MPM TECHNOLOGIES, INC.
222 W. MISSION, SUITE 30
Spokane, Washington, 99201
NOTICE of SPECIAL MEETING of SHAREHOLDERS
and
PROXY STATEMENT
Relating to
Special Meetings of Shareholders
to be held January 25, 1999
Date of Notice: December 28, 1998<PAGE>
MPM TECHNOLOGIES, INC.
NOTICE TO SHAREHOLDERS
OF
SPECIAL MEETING OF SHAREHOLDERS
TO: Shareholders of MPM Technologies, Inc.
Notice is hereby given that a special meeting of shareholders of MPM
Technologies, Inc (the "Company") will be held at 9:00 o'clock a.m. local time
on Monday, January 25, 1999, at the Suite 333 of the 400 Jefferson Building
located at South 400 Jefferson, Spokane, Washington, 99204. For the following
purposes:
I. To consider and vote upon the issuance of shares of the Company's $0.001
par value common stock ("Common Stock") in exchange for and upon the
conversion of shares of the Company's outstanding Series A Convertible
Preferred Stock ("Preferred Stock")
II. To act upon such other matters as may properly come before the meeting.
MPM shareholders of record at the close of business on December 21, 1998 will
be entitled to vote.
DATED: December 28, 1998
By Order of the Board of Directors
/s/Robert D. Little
Robert D. Little, Secretary<PAGE>
GENERAL INFORMATION
This Proxy Statement is being furnished by the Board of Directors of MPM
Technologies, Inc. ("MPM" or the "Company") to holders of shares of the
Company's $0.001 par value Common Stock, (the "Common Stock") in connection
with the solicitation by the Board of Directors of Proxies to be voted at the
Special Meeting of Shareholders of the Company to be held at 9:00 o'clock am,
local time, on January 18, 1999, and any adjournment or adjournments thereof
(the "MPM Special Meeting") for the purposes set forth in the accompanying
Notice of Special Shareholders Meeting. The MPM Special Shareholders Meeting
will be held at the Suite 333 of the 400 Jefferson Building located at South
400 Jefferson, Spokane, Washington, 99204. This Proxy Statement is first being
mailed to Shareholders on or about December 28, 1998.
PURPOSE OF MPM SPECIAL SHAREHOLDERS MEETING
APPROVAL OF ISSUANCE OF COMMON STOCK
The purpose of the MPM Special Shareholders Meeting is to approve the issuance
of shares of the Company's Common Stock to be issued pursuant to certain
financing arrangements. In August, 1998 the Company entered into an agreement
(the "Agreement") with World Capital Funding, L.L.C. ("WCF") to assist the
Company in its efforts to finance its operations.
In August, 1998, the Company conducted a $1,200,000 private placement of 1,200
shares of a newly created series of preferred stock, Series A Convertible
Preferred Stock ("Preferred Stock"). The Preferred Stock was offered and sold
in a private placement pursuant to a Regulation D exemption from registration
under the Securities Act of 1933, as amended (the "Act").
In conjunction with the private placement, 9,375 shares of Common Stock are
issuable to, and options exercisable for 150,000 shares of Common Stock were
granted to, WCF (or its assigns). The exercise price of the options ranges
from $1.50 to $5.00 per share.
The offering proceeds were to be used in connection with current working
capital needs, the acquisition of a division of FLS Miljo, Inc, and future
acquisitions. The holders of this Series A Convertible Preferred Stock are
entitled to receive a 6% annual dividend, payable in arrears beginning July 1,
1999. The Company may pay this dividend in cash or common stock at its option.
The preferred stock is convertible into Common Stock at the option of its
holder. Each share of Preferred Stock is convertible into 1,000 shares of
Common Stock at a price equal to a 30% discount to the average closing price of
the Common Stock for the five (5) trading days immediately preceding the date
of conversion. The Preferred Stock will become convertible onto Common Stock
immediately upon the effective date of a registration statement relating to the
shares of common Stock issuable upon conversion. The holders of the Preferred
Stock have agreed that they will not, at any one time, convert into common
Stock more than 15% of the total initial outstanding Preferred Stock, and will
not execute any conversion within five (5) days of any prior conversion.
Under the terms of the Agreement, at the Company's option, for a period of 18
months from the effective date of the registration statement relating to the
shares of Common Stock issuable pursuant to conversion of the Preferred Stock
WCF will provide up to $1,300,000 of additional financing for the Company. The
financing will consist of a private placement of shares of the Company's Common<PAGE>
Stock. The offering will be made pursuant to a Regulation D exemption from
registration under the Act. The price at which the shares shall be issued is
70% of the average closing price of the Common Stock for the five (5) trading
days immediately preceding the date on which the Company draws funds. WCF will
be paid a fee of 9,750 shares of Common Stock and 12% of the funds raised in
the private placement.
Pursuant to NASDAQ Marketplace Rules, a company is required to seek shareholder
approval of a plan or arrangement in connection with a transaction, other than
a public offering, involving the sales or issuance by a company of common stock
(or securities convertible into common stock) equal to 20% or more of the
common stock outstanding before the issuance for less than the greater of book
or market value of the stock. Depending upon the trading price of the
Company's Common Stock at the time of the conversion of the Preferred Stock,
the number of shares of Common Stock to be issued may be in excess of 20% of
the then issued and outstanding shares of Common Stock. The Company is
therefore seeking shareholder approval of the issuance of the Common Stock to
be issued upon conversion of the Preferred Stock, 19,125 shares of Common Stock
to be issued as a fee to the placement agent, 150,000 shares of Common Stock to
be issued upon exercise of the options issued in connection with the plcement
of the Preferred Stock and any shares of Common Stock issued pursuant to the
$1,300,000 additional private placement which the may make.
YOUR VOTE IS VERY IMPORTANT. IT IS REQUESTED THAT YOU COMPLETE AND SIGN THE
ENCLOSED PROXY AND MAIL IT PROMPTLY IN THE RETURN ENVELOPE PROVIDED. SHARES
CANNOT BE VOTED AT THE MEETING UNLESS THE OWNER IS PRESENT TO VOTE OR IS
REPRESENTED BY PROXY.
(The balance of this page is intentionally left blank)<PAGE>
VOTING AT SPECIAL SHAREHOLDERS MEETING
1. Record Date. The Board of Directors MPM has fixed the close of business
on December 21, 1998, as the record date for the purpose of determining
shareholders of MPM entitled to notice of and to vote at the Special
Shareholders Meeting. At the close of business on that date, MPM had
2,137,428 shares of Common Stock outstanding. A majority of such shares
will constitute a quorum for the transaction of business at the Special
Shareholders Meeting. Proxies which are submitted but are not voted FOR
or AGAINST (because of abstention, broker non-votes, or otherwise) will be
treated as present for all matters considered at the meeting.
2. Solicitation of Proxies. The accompanying Proxies are solicited on behalf
of the Board of Directors of MPM, and the cost of solicitation will be
borne by the Company. Following the original mailing of the Proxies and
soliciting materials, directors, officers and employees of MPM may solicit
proxies by mail, telephone, telegraph, or personal interviews. MPM may
request brokers, custodians, nominees, and other record holders to forward
copies of the respective proxies and soliciting materials to persons for
whom they hold shares of MPM and to request authority for the exercise of
proxies. In such cases MPM will reimburse such holders for their
reasonable expenses. In addition, the Company has retained W.S. Doring &
Co., Inc. to assist in the solicitation of proxies from all shareholders
for a fee estimated at $3,500 plus reimbursement of reasonable out-of-
pocket expenses.
3. Revocation of Proxy. Any proxy delivered in the accompanying form may be
revoked by the person executing the proxy by giving written notice to that
effect received by the Secretary of MPM at any time before the authority
thereby granted is exercised, by execution of a proxy bearing a later date
presented at the meeting, or by attendance of such person at the Special
Shareholders Meeting.
4. How Proxies will be Voted.
Proxies received by the MPM Board of Directors in the accompanying form
will be voted at the Special Shareholders Meeting as specified therein by
the person giving the proxy. If no specification is made with respect to
the matters to be voted upon at the meeting, the shares represented by
such proxy will be voted, FOR the issuance of shares of Common Stock.
All shares represented by valid proxy will be voted at the descretion of
the proxy holders on any other matters that may properly come before the
respective Special Shareholders Meeting. However, the Board of Directors
does not know of any matters to be considered at the meeting other than
those specified in the Notice of Meeting.
5. Voting Power. Shareholders of the Common Stock of MPM are entitled to one
vote for each share held.<PAGE>
6. Principal Shareholders
MPM. There are 688 shareholders of record and the Company estimates that
there are approximately 2,300 beneficial shareholders. The following
table sets forth the identity of the beneficial owners of more than five
percent (5%) of the outstanding shares of MPM Common Stock as of the date
hereof:
Common
Stock Percentage of
Shareholder Owned Outstanding
------------- ------- -------------
Richard E. Appleby (1) 193,155 9.04
Daniel D. Smozanek (2) 162,257 7.59
U.S. Filter Corporation 146,667 6.86
Myron Katz (3) 135,400 6.33
Unitel Technologies, Inc. 133,334 6.23
(1) Includes 58,818 shares owned of record by Mr. Appleby's spouse
(2) Includes 5,615 shares owned of record by Mr. Smozanek's spouse
(3) Includes 10,368 shares owned of record by Mr. Katz's spouse
7. Required Approvals.
MPM Directors' Approval.
On September 14, 1998 the Board of Directors approved the issuance of up
to 1,200 shares of Series A Preferred Stock and the shares Common Stock to
be issued in exchange for and upon for the conversion of the Series A
Preferred Stock.
MPM Shareholder Approval.
At the Record Date the Company had 2,137,428 shares of Common Stock issued
and outstanding. Approval of the matters to be considered will require
the affirmative vote of a majority of the shares present at a meeting of
shareholders at which a quorum (1,068,714 shares) is present in person or
by proxy.
8. Dissenters' Rights.
None of the actions contemplated to be taken at the MPM Special
Shareholder Meeting give rise to the dissenters' rights under the
Washington Business Corporations Act.
9. Transfer Agent.
TranSecurities International, Inc., 2510 N. Pines Rd. Suite 202, Spokane,
Washington, 99206 (tel. 509-927-1255) is the transfer agent and registrar
for the Company.<PAGE>
MATTERS TO BE SUBMITTED TO SHAREHOLDERS
THE FOLLOWING MATTERS SHALL BE SUBMITTED TO THE MPM SHAREHOLDERS FOR
CONSIDERATION AT THE SPECIAL MEETING OF SHAREHOLDERS:
I. Approval of Issuance of Shares of Common Stock
Resolved: That the issuance of the shares of the Company's Common Stock
pursuant to the Agreement with WCF including (1) Common Stock issuable pursuant
to conversion of the 1,200 issued and outstanding shares of Series A
Convertible Preferred Stock; (2) 150,000 shares of Common Stock underlying the
options granted in connection with the private placement of the Preferred
Stock; (3) 9,125 shares issued to WCF as fees and, (4) Common Stock issuable
pursuant to a $1,300,000 private placement be and hereby is approved.
ADDITIONAL SHAREHOLDER INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports and other information with the Securities and Exchange
Commission (the "Commission"). Such reports, as well as proxy statements and
other information filed by the Company with the Commission, can be inspected
and copied at the public reference facilities maintained by the commission at
450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549, and at its Regional
Offices located at 7 World Trade Center, New York, New York 10048, and at
Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661.
Copies of such material can be obtained at prescribed rates from the Public
Reference Section of the Commission, Washington, D.C. 20549, during regular
business hours. The Commission maintains a Web site that contains reports,
proxy and information statements and other information regarding issuers such
as the Company that file electronically with the Commission at
http://www.sec.gov.
This Proxy Statement incorporates by reference the Company's Annual Report on
Form 10-KSB for the year ended December 31, 1997, its Quarterly Reports on Form
10-QSB for the quarters ended March 31, 1998, June 30 and September 30, 1998,
its Current Reports on Form 8-K dated February 25, 1998, June 12, 1998, and
August 25, 1998, its definitive proxy statement dated August 27, 1998, the
description of securities included in the Company's Registration Statement on
Form 8-A, File No. 0-14910, and all other documents subsequently filed by the
Company pursuant to Section 13(a), 13(c) or 14 of the Exchange Act prior to the
January 18,1998 date of the Special Meeting of Shareholders. Statements
contained in this Proxy Statement as to the contents of any contract or other
document are not necessarily complete, and in each instance reference is made
to the copy of such contract or document filed with the Securities and Exchange
Commission, each such statement being qualified in its entirety by such
reference. The Company will provide, without charge upon oral or written
request of any person, a copy of any information incorporated by reference
herein. Such request should be directed to the Company at 222 W. Mission
Avenue, Suite 30, Spokane, Washington 99201, telephone (509) 326-3443.
Any shareholder having questions with regard to any matter contained in this
Proxy Statement should feel free to contact the Company's Secretary, Robert D.
Little, telephone (509) 326-3443.<PAGE>
PROXY
MPM Technologies, Inc.
222W. Mission Ave., Ste. 30
Spokane, WA 99201-2347
This Proxy is Solicited on Behalf of the Board of Directors
The undersigned hereby appoints Charles A. Romberg and Robert D. Little, or
each of them, each with the power to appoint his substitute, and hereby
authorizes them to represent and to vote, as designated below, all the shares
of Common Stock of MPM Technologies, Inc. held of record by the undersigned on
December 21, 1998, at the Special Meeting of Shareholders to be held January
25, 1999, or any adjournment thereof.
1. ISSUANCE OF SHARES IN EXCHANGE FOR AND UPON CONVERSION OF SHARES OF THE
COMPANY'S OUTSTANDING SERIES A CONVERTIBLE PREFERRED STOCK.
FOR___ AGAINST___ ABSTAIN___
2. IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER
BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING.
This proxy, when properly executed, will be voted in the manner directed herein
by the undersigned shareholder. If no direction is made, this proxy will be
voted for Proposal 1.
Please sign exactly as name appears below. When shares are held by joint
tenants, both should sign. When signing as attorney, executor, administrator,
trustee, or guardian, please give full title as such. If a corporation, please
sign in full corporate name by President or other authorized officer. If a
partnership, please sign in partnership name by authorized person.
DATED:______________
PLEASE MARK, SIGN, DATE
AND RETURN THE PROXY
CARD PROMPTLY USING
THE ENCLOSED ENVELOPE.
__________________________
Signature
__________________________
Signature if held jointly<PAGE>
