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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2003
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _________ to _________
Commission File Number: 333-19584
POWERCOLD CORPORATION
(Exact name of registrant as specified in its charter)
NEVADA
23-2582701
(State or other jurisdiction of incorporation or organization)
(I.R.S. Employer Identification No.)
115 CANFIELD ROAD
LA VERNIA, TEXAS
78121
(Address of principal executive offices)
(Zip Code)
210-659-8450
(Registrant's telephone number, including area code)
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. [X] Yes [ ] No
Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes [ ] No [X]
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. [ ] Yes [ ] No
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. Common Stock, par value $0.001 – 19,202,066 shares outstanding at March 31, 2003.
POWERCOLD CORPORATION AND SUBSIDIARIES
FORM 10Q
MARCH 31, 2003
INDEX
Page
PART I.
FINANCIAL INFORMATION
Item 1:
Consolidated Financial Statements
Consolidated Balance Sheets
3
Consolidated Statements of Operations
4
Consolidated Statements of Cash Flows
5
Condensed Notes to Consolidated Financial Statements
6
Item 2:
Management's Discussion and Analysis of
Financial Condition and Results of Operations.
9
Item 3:
Quantitative and Qualitative Disclosures About Market Risk.
13
Item 4.
Controls and Procedures.
13
PART II. OTHER INFORMATION
Item 1.
Legal Proceedings.
16
Item 2.
Changes in Securities.
16
Item 3.
Defaults Upon Senior Securities.
16
Item 4.
Submission of Matters to a Vote of Security Holders.
16
Item 5.
Other Information.
16
Item 6.
Exhibits and Reports on Form 8-K.
16
Signature
17
Certification
18
POWERCOLD CORPORATION AND SUBSIDIARIES
FORM 10Q
MARCH 31, 2003
PART I - FINANCIAL INFORMATION
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS
POWERCOLD CORPORATION CONSOLIDATED BALANCE SHEETS | |||||||||
March 31, | December 31, | ||||||||
2003 | 2002 | 2001 | |||||||
Unaudited | |||||||||
ASSETS | |||||||||
CURRENT ASSETS | |||||||||
Cash | $ 97,686 | $ 93,372 | $ 290,174 | ||||||
Trade accounts receivable, net of allowance | 1,007,260 | 296,179 | 173,769 | ||||||
Receivables from related parties | - | - | 1,686 | ||||||
Inventory | 153,109 | 180,433 | 241,853 | ||||||
Prepaid expenses | 92,000 | 3,875 | 22,500 | ||||||
Total Current Assets | 1,350,055 | 573,859 | 729,982 | ||||||
OTHER ASSESTS | |||||||||
Property and equipment, net | 128,737 | 132,622 | 41,113 | ||||||
Patent rights and related technology, net | 504,658 | 526,716 | 382,108 | ||||||
Goodwill, net | 16,866 | 16,866 | 16,866 | ||||||
Prepaid royalties | 400,000 | 400,000 | - | ||||||
Securities available for sale | 19,317 | 38,800 | 970,000 | ||||||
Deposits and prepaid rent | 16,489 | 6,336 | 9,645 | ||||||
Total Other Assets | 1,086,067 | 1,121,340 | 1,419,732 | ||||||
Net assets from discontinued operations | - | 689,810 | |||||||
TOTAL ASSETS | $ 2,436,122 | $ 1,695,199 | $ 2,839,524 | ||||||
LIABILITIES AND STOCKHOLDER' EQUITY | |||||||||
CURRENT LIABILITIES | |||||||||
Accounts payable and accrued expenses | $ 945,967 | $ 345,899 | $ 232,204 | ||||||
Commissions and royalty payable | 55,067 | 55,067 | 55,067 | ||||||
Advance from shareholder | 201,760 | 196,760 | - | ||||||
Note payable | 34,014 | 34,014 | 36,329 | ||||||
Current portion of capital lease payable | 3,018 | 3,321 | 3,018 | ||||||
Total Current Liabilities | 1,239,826 | 635,061 | 326,618 | ||||||
CAPITAL LEASE PAYABLE, net of current portion | 326 | 600 | 5,413 | ||||||
COMMITMENTS AND CONTINGENCIES | 271,203 | 277,903 | 168,300 | ||||||
STOCKHOLDERS' EQUITY | |||||||||
Convertible preferred stock, Series A, $0.001 | |||||||||
par value: 5,000,000 shars authorized, 0 | |||||||||
shares issued and outstanding | - | - | - | ||||||
Common stock, $0.001 par value:200,000,000 | |||||||||
share authorized, 19,202,066, 18,442,066 and 16,027,882 | |||||||||
share issued and outstanding, respectively | 19,203 | 18,442 | 16,027 | ||||||
Additional paid-in capital | 14,189,020 | 13,644,779 | 10,210,665 | ||||||
Stock options and warrants | 504,998 | 504,998 | 471,980 | ||||||
Accumulated deficit | (13,807,771) | (13,425,384) | (9,329,479) | ||||||
Accumulated other comprehensive income | 19,317 | 38,800 | 970,000 | ||||||
Total Stockholder's Equity | 924,767 | 781,635 | 2,339,193 | ||||||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 2,436,122 | $ 1,695,199 | $ 2,839,524 | ||||||
See accompanying condensed notes.
POWERCOLD CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS | |||||||||
Three Months Ended March 31 | |||||||||
2003 | 2002 | 2001 | |||||||
Unaudited | Unaudited/Restated | Unaudited/Restated | |||||||
REVENUES | |||||||||
Product Sales | $ 1,081,507 | $ 327,587 | $ 247,004 | ||||||
Services | 30,827 | 23,163 | 42,340 | ||||||
Total Revenues | 1,112,334 | 350,750 | 289,344 | ||||||
COST OF REVENUES | 919,478 | 287,130 | 149,691 | ||||||
GROSS PROFIT | 192,856 | 63,620 | 139,653 | ||||||
OPERATING EXPENSES | |||||||||
Sales, marketing and advertising | 95,934 | 138,286 | 130,716 | ||||||
General and administrative | 454,127 | 637,957 | 278,926 | ||||||
Depreciation and amortization | 25,068 | 27,967 | 23,360 | ||||||
Total Operating Expenses | 575,129 | 804,210 | 433,002 | ||||||
LOSS FROM OPERATIONS | (382,273) | (740,590) | (293,349) | ||||||
OTHER INCOME (EXPENSES) | |||||||||
Royalty income | - | - | 44,785 | ||||||
Interest income | 60 | (1,572) | 1,996 | ||||||
Interest and financing expense | (242) | - | (55,834) | ||||||
Other Income | 68 | - | - | ||||||
Total Other Income (Expense) | (114) | (1,572) | (9,053) | ||||||
LOSS BEFORE INCOME TAX | (382,387) | (742,162) | (302,402) | ||||||
INCOME TAX EXPENSES | - | - | - | ||||||
LOSS FROM CONTINUING OPERATIONS | (382,387) | (742,162) | (302,402) | ||||||
LOSS FROM DISCONTINUED OPERATIONS | (15,502) | (25,488) | |||||||
NET LOSS | (382,387) | (757,664) | (327,890) | ||||||