claims. Approximately $532,000 has been expended on buildings, machinery and equipment. Six and three months ended 6/30/98 compared to six and three months ended 6/30/97 - -------------------------------------------------------------------------- For the six months ended 6/30/98, the Company had a net loss of $231,866, or $.13 per share compared to a net loss of $73,968, or $.04 per share for the six months ended 6/30/97. For the three months ended 6/30/98, the Company had net income of $73,417, or $.04 per share compared to net income of $22,643, or $.01 per share for the three months ended 6/30/97. Revenues were $2,431,531 for the six months ended 6/30/98 compared to $2,894,335 for the six months ended 6/30/97. For the three months ended 6/30/98, revenues were $2,431,531 compared to $2,894,335 for the three months ended 6/30/97. Operating expenses were $1,136,315 and $621,442 for the six and three months ended 6/30/98, respectively, compared to $533,762 and $460,414 for the six and three months ended 6/30/97, respectively. Working capital at 6/30/98 was $984,183 compared to $1,223,992 at 12/31/97. It should be noted that the results include the operations of the Company's wholly-owned subsidiary, Huntington Environmental Systems, Inc. beginning April 1, 1997. PART II 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 At a special meeting of Shareholders on June 12, 1998, the shareholders of the Company voted for Amended and Restated Articles of Incorporation which included authorizing two classes of stock, common stock and preferred stock. The number of authorized common shares was increased to one hundred million (100,000,000) from fifty million (50,000,000). The number of preferred shares authorized is ten million (10,000,000). Shareholders of the Company will have no preemptive rights to acquire additional shares issued by the corporation, or any securities convertible into, or carrying or evidencing any rights or option to purchase, any such shares. The holders of any of the Company's capital stock shall have voting power for the election of directors and for all other purposes, subject to such limitation as may be imposed by law and by any provision of the Articles of Incorporation in the exercise of their voting power. Cumulative voting for the election of directors is hereby expressly prohibited. The holders of Common Stock shall be entitled to one vote per share held. All of the Common Stock authorized herein shall have equal voting rights and powers without restrictions in preference. Subject to the power of shareholders to amend or repeal, the Board of Directors of this corporation shall have the power to enact and amend such Bylaws defining the powers and duties of the officers of the corporation and providing for such other matters in relation to its affairs as they may deem necessary and convenient, provided the same are not out of harmony with the laws of the State of Washington or these Articles of Incorporation. The Company reserves the right to amend, alter, change or repeal any provision contained in the Articles of Incorporation in the manner now or hereafter prescribed by statute, and all rights conferred on the shareholders herein are granted subject to this reservation. The affirmative vote of a majority of all of the votes entitled to be cast on the matter shall be sufficient, valid, and effective, after due consideration and reconsideration of such action by the Board of Directors, as required by law, to approve and authorize the following acts of the Company: a. an amendment to the Articles of Incorporation; b. the merger of this corporation or the merger of one or more other corporations into this corporation; c. the acquisition by another corporation of all of the outstanding shares of one or more classes or series of this corporation; or d. the sale, lease, exchange, or other disposition by this corporation of all, or substantially all, of its property other than in the usual and regular course of business. 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 A special meeting of shareholders was held on June 12, 1998. Following are the results of the voting at the meeting: Item 1. Reverse Split of Common Stock For: 14,740,671 Against: 397,184 Abstain: 50,665 Item 2. Amended and Restated Articles of Incorporation For: 11,430,198 Against: 618,356 Abstain: 60,415 The total shares voted of 15,188,520 represents 91.88% of the common shares outstanding as of the record date May 15, 1998. A total of 16,530,404 shares were outstanding on that date. ITEM 5. OTHER INFORMATION On July 1, 1998 the Company acquired certain of the assets and assumed certain of the liabilities of AirPol, Inc., a division of FLS miljo of Copenhagen, Denmark. In connection with the acquisition, the Company will issue stock and make a cash payment, subject to certain adjustments relating to the financial position and results of operations of AirPol, Inc. 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 13, 1998 /s/Robert D. Little - ----------------------- ------------------------------ (date) Robert D. Little Corporate Secretary EX-27 2
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