SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549
                                   Form 10-KSB

[X]  ANNUAL REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF
     1934

                   FOR THE FISCAL YEAR ENDED DECEMBER 31, 2004
                         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 Identification Number)
 incorporation or organization)

                 199 POMEROY ROAD, PARSIPPANY, NEW JERSEY 07054
                    (Address of principal executive offices)

Registrant's telephone number, including area code: 973-428-5009

SECURITIES REGISTERED UNDER SECTION 12(B) OF THE EXCHANGE ACT: None

SECURITIES REGISTERED UNDER SECTION 12(g) OF THE EXCHANGE ACT:
                        COMMON STOCK, PAR VALUE OF $0.001
                        ---------------------------------

Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or 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. Yes__X__ No__

Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. [X]

State issuer's revenues for the most recent fiscal year: $ 1,849,948

The aggregate market value of the voting and non-voting equity held by
non-affiliates computed by reference to the closing price of $0.30 at which the
common equity was sold as of April 1, 2005 was $291,578.

The number of shares outstanding of the registrant's common stock as of April 1,
2005 was 3,183,064. Transitional Small Business Disclosure Format Yes__ No__X__

<PAGE>


PART I

Item 1. Business

MPM Technologies, Inc. ("MPM" or "the Company") has three wholly-owned
subsidiaries: , AirPol, Inc. ("AirPol"), Nupower, Inc. ("Nupower") and MPM
Mining ("Mining"). MPM was incorporated in 1983. For the year ended December 31,
2004, AirPol was the only revenue generating entities.

On March 9, 2004, a petition was filed by MPM management for HES in court under
Chapter 7 of the U.S. Bankruptcy Code. Management determined that it was in the
best interests of the Company to take this action for the proper disposition of
the assets and liabilities of HES.

AirPol continues to operate in the air pollution control industry. It sells air
pollution control systems to Fortune 500 and other large industrial companies.
MPM continues its efforts in the development of a waste-to-energy process known
as "Skygas". These efforts are largely through MPM's participation in Nupower
Partnership in which MPM has a 58.21% interest through its ownership of Nupower.
Mining operations were discontinued several years ago. MPM's Board of Directors
had originally decided to sell the mining properties and the related buildings
and equipment. Currently, the Board has instructed management to continue to
hold the properties as an investment.

HUNTINGTON ENVIRONMENTAL SYSTEMS, INC.

Effective April 1, 1997, MPM acquired certain of the assets and assumed certain
of the liabilities of part of a division of United States Filter Corporation in
exchange for 146,666 shares of the Company's common stock. The transaction was
accounted for as a purchase. In connection with the acquisition, MPM formed a
wholly-owned subsidiary, HES, which assumed the assets and liabilities acquired.

As noted above, on March 9, 2004, a petition was filed for HES in court under
Chapter 7 of the U.S. Bankruptcy Code.

AIRPOL, INC.

Effective July 1, 1998, the Company acquired certain of the assets and assumed
certain of the liabilities of part of a division of FLS miljo, Inc. The
agreement called for the Company to pay $300,000 stock and $234,610 in cash. The
transaction was accounted for as a purchase.

AirPol designs, engineers, supplies and services air pollution control systems
for Fortune 500 and other environmental and industrial companies. The
technologies used by AirPol differ from those used by HES, and the companies are
in no way competitors.

The technologies of AirPol utilize wet and dry scrubbers, wet electrostatic
precipitators and venturi absorbers to control air pollution. AirPol brings over
30 years experience to MPM through its technologies and employees.

AirPol also owns a 40.1% interest in Sunic AirPol ("Sunic"), a joint venture
company located in Mainland China. Sunic's results are recorded on AirPol's
books using the equity method. Sunic is in the same business as AirPol.

<PAGE>


NUPOWER, INC.

The Company holds a 58.21% interest in Nupower Partnership through its ownership
of Nupower. No other operations were conducted through Nupower. Nupower
Partnership is engaged in the development and commercialization of a
waste-to-energy process. This is an innovative technology for the disposal and
gasification of carbonaceous wastes such as municipal solid waste, municipal
sewage sludge, pulp and paper mill sludge, auto fluff, medical waste and used
tires. The process converts solid and semi-solid wastes into a clean-burning
medium BTU gas that can be used for steam production for electric power
generation. The gas may also be a useful building block for downstream
conversion into valuable chemicals. Nupower Partnership owns 85% of the Skygas
Venture. In addition to its ownership in the partnership, MPM separately owns
15% of the Venture.

MPM MINING, INC.

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 Corporation, Freeport McMoran Gold Company and Hecla Mining Company in
addition to the efforts of MPM Mining. In 1998, the Board of Directors decided
to dispose of the mining properties. In early 2002, the Board of Directors
decided to hold the properties as an investment.

Due to the escalations in the prices of gold and silver, management has been
approached by several companies regarding the mining properties. Negotiations
are ongoing for either a partial sale or joint venture for the properties.

FACTORS MANAGEMENT USED TO IDENTIFY REPORTABLE SEGMENTS

Management considers MPM's reportable segments to be business units that offer
different products. The business segments may be reportable because they are
each managed separately, or they design and engineer distinct products with
different applications in the air pollution control field. In the opinion of
management, Airpol and HES both operate in the same air pollution control field,
and the differences in the design and engineering of their respective products
are not sufficient to warrant individual segment reporting. MPM's other segments
are essentially non-operational at the present time, and, accordingly have been
aggregated for reporting purposes. Accordingly, for the years ended December 31,
2004 and 2003, the Company operated in one segment, and there is no separate
segment reporting required.

BACKLOG

MPM had a backlog of orders and work in progress at AirPol aggregating
approximately $1,000,000 at December 31, 2004. It is anticipated that operations
will consume these backorders during 2005. There is currently no other backlog
of orders for any of MPM's other businesses.

WASTE-TO-ENERGY

MPM's waste-to-energy process consists of an innovative technology known as
"Skygas". The process is used in the disposal and gasification of various forms
of non-metallic wastes. MPM continues to negotiate with interested entities for
the manufacture and operation of Skygas units. These negotiations are ongoing,
and MPM management is hopeful that there will be formal agreements in place
during 2005.

COMPETITIVE CONDITIONS

AirPol operates in extremely competitive environments. There are a number of
potential competitors for every job the companies bid on. The number of bidders
ranges from two or three to as many as seven or eight depending on the potential
customer and the work to be performed. The parts and service side of the
business tends to be somewhat less competitive since the parts and service work
are generally for units that have previously been sold and/or installed by the
companies.

<PAGE>


There are a significant number of persons and companies developing or have
developed any number of waste-to-energy systems. Management of MPM believes that
its development of Skygas as a non-polluting and energy efficient system will
give it the necessary competitive edge in this area.

Due to the large number of persons and companies engaged in exploration for and
production of mineralized material, there is a great degree of competition in
the mining part of the business. Since management has decided to sell its mining
holdings and equipment, it will no longer need to compete in this area.

SEASONAL VARIATIONS

The impact of seasonal changes is minimal on the air pollution control business
of AirPol. There may be some limitations on the installation of the air
pollution control units when the weather is more severe in the winter months in
those areas of the world where the weather is significantly colder in that
season. There have been, however, no discernible variations to date to indicate
that the business is subject to seasonal variations.

There are currently no seasonal influences on the ongoing development of the
Skygas process. It is also not expected that there will be any seasonal
variations when the Skygas units are produced.

EMPLOYEES

At December 31, 2004, MPM had three employees and there were five employees at
AirPol. MPM believes that its relations with its employees are good.

Item 2. Properties

AirPol leases its office space that expires in August of 2007. MPM has no
property related to its waste-to-energy operations. MPM believes that its
existing facilities are adequate for the current level of operations.

The principal properties of MPM's mining interests consist of the following
claims under control:

     Owned by MPM:
          Eight Patented Claims

     Leased by MPM:
          Seven Patented Claims

These claims amount to approximately 300 acres of land in Montana. MPM controls
eighteen former mine sites that have been inactive since 1930. Each of these has
old adits, tunnels and dump piles of known mineralized material. All testing and
metallurgical work has been completed. Management has directed MPM to hold these
interests as previously discussed. As noted above, several companies have
expressed interest in the mining properties. Management is considering either a
partial sale or a joint venture for the mining properties.

Item 3. Legal Proceedings

The Company filed a petition in court for HES under Chapter 7 of the U.S.
Bankruptcy Code on March 9, 2004. The disposition of the assets and liabilities
of HES will be determined by the bankruptcy court.

<PAGE>


Item 4. Submission of Matters to a Vote of Security Holders

There were no matters submitted to a vote of the shareholders during the fourth
quarter of 2004.

PART II

Item 5. Market for the Registrant's Common Equity and Related Stockholder
        Matters

a) Market Information

Until February 18, 2003, MPM's common stock traded on The Nasdaq SmallCap Market
under the symbol MPML. On that date MPM common stock began trading on the OTC
Bulletin Board under the same trading symbol. The following table shows
quarterly high and low bid prices for 2004 and 2003 as reported by the National
Quotations Bureau Incorporated. These prices reflect interdealer quotations
without adjustments for retail markup, markdown or commission and do not
necessarily represent actual transactions.

                                       High Bid          Low Bid
                                       --------         ---------
2004
----
First Quarter                           $  .25           $   .18
Second Quarter                             .25               .15
Third Quarter                              .35               .21
Fourth Quarter                             .65               .22

2003
----
First Quarter                           $  .25           $   .18
Second Quarter                             .25               .15
Third Quarter                              .35               .21
Fourth Quarter                             .65               .22

b) Holders

As of April 1, 2005, there were approximately 1,800 holders of record of the
Registrant's common stock.

c) Dividends

MPM has not paid dividends in the past. It is not anticipated that MPM will
distribute dividends for the foreseeable future. Earnings of MPM are expected to
be retained to enhance its capital and expand its operations.

d) Recent Sales of Unregistered Securities

     None

Item 6. Management's Discussion and Analysis of Financial Condition and Results
        of Operations

In addition to reading this section, you should read the consolidated financial
statements that begin on page F-1. That section contains all detailed financial
information including our results of operations.

<PAGE>


a) Results of Operations

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 to
run this air pollution control business. As of April 1, 1997, MPM acquired
certain of the assets and assumed certain of the liabilities of a portion of a
division of United States Filter Corporation, and formed HES to operate this air
pollution control business. The results of operations for the years ended
December 31, 2004 and 2003 include the operations of HES and AirPol.

For the year ended December 31, 2004, MPM had consolidated revenues of
$1,849,948. Consolidated revenues for 2003 were $3,119,212. MPM's net loss for
the year was $1,905,446, or $0.60 per share. There were a number of significant
adjustments made by the Company that contributed to the loss. Revenues were
again hurt by the lack of enforcement of clean air laws. Air pollution control
companies depend heavily on the enforcement of clean air laws.

MPM's management continues to work to restructure the Company. Management is
considering further reductions in personnel, office space, and other cost saving
changes. Other businesses are being evaluated to consider moving the Company's
business toward other more profitable ventures. There have been significant
consolidations in the air pollution control industry in the past few years. MPM
management's short term goal is to operate a lean, profitable company.

2004 COMPARED TO 2003

Revenues decreased $1,269,264 (41%) from $3,119,212 in 2003 to $1,849,948 in
2004. The net loss for 2003 was $1,905,446 or $0.60 per share compared to
$3,961,318 or $1.27 per share in 2003.

Selling, general and administrative expenses decreased $1,589,904 (39%) from
$3,620,964 in 2003 to $2,031,060 in 2004. This was due largely to cost savings
related to personnel reductions.

LIQUIDITY AND CAPITAL RESOURCES

During 2004, funds for operations were provided principally by loans from an
officer/director. Current cash reserves and continuing operations of HES and
AirPol are not believed to be adequate to fund MPM's and its subsidiaries
operations for the foreseeable future. MPM management is also considering
alternative sources of capital such as private placements, other stock offerings
and loans from shareholders and officers to fund its current business and expand
in other related areas through more acquisitions.

Following is a summary from MPM's consolidated statements of cash flows:

                                                  Year ended
                                                  December 31,
                                                  -----------
                                                     2004              2003
                                                     ----              ----

      Net cash used in operating activities       $ (581,576)     $ (3,335,451)

      Net cash used in investing activities           (2,005)                -

      Net cash provided by financing activities      581,516         3,331,402

      Net decrease in cash and cash equivalents   $   (2,065)     $     (4,049)

The net cash used in operating activities in 2004 and 2003 was due primarily to
net losses. This was due mainly to the decreased activity level at AirPol and
HES during 2004 and 2003.

<PAGE>


The net cash provided by financing activities in 2004 of $581,516 was due to
primarily to loans from a related party.

Management believes its present sources of working capital are sufficient for
both its short and long-term purposes.


IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS

New Accounting Pronouncements

In January 2003, the FASB issued Interpretation No. 46 ("FIN 46"), Consolidation
of Variable Interest Entities, an Interpretation of ARB No. 51. FIN 46 requires
certain variable interest entities to be considered by the primary beneficiary
of the entity if the equity investors in the entity do not have the
characteristics of a controlling financial interest or do not have sufficient
equity at risk for the entity to finance its activities without additional
subordinated financial support from other parties. FIN 46 is effective for all
new variable interest entities created or acquired after January 31, 2003. The
adoption of FIN 46 did not have a significant impact on the Company's results of
operations or financial position.

In December 2004, the FASB revised Statement No. 123, Accounting for Stock-Based
Compensation. This Statement supercedes APB Opinion No. 25, Accounting for Stock
Issued to Employees, and its related implementation guidance. This Statement
establishes standards for the accounting for transactions in which an entity
exchanges its equity instruments for goods or services. It also addresses
transactions in which an entity incurs liabilities in exchange for goods or
services that are based on the fair value of the entity's equity instruments or
that may be settled by the issuance of those equity instruments. This Statement
focuses primarily on accounting for transactions in which an entity obtains
employee services in share-based payment transactions. This Statement does not
change the accounting guidance for share-based payment transactions with parties
other than employees provided in Statement 123 as originally issued and EITF
Issue No. 96-18, "Accounting for Equity Instruments That Are Issued to Other
Than Employees for Acquiring, or in Conjunction with Selling, Goods or
Services." This Statement does not address the accounting for employee share
ownership plans, which are subject to AICPA Statement of Position 93-6,
Employers' Accounting for Employee Stock Ownership Plans. This Statement is
effective for the year ending December 31, 2005. It is not expected to have a
significant impact on the Company's results of operations or financial position.

In October 2002, the FASB issued Statement No. 147, Acquisitions of Certain
Financial Institutions - an amendment of FASB Statements No. 72 and 144 and FASB
Interpretation No. 9. FASB Statement No. 72, Accounting for Certain Acquisitions
of Banking or Thrift Institutions, and FASB Interpretation No. 9, Applying APB
Opinions No. 16 and 17 When Savings and Loan Association or a Similar
Institution Is Acquired in a Business Combination Accounted for by the Purchase
Method, provided interpretive guidance on the application of the purchase method
to acquisitions of financial institutions. Except for transactions between two
or more mutual enterprises, this Statement removes acquisitions of financial
institutions from the scope of both Statement 72 and Interpretation 9 and
requires that those transactions be accounted for in accordance with FASB
Statements No. 141, Business Combinations, and No. 142, Goodwill and Other
Intangible Assets. Thus, the requirement in paragraph 5 of Statement 72 to
recognize (and subsequently amortize) any excess of the fair value of
liabilities assumed over the fair value of tangible and identifiable intangible
assets acquired as an unidentifiable intangible asset no longer applies to
acquisitions within the scope of this Statement. In addition, this Statement
amends FASB Statement No. 144, Accounting for the Impairment or Disposal of
Long-Lived Assets, to include in its scope long-term customer relationship
intangible assets of financial institutions such as depositor and borrower
relationship intangible assets and credit cardholder intangible assets.
Consequently, those intangible assets are subject to the same undiscounted cash
flow recoverability test and impairment loss recognition and measurement
provisions that Statement 144 requires for other long-lived assets that are held
and used. This Statement was effective for acquisitions on or after October 1,
2002. It did not have an impact on the Company's results of operations or
financial position.

In December 2002, the FASB issued Statement No. 148, Accounting for Stock-Based
Compensation. This statement provides alternative methods of transition for a
voluntary change to the fair value based method of accounting for stock-based
employee compensation. In addition, this Statement amends the disclosure
requirements of Statement 123 to require prominent disclosures in both annual
and interim financial statements about the method of accounting for stock-based
employee compensation and the effect of the method used on reported results.
Provisions of SFAS No. 148 were effective for the Company on December 31, 2002.
The adoption of SFAS No. 148 did not have a significant impact on the Company's
results of operations or financial position.

<PAGE>


In April 2003, the FASB issued Statement No. 149, Amendment of Statement 133 on
Derivative Instruments and Hedging Activities. This statement amends and
clarifies financial accounting and reporting for derivative instruments,
including certain derivative instruments embedded in other contracts
(collectively referred to as derivatives) and for hedging activities under FASB
Statement No. 133, Accounting for Derivative Instruments and Hedging Activities.
The adoption of Statement No. 146 did not have a significant impact on the
Company's results of operations or financial position.

In May 2003, the FASB issued Statement No. 150, "Accounting for Certain
Financial Instruments with Characteristics of both Liabilities and Equity". This
Statement establishes standards for how an issuer classifies and measures
certain financial instruments with characteristics of both liabilities and
equity. It requires that an issuer classify a financial instrument that is
within its scope as a liability (or an asset in some circumstances). This
statement is effective for financial instruments entered into or modified after
May 31, 2003, and otherwise is effective at the beginning of the first interim
period beginning after June 15, 2003, except for mandatorily redeemable
financial instruments of nonpublic entities, if applicable. It is to be
implemented by reporting the cumulative effect of a change in an accounting
principle for financial instruments created before the issuance date of the
Statement and still existing at the beginning of the interim period of adoption.
The adoption of this statement did not have a significant impact on the
Company's results of operations or financial position.

In November 2004 the FASB issued Statement No. 151, Inventory Costs - An
Amendment of ARB No. 43, Chapter 4. This Statement amends the guidance in ARB
No. 43, Chapter 4, "Inventory Pricing," to clarify the accounting for abnormal
amounts of idle facility expense, freight, handling costs, and wasted material
(spoilage). Paragraph 5 of ARB 43, Chapter 4, previously stated that "... under
some circumstances, items such as idle facility expense, excessive spoilage,
double freight, and rehandling costs may be so abnormal as to require treatment
as current period charges..." This Statement requires that those items be
recognized as current-period charges regardless of whether they meet the
criterion of "so abnormal". In addition, this Statement requires that allocation
of fixed production overheads to the costs of conversion be based on the normal
capacity of the production facilities. This Statement if effective for inventory
costs incurred during fiscal years beginning after June 15, 2005. This Statement
is not expected to have a significant impact on the Company's results of
operations or financial position.

The FASB has issued Statement No. 152, Accounting for Real Estate Time-Sharing
Transactions. This Statement amends FASB Statement No. 66, Accounting for Sales
of Real Estate, to reference the financial accounting and reporting guidance for
real estate time-sharing transactions that is provided in AICPA Statement of
Position (SOP) 04-02, Accounting for Real Estate Time-Sharing Transactions. This
Statement also amends FASB Statement No. 67, Accounting for Costs and Initial
Rental Operations of Real Estate Projects, to state that the guidance for (a)
incidental operations and (b) costs incurred to sell real estate projects does
not apply to real estate time-sharing transactions. The accounting for those
operations and costs is subject to the guidance in SOP 04-02. This Statement is
effective for fiscal years beginning after June 15, 2005 and is not expected to
have a significant impact on the Company's results of operations or financial
position.

The FASB issued Statement No. 153, Exchanges of Nonmonetary Assets. The guidance
in APB Opinion No. 29, Accounting for Nonmonetary Transactions, is based on the
principle that exchanges of nonmonetary assets should be measured based on the
fair value of the assets exchanged. The guidance in the Opinion, however,
included certain exceptions to that principle. This Statement amends Opinion No.
29 to eliminate the exception for exchanges of nonmonetary assets that do not
have commercial substance. A nonmonetary exchange has commercial substance if
the future cash flows of the entity are expected to change significantly as a
result of the exchange. This Statement is effective for nonmonetary exchanges
occurring in fiscal periods beginning after June 15, 2005 and is not expected to
have a significant impact on the Company's results of operations or financial
position.

<PAGE>


IMPACT OF INFLATION

Although inflation has slowed in recent years, it is still a factor in our
economy and MPM continually seeks ways to mitigate its impact. To the extent
permitted by competition, AirPol passes increased costs on to its customers by
increasing prices over time. Management estimates that the impact of inflation
on the revenues for 2004 was negligible.

Since MPM did not engage in any mining operations, sales of metals or metal
bearing ores, and was in the development stage of the waste-to-energy process,
inflation did not materially impact the financial performance of those segments
of the MPM's business. Management estimates that the operations of MPM were only
nominally impacted by inflation.

SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

Forward-looking statements in this report, including without limitation,
statements relating to MPM's plans, strategies, objectives, expectations,
intentions and adequacy of resources, are made pursuant to the safe harbor
provisions of the Private Securities Reform Act of 1995. Investors are cautioned
that such forward-looking statements involve risks and uncertainties including
without limitation the following: (i) MPM's loans, strategies, objectives,
expectations and intentions are subject to change at any time at the discretion
of MPM's management; (ii) MPM's plans and results of operations will be affected
by its ability to manage its growth and (iii) other risks and uncertainties
indicated from time to time in MPM's filings with the Securities and Exchange
Commission.

Item 7. Financial Statements

The financial statements follow on the next page.

<PAGE>


                     MPM TECHNOLOGIES, INC. AND SUBSIDIARIES
                     ---------------------------------------

                              FINANCIAL STATEMENTS
                              --------------------

                           DECEMBER 31, 2004 AND 2003

<PAGE>


                     MPM TECHNOLOGIES, INC. AND SUBSIDIARIES
                     ---------------------------------------

                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS


Report of Independent Registered Public Accounting Firm......................F-2

Consolidated Balance Sheet as of December 31, 2004...........................F-3

Consolidated Statements of Operations for the years ended December
 31, 2004 and 2003...........................................................F-4

Consolidated Statements of Stockholders' Equity for the years ended
 December 31, 2004 and 2003..................................................F-5

Consolidated Statements of Cash Flows for the years ended December
 31, 2004 and 2003....................................................F-6 to F-7

Summary of Accounting Policies.......................................F-8 to F-11

Notes to Consolidated Financial Statements..........................F-12 to F-21

<PAGE>


           Report of the Independent Registered Public Accounting Firm


To the Board of Directors and Stockholders of
MPM Technologies, Inc. and Subsidiaries

We have audited the accompanying consolidated balance sheet of MPM Technologies,
Inc. and Subsidiaries as of December 31, 2004 and the related consolidated
statements of operations, stockholders' equity and cash flows for the years
ended December 31, 2004 and 2003. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of MPM Technologies,
Inc. and Subsidiaries as of December 31, 2004, and the consolidated results of
their operations and cash flows for the years ended December 31, 2004 and 2003
in conformity with accounting principles generally accepted in the United States
of America.

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, the Company has not been able to generate any
significant revenues and has a working capital deficiency of $8,111,209 at
December 31, 2004. 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. The consolidated financial statements do not include any adjustments
that might result from the outcome of this uncertainty.




Rosenberg Rich Baker Berman & Co.
Bridgewater, New Jersey
May 12, 2005

                                      F-2
<PAGE>


                     MPM TECHNOLOGIES, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEET
                                DECEMBER 31, 2004

                                     ASSETS

Current assets:
   Cash and cash equivalents.....................................  $      6,778
   Accounts receivable, less allowance for doubtful accounts
    of $154,047 (Notes 10).......................................       121,650
   Costs and estimated earnings in excess of billings (Notes 1
    and 2).......................................................       129,444
   Other current assets..........................................        42,385
   Assets to be disposed of......................................         2,995
                                                                   -------------
       Total current assets......................................       303,252
                                                                   =============

Property, plant and equipment (Notes 1 and 4)....................        67,708
Mineral property held for investment (Note 11)...................     1,070,368
Prepaid royalty (Note 12)........................................       273,000
Purchased intangible, net of accumulated amortization of $472,500
 (Note 14).......................................................       202,500
Investments - at equity (Note 3).................................       119,577
Other assets, net................................................        88,918
                                                                   -------------
                                                                   $  2,125,323
                                                                   =============

                       LIABILITIES AND STOCKHOLDERS EQUITY

Current liabilities:
   Accounts payable (Note 1).....................................  $  1,125,978
   Accrued expenses (Note 1).....................................        88,340
   Billings in excess of costs and estimated earnings (Notes 1
    and 2).......................................................       266,000
   Related party debt (Note 6)...................................     4,200,462
   Liabilities to be disposed of.................................     2,733,681
                                                                   -------------
       Total current liabilities.................................     8,414,461

   Notes payable (Note 5)........................................     3,085,075
                                                                   -------------
       Total liabilities.........................................    11,499,536
                                                                   -------------
Commitments and contingencies (Notes 7)
Stockholders' equity (Note 9):
   Common stock, $0.001 par value; 100,000,000 shares authorized;
    3,183,064 shares issued and outstanding .....................         3,183
   Additional paid-in capital....................................    11,313,019
   Accumulated deficit...........................................   (20,690,415)
                                                                   -------------
       Total stockholders' equity................................    (9,374,213)
                                                                   -------------
                                                                   $  2,125,323
                                                                   =============


See accompanying summary of accounting policies and notes to the consolidated
financial statements.

                                      F-3
<PAGE>


                     MPM TECHNOLOGIES, INC. AND SUBSIDIARIES
                     ---------------------------------------
                      CONSOLIDATED STATEMENTS OF OPERATIONS


                                                      Year Ended December 31,
                                                   -----------------------------
                                                       2004             2003
                                                   -------------   -------------

Revenues (Notes 2)...............................  $  1,849,948    $  3,119,212

Cost of sales....................................    (1,031,102)     (2,782,165)
                                                   -------------   -------------

Gross margin.....................................       818,846         337,047
Selling, general and administrative expenses.....    (2,031,060)     (3,620,964)

                                                   -------------   -------------
Loss from operations.............................    (1,212,214)     (3,283,917)

                                                   -------------   -------------

                                                   -------------   -------------

Other income (expense):
  Provision for pending lawsuit settlement.......            (-)       (308,546)
  Gain on settlement ............................       253,317         160,348
  Interest expense (Note 6)......................      (500,455)       (562,398)
  Equity in earnings (loss) of unconsolidated
   jointly owned company.........................        12,795         (66,272)
  Other income (expense), net....................      (458,889)         99,467
                                                   -------------   -------------
Net other expense................................      (693,232)       (677,401)
                                                   -------------   -------------
Net loss                                           $ (1,905,446)     (3,961,318)
                                                   =============   =============


Loss per share - basic and diluted:                $      (0.60)   $      (1.31)

Weighted average shares of common stock
 outstanding - basic and diluted.................     3,183,064       3,021,040
                                                   =============   =============


See accompanying summary of accounting policies and notes to the consolidated
financial statements.

                                      F-4
<PAGE>


                     MPM TECHNOLOGIES, INC. AND SUBSIDIARIES
                     ---------------------------------------
                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY



<TABLE>
<CAPTION>
                                          Common Stock         Additional                       Total
                                      ---------------------     Paid-In      Accumulated    Stockholders'
                                        Shares      Amount      Capital        Deficit         Equity
                                      -----------  ------------------------------------------------------


                                      -----------  --------  -------------  --------------  -------------
<S>                                   <C>          <C>       <C>            <C>             <C>
Balance, January 1, 2003               3,021,917     3,022     11,266,148     (14,823,651)    (3,554,481)

Common stock issued as compensation      161,147       161         46,871               -         47,032

Net loss                                       -         -              -      (3,961,318)    (3,961,318)
                                      -----------  --------  -------------  --------------  -------------

Balance, December 31, 2003             3,183,064     3,183     11,313,019     (18,784,969)    (7,468,767)
                                      -----------  --------  -------------  --------------  -------------

Net loss                                       -         -              -      (1,905,446)    (1,905,446)
                                      -----------  --------  -------------  --------------  -------------

Balance, December 31, 2004             3,183,064   $ 3,183   $ 11,313,019   $ (20,690,415)  $ (9,374,213)
                                      ===========  ========  =============  ==============  =============
</TABLE>


See accompanying summary of accounting policies and notes to the consolidated
financial statements.

                                      F-5
<PAGE>


                     MPM TECHNOLOGIES, INC. AND SUBSIDIARIES
                     ---------------------------------------
                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                                                      Year Ended December 31,
                                                   -----------------------------
                                                       2004             2003
                                                   -------------   -------------

Cash flows from operating activities:
   Net loss....................................... $ (1,905,446)   $ (2,895,144)

   Adjustments to reconcile net loss to net cash
   (used in) operating activities:
     Depreciation and amortization................      221,670         345,568
     Stock based compensation.....................            -          47,032
     Loss on disposition of fixed assets..........      709,902         174,673
     (Gain)/Loss on minority owned joint venture..      (12,795)         66,272
     Loss on write-off of leasehold improvements
      due to terminated lease.....................                       12,980
     Change in assets and liabilities:
        Accounts receivable.......................      184,896         684,837
        Costs and estimated earnings in excess of
         billings.................................      (47,194)        408,641
        Inventories...............................            -          29,604
        Other current assets......................        8,357               -
        Other assets..............................       12,359           7,916
        Accounts payable and accrued expenses.....   (2,838,921)     (1,712,079)
        Billings in excess of costs and estimated
         earnings.................................      111,937          29,619
        Other current liabilities.................      209,768               -
                                                   -------------   -------------
Cash (used in) continuing operations..............   (3,345,467)     (2,800,081)
                                                   -------------   -------------

Gain/(loss) from discontinued operations                 33,205      (1,066,174)
Decrease in net assets of discontinued operations     2,730,686         530,804
                                                   -------------   -------------
Cash provided by (used in) discontinued operations    2,763,891        (535,370)
                                                   -------------   -------------

Net cash (used in) operating activities                (581,576)     (3,335,451)
                                                   -------------   -------------

Cash flows from investing activities:
Acquisition of purchased intangibles..............       (2,005)              -
                                                   -------------   -------------
Net cash (used in) investing activities...........       (2,005)              -
                                                   -------------   -------------

Cash flows from financing activities:
   Borrowings from related parties................    1,575,193         447,665
   Proceeds from long-term debt...................            -       2,883,737
   Repayments of long-term debt...................     (993,677)              -
                                                   -------------   -------------
Net cash provided by financing activities.........      581,516       3,331,402
                                                   -------------   -------------

Net (decrease) in cash and cash equivalents.......       (2,065)         (4,049)
Cash and cash equivalents, beginning of year......        8,843          12,892
                                                   -------------   -------------
Cash and cash equivalents, end of year............ $      6,778    $      8,843
                                                   =============   =============

See accompanying summary of accounting policies and notes to the consolidated
financial statements.

                                      F-6
<PAGE>


                     MPM TECHNOLOGIES, INC. AND SUBSIDIARIES
                     ---------------------------------------
                      CONSOLIDATED STATEMENTS OF CASH FLOWS


                                                      Year Ended December 31,
                                                   -----------------------------
                                                       2004            2003
                                                   -------------   -------------
Supplemental Disclosures Of Cash Flow Information

Cash paid during the year for:
   Interest....................................... $      4,227    $      3,679




See accompanying summary of accounting policies and notes to the consolidated
financial statements.

                                      F-7
<PAGE>


                     MPM TECHNOLOGIES, INC. AND SUBSIDIARIES
                     ---------------------------------------

Operations, Principles of Consolidation and Basis of Presentation

MPM Technologies,  Inc. (the Company) was incorporated as Okanogan  Development,
Inc. on July 18, 1983, under the laws of the State of Washington.  It was formed
primarily  for the purpose of  investing  in real estate and  interests  in real
estate. On April 25, 1985, the Company combined with MADD Exploration  (MADD), a
Montana  partnership,  and changed its name to Montana Precision Mining, Ltd. In
August 1995, the Company changed its name to MPM Technologies,  Inc. As a result
of the combination with MADD, the Company acquired mining properties  located in
Powell County,  Montana.  The Company is not currently engaged in exploration or
developmental mining activities in regard to these properties.

The accompanying  consolidated  financial statements include the accounts of the
Company and the  following  subsidiaries  and other  entities  controlled by the
Company:  Huntington  Environmental  Systems, Inc. (HES), AirPol, Inc. (AirPol),
MPM Mining,  Inc.,  NuPower,  Inc., NuPower (a General  Partnership) and Skygas.
Intercompany accounts and transactions among the companies have been eliminated.

HES, a wholly owned subsidiary, was acquired on March 31, 1997 (See Note 1). HES
designs,  engineers,  supplies and services air  pollution  control  systems for
Fortune 500 and other environmental and industrial  companies  worldwide.  HES's
systems primarily utilize heat and chemicals to control air pollution.  On March
9, 2004,  management  filed a petition in federal  court under  Chapter 7 of the
United  States  Bankruptcy  Code.  Accordingly,   HES  is  accounted  for  as  a
discontinued operation.

AirPol,  a wholly owned  subsidiary,  was acquired on July 2, 1998 (See Note 1).
AirPol,  like HES,  designs,  engineers,  supplies and  services  air  pollution
control systems.  AirPol's systems,  however, utilize wet and dry scrubbers, wet
electrostatic precipitators and venturi absorbers to control air pollution.

NuPower, a 58.21% owned partnership,  is engaged in the research and development
of an electrothermal  gasification  process which will be utilized  primarily in
the waste-to-energy field, although the process is expected to have applications
in other areas. This partnership was formed in 1986.

Skygas,  an 85% directly and indirectly owned joint venture,  was formed in 1990
for  the  purpose  of  commercializing   the  Skygas  technology,   which  is  a
disposal/gasification  process that converts  solid and  semi-solid  wastes into
clean, medium BTU syntheses gas. As of December 31, 2004 and 2003,  participants
and  interests  owned in the Skygas  venture  included:  NuPower (a 58.2%  owned
subsidiary of the Company),  70%, MPM Technologies,  Inc., 15%, and USF Smogless
of Milan,  Italy (a subsidiary of United  States Filter  Corporation  which also
owns shares of the Company totaling 6.83% of the common stock outstanding), 15%.

The accompanying  consolidated  financial statements have been prepared assuming
that the Company will continue as a going concern.  As of December 31, 2004, the
Company has a working capital deficiency,  an accumulated  deficit,  and has not
been  able  to  generate  any  significant  revenues.   These  conditions  raise
substantial  doubt  about the  ability  of the  Company to  continue  as a going
concern.  The  Company  plans to raise  additional  capital in the  future.  The
consolidated  financial  statements  do not include any  adjustments  that might
result from the outcome of this uncertainty.

Revenue Recognition

Contract  revenue is  recognized on the  percentage-of-completion  method in the
ratio that costs incurred bear to estimated  costs at completion.  Costs include
all direct  material and labor  costs,  and  indirect  costs,  such as supplies,
tools, repairs and depreciation.  Selling,  general and administrative costs are
charged to expense  as  incurred.  Other  revenue  is  recorded  on the basis of
shipment or  performance  of services or  shipment of  products.  Provision  for
estimated  contract  losses,  if any, is made in the period that such losses are
determined.  During 2004 and 2003,  no amounts  were  recognized  for  estimated
contract losses.

                                       F-8
<PAGE>


                     MPM TECHNOLOGIES, INC. AND SUBSIDIARIES
                     ---------------------------------------

The asset  "costs  and  estimated  earnings  in excess of  billings"  represents
revenues  recognized in excess of amounts invoiced.  The liability  "billings in
excess  of costs  and  estimated  earnings"  represents  invoices  in  excess of
revenues recognized.

Property, Plant and Equipment

Property, plant and equipment are stated at cost, less accumulated depreciation.
For  financial  reporting  purposes,  the  costs  of  plant  and  equipment  are
depreciated  over the  estimated  useful  lives of the assets,  which range from
three to fifteen years, using the straight-line method.

Purchased Intangible

Purchased  intangible  represents the excess of the purchase price over the fair
value of net assets  acquired and is being  amortized on a  straight-line  basis
over  its  estimated  period  of  future  benefit  of  ten  years.  The  Company
periodically   evaluates  the  recoverability  of  purchased   intangible.   The
measurement of possible  impairment is based primarily on the Company's  ability
to recover the  unamortized  balance of the purchased  intangible  from expected
future operating cash flows on an undiscounted basis.

Asset Impairment

The Company  evaluates  its  long-lived  assets for  financial  impairment,  and
continues to evaluate them as events or changes in  circumstances  indicate that
the  carrying  amount of such assets may not be fully  recoverable.  The Company
evaluates  the  recoverability  of  long-lived  assets by measuring the carrying
amount of the  assets  against  the  estimated  undiscounted  future  cash flows
associated  with them.  At the time such  evaluations  indicate  that the future
undiscounted  cash flows of certain  long-lived  assets  are not  sufficient  to
recover the carrying value of such assets, the assets are adjusted to their fair
values.

Income Taxes

The Company  accounts  for income  taxes under the  provisions  of  Statement of
Financial  Accounting  Standards (SFAS) No. 109,  "Accounting for Income Taxes".
SFAS No.  109 uses the asset and  liability  method so that  deferred  taxes are
determined based on the estimated future tax effects of differences  between the
financial statement and tax basis of assets and liabilities given the provisions
of enacted  tax laws and tax rates.  Deferred  income tax  expense or benefit is
based on the changes in the  financial  statement  basis versus the tax bases in
the Company's assets or liabilities from period to period.

Research and Development Costs

Research and development costs are charged to expense as incurred.

Advertising Costs

Advertising costs are charged to operations when incurred.  Advertising  expense
was  $1,287  and  $18,071  for the  years  ended  December  31,  2004 and  2003,
respectively.

Estimates

The preparation of financial  statements in conformity  with generally  accepted
accounting  principles  requires  management to make estimates and  assumptions.
Those  estimates  and  assumptions  affect  the  reported  amounts of assets and
liabilities and disclosures of contingent  assets and liabilities at the date of
the  financial  statements  and the  reported  amounts of revenues  and expenses
during the reporting period. Actual results could differ from those estimates.

                                       F-9
<PAGE>


                     MPM TECHNOLOGIES, INC. AND SUBSIDIARIES
                     ---------------------------------------

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.

Fair Value of Financial Instruments

The carrying  amounts  reported in the balance sheet as of December 31, 2004 for
cash equivalents, investments, accounts payable and accrued expenses approximate
fair value because of the immediate or  short-term  maturity of these  financial
instruments.  The fair value of notes  payable and long-term  debt  approximates
their  carrying  value as the  stated or  discounted  rates of the debt  reflect
recent market conditions.

Limitations

Fair value  estimates  are made at a specific  point in time,  based on relevant
market  information  and  information  about  the  financial  statement.   These
estimates  are  subjective  in nature and involve  uncertainties  and matters of
significant judgment and therefore cannot be determined with precision.  Changes
in assumptions could significantly affect the estimates.

Cash and Cash Equivalents

For purposes of balance sheet  classification  and the statements of cash flows,
the Company considers all highly liquid  investments  purchased with an original
maturity of three months or less to be cash equivalents.

Warranty Reserve

The  Company  warranties  its  pollution  control  units for  defects in design,
materials, and workmanship generally for a period of 18 months from date sold or
12 months from date placed in service. Provision for estimated warranty costs is
recorded  upon  completion of the project and  periodically  adjusted to reflect
actual experience.

Earnings Per Share

SFAS No. 128 requires dual  presentation of basic earnings per share and diluted
earnings per share on the face of all income  statements  issued after  December
15, 1997 for all entities with complex  capital  structures.  Basic earnings per
share  includes no dilution and is  calculated by dividing  income  available to
common   shareholders  by  the  weighted   average  number  of  shares  actually
outstanding during the period.  Diluted earnings per share reflect the potential
dilution  of  securities  (such  as  stock  options,   warrants  and  securities
convertible into common stock) that could share in the earnings of an entity. At
December 31, 2004 and 2003,  outstanding options to purchase 1,864,508 shares of
the  Company's  common  stock were not  included in the  computation  of diluted
earnings  per  share  as their  effect  would  have  been  antidilutive.  As the
Company's stock options are  antidilutive,  basic and diluted earnings per share
are the same for all periods presented.

                                      F-10
<PAGE>


                     MPM TECHNOLOGIES, INC. AND SUBSIDIARIES
                     ---------------------------------------

1. Business Acquisitions

On March 31, 1997, the Company acquired an operating business from United States
Filter   Corporation  under  the  terms  of  an  asset  purchase  agreement  and
subsequently formed an Illinois corporation,  Huntington  Environmental Systems,
Inc.,  into which the acquired  assets and  liabilities  were  transferred.  The
acquisition  of HES was  recorded  under  the  purchase  method  of  accounting;
accordingly,  the results of operations of HES are included in the  consolidated
statements  of  operations  from the date of  acquisition.  The  purchase  price
consisted of the issuance of 146,667 shares of the Company's common stock valued
at $990,000.  The excess of the fair value of the net assets  acquired  over the
purchase price was $944,889, which has been established as negative goodwill and
was being amortized over ten years.

On July 2, 1998, the Company acquired an operating business from FLS miljo, Inc.
under the terms of an asset  purchase  agreement and  subsequently  formed a New
Jersey corporation, AirPol, Inc., into which the acquired assets and liabilities
were  transferred.  The  acquisition  of AirPol was recorded  under the purchase
method of  accounting;  accordingly,  the  results of  operations  of AirPol are
included  in  the  consolidated  statements  of  operations  from  the  date  of
acquisition.  The total  purchase  price of AirPol was $534,610 and consisted of
$234,610  of cash and 96,884  shares of common  stock of the  Company  valued at
$300,000. The excess of the purchase price over the fair value of the net assets
acquired was $760,532 and was being amortized over ten years.

As of July 2, 1998, the fair values of assets acquired and  liabilities  assumed
were as follows:

        Costs and estimated earnings in excess of billings..........  $ 248,038
        Plant, property and equipment...............................     89,539
        Goodwill....................................................    760,532
        Accrued expenses............................................    (15,751)
        Billings in excess of costs and estimated earnings..........   (547,748)
                                                                      ----------
                                                                      $ 534,610
                                                                      ==========

As of December 31, 2001,  the Company wrote off the net balances of the goodwill
and negative goodwill. The effect of these write-offs was not material.

In  September   2000,   the  Company   entered  into  an  agreement  to  acquire
substantially  all of the stock of New  Monitor  Builders,  Inc.  Since the only
assets of New Monitor Builders were patents,  the agreement was changed, and the
Company  acquired  only the patents.  The Company  issued  89,300  shares of its
common stock, and recorded the patents acquired at the market value of the stock
on its date of issue,  $588,244.  The patents were being  carried at cost on the
accompanying  financial  statements.  The patents were being  amortized over the
life of the  patents.  During 2002,  management  took a charge to income for the
impairment of the New Monitor  investment,  based on the  estimated  fair market
value of the asset.  This charge  amounted  to  $514,000  and is included on the
consolidated statements of operations.

                                      F-11
<PAGE>


                     MPM TECHNOLOGIES, INC. AND SUBSIDIARIES
                     ---------------------------------------

2. Costs and Estimated Earnings on Contracts in Progress

Following is a summary of costs, billings, and estimated earnings on contracts
in progress as of December 31, 2004.

        Costs incurred on contracts in progress...................  $ 9,135,422
        Estimated earnings........................................      852,251
                                                                    ------------
                                                                      9,987,673
        Less billings to date.....................................   10,124,229
                                                                    ------------
                                                                    $  (136,556)
                                                                    ============


The above accounts are shown in the accompanying consolidated balance sheets
under these captions at December 31, 2004.

        Costs and estimated earnings in excess of billings........  $   129,444
        Billings in excess of costs and estimated earnings........     (266,000)
                                                                    ------------
                                                                    $  (136,556)
                                                                    ============

3. Investments at Equity

Investments in unconsolidated jointly owned companies in which the company has a
20% to 50% interest or otherwise exercises  significant influence are carried at
cost,  adjusted for the  company's  proportionate  share of their  undistributed
earnings or losses.

At December 31, 2004 the  Company's  investment  accounted  for using the equity
consists  of a  40%  ownership  in  Sunia-AirPol,  Inc.  As  a  result  of  this
investment, the Company recognized $12,795 of income and $66,272 of loss for the
years ended December 31, 2004 and 2003, respectivley.

4. Property, Plant and Equipment

Property, plant and equipment consists of the following at December 31, 2004:

        Equipment.................................................  $   295,953
        Furniture and fixtures....................................       31,008
                                                                        326,961
        Less accumulated depreciation.............................      259,253
                                                                    ------------
                                                                    $    67,708
                                                                    ============

Depreciation expense charged to operations was $152,165 and $293,230 in 2004 and
2003, respectively. In 2004, equipment was impaired in the amount of $709,902.

5. Note Payable and Long-Term Debt

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 matures on
January 2, 2008. As of December 31, 2004, the Company has $3,085,075 of advances
(including accrued interest) outstanding under the agreement.

                                      F-12
<PAGE>


                     MPM TECHNOLOGIES, INC. AND SUBSIDIARIES
                     ---------------------------------------

In conjunction  with the Company's  acquisition of HES (See Note 1), the Company
assumed a long-term obligation totaling $1,200,000,  which is payable in sixteen
annual  installments  of $75,000.  As there was no stated  interest  rate on the
obligation,  an imputed  interest  rate of 9%, which  represented  the Company's
estimated  borrowing rate, was utilized.  The payments due in 2004,  2003, 2002,
2001,  2000, 1999 and 1998 have not been made, as the Company  believes the note
holder has breached the agreement. Under the terms of the agreement, non-payment
does not result in the debt being  callable.  At December 31, 2004, the carrying
value of the obligation,  net of discount,  was $993,677 plus accrued  interest.
This  amount is  included in the  accompanying  balance  sheet under the caption
"Liabilities to be disposed of".

6.       Related Party Debt

Related  party debt  consists of advances  received  from various  directors and
related  parties.  At December 31,  2004,  amounts  owed these  related  parties
totaled $4,200,462 due on demand.

7.       Commitments and Contingencies

The Company leases office space and mineral  properties  under operating  leases
that expire at various  dates  through  2008.  Future  minimum  rental  payments
required under  operating  leases that have initial and remaining  noncancelable
terms in excess of one year are as follows:

             Year Ending December 31,
             --------------------------------------------  --------------

             2005 ........................................      $169,776
             2006 ........................................       169,776
             2007 ........................................       169,776
             Thereafter ..................................        28,296
                                                           -------------
                                                                $537,624
                                                           =============



Rent  expense for the years ended  December  31, 2004 and 2003 was  $131,108 and
$200,393, respectively.

The  Company  has  entered  into  an  exclusive  license  rights  agreement  for
technology  to be utilized in its SkyGas  venture.  Pursuant to the terms of the
agreement,  the Company has agreed to pay $72,000  annually  through April 2007.
The agreement may be terminated by the Company at any time.

The Company is a defendant in various  lawsuits,  some of which seek substantial
monetary  damages.  The lawsuits  include those brought  against the Company for
breach of  contract.  The  estimated  losses as a result of the  lawsuits  total
$381,300  and is  recorded  as a  charge  to  income  on the  2003  consolidated
statement of operations.


                                      F-13
<PAGE>


                     MPM TECHNOLOGIES, INC. AND SUBSIDIARIES
                     ---------------------------------------


8. Income Taxes

As of December 31, 2004 the significant components of the Company's net deferred
tax asset is as follows:


                  Net operating loss carryforward..................$4,704,000
                  Differences between book and tax depreciation....   220,000
                  Goodwill and purchase asset adjustments..........    10,000
                  Writedown of mineral properties..................   136,000
                  Other............................................    40,000
                                                                   ----------
                                                                    5,110,000
                  Less: valuation allowance........................ 5,110,000
                                                                   ----------

                                                                   $       --
                                                                   ==========

As management of the Company  cannot  determine  that it is more likely than not
that the  Company  will  realize the benefit of the net  deferred  tax asset,  a
valuation  allowance equal to the net deferred tax asset has been established at
December 31, 2004.

At December 31,  2004,  the Company has net  operating  loss  carryforwards  for
federal income tax purposes totaling  approximately $13.4 million that expire in
the years 2005 through  2024.  At December  2004,  the Company has net operating
loss  carryforwards  for state income tax purposes totaling  approximately  $9.8
million that expire in the years 2005 through 2024.

9. Stockholders' Equity

Stock Option Plan

On May 22, 1989, the shareholders of the Company voted to approve a stock option
plan (the Plan) for  selected  key  employees,  officers  and  directors  of the
Company.  The Plan is administered  by a Compensation  Committee of the Board of
Directors  (the  "Committee")  consisting of those  directors of the Company and
individuals who are elected annually by the Board of Directors to the Committee.
The Board of Directors has chosen one of the Company's directors and one outside
individual to serve on the Committee.  No director  eligible to receive  options
under the Plan may vote  upon the  granting  of an option or Stock  Appreciation
Rights  (SAR) to  himself  or  herself  or upon  any  decision  of the  Board of
Directors or the  Committee  relating to the Plan.  Under the Plan, a maximum of
236,667  shares  were  approved to be granted,  which in 2003 was  increased  by
300,000.  Generally, the Plan provides that the terms under which options may be
granted are to be determined by a Committee  subject to certain  requirements as
follows:  (1) the exercise  price will not be less than 100% of the market price
per share of the  common  stock of the  Company at the time an  Incentive  Stock
Option is granted,  or as established by the Committee for  Non-qualified  Stock
Options or Stock Appreciation  Rights; and (2) the option purchase price will be
paid in full on the date of purchase.

                                      F-14
<PAGE>


                     MPM TECHNOLOGIES, INC. AND SUBSIDIARIES
                     ---------------------------------------



Qualified  stock option activity under the Plan and  non-qualified  stock option
activity outside the Plan are summarized as follows:



                                                                    Weighted
                                                                     Average
                                                                     Option
                                                        Options       Price
                                                      -----------   ----------






                                                      -----------   ----------

               Outstanding at January 1, 2004.........  1,864,508  $      1.83
                                                      ===========   ==========

               Granted................................          -            -
               Exercised..............................          -            -
               Expired................................          -            -
                                                      -----------   ----------

               Outstanding at December 31, 2004.......  1,864,508  $      1.83
                                                      ===========   ==========

                              Proforma Information

SFAS No. 123 requires the Company to provide pro forma information regarding net
loss and loss per share as if  compensation  cost for the Company's stock option
plan  had been  determined  in  accordance  with the  fair  value  based  method
prescribed  by SFAS No. 123. The Company  estimates the fair value of each stock
option at the grant date by using the  Black-Scholes  option-pricing  model with
the following weighted-average assumptions used: dividend yield of zero percent;
expected  volatility of 23 percent;  risk-free interest rate of 4.35 percent for
2003; and expected lives of ten years for 2003. The weighted  average fair value
at date of grant for options granted to employees was $0.22 per option for 2003.
No options were granted in 2004.  Under the  accounting  provisions  of SFAS No.
123, the  Company's net loss and loss per share for each of the two years in the
period ended  December 31, 2003 would have been adjusted to the pro forma amount
indicated below:

                                               Year Ended
                                               December 31
                                               ------------------------------
                                                   2003
                                               -------------    -------------

                  Net loss................
                     As reported..........   $   (3,961,318)
                     Pro forma............   $   (4,043,968)

                  Loss per share..........
                     As reported..........   $        (1.31)
                     Pro forma...............$        (1.34)



                                      F-15
<PAGE>


                     MPM TECHNOLOGIES, INC. AND SUBSIDIARIES
                     ---------------------------------------


The following table summarizes  information  about stock options  outstanding at
December 31, 2004:


<TABLE>
<CAPTION>
                                                                                            Options
                                              Number               Weighted             Outstanding and
                          Range of          Outstanding             Average           Exercisable Weighted
                          Exercise        and Exercisable          Exercise            Average Remaining
                           Prices           at 12/31/04              Price          Contractual Life (Years)
                       ---------------   ------------------      --------------    ---------------------------
<S>                  <C>                           <C>         <C>                            <C>
                     $           0.22              413,250     $          0.22                9.8
                     $   0.88 - $0.90              164,591     $          0.89                4.6
                     $           2.00              710,000     $          2.00                7.4
                     $           2.70              450,000     $          2.70                8.8
                     $           3.00              126,667     $          3.00                7.5
                                         ------------------                        ---------------------------

                     $   0.22 - $3.00            1,864,508     $          1.74
                                         ==================                        ===========================
</TABLE>

10.      Valuation and Qualifying Accounts

Allowance for doubtful account activity was as follows at December 31, 2004.


                 Balance, beginning of year..............   $        15,047
                 Charged to (deducted from) expense......           139,000
                 Write-offs, net of recoveries...........                --
                                                            ---------------
                 Balance, end of year...................    $       154,047
                                                            ===============


11. Mineral Properties

During  1998,  the  Board  of  Directors  authorized  a plan to  dispose  of the
Company's  mineral  properties and related mining assets.  In 2001, the Board of
Directors  changed this plan to hold the mineral  properties  as an  investment.
Accordingly,  the Company has classified these assets as mineral properties held
for investment in its balance sheet at December 31, 2004 and 2003.



12. Prepaid Royalty

During 1994,  the Company  entered  into an agreement to sell certain  equipment
related to the SkyGas  technology to the inventor of this technology in exchange
for a $275,000 note  receivable.  The note was  collateralized  by the equipment
sold. Under the agreement,  the note was due in a balloon payment of $275,000 on
December 1, 1995 or at such time the SkyGas  process is placed into  sustainable
commercial  production.  Additional  renewals have not been  negotiated  and the
Company has  recharacterized  this former note receivable as prepaid  royalties,
recoverable from future revenues  resulting from the operation of the equipment.
The balance at December 31, 2004 was $273,000.


                                      F-16
<PAGE>


                     MPM TECHNOLOGIES, INC. AND SUBSIDIARIES
                     ---------------------------------------

13. Related Party Transactions

The Company contracts for its shareholder  relations services with an officer of
the Company. The Company incurred expenses to this related party for services in
2004 and 2003 of $57,200 and $53,416, respectively.

As of December 31, 2004 and 2003, a business  owned by the  Company's  President
owed the  Company  $19,614  from the sale of certain  equipment.  This amount is
included in accounts receivable.

14. Purchased Intangible

In 1996,  the Company  issued  133,333  shares of its common stock to acquire an
additional 15% interest in the SkyGas  venture.  The transaction was recorded at
$675,000 based on the then-fair  value of the shares issued.  In accordance with
FASB  Technical  Bulletin No. 84-1,  the Company  recorded an  intangible  asset
representing the additional  interest purchased in SkyGas's patent and licensing
rights.

15. New Accounting Pronouncements

In January 2003, the FASB issued Interpretation No. 46 ("FIN 46"), Consolidation
of Variable Interest Entities,  an Interpretation of ARB No. 51. FIN 46 requires
certain variable interest  entities to be considered by the primary  beneficiary
of  the  entity  if  the  equity  investors  in  the  entity  do  not  have  the
characteristics  of a controlling  financial  interest or do not have sufficient
equity at risk for the  entity to  finance  its  activities  without  additional
subordinated  financial support from other parties.  FIN 46 is effective for all
new variable  interest  entities created or acquired after January 31, 2003. The
adoption of FIN 46 did not have a significant impact on the Company's results of
operations or financial position.

In December 2004, the FASB revised Statement No. 123, Accounting for Stock-Based
Compensation. This Statement supercedes APB Opinion No. 25, Accounting for Stock
Issued to Employees,  and its related  implementation  guidance.  This Statement
establishes  standards for the  accounting for  transactions  in which an entity
exchanges  its  equity  instruments  for goods or  services.  It also  addresses
transactions  in which an entity  incurs  liabilities  in exchange  for goods or
services that are based on the fair value of the entity's equity  instruments or
that may be settled by the issuance of those equity instruments.  This Statement
focuses  primarily on accounting  for  transactions  in which an entity  obtains
employee services in share-based payment  transactions.  This Statement does not
change the accounting guidance for share-based payment transactions with parties
other than  employees  provided in Statement 123 as  originally  issued and EITF
Issue No. 96-18,  "Accounting  for Equity  Instruments  That Are Issued to Other
Than  Employees  for  Acquiring,  or  in  Conjunction  with  Selling,  Goods  or
Services."  This  Statement  does not address the  accounting for employee share
ownership  plans,  which  are  subject  to AICPA  Statement  of  Position  93-6,
Employers'  Accounting for Employee  Stock  Ownership  Plans.  This Statement is
effective  for the year ending  December 31, 2005.  It is not expected to have a
significant impact on the Company's results of operations or financial position.

In December 2002, the FASB issued Statement No. 148,  Accounting for Stock-Based
Compensation.  This statement provides  alternative  methods of transition for a
voluntary  change to the fair value based method of accounting  for  stock-based
employee  compensation.  In  addition,  this  Statement  amends  the  disclosure
requirements  of Statement 123 to require  prominent  disclosures in both annual
and interim financial  statements about the method of accounting for stock-based
employee  compensation  and the effect of the method used on  reported  results.
Provisions of SFAS No. 148 were  effective for the Company on December 31, 2002.
The adoption of SFAS No. 148 did not have a significant  impact on the Company's
results of operations or financial position.

In April 2003, the FASB issued Statement No. 149,  Amendment of Statement 133 on
Derivative  Instruments  and  Hedging  Activities.  This  statement  amends  and
clarifies  financial  accounting  and  reporting  for  derivative   instruments,
including   certain   derivative   instruments   embedded  in  other   contracts
(collectively  referred to as derivatives) and for hedging activities under FASB
Statement No. 133, Accounting for Derivative Instruments and Hedging Activities.
The  adoption  of  Statement  No. 146 did not have a  significant  impact on the
Company's results of operations or financial position.

                                      F-17
<PAGE>


                     MPM TECHNOLOGIES, INC. AND SUBSIDIARIES
                     ---------------------------------------

In May  2003,  the FASB  issued  Statement  No.  150,  "Accounting  for  Certain
Financial Instruments with Characteristics of both Liabilities and Equity". This
Statement  establishes  standards  for how an  issuer  classifies  and  measures
certain  financial  instruments  with  characteristics  of both  liabilities and
equity.  It  requires  that an issuer  classify a financial  instrument  that is
within  its  scope as a  liability  (or an asset  in some  circumstances).  This
statement is effective for financial  instruments entered into or modified after
May 31, 2003,  and  otherwise is effective at the beginning of the first interim
period  beginning  after  June  15,  2003,  except  for  mandatorily  redeemable
financial  instruments  of  nonpublic  entities,  if  applicable.  It  is  to be
implemented  by reporting  the  cumulative  effect of a change in an  accounting
principle  for  financial  instruments  created  before the issuance date of the
Statement and still existing at the beginning of the interim period of adoption.
The  adoption  of  this  statement  did not  have a  significant  impact  on the
Company's results of operations or financial position.

In  November  2004 the FASB  issued  Statement  No.  151,  Inventory  Costs - An
Amendment of ARB No. 43,  Chapter 4. This  Statement  amends the guidance in ARB
No. 43, Chapter 4,  "Inventory  Pricing," to clarify the accounting for abnormal
amounts of idle facility expense,  freight,  handling costs, and wasted material
(spoilage).  Paragraph 5 of ARB 43, Chapter 4, previously stated that "... under
some  circumstances,  items such as idle facility expense,  excessive  spoilage,
double freight,  and rehandling costs may be so abnormal as to require treatment
as current  period  charges..."  This  Statement  requires  that those  items be
recognized  as  current-period  charges  regardless  of  whether  they  meet the
criterion of "so abnormal". In addition, this Statement requires that allocation
of fixed production  overheads to the costs of conversion be based on the normal
capacity of the production facilities. This Statement if effective for inventory
costs incurred during fiscal years beginning after June 15, 2005. This Statement
is not  expected  to have a  significant  impact  on the  Company's  results  of
operations or financial position.

The FASB has issued Statement No. 152,  Accounting for Real Estate  Time-Sharing
Transactions.  This Statement amends FASB Statement No. 66, Accounting for Sales
of Real Estate, to reference the financial accounting and reporting guidance for
real estate  time-sharing  transactions  that is provided in AICPA  Statement of
Position (SOP) 04-02, Accounting for Real Estate Time-Sharing Transactions. This
Statement  also amends FASB  Statement No. 67,  Accounting for Costs and Initial
Rental  Operations of Real Estate  Projects,  to state that the guidance for (a)
incidental  operations and (b) costs incurred to sell real estate  projects does
not apply to real estate  time-sharing  transactions.  The  accounting for those
operations and costs is subject to the guidance in SOP 04-02.  This Statement is
effective for fiscal years  beginning after June 15, 2005 and is not expected to
have a significant  impact on the  Company's  results of operations or financial
position.

The FASB issued Statement No. 153, Exchanges of Nonmonetary Assets. The guidance
in APB Opinion No. 29, Accounting for Nonmonetary Transactions,  is based on the
principle that  exchanges of nonmonetary  assets should be measured based on the
fair  value of the assets  exchanged.  The  guidance  in the  Opinion,  however,
included certain exceptions to that principle. This Statement amends Opinion No.
29 to eliminate the exception  for exchanges of  nonmonetary  assets that do not
have commercial  substance.  A nonmonetary  exchange has commercial substance if
the future cash flows of the entity are  expected to change  significantly  as a
result of the exchange.  This Statement is effective for  nonmonetary  exchanges
occurring in fiscal periods beginning after June 15, 2005 and is not expected to
have a significant  impact on the  Company's  results of operations or financial
position.


16. Discontinued Operations

On March 7, 2004,  management  filed a petition in federal  bankruptcy  court on
behalf of HES under Chapter 7 of the  Bankruptcy  Code. As a result,  the assets
and  liabilities  of HES are shown in the  accompanying  balance sheet under the
captions "Assets to be disposed of" and "Liabilities to be disposed of". No gain
or loss  has  been  reflected  in the  2004  Statement  of  Operations  as it is
anticipated that the result of the bankruptcy  proceedings will be a gain on the
extinguishments  of debt. Since HES was inactive for the periods  presented,  no
gains  or  losses  from  discontinued  operations  have  been  reflected  in the
Statement of Operations.


                                      F-18
<PAGE>


                     MPM TECHNOLOGIES, INC. AND SUBSIDIARIES
                     ---------------------------------------

The case remains in federal  bankruptcy  court. The ultimate  disposition of the
assets and liabilities of HES and the timing of such  disposition will be at the
discretion of the federal bankruptcy trustee.

Item  8.  Changes  in and  disagreements  with  accountants  on  Accounting  and
          Financial Disclosure.
--------------------------------------------------------------------------------
Not applicable

PART III

Item 9. Directors and Executive Officers of the Registrant

a)  Identification of Directors
                                                              FIRST ELECTED
      NAME                 AGE      POSITION                  DIRECTOR
--------------------------------------------------------------------------------
Richard E. Appleby         65       Director                  4/25/1985
Glen Hjort                 52       Director                  2/16/1998
Frank E. Hsu               59       Director                  6/24/2002
Richard Kao                64       Director                  6/28/1999
Michael J. Luciano         51       Director                  2/16/1998
L. Craig Cary Smith        55       Director                  4/25/1985
Daniel D. Smozanek         79       Director                  4/25/1985

The directors will serve until the next meeting of  shareholders  or until their
successors are elected and qualified.

b) Identification of Executive Officers.

      NAME                          AGE     POSITION              OFFICER SINCE
-------------------------------------------------------------------------------
Richard E. Appleby                  65      Vice President           4/25/1985
Glen Hjort                          52      Chief Financial Officer  6/28/1999
Frank E. Hsu                        59      Chief Operating Officer  6/24/2002
Robert D. Little                    55      Secretary                1/03/1991
Michael J. Luciano                  51      Chairman & CEO           2/16/1998
Daniel D. Smozanek                  79        Treasurer              4/25/1985

The officers  will serve until the next meeting of  shareholders  or until their
successors are elected and qualified.

c) Identification of Certain Significant Employees.

As of December 31, 2004,  MPM was  dependent  upon the services of its principal
officers and directors.  In the event that one of these persons should leave the
Company,  there  is  no  assurance  that  the  Company  can  employ  a  suitable
replacement.

d)   Family Relations

Michael J.  Luciano,  Chairman  of the Board of  Directors  and Chief  Executive
Officer is the nephew of Richard E. Appleby, Vice President and Director.  There
are no other  family  relationships,  whether by blood,  marriage,  or adoption,
between any executives and/or directors.

<PAGE>


                     MPM TECHNOLOGIES, INC. AND SUBSIDIARIES
                     ---------------------------------------

e)  Business Experience


Background

Michael J. Luciano was elected Chairman and Chief Executive  Officer in 1999. In
1998, he was named Senior Vice President and elected a director.  His continuing
responsibilities  in addition to overall company management include  negotiating
ventures and business  opportunities in the U.S., Europe,  Asia, and Africa. Mr.
Luciano  was a co-owner  of Morris  County  Sanitation  Services,  Inc.  in East
Hanover,  New Jersey where he was  responsible  for  acquisitions,  governmental
regulatory  permitting and compliance.  He is also the owner of MJL & associates
involved  in  consulting  services   specializing  in  solid  waste  facilities,
permitting,  construction and operations.  Mr. Luciano resides in Mt. Arlington,
New Jersey.

Glen Hjort was elected Chief  Financial  Officer in 1999 and has been a Director
since 1998.  Mr. Hjort is a certified  public  accountant  with over twenty five
years  experience  providing  services to numerous  corporate  clients in a wide
variety of industries. Mr. Hjort resides in Palatine, Illinois.

Frank E. Hsu is Chief  Operating  Officer and was elected  Director in 2002. Mr.
Hsu is a registered professional engineer with 29 years of experience in design,
manufacturing  and  construction  of air pollution  control  equipment and solid
waste disposal systems.  He holds a B.S. Degree in Civil engineering from Taiwan
Chen Kung  University,  an M.S.  Degree in  Environmental  Engineering  from New
Jersey  Institute  of  Technology  and an MBA Degree  from  Fairleigh  Dickinson
University. Prior to joining AirPol in 1990, Mr. Hsu was Engineering Director of
Belco  Pollution  Control  Corp.  In addition to his  engineering  and  business
management background,  he also has extensive experience in international sales,
marketing and project execution. Mr. Hsu resides in Warren, New Jersey.

Richard E.  Appleby is Vice  President  and a Director  since 1985.  He attended
postgraduate courses at Rutgers in Landscape Design,  Landscape  Maintenance and
Landscape  Construction.  From 1957 to 1973, Mr. Appleby was  Superintendent and
Manager of A-L Services and for Farm Harvesting Co.,  constructing  all types of
site development and landscape construction projects.  From 1973 to 1980, he was
Vice  President  of A-L  Services  and since 1980,  has been  President  of that
company. Mr. Appleby resides in Mendham, New Jersey.

Daniel D.  Smozanek is Treasurer and a Director  since 1985.  From 1947 to 1972,
Mr. Smozanek was owner and President of Spring House Tree Service in Summit, New
Jersey.  He has been involved in extensive  real estate and land  development in
New Jersey,  Montana and  Florida.  From 1972 to 1980,  he was a partner in land
development and real estate sales in the Eureka, Montana area. During this time,
he was also a partner in the  exploration  of 29 silver and copper mining claims
in the  Flathead  National  Forest.  Mr.  Smozanek  resides  in Port St.  Lucie,
Florida.

Robert D.  Little is  Secretary  of the  Company.  He is a  graduate  of Central
Washington  University  with a Bachelor  of Arts Degree in  Sociology;  graduate
studies at the  University  of  Washington  in Education  and earned his Teacher
Certification at Seattle  University.  From 1985 to the present,  Mr. Little has
been  Manager for MPM and became  Secretary  of MPM in 1991.  Mr.  Little is the
owner of R.D.  Little  Company  which  specializes  in  assisting  small  public
companies with shareholder and investor relations from 1985 to the present.  Mr.
Little resides in Spokane, Washington.

L. Craig Cary Smith has been a Director  since 1985.  Mr. Smith  graduated  from
Gonzaga  Law School in 1981 and was  admitted to the  Washington  State Bar that
same year.  From 1981 to the  present,  Mr.  Smith has been a partner in general
practice at Smith  Hemingway  Anderson  P.S. in Spokane,  Washington.  Mr. Smith
resides in Spokane, Washington.

Dr.  Richard Kao has been a Director  since 1998.  Dr. Kao has PhD and Master of
Science  degrees  in  chemical   engineering  from  the  Illinois  Institute  of
Technology in Chicago,  and a Bachelor of Science degree in chemical engineering
from Tunghai  University in Taiwan. He presently serves as senior vice president
of Unitel Technologies,  Inc., and is responsible for the research, development,
economic  evaluation,  assessment and upgrade of new technologies for commercial
application for chemical,  petroleum,  solid/semi-solid/liquid  waste, synthetic
fuel, food, pulp, and paper industries. Prior to joining Unitel, he was Director
of Technologies for the Gas Technology Institute  (1967-1982).  Prior to joining
Unitel, he was Director of Technologies for Xytel Corporation (1988-1996). He is
a registered  professional engineer in Illinois and a member of Sigma Xi and the
National  Society of  Professional  Engineers.  Dr. Kao  resides in  Northbrook,
Illinois.

<PAGE>


                     MPM TECHNOLOGIES, INC. AND SUBSIDIARIES
                     ---------------------------------------



(2) Directorships

None of the  directors  of the Company are  directors  of other  companies  with
securities  registered  pursuant to section 12 of the Exchange Act or subject to
the  requirements of section 15(d) of such act or any company  registered  under
the Investment Company Act of 1940.

f) Involvement in Certain Legal Proceedings.

     Not Applicable

g) Promoter and Control Persons.

     Not Applicable

Item 10.  Executive Compensation

The following  table shows the  remuneration of officers and directors in excess
of $100,000 in 2004 and 2003.

Summary Compensation Table
--------------------------

<TABLE>
<CAPTION>

                                        Annual Compensation
                                        --------------------
Name and
Principal
Position  Year         Salary         Bonus(s)    Compensation   Awards(s)   ($)SARs   ($)Payout(s)   ($) Compensation
----------------------------------------------------------------------------------------------------------------------
<S>       <C>         <C>             <C>         <C>            <C>         <C>        <C>            <C>
Michael J.
Luciano   2004                      $120,000
CEO       2003                      $300,000 (1)

Robert D. (2)
Little        2004                  $ 57,200
Secretary  2003                     $ 53,416
</TABLE>


(1)  Of the  $300,000,  $150,000  was paid in cash with the balance  accrued for
     payment at such time as the Board of Directors deems appropriate.

(2)  MPM  contracts  with Mr.  Little for its  shareholder  relations  services.
     Expenses  related  to this  were  $71,636  and  $53,416  for 2004 and 2003,
     respectively.

<PAGE>


                     MPM TECHNOLOGIES, INC. AND SUBSIDIARIES
                     ---------------------------------------


Option Grants In 2004 Fiscal Year Individual Grants Individual Grants

<TABLE>
<CAPTION>
                                                                        Market
                            % of Total                                  Price on
              Options       Options Granted         Exercise or         Date of               Expiration
Name          Granted       In Fiscal Year          Base Price          Grant                 Date
--------      -------       ---------------         ----------          ------------          ------------
<S>           <C>           <C>                     <C>                  <C>                  <C>
                                      NONE
</TABLE>


Aggregated Option/SAR Exercises in Last Fiscal Year and FYE 2003
Option/SAR Values


<TABLE>
<CAPTION>
                                                                                Number of
                                                                                Securities       Value of
                                                                                Underlying       Unexercised
                                                                                Unexercised      In-The-Money
                                                                                Options/SARs     Options/SARs
                            Shares                                              At FY-End(#)     At FY-End
                            Acquired                  Value                     Exercisable/     Exercisable/
Name                        On Exercise               Realized ($)              Unexercisable    Unexercisable
--------------------------------------------------------------------------------------------------------------
<S>                         <C>                      <C>                      <C>                <C>
Michael J. Luciano          None                                                621,890            $105,721
                                                                                Exercisable

Robert D. Little            None                                                260,223            $ 44,238
                                                                                Exercisable

L. Craig Cary Smith         None                                                245,389            $ 41,716
                                                                                Exercisable

Frank E. Hsu                None                                                140,000            $ 23,800
                                                                                Exercisable

Glen Hjort                  None                                                90,000             $ 15,300
                                                                                Exercisable

Richard E. Appleby          None                                                38,000             $ 24,700
                                                                                Exercisable

Daniel D. Smozanek          None                                                8,000              $  5,200
                                                                                Exercisable
a) Current Remuneration.
</TABLE>

Except as noted above,  none of the officers or  directors  is  compensated  for
their services as an officer or director.  Each is reimbursed for  out-of-pocket
expenses incurred on MPM business.

b) Proposed Remuneration.

It is not  contemplated  that any other salaries will be paid unless,  and until
such  time as,  MPM may  require  full  time  commitments  from any  officer  or
director. MPM's officers and directors are committed to the long-term success of
the Company,  and have,  accordingly,  weighted heavily any benefits received in
the form of stock and stock options.

<PAGE>


                     MPM TECHNOLOGIES, INC. AND SUBSIDIARIES
                     ---------------------------------------


c) Incentive and Compensation Plans and Arrangements.

MPM has no retirement,  profit sharing, pension, or insurance plans covering its
officers and directors. No advances have been made, nor are any contemplated, by
MPM to any of its officers or directors.

The  shareholders  of MPM, at the Annual  Shareholders  Meeting on May 22, 1989,
voted to  approve a stock  option  plan for  selected  employees,  officers  and
directors of MPM. The purpose of the option plan is to promote the  interests of
MPM  and  its   stockholders  by  attracting,   retaining  and  stimulating  the
performance  of  selected  employees,  officers  and  directors  and giving such
employees the  opportunity  to acquire a proprietary  interest in MPM's business
and an increased  personal interest in this continued  success and progress.  At
the Annual  Meeting of  Shareholders  held on June 26,  2003,  the  shareholders
approved an amendment to the stock option plan  therefore  increasing the number
of shares in the plan by 300,000.

Item 11.  Security Ownership of Certain Beneficial Owners and Management

a) Security Ownership of Certain Beneficial Owners.

Except as noted in part b. below, no person or group was known by the Registrant
except as noted below to own more than five  percent (5%) of its common stock at
December 31, 2004.

b) Security Ownership of Management as of April 1, 2005.

The following table sets forth, as of April 1, 2005 the amount and percentage of
the Common Stock of MPM, which according to the information  supplied to MPM, is
beneficially  owned by  management,  including  officers  and  directors of MPM.
Except as otherwise  specified,  the persons named in the table have sole voting
power  and  investment  power  with  respect  to  all  shares  of  Common  Stock
beneficially owned by them.


<TABLE>
<CAPTION>
 Title of         Name of                            Amount and Nature of       Percent
 Class            Beneficial Owner                   Beneficial Ownership[1]    of Class
----------        -----------------                  ------------------------   ----------------
<S>               <C>                                <C>                        <C>
Common            Michael J. Luciano                 973,910[2]                     21.71
Common            Robert D. Little                   267,966                         5.97
Common            L. Craig Cary Smith                246,724                         5.50
Common            Richard E. Appleby                 221,155                         4.93
Common            Frank E. Hsu                       176,404                         3.93
Common            Daniel D. Smozanek                 160,257                         3.57
Common            Glen Hjort                         101,833                         2.27
Common            Richard Kao                         64,222                         1.43
Common            As A Group                       2,211,136                        49.30
</TABLE>

[1]  Includes options  available for exercise  aggregating  1,403,502 shares for
     the entire group.

[2]  Does not include 396,509 shares (8.84%) of the Company's outstanding shares
     including  options  available  for exercise  owned by a trust for which Mr.
     Luciano is the Trustee.


c)   Changes in Control.

There are no contractual  arrangements of any kind, known to MPM, which may at a
subsequent date result in a change in control of MPM.

<PAGE>


                     MPM TECHNOLOGIES, INC. AND SUBSIDIARIES
                     ---------------------------------------

Item 12.  Certain Relationships and Related Transactions

a) Transactions with Management and Others.

No  Officers or  Directors  of MPM, or nominees  for  election as  Director,  or
beneficial owners of more than five percent of MPM's voting stock, or members of
their immediate  families had any material  transactions  with MPM other than as
set forth in part b. of this item.

b) Certain Business Relationships.

In September  2001,  Michael J. Luciano,  Chairman and Chief  Executive  Officer
loaned the Company approximately  $600,000 evidenced by a convertible promissory
note.  Under the terms of the  promissory  note,  the  principal  and any unpaid
accrued  interest  may be  converted  to common  stock at the option of the note
holder.

Under the terms of an  agreement  with  Michael J.  Luciano,  Chairman and Chief
Executive Officer,  in April 1999, MPM issued 150,000 shares of its common stock
at the then current  market price of $2.00 in exchange  for $300,000  cash.  MPM
also issued convertible  debentures  aggregating $400,000 which were convertible
to common stock at the  discounted  price of $0.40 per share.  These  debentures
were converted  concurrently  with the stock issue and resulted in an additional
333,333 shares being issued. The discount of $266,666 was treated as a financing
charge  against  MPM's  income  for 1999.  At the same  time,  MPM issued a note
payable to Mr.  Luciano in the amount of $400,000  with  interest  only payments
monthly through March 2004 and the entire  principal  balance due in April 2004.
In 2000,  MPM issued  100,000  shares of its common stock in  settlement  of the
debt.

At  December  31,  2004 and  2003,  Richard  Appleby  was owed  $282,741.33  and
$210,296.45, respectively, pursuant to unsecured demand notes.

MPM has a contract  with R.D.  Little Co. to provide  shareholder  and  investor
relations services.  Robert D. Little, Secretary of the company owns R.D. Little
Co. For the years ended December 31, 2004 and 2003, MPM paid $71,636 and $53,416
for these services, respectively.

It is the  opinion  of  management  that the  amount  and terms for  leases  and
services from  affiliates  are  comparable to those which might be obtained from
unaffiliated parties.

c)  Other Information

      None

Item 13.  Exhibits, Financial Statement Schedules, and Reports on Form 8-K

(A) Exhibits and Financial Statements have been previously reported or are being
shown as an exhibit in this Form 10-KSB.

(B) Reports on Form 8-K

        None

<PAGE>


                     MPM TECHNOLOGIES, INC. AND SUBSIDIARIES
                     ---------------------------------------

                                   SIGNATURES

Pursuant to the  requirements of Section 13 or 15(d) 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.

         By: /s/ Michael J. Luciano
         --------------------------------------------
         Title:  Chariman and Chief Executive Officer

         Date: May 9, 2005


Pursuant to the  requirements of Section 13 or 15(d) 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.

/s/ Michael J. Luciano                 /s/ Glen Hjort
----------------------------------    -----------------------------------------
Michael J. Luciano                     Glen Hjort
Chairman & Chief Executive Officer     Chief Financial Officer & Director
Dated:  May 9, 2005                    Dated:  May 9, 2005


/s/ Frank E. Hsu                       /s/ Daniel D. Smozanek
----------------------------------    -----------------------------------------
Frank E. Hsu                           Daniel D. Smozanek
Chief Operating Officer & Director     Treasurer & Director
Dated:  May 9, 2005                    Dated:  May 9, 2005


/s/ Richard E. Appleby                /s/ L. Craig Cary Smith
----------------------------------    -----------------------------------------
Richard E. Appleby                    L. Craig Cary Smith
Vice President & Director             Director
Dated:  May 9, 2005                   Dated:  May 9, 2005


/s/ Richard Kao
----------------------------------
Richard Kao
Director
Dated:   May 9, 2005

<PAGE>


                     MPM TECHNOLOGIES, INC. AND SUBSIDIARIES
                     ---------------------------------------


                                  CERTIFICATION


I, Michael J. Luciano, CHIEF EXECUTIVE OFFICER of MPM TECHNOLOGIES, INC. certify
that:

1.   I have reviewed this Form 10-KSB of MPM Technologies, Inc.

2.   Based on my knowledge, this report does not contain any untrue statement of
     material  fact  or  omit to  state  material  fact  necessary  to make  the
     statements made, in light of the circumstances  under which such statements
     were made,  not  misleading  with  respect  to the  period  covered by this
     report;

3.   Based on my  knowledge,  the  financial  statements,  and  other  financial
     information  included  in  this  report,  fairly  present  in all  material
     respects the financial condition,  results of operations, and cash flows of
     the registrant as of, and for, the periods presented in this annual report;

4.   The  registrant's  other  certifying  officer  and  I are  responsible  for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

     a)   Designed  such  disclosure  controls  and  procedures  to ensure  that
          material  information  relating  to  the  registrant,   including  its
          consolidated subsidiaries,  is made known to us by others within those
          entities,  particularly  during the period in which this annual report
          is being prepared;

     b)   Evaluated the  effectiveness of the registrant's  disclosure  controls
          and  procedures as of the date within 45 days prior to the filing date
          of this report (the Evaluation Date"); and

     c)   Presented in this report our conclusions  about the  effectiveness  of
          the disclosure  controls and procedures  based on our evaluation as of
          the Evaluation Date.

5.   The registrant's  other certifying  officer and I have disclosed,  based on
     our most recent  evaluation,  to the  registrant's  auditors  and the audit
     committee of  registrant's  board of directors (or persons  performing  the
     equivalent functions):

     a)   All  significant  deficiencies  in the design or operation of internal
          controls  which could  adversely  affect the  registrant's  ability to
          record,  process,   summarize  and  report  financial  data  and  have
          identified for the  registrant's  auditors any material  weaknesses in
          internal controls: and

     b)   Any fraud, whether or not material,  that involves management or other
          employees who have a  significant  role in the  registrant's  internal
          controls.

6.   The  registrant's  other  certifying  officer and I have  indicated in this
     report whether there were  significant  changes in internal  controls or in
     other factors that could significantly  affect internal controls subsequent
     to the date of our most recent evaluation, including any corrective actions
     with regard to significant deficiencies and material weaknesses.



Date: May 9, 2005                           /s/ Michael J. Luciano
-----------------                           --------------------------------
                                                Chief Executive Officer

<PAGE>


                     MPM TECHNOLOGIES, INC. AND SUBSIDIARIES
                     ---------------------------------------

                                  CERTIFICATION

I, Glen Hjort, CHIEF FINANCIAL OFFICER of MPM TECHNOLOGIES, INC. certify that:

1.   I have reviewed this Form 10-KSB of MPM Technologies, Inc.

2.   Based on my knowledge, this report does not contain any untrue statement of
     material  fact  or  omit to  state  material  fact  necessary  to make  the
     statements made, in light of the circumstances  under which such statements
     were made,  not  misleading  with  respect  to the  period  covered by this
     report;

3.   Based on my  knowledge,  the  financial  statements,  and  other  financial
     information  included  in  this  report,  fairly  present  in all  material
     respects the financial condition,  results of operations, and cash flows of
     the registrant as of, and for, the periods presented in this annual report;

4.   The  registrant's  other  certifying  officer  and  I are  responsible  for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

     a)   Designed  such  disclosure  controls  and  procedures  to ensure  that
          material  information  relating  to  the  registrant,   including  its
          consolidated subsidiaries,  is made known to us by others within those
          entities,  particularly  during the period in which this annual report
          is being prepared;

     b)   Evaluated the  effectiveness of the registrant's  disclosure  controls
          and  procedures as of the date within 45 days prior to the filing date
          of this report (the Evaluation Date"); and

     c)   Presented in this report our conclusions  about the  effectiveness  of
          the disclosure  controls and procedures  based on our evaluation as of
          the Evaluation Date.

5.   The registrant's  other certifying  officer and I have disclosed,  based on
     our most recent  evaluation,  to the  registrant's  auditors  and the audit
     committee of  registrant's  board of directors (or persons  performing  the
     equivalent functions):

     a)   All  significant  deficiencies  in the design or operation of internal
          controls  which could  adversely  affect the  registrant's  ability to
          record,  process,   summarize  and  report  financial  data  and  have
          identified for the  registrant's  auditors any material  weaknesses in
          internal controls: and

     b)   Any fraud, whether or not material,  that involves management or other
          employees who have a  significant  role in the  registrant's  internal
          controls.

6.   The  registrant's  other  certifying  officer and I have  indicated in this
     report whether there were  significant  changes in internal  controls or in
     other factors that could significantly  affect internal controls subsequent
     to the date of our most recent evaluation, including any corrective actions
     with regard to significant deficiencies and material weaknesses.



Date: May 9, 2005                                    /s/ Glen Hjort
                                                     -----------------------
                                                     Chief Financial Officer