SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D C 20549
FORM 10-QSB/A
AMENDMENT NO. 1
QUARTERLY REPORT UNDER SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTER ENDED MARCH 31, 2000
COMMISSION FILE NUMBER 33-19584
POWERCOLD CORPORATION
(Exact name of registrant as specified in its charter)
NEVADA 23-2582701
(State of Incorporation) (IRS Employer
Identification No.)
103 GUADALUPE DRIVE
CIBOLO, TEXAS 78108 210-659-8450
(Address of principal executive offices) (Registrant's telephone number)
Securities registered pursuant to Sections 12(b) of the Act: NONE
Securities registered pursuant to Sections 12(g) of the Act: NONE
Common Stock, $0.001 Par Value OTC Bulletin Board
Indicate by check mark whether the registrant (1) has filed all reports required
by Section 13 or 15(d) of the Securities and Exchange Act of 1934 during the
preceding 12 months and (2) has been subject to such filing requirements for the
past 90 days. Yes X NO.
---
As of March 31, 2000, 8,924,996 Common Shares were outstanding, and the
aggregate market value of such shares held by non-affiliates was approximately
$2,852,729
POWERCOLD CORPORATION
AND SUBSIDIARIES
INDEX
-----
PART I. FINANCIAL INFORMATION PAGE
ITEM 1: FINANCIAL STATEMENTS (UNAUDITED)
Independent Accountant's Report
Consolidated Balance Sheets as of
March 31, 2000 and December 31, 1999. 3
Consolidated Statement of Operations for Three
Months Ended March 31, 2000 and March 31, 1999. 4
Consolidated Statement of Cash Flows for Three
Months Ended March 31, 2000 and March 31, 1999. 5
Notes to Consolidated Financial Statements at March 31, 2000. 6
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF 7
FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
PART II. OTHER INFORMATION 11
ITEM 1. LEGAL PROCEEDINGS.
ITEM 2. CHANGES IN SECURITIES.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
ITEM 5. OTHER INFORMATION.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
Signature Page 12
<PAGE>
R. E. BASSIE & CO., P.C.
R. E. BASSIE & CO., P.C.
CERTIFIED PUBLIC ACCOUNTANTS
A PROFESSIONAL CORPORATION
6776 Southwest Freeway, Suite 580
Houston, Texas 77074
Tel: (713) 266-0691 Fax: (713) 266-0692
E-Mail: [email protected]
INDEPENDENT ACCOUNTANTS' REPORT
The Board of Directors
PowerCold Corporation:
We have reviewed the accompanying condensed consolidated balance sheet of
PowerCold Corporation and Subsidiaries as of March 31, 2000, and the related
condensed consolidated statements of operations and cash flows for the
three-month periods ended March 31, 2000. These financial statements are the
responsibility of the Company's management.
We conducted our review in accordance with standards established by the American
Institute of Certified Public Accountants. A review of interim financial
information consists principally of applying analytical procedures to financial
data and of making inquiries of persons responsible for financial and accounting
matters. It is substantially less in scope than an audit conducted in
accordance with generally accepted auditing standards, the objective of which is
the expression of an opinion regarding the financial statements taken as a
whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that should
be made to such condensed consolidated financial statements for them to be in
conformity with generally accepted accounting principles.
The accompanying condensed financial statements have been prepared assuming that
the Company will continue as a going concern. As discussed in Note 2 to the
condensed financial statements (and Note 2 to the annual financial statements
for the year ended December 31, 1999 (not presented herein), certain conditions
raise substantial doubt about its ability to continue as a going concern.
Management's plans in regard to these matters are also described in Note 2 (and
Note 2) to the respective financial statements.
We have previously audited, in accordance with generally accepted auditing
standards, the consolidated balance sheet of PowerCold Corporation and
Subsidiaries as of December 31, 1999, and the related consolidated statements of
operations, stockholders' equity, and cash flows for the year then ended (not
presented herein); and in our report dated March 30, 2000, we expressed an
unqualified opinion on those consolidated financial statements and included an
explanatory paragraph concerning matters that raise substantial doubt about the
Company's ability to continue as a going concern. In our opinion, the
information set forth in the accompanying condensed consolidated balance sheet
as of December 31, 1999 is fairly stated, in all material respects, in relation
to the consolidated balance sheet from which it has been derived.
As discussed in Note 3, the Company's condensed consolidated financial
statements for the three months ended March 31, 2000 have been restated to
reflect the proper accounting for the investment in a wholly owned subsidiary.
/s/ R. E. Bassie & Co., P.C.
Houston, Texas
May 10, 2000, except with respect to
Note 3 to which date is September 15, 2000
<PAGE> 3
POWERCOLD CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
March 31, 2000 and December 31, 1999
(Unaudited - see accompanying accountants' review report)
<TABLE>
2000 1999
(Audited)
-------------- --------------
<S> <C> <C>
ASSETS
Current assets:
Cash $ 363,738 $ 14,464
Trade accounts receivable, net of
allowance for doubtful accounts of
$81,778 in 2000 and $138,379 in 1999 127,255 152,154
Refundable income taxes 52,222 52,222
Inventories 34,993 34,993
Prepaid expenses 69,347 69,347
-------------- --------------
Total current assets 647,555 323,180
-------------- --------------
Property and equipment, net 25,311 29,229
Patent rights and related technology, net 1,139,910 1,166,554
Goodwill, net 112,766 115,398
-------------- --------------
Total assets $ 1,925,542 $ 1,634,361
============== ===============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses 864,539 778,258
Commissions payable 42,239 42,240
Advances from affiliates 398,198 365,254
Short-term borrowing 21,378 21,378
Current installments of long-term debt 3,564 3,564
-------------- --------------
Total current liabilities 1,329,918 1,210,694
Long-term debt, less current installments 9,609 9,609
-------------- --------------
Total liabilities 1,339,527 1,220,303
-------------- --------------
Stockholders' equity:
Convertible, preferred stock, Series A,
$.001 par value, $1,000,000 in
liquidation, 1,250,000 shares authorized,
issued and outstanding 1,250 1,250
Common stock, $.001 par value. Authorized
200,000,000 shares: issued and
outstanding, 8,924,996 shares at March 31,
2000 and 7,876,641 at December 31, 1999 8,925 7,876
Additional paid-in capital 6,557,109 6,044,092
Accumulated deficit (5,972,769) (5,629,660)
-------------- --------------
594,515 423,558
Less receivable for stock subscription (8,500) (9,500)
-------------- --------------
Total stockholders' equity 586,015 414,058
Commitments and contingent liabilities - -
-------------- --------------
Total liabilities and stockholders' equity $ 1,925,542 $ 1,634,361
============== ==============
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE> 4
POWERCOLD CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
Three months ended March 31, 2000 and 1999
(Unaudited - see accompanying accountants' review report)
<TABLE>
2000 1999
(Reviewed) (Audited)
-------------- --------------
<S> <C> <C>
Revenues:
Product sales $ 28,708 $ 66,965
Services 14,190 26,603
-------------- --------------
Total revenues 42,898 93,568
-------------- --------------
Cost of revenues
Product sales 34,945 34,468
Services 9,876 43,594
-------------- --------------
Total cost of revenues 44,821 78,062
-------------- --------------
Gross margin (1,923) 15,506
Operating expenses:
General and administrative 295,352 153,831
Sales and marketing - 132,488
Research and development - 16,048
Depreciation and amortization expense 33,195 39,775
-------------- --------------
Total operating expenses 328,547 342,142
-------------- --------------
Operating loss (330,470) (326,636)
Other income (expenses):
Interest income - 10,043
Interest expense (11,317) (14,482)
Other (1,322) -
-------------- --------------
Total other income (expense) (12,639) (4,439)
Loss before provision for income tax (343,109) (331,075)
-------------- --------------
Provisions for income taxes - -
-------------- --------------
Net loss $ (343,109) $ (331,075)
============== ==============
Net loss per share $ (0.04) $ (0.05)
============== ==============
Weighted average common shares 8,222,811 6,836,935
============== ==============
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE> 5
POWERCOLD CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
Three months ended March 31, 2000 and 1999
(Unaudited - see accompanying accountants' review report)
<TABLE>
2000 1999
(Reviewed) (Audited)
-------------- --------------
<S> <C> <C>
Cash flows from operating activities:
Net loss $ (343,109) $ (331,075)
Adjustments to reconcile net loss to net
cash provided by (used) in operating activities:
Depreciation and amortization 33,195 39,775
Write-off of investment in affiliate - 825,988
Common stock issued for operating expenses 139,065 -
(Increase) decrease in operating assets:
Accounts receivable 24,899 (55,929)
Receivable from related party - (63,515)
Interest receivable - -
Inventories - (9,074)
Prepaid expenses and other current assets - (38,646)
Increase (decrease) in operating liabilities:
Accounts payable and accrued expenses 86,280 (251,504)
-------------- --------------
Net cash provided by (used in)
operating activities (59,670) 116,020
-------------- --------------
Cash flows from investing activities:
Additions to property and equipment - 5,029
Increase in advances from affiliate 32,944 295,179
Purchase of patent rights - (741,470)
Release of restricted cash - 400,000
Proceeds from sale of securities
available for sale - 32,500
-------------- --------------
Net cash provided by (used in)
investing activities 32,944 (8,762)
-------------- --------------
Cash flows from financing activities:
Proceeds from short-term borrowings - 206,669
Repayment of short-term borrowings - -
Proceeds from issuance of shares
under private placement 376,000 (329,883)
-------------- --------------
Net cash provided by (used in)
financing activities 376,000 (123,214)
-------------- --------------
Net increase (decrease) in cash 349,274 (15,956)
Cash at beginning of year 14,464 21,781
-------------- --------------
Cash at end of year $ 363,738 $ 5,825
============== ==============
Supplemental schedule of cash flow information:
Interest paid $ 11,317 $ 14,482
============== ==============
Noncash operating activities:
Common stock issued for deferred
compensation $ - $ -
============== ==============
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE> 6
POWERCOLD CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(1) GENERAL
The unaudited consolidated financial statements have been prepared on the same
basis as the audited consolidated financial statements and, in the opinion of
management, reflect all adjustments (consisting of normal recurring adjustments)
necessary for a fair presentation for each of the periods presented. The
results of operations for interim periods are not necessarily indicative of
results to be achieved for full fiscal years.
As contemplated by the Securities and Exchange Commission (SEC) under Rules of
Regulation S-B, the accompanying consolidated financial statements and related
footnotes have been condensed and do not contain certain information that will
be included in the Company's annual consolidated financial statements and
footnotes thereto. For further information, refer to the Company's 1999 audited
consolidated financial statements and related footnotes.
(2) OPERATIONAL STATUS
The accompanying consolidated financial statements have been prepared in
conformity with generally accepted accounting principles, which contemplates
continuation of the Company as a going concern. However, the Company has
sustained substantial operating losses in recent years and for the three-month
period March 31, 2000, and the Company has used substantial amounts of working
capital in its operations. At March 31, 2000, current liabilities exceed
current assets by $682,363 and intangible assets comprise a material portion of
the Company's assets. The recovery of these intangible assets is dependent upon
achieving profitable operations and favorable resolution of the matter discussed
in this note. The ultimate outcome of these uncertainties cannot presently be
determined. Management is actively seeking additional equity financing.
Additionally, management believes that the prior years acquisitions will lead to
the overall structure necessary to fulfill the Company's strategic plans.
In view of these matters, realization of a major portion of the assets in the
accompanying balance sheet is dependent upon continued operations of the
Company, and the success of its future operations. Management believes that
actions presently being taken to obtain additional equity financing and
increasing sales provide the opportunity to continue as a going concern.
(3) RESTATEMENT
The consolidated financial statements for the Company as of March 31, 2000 and
for the three months then ended are being restated to reflect the restatement of
the 1999 consolidated statements.
The restatement is as follows:
As previously Increase
reported (decrease) Restated
-------------- -------------- ------------
Investment in affiliate $ 616,332 $ (616,332) $ -
Receivable from CFTI 283,410 (283,410) -
Property and equipment, net 20,596 4,715 25,311
Patent rights and related
technology, net 361,426 778,484 1,139,910
Total liabilities 1,211,758 127,769 1,339,527
Equity loss in unconsolidated
affiliate (4,760) 4,760 -
-------------- -------------- ------------
Net loss $ (333,588) $ (9,524) $ (343,109)
============== ============== ============
<PAGE> 7
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS.
Forward looking statements made herein are based on current expectations of the
Company that involves a number of risks and uncertainties and should not be
considered as guarantees of future performance. These statements are made under
the Safe Harbor Provisions of the Private Securities Litigation Reform Act of
1995. The factors that could cause actual results to differ materially include;
interruptions or cancellation of existing contracts, impact of competitive
products and pricing, product demand and market acceptance risks, the presence
of competitors with greater financial resources than the Company, product
development and commercialization risks and an inability to arrange additional
debt or equity financing.
GENERAL FINANCIAL ACTIVITY
POWERCOLD CORPORATION - is a solution provider of energy efficient products for
users of industrial and commercial refrigeration systems world-wide. The Company
operates across many market sectors from large industrial food processors to
small commercial air conditioning systems. The firm's focus is to give customers
products and systems that allow them to benefit from current changes occurring
in the natural gas and electrical utility marketplace. Refrigeration is the most
energy intensive operation most business operators face. PowerCold has the
opportunity to provide products and systems, that customers require to take
advantage of these changes, to improve profitability by reducing their operating
costs.
Deregulation of the gas and electric utilities will provide continuing
opportunities, creating new markets for more efficient refrigeration systems.
PowerCold has the products, experience and creative ability to package unique
refrigeration systems for the multi-billion dollar refrigeration market. The
Company is acquiring synergistic businesses, and marketing alliances are being
formed with major utility companies and established refrigeration companies for
these products and services.
The Company's business operations are supported by a management team with over
(150) years experience. The Company maintains administrative corporate offices
in Cibolo, Texas, and Philadelphia, Pennsylvania. Engineering and manufacturing
facilities are located in Cibolo, Texas.
The Company's mission is to be a solution provider of energy efficient products
for the multi-billion dollar refrigeration, air condition and power industry.
The Company's goal is to achieve profitable growth and increase shareholder
value - providing superior products and services through related acquisitions
and joint ventures.
POWERCOLD COMPANIES:
REALCOLD PRODUCTS, INC. - designs and manufactures unique energy efficient
packaged products for the refrigeration industry. RealCold Products also
supports Rotary Power Enterprise and Alturdyne Energy Systems by engineering and
packaging their products. RealCold Products will also support Channel Freeze
Technologies by designing and packaging their accompanying refrigeration
systems. Management believes that the recent acquisition of Channel Freeze and
Alturdyne Energy Systems should provide improved revenues and profits (subject
to sufficient working capital) for RealCold Products in 2000, based upon its
expertise in custom
manufacturing systems. There are proposed alliances with other refrigeration
companies, whereas RealCold Products will package various components adding
value for a total turnkey refrigeration system.
<PAGE> 8
NAUTICON INC. - manufactures and markets a product line of patented evaporative
heat exchange systems for the HVAC and refrigeration industry. The new patented
products are innovative and unique in design, use new material technology, is
simple to manufacture, and have a low operating cost. They are used for
condensers, fluid coolers, subcoolers, and cooling towers. Nauticon products
can save power cost in the refrigeration industry by 20% to 30%, making these
units contribute to the utilities needs to reduce power demand. There are over
150 systems installed in the US.
TECHNICOLD SERVICES, INC. - offers consulting engineering services, including
process safety management compliance and ammonia refrigeration and carbon
dioxide system design. TSI also provides operation, maintenance and safety
seminars for ammonia refrigeration technicians and supervisors.
ROTARY POWER ENTERPRISE, INC. - was formed (September 1998) as a new PowerCold
entity to acquire the Natural Gas Business from Rotary Power International. The
agreement includes: the business assets including intellectual property,
inventory and manufacturing capability; a marketing agreement with one of the
world's largest supplier of supermarket refrigeration equipment, for marketing
the natural gas engine screw compressor systems to supermarkets; the North
American rights to the small 65 series Mazda natural gas engine block, subject
to Mazda Agreement; and an exclusive Distributor Agreement for the Rotary Power
580 series engines form Rotary Power International, Inc. The Company has
delivered fourteen 65 HP engines and one 500 HP engine on its major sales
agreement with Kem Equipment Company, an engine packager for OEM applications
for the oil and gas industry in Western Canada. The Sales Agreement is for (100
small 65 HP and 60 large 500 HP) natural gas engines valued some $5 million.
The major application is for oil and gas field systems. The initial (160)
engines are scheduled for delivery to a major Canadian oil and gas operation in
Western Canada.
CHANNEL FREEZE TECHNOLOGIES, INC. - was recently formed (September 1998) as a
PowerCold subsidiary to acquire 80% of the assets of Channel Ice Technologies.
Channel Ice produces a proprietary patented and economical multi-purpose
freezing system, suitable for virtually any liquid or semi-liquid product, that
is inherently more efficient than prior technologies in a variety of industries
including; block ice - for ice plants, fish and produce industries; food and
food byproducts - for food suppliers and their leftover byproducts, fruit and
juice products. The most notable new application is for highly efficient
management of liquid and semi-liquid industrial waste products for municipal
water, pulp and paper plants and utilities. The freeze-thaw process; waste is
frozen, the water in the frozen sludge drains almost immediately during thaw,
and the remaining materials are than disposed of at greatly reduced cost,
recycled or sold.
ALTURDYNE ENERGY SYSTEMS - PowerCold recently signed a Letter of Agreement
(December 1998), to acquire a division of Alturdyne that produces natural gas
engine driven water chillers. The Company also announced a Strategic Alliance
with Alturdyne for manufacturing and marketing of their respective products.
Alturdyne is an innovative manufacturer of standby diesel generator sets,
turbine and rotary generator sets, pumps and natural gas engine-driven chillers.
Alturdyne's strength lies in its power engineering personnel, who are
knowledgeable in the generator set business, telephone company applications,
small turbines, rotaries and chillers. Their capabilities and experience in
developing low cost, customer power packages that meet specific needs have
established Alturdyne's excellent reputation in the industry. Alturdyne's added
expertise is in the design and production of rotary engines.
<PAGE> 9
Alturdyne Energy Systems, as an Alturdyne division installed over (140) chillers
systems. The manufacturing operations have been moved to the Company's facility
in Cibolo, Texas. The added expertise of RealCold Products engineering and
manufacturing should enhance the existing chiller business.
RESULTS OF OPERATIONS - FIRST QUARTER 2000
The Company's Consolidated Statements of Operations for the first quarter ended
March 31, 2000 compared to the first quarter ended March 31, 199: Total revenue
for the first quarter 2000 was $42,898 compared to $93,568 for 1999; operating
loss of ($330,470) for 2000 compared to ($326,636) for 1999; and net loss of
($343,109) or ($0.04) per share for 2000 compared to a net loss of ($331,075) or
($0.05) per share for 1999. Net income (loss) per share was based on weighted
average number of shares of 8,222,811 for 2000 compared to 6,836,935 for 1999.
The Company's Consolidated Balance Sheets as of March 31, 2000 and March 31,
1999 respectively: Total current assets were $647,555 for 2000 and $323,180 for
1999; total assets were $1,985,542 for 2000 and $1,634,361 for 1999; total
liabilities were $1,339,527 for 2000 and were $1,220,303 for 1999; total
stockholders' equity was $586,015 for 2000 and $414,058 for 1999; and the
Company has no long term debt.
The first quarter ending March 31, 2000; operating loss was due to maintaining
general Company operating overhead including additional engineering and
marketing costs for the Nauticon and Channel Freeze product lines. The Company
has restructured its operations to comply with its current product line of
Evaporative Condensers - reason for the decline in revenue and the negative
gross margin. Effective as of the first quarter of 2000, Jack Kazmar took over
as COO of the PowerCold consolidated operations. Mr. Kazmar has over 40 years
operating experience in the refrigeration and energy business.
The increase in assets was primarily due to an increase in cash from private
placements of $375,000. The increase in liabilities was primarily due to the
restatement of Channel Freeze Technologies. Reference attached notes to
consolidated financial statements.
The Company issued a total of 448,355 shares of new common restricted shares in
the first quarter for consulting services. The Company issued a total of 600,000
shares of new common restricted shares in the first quarter for $375,000.00
cashHistorically the Company issues restricted common shares for private
placement funding on a negotiated basis up to minimum of a 50% discount off the
then current share price, and the Company also issues restricted common shares
for expenses and service rendered based on a discount up to a 50% off the share
price within the quarter issued according to the value of the service.
Because of insufficient working capital needed for raw materials and labor for
the Company, sales and revenue was greatly impaired. The working capital
shortage was mainly due because of the large amounts of Company funds that was
used for the promotion and support of the new Channel Freeze business in 1999.
The Company had to cancel some $1.7 Million in sales orders. This loss of sales
orders has not impaired Company operations because they were not booked as
revenue. Management foresees restating most of the loss sales orders because of
their long lead time to delivery, and as new working capital comes into the
Company.
Subsequent Event to this Amended Filing - Effective August 31, 2000, The
Company, Nauticon, Inc. and Robert E. Jenkins agreed upon a full and final
settlement of the lawsuit titled Nauticon, Inc. et al Vs Robert E. Jenkins Cause
No. 97-13035, in the 53rd District court of Travis County, Texas. Nauticon had
been continually hindered by major operating and legal expenses due to previous
inept management in the operations of Nauticon. Because of the major operating
<PAGE> 10
losses and outstanding accounts payable incurred by previous management,
Nauticon does not have sufficient resources to continue operations. Therefore
Nauticon is now currently in the process of restructuring its accounts payables
with its vendors. The new Nauticon product line of evaporative condensers,
developed by RealCold Products, are manufactured and marketed by RealCold
Products. Nauticon technology was licensed to RealCold Products for a two and
one half per cent (2 1/2%) royalty fee on product sales.
Channel Freeze sales and revenue continues to be slow, because of the limited
marketing experience and lack of product credibility in the marketplace. The
new Channel Freeze management support team believes that the product is now
ready for customer delivery and acceptance.
Management intends to continue to utilize and develop the intangible assets of
the Company. It is Management's opinion that the Company's cash flow generated
from current intangible assets is not impaired, and that recovery of its
intangible assets, upon which profitable operations will be based, will occur.
Management believes that its working capital may not be totally sufficient to
support both its current operations and growth plans for additional acquisitions
and joint ventures for the near future. Management has implemented a new
operating plan providing guidance for cash management and revenue growth. Also
during the past few months the Company has raised private placement capital for
current production cash requirements, and foresees continued private placement
funding to meet production needs for the remainder of the year. The Company is
also currently seeking investor proposals to obtain additional major financing
to support its future growth plans and acquisitions.
The current status of Company acquisitions is dependent on the success of
investor funding. PowerCold signed a Letter of Agreement (December 1998), to
acquire a division of Alturdyne that produces natural gas engine driven water
chillers. To date the transaction has not been finalized pending funding. The
two companies operate as a joint alliance for the sales of engine and generator
products.
Management intends to continue to utilize and develop the intangible assets of
the Company. It is Management's opinion that the Company's cash flow generated
from current intangible assets is not impaired, and that recovery of its
intangible assets, upon which profitable operations will be based, will occur.
The Company has engaged J. E. Liss & Company, as the Company's non-exclusive
investment banking agent, to provide the Company with financial advisory and
consulting services, relating to, among other things, the development of a
strategic financial and business plan for the Company, acquisitions,
divestitures, restructurings, recapitalizations, consolidations, formation of
joint ventures and negotiations with lenders and other potential providers of
capital.
PART 11. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
Management of the Company is seeking to recoup damages from the former president
and director of Nauticon, in connection with Nauticon's acquisition by the
Company. Related to this matter is the ownership of certain patents. It is the
opinion of management that this matter will not have any adverse effect on the
Company at this time, because the Company legally acquired all the assets of
Nauticon including the patents in exchange for stock. The former president of
Nauticon has filed a counter claim against the Company and two Company
Executives/Directors. Because of these and other financial and managerial
problems, and continued lack of operating capital, bad debts and certain claims
have been filed against some of the Companies.
<PAGE> 11
Subsequent Event to this Amended Filing: Effective August 31, 2000, The
Company, Nauticon, Inc. and Robert E. Jenkins agreed upon a full and final
settlement of the lawsuit titled Nauticon, Inc. et al Vs Robert E. Jenkins Cause
No. 97-13035, in the 53rd District court of Travis County, Texas.
ITEM 2. CHANGES IN SECURITIES
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
ITEM 5. OTHER INFORMATION.
None.
ITEM 6 EXHIBITS AND REPORTS ON FORM 8-K.
8-K - Dated April 5, 2000
POWERCOLD CORPORATION
FORM 10-QSB
MARCH 31, 2000
SIGNATURE
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
POWERCOLD CORPORATION
/s/ Francis L. Simola
---------------------------
Francis L. Simola
President and CEO
Date: November 10, 2000
