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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, 1998
TURBODYNE TECHNOLOGIES INC.
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(Translation of registrant's name into English)
Suite 510, 1090 West Pender Street, Vancouver, BC, Canada, V6E 2N7
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(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
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[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
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[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)
Date: June 25, 1998 By: Leon E. Nowek
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/s/ Leon E. Nowek
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(Signature)*
*Print the name and title of the signing officer under his signature
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THIS IS THE FORM OF MATERIAL CHANGE REPORT REQUIRED UNDER SECTION 85(1) OF
THE SECURITIES ACT.
FORM 27
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Securities Act
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MATERIAL CHANGE REPORT UNDER SECTION 85(1) OF THE ACT
Item 1. REPORTING ISSUER
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TURBODYNE TECHNOLOGIES INC.
Suite 510, 1090 West Pender Street
Vancouver, British Columbia V6E 2N7
Telephone: 604-682-8854
Facsimile: 604-688-8621
Item 2. DATE OF MATERIAL CHANGE
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June 24, 1998
Item 3. PRESS RELEASE
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June 24, 1998
Item 4. SUMMARY OF MATERIAL CHANGE
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Turbodyne Technologies Inc. (the "Company") announced
financial results for its first quarter ended March 31, 1998.
Item 5. FULL DESCRIPTION OF MATERIAL CHANGE
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Turbodyne announced financial results for its first quarter
ended March 31, 1998. The Company's revenues rose 7.5 per cent
to $9.7 million from $9.0 million in revenues for its 1997
first quarter. The net loss for the quarter was $4.0 million,
or 13 cents a diluted share, compared to a net loss of $2.0
million, or 12 cents a diluted share, for the quarter ended
March 31, 1997. The weighted average basic and diluted shares
outstanding for the 1998 first quarter were 31,172,000
compared to
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16,641,000 weighted average basic and diluted shares
outstanding for 1997 first quarter.
"While revenues for the quarter increased by 7.5 per cent,
sales in the light metals division were dampened by the
production transfer of our wheel manufacturing into our newly
acquired facility in Ensenada, Mexico," said Edward Halimi,
Turbodyne's Chairman. "This resulted in lower delivery of
wheels in January and February. It also resulted in higher
costs in the our La Mirada, California facility, especially in
excess overtime. These issues, along with some currency
exchange loss, were the main reasons for the increase in the
loss for the quarter. However, during March, the additional
Mexico facility became operational and we expect to see
improved economics during the second quarter."
"Also contributing to the first quarter loss were costs
associated with the ramp-up of production facilities for
Turbodyne's pollution control and engine performance
technology, later stage research and development of the
technology, and the various testing programs that we were or
are currently engaged in around the world.," Mr. Halimi
continued.
"Starting with our 1997 year end audit, we changed from
Canadian GAAP to U.S. GAAP due to our pending domicile move to
the United States," said Mr. Halimi. "This accounting change
resulted in restating all of the quarterly figures for 1997
for comparison purposes."
Turbodyne's balance sheet has strengthened from the year ago
quarter with a 42 per cent increase in current assets to $22.8
million, a 43 per cent increase in working capital to $11.3
million and a 29 per cent rise in total assets to $55.8
million. The Company's current ratio is 1.97 to 1.
During the first quarter, all holders of the Company's class A
convertible Preferred Stock elected to exercise their
conversion rights, which resulted in the issuance of 4,742,522
common shares.
"Management's outlook for the 1998 second quarter and the 1998
fiscal year remains strong for the Company as we roll out our
new breakthrough technology on a global scale," Mr. Halimi
continued. We began shipments of Turbopacs(TM) through our
distribution agreement with Detroit Diesel Corporation for the
EPA's Urban Bus Retrofit/Rebuild program in the second
quarter. We also signed an agreement to provide Turbopac(TM)
1500 and 2200 models to a major European vehicle and engine
manufacturer, with the Turbopacs(TM) to be installed during
production on this manufacturer's 1999 models. We expect to
begin shipments to this manufacturer in the latter part of the
fourth quarter of this year. At this time, management does not
expect this new agreement to have a material impact on the
Company's 1998 top line growth."
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Turbodyne Systems, the high technology division of Turbodyne,
manufacturers, designs, markets and develops patented
pollution-reduction, fuel economy and performance enhancing
technology for internal combustion engines in the automotive,
transportation, construction, marine, agriculture, mining,
military and power generation industries.
Offices and plants are located in Carpinteria, La Mirada,
Encinatas and Woodland Hills, CA; Ensendada and Mexico City,
Mexico; Northants, England; Frankfurt, Germany; Vancouver,
Canada; and Paris, France.
-tables follow-
TURBODYNE TECHNOLOGIES INC.
AND SUBSIDIARIES
Consolidated Balance Sheets
March 31, 1998 and 1997
(in thousands of US dollars)
(Unaudited)
<TABLE>
<S> <C> <C>
ASSETS 1998 1997
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Current Assets:
Cash $2,569 1,473
Trade accounts receivable 11,566 7,249
Employee advances receivable 805 99
Inventories 6,598 5,767
Prepaid expenses and other current assets 1,269 1,531
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Total current assets $22,807 $16,119
Property, Plant and Equipment, at cost, net 18,993 12,697
Goodwill, net 13,553 14,331
Other Assets 469 257
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
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Current maturities of long-term debt $534 $931
Current maturities of obligation under capital 683 451
leases
Accounts payable and accrued liabilities 9,285 6,655
Loan payable 1,000 --
Income taxes payable 48 210
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Total current liabilities $11,550 $8,247
Long term debt, less current maturities $9,354 $1,174
Subordinated convertible debenture 1,500 --
Obligations under capital leases, less current 2,920 6,115
maturities
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$25,324 $15,536
Stockholders' Equity
Class A preferred stock, no par value. Authorized -- --
100,000,000 shares, none issued
Class B preferred stock, no par value. Authorized -- --
100,000,000 shares, none issued
Common stock, no par value. Authorized -- --
100,000,000 shares; issued and outstanding
36,275,579 shares in 1998 and 24,049,566 shares
in 1997
Additional paid-in capital 58,731 24,734
Special Warrants - 16,007
Cumulative currency translation adj. 22 (214)
Accumulated deficit (28,255) (12,659)
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Total Stockholders' Equity $30,498 $27,868
$55,822 $43,404
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</TABLE>
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TURBODYNE TECHNOLOGIES INC.
AND SUBSIDIARIES
Consolidated Statements of Operations
Three months ended March 31, 1998 and 1997
(in thousands of US dollars, except per share information)
(Unaudited)
<TABLE>
<S> <C> <C>
1998 1997
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Net sales $9,726 $9,045
Cost of goods sold 8,301 6,797
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Gross profit 1,425 2,248
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Selling, research, general 5,150 3,850
and administrative expenses
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Loss from operations (3,725) (1,602)
Other expense (income): 285 148
Interest expense, net - 148
Other, net - (11)
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Loss before income taxes (4,010) (1,739)
Income tax expense 8 232
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Net loss ($4,018) ($1,971)
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Net loss per share:
Basic loss per share ($0.13) ($0.12)
Diluted loss per share ($0.13) ($0.12)
Weighted average shares used for basic and 31,172,000 16,641,000
diluted loss per share
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</TABLE>
Item 6. RELIANCE ON SECTION 85(2) OF THE ACT
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Not applicable.
Item 7. OMITTED INFORMATION
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Not applicable.
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Item 8. SENIOR OFFICERS
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Mr. Walter F. Ware
President & Chief Executive Officer
c/o Turbodyne Technologies Inc.
21700 Oxnard Street
Suite 1550, Warner Center
Woodland Hills, California 91367
Telephone: (800) 350-2031
Facsimile: (818) 593-2284
Item 9. STATEMENT OF SENIOR OFFICER
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The foregoing accurately discloses the material change
referred to herein.
June 25, 1998
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Date
/s/ Leon E. Nowek
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(signature)
Leon E. Nowek
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Name
Director/Vice President
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Position
Woodland Hills, California
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Place of Declaration
