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, 2002
                         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: $ 8,005,634

The aggregate market value of the voting and non-voting equity held by
non-affiliates computed by reference to the closing price of $0.25 at which the
common equity was sold as of May 1, 2003 was $538,397.

The number of shares outstanding of the registrant's common stock as of May 1,
2003 was 3,081,074.
Transitional Small Business Disclosure Format  Yes __   No X


                                       1
<PAGE>

PART  I

Item 1.  Business

MPM Technologies, Inc. ("MPM" or "the Company") has four wholly-owned
subsidiaries: Huntington Environmental Systems, Inc. ("HES"), AirPol, Inc.
("AirPol"), Nupower, Inc. ("Nupower") and MPM Mining ("Mining"). MPM was
incorporated in 1983. For the year ended December 31, 2001, HES and AirPol were
the only revenue generating entities.

HES and AirPol operate in the air pollution control industry. They sell 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 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.
HES designs, engineers, supplies, and services high temperature and chemical air
pollution control systems for Fortune 500 and other environmental and industrial
companies around the world.

HES has been in the business for over 25 years, and has over 300 installations
worldwide. HES's engineering staff is uniquely prepared to address the full
scope of customers' process problems. HES's policy of handling clients'
individual concerns includes in-depth analysis and evaluation, followed by
complete engineering and design services leading to application-specific
engineered solutions.

HES was the first acquisition in MPM's revised plans to change its focus and
direction toward environmental concerns generally, and pollution issues
specifically.

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, like HES, 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. On certain specific applications, they
may complement each other in that a customer may require both types of pollution
control systems.


                                       2
<PAGE>

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.

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.

FACTORS MANAGEMENT USED TO IDENTIFY REPORTABLE SEGMENTS

MPM's reportable segments are business units that offer different products. The
reportable segments are each managed separately because they design and engineer
distinct products with different applications in the air pollution control
field. MPM's other segments are essentially non-operational at the present time,
and, accordingly have been aggregated for reporting purposes. For the years
ended December 31, 2002 and 2001, the Company operated in two segments. Data for
segment reporting is shown in the notes to the consolidated financial statements
in Item 16.


                                       3
<PAGE>



BACKLOG

MPM had a backlog of orders and work in progress aggregating approximately
$1,961,254 at December 31, 2002. This is comprised of approximately $1,753,941
at AirPol and approximately $207,313 at HES. It is anticipated that operations
will consume these backorders during 2002. 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 2003.

COMPETITIVE CONDITIONS

Both HES and AirPol operate 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.

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
businesses of HES and 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.


                                       4
<PAGE>

EMPLOYEES

At December 31, 2002, MPM employed five employees at HES, and twelve full-time
employees at AirPol. MPM believes that its relations with its employees are
good.

Item 2.  Properties

HES presently owns no property related to its air pollution control business. It
leases its office space under a lease on a month to month basis. 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.

Item 3.  Legal Proceedings

The Company was notified during the second quarter of 2002 that it had been
named in a lawsuit earlier in the year. The case was dismissed during the fourth
quarter of 2002.

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 2001.

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 2002 and 2001 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.


                                       5
<PAGE>

                         High Bid         Low Bid
2002                     --------         -------
----
First Quarter           $   3.93          $  2.80
Second Quarter              2.90             1.07
Third Quarter               1.11              .48
Fourth Quarter               .70              .16

2001
First Quarter           $   5.63          $  4.13
Second Quarter              5.50             3.66
Third Quarter               3.70             2.90
Fourth Quarter              5.46             2.90
b) Holders

As of May , 2003, there were approximately 2,100 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.

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, 2002 and 2001 include the operations of HES and AirPol.


                                       6
<PAGE>

For the year ended December 31, 2002, MPM had consolidated revenues of
$8,005,634. Consolidated revenues for 2001 were $18,519,390. MPM's net loss for
the year was $3,897,927 or $1.29 per share.

In 2002, MPM's management decided to take three significant charges against
income. The first of these was to recognize a provision for some disputed
accounts receivable. Management intends to pursue its claims vigorously using
all available business and legal means at its disposal. For the year ended
December 31, 2002, however, the Company took a charge against income of $595,000
related to these disputed receivables. Additionally, the fair market value of
various intangible assets owned by the Company, were estimated below the
recorded value. For the year ended December 31, 2002, the Company took a charge
against income of $514,000 to recognize the impairment of these assets.
Additionally, 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. For the year ended December 31, 2002, the
Company took a charge against income of $294,143 to record a provision for
pending lawsuit settlements. Without these one-time charges, MPM's net loss
would have been $2,494,784, or $0.83 per share.

In late 2002, there were personnel reductions and other cost saving changes.
Emphasis continues to be placed on combining the resources of HES and AirPol to
realize additional cost savings as we progress in 2002.

Management of HES believes that the reorganization of its sales and marketing
efforts puts it in a position to significantly increase revenues, with a
corresponding improvement on the bottom line. Requests for quotations are at
strong levels both for firm quotations and for budget quotations. Firm
quotations are requests to quote on projects that the customer is currently
planning to implement, and budget quotations are for customers who are in the
process of doing their capital budgeting, and may be planning to include an HES
unit, upgrade or service.

In December 2000 the United States Environmental Protection Agency promulgated
the long delayed "Pulp and Paper Cluster Rules" based on the Clean Air Act II
legislation. There are 153 pulp and paper mills in the U.S. that will be
affected by the new rules. These mills will have to either upgrade or retrofit
new air pollution control equipment. AirPol has been a supplier of air pollution
control equipment in the pulp and paper industry for over 30 years. It has over
400 equipment installations in pulp and paper mills and is anticipating that
many orders will come from customers who already have AirPol equipment in place.
Many of these customers will be looking to upgrade the old equipment to meet the
new emission standards. Management expects to get approximately 40
upgrade/retrofit projects over the next two years aggregating about $10 million
in sales for this market segment.

The Maximum Achievable Control Technology ("MACT") Rules for Hazardous Waste
Incinerators ("HWI") was promulgated in October 1999. Facilities classified as
HWI have until April 2003 to prove they are in compliance with the new emission
standards. There are approximately 130 of these facilities in the U.S. Many of
these facilities will need to purchase air pollution control equipment during
2001 to meet the 2003 deadline.


                                       7
<PAGE>

The EPA promulgated the MACT Rules for small municipal solid waste incinerators
and Commercial Industrial Solid Waste Incinerators in December 2000. Over 50
facilities are affected by these rules. To meet the April 2003 compliance
deadline, these facilities will have had to start purchasing activities from mid
2001 to early 2002. Over the next 12 months, AirPol expects to have significant
sales in this market.

2002 COMPARED TO 2001

Revenues decreased $10,513,756 from $18,519,390 in 2001 to $8,005,634 in 2002.
The net loss for 2002 was $3,897,927 or $1.29 per shares compared to $1,926,216,
or $0.65 per share, for 2001. This was due to severe downward economic trend in
the U.S. coupled with the easing of certain air pollution standards.

Selling, general and administrative expenses decreased $596,718, from $5,405,078
in 2001 to $4,808,360 in 2002. This was due to one-time charges and delayed
staff reductions in 2001. The cost savings were realized in 2002.

LIQUIDITY AND CAPITAL RESOURCES

During 2002, funds for operations were provided principally by loans from an
officer/director and cash generated by the continuing operations of HES and
AirPol. 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 has contracted with an insurance company to arrange
a financing package. This financing is collaterialzed by assets of an MPM
director. 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:

<TABLE>
<CAPTION>
                                                                                        Year ended
                                                                                        December 31,
                                                                                  2002               2001
                                                                                  ----               ----

        <S>                                                                 <C>                  <C>
         Net cash (used in) provided by operating activities                 $(1,930,406)         $(615,155)

         Net cash used in investing activities                                  (325,447)           (78,862)

         Net cash provided by financing activities                             1,667,614            721,174

         Net (decrease) increase in cash and cash equivalents                   (588,239)            27,157
</TABLE>

The net cash used in operating activities in 2002 and 2001 was due primarily to
net losses, and to decreases in billings in excess of costs and estimated
earnings on jobs in progress. This was due mainly to the decreased activity
level at AirPol and HES during 2002 and 2001.
The net cash used in investing activities of $325,447 and $78,862 in 2002 and
2001, respectively, was entirely due to acquisitions of property and equipment.


                                       8
<PAGE>

The net cash provided by financing activities in 2002 of $1,667,614 was due to a
loan from an officer/director, notes payable proceeds and to the exercise of
stock options during the year. The net cash provided by financing activities in
2001 of $721,174 was due to a loan from an officer/director and to the exercise
of stock options during the year.

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

IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS

In April 2002, the Financial Accounting Standards Board (FASB) issued SFAS No.
145, "Rescission of FASB Statements No. 4, 44 and 64, Amendment of FASB
Statement No. 13, and Technical Corrections," effective May 14, 2002. SFAS No.
145 eliminates the requirement that gains and losses from the extinguishment of
debt be aggregated and classified as an extraordinary item, net of tax, and
makes certain other technical corrections. SFAS No. 145 did not have a material
effect on the Company's Consolidated Financial Statements.

In October 2001, the FASB issued SFAS No. 144, "Accounting for the Impairment or
Disposal of Long-Lived Assets." SFAS No. 144 addresses significant issues
relating to the implementation of SFAS No. 121, "Accounting for the Impairment
of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of," and develops
a single accounting model, based on the framework established in SFAS No. 121
for long-lived assets to be disposed of by sale, whether such assets are or are
not deemed to be a business. SFAS No. 144 also modifies the accounting and
disclosure rules for discontinued operations. The standard was adopted on
January 1, 2002, and did not have a material impact on the Company's
Consolidated Financial Statements.

In July 2001, the FASB issued SFAS No. 141, "Business Combinations," and SFAS
No. 142, "Goodwill and Other Intangible Assets." SFAS No. 141 requires the use
of the purchase method of accounting for business combinations and prohibits the
use of the pooling of interests method. Under the previous rules, the Company
used the purchase method of accounting. SFAS No. 141 also refines the definition
of intangible assets acquired in a purchase business combination. As a result,
the purchase price allocation of current business combinations may be different
than the allocation that would have resulted under the old rules. Business
combinations must be accounted for using SFAS No. 141 effective July 1, 2001.

SFAS No. 142 eliminates the amortization of goodwill, requires annual impairment
testing of goodwill and introduces the concept of indefinite life intangible
assets. The Company adopted SFAS No. 142 on January 1, 2002. The new rules also
prohibit the amortization of goodwill associated with business combinations that
closed after June 30, 2001. The adoption of SFAS No. 142 resulted in an
impairment of $514,000 in 2002.

                                       9
<PAGE>

In June 2001, the FASB issued SFAS No. 143, "Accounting for Asset Retirement
Obligations." SFAS No. 143 provides accounting and reporting guidance for legal
obligations associated with the retirement of long-lived assets that result from
the acquisition, construction or normal operation of a long-lived asset. SFAS
No. 143 requires the recording of an asset and a liability equal to the present
value of the estimated costs associated with the retirement of long-lived assets
where a legal or contractual obligation exists. The asset is required to be
depreciated over the life of the related equipment or facility, and the
liability is required to be accreted each year based on a present value interest
rate. The standard is effective for the Company on January 1, 2003. The Company
has reviewed the provisions of this standard, and its adoption is not expected
to have a material effect on the Company's Consolidated Financial Statements.

In July 2002, the FASB issued SFAS No. 146, "Accounting for Costs Associated
with Exit or Disposal Activities." SFAS No. 146 supersedes EITF No. 94-3,
"Liability Recognition for Certain Employee Termination Benefits and Other Costs
to Exit and Activity (Including Certain Costs Incurred in a Restructuring)," and
requires that a liability for a cost associated with an exit or disposal
activity be recognized when the liability is incurred. Such liabilities should
be recorded at fair value and updated for any changes in the fair value of each
period. The Company is currently evaluating the possible effect on future
Consolidated Financial Statements.

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, HES and AirPol pass increased costs on to their
customers by increasing prices over time. Management estimates that the impact
of inflation on the revenues for 2002 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.



                                       10
<PAGE>

<TABLE>
<CAPTION>

                     MPM TECHNOLOGIES, INC. AND SUBSIDIARIES


                              FINANCIAL STATEMENTS

       DECEMBER 31, 2002 AND 2001 MPM TECHNOLOGIES, INC. AND SUBSIDIARIES

                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS



<S>                                                                                             <C>
Report of Independent Certified Public Accountants............................................... F-2

Consolidated Balance Sheet as of December 31, 2002............................................... F-3

Consolidated Statements of Operations for the years ended December 31, 2002 and 2001............. F-4


Consolidated Statements of Stockholders' Equity for the years ended December 31, 2002 and 2001... F-5

Consolidated Statements of Cash Flows for the years ended December 31, 2002 and 2001............. F-6 to F-7


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

Notes to Consolidated Financial Statements....................................................... F-12 to F-22

</TABLE>



<PAGE>




                          Independent Auditors' Report


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, 2002 and the related consolidated
statements of operations, stockholders' equity and cash flows for the years
ended, December 31, 2002 and 2001. 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 auditing standards generally accepted
in the United States of America. 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, 2002, and the consolidated results of
their operations and cash flows for the years ended December 31, 2002 and 2001
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 $6,366,352 at
December 31, 2002. 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.


                                  /s/Rosenberg Rich Baker Berman & Company


Bridgewater, New Jersey
April 1, 2003



                                      F-2
<PAGE>

<TABLE>
<CAPTION>


                     MPM TECHNOLOGIES, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEET
                                DECEMBER 31, 2002

                                     ASSETS
<S>                                                                                                        <C>
Current assets:
     Cash and cash equivalents.................................................................         $    12,892
     Accounts receivable, less allowance for doubtful accounts of $1,608,000 (Notes 11 and 14)            1,399,953
     Inventories (Note 3)......................................................................              29,604
     Costs and estimated earnings in excess of billings (Notes 1 and 2)........................             490,891
     Other current assets......................................................................              79,198
                                                                                                      --------------
              Total current assets.............................................................           2,012,538
                                                                                                      ==============

Property, plant and equipment (Notes1 and 5) ..................................................           1,408,587
Mineral property held for investment (Note 12)                                                            1,086,346
Prepaid royalty (Note 13)......................................................................             273,000
Purchased intangible, net of accumulated amortization of $337,500 (Note 15)....................             337,500
Investments - at equity (Note 4) ..............................................................             173,054
Other assets, net..............................................................................              89,708
                                                                                                      --------------
                                                                                                    $     5,380,733
                                                                                                      ==============
                                      LIABILITIES AND STOCKHOLDERS EQUITY

Current liabilities:
     Accounts payable (Note 1).................................................................     $     4,769,281
     Accrued expenses (Note 1).................................................................             808,387
     Billings in excess of costs and estimated earnings (Notes 1 and 2)........................              60,265
     Related party debt (Note 7)...............................................................           2,290,957
     Current portion of long-term debt (Note 6)................................................             450,000
                                                                                                      --------------
              Total current liabilities........................................................           8,378,890

     Notes payable (Note 6) ...................................................................             150,000
     Long-term debt, less current portion (Note 6).............................................             406,324
                                                                                                      --------------
              Total liabilities................................................................           8,935,214
                                                                                                      --------------
Commitments and contingencies (Notes 8) Stockholders' equity (Note 10):
     Common stock, $0.001 par value; 100,000,000 shares authorized; 3,021,917
shares issued
        and outstanding .......................................................................               3,022
     Additional paid-in capital................................................................          11,266,148
     Accumulated deficit.......................................................................        (14,823,651)
                                                                                                      --------------
              Total stockholders' equity.......................................................         (3,554,481)
                                                                                                      --------------
                                                                                                    $     5,380,733
                                                                                                      ==============

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

</TABLE>


                                       F-3
<PAGE>

<TABLE>
<CAPTION>

                     MPM TECHNOLOGIES, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS



                                                                                        Year Ended December 31,
                                                                                   -----------------------------------
                                                                                       2002                 2001
                                                                                   --------------       --------------
<S>                                                                                  <C>                 <C>
Revenues (Notes 2 and 16).......................................................  $    8,005,634      $    18,519,390
Cost of sales...................................................................      (5,932,306)         (14,256,598)
Gross margin....................................................................       2,073,328            4,262,792
Selling, general and administrative expenses....................................      (4,808,360)          (5,405,078)
Impairment loss on intangible asset.............................................        (514,000)                   -
Loss from operations............................................................      (3,249,032)          (1,142,286)
Other income (expense:
   Provision for pending lawsuit settlement.....................................        (294,143)                   -
   Provision for unconsummated acquisition expenses (Note 10)...................               -             (829,000)
   Interest expense (Note 7)....................................................        (384,819)            (110,350)
   Equity in earnings of unconsolidated jointly owned company...................          21,198               33,664
   Other income (expense), net..................................................           8,869              121,756
Net other expense...............................................................        (648,895)            (783,930)
Net loss                                                                          $   (3,897,927)      $   (1,926,216)
                                                                                  ==============       ==============

Loss per share - basic and diluted:                                               $        (1.29)      $        (0.65)

Weighted average shares of common stock outstanding -  basic and diluted.........      3,021,040            2,946,645
                                                                                  ==============       ==============

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

</TABLE>




                                       F-4
<PAGE>

<TABLE>
<CAPTION>


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

                                                                            Additional                           Total
                                                      Common Stock            Paid-In      Accumulated       Stockholders'
                                                  Shares        Amount        Capital         Deficit           Equity
                                                 ----------    ------------------------------------------------------------
<S>                                              <C>        <C>            <C>               <C>               <C>
Balance, January 1, 2001......................   2,933,291   $     2,933  $  11,163,122 $     (8,999,508)      $ 2,166,547
Sale of common stock pursuant to Regulations
   under the Securities Act of 1933.                22,566            23         32,677                -            32,700
Interest imputed on related party debt (Note 6)          -             -          9,000                -             9,000
Common stock issued on exercise of stock
   options...................................       56,060            56         50,140                -            50,196
Net loss.....................................            -             -              -       (1,926,216)       (1,926,216)
                                                 ----------    ----------   ------------  ---------------    --------------

Balance, December 31, 2001...................    3,011,917         3,012     11,254,939      (10,925,724)          332,227
Interest imputed on related party debt.......            -             -          2,219                -             2,219
Common stock issued on exercise of stock options    10,000            10          8,990                -             9,000

Net loss.....................................            -             -              -       (3,897,927)       (3,897,927)
                                                 ----------    ----------   ------------  ---------------    --------------
Balance, December 31, 2002                       3,021,917      $  3,022    $ 11,266,148   $ (14,823,651)    $ (3,554,481)


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

</TABLE>


                                       F-5
<PAGE>

<TABLE>
<CAPTION>


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


                                                                                         Year Ended December 31,
                                                                                    ----------------------------------
                                                                                        2002                 2001
                                                                                    -------------        -------------
<S>                                                                                   <C>              <C>
Cash flows from operating activities:
   Net loss.......................................................................$   (3,897,927)      $   (1,926,216)

   Adjustments to reconcile net loss to net cash provided (used in) by operating
    activities:
     Depreciation and amortization................................................       215,382              157,035
     Stock issued for compensation................................................             -               50,196
     Interest imputed on related party debt.......................................         2,219                9,000
     Impairment loss on intangible assets.........................................       514,000                    -


     Change in assets and liabilities:
         Accounts receivable......................................................       675,446            2,221,690
         Costs and estimated earnings in excess of billings.......................       404,546             (226,188)
         Inventories..............................................................         8,255             (576,123)
         Other assets.............................................................       239,255              356,053
         Accounts payable and accrued expenses....................................       489,588            1,054,350
         Billings in excess of costs and estimated earnings.......................      (581,170)          (1,734,952)
                                                                                    ------------         ------------
Net cash (used in) operating activities...........................................    (1,930,406)            (615,155)
                                                                                    ------------         ------------

Cash flows from investing activities:
Acquisition of property, plant and equipment......................................      (325,447)             (78,862)
                                                                                    ------------         ------------
Net cash (used in) investing activities...........................................      (325,447)             (78,862)
                                                                                    ------------         ------------

Cash flows from financing activities:
   Stock issued for cash..........................................................         9,000               82,896
   Borrowings from related parties................................................     1,508,614              592,343

   Proceeds from long-term debt...................................................       150,000               45,935
                                                                                    ------------         ------------
Net cash provided by financing activities.........................................     1,667,614              721,174
                                                                                    ------------         ------------

Net (decrease) increase in cash and cash equivalents..............................      (588,239)              27,157
Cash and cash equivalents, beginning of year......................................       601,131              573,974
                                                                                    -------------        ------------
Cash and cash equivalents, end of year............................................$       12,892       $      601,131
                                                                                    =============        ============


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

</TABLE>

                                       F-6
<PAGE>

<TABLE>
<CAPTION>


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




                                                                                         Year Ended December 31,
                                                                                    ----------------------------------
                                                                                        2002                 2001
                                                                                    -------------        -------------
<S>                                                                                <C>                   <C>
Supplemental Disclosures Of Cash Flow Information

Cash paid during the year for:
    Interest......................................................................$       73,875       $        6,651


           See accompanying summary of accounting policies and notes to the consolidated financial statements.
</TABLE>


                                       F-7
<PAGE>



                     MPM TECHNOLOGIES, INC. AND SUBSIDIARIES
                         SUMMARY OF ACCOUNTING POLICIES

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. (See Note 12.)

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.

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.

The Company currently operates within two reportable segments as disclosed in
Note 16.

The accompanying consolidated financial statements have been prepared assuming
that the Company will continue as a going concern. As of December 31, 2002, 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.



                                       F-8
<PAGE>

                     MPM TECHNOLOGIES, INC. AND SUBSIDIARIES
                         SUMMARY OF ACCOUNTING POLICIES


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 2002 and 2001, no amounts were recognized for estimated
contract losses.

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.

Inventories

Inventories are stated at the lower of cost or market. Cost is determined by the
first-in, first-out method.

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.


                                       F-9
<PAGE>

                     MPM TECHNOLOGIES, INC. AND SUBSIDIARIES
                         SUMMARY OF ACCOUNTING POLICIES


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 $26,464 and $35,602 for the years ended December 31, 2002 and 2001,
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.

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 maintain
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, 2002 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.


                                      F-10
<PAGE>

                     MPM TECHNOLOGIES, INC. AND SUBSIDIARIES
                         SUMMARY OF ACCOUNTING POLICIES

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, 2002 and 2001, outstanding options to purchase 1,451,258 and
1,411,258 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.

Reclassifications

Certain amounts in the 2001 consolidated financial statements have been
reclassified to conform to the 2002 consolidated financial statement
presentation.



                                       F-11
<PAGE>

                     MPM TECHNOLOGIES, INC. AND SUBSIDIARIES
                         SUMMARY OF ACCOUNTING POLICIES


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:
<TABLE>
<CAPTION>
                 <S>                                                                    <C>
                 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
                                                                                     ============
</TABLE>

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 are 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.



                                       1
<PAGE>

                     MPM TECHNOLOGIES, INC. AND SUBSIDIARIES
                         SUMMARY OF ACCOUNTING POLICIES


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, 2002.

Costs incurred on contracts in progress............   $ 9,674,294
Estimated earnings.................................     3,602,679
                                                     -------------
                                                       13,276,973
Less billings to date..............................    12,846,347
                                                     -------------
                                                   $      430,626
                                                     =============


The above accounts are shown in the accompanying consolidated balance sheets
under these captions at December 31, 2002.


Costs and estimated earnings in excess of billings..... $      490,891
Billings in excess of costs and estimated earnings......       (60,265)
                                                          ------------
                                                        $      430,626
                                                          ============

3.   Inventories

Inventories consist of the following at December 31, 2002.


Equipment........................................... $      -
Chemicals...........................................        -
Parts and supplies .................................   29,604
                                                     --------
                                                     $ 29,604
                                                     ========


4.   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, 2002 the Company's investment carried at equity consists of a
40% ownership in Sunia-AirPol, Inc. As a result of this investment, the Company
recognized $21,198 of income for the year ended December 31, 2002.




                                       2
<PAGE>

                     MPM TECHNOLOGIES, INC. AND SUBSIDIARIES
                         SUMMARY OF ACCOUNTING POLICIES



5.   Property, Plant and Equipment

Property, plant and equipment consists of the following at December 31, 2002:

        Equipment.........................................$.   1,750,859
        Furniture and fixtures..............................     132,884
        Leasehold improvements..............................      14,708
                                                            -------------
                                                               1,898,451
        Less accumulated depreciation.......................     489,864
                                                            -------------
                                                          $    1,408,587
                                                            =============

Depreciation expense charged to operations was $215,382 and $89,535 in 2002 and
2001, respectively.

6.   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. The note is secured by stock and matures on
December 1, 2005. As of December 31, 2002, the Company has $150,000 of advances
outstanding under the agreement.

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 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, 2002, the carrying value of
the obligation, net of discount, was $856,324 plus accrued interest. At December
31, 2002, current amounts owed under this obligation are $450,000.

7.   Related Party Debt

Related party debt consists of advances received from various directors and
related parties. At December 31, 2002, amounts owed these related parties
totaled $2,290,957 due on demand.

Certain of the related party creditors voluntarily agreed to terminate their
current and future right to interest payments. As such, interest expense of
$2,219 and $9,000 has been imputed on this debt at 10% for 2002 and 2001 with a
corresponding offset to additional paid-in capital.


                                       3
<PAGE>

                     MPM TECHNOLOGIES, INC. AND SUBSIDIARIES
                         SUMMARY OF ACCOUNTING POLICIES


8.   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,                  Amount
                   -----------------------------------     ----------

                   2003...............................     $  181,776
                   2004...............................        185,413
                   2005...............................        189,120
                   2006...............................        192,902
                   2007...............................        196,760
                   Thereafter.........................         33,449
                                                           ----------
                                                           $  979,420
                                                           ==========

Rent expense for the years ended December 31, 2002 and 2001 was $315,954 and
$345,226, 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
$294,143 and is recorded as a charge to income on the consolidated statement of
operations.

9.       Income Taxes

As of December 31, 2002 the significant components of the Company's net deferred
tax asset is as follows:


       Net operating loss carryforward......................    $ 2,584,000
       Differences between book and tax depreciation........        220,000
       Goodwill and purchase asset adjustments..............         10,000
       Writedown of mineral properties......................        136,000
       Other................................................         40,000
                                                                -----------
                                                                  2,990,000
       Less: valuation allowance............................      2,990,000
                                                                -----------
                                                                $         -
                                                                ============

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, 2002.

At December 31, 2002, the Company has net operating loss carryforwards for
federal income tax purposes totaling approximately $7.6 million that expire in
the years 2003 through 2022. At December 2002, the Company has net operating
loss carryforwards for state income tax purposes totaling approximately $4.0
million that expire in the years 2003 through 2022.


                                       4
<PAGE>

                     MPM TECHNOLOGIES, INC. AND SUBSIDIARIES
                         SUMMARY OF ACCOUNTING POLICIES


10.  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 2002 and 2001, was
increased by 300,000 and 300,000, respectively. 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.

Qualified stock option activity under the Plan and non-qualified stock option
activity outside the Plan are summarized as follows:
<TABLE>
<CAPTION>
                                                                                           Weighted
                                                                                            Average
                                                                                            Option
                                                                            Options          Price
                                                                          ------------    ------------
                        <S>                                                  <C>        <C>
                  Outstanding at January 1, 2001........................    1,014,480     $   1.86
                  Granted...............................................      452,838         2.70
                  Exercised.............................................      (56,060)       (0.92)
                  Expired...............................................            -            -
                                                                           ----------     --------

                  Outstanding at December 31, 2001......................    1,411,258         2.11
                  Granted...............................................       50,000         0.60
                  Exercised.............................................      (10,000)       (0.90)
                  Expired...............................................            -            -
                                                                          ------------    --------

                  Outstanding at December 31, 2002......................   1,451,258      $   2.05
                                                                          ============    ========
</TABLE>

                              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
2002 and 5.25 percent for 2001; and expected lives of ten years for 2002 and
five years for 2001. The weighted average fair value at date of grant for
options granted to employees was $2.07 per option for 2002 and $2.64 per option
for 2001. 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, 2002 and 2001 would have been adjusted to the pro forma amounts indicated
below:

                                       5
<PAGE>
<TABLE>
<CAPTION>

                     MPM TECHNOLOGIES, INC. AND SUBSIDIARIES
                         SUMMARY OF ACCOUNTING POLICIES

                                                                                 Year Ended
                                                                                 December 31
                                                                        ------------------------------
                                                                            2002             2001
                                                                       -------------    -------------
                    <S>                                                <C>           <C>
                  Net loss..........................................
                     As reported.................................... $ (3,897,927)  $ (1,926,216)

                     Pro forma...................................... $ (3,911,277)  $ (2,212,822)


                  Loss per share....................................
                     As reported....................................      $ (1.29)     $  (0.65)

                     Pro forma......................................      $ (1.29)     $  (0.75)


           The following table summarizes information about stock options outstanding at December 31, 2002:
</TABLE>

<TABLE>
<CAPTION>
                                                                                            Options
                                              Number               Weighted             Outstanding and
                          Range of          Outstanding             Average           Exercisable Weighted
                          Exercise        and Exercisable          Exercise            Average Remaining
                           Prices           at 12/31/02              Price          Contractual Life (Years)
                       ---------------   ------------------      --------------    ---------------------------
                     <S>                          <C>           <C>                     <C>
                     $   0.88 - $0.90              164,591      $    0.89                  5.6
                     $           2.00              710,000      $    2.00                  8.4
                     $           2.70              450,000      $    2.70                  9.8
                     $           3.00              126,667      $    3.00                  8.5
                                                ----------                          ----------

                     $   0.88 - $3.00            1,451,258      $    2.05                  7.5
                                                ==========                          ===========
</TABLE>

11.  Valuation and Qualifying Accounts

Allowance for doubtful account activity was as follows at December 31, 2002.


     Balance, beginning of year...........................    $ 1,013,000
     Charged to (deducted from) expense....................       595,000
     Write-offs, net of recoveries.........................             -
                                                            -------------
     Balance, end of year..................................  $  1,608,000
                                                            =============

At December 31, 2002, management of the Company decided to provide for a large
amount for accounts that were in dispute at that time. Management intends to
vigorously pursue all its legal and business options in collecting these
receivables.

Additionally, in 2001 management elected to take a change to income for expenses
that were related to some business acquisitions, which did not come to fruition.
This charge amounted to $829,000.

12.  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, 2002 and 2001.


                                       6
<PAGE>

                     MPM TECHNOLOGIES, INC. AND SUBSIDIARIES
                         SUMMARY OF ACCOUNTING POLICIES

13.  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, 2002 and 2001 was $273,000.

14.  Related Party Transactions

The former President of the Company is also the president of another company
that provides general insurance coverage and various administrative and office
expenses for the Company. In 2002 and 2001, the Company incurred expenses to
this related party company of $72,276 and $75,718, respectively.

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
2002 and 2001 of $90,998 and $70,569, respectively.

As of December 31, 2002 and 2001, 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.

15.  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.

16.  Segment Information

The Company's consolidated financial statements include certain reportable
segment information. These segments include HES, a wholly owned subsidiary
engaged in designing, engineering, supplying and servicing air pollution control
systems which primarily utilize heat and chemicals to control air pollution, and
AirPol, a wholly owned subsidiary engaged in designing, engineering, supplying
and servicing air pollution control systems which utilize wet and dry scrubbers,
wet electrostatic precipitators and venturi absorbers to control air pollution.
The Company evaluates the performance of these segments based upon multiple
variables including revenues and profit or loss.



                                       7
<PAGE>
<TABLE>
<CAPTION>

                     MPM TECHNOLOGIES, INC. AND SUBSIDIARIES
                         SUMMARY OF ACCOUNTING POLICIES


   The segments' profit and loss components and schedule of assets as of December 31, 2002 are as follows:

                                                   Air               Air
                                                Pollution         Pollution
                                                 Control            Control              All
                                                 (Heat)          (Scrubbers)           Other            Total
                                               -------------    ----------------    -------------    --------------
<S>                                               <C>              <C>                <C>             <C>
Revenue external............................  $  2,369,552      $    5,601,979      $    34,103     $   8,005,634
Impairment loss on intangible assets........             -                   -          514,000           514,000
Interest expense............................        56,834              26,481          301,504           384,819
Depreciation and amortization...............       153,498              41,823           20,061           215,382
Segment income (loss).......................      (800,270)         (2,413,833)        (683,824)       (3,897,927)
Other significant non-cash items:
    Costs and estimated earnings in excess
     of billings............................       115,708             375,183                -           490,891
    Billings in excess of costs and
     estimated earnings.....................         3,922              56,343                -            60,265


Segment assets.............................      1,872,763           2,522,515        6,886,032        11,281,310
Expenditures for long lived assets.........        317,732               3,047            4,668           325,447

Reconciliation of net income (loss), total assets, and other significant items for the year ended December 31, 2002 are as follows:
</TABLE>
<TABLE>
<CAPTION>


            <S>                                                                    <C>
             Profit or loss                                                              Amount
             --------------                                                              ------
             Total loss for reportable segments.................................... $ (3,214,103)
             Other loss............................................................     (683,824)
             Total consolidated or loss............................................ $ (3,897,927)
                                                                                      ===========
             Assets
             ------

             Total assets for reportable segments..................................  $ 4,395,278
             Other assets..........................................................    6,886,032
             Elimination of intersegment assets....................................   (5,900,577)
             Total consolidated assets.............................................  $ 5,380,733
                                                                                     ===========

The Company's revenues by geographic region for the year ended December 31, 2002 are as follows:
</TABLE>
<TABLE>
<CAPTION>

             Geographic Region                                                         Revenues
             -----------------                                                         --------
                <S>                                                                   <C>
             United States                                                         $    7,967,700
             Foreign countries                                                             37,934
             Total consolidated revenues                                           $    8,005,634
                                                                                   ==============

        The Company attributes revenues to countries based on the location of the customer.
</TABLE>


                                       8
<PAGE>

                     MPM TECHNOLOGIES, INC. AND SUBSIDIARIES
                         SUMMARY OF ACCOUNTING POLICIES

<TABLE>
<CAPTION>

 The segments' profit and loss components and schedule of assets as of December 31, 2001 are as follows:

                                                   Air               Air
                                                Pollution         Pollution
                                                 Control           Control              All
                                                 (Heat)          (Scrubbers)           Other            Total
                                               -------------    ----------------    -------------    --------------
<S>                                               <C>             <C>              <C>               <C>
Revenue external............................  $  7,103,019      $   11,416,371      $         -     $  18,519,390
Interest income.............................        72,129              31,123              218           103,470
Interest expense............................        91,888                   -           18,462           110,350
Depreciation and amortization...............       (33,278)            121,893           68,420           157,035
Segment income (loss).......................    (1,041,763)          1,300,481       (2,184,934)       (1,926,216)
Other significant non-cash items:
    Costs and estimated earnings in excess
     of billings............................       108,477             786,960                -           895,437
    Billings in excess of costs and
     estimated earnings.....................        77,662             563,773                            641,435
                                                                                              -

Segment assets..............................     2,081,426           5,510,272        2,876,487        10,468,185
Expenditures for long-lived assets..........        15,176              63,686                -            78,862

Reconciliation of net income (loss), total assets, and other significant items for the year ended December 31, 2001 are as follows:
</TABLE>
<TABLE>
<CAPTION>

            <S>                                                                       <C>
             Profit or loss                                                            Amount
             --------------                                                            ------
             Total income for reportable segments.................................. $    258,718
             Other loss............................................................   (2,184,934)

             Total consolidated profit or loss..................................... $ (1,926,216)
                                                                                    ============

             Assets
             ------

             Total assets for reportable segments................................     $ 7,591,700
             Other assets........................................................       2,876,487
             Elimination of intersegment assets..................................      (2,767,778)
             Total consolidated assets...........................................     $ 7,700,409
                                                                                    ============
</TABLE>
<TABLE>
<CAPTION>


Other significant items:
                                                                  Segment                          Consolidated
                                                                  Totals        Eliminations          Totals
                                                                -------------  ----------------   -----------------
<S>                                                               <C>                 <C>                 <C>
Interest income................................................  $  103,470       $   (38,466)         $   65,004

Interest expense...............................................     110,350           (38,466)             71,884
Expenditures for long-lived assets.............................      16,062                 -              16,062
Depreciation and amortization..................................     128,164                 -             128,164
Costs and estimated earnings in excess of billings.............     895,437                 -             895,437
Billings in excess of costs and estimated earnings.............     641,435                 -             641,435
</TABLE>


                                       9
<PAGE>

                     MPM TECHNOLOGIES, INC. AND SUBSIDIARIES
                         SUMMARY OF ACCOUNTING POLICIES

Adjustments to reconcile interest expense and interest income represent total
intercompany amounts.

The Company's revenues by geographic region for the year ended December 31, 2001
are as follows:
<TABLE>
<CAPTION>

             Geographic Region                                                         Revenues
             -----------------                                                         --------
             <S>                                                                     <C>
             United States                                                         $   17,480,639
             United Kingdom                                                             1,033,498
             Other foreign countries                                                        5,253

             Total consolidated revenues                                           $   18,519,390
                                                                                   ==============
</TABLE>

The Company attributes revenues to countries based on the location of the
customer.

17.  New Accounting Pronouncements

    Standards Implemented

         In April 2002, the Financial Accounting Standards Board (FASB) issued
         SFAS No. 145, "Rescission of FASB Statements No. 4, 44 and 64,
         Amendment of FASB Statement No. 13, and Technical Corrections,"
         effective May 14, 2002. SFAS No. 145 eliminates the requirement that
         gains and losses from the extinguishment of debt be aggregated and
         classified as an extraordinary item, net of tax, and makes certain
         other technical corrections. SFAS No. 145 did not have a material
         effect on the Company's Consolidated Financial Statements.

         In October 2001, the FASB issued SFAS No. 144, "Accounting for the
         Impairment or Disposal of Long-Lived Assets." SFAS No. 144 addresses
         significant issues relating to the implementation of SFAS No. 121,
         "Accounting for the Impairment of Long-Lived Assets and for Long-Lived
         Assets to Be Disposed Of," and develops a single accounting model,
         based on the framework established in SFAS No. 121 for long-lived
         assets to be disposed of by sale, whether such assets are or are not
         deemed to be a business. SFAS No. 144 also modifies the accounting and
         disclosure rules for discontinued operations. The standard was adopted
         on January 1, 2002, and did not have a material impact on the Company's
         Consolidated Financial Statements.

         In July 2001, the FASB issued SFAS No. 141, "Business Combinations,"
         and SFAS No. 142, "Goodwill and Other Intangible Assets." SFAS No. 141
         requires the use of the purchase method of accounting for business
         combinations and prohibits the use of the pooling of interests method.
         Under the previous rules, the Company used the purchase method of
         accounting. SFAS No. 141 also refines the definition of intangible
         assets acquired in a purchase business combination. As a result, the
         purchase price allocation of current business combinations may be
         different than the allocation that would have resulted under the old
         rules. Business combinations must be accounted for using SFAS No. 141
         effective July 1, 2001.

         SFAS No. 142 eliminates the amortization of goodwill, requires annual
         impairment testing of goodwill and introduces the concept of indefinite
         life intangible assets. The Company adopted SFAS No. 142 on January 1,
         2002. The new rules also prohibit the amortization of goodwill
         associated with business combinations that closed after June 30, 2001.
         The adoption of SFAS No. 142 resulted in an impairment of $514,000 in
         2002.


                                       10
<PAGE>

                     MPM TECHNOLOGIES, INC. AND SUBSIDIARIES
                         SUMMARY OF ACCOUNTING POLICIES

      New Standards to be Implemented

         In June 2001, the FASB issued SFAS No. 143, "Accounting for Asset
         Retirement Obligations." SFAS No. 143 provides accounting and reporting
         guidance for legal obligations associated with the retirement of
         long-lived assets that result from the acquisition, construction or
         normal operation of a long-lived asset. SFAS No. 143 requires the
         recording of an asset and a liability equal to the present value of the
         estimated costs associated with the retirement of long-lived assets
         where a legal or contractual obligation exists. The asset is required
         to be depreciated over the life of the related equipment or facility,
         and the liability is required to be accreted each year based on a
         present value interest rate. The standard is effective for the Company
         on January 1, 2003. The Company has reviewed the provisions of this
         standard, and its adoption is not expected to have a material effect on
         the Company's Consolidated Financial Statements.

         In July 2002, the FASB issued SFAS No. 146, "Accounting for Costs
         Associated with Exit or Disposal Activities." SFAS No. 146 supersedes
         EITF No. 94-3, "Liability Recognition for Certain Employee Termination
         Benefits and Other Costs to Exit and Activity (Including Certain Costs
         Incurred in a Restructuring)," and requires that a liability for a cost
         associated with an exit or disposal activity be recognized when the
         liability is incurred. Such liabilities should be recorded at fair
         value and updated for any changes in the fair value of each period. The
         Company is currently evaluating the possible effect on future
         Consolidated Financial Statements.



                                       11
<PAGE>

                     MPM TECHNOLOGIES, INC. AND SUBSIDIARIES
                         SUMMARY OF ACCOUNTING POLICIES


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 ........         63      Director                 4/25/1985
Glen Hjort.................         50      Director                 2/16/1998
Frank E. Hsu...............         57      Director                 6/24/2002
Richard Kao................         62      Director                 6/28/1999
Anthony L. Lee [1].........         67      Director                 2/16/1998
Michael J. Luciano ........         49      Director                 2/16/1998
L. Craig Cary Smith........         53      Director                 4/25/1985
Daniel D. Smozanek.........         77      Director                 4/25/1985

[1] On March 6, 2003, Mr. Lee announced his retirement from the Board of
Directors.

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.........         63      Vice President           4/25/1985
Glen Hjort................          50      Chief Financial Officer  6/28/1999
Frank E. Hsu...............         57      Chief Operating Officer  6/24/2002
Robert D. Little...........         53      Secretary                1/03/1991
Michael J. Luciano........          49      Chairman & CEO           2/16/1998
Daniel D. Smozanek.........         77      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, 2002, 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.


                                       12
<PAGE>


                     MPM TECHNOLOGIES, INC. AND SUBSIDIARIES
                         SUMMARY OF ACCOUNTING POLICIES


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.

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 included negotiating joint ventures in the U.S. and Asia, and
the development of the Skygas technology. 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. He has been a Director
since 1998. Mr. Hjort is a certified public accountant with over twenty years
experience providing services to numerous corporate clients in a wide variety of
industries. He is a past Chief Financial Officer for a public company where he
had responsibility for all accounting, personnel and administrative functions,
and for SEC reporting. 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 28 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.


                                       13
<PAGE>

                     MPM TECHNOLOGIES, INC. AND SUBSIDIARIES
                         SUMMARY OF ACCOUNTING POLICIES

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 completed Teacher
Certification at Seattle University. From 1985 to the present, Mr. Little as
been Operations 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 and Hemingway 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.

(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 2002 and 2001.


                                       14
<PAGE>

                     MPM TECHNOLOGIES, INC. AND SUBSIDIARIES
                         SUMMARY OF ACCOUNTING POLICIES


Summary Compensation Table

                                        Annual Compensation
Name and
Principal
<TABLE>
<CAPTION>

<S>             <C>      <C>         <C>         <C>     <C>     <C>            <C>
Position  Year Salary  Bonus(s)  Compensation  Awards(s)($)SARs($)Payout(s)($) Compensation
-------------------------------------------------------------------------------------------
Michael J.
Luciano      2002                 $ 25,000         None
CEO          2001                 $ 25,000         None

Robert D.
Little       2002                 $ 61,776
Secretary    2001                 $ 71,897

</TABLE>

(1) MPM contracts with Mr. Little for its shareholder relations services.
    Expenses related to this were $ 61,776 and $71,897 for 2002 and 2001,
    respectively.

Option Grants In 2002 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>
Frank E.
Hsu            50,000             100%                 $0.60             $0.60          8/7/12

</TABLE>

<TABLE>
<CAPTION>

Aggregated Option/SAR Exercises in Last Fiscal Year and FYE 2002 Option/SAR Values

                                                              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>
Michael J. Luciano           None                               521,890             $130,473
                                                                Exercisable

L. Craig Cary Smith          None                               200,389             $ 50,097
                                                                Exercisable

Robert D. Little           10,000                               195,223             $ 48,806
                                                                Exercisable

Glen Hjort                  None                                90,000              $ 22,500
                                                                Exercisable

Frank E. Hsu                None                                50,000              $  12,500
                                                                Exercisable

Richard E. Appleby          None                                38,000              $   9,500
                                                                Exercisable

Daniel D. Smozanek          None                                8,000               $   2,000
                                                                Exercisable
</TABLE>

                                       15
<PAGE>
                     MPM TECHNOLOGIES, INC. AND SUBSIDIARIES
                         SUMMARY OF ACCOUNTING POLICIES


a) Current Remuneration.

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 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.

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, 2002, 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, 2002.


                                       16
<PAGE>

                     MPM TECHNOLOGIES, INC. AND SUBSIDIARIES
                         SUMMARY OF ACCOUNTING POLICIES


b) Security Ownership of Management as of May 1, 2003.

The following table sets forth, as of May 1, 2003 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>

<S>               <C>                      <C>                          <C>
 Title of         Name of                  Amount and Nature of         Percent
 Class            Beneficial Owner         Beneficial Ownership [1]     of Class
 -----            ----------------         ------------------------     -------
Common            Michael J. Luciano         873,910  [2]                17.50
Common            Richard E. Appleby         221,155                      4.43
Common            Robert D. Little           202,966                      4.06
Common            L. Craig Cary Smith        200,389                      4.01
Common            Daniel D. Smozanek         160,257                      3.21
Common            Glen Hjort                 101,833                      2.04
Common            Frank E. Hsu                68,756                      1.38
Common            Richard Kao                 64,222                      1.29
Common            Anthony Lee [3]             20,000                         *
Common            As A Group               1,950,349                      48.1
</TABLE>

[*]  Less than one percent

[1]  Includes options available for exercise aggregating 1,074,502 shares for
     the entire group.

[2]  Does not include 396,509 shares (7.94%) of the Company's outstanding stock
     owned by a trust for which Mr. Luciano is the Trustee.

[3]  On March 6, 2003, Mr. Lee announced his retirement from the Board of
     Directors.

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.

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.


                                       17
<PAGE>

                     MPM TECHNOLOGIES, INC. AND SUBSIDIARIES
                         SUMMARY OF ACCOUNTING POLICIES


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 $1.20 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, 2002 and 2001, Richard Appleby was owed $65,000 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 MPM owns R.D. Little Co.. For
the years ended December 31, 2002 and 2001, MPM paid $61,776 and $71,897 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



                                       18
<PAGE>

                     MPM TECHNOLOGIES, INC. AND SUBSIDIARIES
                         SUMMARY OF ACCOUNTING POLICIES


                                   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 1, 2003
                -------------------------

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 1, 2003                                   Dated: May 1, 2003
       -----------                                          -----------


/s/ Frank E. Hsu                                     /s/ Daniel D. Smozanek
------------------                                   --------------------------
Frank E. Hsu                                         Daniel D. Smozanek
Chief Operating Officer & Director                   Treasurer & Director

Dated: May 1, 2003                                   Dated: May 1, 2003
       -----------                                          -----------

/s/ Richard E. Appleby                               /s/ L. Craig Cary Smith
--------------------------                           ---------------------------
Richard E. Appleby                                   L. Craig Cary Smith
Vice President & Director                            Director

Dated: May 1, 2003                                   Dated: May 1, 2003
       -----------                                          -----------


/s/ Richard Kao
------------------
Richard Kao
Director

Dated: May 1, 2003
       -----------


                                       19
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