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                                  EXHIBIT 99.1

RISK  FACTORS

We  face  risks  in  executing  our  business  plan and achieving revenues.  The
following  risks  are  material  risks  that  we  face.  We  also face the risks
identified  elsewhere  in  our  Annual  Report  on  Form 10-K for the year ended
December  31,  2001,  our  Quarterly  Report on Form 10-QSB for the three months
ended  March  31, 2002 and in other filings that we make with the Securities and
Exchange  Commission.  If  any  of  these  risks  occur,  our  business  and our
operating  results  and financial condition could be seriously harmed and we may
not  be  able  to  continue  business  operations  as  a  going  concern.

RISKS  RELATING  TO  OUR  FINANCIAL  CONDITION

There  Is  A  Substantial Risk That We Will Not Be Able To Continue Our Business
Operations  Due  To  Our  Financial  Condition.

We had a working capital deficit of $10,656,137 as at March 31, 2002.  As we are
not  earning  revenues,  we require substantial amounts of additional capital in
order  to  continue business operations. We are seeking additional funds through
private  placement offerings of our common stock and we are pursuing development
of  our  technology  through  joint  development  agreements. We do not have any
arrangements  in  place for any financing.  In addition, if we are successful in
achieving financing, we anticipate that any financing would be achieved by sales
of  additional  shares  of  our common stock.  Sales of additional shares of our
common  stock  will  result in significant dilution to our current stockholders.
If  we  do  not achieve additional financing, we may be forced to cease business
operations.  In  addition, the maximum number of shares of our common stock that
we  can  issue  is  99,000,000  shares  until  such  time  as our certificate of
incorporation is amended to permit an increased number of authorized shares.  An
amendment  to  our  certificate  of incorporate will require the approval of our
shareholders  in  accordance  with  Delaware  law.

There Is Substantial Doubt As To Our Ability To Raise Additional Capital Through
Sales  Of  Our  Common  Stock.

There is substantial doubt as to our ability to raise additional capital through
sales  of  our  common  stock  due  to  the  following  factors:

1.   We  have  a  substantial  working  capital  deficit;
2.   We  do  not  have  any  significant  revenues;
3.   We  will  not  achieve  significant  revenues  until  we  complete  the
     commercialization  of  products  incorporating  our  technology, whether by
     ourselves  or  in  conjunction  with  automotive  OEM's;
4.   We  will be required to incur substantial research and development expenses
     prior  to  the  commercialization of products incorporating our technology;
5.   Our  relationship  with  Honeywell  is  the  subject  of legal proceedings;
6.   We  are  the  subject  of  outstanding judgments and legal proceedings; and
7.   The  presence  of  the other risks identified in this Annual Report on Form
     10-K.

There  Is  Substantial  Doubt  About Our Ability To Continue As A Going Concern.

We  reported  net  losses of $7,365,220 and $16,966,245 for the two fiscal years
ended  December  2001 and 2000 respectively and a net loss of $1,556,734 for the
three  months  ended  March  31,  2002.  We  suffered net losses in recent years
resulting in an accumulated deficit of $116,146,095 at March 31, 2002, have used
cash  in  our  operating  activities  in recent years, have disposed of our most
significant subsidiary through bankruptcy, are subject to lawsuits, and based on
our  projected  cash  flows  for  the  ensuing  year we will be required to seek
additional equity or debt


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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.

Our  auditors  have made reference to the substantial doubt about our ability to
continue  as  a  going  concern  in  their audit report on our audited financial
statements  for  the  year  ended  December  31,  2001.

Substantially  All  Of  Our  Historical Revenues Were Derived From Pacific Baja,
Substantially  All Of The Assets Of Which Were Sold In Bankruptcy Proceedings In
1999.

Substantially all of our revenues on a consolidated basis have historically been
derived  from  Pacific  Baja,  our former subsidiary. The assets of Pacific Baja
were sold in bankruptcy proceedings in December 1999.  The sale of substantially
all  of the assets of Pacific Baja has had an adverse affect on our business and
results  of  operations.

We  Have  No  History  Of  Product  Sales.

None  of  the  Turbopac  or Dynacharger products have been commercially produced
except  for  the  limited  commercial production of the TurbopacTM 2500 product.
Sales  of  the  Turbopac  2500 product have been terminated by Honeywell.  Other
models  of  the  TurbopacTM  product  and  all  models  of the DynachargerTM and
TurboAir products remain in various stages of development.  We cannot assure you
that the TurbopacTM models, DynachargerTM or TurboAir products will be developed
timely or that they will be commercially accepted. The failure of the TurbopacTM
and DynachargerTM or TurboAir products to achieve commercial success will have a
material  adverse  effect  on  the  business,  operating  results  and financial
condition  of  the  Company.

RISKS  RELATING  TO  THE  STATUS  OF  OUR  AGREEMENTS  WITH  HONEYWELL

The  Termination  Of Our Joint Development And License Agreements With Honeywell
Would  Have  A  Material  Adverse  Effect  On  Our  Business.

Honeywell  has  initiated  arbitration  proceedings  against us to terminate our
license  agreement and joint development agreement with Honeywell as a result of
our  alleged inability to meet our commitments under the agreements.  We contest
Honeywell's  attempts  to terminate the agreements and disagree with Honeywell's
assertions  regarding alleged delinquencies. We have commenced legal proceedings
in  court in an attempt to enjoin Honeywell from proceeding with the arbitration
proceedings.  There  is  no  assurance  that  we will be successful in enjoining
these  proceedings.

There  Is  No  Assurance  That  Our Claims Against Honeywell Will Be Successful.

We  have  commenced  legal  proceedings  against  Honeywell  seeking substantial
damages as a result of Honeywell's conduct under our license agreement and joint
development  agreement  with  Honeywell.  There  is no assurance that we will be
successful  in  prosecuting these legal proceedings against Honeywell.  There is
also  no  assurance  that  if an award of damages is obtained against Honeywell,
that any award of damages would be in the range of the damages we are seeking in
these  legal  proceedings.

We May Not Be Able To Continue In Business Even If We Retain Our Agreements With
Honeywell.

Due  to  our  past losses and our limited working capital, we may not be able to
stay  in business, even if we continue to develop our technology with Honeywell.
Honeywell has terminated sales of the Turbopac products that they have the right
to sell under our license agreement.  Honeywell is also not currently proceeding
with the commercial development of Dynacharger products and


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no  sales  of  products  incorporating the Dynacharger technology are being made
under  our license agreement. Accordingly, we are not earning revenues under our
license  and  joint development agreements with Honeywell. As we do not have any
other  products  ready  for  commercial  sale at this time, there is significant
doubt as to our ability to continue business operations even if Honeywell is not
successful in terminating our license agreement and joint development agreement.
Our  current  sources  of working capital are not sufficient to meet our working
capital  needs.

RISKS  RELATING  TO  ADDITIONAL  LEGAL  PROCEEDINGS

We  Have  Been  Named  As  A  Defendant  In  Legal  Proceedings Arising From The
Bankruptcy  Of  Pacific  Baja.

We  have been named as a defendant in legal proceedings commenced by the Pacific
Baja  Liquidating  Trust  on  behalf  of  the  creditors of Pacific Baja seeking
damages  in  excess  of  $12  million from ourselves and the former officers and
directors  of  Pacific  Baja  and  Turbodyne  Systems.  If  the  Pacific  Baja
Liquidating  Trust  is  successful  in achieving an award of substantial damages
against  us,  we  may  be forced to cease business operations.  In addition, the
continuation  of  these  legal  proceedings  may  have  an adverse affect on our
ability  to  raise  additional  capital.

We Are Subject To Outstanding Judgments That May Adversely Impact Our Ability To
Continue  Operations.

We  are  the subject of a judgment in favor of Heartland Financial in the amount
of  approximately  $535,490.  While  we have appealed this judgment, there is no
assurance  our  appeal  will be successful.  We are the subject of a judgment in
the  amount  of  approximately  $50,000 in favour of Bowne.  The commencement of
execution  proceedings  by our judgment creditors will have an adverse impact on
our  ability  to  continue  as  a  going  concern.

We  Are  The  Subject Of Additional Legal Claims That Could Adversely Impact Our
Ability  To  Continue  Operations.

In addition to the claims described above, we are party to the legal proceedings
described in our Annual Report on Form 10-K for the year ended December 31, 2001
and  our  Quarterly  Report  on Form 10-QSB for the three months ended March 31,
2002.  Our  inability  to settle these legal claims or adverse decisions against
us  in  the  proceedings  may  have an adverse affect on our ability to continue
operations  as  a  going  concern.

RISKS  RELATED  TO  OUR  BUSINESS  STRATEGY

Our  Business May Be Adversely Affected If We Are Not Able To Achieve Management
Stability.

There  is  no assurance that we will be able to retain a management team that is
capable  of  implementing  our  business  strategy  successfully.  Our  board of
directors and management has experienced a high rate of turnover recently, which
has  affected  our  ability to focus on the core elements of our business. It is
possible  that we will continue to experience turnover, although we believe that
our  executive  officers will retain their positions for the foreseeable future.
If  management resources continue to be diverted towards replacing directors and
executive officers, our ability to manage our business, achieve financing and to
further  develop  our  technology  will  be  impaired  with  the result that our
business  will  be adversely affected.   In addition, our current stability will
have  a  negative impact on the quality of management that we are able to retain
to  manage  our  business.

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Our  Business  Will  Not  Succeed If We Cannot Convince OEM's To Incorporate Our
Technology  Into  Their  Product  Lines.

Our  future financial performance depends primarily on our ability to enter into
agreements  with automotive OEM's that lead to the commercialization of products
incorporating  our  technology. If we are unable to convince automotive OEM's of
the  advantages  and  viability  of  our  technology, we will not be successful.

We  May  Expend A Significant Amount Of Time And Resources Testing Programs That
May  Not  Result  In  Any  Sales.

A  key  component  of  our  business  strategy  involves  entering  into  joint
development  agreements  with  automotive OEM's with the objective of having the
OEM's  incorporate  our  technology  into  the  OEM's  products.  Developing
relationships  with  OEM's  involves  lengthy periods of product development and
performance  evaluation.  During this period, we may provide certain products or
services  free  of  charge  or  at  a reduced rate. We also devote a significant
amount  of  time and attention to pursuing these programs in an effort to obtain
commercialization  for  products  incorporating  our  technology.  OEM's that we
conduct  joint  development work with may be under no obligation to purchase our
products  and  after  evaluation  may  determine  not  incorporate  any  of  our
technology  into their products. Accordingly, we may devote substantial time and
resources  to  developing relationships and development programs with OEM's that
do  not  result  in  commercialization of products incorporating our technology.

Our Business Could Be Materially Adversely Affected If We Encounter Problems And
Delays  In  Completing  The Development Of Products Incorporating Our Technology
For  Commercialization.

With  the  exception  of  limited  commercial production of certain Turbopac(TM)
models,  products  incorporating  our  technology  are in the development stage.
Historically, we have encountered delays in development due to design defects or
changes in specifications and we may continue to experience delays. These delays
could  increase the cost of development of products incorporating our technology
and  affect  the timing of commercialization. Our future revenues depend largely
on  sales  of  products  incorporating  our  technology  and  delays  in
commercialization  will impact on our financial condition and operating results.
In  addition,  new  products incorporating our technology may not receive market
acceptance  and  may  not  be  sold  at  a  profit.

Future  Revenues  Depend  On  Our  Ability  To  Get  Patent  Protection  For Our
Technology.

Protection of trade secrets and proprietary know how is critical to our success.
If  our  competitors  independently  develop similar or superior technologies or
gain  access to our trade secrets, our business will be materially and adversely
affected. While we have assigned our patent and trademark rights relating to the
Turbopac(TM)  and  the  Dynacharger(TM)  to  Honeywell,  we have also obtained a
non-exclusive  license  for  these  patents  under  our  license  agreement with
Honeywell.  Accordingly,  we  depend  on  continued  patent protection for these
products.  We are also pursuing patent protection of new technology that we have
developed  and incorporated into our TurboAir product.  Patent applications have
been  filed  in  the United States and certain foreign jurisdictions relating to
these  products. The patents may not be issued, however, or, if issued, they may
be  modified.  If we are unable to obtain and maintain patent protection for our
technology,  we  may  not be able to gain a competitive advantage or protect our
technology  and  our  business  will  be  adversely  affected.

Application  for  a  patent  offers no assurance that a patent will be issued or
issued  without  material  modification.  Moreover,  we  cannot  assure you that
patents  will  be  issued,  or  that  issued patents will not be circumvented or
invalidated,  that  proprietary information can be maintained as such or that we
will  be  able  to  achieve or maintain a technological advantage.  We may incur
substantial  costs  seeking to enforce our patent rights against infringement or
the  unauthorized  use  of  our


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proprietary  technology  by  others  or  in  defending ourselves against similar
claims of others. Our trade secrets and proprietary know-how are critical for us
to achieve and maintain a competitive position. We cannot assure you that others
may not independently develop similar or superior technologies or gain access to
our  trade  secrets  or  know-how.

If  New,  Commercially  Successful  Techniques  Similar  To  Our  Products  Are
Developed,  Our  Potential  Market  Share  Will  Be  Reduced.

The  business environment in which we operate is highly competitive. Although we
know of no products that are technologically similar to ours, future competitors
may  develop  related  technologies  that  improve  the  performance of internal
combustion  engines  or  products  that  are  not encompassed by our patents. In
addition,  competitors may be issued patents that inhibit our ability to develop
certain  products.  There  may also be improvements to current technologies that
compete  with  ours.  Successful  development  of  new techniques may reduce our
potential market share or make our products less attractive or obsolete, each of
which  would  adversely  affect  our  business.  In addition, a relatively small
number of OEM's hold a significant share of the automotive market. If any of the
OEM's  decides  not  to  incorporate  our products into their product lines, our
potential  market  share might be significantly reduced. Our products may not be
superior  to  existing or subsequently developed competitive products and we may
not  be  able to obtain significant market share or be able to adapt to evolving
markets  or  technologies.

We  Must  Keep  Pace  With  Technological  Change  To  Achieve  Success.

The  automotive  industries  in  which we compete are characterized by rapid and
significant  technological  change.  Our  success  depends  on  our  ability  to
continually  develop  new  technology  and  to refine products incorporating our
original technology.  We have been pursuing commercialization of Dynacharger(TM)
and  Turbopac(TM)  product  lines.  However, development of these products under
our  agreements  with Honeywell has not proceeded as planned.  Due to this delay
and the rapid pace of technological innovation in the automotive industry, there
is  a  risk  that  these products may be superceded by new technology and become
obsolete.  We  have  embarked  on  development of new technology to counter this
risk,  including the development of our new TurboAir product.  However, there is
no  assurance  that  our  new  technology  will  achieve  success

We  cannot assure you that our products will be commercially accepted or that we
will  be  able  to  enhance  existing products or develop new products.  We also
cannot  assure  you  that  technological  change  will  not  render  obsolete or
uneconomical any of our products.  Our ability to continue to develop and market
new  and  improved  products that can achieve significant market acceptance will
determine  our  future  sales  and  profitability.

Intense  Competition.

The business environment in which we operate is highly competitive.  Most of our
competitors  have  and  potential  competitors  may  have  greater  financial,
marketing,  technological  and  other  resources.  We  believe  that no products
technologically similar to the TurbopacTM and DynachargerTM or TurboAir products
have  been  sold.  However,  future competitors may develop related technologies
that  improve  the  performance  of  internal  combustion  engines and/or reduce
emissions that are not encompassed by our patents.  In addition, other companies
may  be issued patents which may inhibit our ability to develop certain products
encompassed  by  those  patents.  There  also  may  be  improvements to existing
technologies.

If new techniques are developed and are commercially successful, they may reduce
our  potential  market  share or make products incorporating our technology less
attractive  or  obsolete,  each of which will adversely affect our business.  In
addition,  a  relatively  small  number of OEM's hold a significant share of the
automotive  market  and  the  determination  of  an  OEM  not to incorporate

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the  TurbopacTM products into its product line may force us to expend additional
amounts  to  gain  market share and/or significantly reduce our potential market
share.

RISKS  RELATING  TO  OUR  MARKET

Because  Our  Stock Is A Penny Stock, Shareholders Will Be More Limited In Their
Ability  To  Sell  Their  Stock.

Our  common  stock  is  traded  on  the  over-the-counter  bulletin  board  and
constitutes  a  penny  stock  under the Securities and Exchange Act.  Our shares
will  remain  classified  as  a  penny  stock  for  the foreseeable future.  The
classification  as  a penny stock makes it more difficult for a broker-dealer to
sell  the  stock  into  a  secondary market, which makes it more difficult for a
purchaser  to liquidate his or her investment.  Any broker-dealer engaged by the
purchaser  for the purpose of selling his or her shares will be subject to rules
15g-1  through 15g-10 of the Securities and Exchange Act.  Rather than having to
comply  with  these  rules, some broker-dealers will refuse to attempt to sell a
penny  stock.  These  rules may affect the ability of broker-dealers to sell our
common  stock  and also may affect the ability of holders of our common stock to
resell  their  shares  of  common  stock.

Our  Stock  Price  Is  Extremely  Volatile.

The  price  of  our common stock has been and may continue to be subject to wide
fluctuations  in  response  to a number of events and factors, such as quarterly
variations  in the results of our operations, announcements of new technological
innovations  by  competitors,  our inability to achieve commercialization of our
products or enter into joint venture and licensing agreements, the operating and
stock price performance of other companies that investors may deem comparable to
us, and news relating to trends in our markets. In addition, the stock market in
general,  and  the  market  for  high  technology  stocks  in  particular,  has
experienced  extreme  volatility  that often has been unrelated to the operating
performance of these companies. These broad market and industry fluctuations may
adversely  affect  the  price  of  our common stock, regardless of our operating
performance.

Absence  Of  Dividends.

We  have never paid cash dividends on the common stock and no cash dividends are
expected  to  be paid on our common stock in the foreseeable future.  Any future
determination to declare or pay dividends will be at the discretion of the board
of  directors  and  will  be  dependent  on our results of operations, financial
condition,  contractual and legal restrictions and other factors deemed relevant
by  the  board  of  directors.