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: March 31, 1997 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, Ste 30
Spokane, WA 99201-2261
- --------------------------------- -------------------------
(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 April 23, 1997, the registrant had outstanding 14,966,831 shares of
common stock which is the registrant's only class of stock.<PAGE>
PART 1 - FINANCIAL INFORMATION
Item 1. Financial Statements
Financial Statements follow on the next page.<PAGE>
MPM TECHNOLOGIES, INC.
AND SUBSIDIARIES
(A Development Stage Company)
Spokane, Washington
Financial Statements
March 31, 1997 and December 31, 1996<PAGE>
<TABLE>
<CAPTION>
MPM TECHNOLOGIES, INC. Consolidated Statement of Financial
AND SUBSIDIARIES Position as of March 31, 1997 and
(A Development Stage Company) December 31, 1996
UNAUDITED
ASSETS
<S> <C> <C>
March December
31, 1997 31, 1996
--------------- --------------
CURRENT ASSETS
Cash (Note 2) $ 130,286 $ 40,566
Receivables 5,506 37,017
Prepaid insurance 6,696 1,438
--------------- --------------
Total current assets 142,488 79,021
--------------- --------------
PROPERTY, PLANT AND EQUIPMENT (NOTE 2)
Land 70,000 70,000
Mining claims (Note 3) 48,600 48,600
Mining leases (Notes 3 and 7) 5,437 5,437
Buildings 133,005 133,005
Mill machinery 289,063 289,063
Vehicles and equipment 117,630 117,630
Software 3,258 3,258
--------------- --------------
Total property, plant and equipment 666,993 666,993
Less accumulated depreciation 433,177 422,167
--------------- --------------
Net property, plant and equipment 233,816 244,826
--------------- --------------
OTHER ASSETS
Deferred exploration and development costs (Note 1) 1,195,466 1,195,466
Investment (Note 1) 1,200,000 1,200,000
Notes receivable 275,000 275,000
Licenses, net of accumulated amortization of $4,846
and $4,595, respectively (Note 2) 29,243 29,494
Advance minimum royalties (Note 2) 50,750 50,750
Mineralized material in place (Note 3) 10 10
--------------- --------------
Total other assets 2,750,469 2,750,720
--------------- --------------
TOTAL ASSETS $ 3,126,773 $ 3,074,567
=============== ==============
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
<TABLE>
<CAPTION>
MPM TECHNOLOGIES, INC. Consolidated Statement of Financial
AND SUBSIDIARIES Position as of March 31, 1997 and
(A Development Stage Company) December 31, 1996
UNAUDITED
LIABILITIES AND STOCKHOLDERS' EQUITY
<S> <C> <C>
March December
31, 1997 31, 1996
---------------- ---------------
CURRENT LIABILITIES
Accounts payable $ -0- $ 963
Interest payable - other 439 5,859
Interest payable - related parties (Note 4) 129,997 129,997
Notes payable - other (Note 4) 635,116 570,234
Notes payable - related parties (Note 4) 314,765 314,765
---------------- ---------------
Total current liabilities 1,080,317 1,021,818
---------------- ---------------
MINORITY INTEREST (NOTES 2 and 6)
Minority interest in consolidated entities (728,570) (718,888)
---------------- ---------------
COMMITMENTS (NOTE 7)
STOCKHOLDERS' EQUITY
Common stock, $.001 par value, 50,000,000 shares authorized,
14,851,624 shares and 14,399,773 shares outstanding
March 31, 1997, and December 31, 1996, respectively
(Notes 1, 6 and 8) 14,851 14,399
Additional paid-in capital 7,517,545 7,417,996
Accumulated deficit during the development stage (4,757,370) (4,660,758)
---------------- ---------------
Total stockholders' equity 2,775,026 2,771,637
---------------- ---------------
TOTAL LIABILITIES, MINORITY INTEREST AND
STOCKHOLDERS' EQUITY $ 3,126,773 $ 3,074,567
================ ================
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
<TABLE>
<CAPTION>
MPM TECHNOLOGIES, INC. Consolidated Statement of Operations for the Quarters
AND SUBSIDIARIES Ended March 31, 1997 and 1996 and Cumulative
(A Development Stage Company) Amounts from Inception (May 1, 1983) Through
March 31, 1997
UNAUDITED
Quarter Ended
March 31, Cumulative
<S> <C> <C> <C>
1997 1996 Amounts
------------ ------------ --------------
REVENUES
Management fees - related party $ -0- $ -0- $ 77,000
Sales of equipment 200,147
------------ ------------ --------------
Total revenues -0- -0- 277,147
------------ ------------ --------------
SELLING, GENERAL AND ADMINISTRATIVE
EXPENSES
Bank service fees 10 2,791
Contract labor 18,000 1,297,314
Depreciation and amortization 11,261 3,100 622,915
Dues and subscriptions 30 38,914
Employee benefits 3,704
Equipment rental 24,056
Exploration 132,829
Freight 10,553
Insurance 3,258 2,876 141,441
Professional services 28,856 37,104 1,496,848
Licenses, taxes and other fees 22,035 4,340 248,307
Office 3,331 2,716 203,478
Public relations 74,168
Rent - office 1,540 1,140 172,373
Repairs and maintenance 53,397
Research and development 447,111
Telephone and utilities 723 374 57,613
Transfer and registration fees 12,364 368 54,854
Travel and entertainment 10,215 6,361 269,822
Watchman 300 300 34,137
Miscellaneous 3,105 3,000 124,172
Reimbursed expenses (3,680) (9,888) (502,064)
------------ ------------ --------------
Total expenses 93,348 69,791 5,008,733
------------ ------------ --------------
(LOSS) BEFORE NON-OPERATING ITEMS (93,348) (69,791) (4,731,586)
------------ ------------ --------------
NON-OPERATING INCOME (EXPENSE)
Interest income 691 529 37,015
Interest expense (13,637) (13,490) (1,101,081)
Forgiveness of debt by related parties 101,509
Gain on sale of securities 6,160
Other income 42,965
------------ ------------ --------------
Total non-operating income (expense) (12,946) (12,961) (913,432)
------------ ------------ --------------
(LOSS) BEFORE INCOME TAXES AND
SUBSIDIARY LOSS (106,294) (82,752) (5,645,018)
------------ ------------ --------------
INCOME TAXES AND SUBSIDIARY LOSS
Income taxes (768)
Minority interest in subsidiary loss (income) 9,682 8,539 900,832
Equity in loss of unconsolidated subsidiary (12,416)
------------ ------------ --------------
Total income taxes and subsidiary loss (income) 9,682 8,539 887,648
------------ ------------ --------------
NET (LOSS) $ (96,612) $ (74,213) $ (4,757,370)
============ ============ ==============
NET (LOSS) PER SHARE (NOTE 2) $ (.01) $ (.01) $ (.32)
============ ============ ==============
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
<TABLE>
<CAPTION>
MPM TECHNOLOGIES, INC. Consolidated Statement of Changes in Stockholders'
AND SUBSIDIARIES Equity for the Period from Inception (May 1, 1983)
(A Development Stage Company) Through March 31, 1997
UNAUDITED
<S> <C> <C> <C> <C> <C>
Accumulated
Deficit
Additional During the
Common Stock Paid-In Development
Shares Amount Capital Stage Totals
------------- ------------- ----------- ----------- ------------
Balances, May 1, 1983 -0- $ -0- $ -0- $ -0- $ -0-
Stock issued for cash,
July 1983,
$.01 per share 400,000 4,000 4,000
Stock issued for mining
claims and leases,
at $.015 per share 30,130,328 471,397 471,397
4:1 Reverse stock split (22,897,746)
Change from no-par
to $.001 par (467,764) 467,764
------------- ------------- ----------- ----------- ------------
Balances, December 31, 1983 7,632,582 7,633 467,764 -0- 475,397
Stock issued for cash,
March 1984,
$.08 per share 937,500 938 74,062 75,000
Cost of offering (9,081) (9,081)
Net income 4,349 4,349
------------- ------------- ----------- ----------- ------------
Balances, December 31, 1984 8,570,082 8,571 532,745 4,349 545,665
Net (loss) (115,602) (115,602)
------------- ------------- ----------- ----------- ------------
Balances, December 31, 1985 8,570,082 8,571 532,745 (111,253) 430,063
Stock issued for cash,
July 1986,
$.60 per share 705,211 705 422,415 423,120
Costs of offering (9,848) (9,848)
Stock issued for cash,
December 1986:
$.60 per share 166,667 167 99,833 100,000
$1.00 per share 100,000 100 99,900 100,000
Net (loss) (133,173) (133,173)
------------- ------------- ----------- ----------- ------------
Balances, December 31, 1986 9,541,960 9,543 1,145,045 (244,426) 910,162
Prior period adjustment (12,416) (12,416)
------------- ------------- ----------- ----------- ------------
Balances, December 31, 1986 as restated 9,541,960 9,543 1,145,045 (256,842) 897,746
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
<TABLE>
<CAPTION>
MPM TECHNOLOGIES, INC. Consolidated Statement of Changes in Stockholders'
AND SUBSIDIARIES Equity for the Period from Inception (May 1, 1983)
(A Development Stage Company) Through March 31, 1997
UNAUDITED
<S> <C> <C> <C> <C> <C> <C> <C>
Accumulated
Deficit
Additional During the
Common Stock Paid-In Treasury Stock Development
Shares Amount Capital Shares Amount Stage Totals
------------ --------- ------------ ---------- ------- ------------- -------------
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,
$.60 per share 21,784 22 13,048 13,070
Services, March 1987,
$.60 per share 6,660 6 3,990 3,996
Cash, April-September
1987, $1.40 per share 576,123 576 805,999 806,575
Services, June 1987,
$1.40 per share 3,699 4 5,175 5,179
Buildings, land, equipment,
mining leases, July 1987,
$1.06 per share 761,548 762 809,151 809,913
Increased partnership interest,
October 1, 1987,
$.10 per share (Note 2) 269,167 269 (45,367) (45,098)
Treasury stock acquired (237,900)
Net (loss) (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 1 955 956
September 1988,
$1.50 per share 200 300 300
Sales of treasury stock 1,272 20,000 1,272
Net (loss) (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
September 1989,
$.90 per share 1,000 1 899 900
Operating expenses
May-December 1989 8,200 8 6,647 6,655
Net (loss) (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>
The accompanying notes are an integral part of these financial statements.
<PAGE>
<TABLE>
<CAPTION>
MPM TECHNOLOGIES, INC. Consolidated Statement of Changes in Stockholders'
AND SUBSIDIARIES Equity for the Period from Inception (May 1, 1983)
(A Development Stage Company) Through March 31, 1997
UNAUDITED
<S> <C> <C> <C> <C> <C> <C> <C>
Accumulated
Deficit
Additional During the
Common Stock Paid-In Treasury Stock Development
Shares Amount Capital Shares Amount Stage Totals
------------ --------- ------------ ---------- ------- ------------- -------------
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 1,000
Operating expenses
at $.047 per share 200 94 94
at $.81 per share 27,231 27 22,098 22,125
at $1.25 per share 5,000 5 6,245 6,250
Patents, October 1990,
$1.25 per share 8,000 8 9,992 10,000
Cash, 4th Quarter,
$1.25 per share 188,456 189 235,319 235,508
Net (loss) (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 20,625
Operating expenses
September 1991,
$1.00 per share 1,000 1 999 1,000
October 1991,
$.905 per share 10,000 10 9,040 9,050
Recision of Treasury
Stock, 2nd Quarter 216,900
Contributed capital
from directors 208,036 208,036
Net (loss) (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,
3rd Quarter 50,262 50 26,338 26,388
Cash, 4th Quarter 40,000 40 3,960 4,000
Exercise of 1990
option 435,912 436 (436)
Options granted for
services 533,975 533,975
Contributed capital
from directors 467,290 467,290
Net (loss) (817,804) (817,804)
------------ --------- ------------ ---------- ------- ------------- -------------
Balances, December 31, 1992 11,973,585 11,974 4,290,673 -0- -0- (3,271,596) 1,031,051
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
<TABLE>
<CAPTION>
MPM TECHNOLOGIES, INC. Consolidated Statement of Changes in Stockholders'
AND SUBSIDIARIES Equity for the Period from Inception (May 1, 1983)
(A Development Stage Company) Through March 31, 1997
UNAUDITED
<S> <C> <C> <C> <C> <C>
Accumulated
Deficit
Additional During the
Common Stock Paid-In Development
Shares Amount Capital Stage Totals
------------ --------- ------------ ------------ ------------
Balances, December 31, 1992 11,973,585 $ 11,974 $ 4,290,673 $(3,271,596) $ 1,031,051
Stock issued for:
Cash
at $.10 per share 90,000 90 8,910 9,000
at $1.25 per share 1,000 1 1,249 1,250
at $.10 per share 10,000 10 990 1,000
Operating expenses 10,000 10 12,690 12,700
Exercise of 1990 options 2,000 2 (2)
Contributed capital from directors 816,124 816,124
Contributed capital - other 1,250 1,250
Net (loss) (495,513) (495,513)
------------ --------- ------------ ------------ ------------
Balances, December 31, 1993 12,086,585 12,087 5,131,884 (3,767,109) 1,376,862
Stock issued for:
Cash
at $.97 per share 50,000 50 48,550 48,600
at $.88 per share 30,000 30 26,430 26,460
at $.97 per share 65,574 66 63,574 63,640
Operating expenses 12,800 13 39,987 40,000
Prepaid expenses 12,800 13 39,987 40,000
Reduction of debt 8,380 8 29,992 30,000
Operating expenses 9,120 9 32,706 32,715
Options 110,000 110 10,890 11,000
Contributed capital from directors 176,108 176,108
Net (loss) (227,991) (227,991)
------------ --------- ------------ ------------ ------------
Balances, December 31, 1994 12,385,259 12,386 5,600,108 (3,995,100) 1,617,394
Contributed capital from directors 190,752 190,752
Stock issued for:
Cash
at $.97 per share 82,580 83 79,917 80,000
at $.87 per share 115,077 115 99,885 100,000
at $.95 per share 159,260 159 151,804 151,963
Investment in NuPower 100,000 100 (119,349) (119,249)
Stock registration fees (4,151) (4,151)
Net (loss) (271,052) (271,052)
------------ --------- ------------ ------------ ------------
Balances, December 31, 1995 12,842,176 12,843 5,998,966 (4,266,152) 1,745,657
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
<TABLE>
<CAPTION>
MPM TECHNOLOGIES, INC. Consolidated Statement of Changes in Stockholders'
AND SUBSIDIARIES Equity for the Period from Inception (May 1, 1983)
(A Development Stage Company) Through March 31, 1997
UNAUDITED
<S> <C> <C> <C> <C> <C>
Accumulated
Deficit
Additional During the
Common Stock Paid-In Development
Shares Amount Capital Stage Totals
------------ --------- ------------ ------------- ------------
Balances, December 31, 1995 12,842,176 $ 12,843 $ 5,998,966 $ (4,266,152) $ 1,745,657
Common stock issued
for services at $.375
per share 34,000 34 20,026 20,060
Cash contributed to
additional paid-in
capital 55,528 55,528
Notes payable converted
to common stock at
$.729 per share 34,305 34 24,964 24,998
Common stock options
exercised for cash at
$.10 per share 50,000 50 4,950 5,000
Notes payable converted
to common stock at
$.646 per share 61,895 62 39,938 40,000
Notes payable converted
to common stock at
$.454 per share 110,193 110 49,890 50,000
Notes payable converted
to common stock at
$.372 per share 67,204 67 24,933 25,000
Common stock issued
for 15% of a development
stage company (Note 1) 1,200,000 1,200 1,198,800 1,200,000
Contributed capital from directors
Net (loss) (394,606) (394,606)
------------ --------- ------------ ------------- ------------
Balances, December 31, 1996 14,399,773 14,400 7,417,995 (4,660,758) 2,771,637
Notes payable converted
to common stock at
$.236 per share 105,764 105 24,895 25,000
Notes payable converted
to common stock at
$.217 per share 230,880 231 49,769 50,000
Notes payable converted
to common stock at
$.217 per share 115,207 115 24,885 25,000
Contributed capital from directors
Net (loss) (96,612) (96,612)
------------ --------- ------------ ------------- ------------
Balances, March 31, 1997 14,851,624 $ 14,851 $ 7,517,544 $ (4,757,370) $ 2,775,025
============ ========= ============ ============= ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
<TABLE>
<CAPTION>
MPM TECHNOLOGIES, INC. Consolidated Statement of Cash Flows for the Quarters Ended
AND SUBSIDIARIES March 31, 1997, and 1996 and Cumulative Amounts from
(A Development Stage Company) Inception (May 1, 1983) Through March 31, 1997
UNAUDITED
<S> <C> <C> <C>
Quarter Ended
March 31 Cumulative
1997 1996 Amounts
----------- ----------- -------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net (loss) $ (96,612) $ (74,213) $ (4,757,370)
Add items not requiring the use
of cash:
Depreciation and amortization 11,261 3,100 632,001
Forgiveness of debt (101,509)
Minority interest (9,682) (8,539) (888,414)
Loss (gain) on sale of equipment (199,220)
Stock granted for operating expenses 174,150
Stock options issued for services 533,975
Accrued interest payable converted to debt 56,631
Net (increase)/decrease in:
Accounts receivable 31,511 (3,888) 6,596
Prepaid insurance (5,258) (6,695)
Stock issued for prepaid expenses 40,000
Net increase/(decrease) in:
Accounts payable (963) 2,000 2,974
Interest payable (5,420) 3,872 130,436
----------- ----------- -------------
NET CASH FLOWS PROVIDED FROM
OPERATING ACTIVITIES (75,163) (77,668) (4,376,445)
----------- ----------- -------------
CASH FLOWS FROM INVESTING ACTIVITIES
(Additions)/reductions:
Mining claims (10,728)
Deferred exploration and
development costs (485,000)
Property, plant and equipment (302,970)
Mining leases (5,330)
Leasehold improvements (9,357)
Patents and licenses (72,856)
Advance minimum royalties (23) (52,591)
Partnership investment 90,749
Organization costs (1,296)
Proceeds from:
Sale of equipment 296,876
Redemption of bonds and deposits 3,091
Loans made (395,456)
Less repayments 108,354
----------- ----------- -------------
NET CASH FLOWS PROVIDED (USED)
FROM INVESTING ACTIVITIES - (23) (836,514)
----------- ----------- -------------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds of short term debt 200,000 2,483,112
Payments to settle debt (35,117) (36,406) (1,768,823)
Issuance of long term debt 588,184
Sale of treasury stock 1,272
Contributed capital 1,920,038
Issuance of common stock 2,119,462
----------- ----------- -------------
NET CASH FLOWS PROVIDED
FROM FINANCING ACTIVITIES 164,883 (36,406) 5,343,245
----------- ----------- -------------
NET INCREASE (DECREASE) IN CASH 89,720 (114,097) 130,286
CASH AT BEGINNING OF YEAR 40,566 136,744
----------- ----------- -------------
CASH AT END OF YEAR $ 130,286 $ 22,647 $ 130,286
=========== =========== =============
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
MPM TECHNOLOGIES, INC. NOTES TO FINANCIAL STATEMENTS
AND SUBSIDIARIES
(A Development Stage Company)
Spokane, Washington
NOTE 1 - UNAUDITIED 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, 1996. 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, 1996.
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 March 31, 1997, should not necessarily be
taken as indicative of the results of operations that my be expected for the
entire year 1997.
(The Remainder of This Page Intentionally Left Blank)<PAGE>
PART I
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 500 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 First Quarter of 1997, 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 creation of fuel gas. The project
is estimated to be in excess of $10 million of capital investment.
The Company is currently in negotiations for Skygas installations in Taiwan,
South Korea, Thailand, China, Europe and North America.
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 1995, 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. In December,
1996, the Company announced it had purchased Unitel's 15% interest in the
Skygas Venture for 1.2 million shares of common stock. Percentage of
interest in the Skygas Venture is as follows: NuPower - 70%; MPM
Technologies, Inc. - 15%; and USF Smogless - 15%.
b) Liquidity
During the First Quarter of 1997, the sole source of revenue was from nominal
interest on bank accounts. Funds for operations were provided by cash
reserves, reimbursement of expenses from USF Smogless, and from the sale of
company stock.<PAGE>
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 First Quarter of 1997. 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 3/31/97 COMPARED TO QUARTER ENDED 3/31/96
Results of Operations
1997 1996 Inc/(Dec) % of Change
Working Capital (Deficit) (937,829) (900,099) (37,730) (4.2)
Total Operating Expenses 93,348 69,791 23,557 33.8
Interest Expenses 13,637 13,490 147 1.1
Contract Services 18,000 (18,000) (100.0)
Insurance 3,258 2,876 382 13.3
Legal and Accounting 8,760 10,204 (1,444) (14.2)
Office and Postage 3,331 2,716 615 22.6
Reimbursed Expenses 3,680 9,888 (6,208) (62.8)
Travel and Entertainment 10,215 6,361 3,854 60.6
Net Income (Loss) (96,612) (76,213) (22,399) (30.2)<PAGE>
PART II
Item 1. Legal Proceeding
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
No matters were submitted to a vote of the security holders during the First
Quarter of 1997.
Item 5. Other Information
8-K Filings
On January 13, 1997, the Company announced that it is in compliance with the
alternative to the minimum bid of $1.00 required by NASDAQ. As of December
31, 1996, the Market Value of the Public Float being $4,704,603 and Capital
and Surplus being $2,832,968. The increase in Capital and Surplus is
attributed to the purchase of 15% interest in the Skygas Venture for
1,200,000 shares of common stock valued at $1,200,000.<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.
5/9/97 /s/Robert D. Little
- --------------------------- -----------------------------
(Date) Robert D. Little
Secretary
<PAGE>
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