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 May, 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.
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(Registrant)
Date: MAY 20, 1998 By: ANDREW LEE
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/S/ ANDREW LEE
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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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May 14, 1998
ITEM 3. PRESS RELEASE
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May 14, 1998
ITEM 4. SUMMARY OF MATERIAL CHANGE
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Turbodyne Technologies Inc. ("Turbodyne") announced reported its
financial results for the year ended December 31, 1997, under US
Generally Accepted Accounting Principles (GAAP), which had previously
been released in preliminary form reported under Canadian GAAP.
ITEM 5. FULL DESCRIPTION OF MATERIAL CHANGE
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Turbodyne announced reported its financial results for the year ended
December 31, 1997, under US Generally Accepted Accounting Principles
(GAAP), which had previously been released in preliminary form
reported under Canadian GAAP.
The Company posted revenues of $39.2-million, a 181 percent increase
compared to revenues of $13.9 million for 1996. The net loss for the
year was $13.2 million, or 50 cents a share, compared to a net loss
of $5.5 million, or 27 cents a share, for 1996.
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"The revenues the Company reported for 1997 were almost exclusively
derived from our light metals division," said John Singleton,
Turbodyne's Chief Operating Officer and CFO. "The increase in
revenues is largely attributable to including in the Company's 1997
financial results the results of operations of the light metals
division for the Company's full fiscal year, as compared to a six
month period in 1996. The increase also results from about a 10 per
cent growth in that business."
"The increase in the Company's loss for the year is due to 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 costs associated with the
various testing programs we were or are currently, engaged in around
the world," Singleton continued. "We also had significant costs
associated with the expansion of our facilities in Ensenada, Mexico,
which was necessary for both the pending TurbopacTM production we
expect this year and growth of the light metals division."
For the year-end audit, Turbodyne changed from Canadian GAAP to U.S.
GAAP due to its pending domicile move to the United States. This
accounting change resulted in the reclassification of $6.6 million
in research and development to an expense from a capitalized line
item, thereby reflecting higher expenses, which resulted in an
increase in the reported loss for 1997. The net loss reflects, as
previously announced, one time non-operating adjustments as required
by the change from Canadian to U.S. GAAP. This audit was the first
audit completed for Turbodyne by its new accounting firm KPMG Peat
Marwick LLP, in Los Angeles, CA.
Turbodyne's balance sheet has strengthened from a year ago with about
a $3.5 million increase in current assets, an increase in working
capital to $8.5 million from $7.2 million, and the ratio of current
assets to current liabilities is 2:1.
Turbodyne's executive management believes the outlook for 1998
remains strong as the Company rolls out its breakthrough technology
on a global scale. After receiving official EPA certification, the
Company began shipping TurbopacsTM through its purchase order
agreement with Detroit Diesel Corp. for the EPA's Urban Bus
Retrofit/Rebuild program. The Company also recently began testing
TurbopacsTM on public transit buses in France, as well received
approval to install units in a pilot program for Ralphs Grocery
Company's diesel truck fleet in California.
"Management also expects to see significant growth from the light
metals division in 1998," Singleton said. "This division is
experiencing rapid growth, mainly due to the increase in the Mexican
content laws for auto makers with existing facilities in Mexico. This
division's backlog currently stands at $115 million."
Turbodyne Systems, the high technology division of Turbodyne,
manufactures, designs, markets and develops patented pollution-
reduction, fuel economy and performance enhancing technology for
internal combustion engines in the
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automotive, transportation, construction, marine, agriculture,
mining, military and power generation industries. Turbodyne's light
metals division is a manufacturer of machined aluminum castings and a
leading supplier to the automotive industry.
Offices and plants are located in Carpinteria, La Mirada, Encinatas
and Woodland Hills, CA; Ensenada and Mexico City, Mexico; Northants,
England; Frankfurt, Germany; Vancouver, Canada; and Paris, France.
TURBODYNE TECHNOLOGIES INC.
AND SUBSIDIARIES
Consolidated Statements of Operations
Years ended December 31, 1997 and 1996
1997 1996
Net sales $39,165,000 $13,944,000
Cost of goods sold 32,326,000 12,101,000
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Gross profit 6,839,000 1,843,000
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Selling, research, general
and admin expenses 18,982,000 7,781,000
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Loss from operations (12,143,000) (5,938,000)
Other expense (income):
Interest expense, net 770,000 360,000
Other, net 66,000 (315,000)
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Loss before income taxes (12,979,000) (5,983,000)
Income tax expense (benefit) 206,000 (420,000)
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Net loss ($13,185,000) ($5,563,000)
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Net loss per common share:
Basic loss per share (50 cents) (27 cents)
Diluted loss per share (50 cents) (27 cents)
Weighted average shares used for
basic and diluted loss per share $26,835,000 $20,791,000
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TURBODYNE TECHNOLOGIES INC.
AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
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December 31, 1997 and 1996
ASSETS 1,997 1,996
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Current Assets 17,391,000 13,488,000
Property and equipment,
at cost, net 18,122,000 11,290,000
Goodwill, net 13,740,000 14,528,000
Other assets 473,000 135,000
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49,726,000 39,441,000
LIABILITIES
Current Liabilities 8,861,000 6,462,000
Long-term debt 8,155,000 4,095,000
Obligations under capital
leases, less current maturity 1,867,000 1,170,000
18,883,000 11,727,000
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STOCKHOLDERS' EQUITY
Class A pref. Stock, no par
value. Authorized 100,000,000
shares, none issued -- --
Class B pref. Stock, no par
value. Authorized 100,000,000
shares, none issued -- --
Preferred stock, no par value.
Authorized and issued 10,000
Series One Class A, 7%
cumulative convertible Common
stock, no par value. 9,604,000 --
Authorized 100,000,000 shares; issued
and outstanding 29,961,612 shares in
1997 and 23,580,098 shares in 1996 -- --
Additional paid-in capital 45,290,000 22,599,000
Special Warrants -- 16,007,000
Cumulative currency translation adj. 22,000 (204,000)
Accumulated deficit 24,073,000) (10,688,000)
Total Stockholders' Equity 30,843,000 27,714,000
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$49,726,000 $37,441,000
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ITEM 6. RELIANCE ON SECTION 85(2) OF THE ACT
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Not applicable.
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ITEM 7. OMITTED INFORMATION
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Not applicable.
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.
MAY 20, 1998
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Date
/S/ ANDREW LEE
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(signature)
ANDREW LEE
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Name
CORPORATE SECRETARY
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Position
WOODLAND HILLS, CA
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Place of Declaration
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