-----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, Laaz0pXaXzoorBKB1cEc38kjhkjoDyMhL6N2U5fcH0An+F3wa6tXov+Bfg3Hzsg+ hd95IG7PrPkALKqFr0Ep1w== 0001157523-04-010769.txt : 20041115 0001157523-04-010769.hdr.sgml : 20041115 20041115142130 ACCESSION NUMBER: 0001157523-04-010769 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20040930 FILED AS OF DATE: 20041115 DATE AS OF CHANGE: 20041115 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: 1934 Act SEC FILE NUMBER: 000-14910 FILM NUMBER: 041144003 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 a4766396.txt MPM TECHNOLOGIES, INC. 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, 2004 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) 199 Pomeroy Road Parsippany, NJ 07054 -------------------------------- --------------------------- (Address of principal (Zip Code) executive offices) Issuers's telephone number, including area code: 973-428-5009 As of October 25, 2004 the registrant had outstanding 3,083,064 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 ASSETS SEPTEMBER DECEMBER 30, 2004 31, 2003 ------------- ------------- (UNAUDITED) Current assets: Cash and cash equivalents $17,093 $8,843 Accounts receivable, net of allowance for doubtful accounts of $15,000 414,659 306,546 Costs and estimated earnings in excess of billings 174,642 82,250 Other current assets 42,385 50,742 ------------- ------------- Total current assets 648,779 448,381 ------------- ------------- Property, plant and equipment, net 777,610 929,775 Mineral properties held for sale 1,070,368 1,070,368 Prepaid royalty 273,000 273,000 Purchased intangible, net of accumulated amortization of $455,625 and $405,000 219,375 270,000 Investments at equity 106,782 106,782 Other assets, net 86,614 101,277 ------------- ------------- $3,182,528 $3,199,583 ============= ============= LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $2,432,812 $3,447,347 Accrued expenses 928,300 678,204 Billings in excess of costs and estimated earnings 338,657 154,063 Related party debt 3,936,433 2,625,269 Current portion of long-term debt 807,082 807,082 ------------- ------------- Total current liabilities 8,443,284 7,711,965 ------------- ------------- Notes payable 2,963,895 2,769,790 Long-term debt, less current portion 186,595 186,595 ------------- ------------- Total liabilities 11,593,774 10,668,350 ------------- ------------- 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, 3,183,064 shares issued and outstanding 3,183 3,183 Additional paid-in capital 11,313,019 11,313,019 Accumulated deficit (19,727,448) (18,784,969) ------------- ------------- Total stockholders' equity (8,411,246) (7,468,767) ------------- ------------- $3,182,528 $3,199,583 ============= =============
MPM TECHNOLOGIES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) Nine Months Ended Three Months Ended September 30, September 30, ----------------------------- ------------------------------ 2004 2003 2004 2003 ------------ ------------- ------------- ------------ Revenues $1,613,915 $3,827,035 $653,977 $919,232 Cost of sales 953,433 2,976,281 407,068 941,868 ------------ ------------- ------------- ------------ Gross margin 660,482 850,754 246,909 (22,636) Selling, general and administrative expenses 1,616,689 2,427,840 437,408 601,014 ------------ ------------- ------------- ------------ (Loss) from operations (956,207) (1,577,086) (190,499) (623,650) ------------ ------------- ------------- ------------ Other income (expense): Gain on payables settlements, net of provision for 220,846 - - - lawsuits Interest expense (292,552) (388,354) (47,450) (161,130) Miscellanious 85,434 757,322 7,348 468,647 ------------ ------------- ------------- ------------ Net other income (expense) 13,728 368,968 (40,102) 307,517 ------------ ------------- ------------- ------------ Net (loss) ($942,479) ($1,208,118) ($230,601) ($316,133) ============ ============= ============= ============ Income per share - basic and diluted: Net (loss) ($0.30) ($0.39) ($0.07) ($0.10) ============ ============= ============= ============ Weighted average shares of common stock outstanding - basic 3,183,064 3,082,445 3,183,064 3,101,861 ============ ============= ============= ============ Weighted average shares of common stock outstanding - diluted 5,037,072 4,246,633 5,037,072 4,266,049 ============ ============= ============= ============
MPM TECHNOLOGIES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) Nine Months Ended September 30, ------------------------------ 2004 2003 ------------- ------------- CASH FLOWS FROM OPERATING ACTIVITIES Net (loss) ($942,479) ($1,208,119) Adjustments to reconcile net income to net cash used in operating activities: Depreciation and amortization 202,790 275,175 Change in assets and liabilities: Accounts receivable (108,113) 48,952 Costs and estimated earnings in excess of billings (92,392) 31,864 Inventories - 2,245 Other assets 23,020 4,017 Accounts payable and accrued expenses (764,439) (1,527,471) Billings in excess of costs and estimated earnings 184,594 102,926 ------------- ------------- Net cash used in operating activities (1,497,019) (2,270,411) ------------- ------------- Cash flows from financing activities: Proceeds from related party debt 1,311,164 - Proceeds from debt financing 194,105 2,525,869 Repayment of related party debt - (257,253) ------------- ------------- Net cash provided by financing activities 1,505,269 2,268,616 ------------- ------------- Net decrease in cash and cash equivalents 8,250 (1,795) Cash and cash equivalents, beginning of period 8,843 12,892 ------------- ------------- Cash and cash equivalents, end of period $17,093 $11,097 ============= ============= Supplemental disclosure of cash flow information: Cash paid during the period for: Interest $ - $99,610 Income taxes $ - $ -
MPM TECHNOLOGIES, INC. AND SUBSIDIARIES NOTES TO FINANCIAL STATEMENTS 1. Unaudited Financial Statements These consolidated 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, 2003. 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 consolidated financial statements specifically refer to the footnotes to the consolidated financial statements of the Company as of December 31, 2003. In the opinion of management, these unaudited interim consolidated financial statements reflect all adjustments and disclosures necessary for a fair statement of the financial position and results of operations and cash flows of the Company for the interim period presented. Such adjustments consisted only of those of a normal recurring nature. Results of operations for the three and nine months ended September 30, 2004 should not necessarily be taken as indicative of the results of operations that may be expected for the entire year 2004. 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 Nine Months Ended September 30, 2004 - -------------------------------------------- Weighted- Net Average Per-Share Loss Shares Amount ---------------- ---------------- ---------------- Basic EPS Loss available to common stockholders $(942,479) 3,183,064 $(0.30) Effect of Dilutive Securities Common stock options - 1,854,008 - ---------------- ---------------- ---------------- Diluted EPS Loss available to common stockholders - assumed conversions $(942,479) 5,037,072 $(0.30) ================ ================ ================ For the Three Months Ended Septermber 30, 2004 - ---------------------------------------------- Weighted- Net Average Per-Share Loss Shares Amount ---------------- ---------------- ---------------- Basic EPS Loss available to common stockholders $(230,601) 3,183,064 $(0.07) Effect of Dilutive Securities Common stock options - 1,854,008 - ---------------- ---------------- ---------------- Diluted EPS Loss available to common stockholders - assumed conversions $(230,601) 5,037,072 $(0.07) ================ ================ ================ For the Nine Months Ended September 30, 2003 - -------------------------------------------- Weighted- Net Average Per-Share Loss Shares Amount ---------------- ---------------- ---------------- Basic EPS Loss available to common stockholders ($1,208,118) 3,082,445 ($0.39) Effect of Dilutive Securities Common stock options - 1,164,188 - ---------------- ---------------- ---------------- Diluted EPS Loss available to common stockholders - assumed conversions ($1,208,118) 4,246,633 ($0.39) ================ ================ ================ For the Three Months Ended September 30, 2003 - --------------------------------------------- Weighted- Net Average Per-Share Loss Shares Amount ---------------- ---------------- ---------------- Basic EPS Income available to common stockholders ($316,133) 3,101,861 ($0.10) ================ Effect of Dilutive Securities Common stock options - 1,164,188 - ---------------- ---------------- ---------------- Diluted EPS Income available to common stockholders - assumed conversions ($316,133) 4,266,049 ($0.10) ================ ================ ================
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, ability to generate sufficient cash flow or secure additional sources of financing, collectability of project payments, future customer revenue, variability of quarterly operating results, completion of remaining contracts, attraction and retention of employees and key management personnel, political and economic uncertainty and other competitive factors. Additionally, 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. 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 designed, engineered, supplied and serviced high temperature and chemical air pollution control systems for Fortune 500 and other industrial and environmental companies. As further discussed below, HES management filed a petition under Chapter 7 of the United States Bankruptcy Code in federal court on March 7, 2004. MPM holds a 58.21% interest in Nupower Partnership through its ownership of Nupower. No other operations were conducted through Nupower. Nupower Partnership is engaged in the development and commercialization of a waste-to-energy process. This 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. Nupower Partnership owns 85% of the Skygas Venture. In addition to its ownership in the partnership, MPM separately owns 15% of the Venture. Mining controls 15 claims on approximately 300 acres in the historical Emery Mining District in Montana. It also owns a 200-ton per day floatation mill on site. Extensive exploration has been conducted in the area by companies such as Exxon-Mobil Corporation, Freeport McMoran Gold Company and Hecla Mining in addition to the efforts of MPM Mining. In early 2002, the Board of Directors decided to hold the properties as an investment. AirPol is an active continuing concerns. As noted above and discussed below, HES filed a petition in federal Bankruptcy court on March 7, 2004 under Chapter 7 of the U.S. Bankruptcy Code. 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 nine and three months ended September 30, 2004 include the operations of AirPol, Nupower and MPM. The financial statements for the nine and three months ended September 30, 2003 include those entities and HES as well. MPM's consolidated net loss for the nine months ended September 30, 2004 was $942,479 or $0.30 per share compared to net loss of $1,208,118, or $0.39 per share for the nine months ended September 30, 2003. 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 in the near future. There can, however, be no assurances that MPM will be successful in its negotiations. MPM faces significant challenges, including, without limitation, the ability to generate or raise sufficient operating capital, and a difficult sales environment. Organizations in the United States are obligated to comply with environmental laws that reduce air pollution emissions. In view of the national economic downturn and, in our opinion, a perception of limited enforcement of environmental laws in general, companies that require or benefit from MPM's environmental technology and knowledge are not procuring or replacing equipment, or are delaying purchasing decisions. Nine and three months ended 9/30/04 compared to nine and three months ended - -------------------------------------------------------------------------------- 9/30/03 - ------- For the nine months ended 9/30/04, MPM had a net loss of $942,479, or $0.30 per share compared to net loss of $1,208,118, or $0.39 per share for the nine months ended 9/30/03. Revenues decreased 57.8% to $1,613,915 for the nine months ended 9/30/04 compared to $3,827,035 for the nine months ended 9/30/03. Costs of sales decreased 68.0% to $953,433 for the nine months ended 9/30/04 compared to $2,976,281 for the nine months ended 9/30/03. This corresponded to the decreases in revenues. Operating expenses decreased 33.4% to $1,616,689 for the nine months ended 9/30/04 compared to $2,427,840 for the nine months ended 9/30/03. For the three months ended 9/30/04, MPM had a net loss of $230,601, or $0.07 per share compared to a net loss of $316,133, or $0.10 per share for the three months ended 9/30/03. Revenues decreased 28.9% to $653,977 for the three months ended 9/30/04 compared to $919,232 for the three months ended 9/30/03. Costs of sales decreased 56.8% to $407,068 for the three months ended 9/30/04 compared to $941,868 for the three months ended 9/30/03 due to the decreases in revenues. Operating expenses decreased 27.2% to $437,408 for the three months ended 9/30/04 compared to $601,014 for the three months ended 9/30/03 representing significant expense cuts throughout the Company. Financial Condition and Liquidity - --------------------------------- For the nine months-ended 9/30/04, the Company relied principally on cash loans from an officer/director of the Company to fund the operations. Current cash position, cash from continuing operations and the Company's borrowing form an officer/director are believed to be adequate to fund MPM's operations for the foreseeable future. While Management anticipates securing additional financing, there is no assurance of this or that the Company will achieve profitable operations. Working capital at 9/30/04 was negative $7,794,505. Accordingly, MPM is continuing to seek sources of capital such as private placements, stock offerings and other financing alternatives. PART II - OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS On March 7, 2004, management filed a petition on behalf of HES in federal court under Chapter 7 of the United States Bankruptcy Code. Prior to that there were a number of legal actions against HES for nonpayment of outstanding accounts payable. 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 None 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 9/30/04. 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 8, 2004 /s/ Michael J. Luciano ----------------- ---------------------- (date) Michael J. Luciano Chairman & CEO CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350 AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Quarterly Report of MPM Technologies, Inc. (the "Company") on Form 10-QSB for the period ended September 30, 2004 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Michael J. Luciano, Chairman and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge: 1. I have reviewed this Form 10-QSB of MPM Technologies, Inc. 2. Based on my knowledge, this report does not contain any untrue statement of material fact or omit to state material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, and cash flows of the registrant as of, and for, the periods presented in this annual report; 4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have: a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared; b) Evaluated the effectiveness of the registrant's disclosure controls and procedures as of the date within 45 days prior to the filing date of this report (the Evaluation Date"); and c) Presented in this report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date. 5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions): a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls: and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls. 6. The registrant's other certifying officer and I have indicated in this report whether there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Date: November 8, 2004 /s/ Michael J. Luciano - ----------------------- ------------------------ Chief Executive Officer ------------------------ CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350 AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Quarterly Report of MPM Technologies, Inc. (the "Company") on Form 10-QSB for the period ended September 30, 2004 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Glen Hjort, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge: 1. I have reviewed this Form 10-QSB of MPM Technologies, Inc. 2. Based on my knowledge, this report does not contain any untrue statement of material fact or omit to state material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, and cash flows of the registrant as of, and for, the periods presented in this annual report; 4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have: a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared; b) Evaluated the effectiveness of the registrant's disclosure controls and procedures as of the date within 45 days prior to the filing date of this report (the Evaluation Date"); and c) Presented in this report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date. 5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions): a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls: and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls. 6. The registrant's other certifying officer and I have indicated in this report whether there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Date: November 8, 2004 /s/ Glen Hjort - ----------------------- ----------------------- Chief Financial Officer ----------------------- -----END PRIVACY-ENHANCED MESSAGE-----