<PAGE>

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

                                   FORM 10-QSB

[X]     Quarterly  Report pursuant to Section 13 or 15(d) of the Securities
        Exchange  Act  of  1934

        For  the  quarterly  period  ended  June  30,  2002

[ ]     Transition  Report  pursuant to 13 or 15(d) of the Securities Exchange
        Act  of  1934

        For  the  transition  period to


          Commission  File  Number     000-21391
                                       ---------

                           TURBODYNE TECHNOLOGIES INC.
          -----------------------------------------------------------------
          (Exact name of small Business Issuer as specified in its charter)

DELAWARE                                               95-4699061
-------------------------------                        ----------------------
(State or other jurisdiction of                        (IRS Employer
incorporation or organization)                         Identification No.)


6155 Carpinteria Avenue,
Carpinteria, California                                93013
-----------------------------------------              -------------
(Address of principal executive offices)               (Zip Code)

Issuer's telephone number, including area code:        (805) 684-4551
                                                       --------------

                                 NOT APPLICABLE
           ---------------------------------------------------------
          (Former name, former address and former fiscal year end,
                          if changed since last report)

Check  whether  the issuer (1) 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 issuer was required to file such
reports),  and  (2) has been subject to such filing requirements for the past 90
days  [X]  Yes    [ ]  No

State the number of shares outstanding of each of the issuer's classes of common
stock,  as  of  the  latest practicable date:  97,581,385 shares of common stock
issued  and  outstanding  as  of  August  2,  2002.


<PAGE>
                         PART 1 - FINANCIAL INFORMATION

Item 1.     Financial Statements

The accompanying unaudited financial statements have been prepared in accordance
with  the  instructions  to Form 10-QSB and Item 310 (b) of Regulation S-B, and,
therefore, do not include all information and footnotes necessary for a complete
presentation  of  financial  position,  results  of  operations, cash flows, and
stockholders'  equity  in  conformity  with  generally  accepted  accounting
principles.  In  the opinion of management, all adjustments considered necessary
for a fair presentation of the results of operations and financial position have
been  included  and  all  such  adjustments  are  of  a normal recurring nature.
Operating  results  for  the  six months ended June 30, 2002 are not necessarily
indicative  of the results that can be expected for the year ending December 31,
2002.

<PAGE>

          Turbodyne  Technologies,  Inc.  and  Subsidiaries
          Consolidated  Financial  Statements
          For  the  six-month  periods  ended  June  30,  2002  and  2001
          (Unaudited  -  Expressed  in  US  Dollars)


<PAGE>


          Turbodyne  Technologies,  Inc.  and  Subsidiaries
          Consolidated  Financial  Statements
          For  the  six-month  periods  ended  June  30,  2002  and  2001
          (Unaudited  -  Expressed  in  US  Dollars)


                                                                        Contents
Consolidated  Financial  Statements
--------------------------------------------------------------------------------
     Balance  Sheets
     Statements  of  Operations
     Statements  of  Capital  Deficit
     Statements  of  Cash  Flows
     Notes  to  the  Financial  Statements


<PAGE>

<TABLE>
<CAPTION>

                         Turbodyne  Technologies,  Inc.  and  Subsidiaries
                                               Consolidated Balance Sheets
                                               (Expressed in US Dollars)


                                            June 30          December 31
                                             2002            2001
--------------------------------------------------------------------------
<S>                                   <C>                   <C>
Assets                                     (Unaudited)
Current
  Cash                                $           187,644   $      20,257
  Prepaid expenses
  and other current assets                          3,475               -
                                      --------------------  --------------
  Total current assets                            191,119          20,257

Property and equipment,
 at cost, less
 accumulated depreciation                         191,693         210,550
Licenses, at cost
 less accumulated
 amortization                                     936,000       1,040,000
                                      --------------------  --------------

Total Assets                          $         1,318,812   $   1,270,807
==========================================================================


Liabilities and
Capital Deficit

Liabilities
Current
  Current maturities of
  long-term debt                      $            73,071   $      73,071
  Accounts payable                              2,582,896       2,751,769
  Accrued liabilities                             662,746         354,474
  Loans payable (Note 3)                          173,000               -
  Accrual for lawsuit
  settlements                                   6,169,238       6,169,238
                                      --------------------  --------------

  Total liabilities                             9,660,951       9,348,552
                                      --------------------  --------------
Capital Deficit
  Share Capital
    Authorized
        1,000,000 preferred shares,
        par value $0.001
        99,000,000 common shares,
        par value $0.001
    Issued
        95,784,255 common
       shares in 2002
       (2001 - 84,036,915)                         95,784          84,037
  Treasury stock,
   at cost (378,580 shares)                    (1,755,534)     (1,755,534)
  Additional paid-in capital                  110,166,503     108,147,994
  Accumulated other
  comprehensive income -
    Foreign exchange
    translation gain                               35,119          35,119
  Accumulated deficit                        (116,884,011)   (114,589,361)

                                      --------------------  --------------

  Total capital deficit                        (8,342,139)     (8,077,745)
                                      --------------------  --------------
Contingencies (Note 4)
Total Liabilities and
Capital Deficit                       $         1,318,812   $   1,270,807
==========================================================================
<FN>

      The  accompanying  notes  are  an  integral  part  of
            these consolidated financial statements.

</TABLE>





<PAGE>
<TABLE>
<CAPTION>

                                     Turbodyne  Technologies,  Inc.  and  Subsidiaries
                                                 Consolidated Statements of Operations
                                                 (Unaudited - Expressed in US Dollars)


                                   Three-month            Six-month
                                 periods ended          periods ended
                                    June 30                      June 30
                              2002          2001          2002          2001
--------------------------------------------------------------------------------
<S>                       <C>           <C>           <C>           <C>
Net sales (returns)       $         -   $      (973)  $         -   $     9,470
Cost of goods sold                  -           240             -         2,900
                          ------------------------------------------------------
    Gross profit (loss)             -        (1,213)            -         6,570
                          ------------------------------------------------------
Expenses
  Selling, general and
  administrative               97,597       497,826       365,272     1,125,862
  Research and
  developmental costs         388,235       691,648     1,343,088     1,422,927
  Litigation                  188,679       242,186       459,580       257,238
  Depreciation and
  amortization                 66,000        23,070       132,075        46,141
                          ------------------------------------------------------

    Total expenses            740,511     1,454,730     2,300,015     2,852,168
                          ------------------------------------------------------

Loss from operations         (740,511)   (1,455,943)   (2,300,015)   (2,845,598)
                          ------------------------------------------------------
Other income (expenses)
  Other, net                    2,595           722         5,491        17,192
  Interest expense,
  net                               -          (341)         (126)       (3,338)
                          ------------------------------------------------------

Net loss for the period   $  (737,916)  $(1,455,562)  $(2,294,650)  $(2,831,744)
================================================================================
Net loss per
common share
================================================================================
  Basic and diluted       $     (0.01)  $     (0.02)  $     (0.03)  $     (0.04)
================================================================================

Weighted average
 shares outstanding
 used for basic
  and diluted loss
  per
  share                    91,954,652    64,600,790    90,207,848    63,333,260
================================================================================

<FN>

                 The  accompanying  notes  are  an  integral part
                    of these consolidated financial statements.

</TABLE>

<PAGE>

<TABLE>
<CAPTION>

                                                         Turbodyne  Technologies,  Inc.  and  Subsidiaries
                                                                Consolidated Statements of Capital Deficit
                                                                     (Unaudited - Expressed in US Dollars)

                                                                              Other
                                                                 Additional Comprehensive    Accu-
                       Common Stock     Treasury Stock           Paid-in      Income         mulated
                  Shares    Amount     Shares       Amount       Capital       (Loss)        Deficit
<S>               <C>         <C>      <C>         <C>           <C>           <C>          <C>
----------------------------------------------------------------------------------------------------------
Balance, December
 31, 2000         58,151,821  $58,152     378,580  $(1,755,534)  $101,126,022       35,119  $(107,224,141)

Exercise of
 stock options     3,874,566    3,875           -            -        461,463            -              -
Private placement
 of common stock  11,930,528   11,930           -            -      1,897,692            -              -
Issuance of stock
 for services      3,780,000    3,780           -            -        790,020            -              -
Issuance of stock
 recorded as
 compensation      3,500,000    3,500                               1,466,500            -              -

Issuance of stock and
 warrants for
 licenses          2,000,000    2,000           -            -      1,038,000            -              -
Issuance of stock
 and warrants
 for settlement
 of a guarantee      800,000      800           -            -        251,200            -              -
Issuance of stock
 options for non-
 employees for services    -        -           -            -      1,117,097            -              -
Net loss and
 comprehensive
 loss for the year         -        -           -            -              -            -     (7,365,220)
                  ----------  -------  ----------  ------------  ------------  -----------  --------------

Balance, December
 31, 2001         84,036,915   84,037     378,580   (1,755,534)   108,147,994       35,119   (114,589,361)
Private placement
 of common stock   8,296,340    8,296           -            -        971,621            -              -
Exercise of
 stock options       720,000      720           -            -        103,280            -              -
Issuance of stock
 for services      2,731,000    2,731           -            -        898,499            -              -
Issuance of stock
 options to non-
 employees for services    -        -           -            -         45,109            -              -
Net loss and
 comprehensive
 loss for the period       -        -           -            -              -            -     (2,294,650)
                  ----------  -------  ----------  ------------  ------------  -----------  --------------

Balance, June
 30, 2002         95,784,255  $95,784  $  378,580  $(1,755,534)  $110,166,503  $    35,119  $(116,884,011)
                  ==========  =======  ==========  ============  ============  ===========  ==============

                                  Total
                                  Capital
                                  Deficit
                                ------------
<S>                             <C>
Balance, December 31, 2000      $(7,760,382)

Exercise of stock options           465,338

Private placement
 of common stock                  1,909,622

Issuance of stock
 for services                       793,800

Issuance of stock
 recorded as compensation         1,470,000

Issuance of stock and
 warrants for licenses            1,040,000

Issuance of stock and
 warrants for settlement
 of a guarantee                     252,000

Issuance of stock
 options for non-
 employees for services           1,117,097

Net loss and comprehensive
 loss for the year               (7,365,220)
                                 -----------
Balance, December 31, 2001       (8,077,745)

Private placement
 of common stock                    979,917

Exercise of stock options           104,000

Issuance of stock for services      901,230

Issuance of stock
 options to non-
 employees for services              45,109

Net loss and
 comprehensive
 loss for the period             (2,294,650)
                                ------------
Balance, June 30, 2002          $(8,342,139)
                                ============
<FN>

        The  accompanying  notes  are  an  integral  part  of
             these  consolidated  financial  statements.





</TABLE>


<PAGE>

<TABLE>
<CAPTION>


                                Turbodyne Technologies, Inc. and Subsidiaries
                                        Consolidated Statements of Cash Flows
                                         (Unaudited - Expressed in US Dollars)


For the six-month periods
ended June 30                          2002          2001
                                   ------------  ------------
<S>                                <C>           <C>
Cash provided by (used in)

Operating activities
  Net loss for the period          $(2,294,650)  $(2,831,744)
  Adjustments to reconcile
   net loss for the
   period to net cash
   used in operating
   activities:
    Depreciation and
     amortization                      132,075        46,141
    Issuance of
     stock for services                901,230             -
    Stock option
     compensation                       45,109             -
    Stock and warrants
     issued on settlement
     of guarantee                            -       252,000
  (Increase) decrease
   in operating assets
    Trade accounts
     receivable                              -       300,148
    Employee advances
     receivable                              -        (1,000)
    Inventories                              -         2,900
    Prepaid expenses
     and other current
     assets                             (3,475)            -
    Other assets                             -         4,793
  Increase (decrease)
   in operating liabilities
    Accounts payable                  (168,873)      121,695
    Accrued liabilities
     and reserve for
     lawsuit settlements               308,272        35,563
                                   ------------  ------------

                                    (1,080,312)   (2,069,504)
                                   ------------  ------------
Investing activity
  Purchase of property
  and equipment                         (9,218)            -
                                   ------------  ------------

Financing activities
  Net proceeds from
  (repayment of) short-
  term borrowings                            -       (99,458)
  Loans payable                        173,000             -
  Issuance of common
   stock and stock
   subscriptions                     1,083,917     2,032,923
  Increase in cash overdraft                 -       136,039
                                   ------------  ------------

                                     1,256,917     2,069,504
                                   ------------  ------------
Net increase in cash                   167,387             -
Cash, beginning
 of period                              20,257             -
                                   ------------  ------------

Cash, end
of period                          $   187,644   $         -
                                   ============  ============
Supplementary disclosure of
cash flow information
  Cash paid during
   the period
    Interest                       $         -   $         -
    Income taxes                   $         -   $     3,200
Supplementary disclosure
 of non-cash investing
 and financing activities
  Issuance of stock for services   $   901,230   $         -
  Stock option compensation        $    45,109   $         -
  Stock and warrants
  issued on settlement
  of a guarantee                   $         -   $   252,000
                                   ============  ============


            The  accompanying  notes  are  an  integral part
               of these consolidated financial statements.

</TABLE>





<PAGE>
                                   Turbodyne Technologies, Inc. and Subsidiaries
                                  Notes to the Consolidated Financial Statements
                                           (Unaudited - Expressed in US Dollars)
June  30,  2002  and  2001

1.     Nature  of  Business  and  Ability  to  Continue  as  a  Going  Concern

     Turbodyne Technologies, Inc., a Deleware corporation, and subsidiaries (the
Company)  engineer,  develop and market products designed to enhance performance
and  reduce  emissions  of  internal  combustion  engines.

     The  interim  financial statements included herein, presented in accordance
with  United  States  generally  accepted accounting principles and stated in US
dollars, have been prepared by the Company, without audit, pursuant to the rules
and  regulations of the Securities and Exchange Commission.  Certain information
and  footnote  disclosures normally included in financial statements prepared in
accordance  with generally accepted accounting principles have been condensed or
omitted  pursuant  to  such rules and regulations, although the Company believes
that  the  disclosures  are  adequate  to  make  the  information  presented not
misleading.

     These  financial  statements  reflect all adjustments, consisting of normal
recurring  adjustments,  which  in  the opinion of management, are necessary for
fair  presentation  of  the information contained therein.  It is suggested that
these  interim  financial  statements  be  read  in conjunction with the audited
financial  statements  of  the Company for the years ended December 31, 2001 and
2000 included in the Company's 10-K Annual Report.  The Company follows the same
accounting  policies  in  the  preparation  of  interim  reports.

     Results  of operations for the interim periods are not indicative of annual
results.

     The  accompanying  consolidated  financial  statements  have  been prepared
assuming  that  the  Company  will continue as a going concern.  The Company has
suffered  net  losses  in  recent periods resulting in an accumulated deficit of
$116,884,011  at  June  30,  2002,  has used cash in its operating activities in
recent  periods,  is  subject to lawsuits brought against it by shareholders and
other  parties,  and based on the Company's projected cash flows for the ensuing
year it will be required to seek additional equity or debt financing in order to
continue its present operations, irrespective of the amounts to be paid, if any,
in connection with the aforementioned lawsuits.  These matters raise substantial
doubt  about  the  Company's  ability  to  continue  as  a  going  concern.

     The  Company's  operations  have  been  financed  principally  through  a
combination of private and public sales of equity and debt securities.  Although
the  Company  continues  to raise operating funds with a combination of debt and
equity  instruments  there  is  no  guarantee  that  the Company will be able to
continue  to  finance operations by this method.  The Company is also limited in
raising  funds  through  the  sale  of  equity  because of the limited remaining
authorized  shares  available  for  sale.

     The  Company  continues  to examine its operation and processes for further
methods  of  cutting  costs  and  gaining  efficiencies.  However,  there  is no
assurance  that  the  cost  reductions will be realized in the full amount.  The
Company  is  examining  alternatives  for  financing  and fulfilling its working
capital  needs  based  on  its  working  capital projections.  If the Company is
unable  to  satisfactorily  settle  litigation,  including  its  dispute  with
Honeywell,  the  present  holder  of  the  Company's  core  technology and raise
substantial  monies  to  meet  its  working  capital needs, it may have to cease
operating  and  seek  relief  under  appropriate  statutes.


<PAGE>
                                   Turbodyne Technologies, Inc. and Subsidiaries
                                  Notes to the Consolidated Financial Statements
                                           (Unaudited - Expressed in US Dollars)
June  30,  2002  and  2001

2.     Stockholders'  Equity
--
     Transactions  not  disclosed  elsewhere  in  these  consolidated  interim
financial  statements  are  as  follows:
     a)     Stock  Options
          In  addition  to the existing stock option plans, on June 3, 2002, the
Company  established  the  2002  stock option plan (the "2002 Plan").  Under the
2002  Plan,  the Company may grant options to its directors, officers, employees
and  consultants  for  up  to  6,000,000  shares  of common stock.  The option's
maximum  term is ten years.  The Stock Option Committee will determine the terms
of  any options or other rights granted under the 2002 Plan, including the grant
date  of  any  option, the exercise price and the term, which in any event shall
not  exceed  ten  years.  The  maximum number of options to be granted under the
2002  Plan  to  any  participant  is  180,000  per  year.
          The  following summarizes information relating to stock options during
2002:




                                                               2002
                          Non-employees               Employees          Total
                                 Weighted          Weighted           Weighted
                                 Average           Average            Average
                                 Exercise          Exercise           Exercise
                       Options    Price   Options  Price    Options    Price
                      --------------------------------------------------------
Outstanding at
 beginning of period  1,913,415   $ 0.33        -  $    -  1,913,415   $ 0.33
  Granted               430,000     0.35  525,000    0.35    955,000     0.35
  Exercised            (720,000)    0.14        -       -   (720,000)    0.14
                      --------------------------------------------------------

  Outstanding at end
  of period           1,623,415   $ 0.42  525,000  $ 0.35  2,148,415   $ 0.40
                      ========================================================

  Options exercisable at
   end of period      1,623,415   $ 0.42  525,000  $ 0.35  2,148,415   $ 0.40
                      =========================================================




     b)     Issuance  of  Stock  Options  to  Non-employees  for  Services
            --------------------------------------------------------------

          The Company has recorded $45,109 (2001 - $Nil) of compensation expense
in  2002 relating to stock options issued to non-employees for services rendered
during  the  period.

     c)     Stock  Purchase  Warrants

          At  June  30, 2002, the Company had 23,967,977 stock purchase warrants
outstanding,  respectively.  These  warrants  were  issued  in  connection  with
private  placements and other means of financing.  The holders of these warrants
are entitled to receive one share of common stock of the Company for one warrant
exercised.  The  warrants  have  exercise prices ranging from $0.11 to $4.00 and
expiration  dates  between  2003  and  2004.

<PAGE>

                                   Turbodyne Technologies, Inc. and Subsidiaries
                                  Notes to the Consolidated Financial Statements
                                           (Unaudited - Expressed in US Dollars)
June  30,  2002  and  2001

3.     Loans  Payable

     During  the  period  ended  June  30,  2002,  the  Company  received  from
shareholders  and  other  parties  $303,000  in  unsecured, non-interest bearing
advances.  Management expects that the amounts owing will be settled through the
issuance  of  common  stock  and  share  purchase  warrants.

4.     Contingencies

     The Company is party to various legal claims and lawsuits which have arisen
in  the  normal  course of business.  There have been no material changes in the
status  of  these  matters  since the issuance of the most recent audited annual
financial  statements.

5.     New  Accounting  Pronouncements

     In  June  2001, the Financial Accounting Standards Board finalized SFAS No.
141,  "Business  Combinations", and SFAS No. 142, "Goodwill and Other Intangible
Assets".  SFAS  141  requires  the  use of the purchase method of accounting and
prohibits  the use of the pooling-of-interests method of accounting for business
combinations  initiated  after  June  30,  2001. SFAS 141 also requires that the
Company recognize acquired intangible assets apart from goodwill if the acquired
intangible  assets  meet  certain  criteria.  SFAS  141  applies to all business
combinations  initiated  after  June  30,  2001  and  for  purchase  business
combinations completed on or after July 1, 2001. It also requires, upon adoption
of  SFAS  142,  that  the  Company reclassify the carrying amounts of intangible
assets  and  goodwill  based  on  the  criteria  in  SFAS  141.

     SFAS  142  requires,  among other things, that companies no longer amortize
goodwill,  but  instead  test  goodwill  for  impairment  at  least annually. In
addition,  SFAS  142  requires that the Company identify reporting units for the
purposes  of  assessing  potential  future impairments of goodwill, reassess the
useful  lives  of  other  existing  recognized  intangible  assets,  and  cease
amortization  of intangible assets with an indefinite useful life. An intangible
asset  with  an  indefinite  useful  life  should  be  tested  for impairment in
accordance  with the guidance in SFAS 142. SFAS 142 is required to be applied in
fiscal  years  beginning  after  December  15,  2001  to  all goodwill and other
intangible  assets recognized at that date, regardless of when those assets were
initially  recognized.  SFAS 142 requires the Company to complete a transitional
goodwill  impairment  test  six months from the date of adoption. The Company is
also required to reassess the useful lives of other intangible assets within the
first  interim  quarter  after  adoption  of  SFAS  142.

     The  Company's  previous business combinations were accounted for using the
purchase  method.  The adoption of SFAS 141 and SFAS 142 did not have a material
effect  on  the  Company's  financial  statements.

     In  October  2001, the Financial Accounting Standards Board issued SFAS No.
144, "Accounting for the Impairment or Disposal of Long-Lived Assets".  SFAS No.
144  requires  that those long-lived assets be measured at the lower of carrying
amount  or  fair  value  less  cost  to  sell,  whether  reported  in continuing
operations  or  in  discontinued operations.  Therefore, discontinued operations
will  no  longer  be  measured  at  net  realizable value or include amounts for
operating  losses  that  have  not  yet occurred.  SFAS No. 144 is effective for
financial  statements  issued for fiscal years beginning after December 15, 2001
and,  generally, is to be applied prospectively.  The implementation of this new
standard  did  not have a material effect on the Company's financial statements.

<PAGE>

                                   Turbodyne Technologies, Inc. and Subsidiaries
                                  Notes to the Consolidated Financial Statements
                                           (Unaudited - Expressed in US Dollars)
June  30,  2002  and  2001

6.     Comparative  Amounts

     Certain  comparative  amounts  have been restated to conform to the current
period's  presentation.

7.     Subsequent  Events

     Subsequent  to  June  30,  2002  and  subject to regulatory acceptance, the
Company completed a merger with an inactive shell company and was reincorporated
as  a Nevada corporation.  In connection therewith, the authorized common shares
of  the  Company  will  increase  to  150,000,000.


<PAGE>

Item 2.     Management's Discussion and Analysis or Plan of Operations

FORWARD  LOOKING  STATEMENTS

The  information  in  this discussion contains forward-looking statements within
the  meaning  of  Section  27A  of  the  Securities Act of 1933, as amended, and
Section  21E  of  the  Securities  Exchange  Act  of  1934,  as  amended.  These
forward-looking statements involve risks and uncertainties, including statements
regarding  the  Company's capital needs, business strategy and expectations. Any
statements  contained  herein that are not statements of historical facts may be
deemed  to  be  forward-looking  statements.  In  some  cases,  you can identify
forward-looking  statements  by  terminology  such  as  "may", "will", "should",
"expect",  "plan",  "intend",  "anticipate",  "believe",  "estimate", "predict",
"potential"  or  "continue",  the  negative  of  such  terms or other comparable
terminology. Actual events or results may differ materially. In evaluating these
statements, you should consider various factors, including the risks outlined in
the  Risk  Factors  section  below, and, from time to time, in other reports the
Company files with the SEC. These factors may cause the Company's actual results
to  differ  materially from any forward-looking statement. The Company disclaims
any  obligation  to publicly update these statements, or disclose any difference
between  its  actual  results  and  those  reflected  in  these  statements. The
information  constitutes  forward-looking  statements  within the meaning of the
Private  Securities  Litigation  Reform  Act  of  1995.

OVERVIEW

We are a design and engineering company engaged in the design and development of
air  charging  technology  that  enhances the performance of internal combustion
engines.  Our  technology  is  based  on  DC/AC,  high-speed,  high-powered,
electronically  commutated  electric  motors.   Our  business  strategy involves
entering into license agreements with original equipment manufacturers ("OEM's")
in  the  automotive  industry  who  would  incorporate our technology into their
product  lines in exchange for the payment of royalties or other similar license
fees.

We have incorporated our technology into two initial primary products, which are
(1)  the  Dynacharger(TM)  and  (2)  the  Turbopac(TM).  We  transferred  the
intellectual  property  associated with our Dynacharger and Turbopac products to
Honeywell, Inc. ("Honeywell") in 1999.  Our rights to these products are now the
subject of a license agreement and a joint development agreement with Honeywell.
We  are  now  involved  in  legal  proceedings  regarding  our  agreements  with
Honeywell.  See  Item  1  of  Part  II  -  Legal  Proceedings.

We are presently finalizing the development of additional products incorporating
new  technology,  including a product known as the TurboAir.  These new products
are  in  various stages of design and development.  Our ability to commercialize
these  new products is conditional upon us entering into arrangements with OEM's
that  provide  for  the  final  development and manufacturing of these products.

We  are  currently  in  a transition phase of our business to an engineering and
design business from a business model that originally included manufacturing and
marketing  of products incorporating our technology.   Our operating results for
the  six  months  ended  June  30,  2002  reflect the fact that Honeywell is not
proceeding  with  the commercialization of the Turbopac and Dynacharger products
and  we  are  not  earning  revenues under our license agreement with Honeywell.

We  are  currently  not  earning  any  revenues under our license agreement with
Honeywell  or  through  sales  of  products  incorporating  our  new technology.


                                       4

<PAGE>


PLAN  OF  OPERATIONS

Our  plan  of  operations  over  the  next  twelve  months  is  to undertake the
following:

1.   We  plan  to continue research and development of our TurboAir product with
     the  objective  of  completing  the  necessary  development  work  for
     commercialization  of this product. We plan to spend approximately $650,000
     in  pursuing  this  research  and  development  over  the next twelve month
     period;

2.   We plan to pursue negotiations with original equipment manufacturers in the
     automobile  industry  ("OEM's")  for  the  incorporation  of  our  TurboAir
     products  into  the  OEM's  product  lines.  We plan to spend approximately
     $85,000  in  pursuing these negotiations over the next twelve month period;

3.   We plan to continue research and development of our products, including new
     products  incorporating  our  e-boosting  technology, with the objective of
     completing  the  necessary  development work for commercialization of these
     products. We plan to spend approximately $450,000 in pursuing this research
     and  development  over  the  next  twelve  month  period;

4.   We  plan  to  pursue  resolution  of the outstanding litigation against us,
     including  resolution of the claims summarized in Item 1 of Part II of this
     Quarterly Report on Form 10-QSB. We plan to spend approximately $450,000 in
     litigation  expenses  over  the  next  twelve  month  period;

5.   We  anticipate  spending  approximately $750,000 in administrative expenses
     over the next twelve months in maintaining our head office and staff in our
     Carpenteria,  California  office.

We  had  cash  of  $187,644 as at June 30, 2002 and a working capital deficit of
$9,469,832  as  at  June 30, 2002.  Our plan of operations calls for us to spend
approximately $2,385,000 over the next twelve months, with approximately half of
this  amount  being  incurred over the next six months.  Accordingly, we are not
able  to  pursue  our  stated  plan of operations without substantial additional
financing.  We  are  pursuing  additional  sales  of  our common stock and share
purchase  warrants  to  raise  the  financing  necessary  for  us  to  continue
operations.  We  have  no  arrangements in place for additional equity financing
and there is no assurance that additional equity financing will be obtained.  We
believe  that conventional debt financing is not a financing option to us due to
the  development  stage of our products, our lack of revenues and the litigation
to which we are party.  Based on these risks, there is no assurance that we will
be  able  to carry out our plan of operations. If we achieve less financing than
required  to  pursue  our  stated  plan of operations, then we will be forced to
reduce  our  research and development activities and our administrative overhead
costs.

RESULTS  OF  OPERATIONS

Net  Sales

We did not achieve any sales during the six months ended June 30, 2002.  Our net
sales  were $9,470 for the six months ended June 30, 2001.  Sales during the six
months  ended  June  30,  2001  consisted  entirely of refurbishment of Turbopac
products  sold  under our contract with Detroit Diesel Corporation.  Our current
inability  to  earn revenues reflects the fact that (i) our new TurboAir product
and other new products remain in the development stage; and (ii) we are not able
to  earn


                                       5

<PAGE>

any  revenues  pursuant  to our license agreement with Honeywell as Honeywell is
not  completing  any  sales  of the Turbopac or Dynacharger products. There have
been  no  sales of the Turbopac(TM) product by Honeywell since June 2000 and our
Dynacharger  product  remains  in  development.

We  anticipate  that  we will not be able to generate any revenues from sales of
the  Turbopac or Dynacharger products until we are successful in entering into a
new  license  and  manufacturing  arrangement  with  a  new  automotive OEM.  We
anticipate  that  we will not be able to generate sales of our TurboAir products
until  we  are  able  to  enter into an agreement with an automotive OEM for the
final  development  and  manufacture  of  this  product.

Costs  of  Sales

We  did not have any costs of sales during the six months ended June 30, 2002 in
view  of  the  fact that we had no sales. Cost of goods sold were $2,900 for the
six  months  ended  June  30,  2001 and $240 for the three months ended June 30,
2002.  We  did  not  engage  in any manufacturing activity during the six months
ended  June  30,  2002  and  we  anticipate  that  we  will  not  undertake  any
manufacturing  activity  during 2002, other than manufacturing of prototypes for
evaluation  and  demonstration  purposes.

Gross  Profit

Gross profit for the six months ended June 30, 2002 was $NIL compared to a gross
profit of $6,570 for the six months ended June 30, 2001 and $1,213 for the three
months  ended  June  30,  2002.  The  gross  profit  for  the first half of 2002
reflects  our lack of revenues and the fact that we are currently not engaged in
any  manufacturing  activities.

Selling,  General  and  Administrative  Expenses

Selling,  general  and administrative expenses for the six months ended June 30,
2002  decreased  to  $365,272  from $1,125,862 for the six months ended June 30,
2001,  representing  a  decrease  of  $760,590  or  67.6%.  Selling, general and
administrative  expenses  for  the three months ended June 30, 2002 decreased to
$97,597  from  $497,826 for the three months ended June 30, 2001, representing a
decrease  of  $400,229  or  80.4%.   The  decrease  in  our selling, general and
administrative  expenses  was attributable to our determination in 2001 to scale
back  our  business  operations  to  reflect  our  lack of financing and reduced
marketing  expenses  as  a  result  of  the fact that we were no longer directly
marketing  the  Turbopac  and  Dynacharger products.  General and administrative
costs  included expenses associated with our Carpinteria, California office, our
European  office,  management  compensation,  administrative staff and overhead.
Selling expenses were minimal as we did not undertake any marketing efforts with
respect  to  the  Turbopac and Dynacharger products in the first half of 2002 as
these  products  were  governed  by our agreements with Honeywell.  Our European
office  was  closed  in  the  second  quarter  of  2002.

Research  and  Development

Research  and development costs for the six months ended June 30, 2002 decreased
to $1,343,088 from $1,422,927 for six months ended June 30, 2001, representing a
decrease  of  $79,839 or approximately 5.6%.  Research and development costs for
the  three  months  ended  June 30, 2002 decreased to $388,235 from $691,648 for
three  months  ended  June  30,  2001,  representing  a  decrease of $303,413 or
approximately  43.9%.  Our  research  and  development activities during the six
months  ended  June  30, 2002 did not include any joint research and development
with  Honeywell  and involved primarily developing and testing prototypes of our
TurboAir products   Research and development costs for the six months ended June
30, 2001 primarily included our


                                       6

<PAGE>

participation  in  our  joint  development  agreement with Honeywell. This joint
research  and  development  with  Honeywell  was  terminated  on  June 28, 2001.

Litigation  Expense

We incurred expenses related to litigation in the amount of $459,580 for the six
months  ended  June  30, 2002 compared to $257,238 for the six months ended June
30,  2001.    We  incurred  expenses  related  to  litigation  in  the amount of
$188,679  for  the three months ended June 30, 2002 compared to $242,186 for the
three  months  ended  June  30, 2001.  The increase in litigation expense in the
amount  of  $202,342  for the six months ended June 30, 2002 was attributable to
our  involvement in the legal proceedings described in Item 1 of Part II of this
Quarterly  Report  on  Form  10-QSB.  The  most  significant  component  of  our
litigation  expense  during  the  first  half  of  2002  was attributable to our
litigation  with Honeywell.  Litigation expenses decreased in the second quarter
of  2002  due  to  a  reduction  in  activity  in  our  legal  proceedings.

Net  Loss

Our net loss for the six months ended June 30, 2002 decreased to $2,294,650 from
a  net loss of $2,831,744 for the six months ended June 30, 2001, representing a
decrease of $537,094 or 19.0%.  Our net loss for the three months ended June 30,
2002  decreased  to  $737,916 from a net loss of $1,455,562 for the three months
ended  June  30,  2001,  representing  a  decrease  of  $717,646  or 39.3%.  The
decreases  to  our  net  loss  were primarily reflective of the decreases to our
total  operating  expenses  in  2002  compared  to  2001.

FINANCIAL  CONDITION

We had cash of $187,644 as at June 30, 2002, compared with cash of $20,257 as at
December  31,  2001.  Our  working capital deficit increased to $9,469,832 as at
June  30,  2002,  compared  to  a  working  capital  deficit of $9,328,295 as at
December  31,  2001.  The  largest component of our working capital deficit is a
reserve for lawsuit settlements in the amount of $6,169,238 as at June 30, 2002.

As  of  June  30,  2002,  our current liabilities included a reserve for lawsuit
settlements  in  the  amount  of  $6,169,238,  accounts payable in the amount of
$2,582,896,  accrued  liabilities in the amount of $662,746 and loans payable in
the amount of $173,000.  The largest component of our working capital deficit is
the  reserve  for  lawsuit  settlements.  The  legal  proceedings to which these
reserves  relate are summarized in Item 1 to Part II of this Quarterly Report on
Form  10-QSB.  Our accrued liabilities increased to $662,746 as of June 30, 2002
from  $354,474  as  of  December  31,  2001  due  to  operating  activities.

Cash  used  in  operating  activities for the six months ended June 30, 2002 was
$1,080,312,  compared  to  $2,069,504  for  the  six months ended June 30, 2001.

We  financed  our  business  operations  during the first half of 2002 primarily
through  private  placement  sales  of  our  common  stock,  short  term  loans,
conversion  of  accrued  liabilities  into  stock and through an increase in our
accrued  liabilities.   Cash provided by financing activities for the six months
ended  June  30,  2002 was $1,256,917, compared to $2,069,504 for the six months
ended June 30, 2001.  Financing activities included the issuance of common stock
and  share purchase warrants for aggregate proceeds of $1,083,917 during the six
months ended June 30, 2002, compared to $2,032,923 for the six months ended June
30,  2001.  We  received  loans of $173,000 during the six months ended June 30,
2002, of which $173,000 were outstanding as of June 30, 2002.   During the three
months  ended  June 30, 2002, we converted liabilities owed to our


                                       7

<PAGE>

employees  and  consultants  in  the  amount  of  $901,230  into an aggregate of
2,731,000 shares of our common stock. These shares were registered on a Form S-8
registration  statement  that  we  filed  with  the  Securities  and  Exchange
Commission.

We  are  continuing  with a restructuring program that began in 1999 in order to
reduce  our  working  capital  requirements.  This  restructuring  program  has
included  the  reduction  of  debts,  settlement  of  lawsuits, closing offices,
efforts  to  sublet  unused space at our headquarters, staff reduction and staff
attrition,  disposal  of  unnecessary  assets  and  overall attempts at reducing
operating  costs.  In  addition  we  focused  our  resources  on  research  and
development  of  our  products  incorporating our proprietary technology, rather
than  manufacture  of  our  developed  products.

We  currently  have  minimal cash and working capital resources.  We do not have
adequate  financial  resources  in  order  to enable us to continue our business
operations without additional financing.  Our current sources of working capital
are  sufficient  to  satisfy  our  anticipated  working  capital  needs  for
approximately  the  next  two  weeks.  We  may  not be able to obtain additional
working  capital  on  acceptable  terms,  or  at  all.  Accordingly,  there  is
substantial  doubt  about  our  ability  to  continue  as  a  going  concern.

We  will  require  additional financing if we are to continue as a going concern
and  to  finance  our  business  operations.  We  anticipate that any additional
financing  would  be  through  the  sales  of  our  common or preferred stock or
placement  of  convertible  debt. We are presently in the process of negotiating
private  placements  of  our  securities to raise working capital to finance our
operations.  However,  we  do not have any arrangements in place for the sale of
any  of  our  securities and there is no assurance that we will be able to raise
the additional capital that we require to continue operations. In the event that
we  are  unable  to  raise additional financing on acceptable terms, then we may
have  to  scale  back  our  plan  of operations and operating expenditures.   We
anticipate that we will continue to incur losses until such time as the revenues
we  are  able  to  generate  from licensing of our products exceed our increased
operation  expenses. We base this expectation in part on the expectation that we
will  incur  increased  operating  expenses  in  completing  our  stated plan of
operations  and there is no assurance that we will generate revenues that exceed
these  expenses.

Substantial  Doubt  as  to  Our  Ability  to  Continue  as  a  Going  Concern

The  consolidated  financial  statements  included with this Quarterly Report on
Form  10-QSB  have  been  prepared  assuming  that  we  will continue as a going
concern.  We  have  suffered  net  losses  in  recent  periods  resulting  in an
accumulated  deficit  of  $116,884,011  at  June 30, 2002, have used cash in our
operating  activities  in  recent periods, have disposed of our most significant
subsidiary  through  bankruptcy,  are  subject to lawsuits brought against us by
shareholders  and  other  parties, and based on our projected cash flows for the
ensuing year, we will be required to seek additional equity or debt financing in
order  to  continue  our  present  operations, irrespective of the amounts to be
paid,  if  any,  in  connection with the aforementioned lawsuits.  These matters
raise  substantial  doubt  about  our  ability  to  continue as a going concern.


                                       8

<PAGE>

                           PART II - OTHER INFORMATION

Item  1.     Legal  Proceedings

We  are  a  party to the legal proceedings described below.  We are not party to
any  other  material legal proceedings and to our knowledge, no such proceedings
are  threatened  or  contemplated.

Honeywell  International,  Inc.

We  commenced  an  action against Honeywell in the United States District Court,
Central  District  of  California  in  August  2001.  We  have  alleged  that:

1.   Honeywell's  conduct  under  our  joint  development  agreement and license
     agreement constituted a restraint of trade in violation of the Sherman Act;

2.   the  individual  acts  and  decisions  of  Honeywell  have  resulted in the
     suppression  of  our  technology  and  the  prevention  and  delay  of  the
     commercialization  of  our  technology in contravention of the Sherman Act;

3.   Honeywell's  actions  constitute  instances  of monopolization or attempted
     monopolization  under  the  Sherman  Act  as  a  consequence of Honeywell's
     dominant  position  in  the  turbocharger  market;

4.   Honeywell's  wrongful  interference  with  our  attempts  to  enter  into
     manufacturing  arrangements  for components of the Turbopac and Dynacharger
     products  constituted  the  unlawful  restraint  of  trade,  an instance of
     monopolization  or  attempted  monopolization  and  unfair  competition;

5.   Honeywell's  actions constitute racketeering activity within the meaning of
     the  Racketeer  Influenced  and  Corrupt  Organizations  Act

We  had  claimed  damages  in  excess  of  $3 billion arising as a result of the
alleged  breaches of the Sherman Act by Honeywell.  Honeywell has filed a motion
to dismiss our claim on the basis that we lack standing to sue under the Sherman
Act and the Racketeer Influenced and Corrupt Organizations Act.  This motion was
not  heard.  We determined in the third quarter of 2002 to withdraw our law suit
against  Honeywell  pending  the  outcome  of  the  arbitration proceedings with
Honeywell  on  the  advice of legal counsel.  We will evaluate reinstating these
proceedings  in  the  event  that  we  are  not  successful  in  the arbitration
proceedings.

Prior  to  our  commencing  the above legal proceedings, Honeywell had initiated
arbitration  proceedings  with the American Arbitration Association in June 2001
under  our  license  agreement  and  joint development agreement with Honeywell.
Honeywell  is  seeking  termination  of  the  license  agreement  and  the joint
development agreement based on their allegations that we breached the agreements
and  are  unwilling  and  unable  to  perform  our  future obligations under the
agreements.  We  have  disputed that Honeywell is entitled to termination of the
license  agreement  and  the  joint development agreement.  We filed a motion to
stay  the  arbitration.  The  arbitrator  refused  to grant us our motion.   The
arbitration  hearing  is  scheduled  for  September  2002.

Litigation  Relating  to  Former  Subsidiary

In  September  1999,  Pacific  Baja  Light Metals Corporation, our former wholly
owned subsidiary, filed a Chapter 11 petition in bankruptcy in the United States
Bankruptcy  Court,  Central  District  of


                                       9

<PAGE>

California  (Case  No. RS99-26477MG) in Riverside, California. Substantially all
of  the  assets  of  Pacific  Baja  were  purchased  in  December  1999.

In  September  2001, the Pacific Baja Liquidating Trust commenced action against
us  in  the  United  States  Bankruptcy  Court, Central District of California -
Riverside  Division.  The  Pacific  Baja Liquidating Trust was established under
the  Pacific  Baja  bankruptcy  proceedings  for  the  benefit  of the unsecured
creditors  of  Pacific  Baja.   We did not become aware of this legal proceeding
until  February  2002.

The  Pacific  Baja  Liquidating  Trust  is  seeking:

1.   the  re-characterization  of our advances to Pacific Baja as equity and the
     subordination  of  our  unsecured  claims  against  Pacific  Baja;

2.   the  re-conveyance  of  an  aggregate  of  up  to  approximately $7,190,000
     transferred  by Pacific Baja to us and Turbodyne Systems on the basis of an
     allegation  of  fraudulent  transfer;

3.   an  order that we are liable for all of the debts of Pacific Baja totalling
     approximately  $7,000,000;

4.   damages  and punitive damages against us and certain of our former officers
     and  directors and the former officers and directors of Pacific Baja in the
     amount  of  up to approximately $12,000,000 based on various allegations of
     fraud,  misrepresentation,  breach  of  contract, alter ego and negligence.

We  have filed an answer denying liability.  We also contend that if we did have
any  liability  to  the creditors of Pacific Baja, our liability would be setoff
against  the  full  amount  of  our claims against Pacific Baja in the amount of
approximately  $6,000,000,  which  the bankruptcy court has subordinated but did
not  disallow.

We  are  pursuing  settlement negotiations in this proceeding.  We have proposed
that  we  would  surrender  our  claims  as  a  creditor  of  Pacific  Baja  in
consideration  for  a  release  of the other claims asserted by the Pacific Baja
Liquidating  Trust against us and the former officers and directors of Turbodyne
Systems  and  Pacific  Baja.  We will vigorously contest and defend any claim by
the Pacific Baja Liquidating Trust that would exceed our claims as a creditor of
Pacific  Baja  and that would be satisfied other than by a set-off of our claims
against  Pacific  Baja.

In  March  2000,  TST,  Inc., a vendor to a subsidiary of Pacific Baja, filed an
action  against  us  in  the California Superior Court, County of San Bernardino
alleging  that  we were liable under a guarantee that we granted to TST in order
to induce TST to extend credit to our subsidiary, Pacific Baja. TST alleged that
Pacific  Baja  had  defaulted  on  the credit facility and that we are liable as
guarantor. TST originally sought damages of approximately $1.8 million. However,
if  it  is determined that TST received payment in preference to other creditors
before Pacific Baja filed its Chapter 11 petition in bankruptcy, TST will likely
increase  its  claim  by  $2,130,000.

We  agreed  on  the  terms  of  settlement  with  TST  on October 4, 2001.  This
settlement  will  be  not be binding until a settlement agreement and release is
executed  between  TST  and  us.  We  have  agreed on the form of the settlement
agreement  and  release.  This  settlement  agreement  and  release has not been
executed  to  date.  Under  the  terms  of  the  settlement,  we  would:


                                       10

<PAGE>

     (i)  issue  1,000,000  shares  of our common stock to Mr. Andrew Stein, the
          president  of  TST, and we would agree to register the resale of these
          shares  by  Mr.  Stein  by  filing  a  registration statement with the
          Securities  and  Exchange  Commission;

     (ii) issue  2,000,000  shares  of  our  common  stock  to  TST;

   (iii)  agree to the stipulation for the entry of judgment that will provide
          for  the  immediate  entry  of  judgment  against  us in the amount of
          $2,066,078 plus interest form the date of entry at the rate of 10% per
          annum.  The  amount of this judgment would immediately increase by any
          amount  that TST is compelled by judgment or court order or settlement
          to return as a preferential transfer in connection with the bankruptcy
          proceedings  of  Pacific  Baja;

     (iv) any  proceeds received by TST or Mr. Stein from the sale of the issued
          shares  will  be automatically applied as a credit against that amount
          of  the  judgment  against  us  in  favor  of  TST.

We  have included an amount of $2,066,078 in our reserve for lawsuit settlements
on  our  consolidated  balance  sheet  as  at  June  30,  2002 in regard to this
settlement  with  TST.

In  May  2000, Heartland Financial Corporation filed a complaint for arbitration
against  us seeking approximately $600,000 representing a success fee it claimed
it is entitled to for investment banking services provided to Pacific Baja based
on  a  letter agreement between Heartland, Turbodyne and Pacific Baja. After the
letter  agreement  was  signed,  Pacific  Baja  filed  a  Chapter 11 petition in
bankruptcy.  At  the  conclusion  of  the bankruptcy proceedings, the bankruptcy
court awarded Heartland a portion of its fees. Heartland then sought the balance
of  the  fees  from  us.

Heartland  obtained  an  arbitration  award  against  us  in  the  amount  of
approximately  $535,490.  This  arbitration  award  was  entered  as  a judgment
against  us in the Superior Court of the State of California, City and County of
San  Francisco  in  June 2001.  We have appealed this judgment to the California
Court  of  Appeal  for  the  First  District.  We  are  awaiting  the  filing of
Heartland's response to our appeal.  We may be subject to collection proceedings
should  they  be  instigated  pending  the  appeal.

SEC  Investigation  and  Class  Action  Law  Suits

In  June  1999,  we received a formal request from the SEC for the production of
documents  relating  to press releases issued by our previous management between
May  1997  and  September 1998.  This investigation included an investigation of
the actions of Mr. Edward Halimi, one of our former chief executive officers and
a  former  director.  The  SEC  expanded  its  investigation  to  include  an
investigation  as  to  whether  we  had  issued  unregistered  shares without an
exemption  from the registration requirements of the SEC in contravention of the
Securities  Act  of  1933  (the  "1933  Act").

We consented to the entry of a final judgment of permanent injunction against us
as  part of a settlement reached by us with the SEC in January 2002.   Under the
stipulated  terms  of  this  settlement,  the  SEC filed an action against us on
January  25,  2002.  This action was concluded during February 2002 by the entry
of a final judgment in the United States District Court for the Central District
of  California,  Western  Division  in  the agreed form.  Under the terms of the
final  judgment,  it was ordered that we are permanently restrained and enjoined
from:

1.   violating  section  17(a)  of  the  1933 Act. Section 17(a) of the 1933 Act
     prohibits  fraudulent  devices  and schemes, misstatements and omissions of
     material  facts and acts and


                                       11

<PAGE>

     practices that operate as a fraud or deceit in connection with the offer or
     sale  of  any  securities;

2.   violating  section  10(b) of the Securities Exchange Act of 1934 (the "1934
     Act"),  including  Rule  10b-5.  Section  10(b)  of  the 1934 Act prohibits
     fraudulent  devices  and  schemes,  misstatements and omissions of material
     facts  and  acts  and  practices  that  operate  as  a  fraud  or deceit in
     connection  with  the  offer  or  sale  of  any  securities;

3.   violating section 13(a) of the 1934 Act by causing the filing of a periodic
     report  with  the  SEC  containing any misstatement or omission of material
     facts.

A  similar judgment was consented to by Mr. Halimi enjoining him from violations
of  section  17(a)  of  the  1933 Act, section 10(b) of the 1934 Act and section
13(a)  of the 1934 Act.  In addition, Mr. Halimi consented to a judgment against
him  in  the  amount  of  $50,000.

In  January  through  March  of 1999, six purported class action complaints were
filed  against us and certain of our officers and directors in the United States
District  Court  for  the  Central  District  of  California,  as  follows:

Abbreviated Case Name                    Case No.            Date Filed
-----------------------                  ---------           -----------

Takeda, et al. v. Turbodyne              CV-99-00697-MMM     1/22/99
 Technologies, et al.
Zaks, et al. v. Turbodyne                CV-99-00743-MMM     1/25/99
 Technologies, et al.
Lincscott, et al. v. Turbodyne           CV-99-00933-MMM     1/28/99
 Technologies, et al.
Siebert, et al. v. Turbodyne             CV-99-01288-MMM     2/08/99
 Technologies, et al.
Gentile, et al. v. Turbodyne             CV-99-02194-MMM     3/01/99
 Technologies, et al.
Giammarco, et al. v. Turbodyne           CV-99-02751-MMM     3/16/99
 Technologies, et al.

In  June  1999,  the court consolidated the above actions for all purposes under
the  caption In Re Turbodyne Technologies Securities Litigation, Master File No.
CV-99-00697-MMM  (BQRx).

The  plaintiff's  third amended consolidated class action complaint was filed on
or  about  January 27, 2001.  The amended class action complaint asserted claims
for  violations  of  sections  10(b) and 20(a) of the Securities Exchange Act of
1934  and  rule  10b-5  thereunder.  In  addition  to  Turbodyne, the defendants
included  Edward  Halimi, Leon Nowek and Walter Ware, each of whom is one of our
former  directors  and officers.  The consolidated action purports to be brought
on behalf of individuals claiming that they purchased shares of our common stock
during  the  period  from March 1, 1997 through January 22, 1999. The plaintiffs
seek  unspecified  damages  arising  from  alleged misstatements concerning such
matters  as  the  technological capability and actual and potential sales of our
Turbopac(TM)  products  and the demand and acceptance of this and other products
of ours. The plaintiffs allege that these alleged misstatements caused the price
of our common stock to be artificially inflated during the class period.   These
actions  were  tendered  to  our  insurance  carriers  who  appointed counsel to
represent  us.

We  have  reached  a  settlement agreement that we anticipate will result in the
final  disposition  of  these  legal proceedings.  This settlement agreement has
been approved by the insurance companies involved.  We have signed a stipulation
of  settlement  with  the  legal  counsel for the plaintiffs that sets forth the
terms  and  conditions  of  this settlement.  This stipulation of settlement has
been  submitted  to  the court for approval that has yet to be received to date.
The  settlement will not become final until such time as court approval has been
obtained,  the  time  for appeal has lapsed and funds are released in accordance
with  the  settlement  agreement.  The  agreed terms of settlement provide for a
stipulated  judgment  against  us  in the amount of $7.9 million.  This


                                       12

<PAGE>

judgment will be satisfied solely through our director's and officer's liability
insurance  policies. Our primary and excess insurers will pay approximately $2.9
million of this amount as a condition of settlement. The balance of $5.0 million
will  be  satisfied  from  the  proceeds of the second layer of an excess policy
issued  by  Reliance  Insurance  Company  to  be assigned to the plaintiffs. The
plaintiff's  case  against  us  and  our  co-defendants  will  be dismissed. The
plaintiffs  will not have any right to pursue execution against us or our assets
upon  finalization  of  the  settlement.

We have commenced an action in Superior Court of the State of California for the
County  of  Santa Barbara against Sheppard, Mullin, Richter & Hampton ("Sheppard
Mullin")  in  February  2001.   Sheppard, Mullin were by us engaged as our legal
counsel  for  securities  matters  in 2000.    We are claiming against Sheppard,
Mullin  for  damages  in  excess  of  $100  million dollars.  Our action against
Sheppard,  Mullin  is  based  on  attorney  malpractice arising from the alleged
failure  of  Sheppard  Mullin  to  advise Easdaq of our concern that we may have
issued  unregistered  securities  without  an  available  exemption  from  the
registration  requirements  of  the  1933  Act.  We  allege  that the failure of
Sheppard, Mullin to advise Easdaq of this issue in a timely manner caused Easdaq
to suspend the trading of our common stock on the Easdaq market, with the result
that  the  market  price  for  our  common  stock  was  significantly  devalued.

Sheppard,  Mullin  have  filed  a  defence  in this legal proceeding denying any
liability  to  us.  Discovery  consisting  of  the  production  of  documents,
interrogatories  and  the  taking  of oral dispositions has been pursued by both
parties.  This  action  was originally set for trial in June 2002 but is now set
for  trial  in  December  2002.

We  filed  an action in Superior Court of the State of California for the County
of  Santa  Barbara  (Case  No. 01046250) in March 2001 against Wendell Anderson,
Gerhard  Delf,  Sadayappa  K.  Durairaj, Naresh C. Saxena, Mugerdish Balabanian,
Kenneth Fitzpatrick, Alain G. Chardon, Joseph D. Castano and Marsha Chandler. We
determined  to  abandon  this  law  suit  against all defendants, other than Mr.
Anderson and Mr. Gelf.  Mr. Anderson is one of our former directors and Mr. Delf
is  one  of our former directors and our former chief executive officer.  We are
seeking  damages  for  alleged  breach of fiduciary duty by Mr. Anderson and Mr.
Delf  in  connection  with their handling of our dealings with Sheppard, Mullin,
our  former  securities  legal  counsel,  that have given rise to our litigation
against  Sheppard,  Mullin  and  our  acquisition  of  Pacific  Baja.

Mr.  Leon  Nowek, one of our former directors and former officer, has threatened
to  take  action  against  us  for an alleged breach of his employment agreement
dated August 1, 1997, as amended July 27, 1998.  Mr. Nowek claims to be entitled
to  payment of $1,620,000 in respect of alleged breaches by us of the employment
agreement.  An  additional  amount  of  $32,511  is  claimed  by  Mr.  Nowek for
reimbursement  of  legal  costs incurred by Mr. Nowek in connection with the SEC
investigation and class action lawsuit in which Mr. Nowek was named a party.  We
have a claim against Mr. Nowek in the amount of $225,000 in respect of a housing
loan  that  we  advanced  to Mr. Nowek and that has not been repaid.  We were in
settlement discussion with Mr. Nowek in 2000.  Negotiations broke down on August
11,  2000.  Mr.  Nowek  has  since  indicated to us that he is willing to resume
negotiations and we expect to commence negotiations in the third quarter of this
year.  If  we  are unable to reach settlement, we intend to refer the dispute to
arbitration  under  the  terms  of  the  employment  agreement.

Other  Legal  Proceedings

In  December  2000,  Alain  F. Lombard, one of our former consultants, served us
with  a  demand  for  arbitration.  Mr. Lombard alleged breach of contract.   We
agreed  to  a stipulated judgment against us in the amount of $180,535 in August
2001.  Repayment of this judgment is stipulated at $15,000 per month, commencing
October  2001.  We have completed the first payment of this stipulated


                                       13

<PAGE>

judgment. We are currently eight months in arrears. Mr. Lombard has the right to
accelerate  the  unpaid  portion of the judgment and enter judgment for the full
amount  if  we  default  on  our  payments  to  Mr.  Lombard.

In  December 2000, Bowne of Los Angeles served us with a complaint for breach of
contract  for  services  rendered.  Bowne  sought payment for past services plus
attorneys' fees and costs. Bowne was granted a judgment in the Superior Court of
Los  Angeles  against us in the amount of $49,427.74.  We have not yet paid this
judgment  and  intend  to attempt to negotiate a settlement of the amount owing.


Item  2.     Changes  in  Securities

During  the  three  months  ended  June  30, 2002, we completed the sales of the
following  securities that were not registered pursuant to the Securities Act of
1933  (the  "1933  Act"):

1.   We completed the sale of 71,429 units on April 11, 2002 at a price of $0.28
     per  unit.  We  have  received  proceeds  of $20,000 from the sale of these
     units.  Each  unit  was  comprised of one share of our common stock and one
     share  purchase warrant. Each share purchase warrant entitles the holder to
     purchase  one  share  of our common stock at a price of $0.74 per share for
     the  three  year  period  following  closing.  A total of 71,429 shares and
     71,429  share  purchase  warrants were issued. The purchaser was a European
     investor. No commissions or fees were paid in connection with the offering.
     The  sales  were  completed  pursuant  to  Regulation  S  of  the  Act.

2.   We completed the sale of 55,556 units on April 16, 2002 at a price of $0.27
     per  unit.  We  have  received  proceeds  of $15,000 from the sale of these
     units.  Each  unit  was  comprised of one share of our common stock and one
     share  purchase warrant. Each share purchase warrant entitles the holder to
     purchase  one  share  of our common stock at a price of $0.74 per share for
     the  three  year  period  following  closing.  A total of 55,556 shares and
     55,556  share  purchase  warrants were issued. The purchaser was a European
     investor. No commissions or fees were paid in connection with the offering.
     The  sales  were  completed  pursuant  to  Regulation  S  of  the  Act.

3.   We completed the sale of 74,074 units on April 17, 2002 at a price of $0.27
     per  unit.  We  have  received  proceeds  of $20,000 from the sale of these
     units.  Each  unit  was  comprised of one share of our common stock and one
     share  purchase warrant. Each share purchase warrant entitles the holder to
     purchase  one  share  of our common stock at a price of $0.74 per share for
     the  three  year  period  following  closing.  A total of 74,074 shares and
     74,074  share  purchase  warrants were issued. The purchaser was a European
     investor. No commissions or fees were paid in connection with the offering.
     The  sales  were  completed  pursuant  to  Regulation  S  of  the  Act.

4.   We completed the sale of 96,154 units on April 30, 2002 at a price of $0.26
     per  unit.  We  have  received  proceeds  of $25,000 from the sale of these
     units.  Each  unit  was  comprised of one share of our common stock and one
     share  purchase warrant. Each share purchase warrant entitles the holder to
     purchase  one  share  of our common stock at a price of $0.70 per share for
     the  three  year  period  following  closing.  A total of 96,154 shares and
     96,154  share  purchase  warrants were issued. The purchaser was a European
     investor. No commissions or fees were paid in connection with the offering.
     The  sales  were  completed  pursuant  to  Regulation  S  of  the  Act.


                                       14

<PAGE>

5.   We  completed  the sale of 129,630 units on May 5, 2002 at a price of $0.27
     per  unit.  We  have  received  proceeds  of $35,000 from the sale of these
     units.  Each  unit  was  comprised of one share of our common stock and one
     share  purchase warrant. Each share purchase warrant entitles the holder to
     purchase  one  share  of our common stock at a price of $0.70 per share for
     the  three  year  period  following  closing. A total of 129,630 shares and
     129,630  share  purchase warrants were issued. The purchaser was a European
     investor. No commissions or fees were paid in connection with the offering.
     The  sales  were  completed  pursuant  to  Regulation  S  of  the  Act.

6.   We completed the sale of 394,444 units on June 11, 2002 at a price of $0.18
     per  unit.  We  have  received  proceeds  of $71,000 from the sale of these
     units.  Each  unit  was  comprised of one share of our common stock and one
     share  purchase warrant. Each share purchase warrant entitles the holder to
     purchase  one  share  of our common stock at a price of $0.48 per share for
     the  three  year  period  following  closing. A total of 394,444 shares and
     394,444  share  purchase warrants were issued. The purchaser was a European
     investor. No commissions or fees were paid in connection with the offering.
     The  sales  were  completed  pursuant  to  Regulation  S  of  the  Act.

7.   We completed the sale of 278,333 units on June 11, 2002 at a price of $0.18
     per  unit.  We  have  received  proceeds  of $50,100 from the sale of these
     units.  Each  unit  was  comprised of one share of our common stock and one
     share  purchase warrant. Each share purchase warrant entitles the holder to
     purchase  one  share  of our common stock at a price of $0.48 per share for
     the  three  year  period  following  closing. A total of 278,333 shares and
     278,333  share  purchase warrants were issued. The purchaser was a European
     investor. No commissions or fees were paid in connection with the offering.
     The  sales  were  completed  pursuant  to  Regulation  S  of  the  Act.

8.   We  completed  the  sale  of 2,000,000 units on June 24, 2002 at a price of
     $0.11  per  unit for total proceeds of $220,000. Each unit was comprised of
     one  share  of  our common stock and one share purchase warrant. Each share
     purchase  warrant  entitles  the holder to purchase one share of our common
     stock  at  a  price  of $0.22 per share for the three year period following
     closing.  A total of 2,000,000 shares and 2,000,000 share purchase warrants
     were  issued.  The  purchasers  consisted of two "accredited investors", as
     defined by Rule 501 of Regulation D of the Act. No commissions or fees were
     paid  in connection with the offering. The sales were completed pursuant to
     Rule  506  of  Regulation  D  of  the  Act.

During  the three months ended June 30, 2002, we completed the issuance of share
certificates  for the following sales of our securities that were not registered
pursuant to the Securities Act of 1933 (the "1933 Act") in prior fiscal periods:

1.   On  February  9, 2001 we sold 750,000 shares of our common stock and issued
     warrants  to  purchase  an  additional 750,000 shares of common stock for a
     total  purchase price of $150,000.00. The shares were sold to an accredited
     investor  in reliance on Regulation D and/or Section 4(2) of the Securities
     Act  of 1933, as amended. The warrants are exercisable at a price per share
     of  approximately  $0.40  on  or  before  February  9,  2004.

2.   On  February 14, 2001 we sold 250,000 shares of our common stock and issued
     warrants  to  purchase  an  additional 250,000 shares of common stock for a
     total  purchase  price of $50,000.00. The shares were sold to an accredited
     investor  in reliance on Regulation D and/or Section 4(2) of the Securities
     Act  of 1933, as amended. The warrants are exercisable at a price per share
     of  approximately  $0.40  on  or  before  February  14,  2004.


                                       15

<PAGE>

3.   On  February 23, 2001 we sold 500,000 shares of our common stock and issued
     warrants  to  purchase  an  additional 500,000 shares of common stock for a
     total purchase price of $100,000.00. The shares were sold to two accredited
     investors in reliance on Regulation D and/or Section 4(2) of the Securities
     Act  of 1933, as amended. The warrants are exercisable at a price per share
     of  approximately  $0.40  on  or  before  February  23,  2004.

4.   On  April  7,  2001  we  sold 125,000 shares of our common stock and issued
     warrants  to  purchase  an  additional 125,000 shares of common stock for a
     total  purchase  price of $25,000.00. The shares were sold to an accredited
     investor  in reliance on Regulation D and/or Section 4(2) of the Securities
     Act  of 1933, as amended. The warrants are exercisable at a price per share
     of  approximately  $0.40  on  or  before  April  7,  2004.

5.   On  April  12,  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 $10,000.00. The shares were sold to an accredited
     investor  in reliance on Regulation D and/or Section 4(2) of the Securities
     Act  of 1933, as amended. The warrants are exercisable at a price per share
     of  approximately  $0.40  on  or  before  April  12,  2004.

6.   On  April  20,  2001  we sold 225,000 shares of our common stock and issued
     warrants  to  purchase  an  additional 225,000 shares of common stock for a
     total  purchase price of $45,000.00. The shares were sold to two accredited
     investors in reliance on Regulation D and/or Section 4(2) of the Securities
     Act  of 1933, as amended. The warrants are exercisable at a price per share
     of  approximately  $0.40  on  or  before  April  20,  2004.

7.   On  May  5,  2001  we  sold  544,118  shares of our common stock and issued
     warrants  to  purchase  an  additional 544,118 shares of common stock for a
     total  purchase  price  of  $100,000.00.  The  shares  were  sold  to  four
     accredited investors in reliance on Regulation D and/or Section 4(2) of the
     Securities Act of 1933, as amended. The warrants are exercisable at a price
     per  share  of  approximately  $0.40  on  or  before  May  5,  2004.

8.   On  May  7,  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 $10,000.00. The shares were sold to an accredited
     investor  in reliance on Regulation D and/or Section 4(2) of the Securities
     Act  of 1933, as amended. The warrants are exercisable at a price per share
     of  approximately  $0.40  on  or  before  May  7,  2004.

9.   On  May  11,  2001  we  sold  250,000 shares of our common stock and issued
     warrants  to  purchase  an  additional 250,000 shares of common stock for a
     total  purchase price of $50,000.00. The shares were sold to two accredited
     investors in reliance on Regulation D and/or Section 4(2) of the Securities
     Act  of 1933, as amended. The warrants are exercisable at a price per share
     of  approximately  $0.40  on  or  before  May  11,  2004.

10.  On  May  22,  2001  we  sold  100,000 shares of our common stock and issued
     warrants  to  purchase  an  additional 100,000 shares of common stock for a
     total  purchase  price of $20,000.00. The shares were sold to an accredited
     investor  in reliance on Regulation D and/or Section 4(2) of the Securities
     Act  of 1933, as amended. The warrants are exercisable at a price per share
     of  approximately  $0.40  on  or  before  May  22,  2004.

11.  On  June  1,  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 $10,000.00. The shares were sold to an accredited
     investor  in reliance on Regulation D and/or Section 4(2) of the Securities
     Act  of  1933,  as  amended.  The  warrants  are  exercisable  at  a


                                       16

<PAGE>

     price  per  share  of  approximately  $0.40  on  or  before  June  1, 2004.

12.  On  June  13,  2001  we  sold 100,000 shares of our common stock and issued
     warrants  to  purchase  an  additional 100,000 shares of common stock for a
     total  purchase price of $20,000.00. The shares were sold to two accredited
     investors in reliance on Regulation D and/or Section 4(2) of the Securities
     Act  of 1933, as amended. The warrants are exercisable at a price per share
     of  approximately  $0.40  on  or  before  June  13,  2004.

13.  We  completed  the  sale  of  44,000 units on January 3, 2002 at a price of
     $0.25  per  unit  for total proceeds of $11,000. Each unit was comprised of
     one  share  of  our common stock and one share purchase warrant. Each share
     purchase  warrant  entitles  the holder to purchase one share of our common
     stock  at  a  price  of $0.50 per share for the three year period following
     closing.  A  total of 44,000 shares and 44,000 share purchase warrants were
     issued. The purchasers consisted of four "accredited investors", as defined
     by Rule 501 of Regulation D of the Act. No commissions or fees were paid in
     connection with the offering. The sales were completed pursuant to Rule 506
     of  Regulation  D  of  the  Act.

14.  We  completed  the  sale of 50,000 units on February 21, 2002 at a price of
     $0.20  per  unit for total proceeds of $10,000. Each unit was comprised of
     one  share  of  our common stock and one share purchase warrant. Each share
     purchase  warrant  entitles  the holder to purchase one share of our common
     stock  at  a  price  of $0.40 per share for the three year period following
     closing.  A  total of 50,000 shares and 50,000 share purchase warrants were
     issued.  The purchaser was an "accredited investors, as defined by Rule 501
     of  Regulation D of the Act. No commissions or fees were paid in connection
     with the offering. The sales were completed pursuant to Section 4(2) of the
     Act.

15.  We  completed  the  sale of 350,000 units on January 29, 2002 at a price of
     $0.30  per  unit.  We  have  received proceeds of $105,000 from the sale of
     these  units.  Each unit was comprised of one share of our common stock and
     one share purchase warrant. Each share purchase warrant entitles the holder
     to purchase one share of our common stock at a price of $0.62 per share for
     the  three  year  period  following  closing. A total of 350,000 shares and
     350,000  share  purchase warrants were issued. The purchaser was a European
     investor. No commissions or fees were paid in connection with the offering.
     The  sales  were  completed  pursuant  to  Regulation  S  of  the  Act.

16.  We  completed  the  sale  of 96,154 units on January 30, 2002 at a price of
     $0.26 per unit. We have received proceeds of $25,000 from the sale of these
     units.  Each  unit  was  comprised of one share of our common stock and one
     share  purchase warrant. Each share purchase warrant entitles the holder to
     purchase  one  share  of our common stock at a price of $0.62 per share for
     the  three  year  period  following  closing.  A total of 96,154 shares and
     96,154  share  purchase  warrants were issued. The purchaser was a European
     investor. No commissions or fees were paid in connection with the offering.
     The  sales  were  completed  pursuant  to  Regulation  S  of  the  Act.

17.  We  completed  the  sale of 76,923 units on February 15, 2002 at a price of
     $0.26 per unit. We have received proceeds of $20,000 from the sale of these
     units.  Each  unit  was  comprised of one share of our common stock and one
     share  purchase warrant. Each share purchase warrant entitles the holder to
     purchase  one  share  of our common stock at a price of $0.52 per share for
     the  three  year  period  following  closing.  A total of 76,923 shares and
     76,923  share  purchase  warrants  were  issued.  The  purchaser  was  an
     "accredited  investor",  as defined by Rule 501 of Regulation D of the Act.
     No  commissions  or  fees  were  paid  in


                                       17

<PAGE>

     connection with the offering. The sales were completed pursuant to Rule 506
     of  Regulation  D  of  the  Act.

18.  We  completed  the  sale of 60,000 units on February 21, 2002 at a price of
     $0.20  per  unit  for total proceeds of $12,000. Each unit was comprised of
     one  share  of  our common stock and one share purchase warrant. Each share
     purchase  warrant  entitles  the holder to purchase one share of our common
     stock  at  a  price  of $0.40 per share for the three year period following
     closing.  A  total of 60,000 shares and 60,000 share purchase warrants were
     issued.  The  purchasers consisted of one "accredited investor", as defined
     by Rule 501 of Regulation D of the Act. No commissions or fees were paid in
     connection  with the offering. The sales were completed pursuant to Section
     4(2)  of  the  Act.

19.  We  completed  the  sale of 33,333 units on February 20, 2002 at a price of
     $0.30 per unit. We have received proceeds of $10,000 from the sale of these
     units.  Each  unit  was  comprised of one share of our common stock and one
     share  purchase warrant. Each share purchase warrant entitles the holder to
     purchase  one  share  of our common stock at a price of $0.60 per share for
     the  three  year  period  following  closing.  A total of 33,333 shares and
     33,333  share  purchase  warrants  were  issued.  The  purchaser  was  an
     "accredited  investor",  as defined by Rule 501 of Regulation D of the Act.
     No commissions or fees were paid in connection with the offering. The sales
     were  completed  pursuant  to  Rule  506  of  Regulation  D  of  the  Act.

20.  We  completed  the sale of 716,667 units on February 21, 2002 at a price of
     $0.20  per unit for total proceeds of $143,333. Each unit was comprised of
     one  share  of  our common stock and one share purchase warrant. Each share
     purchase  warrant  entitles  the holder to purchase one share of our common
     stock  at  a  price  of $0.40 per share for the three year period following
     closing. A total of 716,667 shares and 716,667 share purchase warrants were
     issued.  The purchasers consisted of two "accredited investors", as defined
     by Rule 501 of Regulation D of the Act. No commissions or fees were paid in
     connection  with the offering. The sales were completed pursuant to Section
     4(2)  of  the  Act.

21.  We completed the sale of 538,461 units on March 8, 2002 at a price of $0.26
     per  unit.  We  have  received  proceeds of $140,000 from the sale of these
     units.  Each  unit  was  comprised of one share of our common stock and one
     share  purchase warrant. Each share purchase warrant entitles the holder to
     purchase  one  share  of our common stock at a price of $0.64 per share for
     the  three  year  period  following  closing. A total of 538,461 shares and
     538,461  share  purchase  warrants  were  issued. The purchasers were three
     European investors. No commissions or fees were paid in connection with the
     offering.  The  sales  were  completed pursuant to Regulation S of the Act.

22.  We completed the sale of 96,154 units on March 27, 2002 at a price of $0.25
     per  unit.  We  have  received  proceeds  of $25,000 from the sale of these
     units.  Each  unit  was  comprised of one share of our common stock and one
     share  purchase warrant. Each share purchase warrant entitles the holder to
     purchase  one  share  of our common stock at a price of $0.64 per share for
     the  three  year  period  following  closing.  A total of 96,154 shares and
     96,154  share  purchase  warrants  were  issued.  The purchasers were three
     European investors. No commissions or fees were paid in connection with the
     offering.  The  sales  were  completed pursuant to Regulation S of the Act.

23.  We  completed  the  sale  of  100,000 units on March 27, 2002 at a price of
     $0.25 per unit. We have received proceeds of $25,000 from the sale of these
     units.  Each  unit  was  comprised of one share of our common stock and one
     share  purchase  warrant.  Each  share  purchase


                                       18

<PAGE>

     warrant  entitles the holder to purchase one share of our common stock at a
     price  of  $0.82  per  share for the three year period following closing. A
     total  of  100,000  shares and 100,000 share purchase warrants were issued.
     The  purchasers  were three European investors. No commissions or fees were
     paid  in connection with the offering. The sales were completed pursuant to
     Regulation  S  of  the  Act.


Item  3.     Defaults  upon  Senior  Securities

None.


Item  4.     Submission  of  Matters  to  a  Vote  of  Security  Holders

No  matters  were submitted to our security holders for a vote during the fiscal
quarter  ending  June  30,  2002.


Item  5.     Other  Information

Our  annual  general  meeting  of  stockholders  was held on July 16, 2002.  The
following  individuals  were  elected  to our board of directors as a classified
board  of directors to hold office until annual general meeting indicated below:


     Name of Director                 Class          Expiry of Term
     -----------------                -----          ----------------

     MANFRED HANNO JANSSEN            Class II       2005 AGM
     EUGENE O'HAGAN                   Class I        2004 AGM
     ANDREW MARTYN-SMITH              Class III      2003 AGM


Our  stockholders  also  approved  the  following  matters:

1.   our  merger  with  Turbodyne  Nevada,  Inc.  in  connection  with  our
     reincorporation  as  a  Nevada  corporation;
2.   the  increase  the  number  of  shares  of  our  authorized common stock to
     150,000,000  shares;
3.   our  2002  Stock  Option  Plan;
4.   the ratification of the appointment of BDO Dunwoody LLP as our auditors for
     the  year  ended  December  31,  2002.

The  matters  were  approved  by  our  stockholders  as  follows:

                                      Votes             Votes
Description of Matter                 For               Against      Abstentions
-----------------------               ---               -------      -----------

Election of Directors                 46,166,727        NIL          NIL
Approval of Nevada Reincorporation    46,242,827        700          NIL
Approval of Increase to Common Stock  46,242,327        700          500
Approval of 2002 Stock Option Plan    46,130,327        112,700      500
Ratification of Auditor               46,242,927        100          500


                                       19

<PAGE>

We have submitted a Certificate of Merger to the Delaware Secretary of State and
Articles of Merger to the Nevada Secretary of State to give effect to our merger
with  Turbodyne  Nevada, Inc. for the purposes of completing the reincorporation
in  Nevada,  as  approved  by our shareholders.  Our reincorporation as a Nevada
corporation  will be effective upon acceptance by both the Delaware Secretary of
State  and  the  Nevada  Secretary  of  state  of  these  filings.


                                       20

<PAGE>

Item 6.     Exhibits and Reports on Form 8-K.


EXHIBITS

Exhibit Number     Description of Exhibit
--------------     ----------------------
     99.1          Certification  pursuant  to  pursuant  to  18  U.S.C.
                   Section 1350, as adopted pursuant to Section 906 of the
                   Sarbanes-Oxley  Act  of  2002
-------------------------------------------------------------------------------

(1)     Filed  as  an  Exhibit  to  this  Quarterly  Report  on  Form  10-QSB

-------------------------------------------------------------------------------


REPORTS  ON  FORM  8-K

We  a  Form  8-K  Current  Report  on May 3, 2002 to disclose the Certificate of
Amendment  to our Certificate of Incorporation filed with the Delaware Secretary
of  State  on  September  17,  2001.




                                       21

<PAGE>

                                   SIGNATURES

In  accordance with 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  authorised.


Date:  August 16, 2002


TURBODYNE TECHNOLOGIES INC.


By:  /s/ Daniel Black
     ___________________________________
     Daniel Black, President and Chief Executive Officer
     (Principal Executive Officer)
     Date:  August 16, 2002


By:  /s/ Charles Caverno
     ___________________________________
     Charles Caverno, Secretary and Chief Financial Officer
     (Principal Financial Officer and Principal Accounting Officer)
     Date:  August 16, 2002