FORM 6-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13A-16 OR 15D-16 OF
THE SECURITIES EXCHANGE ACT OF 1934
For the month of June 30, 1997
-----------------------------------------
TURBODYNE TECHNOLOGIES INC.
- -----------------------------------------------------------------
(Translation of registrant's name into English)
Suite 510, 1090 West Pender Street, Vancouver, BC, Canada, V6E 2N7
- ------------------------------------------------------------------
(Address of principal executive offices)
[Indicate by check mark whether the registrant files or will file annual
reports under cover Form 20-F or Form 40-F.
Form 20-F X Form 40-F
------ -----
[Indicate by check mark whether the registrant by furnishing the
information contained in this Form is also thereby furnishing the information
to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act
of 1934.
Yes No X
----- -----
[If "Yes" is marked, indicate below the file number assigned to the
registrant in connection with Rule 12g3-2(b):82
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1934, the registrant
has duly caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
TURBODYNE TECHNOLOGIES INC.
---------------------------
Registrant
July 8, 1997 /s/Leon E. Nowek
- ---------------- -----------------------
Date Signature
Leon E. Nowek
-----------------------
Name
Chief Financial Officer
-----------------------
Title
*Print the name and title of the signing officer under his signature
<PAGE>
British Columbia
Securities Commission QUARTERLY REPORT
FORM 61
INSTRUCTIONS
This report is to be filed by Exchange Issuers within 60 days of the end of
their first, second and third fiscal quarters and within 140 days of the end of
their fourth fiscal quarter. Three schedules (typed) are to be attached to
this report as follows:
SCHEDULE A: FINANCIAL INFORMATION
Financial information prepared in accordance with generally accepted accounting
principles for the fiscal year-to-date, with comparative information for the
corresponding period of the preceding fiscal year. This financial information
should consist of the following:
FOR THE FIRST, SECOND AND THIRD FISCAL QUARTERS:
An interim financial report presented in accordance with Section 1750 of the
C.I.C.A. Handbook. This should include a summary income statement (or a
statement of deferred costs) and a statement of changes in financial position.
A summary balance sheet is also to be provided.
FOR THE FOURTH FISCAL QUARTER (YEAR END):
Annual audited financial statements.
SCHEDULE B: SUPPLEMENTARY INFORMATION
The supplementary information set out below is to be provided when not included
in Schedule A.
1. FOR THE CURRENT FISCAL YEAR-TO-DATE:
Breakdown, by major category, of those expenditures and costs which
are included in the deferred costs, exploration and development
expenses, cost of sales or general and administrative expenses set
out in Schedule A. State the aggregate amount of expenditures made
to parties not at arm's length from the issuer.
2. FOR THE QUARTER UNDER REVIEW:
(a) Summary of securities issued during the period, including date
of issue, type of security (common shares, convertible
debentures, etc.), type of issue (private placement, public
offering, exercise of warrants, etc.) number, price, total
proceeds, type of consideration (cash, property, etc.) and
commission paid.
(b) Summary of options granted, including date, number, name of
optionee, exercise price and expiry date.
3. AS AT THE END OF THE QUARTER:
(a) Particulars of authorized capital and summary of shares issued
and outstanding.
(b) Summary of options. warrants and convertible securities
outstanding, including number or amount, exercise or conversion
price and expiry date.
(c) Total number of shares in escrow or subject to a pooling
agreement.
(d) List of directors.
SCHEDULE C: MANAGEMENT DISCUSSION
Review of operations in the quarter under review and up to the date of this
report, including brief details of any significant event or transaction which
occurred during the period. The following list can be used as a guide but is
not exhaustive:
Acquisition or abandonment of resource properties, acquisition of fixed
assets, financings and use of proceeds, management changes, material
contracts, material expenditures, transactions with related parties, legal
proceedings, contingent liabilities, default under debt or other
contractual obligations, special resolutions passed by shareholders.
Specifically, the management discussion must include:
(a) disclosure of and reasons for any material differences in the ACTUAL
use of proceeds from the previous disclosure by the issuer regarding
its INTENDED use of proceeds; and
(b) a brief summary of the investor relations activities undertaken by or
on behalf of the issuer during the quarter and disclosure of the
material terms of any investor relation arrangements or contracts
entered into by the issuer during the quarter.
FREEDOM OF INFORMATION AND PROTECTION OF PRIVACY ACT
The personal information requested on this form is collected under the
authority of and used for the purpose of administering the SECURITIES ACT.
Questions about the collection or use of this information can be directed to
the Supervisor, Statutory Filings (604-660-4890), 1100 - 865 Hornby Street,
Vancouver, British Columbia V6Z 2H4. Toll Free in British Columbia 1-800-373-
6393
ISSUER DETAILS
NAME OF ISSUER Turbodyne Technologies Inc.
FOR QUARTER ENDED Mar 31, 1997
DATE OF REPORT 97/06/10
ISSUER'S ADDRESS 510 - 1090 West Pender Street
CITY Vancouver
PROVINCE BC
POSTAL CODE V6E 2N7
ISSUER FAX NO. 688-8621
ISSUER TELEPHONE NO. 682-8854
CONTACT PERSON Leon E. Nowek
CONTACT'S POSITION Director
CONTACT TELEPHONE NO. 682-8854
CERTIFICATE
THE THREE SCHEDULES REQUIRED TO COMPLETE THIS QUARTERLY REPORT ARE ATTACHED
AND THE DISCLOSURE CONTAINED THEREIN HAS BEEN APPROVED BY THE BOARD OF
DIRECTORS. A COPY OF THIS QUARTERLY REPORT WILL BE PROVIDED TO ANY
SHAREHOLDER WHO REQUESTS IT.
DIRECTOR'S SIGNATURE PRINT FULL NAME DATE SIGNED
/s/ Leon E. Nowek Leon E. Nowek 97/06/10
DIRECTOR'S SIGNATURE PRINT FULL NAME DATE SIGNED
/s/ Eugene A. Hodgson Eugene A. Hodgson 97/06/10
<PAGE>
TURBODYNE TECHNOLOGIES INC.
--------------------------
CONSOLIDATED FINANCIAL STATEMENTS
---------------------------------
MARCH 31, 1997
--------------
(Unaudited - Prepared by Management)
<PAGE>
TURBODYNE TECHNOLOGIES INC.
--------------------------
CONSOLIDATED BALANCE SHEETS
---------------------------
(In thousands of dollars)
(unaudited)
MARCH 31, MARCH 31,
1997 1996
--------- ---------
ASSETS
CURRENT
Cash $ 2,040 $ 2,212
Accounts Receivable 10,057 62
Advances Receivable 184 71
Inventories 7,983 -
Prepaid expenses and deposits 2,053 144
--------- ---------
22,317 2,489
PROPERTY, PLANT AND EQUIPMENT 17,526 763
PRODUCT DEVELOPMENT COSTS 10,415 4,618
GOODWILL 20,871 -
OTHER 356 393
--------- ---------
$ 71,485 $ 8,263
========= =========
LIABILITIES
CURRENT
Accounts payable and accrued
Liabilities $ 9,504 $ 295
Notes payable 624 9
Current portion of long term debt 1,290 28
--------- ---------
11,418 332
LONG TERM DEBT 10,091 100
SHARE SUBSCRIPTIONS RECEIVED - 303
DEFERRED INCOME TAX 1,095 -
--------- ---------
22,604 735
--------- ---------
SHAREHOLDERS' EQUITY
SHARE CAPITAL 33,362 10,973
SPECIAL WARRANTS 21,928 -
DEFICIT (6,591) (3,445)
CUMULATIVE TRANSLATION ADJUSTMENT 182 -
--------- ---------
48,881 7,528
--------- ---------
$ 71,485 $ 8,263
========= =========
Page 1
<PAGE>
TURBODYNE TECHNOLOGIES INC.
---------------------------
CONSOLIDATED STATEMENTS OF OPERATIONS AND DEFICIT
-------------------------------------------------
(In thousands of dollars, except per share information)
(unaudited)
THREE MONTHS THREE MONTHS
ENDED ENDED
MARCH 31, MARCH 31,
1997 1996
------------ ------------
NET SALES $ 12,359 $ -
COST OF GOODS SOLD 9,288 -
----------- ----------
GROSS PROFIT 3,071 -
----------- ----------
OPERATING EXPENSES
Advertising 160 10
Bad debts 29 -
Bank charges and exchange, net (25) (5)
Consulting fees 357 45
Customs 36 -
Depreciation 91 4
Filing and transfer fees 14 21
Fiscal agency fees 68 41
Insurance 128 -
Investor relations 115 26
Management fees - 8
Occupancy 82 8
Office administration and sundry 314 83
Printing 41 2
Professional fees 590 109
Salaries and benefits 963 90
Telephone 52 17
Travel and business development 349 83
----------- ----------
3,364 542
----------- ----------
OPERATING LOSS (293) (542)
----------- ----------
NON OPERATING ITEMS
Interest Income 21 -
Interest Expense (208) -
Amortization of goodwill (363) -
----------- ----------
(550) -
----------- ----------
LOSS BEFORE PROVISIONS FOR INCOME TAXES (843) (542)
PROVISION FOR INCOME TAX 287 -
----------- ----------
NET LOSS FOR THE PERIOD (1,130) (542)
DEFICIT, BEGINNING OF PERIOD (5,461) (2,903)
----------- ----------
DEFICIT, END OF PERIOD $(6,591) $ (3,445)
=========== ==========
LOSS PER SHARE $(0.05) $ (0.03)
=========== ==========
Page 2
<PAGE>
TURBODYNE TECHNOLOGIES INC.
---------------------------
CONSOLIDATED STATEMENTS OF CASH FLOWS
-------------------------------------
(In thousands of dollars)
(unaudited)
THREE MONTHS THREE MONTHS
ENDED ENDED
MARCH 31, MARCH 31,
1997 1996
----------- ----------
CASH PROVIDED BY (USED FOR):
OPERATING ACTIVITIES
Loss for the period $ (1,130) $ (542)
Add non cash items
Amortization 363 -
Depreciation 635 3
----------- ----------
(132) (539)
Change in non cash working
capital items (2,682) 23
----------- ----------
(2,814) (516)
FINANCING ACTIVITIES
Proceeds from debt obligations 1,187 102
Repayment of debt obligations (385) (216)
Net borrowings under line of credit
Arrangements 1,310 -
Issue of common shares 2,924 3,674
Issue of special warrants - -
----------- ----------
5,036 3,560
INVESTING ACTIVITIES
Capital assets (net of depreciation
Allocated to project development Costs) (2,410) (243)
Project development costs (1,758) (732)
Other (318) (166)
----------- ----------
(4,486) (1,141)
----------- ----------
NET (DECREASE) INCREASE IN CASH (2,264) 1,903
CASH, BEGINNING OF PERIOD 4,304 309
----------- ----------
CASH, END OF PERIOD $ 2,040 $ 2,212
=========== ==========
Page 3
<PAGE>
TURBODYNE TECHNOLOGIES INC.
---------------------------
CONSOLIDATED SHARE CAPITAL INFORMATION NOTE
-------------------------------------------
(In thousands of dollars, except per share information)
(unaudited)
3. SHARE CAPITAL
(a) Authorized:
100,000,000 Common shares without par value
100,000,000 Class A preference shares with a par value of $10
(none issued)
100,000,000 Class B preference shares with a par value of $50
(none issued)
Issued and Outstanding Common Shares:
MARCH 31, DECEMBER 31,
1997 1996
-------------------- ----------------------
Number of Number of
Shares Amount Shares Amount
-------- ------ --------- ------
Balance, beginning of
the period 23,580,098 $30,438,092 16,542,121 $7,139,209
Issued for cash
Private Placements
(net of share issue
costs and finder's
fees of $ nil
(1996 - $164,060)) - - 469,497 2,252,467
Exercise of Warrants 203,368 1,149,101 2,840,557 3,463,631
Exercise of incentive
stock options 266,100 1,121,943 651,000 2,198,170
Issued on acquisition of
subsidiary - - 3,076,923 15,384,615
Allocated, not issued
on exercise of warrants 93,646 652,579 - -
---------- ----------- ----------- ------------
Balance, end of the
Period 24,143,212 $33,361,715 23,580,098 $30,438,092
========== =========== =========== ============
<PAGE>
TURBODYNE TECHNOLOGIES INC.
CONSOLIDATED SCHEDULE OF DEFERRED PRODUCT DEVELOPMENT COSTS
MARCH 31, 1997
(UNAUDITED - PREPARED BY MANAGEMENT)
(STATED IN CDN $)
Supplementary Schedule
THREE MONTHS THREE MONTHS
MARCH 31, MARCH 31,
1997 1996
------------ ------------
Project consulting $ 37,652 $ 44,911
Depreciation of equipment used in
development 48,062 26,098
Project management fees 20,496 20,504
Office expenses related to
project space 73,191 17,816
Project space rent and occupancy costs 84,433 56,368
Project development (testing, R&D,
evaluations) 709,221 216,757
Project staff salaries and benefits 703,915 323,906
Telephone and fax 19,511 10,818
Travel related to product testing
and evaluation 14,049 13,408
---------- ----------
Deferred Product Development Costs
for the Period $1,710,530 $ 730,586
PRODUCT DEVELOPMENT COSTS,
beginning of period 8,705,373 3,885,316
---------- ----------
PRODUCT DEVELOPMENT COSTS,
end of period 10,415,903 4,615,902
========== ==========
<PAGE>
TURBODYNE TECHNOLOGIES INC.
FOR THE THREE MONTHS ENDED MARCH 31, 1997
SCHEDULE B: SUPPLEMENTARY INFORMATION
1 FOR THE CURRENT FISCAL YEAR-TO-DATE:
Supplementary schedule - Consolidated Schedule of Deferred Product
Development Costs
[a] Aggregate amount of expenditures made to parties not at arm's length to
issuer:
Project management fees $ 20,496
Consulting fees $ 62,500
Rent (Ensenada facility) $ 66,600
[b] The following amounts are due from related parties:
Advances receivable from directors,
interest free and payable on demand $160,950
2 FOR THE QUARTER UNDER REVIEW:
(a) Summary of securities issued during the first quarter:
Common Shares:
-------------
Type of
Date Type of issue # Price Gross consideration
---- ------------- --- ----- ---------- -------------
Jan-97 Warrants exercised 23,530 4.35 102,355.50 Cash
Jan-97 Warrants exercised 11,765 4.35 51,177.75 Cash
Jan-97 Options exercised 3,600 7.13 25,668.00 Cash
Jan-97 Warrants exercised 11,764 4.35 51,173.40 Cash
Jan-97 Warrants exercised 11,764 4.35 51,173.40 Cash
Jan-97 Warrants exercised 11,765 4.35 51,177.75 Cash
Feb-97 Warrants exercised 23,529 4.35 102,351.15 Cash
Feb-97 Warrants exercised 9,523 5.35 50,948.05 Cash
Feb-97 Options exercised 50,000 7.13 356,500.00 Cash
Feb-97 Options exercised 80,000 1.65 132,000.00 Cash
Feb-97 Warrants exercised 6,896 7.35 50,685.60 Cash
Mar-97 Options exercised 3,600 7.13 25,668.00 Cash
Mar-97 Options exercised 6,500 7.13 46,345.00 Cash
Mar-97 Warrants exercised 7,463 6.80 50,748.40 Cash
Mar-97 Warrants exercised 5,316 6.37 33,862.92 Cash
Mar-97 Warrants exercised 9,524 5.35 50,953.40 Cash
Mar-97 Warrants exercised 6,337 6.48 41,063.76 Cash
Mar-97 Warrants exercised 3,919 6.48 25,395.12 Cash
Mar-97 Warrants exercised 7,937 6.40 50,796.80 Cash
Mar-97 Warrants exercised 21,708 7.01 152,173.08 Cash
Mar-97 Options exercised 2,000 7.13 14,260.00 Cash
<PAGE>
TURBODYNE TECHNOLOGIES INC.
FOR THE THREE MONTHS ENDED MARCH 31, 1997
SCHEDULE B: SUPPLEMENTARY INFORMATION
2(a) Mar-97 Options exercised 5,400 7.13 38,502.00 Cash
Mar-97 Warrants exercised 6,897 7.35 50,692.95 Cash
Mar-97 Warrants exercised 17,450 7.55 131,747.50 Cash
Mar-97 Warrants exercised 6,281 8.06 50,624.86 Cash
Mar-97 Options exercised 115,000 4.20 483,000.00 Cash
------- ------------
ISSUED 469,468 2,271,044.39
------- ------------
Feb-97 Warrants exercised 21,092 6.48 136,676.16 Cash
Feb-97 Warrants exercised 7,936 6.40 50,790.40 Cash
Mar-97 Warrants exercised 7,236 7.01 50,724.36 Cash
Mar-97 Warrants exercised 19,060 7.55 143,903.00 Cash
Mar-97 Warrants exercised 7,462 6.80 50,741.60 Cash
Mar-97 Warrants exercised 10,632 6.37 67,725.84 Cash
Mar-97 Warrants exercised 7,236 7.01 50,724.36 Cash
Mar-97 Warrants exercised 6,711 7.55 50,668.05 Cash
Mar-97 Warrants exercised 6,281 8.06 50,624.86 Cash
------- ------------
ALLOTTED 93,646 652,578.63
------- ------------
TOTAL ISSUED AND ALLOTTED 563,114 2,923,623.02
======= ============
(b) Summary of options granted during the quarter:
Date Shares Price Expiry
---- ------ ----- ------
Jan-97 Options 480,000 9.85 06-Jan-99
3 AS AT THE END OF THE QUARTER:
(a) Issued and outstanding:
See attached Consolidated Share Capital Information Note.
(b) Summary of warrants outstanding:
<--Exercised subsequent
Exercise to Mar 31/97-->
# Expiry Date Price # Gross
- ----------- -------- - -----
33,333 September 3, 1997 9.50 - -
<PAGE>
TURBODYNE TECHNOLOGIES INC.
FOR THE THREE MONTHS ENDED MARCH 31, 1997
SCHEDULE B: SUPPLEMENTARY INFORMATION
3 (b) Summary of options outstanding:
<--Exercised subsequent
Exercise to Mar 31/97-->
# Expiry Date Price # Gross
- ----------- -------- - -----
150,000 July 28, 1997 4.20 60,000 252,000
250,000 August 17, 1997 4.75 15,000 71,250
422,000 December 27, 1997 4.66 - -
432,400 February 27, 1998 7.13 1,400 9,982
475,000 September 3, 1998 9.00 - -
305,000 September 12, 1998 9.00 - -
480,000 January 6, 1999 9.85 - -
Summary of Series "A" special warrants outstanding:
<--Exercised subsequent
Exercise to Mar 31/97-->
# Expiry Date Price # Gross
- ----------- -------- - -----
4,125,000 July 2, 1997 5.50 - -
Summary of Series "C" special warrants outstanding:
<--Exercised subsequent
Exercise to Mar 31/97-->
# Expiry Date Price # Gross
- ----------- -------- - -----
500,000 December 7, 1997 9.50 - -
c) Total number of shares held in escrow: 4,150,000
Total number of shares subject to pooling: nil
(d) List of directors:
Edward M. Halimi
Daniel Geronazzo
Leon E. Nowek
Wendell R. Anderson
Eugene A. Hodgson
Robert F. Taylor
Dr. S. K. Durairaj
<PAGE>
Schedule C: Management Discussion
First Quarter, 1997 May 29, 1997
For your information, enclosed are consolidated financial results for the first
quarter 1997. The Company's operating results and activities are proceeding in
line with its business plans.
Production of the 1500 TurboPac TM, which began late last year, continues.
Distribution and sale of these units in the US has been slowed by further
changes in specifications to meet consumer requirements and as requested by
Grand Technologies. In Europe, initial installations on vehicles and training
of technicians is proceeding with product distribution and sales to begin in
the second quarter.
Development and testing programs continue for the model 2200 and 2500 TurboPacs
TM targeted for the diesel bus and truck markets. Following completion of
independent testing in the second quarter at Southwest Research Institute,
marketing and initial production for these sectors is expected to begin in the
second half of the year.
Evaluation of Turbodyne's unique blower for use in heating systems was
completed earlier than expected. As recently announced acceptance of these
results secured an important agreement with a large European manufacturer of
energy exchangers for 200,000 units per year. Production of these smaller
TurboPac TM units is expected to begin later this year.
Development and evaluation programs with OEM's are continued during the first
quarter. Results achieved from these programs continue to meet design and
potential customer expectations. Ongoing negotiations are expected to result
in joint venture and supply agreements for use of Turbodyne's Dynacharger TM
technology later this year.
The Company's Light Metals division began production of the first of several
new machined parts to be manufactured for Navistar. The sales of this part are
estimated to be over US $3.0 million per year through 1999. In addition, the
Company is in final stages of development of several additional parts for
Navistar with anticipated annual sales in excess of US $10 million per year.
It is anticipated that these parts will be in production during the fourth
quarter of 1997.
The Company is very pleased to receive United Nation's Flag Technology status
for its products from the United Nation's Global Technology Group. Recognizing
Turbodyne technology as the only anti pollution system which simultaneously
improves engine performance and fuel economy, the United Nations Group will act
as an agent for Turbodyne to introduce the technology on a world wide basis and
assist the Company in its programs in South and Central America and Eastern
Europe.
The Company was pleased to commence trading on the NASDAQ system in March, to
better serve its growing number of United States investors.
