UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
Form 10-Q
Quarterly Report Pursuant to Section 13 or 15(d)
of the Securities Exchange act of 1934
For the quarterly period ended September 30, 2009
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)
199 Pomeroy Road.
Parsippany, NJ 07054
- ------------------------------------ --------------------------
(Address of principal (Zip Code)
executive offices)
Registrant's telephone number, including area code: 973-428-5009
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
Indicate by check mark whether the registrant has submitted electronically and
posted on its corporate Web site, if any, every Interactive Data File required
to be submitted and posted pursuant to Rule 405 of Regulation S-T (ss.232.405 of
this chapter) during the preceding 12 months (or for such shorter period that
the registrant was required to submit and post such files.) Yes ___ No ___
Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company.
Large accelerated filer ___ Accelerated filer ___
Non-accelerated filer ___ Smaller reporting company _X_
Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act). ___ Yes _X_No
As of November 23, 2009, the registrant had outstanding 6,707,796 shares of
common stock and no outstanding shares of preferred stock, which are the
registrant's only classes of stock.
MPM TECHNOLOGIES, INC.
QUARTERLY REPORT ON FORM 10-Q
FOR THE FISCAL QUARTER ENDED SEPTEMBER 30, 2009
TABLE OF CONTENTS
Page No
-------
Part I - Financial Information
Item 1 Financial Statements (unaudited) .......................................................4
Condensed Consolidated Balance Sheets as of September 30, 2009
(unaudited) and December 31, 2008.......................................................5
Condensed Consolidated Statements of Operations for the Three and Nine
Month Periods Ended September 30, 2009 (unaudited) and 2008 (unaudited).................6
Condensed Consolidated Statements of Cash Flows for the Nine Months
Ended September 30, 2009 (unaudited) and 2008 (unaudited)...............................7
Notes to Condensed Consolidated Financial Statements....................................8
Item 2 Management's Discussion and Analysis of Financial Condition and Results of
Operations.............................................................................11
Item 3 Quantitative and Qualitative Disclosures about Market Risk.............................13
Item 4 Controls and Procedures ...............................................................13
Part II - Other Information
Item 1 Legal Proceedings .....................................................................14
Item 1A Risk Factors ..........................................................................14
Item 2 Unregistered Sales of Equity Securities and Use of Proceeds ...........................14
Item 3 Defaults upon Senior Securities .......................................................14
Item 4 Submission of Matters to a Vote of Security Holders....................................14
Item 5 Other Information .....................................................................14
Item 6 Exhibits...............................................................................14
Signatures 14
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
MPM TECHNOLOGIES, INC.
AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
ASSETS
September 30, 2009 December 31, 2008
------------------ ------------------
(UNAUDITED)
Current assets:
Cash and cash equivalents $ 26,674 $ 16,290
Accounts receivable, net of allowance for doubtful accounts
of $-0- 47,746 57,101
Other current assets 13,892 8,250
------------------ ------------------
Total current assets 88,312 81,641
------------------ ------------------
Property, plant and equipment, net 2,844 5,013
Mineral properties held for sale 1,070,368 1,070,368
Other assets, net 136,375 136,375
------------------ ------------------
$ 1,297,899 $ 1,293,397
================== ==================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 147,816 $ 350,741
Accrued expenses 249,025 395,841
Billings in excess of costs and estimated earnings 125,054 49,498
Notes payable 5,674,685 5,457,565
Related party debt 7,885,076 7,216,660
------------------ ------------------
Total current liabilities 14,081,656 13,470,305
------------------ ------------------
Commitments and contingencies - -
Stockholders' equity (impairment):
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, 6,707,796 and 6,307,510 shares issued
and outstanding, respectively 6,708 6,308
Additional paid-in capital 12,775,775 12,279,698
Accumulated deficit (25,566,240) (24,462,914)
------------------ ------------------
Total stockholders' equity (impairment) (12,783,757) (12,176,908)
------------------ ------------------
$ 1,297,899 $ 1,293,397
================== ==================
The accompanying notes are an integral part of these financial statements.
MPM TECHNOLOGIES, INC.
AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE NINE AND THREE MONTHS ENDED SEPTEMBER 30, 2009 AND 2008
(UNAUDITED)
Nine Months Ended Three Months Ended
September 30, September 30,
-------------------------- --------------------------
2009 2008 2009 2008
----------- ----------- ----------- -----------
Revenues - Projects $ 143,304 $ 35,430 $ 39,046 $ -
Revenues - Parts and service 399,581 438,437 143,199 246,351
----------- ----------- ----------- -----------
Total Revenues 542,885 473,867 182,245 246,351
----------- ----------- ----------- -----------
Cost of sales - Projects 81,956 13,367 23,199 -
Cost of sales - Parts and service 189,958 206,827 59,711 106,808
----------- ----------- ----------- -----------
Total Cost of Sales 271,914 220,194 82,910 106,808
----------- ----------- ----------- -----------
Gross margin 270,971 253,673 99,335 139,543
Selling, general and administrative expenses 693,623 879,075 228,926 331,807
Stock-based compensation 210,300 - - -
----------- ----------- ----------- -----------
Total Operating Expenses 903,923 879,075 228,926 331,807
----------- ----------- ----------- -----------
Loss from operations (632,952) (625,402) (129,591) (192,264)
----------- ----------- ----------- -----------
Other income (expense):
Interest expense (659,374) (584,916) (219,241) (207,237)
Gain from patent expirations 189,000 - - -
----------- ----------- ----------- -----------
Net other income (expense) (470,374) (584,916) (219,241) (207,237)
----------- ----------- ----------- -----------
Net loss ($1,103,326) ($1,210,318) ($348,832) ($399,501)
=========== =========== =========== ===========
Income per share - basic and diluted:
Net loss ($0.17) ($0.19) ($0.05) ($0.06)
=========== =========== =========== ===========
Weighted average shares of common stock
outstanding -
basic and diluted 6,446,443 6,266,795 6,693,666 6,274,176
=========== =========== =========== ===========
The accompanying notes are an integral part of these financial statements.
MPM TECHNOLOGIES, INC.
AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2009 AND 2008
(UNAUDITED)
Nine Months Ended
September 30,
--------------------------
2009 2008
----------- -----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss ($1,103,326) ($1,210,318)
Adjustments to reconcile net loss to net cash used in
operating activities:
Depreciation and amortization 2,169 2,169
Stock-based compensation 210,300 -
Accrued interest and expenses on notes payable 217,120 206,278
Accrued interest and deferred expenses on related party debt 547,415 804,623
Change in assets and liabilities:
Accounts receivable 9,355 (6,705)
Other current assets (5,642) 6,695
Accounts payable and accrued expenses (163,563) (16,561)
Billings in excess of costs and estimated earnings 75,556 -
----------- -----------
Net cash provided by (used in) operating activities (210,616) (213,819)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from related party debt 307,000 158,000
Payments on related party debt (86,000) -
Stock issued for exercised options - 11,112
----------- -----------
Net cash (used in) provided by financing activities 221,000 169,112
----------- -----------
Net increase (decrease) in cash and cash equivalents 10,384 (44,707)
Cash and cash equivalents, beginning of period 16,290 47,243
----------- -----------
Cash and cash equivalents, end of period $ 26,674 $ 2,536
=========== ===========
Supplemental disclosure of cash flow information:
Cash paid during the period for:
Interest $ - $ -
----------- -----------
Income taxes $ - $ -
----------- -----------
In June 2009, accrued deferred compensation of $186,177 was converted to 300,286
shares of common stock.
Due to the expiration of certain patents and related agreements in April 2009,
the Company realized a net gain of $189,000 from the reversal of amounts accrued
against estimated future income from such patents. No revenues were realized
from the patents.
In July 2009, the Company issued 100,000 shares of common stock at $1.00 per
share, to an office/director in conversion of $100,000 of related party notes
payable.
The accompanying notes are an integral part of these financial statements.
MPM TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
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-K for the
year ended December 31, 2008. 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-Q of Regulation S-X as promulgated by the Securities and Exchange
Commission, these financial statements specifically refer to the footnotes to
the consolidated financial statements of the Company as of December 31, 2008. 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 period ended
September 30, 2009 should not necessarily be taken as indicative of the results
of operations that may be expected for the entire year 2009.
The accompanying consolidated financial statements have been prepared assuming
the Company will continue as a going concern. As discussed in the notes to the
Consolidated Financial Statements of December 31, 2008, the Company has not been
able to generate any significant revenues and has a working capital deficiency
of $13,993,344 at September 30, 2009. These conditions raise substantial doubt
about the Company's ability to continue as a going concern without the raising
of additional debt and/or equity financing to fund operations. Management's
plans in regard to these matters are described in the notes to the Consolidated
Financial Statements of December 31, 2008. The consolidated financial statements
do not include any adjustments that might result from the outcome of this
uncertainty.
2. Earnings Per Share
Earnings per share ("EPS") is computed by dividing net loss by the weighted
average number of common shares outstanding in accordance with Financial
Accounting Standards Board Accounting Codification Topic 260 (ASC 260),
"Earnings Per Share". Diluted net loss per common share adjusts basic net loss
per common share for the effects of outstanding common stock equivalents, only
in the periods in which such effect is dilutive under the treasury stock method.
For the three and nine months ended September 30, 2009 and 2008, the effect of
common stock equivalents were anti-dilutive. As of September 30, 2009, common
stock equivalents consisted of 2,065,084 common stock options.
3. Concentrations of Credit Risk
Financial instruments, which potentially subject the Company to a concentration
of credit risk, consist of cash and cash equivalents. The Company places its
cash and cash equivalents with various high quality financial institutions;
these deposits may exceed federally insured limits at various times throughout
the year. The Company provides credit in the normal course of business. The
Company performs ongoing credit evaluations of its customers and maintains
allowances for doubtful accounts based on factors surrounding the credit risk of
specific customers, historical trends, and other information.
4. Note Payable
In December 2002, the Company entered into a revolving credit agreement with an
insurance company. Under the terms of its agreement, the Company may borrow up
to $500,000 at 5.25% per annum, which was increased to $3,000,000 in 2003. The
note is secured by stock and mineral property held for investment and matured on
January 2, 2008. As of September 30, 2009, the Company has $4,326,499 of
principal advances and accrued interest and expenses of $1,348,186. As of
December 31, 2008, the Company had $4,326,499 of principal advances and accrued
interest and expenses of $1,131,066. During the nine months ended September 30,
2009 and 2008, the Company recorded interest expense of $217,120 and $206,278,
respectively. This note payable was not paid at maturity. The lender has
informally agreed to not pursue collection while revised terms are being
negotiated. As of the date of this report, negotiations continue, but no revised
agreement has been reached.
5. Related Party Debt
Related party debt consists of advances received from and deferred expenses and
reimbursements to various directors and related parties. At September 30, 2009
and December 31, 2008, amounts owed these related parties totaled $7,885,076 and
$7,216,660, respectively, due on demand. For the nine months and three months
ended September 30, 2009, the Company recorded $307,000 and $53,000 in advances,
repayments of $186,000 and $100,000, and an additional $547,415and $180,021 in
interest expense and deferred expenses and reimbursements, respectively. For the
nine and three months ended September 30, 2008, the Company recorded $483,500
and $158,000 in advances, and $479,123 and $167,291 in interest and deferred
expenses and reimbursements, respectively.
6. Patent Pending
In February 2009, the Company filed a provisional new patent for a significantly
improved Skygas process. There can be no guarantee that the new patent will be
approved at this time. There was also a Canadian patent on the Skygas process
that expired in April 2009.
As a result of the patent expirations, and the related agreements, the Company
recognized a gain of $189,000. This gain represents the net amounts accrued
against unpaid advances on future income from the former patented technology. No
income was recognized from the patents, and accordingly, no accrued amounts are
due or owing from the patent agreements.
7. Stock Conversions
On June 22, 2009, the Company issued 300,286 shares of common stock to an
officer/director in conversion of $186,177 of accrued deferred compensation. The
share price used for the conversion was $0.62.
On July 14, 2009, the Company issued 100,000 shares of common stock to an
officer/director in conversion of $100,000 of related party notes payable. The
share price used for the conversion was $1.00.
8. Stock-Based Compensation
On April 15, 2009, the Board of Directors authorized a five year extension of
the expiration dates for 847,667 options outstanding that were due to expire in
April and May, 2009. In accordance with Financial Accounting Standards Board
Accounting Codification Topic 718-10-10, "Accounting for Stock Based
Compensation" (ASC 718), the Company recorded incremental compensation for the
amended stock options based on the excess of the fair value of the amended
option agreements over the fair value of the original options immediately before
the amendment. Fair value was determined using a Black-Scholes Pricing Model,
using the following assumptions: Dividend yield $0; Expected volatility range of
1% (pre-amendment) to 258% (post amendment); Risk-free interest rate of 1.71%;
Expected lives of 4 or 34 days (pre-amendment) to 5 years (post-amendment). The
Company recorded stock-based compensation in the second quarter of 2009 of
$210,300 related to the amended option agreements.
9. Recent Accounting Pronouncements
Effective July 1, 2009, the Company adopted the Financial Accounting Standards
Board ("FASB") Accounting Standards Codification ("ASC") 105-10, Generally
Accepted Accounting Principles -- Overall ("ASC 105-10"). ASC 105-10 establishes
the FASB Accounting Standards Codification (the "Codification") as the source of
authoritative accounting principles recognized by the FASB to be applied by
nongovernmental entities in the preparation of financial statements in
conformity with U.S. GAAP. Rules and interpretive releases of the SEC under
authority of federal securities laws are also sources of authoritative U.S. GAAP
for SEC registrants. All guidance contained in the Codification carries an equal
level of authority. The Codification superseded all existing non-SEC accounting
and reporting standards. All other non-grandfathered, non-SEC accounting
literature not included in the Codification is non-authoritative. The FASB will
not issue new standards in the form of Statements, FASB Staff Positions or
Emerging Issues Task Force Abstracts. Instead, it will issue Accounting
Standards Updates ("ASUs"). The FASB will not consider ASUs as authoritative in
their own right. ASUs will serve only to update the Codification, provide
background information about the guidance and provide the bases for conclusions
on the change(s) in the Codification. References made to FASB guidance
throughout this document have been updated for the Codification.
Effective January 1, 2008, the Company adopted FASB ASC 820-10, Fair Value
Measurements and Disclosures -- Overall ("ASC 820-10") with respect to its
financial assets and liabilities. In February 2008, the FASB issued updated
guidance related to fair value measurements, which is included in the
Codification in ASC 820-10-55, Fair Value Measurements and Disclosures --
Overall -- Implementation Guidance and Illustrations. The updated guidance
provided a one year deferral of the effective date of ASC 820-10 for
non-financial assets and non-financial liabilities, except those that are
recognized or disclosed in the financial statements at fair value at least
annually. Therefore, the Company adopted the provisions of ASC 820-10 for
non-financial assets and non-financial liabilities effective January 1, 2009,
and such adoption did not have a material impact on the Company's results of
operations or financial condition.
Effective April 1, 2009, the Company adopted FASB ASC 820-10-65, Fair Value
Measurements and Disclosures -- Overall -- Transition and Open Effective Date
Information ("ASC 820-10-65"). ASC 820-10-65 provides additional guidance for
estimating fair value in accordance with ASC 820-10 when the volume and level of
activity for an asset or liability have significantly decreased. ASC 820-10-65
also includes guidance on identifying circumstances that indicate a transaction
is not orderly. The adoption of ASC 820-10-65 did not have an impact on the
Company's consolidated results of operations or financial condition.
Effective April 1, 2009, the Company adopted FASB ASC 825-10-65, Financial
Instruments -- Overall -- Transition and Open Effective Date Information ("ASC
825-10-65"). ASC 825-10-65 amends ASC 825-10 to require disclosures about fair
value of financial instruments in interim financial statements as well as in
annual financial statements and also amends ASC 270-10 to require those
disclosures in all interim financial statements. The adoption of ASC 825-10-65
did not have a material impact on the Company's results of operations or
financial condition.
Effective April 1, 2009, the Company adopted FASB ASC 855-10, Subsequent Events
- -- Overall ("ASC 855-10"). ASC 855-10 establishes general standards of
accounting for and disclosure of events that occur after the balance sheet date
but before financial statements are issued or are available to be issued. It
requires the disclosure of the date through which an entity has evaluated
subsequent events and the basis for that date -- that is, whether that date
represents the date the financial statements were issued or were available to be
issued. This disclosure should alert all users of financial statements that an
entity has not evaluated subsequent events after that date in the set of
financial statements being presented. Adoption of ASC 855-10 did not have a
material impact on the Company's results of operations or financial condition.
Effective July 1, 2009, the Company adopted FASB ASU No. 2009-05, Fair Value
Measurements and Disclosures (Topic 820) ("ASU 2009-05"). ASU 2009-05 provided
amendments to ASC 820-10, Fair Value Measurements and Disclosures -- Overall,
for the fair value measurement of liabilities. ASU 2009-05 provides
clarification that in circumstances in which a quoted price in an active market
for the identical liability is not available, a reporting entity is required to
measure fair value using certain techniques. ASU 2009-05 also clarifies that
when estimating the fair value of a liability, a reporting entity is not
required to include a separate input or adjustment to other inputs relating to
the existence of a restriction that prevents the transfer of a liability. ASU
2009-05 also clarifies that both a quoted price in an active market for the
identical liability at the measurement date and the quoted price for the
identical liability when traded as an asset in an active market when no
adjustments to the quoted price of the asset are required are Level 1 fair value
measurements. Adoption of ASU 2009-05 did not have a material impact on the
Company's results of operations or financial condition.
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
Results of Operations
- ---------------------
This Quarterly Report on Form 10-Q, 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-Q,
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-K. 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.
MPM holds a 58.21% interest in NuPower Partnership through its ownership of
NuPower, Inc. 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 partnership interest, MPM owns 15% of the Venture.
Due to the expiration of the patents related to the original Skygas technology,
the related agreements with the NuPower partnership have also expired. It is
expected that new agreements will be negotiated over the next two quarters to
recognize the newer technologies, and possibly raise some capital. There can be
no guarantee that new capital will be raised, however.
In 2008, a new company was incorporated named Skygas Energy Ontario Limited.
NuPower, Inc. owns all 100 shares of the issued and outstanding shares of the
new company. It is anticipated that this company will be part of a business
venture in Canada to commercialize the Skygas process. Management is currently
in negotiations with unrelated third parties with regard to this venture. It is
unclear at this time what form this venture will take.
The United States patent on the Skygas process expired in November 2008. The
Company filed a provisional new patent for a significantly improved Skygas
process in February 2009. There can be no guarantee that the new patent will be
approved at this time. There was also a Canadian patent on the Skygas process
that expired in April 2009.
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 Company
in addition to the efforts of MPM Mining.
MPM management believes that resuming mining operations is a way to generate
positive cash flows and mitigate the continuing losses from other operations
given the current market prices and conditions for precious metals. Accordingly,
management will investigate its needs to make this happen.
AirPol is an active continuing concern. 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 months ended
September 30, 2009 and 2008 include the operations of AirPol, Skygas and MPM.
MPM's consolidated net loss from operations for the nine months ended September
30, 2009 was $1,103,326 or $0.17 per share compared to a net loss of $1,210,318,
or $0.19 per share for the nine months ended September 30, 2008.
Nine and three months ended September 30, 2009 compared to nine and three months
- --------------------------------------------------------------------------------
ended Septmeber 30, 2008
- ------------------------
For the nine months ended September 30, 2009, MPM had a net loss of $1,103,326,
or $0.17 per share compared to net loss of $1,210,318, or $0.19 per share for
the nine months ended September 30, 2008. Revenues increased 15% to $542,885 for
the nine months ended September 30, 2009 compared to $473,867 for the nine
months ended September 30, 2008. The revenue increase was due to the completion
of a project in 2009. Costs of sales increased 24% to $271,914 for the nine
months ended September 30, 2009 compared to $220,194 for the nine months ended
September 30, 2008. This was due to the completion of a project in 2009.
Operating expenses increased 3% to $903,923 for the nine months ended September
30, 2009 compared to $879,075 for the nine months ended September 30, 2008,
primarily due to stock-based compensation expense in 2009 related to option
agreement amendments.
For the three months ended September 30, 2009, MPM had a net loss of $348,832,
or $0.05 per share compared to a net loss of $399,501, or $0.06 per share for
the three months ended September 30, 2008. Revenues decreased 26% to $182,245
for the three months ended September 30, 2009 compared to $246,351 for the three
months ended September 30, 2008. This was due to lower parts and service sales
in 2009. Costs of sales decreased 22% to $82,910 for the three months ended
September 30, 2009 compared to $106,808 for the three months ended September 30,
2008. This was due to the decreased sales of parts and service. Operating
expenses decreased 31% to $228,926 for the three months ended September 30, 2009
compared to $331,807 for the three months ended September 30, 2008.
The Company currently has a backlog of approximately $180,000 in project work.
It is expected that this backlog will be consumed by the end of the year.
Financial Condition and Liquidity
- ---------------------------------
For the nine months ended September 30, 2009, the Company relied principally on
cash from operations and loans from an officer/director to fund its activities.
Working capital deficit at September 30, 2009 was $13,993,344 compared to
$13,388,664 at December 31, 2008. The Company continues to work to narrow its
losses and get to a cash flow neutral position. There can be no assurances that
management will be successful in attaining this goal. Accordingly, management is
continuing to seek alternative sources of capital such as private placements,
stock offerings and other financing alternatives.
Item 3. Quantitative and Qualitative Disclosures about Market Risk.
This item is not applicable because we are a "smaller reporting company," as
defined by applicable SEC regulations.
Item 4. Controls and Procedures.
Management's Report on Disclosure Controls and Procedures.
- ----------------------------------------------------------
We maintain disclosure controls and procedures that are designed to ensure that
information required to be disclosed in our Securities Exchange Act reports is
recorded, processed, summarized and reported within the time periods specified
in the SEC's rules and forms, and that such information is accumulated and
communicated to our management, including our CEO and CFO, as appropriate, to
allow timely decisions regarding required disclosure. In designing and
evaluating the disclosure controls and procedures, we recognized that any
controls and procedures, no matter how well designed and operated, can provide
only reasonable assurance of achieving the desired control objectives, as ours
are designed to do, and we were required to apply our judgment in evaluating the
cost-benefit relationship of possible changes or additions to our controls and
procedures.
As of September 30 2009, we carried out an evaluation, under the supervision and
with the participation of our management, including our Chief Executive Officer
and Chief Financial Officer, of the effectiveness of the design and operation of
our disclosure controls and procedures, as defined in Rules 13a-15(e) and
15d-15(e) under the Securities Exchange Act of 1934. Based upon that evaluation,
our Chief Executive Officer and Chief Financial Officer concluded that our
disclosure controls and procedures had a material weakness because it did not
have a sufficient number of personnel with adequate knowledge, experience and
training in U.S. generally accepted accounting policies commensurate with MPM's
reporting requirements. This material weakness required the identification of
adjustments during the financial statement close process that have been recorded
in MPM's consolidated financial statements. As a result of this material
weakness, management has concluded that internal controls over disclosure
controls and procedures and financial reporting were not effective at September
30, 2009, in enabling us to record, process, summarize and report information
required to be included in our periodic SEC filings within the required time
period.
Changes in Internal Control Over Financial Reporting.
- -----------------------------------------------------
There have been no changes in our internal control over financial reporting that
occurred during the period covered by this report that have materially affected,
or are reasonably likely to materially affect, our internal control over
financial reporting.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None
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
Exhibit No Description
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31.1 Chief Executive Officer's Certificate, pursuant to Section 302
of the Sarbanes-Oxley Act of 2002.
31.2 Chief Financial Officer's Certificate, pursuant to Section 302
of the Sarbanes-Oxley Act of 2002.
32.1 Certification of Chief Executive Officer and Chief Financial
Officer pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
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 23, 2009 /s/ Michael J. Luciano
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(date) Michael J. Luciano
Chairman & CEO