-----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, CAb12LktxQ1+LmU5KvyPIHjU4aylcfhfEl7uppDdtSBuH0RIEUVfSQ9F7G8Arf1g Sk4XvLJNeorJzzo6yVN1Jw== 0001004522-98-000044.txt : 19981124 0001004522-98-000044.hdr.sgml : 19981124 ACCESSION NUMBER: 0001004522-98-000044 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980930 FILED AS OF DATE: 19981123 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: 98757287 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 September 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 November 5, 1998, the registrant had outstanding 1,805,969 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 SEPTEMBER 30, 1998 AND DECEMBER 31, 1997 (UNAUDITED) SEPTEMBER DECEMBER 30, 1998 31, 1997 ----------- ----------- ASSETS CURRENT ASSETS Cash and cash equilavents $615,568 $2,010,596 Receivables, net of allowance for doubtful accounts 2,398,691 603,925 Costs and estimated earnings in excess of billings 949,260 445,205 Inventories 606,235 718,434 Other current assets 113,973 28,814 ----------- ----------- Total current assets 4,683,727 3,806,974 ----------- ----------- PROPERTY, PLANT AND EQUIPMENT Land and buildings 203,005 203,005 Mining property 54,047 54,047 Equipment and machinery 719,973 539,413 Software 8,428 3,258 ----------- ----------- Total property, plant and equipment 985,453 799,723 Less accumulated depreciation 506,945 470,450 ----------- ----------- Net property, plant and equipment 478,508 329,273 ----------- ----------- OTHER ASSETS Goodwill, net of $9,507 accumulated amortization 751,025 - Deposits 19,525 - 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 $6,349 and $5,598, respectively 27,739 28,490 Advance minimum royalties 50,750 50,750 ----------- ----------- Total other assets 3,519,504 2,749,705 ----------- ----------- TOTAL ASSETS $8,681,739 $6,885,952 =========== ===========
MPM TECHNOLOGIES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF FINANCIAL POSITION AS OF SEPTEMBER 30, 1998 AND DECEMBER 31, 1997 (UNAUDITED) SEPTEMBER DECEMBER 30, 1998 31, 1997 ----------- ----------- LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Accounts payable $1,301,467 $419,625 Accounts payable - related party 55,116 55,116 Accrued expenses 259,087 273,959 Billings in excess of costs and estimated earnings 1,732,283 760,224 Interest payable 54,410 43,601 Interest payable - related parties 133,614 129,997 Advance from officer 210,000 200,000 Notes payable 208,805 282,369 Notes payable - related parties 314,765 314,765 Customer deposits - 27,000 Long-term debt - current portion 20,590 67,634 Other current liabilities - 8,692 ----------- ----------- Total current liabilities 4,290,137 2,582,982 ----------- ----------- LONG-TERM DEBT, net of current portion 583,961 583,961 ----------- ----------- MINORITY INTEREST IN CONSOLIDATED ENTITIES (780,164) (753,748) ----------- ----------- PREFERRED STOCK SUBSCRIBED 375,000 - ----------- ----------- COMMITMENTS STOCKHOLDERS' EQUITY Preferred stock, no par value, 10,000,000 shares authorized, no shares issued Common stock, $.001 par value, 100,000,000 shares authorized, 1,809,969 and 1,831,156 shares issued at September 30, 1998 and December 31, 1997, respectively 1,812 1,831 Additional paid-in capital 9,306,154 9,374,398 Accumulated deficit (5,095,161) (4,903,472) ----------- ----------- Total stockholders' equity 4,212,805 4,472,757 ----------- ----------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY 8,681,739 6,885,952 =========== ===========
MPM TECHNOLOGIES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE PERIODS ENDED SEPTEMBER 30, 1998 AND 1997 (UNAUDITED) Quarter Ended Nine Months Ended September 30, September 30, 1998 1997 1998 1997 ----------- ----------- ----------- ----------- REVENUES $3,691,118 $1,465,286 $7,079,491 $4,359,620 COSTS OF REVENUES 2,732,231 1,010,688 5,382,934 3,417,306 ----------- ----------- ----------- ----------- GROSS PROFIT 958,887 454,598 1,696,557 942,314 OPERATING EXPENSES Marketing 272,040 189,022 610,952 392,782 Operating overhead 539,562 237,732 1,009,239 338,468 Depreciation and amortization 27,603 11,069 46,753 58,416 Other operating expenses 69,120 1,372 211,972 207,388 ----------- ----------- ----------- ----------- Total operating expenses 908,325 439,195 1,878,916 997,054 ----------- ----------- ----------- ----------- INCOME (LOSS) BEFORE NON-OPERATING ITEMS 50,562 15,403 (182,359) (54,740) ----------- ----------- ----------- ----------- NON-OPERATING INCOME (EXPENSE) Forgiveness of debt - - - 4,098 Interest income 4,390 15,318 33,755 18,035 Interest expense (22,403) (12,960) (69,503) (40,527) ----------- ----------- ----------- ----------- Total non-operating income (expense) (18,013) 2,358 (35,748) (18,394) ----------- ----------- ----------- ----------- INCOME (LOSS) BEFORE MINORITY INTEREST 32,549 17,761 (218,107) (73,134) MINORITY INTEREST IN SUBSIDIARY LOSS 7,628 6,779 26,418 23,706 ----------- ----------- ----------- ----------- NET INCOME (LOSS) $40,177 $24,540 ($191,689) ($49,428) =========== =========== =========== =========== NET INCOME (LOSS) PER SHARE - PRIMARY $0.02 $0.01 ($0.10) ($0.03) =========== =========== =========== =========== NET INCOME (LOSS) PER SHARE - FULLY DILUTED $0.02 $0.01 ($0.10) ($0.03) =========== =========== =========== ===========
MPM TECHNOLOGIES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997 (UNAUDITED) 1998 1997 ----------- ---------- CASH FLOWS FROM OPERATING ACTIVITIES Net loss (191,689) (49,428) Add items not requiring the use of cash: Depreciation and amortization 46,753 58,417 Forgiveness of debt - (4,098) Minority interest in subsidiary loss (26,416) (23,706) (Increase) decrease in receivables (1,794,766) 1,121,912 (Increase) in costs and estimated earnings in excess of (474,869) (128,536) billings Decrease (increase) in inventory 112,199 (131,484) (Increase) in other assets (104,684) (18,703) Increase in accounts payable 782,357 206,860 (Decrease) increase in accrued expenses (30,623) 30,145 Increase (decrease) in billings in excess of costs and 424,311 (128,519) estimated earnings (Decrease) in customer deposits (27,000) - Increase (decrease) in interest payable 14,426 (5,750) Increase in other current liabilities 1,308 0 ----------- ---------- NET CASH FLOWS (USED IN) PROVIDED BY OPERATING ACTIVITIES (1,268,693) 927,110 ----------- ---------- CASH FLOWS FROM INVESTING ACTIVITIES Cash paid for acquisition of subsidiary (216,273) - Purchase of equipment and machinery (96,191) (116,284) ----------- ---------- NET CASH FLOWS USED IN INVESTING ACTIVITIES (312,464) (116,284) ----------- ---------- CASH FLOWS FROM FINANCING ACTIVITIES Payments on notes payable (120,608) (53,789) Preferred stock subscribed 375,000 - Purchase of outstanding shares (68,263) - Issuance of common stock - 2,060 Contributed capital - 87,057 ----------- ---------- NET CASH FLOWS PROVIDED BY FINANCING ACTIVITIES 186,129 35,328 ----------- ---------- NET (DECREASE) INCREASE IN CASH (1,395,028) 846,154 CASH AT BEGINNING OF PERIOD 2,010,596 40,566 ----------- ---------- CASH AT END OF PERIOD $615,568 $886,720 =========== ========== Supplemental disclosure of cash flow information and non cash financing activities Cash paid for interest: $ 26,266 During the nine monts ended September 30, 1998, the Company issued 5,556 shares of its common stock under the terms of an agreement with an unrelated entity. During the nine months ended September 30, 1997, the Company issued 146,667 shares of its common stock in connection with the purchase of certain of the assets of U.S. Filter Corporation. The Company also transferred equipment with a book amount of approximately $292,890 from proerty and equipment to inventory.
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 September 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. ("the Company") 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 this 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. Similarly, the Company acquired certain of the assets and assumed certain of the liabilities of a part of a division of FLS miljo, Inc. on July 1, 1998 for approximately $150,000 in cash and $300,000 (96,884 shares) of the Company's common stock. It should be noted that this stock has not been issued pending registration. In connection with this acquisition, the Company formed another wholly-owned subsidiary, AirPol Environmental, Inc. operating as AirPol, Inc. ("AirPol") which assumed the assets and liabilities acquired. Since AirPol was a part of a division, the Company was again unable to obtain sufficient historical financial data to determine the pro forma results for prior periods to make the required disclosures assuming AirPol had been acquired as of January 1, 1997. These disclosures were also omitted. The preceding financial statements include the results of operations of HES beginning April 1, 1997, and the results of operations of AirPol beginning July 1, 1998. Due to the Company's inability to obtain historical financial data, there can be no comparative results. Certain reclassifications have been made to the December 1997 amounts to conform to the September 1998 presentation. PART I Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. Huntington Environmental Systems, Inc. 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 by the Company, 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. HES has increased its sales and marketing efforts with the addition of a regional sales manager in September. Requests for quotations have been flat, but at relatively high levels, both for firm quotations and for budget quotations. Numerous quality opportunities are being pursued. HES currently has a backlog amounting to approximately $5,400,000. 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. HES is currently in negotiations with a major customer in Taiwan for an exclusive arrangement to provide HES technology to a wide variety of Taiwan companies. Management believes this arrangement will enable HES to enter the Chinese market with a strong presence in 1999. AirPol Environmental, Inc. AirPol Environmental, Inc. operates under the name AirPol, Inc. ("AirPol") and is also is in the air pollution control business. Its customers are similar to HES serving Fortune 500 and other environmental and industrial companies worldwide. AirPol designs, engineers, supplies and services wet and dry scrubbers, wet electrostatic precipitators and venturi absorber to control air pollution. AirPol brings over 30 years experience through its technologies and employees to the Company. AirPol is an industry leader in its segment of the air pollution control field. At the time of the acquisition, AirPol had a backlog of approximately $3,000,000. In only three months since the acquisition, AirPol has added orders aggregating to approximately $11,700,000, and has a backlog at September 30 of approximately $12,000,000. Nupower, Inc. (Skygas process) The Company continues to work 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. The Company is also working with other interested parties to build a commercial unit for operation. Once negotiations have been finalized, timetables will be established to determine when either or both of these facilities will be ready. 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. 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. Nine and three months ended 9/30/98 compared to nine and three months ended 9/30/97 For the nine months ended 9/30/98, the Company had a net loss of $191,689, or $.10 per share compared to a net loss of $49,428, or $.03 per share for the nine months ended 9/30/97. For the three months ended 9/30/98, the Company had net income of $40,177, or $.02 per share compared to net income of $24,540, or $.01 per share for the three months ended 9/30/97. Revenues were $7,079,491 for the nine months ended 9/30/98 compared to $4,359,620 for the nine months ended 9/30/97. For the three months ended 9/30/98, revenues were $3,691,118 compared to $1,465,286 for the three months ended 9/30/97. Operating expenses were $1,878,916 and $908,325 for the nine and three months ended 9/30/98, respectively, compared to $997,054 and $439,195 for the nine and three months ended 9/30/97, respectively. Working capital at 9/30/98 was $393,590 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, and the operations of the Company's other wholly-owned subsidiary, AirPol, Inc. beginning July 1, 1998. 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 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 The Annual Meeting of Stockholders held on September 14, 1998. Following are the results of the voting at the meeting: Item 1. Election of Directors: Glen Hjort For: 957,829 Withheld: 6,169 Anthony L. Lee For: 958,465 Withheld: 5,533 Michael J. Luciano For: 957,718 Withheld: 6,280 Item 2. To approve the Amendment to the 1989 Stock Option Plan: For: 950,146 Against: 10,230 Abstain: 3,622 The total shares voted of 963,998 represents 52.50% of the common shares outstanding as of the record date July 18, 1998. A total of 1,836,069 shares were outstanding on that date. ITEM 5. OTHER INFORMATION The Company created a series of preferred stock designated as the Series A Convertible Preferred Stock in connection with obtaining financing for current working capital needs and future acquisitions. The holders of this preferred stock will be entitled to receive a 6% annual dividend beginning July 1, 1999. The Company may pay this dividend in cash or in common stock at its option. The preferred stock will be convertible into common stock at the option of its holder. The conversion rate will depend on the market price of the common stock at the time of conversion. None of the preferred stock can be converted until 30 days after the effective date of the registration statement to be filed on Form S-3. The Company is in the process of preparing the registration statement. 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. November 20, 1998 /s/ Robert D. Little - ------------------------ --------------------------- (date) Robert D. Little Corporate Secretary EX-27 2
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