UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

                                  FORM 10-QSB/A

                                 AMENDMENT NO. 1


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

         For the quarterly period ended SEPTEMBER 30, 2006

[   ]    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)

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


36 EAST BARNETT STREET,
VENTURA, CALIFORNIA                            93001
----------------------------------------       ---------
(Address of principal executive offices)      (Zip Code)

Issuer's telephone number, including area code:        (805) 201-3133
                                                       ---------------


                                 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 Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days          [X] Yes [ ] No

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: 337,316,577 OCTOBER 20, 2006.

Transitional Small Business Disclosure Format (check one): Yes  [   ]   No  [X]





<PAGE>



                                EXPLANATORY NOTE

Turbodyne Technologies, Inc. (the "Company") is filing this Amendment No. 1 to
its Quarterly Report on Form 10-QSB for the quarter ended September 30, 2006
(the " September 30, 2006 10-QSB"), which was originally filed on November 14,
2006. This Amendment No. 1 is being filed to restate the Company's financial
statements for the quarter ended September 30, 2006, which understated other
expenses and net loss, overstated liabilities and understated additional paid-in
capital.

The Company is restating its previously issued 2006 consolidated financial
statements for the following reasons: unrecorded beneficial conversion feature
of convertible debt and related amortization, unrecorded value of detachable
warrants issued with the convertible debt, unrecorded debt conversion expense as
a result of Company's modification of conversion terms and terms for the
exercise of warrants to induce conversion and warrants exercise.

The Company issued $615,000 convertible notes with detachable warrants. The
notes bear interest at 5% and mature within one year from date of issuance. The
Notes are convertible, at the option of the holder, to shares of the Company's
common stock at a conversion price per share equal to the lower of (i) 70% of
the market price of common stock at date of issuance; or (ii) $0.025. The
warrants are to purchase the Company's common stock at $0.025 per share expiring
in five years. In September 2006 the board of directors offered to decrease the
note conversion price to $0.005 per share if the note holders exercised their
warrants at $0.01 by September 30, 2006. In consideration for the reduction, the
maturity of the notes was extended for another year. As a result of the
inducement, the Company recognized $127,500 of debt conversion expense for the
quarter ended September 30, 2006 relating to note holders who converted during
the quarter.

The Company also issued to the holders of convertible notes warrants to purchase
12,300,000 shares of the Company's common stock at $0.025 per share. In
accordance with generally accepted accounting principles, the Company allocates
the proceeds received from debt or convertible debt with detachable warrants
using the relative fair value of the individual elements at the time of
issuance. Using the Black-Scholes valuations model, the Company has determined
the aggregate value of the 12,300,000 warrants to be $150,884. The amount
allocated to the warrants amounts to $88,144 and has been recognized as
additional paid in capital. As of September 30, 2006, 11,900,000 of the warrants
have been exercised.

In accordance with generally accepted accounting principles, in the event the
conversion price on notes is less than the Company's stock price on the date of
issuance, the difference is considered to be a beneficial conversion feature and
is amortized as interest expense over the period from the date of issuance to
the earlier of the conversion date or the stated maturity date. The Company has
calculated the aggregate beneficial conversion feature of these convertible
notes to be $358,144. In relation to the inducement to convert, an additional
beneficial conversion feature of $112,795 has been recognized.

For the quarter ended September 30, 2006, the Company recognized $228,510 in
interest expense related to the amortization of the beneficial conversion
feature recorded on these convertible notes. As of September 30, 2006, the
remaining balance of the beneficial conversion feature was $242,430.

This Amendment No. 1 does not reflect events occurring after the original filing
of the Company's September 30, 2006 10-QSB, and does not update or modify the
disclosures therein in any way other than as required to reflect the amendment
described above.

                                      -2-
<PAGE>


                          TURBODYNE TECHNOLOGIES, INC.
                             INDEX TO FORM 10-QSB/A
                               SEPTEMBER 30, 2006

                                                                           PAGE
                                                                          NUMBER

PART I -      FINANCIAL INFORMATION

Item 1.       Financial Statements:

              Consolidated Balance Sheets as of September 30, 2006
                  and December 31, 2005                                        5

              Consolidated Statements of Operations for the
                  three-month and nine-month periods ended
                  September 30, 2006 and September 30, 2005                    6

              Consolidated Statements of Cash Flows for the
                  nine-month periods ended September 30, 2006
                  and September 30, 2005                                       7

              Notes to the Consolidated Financial Statements                   8

Item 2.       Management's Discussion and Analysis and
                  Results of Operations                                       21

Item 3a.      Controls and Procedures                                         32

PART II -     OTHER INFORMATION

 Item 2.       Unregistered Sales of Equity Securities and
                  Use of Proceeds                                             33

Item 6.       Exhibits                                                        33

SIGNATURES                                                                    34




                                      -3-
<PAGE>



PART 1 - FINANCIAL INFORMATION

ITEM 1.           FINANCIAL STATEMENTS












                                   TURBODYNE TECHNOLOGIES, INC. AND SUBSIDIARIES
                                   CONSOLIDATED FINANCIAL STATEMENTS
                                   FOR THE NINE-MONTH PERIODS ENDED
                                   SEPTEMBER 30, 2006 AND 2005
                                   (UNAUDITED - EXPRESSED IN US DOLLARS)






                                      -4-
<PAGE>
<TABLE>
<CAPTION>


=====================================================================================================

                                                        TURBODYNE TECHNOLOGIES, INC. AND SUBSIDIARIES
                                                                          CONSOLIDATED BALANCE SHEETS
                                                                            (EXPRESSED IN US DOLLARS)
                                                                       SEPTEMBER 30       December 31
                                                                               2006              2005
-----------------------------------------------------------------------------------------------------

ASSETS                                                                   (UNAUDITED)
                                                                       (AS RESTATED)
CURRENT
<S>                                                                    <C>              <C>
   Cash                                                                $      22,851    $     100,538
   Prepaid expenses and other current assets                                  34,672              672
                                                                       ------------------------------

            TOTAL CURRENT ASSETS                                              57,523          101,210
PROPERTY AND EQUIPMENT, net                                                    1,092            2,309
                                                                       ------------------------------

TOTAL ASSETS                                                           $      58,615    $     103,519
=====================================================================================================

LIABILITIES AND CAPITAL DEFICIT

LIABILITIES

CURRENT
     Accounts payable                                                  $   2,161,940    $   2,491,259
     Accrued liabilities                                                     453,348          476,048
     Provision for lawsuit settlements (Note 6)                            4,582,853        4,385,105
     Loans payable (Note 4)                                                  468,332          465,662
                                                                       ------------------------------

            TOTAL CURRENT LIABILITIES                                      7,666,473        7,818,074

DEFERRED LICENSING FEE                                                       324,834          341,502
                                                                       ------------------------------

            TOTAL LIABILITIES                                              7,991,307        8,159,576
                                                                       ------------------------------

CAPITAL DEFICIT
     Share Capital (Note 3)
         Authorized
                  1,000,000 preferred shares, par value $0.001
               1,000,000,000 common shares, par value $0.001
         Issued
                12,675 preferred shares in 2006 (2005 - 12,675)                   12               12
              337,316,577 common shares in 2006 (2005 - 320,416,577)         337,317          320,417
     Treasury stock, at cost (1,778,580 shares) (Note 6(c))               (1,963,612)      (1,907,612)
     Additional paid-in capital                                          121,783,637      120,841,762
     Other comprehensive income -
         Foreign exchange translation gain                                    35,119           35,119
     Accumulated deficit                                                (128,125,165)    (127,345,755)
                                                                       ------------------------------

            TOTAL CAPITAL DEFICIT                                         (7,932,692)      (8,056,057)
                                                                       ------------------------------

TOTAL LIABILITIES AND CAPITAL DEFICIT                                  $      58,615    $     103,519
=====================================================================================================






                 The accompanying notes are an integral part of
                    these consolidated financial statements.
</TABLE>


                                      -5-
<PAGE>

<TABLE>
<CAPTION>

==================================================================================================================
                                                                     TURBODYNE TECHNOLOGIES, INC. AND SUBSIDIARIES
                                                                             CONSOLIDATED STATEMENTS OF OPERATIONS
                                                                             (Unaudited - Expressed in US Dollars)

                                                                 THREE-MONTH                       NINE-MONTH
                                                               PERIODS ENDED                    PERIODS ENDED
                                                                SEPTEMBER 30                     SEPTEMBER 30
                                                           2006             2005             2006             2005
------------------------------------------------------------------------------------------------------------------
                                                   (AS RESTATED)                     (AS RESTATED)
------------------------------------------------------------------------------------------------------------------

REVENUE
<S>                                               <C>              <C>              <C>              <C>
      Licensing fees                              $       5,556    $       5,556    $      16,668    $      16,668
                                                  ----------------------------------------------------------------
              TOTAL REVENUE                               5,556            5,556           16,668           16,668
                                                  ----------------------------------------------------------------

EXPENSES (RECOVERY)
       General and administrative                       257,615          117,654          618,535          444,417
       Research and development                         106,803             --            176,910          371,486
       Litigation expense                                 9,916           66,496          162,896          694,679
       Depreciation and amortization                        363              573            1,217           10,821
                                                  ----------------------------------------------------------------
           TOTAL EXPENSES                               374,697          184,723          959,558        1,521,403
                                                  ----------------------------------------------------------------
LOSS FROM OPERATIONS                                   (369,141)        (179,167)        (942,890)      (1,504,735)

OTHER INCOME (EXPENSES)
      Interest expense                                   (7,540)            --            (18,244)          (1,030)
      Amortization of convertible note discount        (228,510)            --           (228,510)            --
      Debt conversion expense                          (127,500)            --           (127,500)            --
      Debt Relief                                       537,734             --            537,734             --
      Interest Income                                      --               --               --              1,836
      Gain (loss) on sale of asset                         --            (14,297)            --            (13,527)
                                                  ----------------------------------------------------------------
INCOME (LOSS) FOR THE PERIOD                      $    (194,957)   $    (193,464)   $    (779,410)   $  (1,517,456)
==================================================================================================================

NET LOSS PER COMMON SHARE -
 BASIC AND DILUTED                                $       (0.00)   $       (0.00)   $       (0.00)   $       (0.01)
==================================================================================================================

WEIGHTED AVERAGE SHARES - BASIC                     322,406,577      205,611,429      320,907,262      180,412,821
==================================================================================================================






                 The accompanying notes are an integral part of
                    these consolidated financial statements.
</TABLE>


                                      -6-
<PAGE>

<TABLE>
<CAPTION>


===============================================================================================

                                                  TURBODYNE TECHNOLOGIES, INC. AND SUBSIDIARIES
                                                          CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                          (UNAUDITED - EXPRESSED IN US DOLLARS)


FOR THE NINE-MONTH PERIODS ENDED SEPTEMBER 30                               2006           2005
-----------------------------------------------------------------------------------------------

                                                                    (AS RESTATED)
CASH PROVIDED BY (USED IN)

OPERATING ACTIVITIES
<S>                                                                  <C>            <C>
     Net loss for the period                                         $  (779,410)   $(1,517,456)
     Adjustments to reconcile net loss to net
     cash provided by (used in) operating activities:
         Amortization of deferred licensing fees                         (16,668)       (16,668)
         Depreciation and amortization                                     1,217         10,821
         Amortization of convertible note discount (Note 2)              228,510           --
         Debt conversion expense (Note 2)                                127,500           --
         Gain on settlement of debt                                     (537,734)          --
         Loss on sale of asset                                              --           13,527
         Stock issued for services                                        50,000           --
         Stock option compensation  (Note 3)                                --          205,006
         Stock received against litigation expense                       (56,000)          --
         Warrant compensation (Note 3)                                   103,191           --
     (Increase) decrease in operating assets
         Prepaid expenses and other current assets                       (34,000)       289,383
     Increase (decrease) in operating liabilities
         Accounts payable                                                208,415        200,924
         Accrued liabilities and provision for lawsuit settlements       193,293        609,491
                                                                     --------------------------
              Net cash used in operating activities                     (511,687)      (204,972)
                                                                     --------------------------

INVESTING ACTIVITIES
    Sale of capital assets                                                  --           17,770
                                                                     --------------------------
             Net cash provided by investing activities                      --           17,770
                                                                     --------------------------
FINANCING ACTIVITIES
     Proceeds from loans payable                                         315,000           --
     Payments of long term debt                                             --          (16,086)
     Accrual for merger                                                     --           13,000
     Proceeds from exercise of Stock Options and Warrants                119,000        189,012
                                                                     --------------------------
              Net cash provided by financing activities                  434,000        185,926
                                                                     --------------------------

NET INCREASE (DECREASE) IN CASH                                          (77,687)        (1,276)

CASH, beginning of  period                                               100,538          1,615
                                                                     --------------------------
CASH, end of period                                                  $    22,851    $       339
===============================================================================================

SUPPLEMENTARY DISCLOSURE OF NON-CASH FLOW INFORMATION

     Issuance of stock for merger consideration                      $     --       $    13,000

     Beneficial conversion feature of convertible debt                   470,940           --
===============================================================================================





                 The accompanying notes are an integral part of
                    these consolidated financial statements.
</TABLE>


                                      -7-
<PAGE>


================================================================================

                                   TURBODYNE TECHNOLOGIES, INC. AND SUBSIDIARIES
                                  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                                           (UNAUDITED - EXPRESSED IN US DOLLARS)

  SEPTEMBER 30, 2006 AND 2005
--------------------------------------------------------------------------------


1.   NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     NATURE OF BUSINESS

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

     The Company had no current business operations, place of business and no
     employees when in September 2005, new management took control with the
     purpose of attempting to resurrect the Company's business and seek
     financing for such purpose. The Company entered into a merger agreement in
     September 2005 that resulted in new management, which is examining
     alternatives for financing, and fulfilling its working capital needs based
     on its working capital projections.

     New management took control pursuant to a merger completed as of September
     9, 2005 pursuant to which a majority owned subsidiary of Aspatuck Holdings
     Ltd. ("Aspatuck") was merged into our newly formed wholly owned subsidiary.
     Prior to the merger, this subsidiary of Aspatuck entered into a consulting
     agreement ("Consulting Agreement") with Stamford Research, LLC that is
     obligated to provide the services of Mr. Albert Case to the Company. Upon
     completion of the merger, 139,192,222 shares of the Company's Common Stock
     were issuable to holders of the subsidiary of Aspatuck and 1,300,000 such
     shares became issuable to Stamford Research LLC, under the Consulting
     Agreement. At this time Mr. Albert Case became president and chief
     executive officer and Mr. Jason Meyers, principal shareholder of Aspatuck,
     became Chairman of the Board of Directors. Additional shares are issuable
     to the former shareholders of the Aspatuck subsidiary in the event the
     Company issues any securities related directly or indirectly to pre-merger
     events.

     The Company's operations have been financed principally through a
     combination of private sales of debt securities. If the Company is unable
     to raise equity capital or generate revenue to meet its working capital
     needs, it may have to cease operating and seek relief under appropriate
     statutes. These consolidated financial statements have been prepared on the
     basis that the Company will be able to continue as a going concern and
     realize its assets and satisfy its liabilities and commitments in the
     normal course of business and do not reflect any adjustment which would be
     necessary if the Company is unable to continue as a going concern.


     BASIS OF PRESENTATION

     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.


                                      -8-
<PAGE>


================================================================================

                                   TURBODYNE TECHNOLOGIES, INC. AND SUBSIDIARIES
                                  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                                           (UNAUDITED - EXPRESSED IN US DOLLARS)

  SEPTEMBER 30, 2006 AND 2005
--------------------------------------------------------------------------------


1.   NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -
     CONTINUED

     BASIS OF PRESENTATION - CONTINUED

     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, 2005 and 2004 included in the Company's 10-KSB 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.

     GOING CONCERN

     The accompanying consolidated financial statements have been prepared
     assuming that the Company will continue as a going concern. The Company has
     suffered net operating losses in recent periods, has an accumulated deficit
     of $128,125,165 at September 30, 2006 and a total capital deficit of
     $7,932,692 at September 30, 2006. It has used most of its available cash in
     its operating activities in recent years, has a significant working capital
     deficiency and is subject to lawsuits brought against it by other parties.
     These matters raise substantial doubt about the Company's ability to
     continue as a going concern.

     PRINCIPLES OF CONSOLIDATION

     The accompanying consolidated financial statements, stated in United States
     dollars, include the accounts of Turbodyne Technologies, Inc. and its
     wholly owned subsidiaries, Turbodyne Systems, Inc., Turbodyne Germany Ltd.,
     Electronic Boosting Systems Inc. and Pacific Baja Light Metals Corp.
     ("Pacific Baja"). All intercompany accounts and transactions have been
     eliminated on consolidation.

     DEPRECIATION AND AMORTIZATION

     Depreciation and amortization of property and equipment is computed using
     the straight-line method over estimated useful lives as follows:


                        Computers                  - 3 years
                        Machinery and equipment    - 7 to 15 years
                        Furniture and fixtures     - 5 to 10 years

     LICENSES

     Licenses are recorded at cost and are amortized over their estimated useful
     life of 18 years.



                                      -9-
<PAGE>


================================================================================

                                   TURBODYNE TECHNOLOGIES, INC. AND SUBSIDIARIES
                                  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                                           (UNAUDITED - EXPRESSED IN US DOLLARS)

  SEPTEMBER 30, 2006 AND 2005
--------------------------------------------------------------------------------


1.   NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -
     CONTINUED

     VALUATION OF LONG-LIVED ASSETS

     The Company periodically reviews the carrying value of long-lived assets
     for indications of impairment in value and recognizes impairment of
     long-lived assets in the event the net book value of such assets exceeds
     the estimated undiscounted future cash flows attributable to such assets.
     Long-lived assets to be disposed of by sale are to be measured at the lower
     of carrying amount or fair value less cost of sale whether reported in
     continuing operations or in discontinued operations. No impairment was
     required to be recognized during 2006 and 2005.

     RECOGNITION OF REVENUE

     License fee revenue is recognized over the term of the license agreement.
     During the year ended December 31, 2003, $400,000 in license fees were
     deferred and are being amortized over 18 years. As a result, for the
     quarter ended September 30, 2006 $5,556 ($5,556 - 2005) of licensing fees
     was recognized as income.

     Prior to the suspension of our operations in 2003, we recognized revenue
     upon shipment of product. Previously, research prototypes were sold and
     proceeds reflected by reductions in our research and development costs. As
     new technology pre-production manufacturing units are produced and related
     non-recurring engineer services are delivered we will recognize the sales
     proceeds as revenue.


     EARNINGS (LOSS) PER SHARE

     Earnings (loss) per share is computed in accordance with SFAS No. 128,
     "Earnings Per Share". Basic earnings (loss) per share is calculated by
     dividing the net income (loss) available to common stockholders by the
     weighted average number of shares outstanding during the period. Diluted
     earnings per share reflects the potential dilution of securities that could
     share in earnings of an entity. In a loss period, dilutive common
     equivalent shares are excluded from the loss per share calculation as the
     effect would be anti-dilutive.


     FAIR VALUE OF FINANCIAL INSTRUMENTS

     The fair values of the Company's cash, term debts, accounts payable,
     accrued liabilities and loans payable approximate their carrying values
     because of the short-term maturities of these instruments.

     USE OF ESTIMATES

     The preparation of financial statements in conformity with generally
     accepted accounting principles requires management to make estimates and
     assumptions that affect the reported amounts of assets and liabilities and
     the disclosure of contingent assets and liabilities at the date of the
     financial statements and the reported amounts of revenue and expenses
     during the reporting period. Actual results could differ from those
     estimates.


                                      -10-
<PAGE>

================================================================================

                                   TURBODYNE TECHNOLOGIES, INC. AND SUBSIDIARIES
                                  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                                           (UNAUDITED - EXPRESSED IN US DOLLARS)

  SEPTEMBER 30, 2006 AND 2005
--------------------------------------------------------------------------------


1.   NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -
     CONTINUED


     STOCK-BASED COMPENSATION

     Prior to January 1, 2005, the Company accounted for employee stock-based
     compensation using the intrinsic value method supplemented by pro forma
     disclosures in accordance with APB 25 and SFAS 123 "Accounting for
     Stock-Based Compensation" ("SFAS 123"), as amended by SFAS No.148
     "Accounting for Stock-Based Compensation--Transition and Disclosures."
     Under the intrinsic value based method, compensation cost is the excess, if
     any, of the quoted market price of the stock at grant date or other
     measurement date over the amount an employee must pay to acquire the stock.

     Effective January 1, 2005 the Company adopted SFAS 123R using the modified
     prospective approach and accordingly prior periods have not been restated
     to reflect the impact of SFAS 123R. Under SFAS 123R, stock-based awards
     granted prior to its adoption will be expensed over the remaining portion
     of their vesting period. These awards will be expensed under the
     accelerated amortization method using the same fair value measurements
     which were used in calculating pro forma stock-based compensation expense
     under SFAS 123. For stock-based awards granted on or after January 1, 2005,
     the Company will amortize stock-based compensation expense on a
     straight-line basis over the requisite service period, which is generally a
     five-year vesting period.

     SFAS 123R requires forfeitures to be estimated at the time of grant and
     revised, if necessary, in subsequent periods if actual forfeitures differ
     from initial estimates. Stock-based compensation expense has been recorded
     net of estimated forfeitures for the periods ended September 30, 2006 and
     2005 such that expense was recorded only for those stock-based awards that
     are expected to vest. Previously under APB 25 to the extent awards were
     forfeited prior to vesting, the corresponding previously recognized expense
     was reversed in the period of forfeiture.

     RESEARCH AND DEVELOPMENT

     Research and development costs related to present and future products are
     charged to operations in the period incurred. Previously, research
     prototypes were sold and proceeds reflected by reductions in our research
     and development costs. As new technology pre-production manufacturing units
     are produced and related non-recurring engineer services are delivered we
     will recognize the sales proceeds as revenue.

     INCOME TAXES

     The Company accounts for income taxes under the asset and liability method
     of accounting for income taxes, which recognizes deferred tax assets and
     liabilities for the estimated future tax consequences attributable to
     differences between the financial statement carrying amounts of existing
     assets and liabilities and their respective tax bases. Deferred tax assets
     and liabilities are measured using enacted tax rates in effect for the
     years in which those temporary differences are expected to be recovered or
     settled. The effect on deferred tax assets and liabilities of a change in
     tax rates is recognized in income in the period that includes the enactment
     date.

                                      -11-
<PAGE>

================================================================================

                                   TURBODYNE TECHNOLOGIES, INC. AND SUBSIDIARIES
                                  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                                           (UNAUDITED - EXPRESSED IN US DOLLARS)

  SEPTEMBER 30, 2006 AND 2005
--------------------------------------------------------------------------------


1.   NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -
     CONTINUED

     COMPREHENSIVE INCOME

     The Company has adopted SFAS No. 130, "Reporting Comprehensive Income".
     SFAS No. 130 establishes standards to measure all changes in equity that
     result from transactions and other economic events other than transactions
     with owners. Comprehensive income is the total of net earnings (loss) and
     all other non-owner changes in equity. Except for net earnings (loss) and
     foreign currency translation adjustments, the Company does not have any
     transactions and other economic events that qualify as comprehensive income
     as defined under SFAS No. 130. As foreign currency translation adjustments
     were immaterial to the Company's consolidated financial statements, net
     earnings (loss) approximated comprehensive income for the quarter ended
     September 30, 2006 and 2005.

     LEGAL FEES

     The Company expenses legal fees in connection with litigation as incurred.

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


                                      -12-
<PAGE>


================================================================================

                                   TURBODYNE TECHNOLOGIES, INC. AND SUBSIDIARIES
                                  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                                           (UNAUDITED - EXPRESSED IN US DOLLARS)

  SEPTEMBER 30, 2006 AND 2005
--------------------------------------------------------------------------------


2    RESTATEMENT OF FINANCIAL STATEMENTS

     The Company is restating its previously issued September 30, 2006
     consolidated financial statements for the following reasons: unrecorded
     beneficial conversion feature of convertible debt and related amortization,
     unrecorded value of detachable warrants issued with the convertible debt,
     unrecorded debt conversion expense as a result of Company's modification of
     conversion terms and terms for the exercise of warrants to induce
     conversion and warrants exercise.

     THE FOLLOWING IS A SUMMARY OF THE RESTATEMENTS FOR THE PERIOD ENDED
     SEPTEMBER 30, 2006:

     Unrecorded inducement expense for the
            exercise of warrants                                $  (127,500)
     Unrecorded amortization of beneficial
            conversion feature of convertible debt                 (226,435)
     Unrecorded amortization of additional beneficial
            conversion feature arising from modification
            of conversion terms                                      (2,075)
                                                                -----------
                                                                $  (356,010)
                                                                ===========

     THE EFFECT ON THE COMPANY'S PREVIOUSLY ISSUED FINANCIAL STATEMENTS FOR THE
     PERIOD ENDED SEPTEMBER 30, 2006 IS SUMMARIZED AS FOLLOWS:

<TABLE>
<CAPTION>


                                                 AS
     BALANCE SHEET DATA                      PREVIOUSLY         INCREASE
                                              REPORTED         (DECREASE)      RESTATED
                                           --------------   --------------    ------------
<S>                                        <C>              <C>               <C>
     TOTAL ASSETS                          $      58,615    $       --        $     58,615

     Loans payable                               798,906         (330,574)         468,332
     Total Current Liabilities                 7,997,047         (330,574)       7,972,868
     TOTAL LIABILITIES                         8,321,881         (330,574)       7,991,307

     Additional paid in capital              121,097,053          686,584      121,783,637
     TOTAL STOCKHOLDER'S DEFICIT              (8,263,266)         330,574       (7,932,692)


     STATEMENT OF OPERATIONS DATA
     Amortization of convertible notes discount     --            228,510          228,510
     Debt conversion expense                        --            127,500          127,500

     NET LOSS                              $    (423,400)   $    (356,010)    $   (779,410)
     -------------------------------------------------------------------------------------
</TABLE>


                                      -13-
<PAGE>


================================================================================

                                   TURBODYNE TECHNOLOGIES, INC. AND SUBSIDIARIES
                                  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                                           (UNAUDITED - EXPRESSED IN US DOLLARS)

  SEPTEMBER 30, 2006 AND 2005
--------------------------------------------------------------------------------


3.   SHARE CAPITAL

     Transactions not disclosed elsewhere in these consolidated interim
     financial statements are as follows:

     a)   Authorized Capital

          At the Annual General Meeting held on June 30, 2004, the shareholders
          approved an increase of authorized capital to 1,000,000,000 common
          shares.

          In 2003, 150,000 of the 1 million preferred shares were designated as
          Series X preferred shares. These shares have a par value of $0.001 per
          share with each share being convertible into 100 common shares at the
          discretion of the holder. As of September 30, 2006 12,675 of Series X
          preferred shares convertible into 1,267,500 common shares are
          outstanding.


     b)   During the nine months ended September 30, 2006 the Company issued
          5,000,000 shares for services and 11,900,000 warrants were exercised.
          During the nine months ended September 30, 2005, the Company issued
          11,516,400 shares of common stock, 10,816,400 for exercise of options
          and 700,000 for conversion of 7,000 preferred shares.





                                      -14-
<PAGE>

================================================================================

                                   TURBODYNE TECHNOLOGIES, INC. AND SUBSIDIARIES
                                  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                                           (UNAUDITED - EXPRESSED IN US DOLLARS)

  SEPTEMBER 30, 2006 AND 2005
--------------------------------------------------------------------------------


3.   SHARE CAPITAL - CONTINUED

     c)   Stock Options

          The following summarizes information relating to stock options for the
          nine months ended September 30, 2006:

<TABLE>
<CAPTION>

                                                                        2006

                                            NON-EMPLOYEES             EMPLOYEES                    TOTAL
                                       -------------------------------------------------------------------------

                                                    WEIGHTED                 WEIGHTED                   WEIGHTED
                                                     AVERAGE                  AVERAGE                    AVERAGE
                                                    EXERCISE                 EXERCISE                   EXERCISE
                                         OPTIONS       PRICE      OPTIONS       PRICE        OPTIONS       PRICE
                                       -------------------------------------------------------------------------
<S>                                  <C>            <C>        <C>           <C>          <C>           <C>
     Outstanding at
        beginning of period            2,505,000    $   0.08    16,033,300    $   0.06    18,538,300    $   0.06

     Expired                            (380,000)       0.07      (136,300)       0.04      (516,300)       0.06
                                       -------------------------------------------------------------------------
     Outstanding at end of
        Period                         2,125,000        0.06    15,897,000        0.06    18,022,000        0.06
                                       -------------------------------------------------------------------------
     Options exercisable at
        end of period                  2,125,000    $   0.06    15,897,000    $   0.06    18,022,000    $   0.06
                                       =========================================================================
</TABLE>




          GRANT OF STOCK OPTIONS TO NON-EMPLOYEES FOR SERVICES

          The Company has recorded $0 (2005 - $41,991) of compensation expense
          relating to stock options issued to non-employees for services
          rendered during the period.

          The per share weighted average fair value of stock options granted for
          the nine-months ended September 30, 2005 was $0.01, $0.02 and $0.04 on
          the date of grant using the Black-Scholes option-pricing model with
          the following weighted average assumptions in 2005: expected dividend
          yield Nil%; expected volatility of 141%, 159% and 163%; risk-free
          interest rate of 2.89% and 3.75%, and expected life of 1 year and 5
          years.


          GRANT OF STOCK OPTIONS TO EMPLOYEES FOR SERVICES

          The Company has recorded $0 (2005 - $63,197) of compensation expense
          relating to stock options issued to employees. The per share weighted
          average fair value of stock options granted to employees during 2005
          was $0.02, calculated on the date of grant using the Black-Scholes
          option pricing model with the following weighted average assumptions
          in 2005: expected dividend yield Nil%; expected volatility of 163%;
          risk-free interest rate from 3.75%; and an expected life of 5 years.


                                      -15-
<PAGE>

================================================================================

                                   TURBODYNE TECHNOLOGIES, INC. AND SUBSIDIARIES
                                  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                                           (UNAUDITED - EXPRESSED IN US DOLLARS)

  SEPTEMBER 30, 2006 AND 2005
--------------------------------------------------------------------------------


3.   SHARE CAPITAL - CONTINUED

     d)   Stock Purchase Warrants

          At September 30, 2006, the Company had 6,561,112 stock purchase
          warrants outstanding. These warrants were issued in connection with
          private placements and additional compensation for officers, directors
          and consultants.

          Details of share purchase warrants issued and expired during the nine
          months ended September 30, 2006 are as follows:

<TABLE>
<CAPTION>

                                                                    2006

                                      INVESTORS        EMPLOYEES & CONSULTANTS         TOTAL
                              -----------------------------------------------------------------------
                                             WEIGHTED              WEIGHTED                  WEIGHTED
                                              AVERAGE               AVERAGE                   AVERAGE
                                             EXERCISE              EXERCISE                  EXERCISE
                                 WARRANTS       PRICE    WARRANTS     PRICE      WARRANTS       PRICE
                              -----------------------------------------------------------------------
<S>                           <C>            <C>      <C>          <C>         <C>           <C>
      Outstanding at
        beginning of period    11,573,510    $   0.09       --     $   0.00    11,573,510    $   0.09
      Granted                   6,000,000        0.01  4,061,112       0.01    10,061,112        0.01
      Exercised               (11,900,000)       0.01       --          --    (11,900,000)       0.01
      Expired                  (3,173,510)       0.21       --          --     (3,173,510)       0.21
                              -----------------------------------------------------------------------
      Outstanding at end of
        period                  2,500,000    $   0.10  4,061,112   $   0.01     6,561,112    $   0.04
                              -----------------------------------------------------------------------
      Warrants exercisable
        at end of period        2,500,000    $   0.12  4,061,112   $   0.01     6,561,112    $   0.04
                              =======================================================================
</TABLE>



          The Company has recorded $103,191 (2005 - $0) of compensation expense
          relating to 4,061,112 warrants issued to consultants. The per share
          weighted average fair value of stock options granted to consultants
          during 2006 was $0.02, calculated on the date of grant using the
          Black-Scholes option pricing model with the following weighted average
          assumptions in 2005: expected dividend yield Nil%; expected volatility
          of 158%, 155% and 146%; risk-free interest rate of 4.60%, 4.70%,
          4.93%, 4.98%, 5.06% and 5.11%; and an expected life of 7 years.

          In 2006 consulting contracts were committed or signed with a total of
          77,200,000 warrants of which only 4,061,112 warrants were vested as of
          September 30, 2006. The remaining warrants may vest over the next two
          or more years upon the continuation of service of the holders and/or
          the happening of specific events.

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


                                      -16-
<PAGE>


================================================================================

                                   TURBODYNE TECHNOLOGIES, INC. AND SUBSIDIARIES
                                  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                                           (UNAUDITED - EXPRESSED IN US DOLLARS)

  SEPTEMBER 30, 2006 AND 2005
--------------------------------------------------------------------------------


4.   LOANS PAYABLE
                                                               2006         2005
                                                           ---------------------
     Unsecured, non-interest bearing loan payable,
     due on demand from stockholders and other parties     $ 148,600   $ 148,600

     Note payable, 5% per annum, due June 15, 2007            15,219       --

     Convertible notes payable net of unamortized
     discount of $242,430 and warrant
     valuation of $88,144 **                                 304,513       --
                                                           ---------------------
           Total Loans Payable                             $ 468,332   $ 148,600
                                                           =====================

     **The Company issued $615,000 convertible notes with detachable warrants.
     The notes bear interest at 5% and mature within one year from date of
     issuance. The Notes are convertible, at the option of the holder, to shares
     of the Company's common stock at a conversion price per share equal to the
     lower of (i) 70% of the market price of common stock at date of issuance;
     or (ii) $0.025. The warrants are to purchase the Company's common stock at
     $0.025 per share expiring in five years. In September 2006 the board of
     directors offered to decrease the note conversion price to $0.005 per share
     if the note holders exercised their warrants at $0.01 by September 30,
     2006. In consideration for the reduction, the maturity of the notes was
     extended for another year. As a result of the inducement, the Company
     recognized $127,500 of debt conversion expense for the quarter ended
     September 30, 2006 relating to note holders who converted during the
     quarter.

     The Company also issued to the holders of convertible notes warrants to
     purchase 12,300,000 shares of the Company's common stock at $0.025 per
     share. In accordance with generally accepted accounting principles, the
     Company allocates the proceeds received from debt or convertible debt with
     detachable warrants using the relative fair value of the individual
     elements at the time of issuance. Using the Black-Scholes valuations model
     the aggregate value of the 12,300,000 warrants is $150,884. Assumptions
     used to value the warrants ranged between: 1.46% and 1.55% for expected
     volatility; 4.36% and 5.02% for risk-free interest rate and an expected
     life of 5 years. The amount allocated to the warrants amounts to $88,144
     and has been recognized as additional paid in capital. As of September 30,
     2006, 11,900,000 of the warrants have been exercised.

     In accordance with generally accepted accounting principles, in the event
     the conversion price on notes is less than the Company's stock price on the
     date of issuance, the difference is considered to be a beneficial
     conversion feature and is amortized as interest expense over the period
     from the date of issuance to the earlier of the conversion date or the
     stated maturity date. The aggregate beneficial conversion feature of these
     convertible notes is $358,144. In relation to the inducement to convert, an
     additional beneficial conversion feature of $112,795 has been recognized.

     For the quarter ended September 30, 2006, the Company recognized $228,510
     in interest expense related to the amortization of the beneficial
     conversion feature recorded on these convertible notes. As of September 30,
     2006, the remaining balance of the beneficial conversion feature was
     $242,430.

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


                                      -17-
<PAGE>

================================================================================

                                   TURBODYNE TECHNOLOGIES, INC. AND SUBSIDIARIES
                                  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                                           (UNAUDITED - EXPRESSED IN US DOLLARS)

  SEPTEMBER 30, 2006 AND 2005
--------------------------------------------------------------------------------


5.   LONG-TERM DEBT

     During the quarter ended September 30, 2004, the Company entered into a
     loan agreement collateralized by an automobile for an aggregate of $36,035.
     The loan bears interest at 6.64%, paid monthly; the last payment of $707 is
     due August 4, 2009.

     Subsequent to March 31, 2005 the Company was unable to make the payments so
     the bank repossessed the automobile and sold it at auction. The Company
     currently owes $17,428 which is included in accounts payable.

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

6.   COMMITMENTS AND CONTINGENCIES

     The Company is party to various legal claims and lawsuits that 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.

     LITIGATION

     a)   TST, Inc.

          In March 2000, TST, Inc. ("TST"), a vendor to a subsidiary of Pacific
          Baja (Note 5(b)) filed an action against the Company alleging that in
          order to induce TST to extend credit to a subsidiary of Pacific Baja,
          the Company executed guarantees in favor of TST. TST alleged that the
          subsidiary defaulted on the credit facility and that the Company is
          liable as guarantor.

          The Company and TST entered into a settlement agreement and release.
          Under the terms of the agreement, the Company agreed to the immediate
          entry of judgment against the Company in the amount of $2,068,078 plus
          interest from 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; and

          TST cannot execute on its judgment until Turbodyne either: (a) files a
          voluntary bankruptcy case; (b) is the subject of an involuntary case;
          or (c) effects an assignment for the benefit of creditors. Any
          proceeds received by TST or its president from the sale of the issued
          shares will be automatically applied as a credit against the amount of
          the judgment against the Company in favor of TST. Prior to March 31,
          2004, 147,000 shares issued in connection with the TST settlement had
          been sold which have reduced the provision for lawsuit settlement by
          $23,345. At September 30, 2006, the Company has included $3,098,068
          (December 31, 2005 - $2,900,320) in regard to this matter in provision
          for lawsuit settlements. 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. TST and Pacific Baja settled the preference payment issue
          with TST paying $20,000 to Pacific Baja and TST relinquishing the
          right to receive $63,000, therefore, the $2,130,000 that the Company
          had included in the provision for lawsuit settlements, has been
          reduced to $83,000. The $2,047,000 difference has been recorded as a
          lawsuit settlement income in the last quarter of 2005.


                                      -18-
<PAGE>


================================================================================

                                   TURBODYNE TECHNOLOGIES, INC. AND SUBSIDIARIES
                                  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                                           (UNAUDITED - EXPRESSED IN US DOLLARS)

  SEPTEMBER 30, 2006 AND 2005
--------------------------------------------------------------------------------


6.   COMMITMENTS AND CONTINGENCIES - CONTINUED


     b)   Pacific Baja Bankruptcy

          In July 1999, a major creditor of the Company's wholly-owned major
          subsidiary, Pacific Baja, began collection activities against Pacific
          Baja which threatened Pacific Baja's banking relationship with, and
          source of financing from, Wells Fargo Bank. As a result, Pacific Baja
          and its subsidiaries commenced Chapter 11 bankruptcy proceedings on
          September 30, 1999.

          In September 2001, the Pacific Baja Liquidating Trust (the "Trust")
          commenced action against us in the aforesaid Bankruptcy Court. The
          Trust was established under the Pacific Baja bankruptcy proceedings
          for the benefit of the unsecured creditors of Pacific Baja.

          The Company vigorously contested the Complaint until April 22, 2005
          when the Company entered into a stipulation for entry of judgment and
          assignment in the Pacific Baja bankruptcy proceedings for $500,000 to
          be issued in common stock or cash or a combination. Additionally the
          Company assigned to the bankruptcy Trust the rights to $9,500,000
          claims under any applicable directors and officers liability insurance
          policies. The bankruptcy Trust also agreed to a covenant not to
          execute against the Company regardless of the outcome of the insurance
          claims

          The Company has completed the assignment of its insurance claims, but
          has not completed the cash/stock payment that was to be paid to the
          Trust by December 9, 2005. We are negotiating with the Trustee
          regarding this default

     c)   Former Officer

          On May 20, 2004, one of the Company's former officers, Mr. Peter
          Hofbauer, filed a motion against the Company alleging that the Company
          failed to pay him the sum of $369,266 pursuant to the terms of a
          purported settlement agreement, allegedly made for the purposes of
          settling amounts owed to the former officer for services to the
          Company. On August 3, 2004 a writ of attachment was applied to the
          Company's Certificate of Deposit for $315,000. On October 25, 2004 the
          former officer and the Company signed and filed with the court a
          Stipulation re: Settlement and Order. The stipulation ordered the
          Company to deliver 4,000,000 shares of common stock without
          restrictions to be used by the former officer to raise funds to settle
          amounts owed to him by the Company. As funds are raised to settle
          amounts owed, writs will be reversed from the Certificate of Deposit.
          If the funds raised are not adequate to settle amounts owed, the
          Company will be obligated to issue further shares to the former
          officer in order to settle amounts owed.

                                      -19-
<PAGE>


================================================================================

                                   TURBODYNE TECHNOLOGIES, INC. AND SUBSIDIARIES
                                  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                                           (UNAUDITED - EXPRESSED IN US DOLLARS)

  SEPTEMBER 30, 2006 AND 2005
--------------------------------------------------------------------------------


6.   Commitments and Contingencies - Continued

     c)   Former Officer - Continued

          During 2004 the Company issued the 4,000,000 shares. Mr. Hofbauer has
          sold 2,600,000 shares and released $125,000 of the Certificate of
          Deposit. On June 7, 2005 Mr. Hofbauer claimed the remaining $210,496
          in the Certificate of Deposit. The remaining 1,400,000 shares have
          been returned to the Company and are included in Treasury Shares.

     d)   Former Director

          A former director of Turbodyne, Erwin Kramer (the "Plaintiff"),
          represented by his attorney Claus Schmidt, a former attorney of
          Turbodyne at the time of the alleged claim, filed a legal action in
          Germany against Turbodyne, our non-operating subsidiary Turbodyne
          Europe GmbH ("Turbodyne GmbH"), and ex-employees of Turbodyne GmbH,
          Peter Kitzinski and Marcus Kumbrick (collectively the "Defendants"),
          with the Regional Frankfurt court (the "German Court") in September,
          2004. The Plaintiff claims damages of Euro 245,620 plus 5% interest
          per annum against the Defendants in respect of actions taken by the
          Defendants while employed with Turbodyne GmbH.

          On September 9, 2004, the German Court, on a motion by the Defendants
          to the suit, dismissed the Plaintiff's claims against Peter Kitzinski
          and Marcus Kumbrick, and ordered that Turbodyne's patents in Munich be
          attached pending the resolution of the Plaintiff's claim against
          Turbodyne and Turbodyne GmbH. On June 13, 2005 the Court in Frankfurt
          dismissed the claim. The Plaintiff filed an appeal against this
          judgment with the Higher Regional Court in Frankfurt.


          The Plaintiff's attorney, Claus Schmidt, also filed similar suits on
          behalf of Frank Walter and Herbert Taeuber. The German courts are
          indicating that all three suits need to be filed in the United States
          not Germany. Presently the suits have not been filed in the United
          States. We vigorously dispute this claim and have retained German
          counsel to defend it and seek its dismissal. At September 30, 2006,
          the Company has included $405,785 in regard to this matter in the
          provision for lawsuit settlements.

     e)   Other

          The Company is currently involved in various collection claims and
          other legal actions. It is not possible at this time to predict the
          outcome of the legal actions.


                                      -20-
<PAGE>


ITEM 2.      MANAGEMENT'S DISCUSSION AND ANALYSIS AND RESULTS 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.

As used in this Quarterly Report on Form 10-QSB, the terms "we", "us", "our",
"Turbodyne" and "our company" mean Turbodyne Technologies, Inc., unless
otherwise indicated. All dollar amounts in this Quarterly Report on Form 10-QSB
are in U.S. dollars unless otherwise stated.


                                      -21-
<PAGE>


RESTATEMENT OF FINANCIAL STATEMENTS

The Company concluded that our consolidated financial statements for September
30, 2006, December 31, 2006 and March 31, 2007 needed to be restated since the
liabilities were overstated liabilities, expenses and net loss were understated
and additional paid in capital was understated.

We are restating our previously issued consolidated financial statements for the
following reasons: unrecorded beneficial conversion feature of convertible debt
and related amortization, unrecorded value of detachable warrants issued with
the convertible debt, unrecorded debt conversion expense as a result of
Company's modification of conversion terms and terms for the exercise of
warrants to induce conversion and warrants exercise.

The following table sets forth the impact of these restatements on certain
amounts previously reported in our consolidated financial statements for the
period ended September 30, 2006:

<TABLE>
<CAPTION>


                                                  AS
                                              PREVIOUSLY         INCREASE
BALANCE SHEET DATA                             REPORTED         (DECREASE)        RESTATED
                                             -------------    -------------     ------------

<S>                                          <C>              <C>               <C>
TOTAL ASSETS                                 $      58,615    $       --        $     58,615
Loans payable                                      798,906         (330,574)         468,332
Total Current Liabilities                        7,997,047         (330,574)       7,972,868
TOTAL LIABILITIES                                8,321,881         (330,574)       7,991,307
Additional paid in capital                     121,097,053          686,584      121,783,638
TOTAL STOCKHOLDER'S DEFICIT                     (8,263,266)         330,574       (7,932,692)


STATEMENT OF OPERATIONS DATA
Amortization of convertible notes discount            --            228,510          228,510
Debt conversion expense                               --            127,500          127,500

NET LOSS                                     $    (423,400)   $    (356,010)    $   (779,410)
</TABLE>


                                      -22-
<PAGE>





OVERVIEW


New management took control September 9, 2005 and began the process of revival
of the Company. We had suspended our business operations in April 2005 due to a
lack of financing. Accordingly, our ability to carry out our plan of operations
has been materially and adversely affected. The current status of our business
and the events that lead to the suspension of our business operations in April
2005 are discussed below under "Recent Corporate Developments". We are
attempting to enter into financing agreements with outside sources and with our
existing shareholders. See "Plan of Operations".

We are an engineering Company and have been engaged, for over ten years, in the
design and development of forced-air induction (air-charging) technologies that
improve the performance of gas and diesel internal combustion engines. Optimum
performance of an internal combustion engine requires a proper ratio of fuel to
air. Power available from the engine is reduced when a portion of the fuel is
not used. In a wide range of gas and diesel engines additional air is needed to
achieve an optimal result. The traditional engineered solution for this problem
is to use belts or exhaust gas (superchargers or turbochargers) to supply
additional air to an engine. Turbodyne, instead, uses electric motors to supply
additional air. Because an electric motor can be engaged more quickly, compared
to the mechanical delays inherent in a belt or exhaust gas device, Turbodyne's
products reduce this `turbolag' and otherwise adds to the effectiveness of gas
and diesel engines used in automotive, heavy vehicle, marine, and other internal
combustion installations.

The focus of our business plan, now that we are implementing resumption of
operations, is to restructure the company's balance sheet and re-engineer our
financial plan. We are reviewing our plans for launching our products. Our
ability to complete commercialization of our products remains subject to our
ability to obtain additional financing. See "Plan of Operations", below.




RECENT CORPORATE DEVELOPMENTS

As of September 9, 2005 the Company entered into an AGREEMENT AND PLAN OF MERGER
(the "Agreement"). A majority owned subsidiary of Aspatuck Holdings Ltd.
("Aspatuck") was merged into our newly formed wholly owned subsidiary. Prior to
the merger, this subsidiary of Aspatuck entered into a consulting agreement
("Consulting Agreement") with Stamford Research LLC, which is obligated to
provide the services of Albert Case to the Company. Upon completion of the
merger, 139,192,222 shares of the Company's Common Stock were issuable to
holders of the subsidiary of Aspatuck and 1,300,000 such shares became issuable
to Stamford Research LLC, under the Consulting Agreement. At this time Mr.
Albert Case became President and Chief Executive Officer and Mr. Jason Meyers,
principal shareholder of Aspatuck, became Chairman of the Board of Directors.
Additional shares are issuable to the former shareholders of the Aspatuck
subsidiary when the Company issues any securities related directly or indirectly
to pre-merger events.

                                      -23-
<PAGE>


The new management has obtained some additional financing and has resumed
limited business activity including:

     o    Updating our financial statements and required SEC filings
     o    Assessment of our technology including patents and other rights
     o    Initiating an engineering program for our Turbopac(TM) product line
     o    Reviews and negotiating to settle outstanding litigation and
          liabilities.
     o    Formulating business and marketing plans

There is no assurance we will be able to obtain sufficient financing to
implement full scale operations.



PRIOR TO THE MERGER:

     1.   We became unable to sustain our business operations due to a lack of
          financing and our working capital deficit. In April 2005, we laid off
          our employees, vacated our premises and relinquished the majority of
          the fixed assets to the landlord to sell and offset against rent
          payable.

     2.   On June 7, 2005 the Company's remaining cash was claimed in connection
          with a litigation settlement and prior attachment.

     3.   In April 2005 we suspended work on the development of our products and
          technologies as part of the suspension of our business operations.




PLAN OF OPERATIONS


Depending on sufficient financing our plan of operations over the next twelve
months will be to focus on continued development of our product line and the
re-launching of our TurboPacTM product line while we are reformulating our
financial plan and resolving outstanding litigation, accounts payable and other
liabilities. Our plan includes the following:

     1.   Continuing a focus on central competencies in design and protection of
          our proprietary technologies and knowledge, continuity of products,
          and innovative applications of our products.

     2.   Updating and implementing plans for re-launching our TurboPac (TM) and
          TurboFlow (TM) product families to the market.

     3.   Developing the product testing, quality assurance, and product life
          cycle disciplines suited to market demands, regulatory compliance, and
          efficient production.

     4.   Developing the supply chain and manufacturing relationships to support
          an outsource engineering and manufacturing capacity to correlate costs
          with product activity.

                                      -24-
<PAGE>




RESULTS OF OPERATIONS

THIRD QUARTER AND NINE MONTHS SUMMARY

<TABLE>
<CAPTION>

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

                                Third Quarter Ended September 30                Nine Months Ended September 30
                           -------------------------------------------  ------------------------------------------
                                                          Percentage                                   Percentage
                               2006           2005         Increase /       2006         2005           Increase /
                                                          (Decrease)                                    (Decrease)
                           -----------    -----------    -----------    -----------    -----------    ------------
<S>                        <C>            <C>            <C>            <C>            <C>            <C>
Total Income               $     5,556    $     5,556        Nil        $    16,668    $    16,668         Nil
Operating Expenses         ($  374,697)   ($  184,723)       103%       ($  959,558)   ($1,521,403)        (37%)
Net Loss from Operations   ($  369,141)   ($  179,167)       106%       ($  942,890)   ($1,504,735)        (37%)
Other Income (Expenses)    $   174,184    ($   14,297)     1,318%       $   163,480        (12,721)      1,385%

Net Loss                   ($  194,957)   ($  193,464)        (1%)      ($  779,410)   ($1,517,456)         49%



NET REVENUE
                           ------------------------------------------   ------------------------------------------
                                Third Quarter Ended September 30               Nine Months Ended September 30
                           ------------------------------------------   ------------------------------------------
                                                          Percentage                                   Percentage
                               2006           2005         Increase /       2006         2005           Increase /
                                                          (Decrease)                                    (Decrease)
                           -----------    -----------    -----------    -----------    -----------    ------------
Licensing Fee              $     5,556    $     5,556        Nil        $    16,668    $    16,668         Nil
</TABLE>

We had no revenue in 2006 and 2005 other than recognition of amortized license
fees. During the year ended December 31, 2003, $400,000 in licensing fees was
deferred and amortized over 18 years. As a result, for the nine months ended
September 30, 2006 and 2005, $16,668 of licensing fees was recognized as income.
Our limited receipts (not reflected as revenue) are derived for the most part
from selling "shop" versions of our product and reflect the fact that our
Turbopac(TM) products are in the development stage. During 2005, we sold one
prototype for $27,319, which reduced our research and development expenses. Our
continued net losses from operations reflect our continued operating expenses
and our inability to generate revenues. We believe that we will not be able to
generate any significant revenues from the TurboPac(TM) products until we
complete our production models and enter into manufacturing and sales
arrangements.

COSTS OF SALES

Because we had no sales in 2006 and 2005, we did not have any costs of sales
during any portion of these years.


                                      -25-
<PAGE>

OPERATING EXPENSES

Operating expense increased in third quarter 2006 and for the nine months ended
September 30, 2006 operating expenses decreased due to our attempt to continue
operations in 2005 with significant research and litigation expense. Since we
resumed operations in late 2005, we have started to devote amounts to research
but we have not been compelled to spend substantial amounts on litigation
expenses through the third quarter of 2006.

The primary components of our operating expenses are outlined in the table
below:

<TABLE>
<CAPTION>

                           ------------------------------------------   ------------------------------------------
                               Third Quarter Ended September 30               Nine Months Ended September 30
                           ------------------------------------------   ------------------------------------------
                                                          Percentage                                   Percentage
                               2006           2005         Increase /       2006         2005           Increase /
                                                          (Decrease)                                    (Decrease)
                           -----------    -----------    -----------    -----------    -----------    ------------
<S>                       <C>             <C>             <C>          <C>            <C>               <C>
Selling, General and
Administrative Expenses      $257,615       $117,654        119%          $618,535       $444,417          39%
Research and Development
Expenses                     $106,803           --         (100%)         $176,910       $371,486          (52%)
Litigation Expense             $9,916        $66,496        (85%)         $162,896       $694,679          (77%)
</TABLE>


SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

General and administrative costs included management compensation and overhead.
Costs increased because we resumed activity for the full period in 2006


RESEARCH AND DEVELOPMENT EXPENSES

The increase in research and development costs for the third quarter ended
September 30, 2006 and the decrease in costs for the nine months then ended is
due to the resumption of research in the current quarter and the suspension of
our operations in April 2005. Our research and development costs related to
present and future products are charged to operations in the period incurred.
Our research and development activities during the nine months ended September
30, 2006 are associated with the development of our Turbopac product.


LITIGATION EXPENSES

The most significant component of our litigation expense was the accrual of
interest relating to TST, Inc. settlement.

Our litigation expenses are attributable to our involvement in several ongoing
legal proceedings or the settlement of these proceedings decreased for the nine
months ended September 31, 2006 because we were not actively in litigation.
Litigation expenses during the balance of 2006 are anticipated to consist
primarily of legal expenses relating to the proceedings involving our former
subsidiary, Pacific Baja and accrual of interest relating to TST, Inc.

                                      -26-
<PAGE>


STOCK BASED COMPENSATION

For the nine months ended September 30, 2006 stock based compensation included
in expenses was $103,191 and $205,006 for the nine months ended September 30,
2005. Stock based compensation includes both options and warrants that were
issued to employees, officers, directors and consultants.

The method by which we account for stock based compensation is discussed below
under "Critical Accounting Policies".


OTHER INCOME (EXPENSE)

<TABLE>
<CAPTION>

                           ------------------------------------------   ------------------------------------------
                               Third Quarter Ended September 30               Nine Months Ended September 30
                           ------------------------------------------   ------------------------------------------
                                                          Percentage                                   Percentage
                               2006           2005         Increase /       2006         2005           Increase /
                                                          (Decrease)                                    (Decrease)
                           -----------    -----------    -----------    -----------    -----------    ------------
<S>                       <C>             <C>             <C>          <C>            <C>               <C>

Debt Relief                   $537,734            -        100%            $537,734            -        100%

Gain on sale of assets               -    ($14,297)       (100%)                  -    ($13,527)       (100%)

Interest Income                      -            -          -                    -       $1,836       (100%)

Interest Expense              ($7,540)            -        100%           ($18,244)     ($1,030)      1,672%
Amortization of convertible
debt discount               ($228,510)            -        100%          ($228,510)            -        100%
Debt conversion expense     ($127,500)            -        100%          ($127,500)            -        100%
</TABLE>


The Company continues to negotiate with our creditors and trade debt holders on
settlement of accounts payable from periods prior to the current management
assuming operation of the Company. When achieved this is represented as a gain
on extinguishment of accounts payable.

The Company had additional other expenses for the quarter ended September 30,
2006 for amortization of discount on convertible notes and for related debt
conversion expenses.


FINANCIAL CONDITION

CASH AND WORKING CAPITAL
<TABLE>
<CAPTION>

                                ----------------------- ---------------------- -------------
                                                                                Percentage
                                                                                 Increase
                                 At September 30, 2006   At December 31, 2005   (Decrease)
                                ----------------------- ---------------------- -------------
<S>                                            <C>                   <C>          <C>
Current Assets                                 $57,523               $101,210     (43%)
Current Liabilities                       ($7,666,473)           ($7,818,074)      (2%)
                                ----------------------- ---------------------- -------------
Working Capital Deficit                   ($7,608,950)           ($7,716,864)       1%
                                ======================= ====================== =============
</TABLE>


                                      -27-
<PAGE>


The increase to our working capital deficit was primarily attributable to a
decrease in cash and an increase in accounts payable, convertible notes and
provision for lawsuit settlements as discussed below.


LIABILITIES

<TABLE>
<CAPTION>
                                    ----------------------- ---------------------- -------------
                                      At September 30, 2006   At December 31, 2005   Percentage
                                                                                      Increase
                                                                                     (Decrease)
                                     ----------------------- ---------------------- -------------
<S>                                              <C>                    <C>              <C>
Provisions for Lawsuit Settlements               $4,582,853             $4,385,105       5%
Accounts Payable                                 $2,161,940             $2,491,259     (13%)
Accrued Liabilities                                $453,348               $476,048      (5%)
Loans Payable                                      $468,332               $465,662      215%
</TABLE>


The increase in provision for lawsuits is due to accrued interest on outstanding
judgments. Accounts payable decreased due to a settlement of debt. Without this
settlement accounts payable would have increased due to a lack of funds to pay
creditors. Short-term loans increased in connection with our note financing to
generate cash. Short-term loans are net of discounts of $242,430 and warrant
allocation of $88,144.

The Company issued $615,000 convertible notes with detachable warrants. The
notes bear interest at 5% and mature within one year from date of issuance. The
Notes are convertible, at the option of the holder, to shares of the Company's
common stock.

In addition, the Company issued to the holders of convertible notes warrants to
purchase 12,300,000 shares of the Company's common stock. In accordance with
generally accepted accounting principles, the Company allocates the proceeds
received from debt or convertible debt with detachable warrants using the
relative fair value of the individual elements at the time of issuance.

We continue to negotiate with our creditors for the payment of our accounts
payable and accrued liabilities. Payment of these liabilities is contingent on
sufficient new funding being received that would enable us to make payments to
the creditors. Our ability to continue our operations is also conditional upon
the forbearance of our creditors.

Included in short-term loans at September 30, 2006 are unsecured, non-interest
bearing advances of $148,600 that we anticipate will be converted into shares of
our common stock.


CASH FLOWS

<TABLE>
<CAPTION>
                                                        --------------------------------------
                                                               Nine Months Ended September 30
                                                         --------------------------------------
                                                                    2006                  2005
                                                                    ----                  ----
<S>                                                           <C>                   <C>
Net Cash provided by (used in) Operating Activities           ($511,687)            ($204,972)
Net Cash provided by (used in) Investing Activities                    -               $17,770
Net Cash provided by  (used in) Financing Activities            $434,000              $185,926
Net Increase (decrease) in Cash During Period                  ($77,687)              ($1,276)
                                                         ======================================
</TABLE>


                                      -28-
<PAGE>


The increase in cash used in operating activities was due to the suspension of
our operations in April 2005.


We will require additional financing if we are to continue as a going concern
and to finance our business operations. While we have obtained some financing in
2005 and 2006 we need substantially more capital. 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 are presently in the process of negotiating to raise working capital to
finance our operations which 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 cease operating and seek relief under appropriate statutes.



CRITICAL ACCOUNTING POLICIES

Our consolidated financial statements have been prepared in accordance with
accounting principles generally accepted in the United States of America. As
such, some accounting policies have a significant impact on the amount reported
in these financial statements. Note that our preparation of this Quarterly
Report on Form 10-QSB requires us to make estimates and assumptions that affect
the reported amount of assets and liabilities, disclosure of contingent assets
and liabilities at the date of our financial statements, and the reported
amounts of revenue and expenses during the reporting period. There can be no
assurance that actual results will not differ from those estimates. We have
identified certain accounting policies, described below, that are the most
important to the portrayal of our current financial condition and results of
operations.


THERE IS SUBSTANTIAL DOUBT AS TO OUR ABILITY TO CONTINUE AS A GOING CONCERN

Our reviewed 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 and have an
accumulated deficit of $128,125,165 at September 30, 2006, have used cash in our
operating activities in recent periods, are subject to lawsuits brought against
us by shareholders and other parties, and based on our projected cash flows for
the ensuing year, we are required to seek additional equity or debt financing in
order to continue our present operations. These matters raise substantial doubt
about our ability to continue as a going concern.


STOCK BASED COMPENSATION

Prior to January 1, 2005, the Company accounted for employee stock-based
compensation using the intrinsic value method supplemented by pro forma
disclosures in accordance with APB 25 and SFAS 123 "Accounting for Stock-Based
Compensation" ("SFAS 123"), as amended by SFAS No.148 "Accounting for
Stock-Based Compensation--Transition and Disclosures." Under the intrinsic value
based method, compensation cost is the excess, if any, of the quoted market
price of the stock at grant date or other measurement date over the amount an
employee must pay to acquire the stock.

                                      -29-
<PAGE>


Effective January 1, 2005 the Company adopted SFAS 123R using the modified
prospective approach and accordingly prior periods have not been restated to
reflect the impact of SFAS 123R. Under SFAS 123R, stock-based awards granted
prior to its adoption will be expensed over the remaining portion of their
vesting period. These awards will be expensed under the accelerated amortization
method using the same fair value measurements which were used in calculating pro
forma stock-based compensation expense under SFAS 123. For stock-based awards
granted on or after January 1, 2005, the Company will amortize stock-based
compensation expense on a straight-line basis over the requisite service period,
which is generally a five-year vesting period.

SFAS 123R requires forfeitures to be estimated at the time of grant and revised,
if necessary, in subsequent periods if actual forfeitures differ from initial
estimates. Stock-based compensation expense is recorded net of estimated
forfeitures such that expense is recorded only for those stock-based awards that
are expected to vest. Previously under APB 25 to the extent awards were
forfeited prior to vesting, the corresponding previously recognized expense was
reversed in the period of forfeiture.


REVENUE RECOGNITION

Prior to the suspension of our operations in 2003, we recognized revenue upon
shipment of product. Since the re-commencement of operations in 2004, we
recognize license and royalty fees over the term of the license or royalty
agreement. Previously, research prototypes were sold and proceeds reflected by
reductions in our research and development costs. As new technology
pre-production manufacturing units are produced and related non-recurring
engineer services are delivered we will recognize the sales proceeds as revenue.


RESEARCH AND DEVELOPMENT

Research and development costs related to present and future products are
charged to operations in the year incurred. Previously, research prototypes were
sold and proceeds reflected by reductions in our research and development costs.
As new technology pre-production manufacturing units are produced and related
non-recurring engineer services are delivered we will recognize the sales
proceeds as revenue.


                                      -30-
<PAGE>



NEW ACCOUNTING PRONOUNCEMENTS


In September 2006, the United States Securities and Exchange Commission (SEC)
issued Staff Accounting Bulletin No. 108, "Considering the Effects of Prior Year
Misstatements when Quantifying Misstatements in Current Year Financial
Statements" ("SAB 108"). This SAB provides guidance on the consideration of the
effects of prior year misstatements in quantifying current year misstatements
for the purpose of a materiality assessment. SAB 108 establishes an approach
that requires quantification of financial statement errors based on the effects
on each of the company's balance sheets, statements of operations and related
financial statement disclosures. The SAB permits existing public companies to
record the cumulative effect of initially applying this approach in the first
year ending after November 15, 2006 by recording the necessary correcting
adjustments to the carrying values of assets and liabilities as of the beginning
of that year with the offsetting adjustment recorded to the opening balance of
retained earnings. Additionally, the use of the cumulative effect transition
method requires detailed disclosure of the nature and amount of each individual
error being corrected through the cumulative adjustment and how and when it
arose. The Company is currently evaluating the impact SAB 108 may have on its
financial condition or results of operations.

In September 2006, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Issues No. 157, "Fair Value Measurements"
("SFAS 157"), which defines the fair value, establishes a framework for
measuring fair value and expands disclosures about fair value measurements. This
statement is effective for financial statements issued for fiscal years
beginning after November 15, 2007, and interim periods within those fiscal
years. Early adoption is encouraged, provided that the Company has not yet
issued financial statements for that fiscal year, including any financial
statements for an interim period within that fiscal year. The Company is
currently evaluating the impact SFAS 157 may have on its financial condition or
results of operations.

In July 2006, the FASB released FASB Interpretation No. 48, Accounting for
Uncertainty in Income Taxes, an interpretation of FASB Statement No. 109 (FIN
48). FIN 48 clarifies the accounting and reporting for uncertainties in income
tax law. This interpretation prescribes a comprehensive model for the financial
statement recognition, measurement, presentation and disclosure of uncertain tax
positions taken or expected to be taken in income tax returns. This statement is
effective for fiscal years beginning after December 15, 2006. The Company is
currently evaluating the impact FIN 48 may have on its financial condition or
results of operations.


                                      -31-
<PAGE>



ITEM 3A.          CONTROLS AND PROCEDURES.


As required by Rule 13a-15 under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), the Company's Chief Executive Officer and its Chief
Financial Officer reviewed and evaluated the effectiveness of the Company's
disclosure controls and procedures (as defined in Exchange Act Rule
13a-15(e)).These controls are designed to ensure that material information the
Company must disclose in its reports filed or submitted under the Exchange Act
is recorded, processed, summarized and reported on a timely basis. These
officers have concluded, based on that evaluation, that as of such date, the
Company's disclosure controls and procedures were effective at a reasonable
assurance level for a Company with substantially no activities and no personnel.
The Company believes it must devise new procedures as it increases its activity
and its personnel.

         As required by Rule 13a-15 under the Exchange Act the Company's Chief
         Executive Officer and its Chief Financial Officer reviewed and
         evaluated the effectiveness of the Company's internal control over
         financial reporting (as defined in Exchange Act Rule 13a-15(f)), The
         term "internal control over financial reporting" is a process designed
         by, or under the supervision of, the registrant's principal executive
         and principal financial officers, to provide reasonable assurance
         regarding the reliability of financial reporting and the preparation of
         financial statements for external purposes in accordance with generally
         accepted accounting principles.

The Company's Chief Executive Officer and Chief Financial Officer believed that
for the limited operations of the Company internal controls over financial
reporting were adequate to provide reasonable assurance at quarter end.
Nevertheless these controls indicated substantial weakness that must be
rectified if the Company increased operations, including a lack of segregation
of duties.


                                      -32-
<PAGE>


PART II - OTHER INFORMATION


ITEM 2.  UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

The following issuances of securities occurred during the three months ended
September 30, 2006.

During the three months ended September 30, 2006 we sold 0.80 units of our
securities in a private placement. Each unit consisted of $100,000, 5%
convertible note and warrants to purchase 2,000,000 of our shares at $0.025.
Each unit consisted of $100,000, 5% convertible note and warrants to purchase
2,000,000 of our shares at $0.025. The note is convertible at any time prior to
payment. The conversion price is equal to the lesser of (i) 70% of the Market
Price of (but not less than $.003) or (ii) $.025 .If the Market Price of the
Common Stock is $.04 for a period of 20 consecutive trading days then the
Conversion Price shall be $.025. The shares were issued pursuant to Section 4(2)
of the Securities Act of 1933 and are exempt from the registration requirements
under that act.

On September 14, 2006 the board of directors extended the maturity date to
October 31, 2007 and decreased the conversion price to one-half penny ($.005)
for new private placements and allowed current note holders to exchange their
current notes if they exercised their warrants by September 30, 2006. Note
holders exercised 11,900,000 warrants therefore extending the maturity date and
decreasing the conversion price for $595,000 of notes.

On September 30, 2006 the notes would be convertible into 194,167,318
(75,167,318 original and 119,000,000 converted note terms) shares at any time
prior to payment.





ITEM 6.  EXHIBITS.

Exhibit
Number    Description of Exhibit
-------   ----------------------------------------------------------------------
31.1      Certification of Chief Executive Officer and Chief Financial Officer
          pursuant to Sec 302 of the Sarbanes-Oxley Act of 2002.

32.2      Certification of Chief Executive Officer and Chief Financial Officer
          pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906
          of the Sarbanes-Oxley Act of 2002.

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

                                      -33-
<PAGE>

In accordance with Section 13 or 15(d) of the Securities Exchange Act of 1934,
the registrant has caused this amendment number 1 to the quarterly report to be
signed on its behalf by the undersigned, thereunto duly authorized.


                                               Turbodyne Technologies, Inc.

Dated:   June 5, 2007                          BY: /S/ ALBERT F. CASE, JR.
                                               ---------------------------
                                               Albert F. Case, Jr,
                                               Chief Executive Officer





                                               BY: /S/ DEBI KOKINOS
                                               Debi Kokinos
                                               Chief Financial Officer and
                                               Chief Accounting Officer




                                      -34-