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UNITED STATES 

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

							

FORM 10-Q

 /X/ Quarterly report pursuant to Section 13 or 15 (d) of the Securities

Exchange Act of 1934

For the quarterly period ended September 30, 2004

or

/ / Transition report pursuant to Section 13 or 15 (d) of the Securities

Exchange Act of 1934

For the transition period from  to 				
Commission File Number 0-6890
**MECHANICAL TECHNOLOGY INCORPORATED**
(Exact name of registrant as specified in its charter)
**New York**14-1462255
(State or other jurisdiction of incorporation or organization)
(I.R.S. Employer Identification No.)**431 New Karner Road, Albany, New York 12205

(Address of principal executive offices)        (Zip Code)  
**(518) 533-2200

(Registrant's telephone number, including area code)
**Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes x No  ̈

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).  Yes    ̈ No   x

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.

Class
Outstanding at November 3,  2004**Common Stock, $1.00 Par Value**29,246,916 Shares**														

			

MECHANICAL TECHNOLOGY INCORPORATED AND SUBSIDIARIES

INDEX

 

 

 

Part I. FINANCIAL INFORMATION
Page No.  
Item 1.  Financial Statements

Financial Statements of Mechanical Technology Incorporated and Subsidiaries   
Condensed Consolidated Balance Sheets - September 30, 2004 (Unaudited) and December 31, 2003  
3-4  
Condensed Consolidated Statements of Operations - Three and nine months ended September 30, 2004 and 2003 (Unaudited)
5  
Condensed Consolidated Statements of Shareholders' Equity and Comprehensive Income -   Nine months ended September 30, 2004 and 2003 (Unaudited)
6  
Condensed Consolidated Statements of Cash Flows - Nine months ended September 30, 2004 and 2003 (Unaudited)
7  
Notes to Condensed Consolidated Financial Statements (Unaudited)
8-27  
Item 2.  Management's Discussion and Analysis of Financial Condition 

and Results of Operations
28-37  
Item 3.  Quantitative and Qualitative Disclosures About Market Risk
38  
Item 4.  Controls and Procedures
38-39  
Part II.  OTHER INFORMATION   
Item 1.  Legal Proceedings
40
Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds
40
Item 3.  Defaults Upon Senior Securities
40
Item 4.  Submission of Matters to a Vote of Security Holders
40
Item 5.  Other Information
40
Item 6.  Exhibits
40  
Signatures
41
 

 

 

 

 

 

 

 

 

 

 

2
**PART I.  FINANCIAL INFORMATION

  Item 1.  Financial Statements****MECHANICAL TECHNOLOGY INCORPORATED AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

As of September 30, 2004 (Unaudited) and December 31, 2003

(Dollars in thousands)

 

 **
Sept. 30, 
Dec. 31, 
2004
2003
Assets  
Current Assets:  
  Cash and cash equivalents
$17,159
$12,380
  Securities available for sale
19,186
44,031
  Accounts receivable 
1,192
962
  Inventories, net
1,099
1,300
  Prepaid expenses and other current assets
    619
    514
    Total Current Assets
39,255
59,187   
Long Term Assets:  
  Securities available for sale - restricted
17,307
-
  Property, plant and equipment, net
2,556
1,999
  Deferred income taxes
3,426
 4,652
  Notes receivable-noncurrent, less allowance of $660 as of December 31, 2003 
         -
         -
    Total Assets
$62,544
$65,838** 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The accompanying notes are an integral part of the condensed consolidated financial statements.
**3
**MECHANICAL TECHNOLOGY INCORPORATED AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

As of September 30, 2004 (Unaudited) and December 31, 2003   

 (Dollars in thousands, except share data)
 
Sept. 30, 
Dec. 31,  
2004
2003
Liabilities and Shareholders' Equity     
Current Liabilities:  
  Accounts payable
$     579
$    692
  Accrued liabilities
2,398
1,528
  Accrued liabilities - related parties
53
48
  Income taxes payable
12
12
  Deferred income taxes
   5,865
 14,481
    Total Current Liabilities
   8,907
 16,761
Long-Term Liabilities:  
  Derivative liability
4,163
-
  Other credits
       24
        24
    Total Liabilities
 13,094
 16,785   
Commitments and Contingencies   
Minority interests
   1,706
      787   
Shareholders' Equity:  
  Common stock, par value $1 per share, authorized 75,000,000;  issued**********************