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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, 2005


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: 000-30709


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.)


PO Box 1239

115 CANFIELD ROAD

LA VERNIA, TEXAS

78121

(Address of principal executive offices)

(Zip Code)


830-779-5213

(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 – 23,635,817 shares outstanding at March 31, 2005.



SEC 1296 (1-04)  Potential persons who are required to respond to the collection of information contained in this form are not required to respond unless the form displays a currently valid OMB number.




1






POWERCOLD CORPORATION AND SUBSIDIARIES

FORM 10Q

MARCH 31, 2005




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

7


Item 2:

Management's Discussion and Analysis of

Financial Condition and Results of Operations.

12


Item 3:

Quantitative and Qualitative Disclosures About Market Risk.

22


Item 4.

Controls and Procedures.

22


PART II.   OTHER INFORMATION


Item 1.

Legal Proceedings.

24


Item 2.

Changes in Securities.

26


Item 3.

Defaults Upon Senior Securities.

26


Item 4.

Submission of Matters to a Vote of Security Holders.

26


Item 5.

Other Information.

26


Item 6.

Exhibits and Reports on Form 8-K.219


Signature

27


Certifications

28














2







POWERCOLD CORPORATION AND SUBSIDIARIES

FORM 10Q

MARCH 31, 2005


PART I - FINANCIAL INFORMATION


ITEM 1.  CONSOLIDATED FINANCIAL STATEMENTS


POWERCOLD CORPORATION

       

CONSOLIDATED BALANCE SHEETS

 

 

 

 

 

 

 

        

March 31,

 

December 31,

        

2005

 

2004

  

2003

ASSETS

         
 

CURRENT ASSETS

       
  

Cash

  

$

427,510

$

1,206,416

$

 

374,678

  

Restricted cash

 

100,000

 

100,000

  

-

  

Contracts and retentions receivable, net of allowance

 

6,986,565

 

5,411,110

  

2,388,495

  

Costs and estimated earnings in excess

       
   

on contracts in progress

 

-

 

-

  

245,535

  

Inventory

  

169,950

 

120,926

  

11,156

  

Prepaid expenses

 

252,224

 

141,790

  

100,118

    

Total Current Assets

 

7,936,249

 

6,980,242

  

3,119,982

OTHER ASSETS

       
  

Property and equipment, net

 

319,862

 

335,675

  

135,858

  

Patent rights and related technology, net

 

1,210,141

 

1,248,805

  

1,306,731

  

Securities available for sale

 

-

 

-

  

19,317

  

Deposits

  

10,688

 

10,828

  

10,828

    

Total Other Assets

 

1,540,691

 

1,595,308

  

1,472,734

     

TOTAL ASSETS

$

9,476,940

$

8,575,550

$

 

4,592,716

              

LIABILITIES AND STOCKHOLDERS' EQUITY

       
 

CURRENT LIABILITIES

       
  

Accounts and retentions payable

$

5,128,753

$

3,577,077

$

 

896,447

  

Accrued expenses

 

277,175

 

189,387

  

356,583

  

Billings in excess of costs and estimated earnings

       
   

on contracts in progress

 

389,255

 

380,873

  

947,807

  

Commissions and royalty payable

 

258,574

 

252,948

  

8,180

  

Accounts payable, related party

 

97,236

 

172,236

  

417,236

  

Convertible debt, net of discounts

 

1,666,666

 

1,166,666

  

334,014

  

Notes payable, current portion

 

43,715

 

42,036

  

-

  

Current portion of capital lease payable

 

-

 

-

  

632

   

Total Current Liabilities

 

7,861,374

 

5,781,223

  

2,960,899

 

LONG-TERM LIABILITIES

       
  

Convertible note payable, net of current portion

 

2,388,092

 

2,755,590

  

-

  

Note payable, net of current portion

 

7,800

 

8,546

  

-

  

Capital leae payable, net of current portion

 

-

    

-

   

Total Long-term Liabilities

 

2,395,892

 

2,764,136

  

-

 

COMMITMENTS AND CONTINGENCIES

 

-

 

-

  

69,417

 

STOCKHOLDERS' EQUITY

       
  

Convertible preferred stock, Series A, $0.001

       
   

par value; 5,000,000 shares authorized, no

       
   

shares issued and outstanding

 

-

 

-

  

-

  

Common stock, $0.001 par value; 200,000,000

       
   

shares authorized, 23,635,817; 21,576,750, and 18,442,066

       
   

shares issued and outstanding, respectively

 

23,638

 

23,486

  

21,578

  

Additional paid-in capital

 

20,920,133

 

20,621,207

  

17,384,460

  

Accumulated deficit

 

(21,724,097)

 

(20,614,502)

  

(15,862,955)

  

Accumulated other comprehensive income

 

-

 

-

  

19,317

    

Total Stockholders' Equity (Deficit)

 

(780,326)

 

30,191

  

1,562,399

     

TOTAL LIABILITIES AND

       
      

STOCKHOLDERS' EQUITY

$

9,476,940

$

8,575,550

$

 

4,592,716


See accompanying condensed notes.



3






POWERCOLD CORPORATION

 CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

          
    

Three Months Ended March 31,

    

2005

 

2004

 

2003

 REVENUES

      
 

 Contracts including equipment

$

2,430,439

$

2,113,228

$

-

 

 Equipment

 

153,528

 

127,875

 

1,112,334

  

 Total Revenues

 

2,583,967

 

2,241,103

 

1,112,334