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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 10-Q
[ ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15() OF THE SECURITIES
EXCHANGE ACT OF 1934
For the Quarterly Period Ended June 30, 2001
Commission file number 0-21391
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TURBODYNE TECHNOLOGIES INC.
---------------------------
(Exact name of registrant as specified in its charter)
Delaware 95-4699061
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(State or other jurisdiction (IRS Employer Identification No.)
of incorporation or organization)
6155 Carpinteria Avenue,
Carpinteria, California
93013
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (805) 684-4551
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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 [ ]
The number of shares of common stock, par value $.001 per share,
outstanding was 72,127,448 on August 3, 2001.
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TURBODYNE TECHNOLOGIES INC.
Report on Form 10-Q
For the Quarter Ended June 30, 2001
TABLE OF CONTENTS
PAGE
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PART I. FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements (Unaudited)
Consolidated Balance Sheets as of June 30, 2001
and December 31, 2000 3
Consolidated Statements of Operations for the
Six Months Ended June 30, 2001 and 2000 4
Condensed Consolidated Statements of Cash Flows for
the Six Months Ended June 30, 2001 and 2000 5
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 6
Item 3. Quantitative and Qualitative Disclosures About Market
Risk 8
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 9
Item 2. Changes in Securities and Use of Proceeds 9
Item 3. Defaults Upon Senior Securities 11
Item 4. Submission of Matters to a Vote of Security Holders 11
Item 5. Other Information 12
Item 6. Exhibits and Reports on Form 8-K 12
Signature 12
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PART I. FINANCIAL INFORMATION
TURBODYNE TECHNOLOGIES INC
CONSOLIDATED BALANCE SHEET
JUNE 30, 2001 AND DECEMBER 31, 2000
JUNE 30, 2001 DECEMBER 31, 2000
ASSETS
CURRENT ASSETS
CASH - -
TRADE ACCOUNTS RECEIVABLE, NET 34,061 334,209
EMPLOYEE ADVANCES RECEIVABLE - LESS
ALLOWANCE FOR DOUBTFUL ACCOUNTS OF
$946,847 IN 2000 AND 2001, RESPECTIVELY 3,250 2,250
INVENTORIES 360,880 363,780
PREPAID EXPENSES AND OTHER
CURRENT ASSETS 11,029 11,029
------------------------------------
TOTAL CURRENT ASSETS 409,221 711,268
PROPERTY, PLANT & EQUIPMENT, AT COST, NET 306,943 353,084
OTHER ASSETS 33,000 37,793
------------------------------------
TOTAL ASSETS 749,164 1,102,145
------------------------------------
LIABILITIES AND SHAREHOLDERS' EQUITY
(DEFICIT) JUNE 30, 2001 DECEMBER 31, 2000
CURRENT LIABILTIES
CURRENT MATURITIES OF LONG-TERM DEBT 118,345 145,293
ACCOUNTS PAYABLE AND CASH OVERDRAFT 2,973,791 2,716,055
ACCRUED LIABILTIES 279,909 265,626
CASH ADVANCED FOR UNISSUED SHARES 630,000 -
RESERVE FOR LAWSUIT SETTLEMENTS 5,732,780 5,711,500
------------------------------------
TOTAL CURRENT LIABILITIES 9,734,824 8,838,474
LONG-TERM DEBT, LESS CURRENT MATURITIES 14,238 24,053
TOTAL LIABILITIES 9,749,062 8,862,527
====================================
STOCK HOLDERS' EQUITY (DEFECIT)
PREFERRED STOCK, $0.001 PAR VALUE.
AUTHORIZED 1,000,000 SHARES - -
COMMON STOCK, $0.001 PAR VALUE.
AUTHORIZED 99,000,000 SHARES;
ISSUED AND OUTSTANDING: 68,007,448
AS OF JUNE 30, 2001 AND 58,151,821
AS OF DECEMBER 31, 2000 68,007 58,152
TREASURY STOCK, AT COST (1,755,534) (1,755,534)
ADDITIONAL PAID IN CAPITAL 102,719,090 101,126,022
CUMULATIVE OTHER COMPREHENSIVE INCOME 35,119 35,119
ACUMULATED DEFICIT (110,066,580) (107,224,141)
TOTAL SHAREHOLDERS' EQUITY (DEFECIT) (8,999,899) (7,760,382)
------------------------------------
TOTAL LIABILITIES AND SHAREHOLDERS'
EQUITY (DEFECIT) 749,164 1,102,145
====================================
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TURBODYNE TECHNOLOGIES INC
CONSOLIDATED STATEMENT OF OPERATIONS
JUNE 30, 2001 AND JUNE 30, 2000
THREE THREE
MONTHS MONTHS SIX MONTHS SIX MONTHS
ENDED ENDED ENDED ENDED
June 30, June 30, June 30, June 30,
2001 2000 2001 2000
NET SALES 603 181,000 11,047 449,000
COST OF GOODS SOLD 240 117,000 2,900 370,000
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GROSS PROFIT 363 64,000 8,147 78,000
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SELLING, GENERAL AND
ADMINISTRATIVE EXPENSE 510,097 1,391,000 1,138,133 2,243,000
RESEARCH AND DEVELOPMENT
COSTS 691,648 1,724,000 1,422,927 2,970,000
DEPRECIATION AND
AMORTIZATION 23,070 0 46,141 0
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TOTAL OPERATION EXPENSE 1,224,815 3,115,000 2,607,201 5,213,000
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LOSS FROM OPERATIONS (1,224,451)(3,051,000) (2,599,054) (5,135,000)
OTHER EXPENSE (INCOME) (722) 3,000 (17,192) 9,000
INTEREST EXPENSE, NET 342 37,000 3,339 78,000
LITIGATION EXPENSE 242,186 - 257,238 -
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LOSS BEFORE INCOME TAXES (1,466,257)(3,026,000) (2,842,439) (5,144,000)
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INCOME TAX EXPENSE (BENEFIT) - -
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NET LOSS $(1,466,257)$(3,026,000)$(2,842,439)$(5,144,000)
================================================
NET LOSS PER COMMON SHARE:
BASIC LOSS PER SHARE $ (0.02)$ (0.06)$ (0.05)$ (0.11)
DILUTED LOSS PER SHARE $ (0.02)$ (0.06)$ (0.05)$ (0.11)
================================================
WEIGHTED AVERAGE SHARES
USED FOR BASIC AND
DILUTED LOSS PER SHARE 62,432,858 47,266,000 60,685,515 47,231,000
================================================
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TURBODYNE TECHNOLOGIES INC
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 2001 AND 2000
2001 2000
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CASH FLOWS FROM OPERATING ACTIVITIES:
NET LOSS $ (2,842,439) $ (5,144,000)
ADJUSTMENTS TO RECONCILE NET LOSS
TO NET CASH USED IN OPERATING
ACTIVITIES:
DEPRECIATION AND AMORTIZATION 46,141 184,000
(INCREASE) DECREASE IN OPERATING ASSETS:
TRADE ACCOUNTS RECEIVABLE 300,148 2,108,000
EMPLOYEE ADVANCES RECEIVABLE (1,000) 55,000
INVENTORIES 2,900 532,000
PREPAID EXPENSES AND OTHER CURRENT ASSETS (0) (25,000)
OTHER ASSETS 4,793 (15,000)
INCREASE (DECREASE) IN OPERATING
LIABILITIES:
TRADE ACCOUNTS PAYABLE 257,736 (371,000)
ACCRUED LIABILITIES 14,283 193,000
RESERVE FOR LAWSUIT SETTLEMENT 21,280 6,211
-------------------------------------
NET CASH USED IN OPERATING
ACTIVITIES: (2,196,159) (2,477,000)
-------------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
PURCHASE OF PROPERTY AND EQUIPMENT 0 (16,000)
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NET CASH USED IN INVESTING
ACTIVITIES: 0 (16,000)
-------------------------------------
CASH FLOW FROM FINANCING ACTIVITIES:
NET PROCEEDS FROM SHORT-TERM BORROWINGS 20,500 3,000
ISSUANCE OF COMMON STOCK 1,398,624 -
CASH ADVANCED FOR UNISSUED SHARES 630,000 -
PROCEEDS FROM EXERCISE OF STOCK OPTIONS
AND WARRANTS - 2,704,000
INCREASE IN CASH OVERDRAFT 147,035 -
ISSUANCE COSTS PAID - -
-------------------------------------
NET CASH PROVIDED BY FINANCING
ACTIVITIES: 2,196,159 2,708,000
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EFFECT OF EXCHANGE RATE CHANGES ON CASH - (21,000)
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NET INCREASE (DECREASE) IN CASH (0) 194,000
CASH AT BEGINNING OF PERIOD - 29,000
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CASH AT END OF PERIOD $ - $ 223,000
=====================================
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
CASH PAID DURING THE PERIOD FOR:
INTEREST $ - $ 36,000
INCOME TAXES $ 3,200 $ 800
SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING
AND FINANCING ACTIVITIES:
CONVERSION OF DEBT TO EQUITY
STOCK ISSUED FOR LEGAL
SETTLEMENTS $ - $ -
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Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operation
Except for the historical information contained below, the
matters discussed in this item are forward-looking statements
that involve a number of risks and uncertainties. Our actual
liquidity needs, capital resources and results may differ
materially from the discussion set forth in the forward-looking
statements. For a discussion of important factors that could
cause our actual results, performance or achievements to be
materially different from those expressed or implied by the
forward-looking statements, see "Risk Factors" in our Annual
Report on Form 10-K for the fiscal year ended December 31, 2000.
RESULTS OF OPERATIONS
SALES
Sales for the six months ended June 30, 2001 decreased to $11,047
from $449,000 for the six months ended June 30, 2000, a decrease
of $437,953 or approximately 97.54% and for the three months
ended June 30, 2001 decreased to $603 from $181,000 for the three
months ended June 30, 2000, a decrease of $180,397 or 99.67%.
This decrease reflects only ancillary sales of parts and services
and no sales of Turbopacs? during the first two quarters. An
additional factor is the transfer of sales and marketing to
Honeywell, pursuant to the joint development agreements, in which
Honeywell recognizes sales of prototypes to the OEMs, while we do
not.
COST OF GOODS SOLD
Cost of goods sold consists primarily of material, labor, and
applied overhead costs. Cost of goods sold for the six months
ended June 30, 2001 decreased to $2,900 from $370,000 for the six
months ended June 30, 2000, a decrease of $367,100 or 99.22%.
Cost of goods sold as a percentage of sales for the six months
ended June 30, 2001 decreased to 26.25% from 82.41% for the six
months ended June 30, 2000 and for the three months ended June
30, 2001 decreased to 39.80% from 64.64% for the three months
ended June 30, 2000. The decrease in cost of goods sold from June
30, 2001 to June 30, 2000 is reflective of the write down of
obsolete inventory in 2000 and lower sales in the first two
quarters of 2001.
GROSS PROFIT
Gross profit for the six months ended June 30, 2001 decreased to
$8,147, or 73.75% of sales from $78,000 or 17.37% of sales for
the six months ended June 30, 2000, a decrease of $69,853, or
89.56% and for the three months ended June 30, 2001 decreased to
$363 from $64,000 for the three months ended June 30, 2000, a
decrease of $63,637 or 99.43%. The increase in gross profit as a
percentage of sales reflects the loss of sales of Turbopacs? in
the first quarter of 2001 and lower cost of goods sold.
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SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
Selling, general and administrative expenses for the six months
ended June 30, 2001 decreased to $1,138,133 from $2,243,000 for
the six months ended June 30, 2000, a decrease of $1,104,867, or
49.26% and for the three months ended June 30, 2001 decreased to
$510,097 from $1,391,000 for the three months ended June 30,
2000. The decrease in selling, general and administrative expense
is attributable to management's continuing efforts to reduce
costs and staff attrition.
RESEARCH AND DEVELOPMENT COSTS
Research and development costs for the six months ended June 30,
2001 decreased to $1,422,927 from $2,970,000 for the six months
ended June 30, 2000, a decrease of $1,547,073, or 52.09%, and for
the three months ended June 30, 2001 decreased to $691,648 from
$1,724,000 for the three months ended June 30, 2000, a decrease
of $1,032,352 or 59.88%. The decrease was primarily attributable
to Honeywell's increased participation in the development cost of
the Dynacharger? product line and the recovery in the first and
second quarter of those monies that we expended in 2000 that
exceeded the amount required in the joint development agreement.
We anticipate research and development costs will continue to be
significant as we move forward our current development goal and
refine development of the Dynacharger? to meet OEM
specifications and production requirements.
OTHER INCOME AND EXPENSES
Other income and expense consists of interest expense, litigation
expense and other income. Interest expense net of interest income
for the six months ended June 30, 2001 decreased to $3,339 from
$78,000 for the six months ended June 30, 2000, and for the three
months ended June 30, 2001 decreased to $342 from $37,000 for the
three months ended June 30, 2000. Litigation expense was $257,238
for the six months ended June 30, 2001, with an increase of
$242,186 during the second quarter period ended June 30, 2001.
The increase is primarily attributable to possible litigation as
result of the Company's general layoff and restructuring effort
at period end.
NET LOSS
Net loss for the six months ended June 30, 2001 was $2,842,439
compared to $5,144,000 for the same period in 2000, a decrease of
$2,301,561 or 44.74% and for the three months ended June 30, 2001
decreased to $1,466,257 from $3,026,000 for the three months
ended June 30, 2000, a decrease of $1,559,743 or 51.54%.
LIQUIDITY AND CAPITAL RESOURCES
The Company's operations have been financed principally through
the private sale of our equity securities.
Cash used in operating activities for the six months ended June
30, 2001 and 2000, was $2,196,159 and $2,477,000, respectively.
For the six months ended June 30, 2001, cash
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used in operating activities decreased $280,841 from the prior
period.
Cash used in investing activities for the six months ended June
30, 2001 and 2000 was $0 and $16,000, respectively.
Cash provided by financing activities for the six months ended
June 30, 2001 and 2000 was $2,196,159 and $2,708,000,
respectively, resulting primarily from the sale of equity.
In an effort to create operating efficiencies and preserve
working capital, for the six months ended June 30, 2001 we
continued our restructuring program, which included efforts to
sublet unused space at our headquarters, staff attrition,
disposal of unnecessary assets and inventory and overall attempts
at reducing operating costs.
As of August 17, 2001, the Company had a negative cash position
of $147,035. If we are not able to obtain sufficient working
capital to satisfy our working capital needs we may be required
to cease operations and seek relief under the appropriate
statutes. Accordingly, there is substantial doubt about our
ability to continue as a going concern.
Quantitative and Qualitative Disclosures About Market Risk
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Not Applicable
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PART II. OTHER INFORMATION
Item 1. Legal Proceedings
Turbodyne Technologies, Inc. et al. v. Sheppard, Mullin.
In our report on Form 10-Q/A for
the quarter ended March 31, 2001, we reported that our company, at the
request of our board of directors, had been dismissed as a plaintiff
in this action for attorney malpractice. However, on July 16, 2001,
our newly elected board of directors reversed the decision of the
previous board and instructed counsel to file an amended complaint
naming our company as plaintiff. Counsel anticipates that such a
complaint will be filed.
The Sheppard action is one of three actions initiated by Rainer
Wollny, former president and chief executive officer, both on behalf
of the company as plaintiff and as a deriviative suit on behalf of the
company by individual directors and stockholders. All three actions
were approved by the current board on July 16, 2001.
In addition to the Sheppard action, these actions include: Turbodyne
Tehnologies, Inc. v. Durairaj, et al., in which damages are sought for
alleged fraud by the sellers to our company (including three former
members of our board of directors) of the business formerly operated
by our wholly-owned subsidiary, Pacific Baja Light Metals, Inc.,
and Turbodyne Technologies v. Anderson, et al.
in which damages are sought for alleged mismanagement and breach
of fiduciary duty by certain former directors and other members of
management relating to the Light Metals acquisition, the suspension by
EASDAQ of trading in the Company's shares and other matters.
In view of the board's approval of these actions, it is believed that
they can no longer be maintained as stockholders' derivative suits
and that as a result our company will become the sole plaintiff.
On July 2, 2001, arbitration proceedings were initiated by Honeywell
International requesting termination of the Joint Development
Agreement between it and Turbodyne. Our Company's new management is
currently engaged in discussions with Honeywell looking toward
resolution by agreement of both parties' concerns relating to the
Agreement.
Item 2. Changes in Securities and Use of Proceeds
On April 5, 2001, we sold 133,333 shares of our common stock and
issued warrants to purchase an additional 133,333 shares of common
stock for a total purchase price of approximately $20,000. The shares
were sold to an accredited investor, who is also one of our
directors, in reliance on Regulation D and/or Section 4(2) of the
Securities Act. The warrants are exercisable at a price per share of
approximately $.38 on or before April 5, 2004.
On April 6, 2001, we sold 133,333 shares of our common stock and
issued warrants to purchase an additional 133,333 shares of common
stock for a total purchase price of approximately $20,000. The shares
were sold to an accredited investor, who is also one of our
directors, in reliance on Regulation D and/or Section 4(2) of the
Securities Act. The
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warrants are exercisable at a price per share of approximately $.38
on or before April 6, 2004.
On April 12, 2001, we sold 66,667 shares of our common stock and
issued warrants to purchase an additional 66,667 shares of common
stock for a total purchase price of approximately $10,000. The shares
were sold to an accredited investor in reliance on Regulation S
and/or Section 4(2) of the Securities Act. The warrants are
exercisable at a price per share of approximately $.38 on or before
April 12, 2004.
On April 24, 2001, we sold 327,373 shares of our common stock and
issued warrants to purchase an additional 327,373 shares of common
stock for a total purchase price of approximately $45,832.20. The
shares were sold to an accredited investor in reliance on Regulation
D and/or Section 4(2) of the Securities Act. The warrants are
exercisable at a price per share of approximately $.35 on or before
April 24, 2004.
On April 24, 2001, we sold 287,122 shares of our common stock and
issued warrants to purchase an additional 287,122 shares of common
stock for a total purchase price of approximately $45,939.60. The
shares were sold to an accredited investor in reliance on Regulation
D and/or Section 4(2) of the Securities Act. The warrants are
exercisable at a price per share of approximately $.40 on or before
April 24, 2004.
On April 25, 2001, we sold 327,858 shares of our common stock and
issued warrants to purchase an additional 327,858 shares of common
stock for a total purchase price of approximately $45,900. The shares
were sold to an accredited investor in reliance on Regulation D
and/or Section 4(2) of the Securities Act. The warrants are
exercisable at a price per share of approximately $.35 on or before
April 25, 2004.
On April 26, 2001, we sold 142,857 shares of our common stock and
issued warrants to purchase an additional 142,857 shares of common
stock for a total purchase price of approximately $20,000. The shares
were sold to an accredited investor, who is also one of our
directors, in reliance on Regulation D and/or Section 4(2) of the
Securities Act. The warrants are exercisable at a price per share of
approximately $.35 on or before April 26, 2004.
On May 11, 2001, we sold 90,910 shares of our common stock and issued
warrants to purchase an additional 90,910 shares of common stock for
a total purchase price of approximately $10,000. The shares were sold
to an accredited investor, who is also one of our officers, in
reliance on Regulation D and/or Section 4(2) of the Securities Act.
The warrants are exercisable at a price per share of approximately
$.28 on or before May 11, 2004.
On May 15, 2001, we sold 63,636 shares of our common stock and issued
warrants to purchase an additional 63,636 shares of common stock for
a total purchase price of approximately $7,000. The shares were sold
to an accredited investor, who is also one of our directors, in
reliance on Regulation D and/or Section 4(2) of the Securities Act.
The warrants are exercisable at a price per share of approximately
$.28 on or before May 15, 2004.
On May 17, 2001, we sold 70,000 shares of our common stock and issued
warrants to purchase an additional 70,000 shares of common stock for
a total purchase price of
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approximately $7,700. The shares were sold to an accredited investor,
who is also one of our directors, in reliance on Regulation D and/or
Section 4(2) of the Securities Act. The warrants are exercisable at
a price per share of approximately $.28 on or before May 17, 2004.
On May 22, 2001, we sold 642,857 shares of our common stock and
issued warrants to purchase an additional 642,857 shares of common
stock for a total purchase price of approximately $90,000. The shares
were sold to an accredited investor in reliance on Regulation D
and/or Section 4(2) of the Securities Act. The warrants are
exercisable at a price per share of approximately $.35 on or before
May 22, 2004.
On June 1, 2001, we sold 55,556 shares of our common stock and issued
warrants to purchase an additional 55,556 shares of common stock for
a total purchase price of approximately $10,000. The shares were sold
to an accredited investor, who is also one of our directors, in
reliance on Regulation D and/or Section 4(2) of the Securities Act.
The warrants are exercisable at a price per share of approximately
$.45 on or before June 1, 2004.
On June 8, 2001, we sold 70,012 shares of our common stock and issued
warrants to purchase an additional 70,012 shares of common stock for
a total purchase price of approximately $14,702.61. The shares were
sold to an accredited investor in reliance on Regulation D and/or
Section 4(2) of the Securities Act. The warrants are exercisable at a
price per share of approximately $.53 on or before June 8, 2004.
On June 13, 2001, we sold 50,000 shares of our common stock and
issued warrants to purchase an additional 50,000 shares of common
stock for a total purchase price of approximately $10,000. The shares
were sold to an accredited investor, who is also one of our
directors, in reliance on Regulation D and/or Section 4(2) of the
Securities Act. The warrants are exercisable at a price per share of
approximately $.50 on or before June 13, 2004.
On June 19, 2001, we sold 625,000 shares of our common stock and
issued warrants to purchase an additional 625,000 shares of common
stock for a total purchase price of approximately $100,000. The
shares were sold to an accredited investor in reliance on Regulation
D and/or Section 4(2) of the Securities Act. The warrants are
exercisable at a price per share of approximately $.40 on or before
June 19, 2004.
On June 28, 2001, we sold 625,000 shares of our common stock and
issued warrants to purchase an additional 625,000 shares of common
stock for a total purchase price of approximately $100,000. The
shares were sold to an accredited investor in reliance on Regulation
D and/or Section 4(2) of the Securities Act. The warrants are
exercisable at a price per share of approximately $.40 on or before
June 28, 2004.
Item 3. Defaults Upon Senior Securities
Not applicable.
Item 4. Submission of Matters to a Vote of Security Holders
None.
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Item 5. Other Information
None.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits.
EXHIBIT DESCRIPTION
NUMBER -----------
- ------
99.1 Press Release dated April 4, 2001
99.2 Press Release dated April 17, 2001
99.3 Press Release dated May 9, 2001
99.4 Press Release dated May 10, 2001
(b) Reports on Form 8-K
On August 17, 2001, we filed a Current Report on Form 8-K to
announce the change in the Company's principal accountant.
SIGNATURE
Pursuant to the requirements of the Securities Exchange 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.
August 19, 2001 By: /s/ Charles Caverno
Charles Caverno,
Acting Chief Financial Officer
(Duly Authorized Officer and
Principal Financial Officer)
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Exhibit 99.1
TURBODYNE ANNOUNCES CHANGES IN MANAGEMENT,
ELECTION OF A NEW DIRECTOR AND DISMISSAL OF LAWSUITS
Carpinteria, California - April 4, 2001 - Turbodyne Technologies, Inc.
(EASDAQ: TRBD) today announced actions taken by its Board of Directors
relating to changes in management, the election of a new director and
the dismissal of certain lawsuits.
At a special meeting held on Friday, March 30, 2001, the Board of
Directors elected Mugurdich Balabanian, M.D. as the Chairman of the
Board. Dr. Balabanian replaces Dr. Friedrich Goes who resigned as a
director on March 9, 2001. In addition, the Board terminated Dr.
Rainer Wollny as President and Chief Executive Officer and appointed
Kenneth F. Fitzpatrick as acting President and Chief Executive
Officer. Mr. Fitzpatrick has served as the Vice-President-Group
Finance of the Company since June 1997. Mr. Fitzpatrick is a graduate
of Babson College of Wellesley, Massachusetts. Mr. Fitzpatrick's
experience in the investment community spans over thirty-five years.
Mr. Fitzpatrick serves on several Company Boards and also is active in
civic and community activities in Santa Barbara, serving as a board
member of Opera Santa Barbara.
Dr. Balabanian noted: "The challenges facing our company require a
rare combination of expertise in automotive technology, finance and
management. In particular, Turbodyne requires a leader who can draw
together the Company's many constituencies into a single team, all
members of which are united in striving for a common goal. We are
fortunate to have in Ken Fitzpatrick, an individual who not only has
expertise in financial matters, but who commands the respect of the
Board, as well as members of management, our research and development
staff and our investors both in the United States and abroad.
In addition, the Board elected Robert Taylor as a Class II director
who will serve until the annual meeting of shareholders in Year 2002
and until his successor is elected and qualified. Mr. Taylor served as
a director of the Company from 1996 until his resignation in October,
2000.
"We are indeed fortunate that Mr. Taylor, who was for so many years a
bridge between the various constituencies on the Board and among the
Company's shareholders, is willing to again provide his moderating
influence," said Dr. Balabanian.
The Board also determined that various lawsuits initiated in the
Company's name against members of management and the Board and the
Company's principal law firm were without merit and had been initiated
without the approval of the Board. Accordingly, the Board directed the
dismissal of all such litigation.
"It is simply beyond comprehension," stated Dr. Balabanian, "that the
Company should squander its limited resources launching multiple
lawsuits when faced with so many critical issues, particularly when
these lawsuits are directed against the very people who are financing
the Company's daily operations, developing its technology and
uncovering and correcting the abuses of prior management. The goal of
this Board and management is clear: "To join all factions in a common
effort to provide a sound financial basis for the Company that will
enable it to successfully exploit its technology for the benefit of
the shareholders. In trying to meet this objective, I will try to
unify the US and Overseas board members, build faith and trust in each
other, and share responsibilities together in order to make the right
decisions. I hope in working together we are able to achieve a common
goal, especially in promoting and pursuing the interest of our
shareholders".
Turbodyne Technologies, Inc., a California based high technology
company, specializes in the
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development of charging technology for internal combustion engines
and the development and manufacturing of high-tech assemblies for
electrically assisted turbochargers and superchargers. Turbodyne
Technologies' headquarters is located in Carpinteria, California,
and its European office is located in Frankfurt, Germany.
Contacts:
Kenneth Fitzpatrick - Investor Relations at California Headquarters:
(800) 566-1130
This release contains forward-looking statements as defined in Section
21E of the Securities Exchange Act of 1934, including statements about
future business operations, financial performance and market
conditions. Such forward-looking statements involve risks and
uncertainties inherent in business forecasts.
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Exhibit 99.2
TURBODYNE ANNOUNCES VOLUNTARY DE-LISTING OF
STOCK FROM NASDAQ EUROPE (FORMERLY EASDAQ)
Carpinteria, California - April 17, 2001 - Turbodyne Technologies,
Inc. (NASDAQ EUROPE: TRBD) announced today that on April 9, 2001 it
requested voluntary de-listing of its shares from trading on NASDAQ
Europe (formerly EASDAQ). On April 10, 2001, at a meeting of the
Market Authority of NASDAQ Europe, the voluntary de-listing was
accepted. Disciplinary proceedings against the Company are to be
withdrawn. Turbodyne will pay secretarial support costs of EURO 4,000.
Turbodyne continues to trade in the United States on the O.T.C. "Pink
Sheets" market, under the symbol TRBD. To keep investors informed, the
Company will issue press releases through the Business Wire, Dow,
Jones and on our web site, www.turbodyne.com. Securities and Exchange
Commission filings will be made quarterly (Form 10-Q) and annually
(Form 10-K). The Company will distribute to shareholders Annual
Reports and Proxy material so that the shareholders will be informed
of company activities and can vote on corporate issues.
"Because of our current capitalization situation," said Mr. Kenneth
Fitzpatrick, Company's President and CEO, "which did not meet NASDAQ
Europe continuing listing requirements, it seemed prudent to seek
voluntary de-listing of our shares. When our situation improves, the
Company's Board of Directors will consider filing for a re-listing."
Turbodyne Technologies, Inc., a California based high technology
company, specializes in the development of charging technology for
internal combustion engines and the development and manufacturing of
high-tech assemblies for electrically assisted turbochargers and
superchargers. Turbodyne Technologies' headquarters is located in
Carpinteria, California, and its European office is located in
Frankfurt, Germany.
Contacts:
Kenneth Fitzpatrick - President and CEO at California Headquarters:
(800) 566-1130
This release contains forward-looking statements as defined in Section
21 E of the Securities Exchange Act of 1934, including statements
about future business operations, financial performance and market
conditions. Such forward-looking statements involve risks and
uncertainties inherent in business forecasts.
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Exhibit 99.3
TURBODYNE ANNOUNCES DISMISSAL OF LAWSUITS
Carpinteria, California - May 9, 2001 - Turbodyne Technologies, Inc.
(TRBD) announced today that on Tuesday, May 8, 2001, the Superior
Court of the State of California granted the Company's request and
ordered that (i) the Company's lawsuit against its former corporate
counsel be dismissed and (ii) the counsel claiming to represent the
Company in such action be removed and replaced by counsel selected by
the Board of Directors.
On January 24, 2001, Rainer Wollny, the former President and Chief
Executive Officer of the Company, retained Norbert A. Schlei, Esq. to
represent the Company in an action against the Company's former
corporate counsel. Mr. Wollny did not obtain the consent of the Board
of Directors to retain Mr. Schlei or to file the lawsuit. On March 30,
2001, the Board of Directors determined that the lawsuit was without
merit, ordered the lawsuit dismissed and directed Mr. Schlei to cease
representing the Company.
Mr. Schlei represents Ed Halimi, a former Chairman of the Board,
President and Chief Executive Officer of the Company, in a pending
investigation by the United States Securities and Exchange Commission.
The Company believes that the investigation pertains to certain press
releases issued by the Company between May 1997 and September 1998. In
April 1999, the Nasdaq Listing Qualifications Panel determined to
delist the Company's securities from The Nasdaq Stock Market. In the
opinion of the Panel, the Company engaged in a pattern of issuing
misleading and incomplete press releases, which often were unsupported
by an adequate basis in fact.
Dr. Balabanian, the Chairman of the Board, noted: "We are delighted
that the Court has upheld the decision of the Board of Directors to
dismiss this meritless lawsuit. It is simply beyond comprehension that
this Company should squander its limited resources launching lawsuits
against the very people who have been tireless in uncovering and
correcting the abuses of prior management. The selection of Mr.
Schlei, who has a clear conflict of interest, as counsel raises
serious questions concerning the true purpose of this lawsuit."
Kenneth Fitzpatrick, the successor to Mr. Wollny as President and
Chief Executive Officer, stated: "I sincerely hope that all parties
will now join together and redirect their energy to addressing the
critical issues facing our Company, particularly improving our working
capital position."
Turbodyne Technologies, Inc., a California based high technology
company, specializes in the development of charging technology for
internal combustion engines and the development and manufacturing of
high-tech assemblies for electrically assisted turbochargers and
superchargers. Turbodyne Technologies' headquarters is located in
Carpinteria, California, and its European office is located in
Frankfurt, Germany.
Contacts:
Kenneth Fitzpatrick - President and CEO at California Headquarters:
(800) 566-1130
This release contains forward-looking statements as defined in Section
21E of the Securities Exchange Act of 1934, including statements about
future business operations, financial performance and market
conditions. Such forward-looking statements involve risks and
uncertainties inherent in business forecasts.
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Exhibit 99.4
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