FORM 10-QSB
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934
For Quarter Ended: June 30, 1996 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 West Mission, Suite 30
Spokane, Wa 99201-2347
(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 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.
(X) Yes ( ) No
As of August 15, 1996, the registrant had outstanding 13,022,376 shares of
common stock which is the registrant's only class of stock.
This Report contains 19 pages.<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Financial Statements Follow on the Next Page
Page 2 of 19<PAGE>
MPM TECHNOLOGIES, INC.
AND SUBSIDIARIES
(a Development Stage Company)
Spokane, Washington
Financial Statements
June 30, 1996 And December 31, 1995
Page 3 of 19<PAGE>
<TABLE>
<CAPTION>
MPM TECHNOLOGIES, INC. Consolidated Balance Sheet As
AND SUBSIDIARIES Of June 30, 1996 And December
(a Development Stage Company) 31, 1995
Spokane, Washington
UNAUDITED
ASSETS
June December
30, 1996 31, 1995
------------ ------------
<S> <C> <C>
CURRENT ASSETS:
Cash (Note 2) $ 160,286 $ 138,675
Prepaid Insurance 3,046 6,094
Receivables 21,861 25,440
------------ ------------
Total Current Assets 185,193 170,209
------------ ------------
PROPERTY, PLANT, & EQUIPMENT (Note 2):
Land 70,000 70,000
Mining Claims (Note 3) 48,600 48,600
Mining Leases (Note 3) 5,437 5,437
Buildings 133,005 133,005
Mill Machinery 289,063 289,063
Vehicles & Equipment 117,633 114,115
Leasehold Improvements -0- -0-
Software 3,258 3,258
------------ ------------
Total Property, Plant &
Equipment 666,996 663,478
Less Accumulated Depreciation
And Amortization (337,588) (332,117)
------------ ------------
Net Property, Plant, &
Equipment 329,408 331,361
------------ ------------
OTHER ASSETS:
Deferred Exploration and
Development Costs (Note 1) 1,195,465 1,195,466
Note Receivable 275,000 275,000
Licenses, Net of
Amortization of $5,913 and
$5,344 Respectively (Note 2) 28,175 28,745
Advance Minimum Royalties (Note 2) 50,750 50,750
Mineralized Material in Place
(Note 3) 10 10
------------ ------------
Total Other Assets 1,549,400 1,549,971
------------ ------------
TOTAL ASSETS $ 2,064,001 $ 2,051,541
============ ============
</TABLE>
The Accompanying Notes Are An Integral Part Of These Financial Statements
Page 4 of 19<PAGE>
<TABLE>
<CAPTION>
MPM TECHNOLOGIES, INC. Consolidated Balance Sheet As
AND SUBSIDIARIES Of June 30, 1996 And December
(a Development Stage Company) 31, 1995 (Continued)
Spokane, Washington
UNAUDITED
LIABILITIES AND STOCKHOLDERS' EQUITY
June December
30, 1996 31, 1995
------------ ------------
<S> <C> <C>
CURRENT LIABILITIES:
Accounts Payable $ 14,355 $ 14,356
Notes Payable (Note 4) 629,960 533,951
Notes Payable to Related
Parties (Note 4) 314,766 314,765
Interest Payable - Related
Parties (Note 4) 129,997 129,997
Interest Payable 506 -0-
------------ ------------
Total Current Liabilities 1,089,584 993,069
------------ ------------
LONG-TERM DEBT: (Net of Current
Portion)
Notes Payable -0- -0-
------------ ------------
Total Long-Term Debt -0- -0-
------------ ------------
Total Liabilities 1,089,584 993,069
------------ ------------
MINORITY INTEREST (Note 6):
Minority Interest in
Consolidated Entities (705,367) (687,185)
------------ ------------
COMMITTMENTS (Note 7)
STOCKHOLDERS' EQUITY:
Common Stock, $0.001 Par Value,
50,000,000 Shares Authorized,
12,876,481 Shares, and
12,842,176 Shares Outstanding
June 30, 1996, and December 31,
1995, Respectively (Notes 6 & 8) 12,876 12,842
Additional Paid-in Capital 6,080,757 5,998,967
Deficit Accumulated During
The Exploration and
Development Stage (4,413,849) (4,266,152)
------------ ------------
Total Stockholders' Equity 1,679,784 1,745,657
------------ ------------
TOTAL LIABILITIES, MINORITY
INTEREST, AND STOCKHOLDERS'
EQUITY $ 2,064,001 $ 2,051,541
============ ============
</TABLE>
The Accompanying Notes Are An Integral Part Of These Financial Statements
Page 5 of 19<PAGE>
<TABLE>
<CAPTION>
MPM TECHNOLOGIES, INC. Consolidated Statement Of Income
AND SUBSIDIARIES (Loss) For The Quarters Ended
(a Development Stage Company) June 30, 1996 And 1995, The Six
Spokane, Washington Months Periods Ended June 30,
1996 And 1995, And From Inception
(May 1, 1983) To Date
UNAUDITED
Quarter Ended Six Months Ended Inception
June 30, June 30, To
1996 1995 1996 1995 Date
----------------------------------- ---------- ------------
<S> <C> <C> <C> <C> <C>
REVENUE:
Management Fees-Related Party $ -0- $ -0- $ -0- $ -0- $ 77,000
Gain on Sale of Equipment -0- -0- -0- -0- 200,147
--------- ------------- ----------- ---------- ------------
Total Revenues -0- -0- -0- -0- 277,147
--------- ------------- ----------- ---------- ------------
EXPENSES:
Bank Charges 27 12 27 20 2,771
Contract Services 4,795 18,000 22,795 36,000 1,317,919
Depreciation and Amortization 2,940 3,100 6,040 6,200 528,392
Donations 250 -0- 250 -0- 250
Dues and Subscriptions 288 280 288 280 38,647
Employee Benefits -0- -0- -0- -0- 3,704
Equipment Rentals -0- -0- -0- -0- 24,056
Exploration & Development -0- -0- -0- -0- 132,829
Freight -0- -0- -0- -0- 10,553
Insurance 3,047 -0- 5,923 2,876 133,698
Legal and Accounting 23,345 13,307 33,550 20,431 337,320
Licenses, Taxes, and Fees 36,320 (3,821) 40,660 263 187,928
Mine Lease Expense 3,600 -0- 3,600 -0- 3,600
Miscellaneous (3,000) 847 -0- 5,167 112,133
Office Expense and Postage 4,941 7,489 7,657 9,734 184,373
Professional Services (8,900) 17,033 18,000 29,933 1,018,546
Public Relations and Finders Fee -0- -0- -0- -0- 72,763
Rent - Office 2,000 -0- 3,140 -0- 167,078
Repairs and Maintenance -0- -0- -0- -0- 51,658
Research and Development -0- -0- -0- -0- 447,111
Reimbursed Expenses (10,833) (8,474) (20,721) (11,103) (468,873)
Telephone and Utilities 473 469 847 1,135 55,639
Transfer Fees and Costs 451 464 819 1,280 36,933
Travel and Entertainment 9,891 1,953 16,251 4,004 250,283
Watchman 1,080 550 1,380 950 32,012
--------- ------------- ----------- ---------- ------------
Total Expenses 70,715 51,209 140,506 107,170 4,681,323
--------- ------------- ----------- ---------- ------------
INCOME (LOSS) BEFORE NON-OPERATING
ITEMS (70,715) (51,209) (140,506) (107,170) (4,404,176)
--------- ------------- ----------- ---------- ------------
NON-OPERATING INCOME (EXPENSE):
Interest Income 965 66 1,494 291 34,786
Interest (Expense) (13,377) (18,536) (26,867) (37,199) (1,059,538)
Forgiveness of Debt By Related
Parties -0- -0- -0- -0- 101,509
Gain On Sale of Securities -0- -0- -0- -0- 6,160
Other -0- -0- -0- -0- 42,965
--------- ------------- ----------- ---------- ------------
Total Non-Operating
Income (Loss) (12,412) (18,470) (25,373) (36,908) (874,118)
--------- ------------- ----------- ---------- ------------
INCOME (LOSS) BEFORE TAXES
AND SUBSIDIARY LOSS (83,127) (69,679) (165,879) (144,078) (5,278,294)
Minority Interest In Subsidiary
Loss 9,643 9,887 18,182 17,297 877,629
Equity in Loss of Unconsolidated
Subsidiary -0- -0- -0- -0- (12,416)
Income Taxes -0- -0- -0- -0- (768)
--------- ------------- ----------- ---------- ------------
NET INCOME (LOSS) $(73,484) $ (59,792) $(147,697) $(126,781) $(4,413,849)
========= ============= =========== ========== ============
NET INCOME (LOSS) PER SHARE (Note2) $ (0.01) $ (0.01) $ (0.01) $ (0.02)
========= ============= =========== ========== ============
</TABLE>
The Accompanying Notes Are An Integral Part Of These Financial Statements
Page 6 of 19<PAGE>
<TABLE>
<CAPTION>
MPM TECHNOLOGIES, INC. Consolidated Statement Of
AND SUBSIDIARIES Stockholders' Equity For The
(a Development Stage Company) Period From Inception (May 1,
Spokane, Washington 1983) To June 30, 1996
UNAUDITED
Deficit
Accumulated
Additional During
Common Stock Paid-In Treasury Stock Exploratory
Shares Amount Capital Shares Amount Stage Total
----------- ----------- ----------- ---------- ---------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Balances, May 1,
1983 -0- $ -0- $ -0- -0- $ -0- $ -0- $ -0-
Stock Issued for
Cash, July 1983,
$0.01 Per Share 400,000 4,000 -0- -0- -0- -0- 4,000
Stock Issued for
Mining Claims and
Leases, April 1985
and January 1986,
$0.015 Per Share 30,130,328 471,397 -0- -0- -0- -0- 471,397
4:1 Reverse Stock
Split (Note 1) (22,897,746) -0- -0- -0- -0- -0- -0-
Change From No-Par
To $0.001 Par -0- (467,764) 467,764 -0- -0- -0- -0-
----------- ----------- ----------- ---------- ---------- ------------ ------------
Balances, December
31, 1983 7,632,582 7,633 467,764 -0- -0- -0- 475,397
Stock Issued for
Cash, March 1984,
$0.08 Per Share 937,500 938 74,062 -0- -0- -0- 75,000
Costs of Offering -0- -0- (9,081) -0- -0- -0- (9,081)
Net Income -0- -0- -0- -0- -0- 4,349 4,349
----------- ----------- ----------- ---------- ---------- ------------ ------------
Balances, December
31, 1984 8,570,082 8,571 532,745 -0- -0- 4,349 545,665
Net (Loss) -0- -0- -0- -0- -0- (115,602) (115,602)
----------- ----------- ----------- ---------- ---------- ------------ ------------
Balances, December
31, 1985 8,570,082 8,571 532,745 -0- -0- (111,253) 430,063
Stock Issued for
Cash, July 1986,
$0.60 Per Share 705,211 705 422,415 -0- -0- -0- 423,120
Costs of Offering -0- -0- (9,848) -0- -0- -0- (9,848)
Stock Issued for Cash
December 1986:
$0.60 per Share 166,667 167 99,833 -0- -0- -0- 100,000
$1.00 per Share 100,000 100 99,900 -0- -0- -0- 100,000
Net (Loss) -0- -0- -0- -0- -0- (133,173) (133,173)
----------- ----------- ----------- ---------- ---------- ------------ ------------
Balances, December
31, 1986 9,541,960 9,543 1,145,045 -0- -0- (244,426) 910,162
Prior Period Adjust-
ment (Note 9) -0- -0- -0- -0- -0- (12,416) (12,416)
----------- ----------- ----------- ---------- ---------- ------------ ------------
Balances, December
31, 1986 as
Restated 9,541,960 9,543 1,145,045 -0- -0- (256,842) 897,746
</TABLE>
(Continued)
The Accompanying Notes Are An Integral Part Of These Financial Statements
Page 7 of 19<PAGE>
<TABLE>
<CAPTION>
MPM TECHNOLOGIES, INC. Consolidated Statement Of
AND SUBSIDIARIES Stockholders' Equity For The
(a Development Stage Company) Period From Inception (May 1,
Spokane, Washington 1983) To June 30, 1996
(Continued)
Deficit
Accumulated
Additional During
Common Stock Paid-In Treasury Stock Exploratory
Shares Amount Capital Shares Amount Stage Total
----------- ----------- ----------- ---------- ---------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
Balances, December
31, 1986 as
Restated 9,541,960 9,543 1,145,045 -0- -0- (256,842) 897,746
Stock Issued for:
Services,February
1987, $0.60 per
Share 21,784 22 13,048 -0- -0- -0- 13,070
Services, March
1987, $0.60 per
Share 6,660 6 3,990 -0- -0- -0- 3,996
Cash, April-Sept 1987,
$1.40 per Share 576,123 576 805,999 -0- -0- -0- 806,575
Services, June 1987
$1.40 per Share 3,699 4 5,175 -0- -0- -0- 5,179
Buildings, Land,
Equipment, Mining
Leases, July 1987,
$1.06 per Share 761,548 762 809,151 -0- -0- -0- 809,913
Increased Partnership
Interest, October 1,
1987, $0.10 per
Share (Note 2) 269,167 269 (45,367) -0- -0- -0- (45,098)
Treasury Stock
Acquired -0- -0- -0- (237,900) -0- -0- -0-
Net (Loss) -0- -0- -0- -0- -0- (301,868) (301,868)
----------- ----------- ----------- ---------- ---------- ------------- -------------
Balances, December
31, 1987 11,180,941 $ 11,182 $ 2,737,041 (237,900) $ -0- $ (558,710) $ 2,189,513
Stock Issued for Services,
February 1988, $1.40
per share 683 1 955 -0- -0- -0- 956
September 1988, $1.50
per share 200 -0- 300 -0- -0- -0- 300
Sale of Treasury Stock -0- -0- 1,272 20,000 -0- -0- 1,272
Net (Loss) -0- -0- -0- -0- -0- (446,594) (446,594)
----------- ----------- ----------- ---------- ---------- ------------- -------------
Balances, December
31, 1988 11,181,824 11,183 2,739,568 (217,900) -0- (1,005,304) 1,745,447
Stock Issued for:
Assets, Sept 1989
$0.90 per share 1,000 1 899 -0- -0- -0- 900
Operating Expenses,
May-Dec 1989 8,200 8 6,647 -0- -0- -0- 6,655
Net (Loss) -0- -0- -0- -0- -0- (549,042) (549,042)
----------- ----------- ----------- ---------- ---------- ------------- -------------
Balances, December
31, 1989 11,191,024 11,192 2,747,114 (217,900) -0- (1,554,346) 1,203,960
</TABLE>
(Continued)
The Accompanying Notes Are An Integral Part Of These Financial Statements
Page 8 of 19<PAGE>
<TABLE>
<CAPTION>
MPM TECHNOLOGIES, INC. Consolidated Statement Of
AND SUBSIDIARIES Stockholders' Equity For The
(a Development Stage Company) Period From Inception (May 1,
Spokane, Washington 1983) To June 30, 1996
(Continued)
Deficit
Accumulated
Additional During
Common Stock Paid-In Treasury Stock Exploratory
Shares Amount Capital Shares Amount Stage Total
----------- ---------- ----------- ---------- ---------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
Balances, December
31, 1989 11,191,024 $ 11,192 $ 2,747,114 (217,900) $ -0- $(1,554,346) $1,203,960
Stock Issued for:
Services -0- -0- 1,000 -0- -0- -0-
Operating Expenses,
Jan. 1990 $0.47 200 -0- 94 -0- -0- -0- 94
June 1990 $0.81 27,231 27 22,098 -0- -0- -0- 22,125
Oct. 1990 $1.25 5,000 5 6,245 -0- -0- -0- 6,250
Patents
Oct. 1990 $1.25 8,000 8 9,992 -0- -0- -0 10,000
Cash 4th Quarter
$1.25 per share 188,456 189 235,319 -0- -0- -0- 235,508
Net (Loss) -0- -0- -0- -0- -0- (515,868) (515,868)
----------- ---------- ----------- ---------- ---------- ------------- -------------
Balances, December
31, 1990 11,419,911 11,421 3,020,862 (216,900) -0- (2,070,214) 962,069
Stock Issued for:
Cash 1st Quarter 16,500 16 20,609 -0- -0- -0- 20,625
Operating Expenses,
Sept. 1991 $1.00 1,000 1 999 -0- -0- -0- 1,000
Oct. 1991 $0.905 10,000 10 9,040 -0- -0- -0- 9,050
Recision of
Treasury Stock
2nd Quarter -0- -0- -0- 216,900 -0- -0- -0-
Contributed Capital
From Directors -0- -0- 208,036 -0- -0- -0- 208,036
Net (Loss) -0- -0- -0- -0- -0- (383,578) (383,578)
----------- ---------- ----------- ---------- ---------- ------------- -------------
Balances, December
31, 1991 11,447,411 11,448 3,259,546 -0- -0- (2,453,792) 817,202
Stock Issued For:
Reduction of Debt 50,262 50 26,338 -0- -0- -0- 26,388
3rd Quarter
Cash 4th Quarter 40,000 40 3,960 -0- -0- -0- 4,000
Exercise of 1990
Option 435,912 436 (436) -0- -0- -0- -0-
Options Granted
For Services -0- -0- 533,975 -0- -0- -0- 533,975
Contributed Capital
From Directors -0- -0- 467,290 -0- -0- -0- 467,290
Net (Loss) -0- -0- -0- -0- -0- (817,804) (817,804)
----------- ---------- ----------- ---------- ---------- ------------- -------------
Balances, Dec.
31, 1992 11,973,585 11,974 4,290,673 -0- -0- (3,271,596) 1,031,051
Stock Issued for:
Cash
1st Qtr. $0.10 90,000 90 8,910 -0- -0- -0- 9,000
2nd Qtr. $1.25 1,000 1 1,249 -0- -0- -0- 1,250
3rd Qtr $0.10 10,000 10 990 -0- -0- -0- 1,000
Operating Expenses 10,000 10 12,690 -0- -0- -0- 12,700
Exercise of
1990 Options 2,000 2 (2) -0- -0- -0- -0-
Contributed Capital
From Directors -0- -0- 816,124 -0- -0- -0- 816,124
Contributed Capital
Other -0- -0- 1,250 -0- -0- -0- 1,250
Net (Loss) -0- -0- -0- -0- -0- (495,513) (495,513)
----------- ---------- ----------- ---------- ---------- ------------- -------------
Balances, December
31, 1993 12,086,585 12,087 5,131,884 -0- -0- (3,767,109) 1,376,862
----------- ---------- ----------- ---------- ---------- ------------- -------------
</TABLE>
(Continued)
The Accompanying Notes Are An Integral Part Of These Financial Statements
Page 9 of 19<PAGE>
<TABLE>
<CAPTION>
MPM TECHNOLOGIES, INC. Consolidated Statement Of
AND SUBSIDIARIES Stockholders' Equity For The
(a Development Stage Company) Period From Inception (May 1,
Spokane, Washington 1983) To June 30, 1996
(Continued)
Deficit
Accumulated
Additional During
Common Stock Paid-In Treasury Stock Exploratory
Shares Amount Capital Shares Amount Stage Total
----------- ----------- ------------ ----------- ---------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
Balances, December
31, 1993 12,086,585 $ 12,087 $ 5,131,884 -0- -0- $(3,767,109) $ 1,376,862
Stock Issued For:
Cash
$0.97 50,000 50 48,550 -0- -0- -0- 48,600
$0.88 30,000 30 26,430 -0- -0- -0- 26,460
$0.97 65,574 66 63,574 -0- -0- -0- 63,640
Operating Expenses 12,800 13 39,987 -0- -0- -0- 40,000
Prepaid Expenses 12,800 13 39,987 -0- -0- -0- 40,000
Reduction of
Debt 8,380 8 29,992 -0- -0- -0- 30,000
Operating Expenses 9,120 9 32,706 -0- -0- -0- 32,715
Options 110,000 110 10,890 -0- -0- -0- 11,000
Contributed Capital
From Directors -0- -0- 176,108 -0- -0- -0- 176,108
Net (Loss) -0- -0- -0- -0- -0- (227,991) (227,991)
----------- ----------- ------------ ----------- ---------- ------------- -------------
Balances, December
31, 1994 12,385,259 12,386 5,600,108 -0- -0- (3,995,100) 1,617,394
----------- ----------- ------------ ----------- ---------- ------------- -------------
Contributed Capital
From Directors -0- -0- 190,752 -0- -0- -0- 190,752
Stock Issued for:
Cash
July $0.97 82,580 83 79,917 -0- -0- -0- 80,000
Sept $0.87 115,077 115 99,885 -0- -0- -0- 100,000
Oct $0.95 159,260 159 151,804 -0- -0- -0- 151,963
Investment in
NuPower 100,000 100 (119,349) -0- -0- -0- (119,249)
Stock Registration
Fees -0- -0- (4,151) -0- -0- -0- (4,151)
Net (Loss) -0- -0- -0- -0- -0- (271,052) (271,052)
----------- ----------- ------------ ----------- ---------- ------------- -------------
Balances, December
31, 1995 12,842,176 12,843 5,998,966 -0- -0- (4,266,152) 1,745,657
----------- ----------- ------------ ----------- ---------- ------------- -------------
Contributed Capital
From Directors -0- -0- 57,824 -0- -0- -0- 57,824
Stock Issued For:
Reduction of
Debt 34,305 33 24,967 -0- -0- -0- 25,000
Stock Registration
Fees -0- -0- (1,000) -0- -0- -0- (1,000)
Net (Loss) 6 Months
Ended June 30, 1996 -0- -0- -0- -0- -0- (147,697) (147,697)
----------- ----------- ------------ ----------- ---------- ------------- -------------
Balances, June
30, 1996 12,876,481 $ 12,876 $ 6,080,757 $ -0- $ -0- $(4,413,849) $1,679,784
=========== =========== ============ ========== ========== ============= -------------
</TABLE>
The Accompanying Notes Are An Integral Part Of These Financial Statements
Page 10 of 19<PAGE>
<TABLE>
<CAPTION>
MPM TECHNOLOGIES, INC. Consolidated Statement Of Cash Flows
AND SUBSIDIARIES For The Six Month Periods Ended June
(a Development Stage Company) 30, 1996 And 1995 And From Inception
Spokane, Washington (May 1, 1983) To Date
UNAUDITED
Six Months Ended Inception
June 30, To
1996 1995 Date
----------- ---------- --------------
<S> <C> <C> <C>
NET CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income (Loss) $ (147,697) $(126,781) $ (4,413,849)
Noncash Expenses, Revenues, Losses,
and Gains Included in Income:
Depreciation and Amortization 5,472 6,200 535,069
Forgiveness of Debt -0- -0- (101,509)
Minority (18,182) (17,297) (865,211)
Loss(Gain) on Sale of Equipment -0- -0- (199,220)
Stock Granted for Operating Expenses -0- -0- 154,090
Stock Issued for Services -0- -0- 533,975
Accrued Interest Payable
Converted to Debt 1,014 -0- 57,645
Net (Increase)/Decrease in:
Accounts Receivable 3,579 (552) (9,759)
Prepaid Insurance 3,048 -0- (3,045)
Stock For Prepaid Expenses -0- -0- 40,000
Net Increase/(Decrease) in:
Accounts Payable -0- (6,000) 17,330
Interest Payable 506 (6,571) 130,503
----------- ---------- --------------
Net Cash Flows from
Operating Activities (152,260) (151,001) (4,123,981)
----------- ---------- --------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to:
Mining Claims -0- -0- (10,728)
Deferred Exploration and
Development Costs -0- -0- (485,000)
Property, Plant and Equipment (3,518) -0- (302,973)
Mining Leases -0- -0- (5,330)
Leasehold Improvements -0- -0- (9,357)
Patents and Licenses 570 (194) (72,286)
Deposits and Advance
Minimum Royalties -0- (44) (52,591)
Partnership Investment -0- -0- 90,749
Organization Costs -0- -0- (1,296)
Proceeds from:
Sale of Equipment -0- -0- 296,876
Redemption of Bonds and Deposits -0- -0- 4,933
Loans Made -0- -0- (395,456)
Less Repayments -0- -0- 108,354
----------- ---------- --------------
Net Cash Used by
Investing Activities (2,949) (238) (834,105)
----------- ---------- --------------
</TABLE>
(Continued)
The Accompanying Notes Are An Integral Part of These Financial Statements
Page 11 of 19<PAGE>
<TABLE>
<CAPTION>
MPM TECHNOLOGIES, INC. Consolidated Statement Of Cash Flows
AND SUBSIDIARIES For The Six Month Periods Ended June
(a Development Stage Company) 30, 1996 And 1995 And From Inception
Spokane, Washington (May 1, 1983) To Date
(continued)
Six Months Ended Inception
June 30, To
1996 1995 Date
------------ ------------- ---------------
<S> <C> <C> <C>
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds of Short-Term Debt 175,000 69,651 2,458,112
Payments to Settle Debt (80,005) (98,883) (1,689,992)
Issuance of Long-Term Debt -0- -0- 288,184
Sale of Treasury Stock -0- -0- 1,272
Contributed Capital 57,824 115,576 1,917,384
Issuance of Common Stock 24,000 -0- 2,143,412
----------- ------------- ---------------
Net Cash Provided by
Financing Activities 176,819 86,344 5,118,372
----------- ------------- ---------------
Net Increase/(Decrease) in Cash 21,611 (64,895) 160,286
Beginning Cash Balance 138,675 102,322 -0-
----------- ------------- ---------------
Ending Cash Balance $ 160,286 $ 37,427 $ 160,286
=========== ============= ===============
</TABLE>
The Accompanying Notes Are An Integral Part of These Financial Statements
Page 12 of 19<PAGE>
MPM TECHNOLOGIES, INC. NOTES TO FINANCIAL STATEMENTS
AND SUBSIDIARIES
(a Development Stage Company)
Spokane, Washington
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-K for the year
ended December 31, 1995. 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, 1995. 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, 1996 should not necessarily be taken as
indicative of the results of operations that may be expected for the entire
year 1996.
(The Remainder of This Page Intentionally Left Blank)
Page 13 of 19<PAGE>
PART 1
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
(a) Review of Operations
MINING
The Company owns or controls 45 patented and unpatented lode claims amounting
to approximately 750 acres in the heart of the historical Emery Mining
District, Powell County, Montana. The 45 claims include: eight patented claims,
and sixteen unpatented claims owned by the Company and eight patented claims
and thirteen unpatented claims leased by the Company.
To date the Company has expended over $1.3 million on exploration and
development, lease payments and claims. Additionally, over $532,000 has been
expended by the Company on buildings, mill machinery, vehicles and equipment.
Management is currently negotiating with several mining companies for a joint
venture to further explore and develop the properties.
WASTE-TO-ENERGY
During the Second Quarter of 1996, the Company's venture partner USF Smogless
moved forward with permitting, site evaluation and selection pursuant to the
agreement entered with a consortium of European companies during the First
Quarter of 1996. The agreement calls for utilization of the Skygas technology
along with USF Smogless' proprietary Flotherm technology for the destruction of
selected wastes and for the creating of fuel gas. The project is estimated to
be in excess of $10 million of capital investment.
The Company is currently in negotiations for other Skygas installations in
Taiwan, South Korea, Thailand, China and Europe.
The Skygas process is a two reactor system (primary and secondary) for the
disposal of carbonaceous wastes by converting these wastes into a clean burning
medium BTU fuel gas. In March of 1990, NuPower, a Montana general partnership,
in which NuPower, Inc., a wholly owned subsidiary of MPM Technologies, Inc.,
owns a 58.21% interest, entered into an agreement with Smogless S.p.A., Milan,
Italy, and Xytel Technologies, Inc., of Mt. Prospect, IL, for the purpose of
commercializing the Skygas process. Smogless agreed to finance, engineer,
build, test and operate a commercial demonstration facility. Xytel agreed to
handle all promotional work, public relations, advertising and marketing of the
process.
During 1994, Smogless was purchased by United States Filter Corp. (NYSE: USF)
and renamed USF Smogless. During the First Quarter of 1996, Xytel announced it
had changed its name to Unitel Technologies, Inc. Percentage of interest in
the Skygas Venture is as follows: NuPower -70%; USF Smogless - 15%; and Unitel
Technologies, Inc. - 15%.
(b) Liquidity
During the Second Quarter of 1996, the sole source of revenue was from nominal
interest on bank accounts. Funds for operations were provided by cash
reserves, reimbursement of expenses from Unitel Technologies and USF Smogless
and from the sale of company stock.
During the Second Quarter, the Company entered into a Subordinated Convertible
Term Note Agreement with Chesterton Trading Limited of London, England. The
agreement allows Chesterton to convert $200,000 USD into common shares of the
Company at a price per share dependent upon the price of the shares as reported
on Nasdaq Stock Market during a five day period prior to conversion. The note
has a term of three years and bears interest at 5% per annum. Additionally,
the agreement entitles Chesterton to purchase up to 100,000 shares of common
Page 14 of 19<PAGE>
stock from the company at $1.00 per share.
(c) Capital Resources
The Company utilized funds received primarily for general operational
expenses. Minimal activity was spent by the Company on the mining properties
during the Second Quarter of 1996. Management is negotiating with various
mining companies for a joint venture which would reduce mining expenses.
Management believes that further development costs relating to the Skygas
process will be minimal due to the venture now in place.
QUARTER ENDED 6/30/96 COMPARED TO QUARTER ENDED 6/30/95
Results of Operations
1996 1995 Inc/(Dec) % of Change
--------- ----------- ----------- -----------
Working Capital
(Deficit) (904,391) (1,071,846) (167,455) 15.6
Total Operating
Expenses 70,715 51,209 19,506 38.1
Interest Expenses 13,377 18,536 (5,159) (27.8)
Contract Services 4,795 18,000 (13,205) (73.4)
Insurance 3,047 -0- 3,047 100.0
Legal and Accounting 23,345 13,307 10,038 75.4
Office and Postage 4,941 7,489 (2,548) (34.0)
Reimbursed Expenses 10,833 8,474 2,359 27.8
Travel and Entertainment 9,891 1,953 7,938 406.5
Net Income (Loss) (73,484) (59,792) (13,692) (22.9)
Page 15 of 19<PAGE>
PART II
ITEM 1. LEGAL PROCEEDINGS
The Company knows of no litigation present, threatened or contemplated or
unsatisfied judgement 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
There was no submission of matters to a vote of security holders during the
Second Quarter of 1996.
ITEM 5. OTHER INFORMATION
There is no other information to report under this item.
Page 16 of 19<PAGE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a) Exhibits Required by Item 601 of Regulation S-K
Reference Form
Exhibit Number 10-Q Page
Number
1.1 Plan of acquisition, reorganization,
arrangement, liquidation or succession N/A
2.1 Instruments defining the rights of security
holders - Filed as Exhibit 3 to Form 10
Registration Statement No. 0-14910 and
incorporated herein by reference. N/A
3.1 Statement re: Computation of Earnings
per share N/A
4.1 Letter re: Unaudited Financial Statements N/A
5.1 Letter re: Change in Accounting Principle N/A
6.1 Previously unfiled documents N/A
7.1 Report furnished to Security Holders N/A
8.1 Published report regarding matters
submitted to vote of security holders N/A
9.1 Consent of Experts and Counsel N/A
10.1 Powers of Attorney N/A
11.1 Additional Exhibits N/A
27 Financial Data Schedule EX-27
b)Reports on Form 8-K
On April 11, 1996, the Company announced it had received notification
from independent auditor Robert Moe & Associates, P.S., that they would not be
able to audit the Company's December 31, 1995, financial statement. A letter
from Robert Moe & Associates, P.S., to the Company dated April 10, 1996, and
one to the SEC dated April 11, 1996, declared that they were not aware of any
information or facts that would impair the integrity of management of MPM
Technologies, Inc., and that they have no disagreements with management to
accounting principles, auditing procedures or similarly significant matters.
The letter goes on to state that the reason for the change of auditors is that
their firm has had a reduction and reassignment in staff.
On May 8, 1996, the Company filed an 8-K/A, amending the 8-K filed on April
11, 1996. The Company stated that reports for years ended 1993 and 1994 by
Robert Moe & Associates, P.S., independent auditor for the Company, did not
contain an adverse opinion or disclaimer of opinion or modified as to
uncertainty, audit scope, or accounting principles. In addition, during the
Company's two most recent fiscal years and subsequent interim period proceeding
dismissal by Robert Moe & Associates, P.S., there were no disagreements with
Page 17 of 19<PAGE>
the former accountant on any matter of accounting principles or practices,
financial statements disclosure, or auditing scope or procedures, which
disagreements if not resolved to the satisfaction of the former accountant,
would have caused it to make reference to the subject matter of the
disagreements in connection with its reports.
Page 18 of 19<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities 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.
8/14/96 /s/Robert D. Little
- ----------------- ------------------------------
(Date) Robert D. Little
Secretary
Page 19 of 19<PAGE>
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