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                                  UNITED STATES
                         SECURITIES AND EXCHANGE COMMISSION
                               Washington, D.C. 20549

                                   FORM 10-KSB

ANNUAL  REPORT  UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

                   For the fiscal year ended December 31, 1999


                         Commission File Number 33-19584

                              POWERCOLD CORPORATION
                 ----------------------------------------------
                 (Name of small business issuer in its charter)

              Nevada                                   23-2582701
     -------------------------             ----------------------------------
     (State  of  Incorporation)           (IRS  Employer  Identification  No.)

        103  Guadalupe  Drive  Cibolo,  Texas            78108
     --------------------------------------------       ---------
     (Address  of  principal  executive  offices)      (Zip  Code)

             Issuer's  telephone  number:     210  659-8450

      Securities registered under Section 12(b) of the Exchange Act:  None

      Securities registered under Section 12(g) of the Exchange Act:  None

     Common Stock,  $0.001 Par Value          OTC Electronic Bulletin Board

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

Check  if  disclosure of delinquent filers in response to Item 405 of Regulation
S-B  is  not contained in this form, and no disclosure will be contained, to the
best  of  registrant's  knowledge, in definitive proxy or information statements
incorporated  by  reference  in Part III of this Form 10-KSB or any amendment to
this  Form  10-KSB.  [X]

The  issuer's  revenues  for its most recent fiscal year:            $541,238.00

The  aggregate  market  value  of  voting  stock  held  by non-affiliates of the
Registrant  was approximately $2,258,284, which is based on the closing price of
$0.5625  on December 31, 1999.  The number of shares of Common Stock outstanding
on  December  31,  1999  was  22,876,641.  (15,000,000  shares were subsequently
canceled  on  April  3,  2000)

Documents  Incorporated  By  Reference:     None


Transitional  Small  Business  Disclosure  Format:     Yes  [  ]  No  [X]




<PAGE>                                  1

                              POWERCOLD CORPORATION
                                   FORM 10-KSB
                      For the year ended December 31, 1999



                                    PART  I

ITEM  1.     DESCRIPTION  OF  BUSINESS

GENERAL

PowerCold  is  a  solution  provider  of  energy  efficient   products  for  the
refrigeration,  air  condition and power industries. The Company operates across
many  market  sectors  from large industrial food processors to small commercial
air  conditioning  systems.  The  firm's focus is to give customers products and
systems that allow them to benefit from current changes occurring in the natural
gas  and  electrical  utility  marketplace.  Refrigeration  is  the  most energy
intensive  operation most business operators face. PowerCold has the opportunity
to  provide  products  and  systems,  that customers require taking advantage of
these  changes,  to  improve  profitability  by  reducing their operating costs.

Deregulation  of  the  gas  and  electric  utilities  will   provide  continuing
opportunities,  creating  new  markets for more efficient refrigeration systems.
PowerCold  has  the  products, experience and creative ability to package unique
refrigeration  systems  for  the  multi-billion  dollar refrigeration market. To
enhance  this  market  the  Company  is  pursuing  synergistic  businesses,  and
marketing  alliances   are  being  formed  with  major   utility  companies  and
established  refrigeration  companies  for  these  products  and  services.

The  Company's mission is to be a solution provider of energy efficient products
for  the  multi-billion  dollar refrigeration, air condition and power industry.
The  Company's  goal  is  to  achieve profitable growth and increase shareholder
value  by forming business alliances and providing superior technology, products
and  services.

Management  intends  to continue to utilize and develop the remaining intangible
assets  of  the Company. It is Management's opinion that the Company's cash flow
generated  from such intangible assets is not impaired, and that recovery of its
intangible  assets,  upon which profitable operations will be based, will occur.

COMPANY  HISTORY

International Cryogenics Systems Corporation (ICSC) was established as a private
company  in  1988 to fabricate and market freezer systems. The Company developed
and  patented  the most advanced, cost-effective and environmentally safe "quick
freeze"  systems in the industry. In January l993 ICSC's assets were merged into
a  public  entity.  The name was changed to PowerCold Corporation (PowerCold) in
April 1997, currently trading on the OTC Bulletin Board - symbol (PWCL). In 1995
the  Company  acquired  four companies - currently three operate as wholly owned
subsidiaries  of  PowerCold;  RealCold Products, Inc., Technicold Services, Inc.
and  Nauticon,  Inc.  RealCold  Products  designs and manufactures refrigeration
systems,  Technicold   Services  provide  consulting  services   for  commercial
refrigeration  and freezing systems for use worldwide, and Nauticon manufactures
and  markets a unique product line of patented evaporative heat exchange systems
for  the  HVAC  and  refrigeration  industry.





<PAGE>                                  2
                              POWERCOLD CORPORATION
                                   FORM 10-KSB
                      For the year ended December 31, 1999


Two  of  the Company's executives /directors, President and Treasurer, have been
affiliated  with the public company since 1988 and were also affiliated with the
private  company  as  directors  prior  to  the  merger.

At  the Annual Meeting of Shareholders on July 30, 1992, the shareholders of the
Company  approved the recapitalization of the Company Common Stock consisting of
a  100  to  1  reverse  split.

ASSET  ACQUISITION - On December 28, 1992, the Board of Directors of the Company
agreed  to  issue  2,414,083  shares  of common stock to six individuals for the
exclusive  rights to U. S. Patent No. 4,928,492 (May 29, 1990); which provides a
method  and apparatus for production treatment of a product through the usage of
a  cryogenic  liquid  and  in  a  manner such that minimum loss of the cryogenic
liquid  is  encountered.  The  products  that  will  be processed by this method
includes,  but  not  limited  to,  food  products,  computer  chips,  tires  for
recycling,  blood  and plasma products, and medical utensils that require a high
degree  of  sterilization.

The  total value of the transaction was $724,224.90. Two of the six individuals,
(Terrence J. Dunne and Francis L. Simola) receiving stock in this transaction as
Directors  of  the  Company.  Terrence  J. Dunne received 850,000 and Francis L.
Simola  received 340,041 shares of stock respectively. This represented 49.3% of
all  the  common  stock  issued  for  the  transaction.

The  structure and organization of PowerCold as a public entity through 1993 and
1994  was considered as a development stage company. The design, manufacture and
testing of two major freeze machine products, and the restructure from a private
company  to  a  public  company  expended  company  time  and capital. The newly
designed and manufactured Star Wheel freezer machine was completed and operating
consistently  as  of  March  1994.  This  was a major undertaking and technology
breakthrough  proving  that  the new immersion freezer design concept worked. In
June  1994  a  marketing  program was initiated for the freezer machine, and the
progress  in  business  activity  projected  the  company  into a true operating
entity.

SUBSIDIARIES

During  1995, PowerCold acquired four companies in the refrigeration business in
a  stock  exchange   transaction.  These  entities,   complimented  and  secured
PowerCold's  position  in  the  industry, operated as wholly owned subsidiaries.
RealCold  Systems,  Inc.,  prior  to  its  sale to Wittcold Systems, a Wittemann
Company,  offered  custom  industrial refrigeration packages and merchant carbon
dioxide  plants  in  a  joint venture with The Wittemann Company. Nauticon, Ltd.
offers  a  product  line  of  evaporative heat exchange systems for the HVAC and
refrigeration  industry. Technicold Services, Inc. offers consulting engineering
services,   including   process  safety   management  compliance   and   ammonia
refrigeration  and  carbon  dioxide  system  design.  Technicold  also  provides
operation, maintenance and safety seminars for ammonia refrigeration technicians
and  supervisors. Jordan Vessel Corporation, which merged into RealCold Systems,
offered  industrial refrigeration system components such as liquid recirculating
packages  and  refrigeration  system  vessels of all types. RealCold Maintenance
Systems,  Inc.  (renamed  RealCold  Products,  Inc.) designs and produces unique
products  for  the  refrigeration  industry.




<PAGE>                                  3
                              POWERCOLD CORPORATION
                                   FORM 10-KSB
                      For the year ended December 31, 1999


RealCold Systems Inc. signed a Joint Cooperative Agreement in July 1995 with The
Wittemann  Company, a wholly owned subsidiary of Dover Resources and Dover Corp.
(NYSE  -  DOV),  for  the  manufacture  and marketing of merchant carbon dioxide
plants  and  refrigeration  products.  The  cooperation  agreement  combines the
technical  expertise and experience of RealCold with the marketing of Wittemann.
Wittemann  is  the  world's  leading  manufacturer of carbon dioxide systems and
refrigeration accessories employed by brewers and other fermentation processors.
Wittemann  has  carbon  dioxide systems operating in almost every country in the
world.  George  Briley,  President  of  RealCold  Systems  with  over  45  years
experience, is a renown expert in the innovative design and building of merchant
carbon  dioxide  systems.  This  industry  combination  of technology, sales and
manufacturing  experience  is  unsurpassed  and  provides  an effective and cost
efficient entry for this worldwide market. Subsequently, Wittcold Systems, Inc.,
a  division  of  Wittemann  Company,  acquired  RealCold  Systems  in July 1997.

In  August  1995,  PowerCold acquired Nauticon Inc., a company that manufactures
and  markets  a product line of innovative evaporative heat exchange systems for
the  HVAC  and   refrigeration  industry,   representing  over   five  years  of
development.  The  new patented products are innovative and unique in design and
simple  to  manufacture.  They  use new material technology with high efficiency
copper  tubing  to  give  very  high efficiency, low operating costs and minimal
maintenance.  The  evaporative   heat  exchangers  are   self-cleaning  in  most
applications  thus  eliminating  chemical  cleaning.  The  outstanding  Nauticon
product  features  cannot be found in competitive products. Nauticon evaporative
heat exchangers serve the residential, commercial HVAC sector and the commercial
refrigeration  industry.  They  have many applications, varying from traditional
commercial  refrigeration  to  HVAC  to  industrial cooling. Customers vary from
supermarkets  to  ice  rinks  to walk-in coolers for refrigeration systems. HVAC
applications   are  in  smaller   commercial  buildings,  for   traditional  air
conditioning  systems  to  highly  efficient  heat  pumps.  Industrial uses span
plastic  molding  and  extrusion  to  conventional  cooling  of process water to
cooling  of  cutting  oils. They are used for condensers, fluid coolers, booster
coolers, and cooling towers. The Company believes that the Nauticon products may
revolutionize the refrigeration industry; an industry that faces serious changes
for  the first time in years due to energy and environmental concerns worldwide.
The  Nauticon  application  should reduce these traditional concerns and enhance
the  industry's  growth.

The  three operating subsidiaries, Technicold Services, Inc., RealCold Products,
Inc.  and  Nauticon  Inc.,  supported  by  the  parent public entity, PowerCold,
supports  all  operating  activities for the freezing systems, the refrigeration
systems  and  the  evaporative  heat  exchange  systems respectively. Technicold
provides  consulting  services  to  the  refrigeration  industry,  and  RealCold
Products,  Inc.  supports  all  refrigeration and freezer systems operating from
their  corporate  facility  in Cibolo, Texas. Nauticon  supports all evaporative
heat  exchange  and  refrigeration  systems  and operations from their corporate
facility  in  Cibolo,  Texas.  The corporate manufacturing facility supports all
technical  and  service  product  operations  including; design and engineering;
assemble  and  fabrication;  administration;  marketing,  sales  support  and
consulting services. Sales and marketing activities are supported by represented
agents  and  distributors.






<PAGE>                                  4
                              POWERCOLD CORPORATION
                                   FORM 10-KSB
                      For the year ended December 31, 1999


Rotary  Power  Enterprise,  Inc.  was  formed  as  a new PowerCold entity, which
acquired  the  Natural  Gas  Business from Rotary Power International on July 2,
1998.  The  agreement  included:  the  business  assets  including  intellectual
property, inventory and manufacturing capability; a marketing agreement with the
world's  largest  supplier  of supermarket refrigeration equipment for marketing
the  natural  gas  engine  screw  compressor  systems to supermarkets; the North
American  rights  to the small 65 series Mazda natural gas engine block, subject
to  Mazda Agreement; and Distributor Agreement for the 580 and 40 series engines
from Rotary Power International, Inc.  The rotary engine driven screw compressor
refrigeration  system  significantly  reduces  refrigeration  electrical  demand
during  the  most  expensive  periods  of  the  day  and  year.

Deregulation  of  gas and electric utilities is creating major changes in energy
use  and costs. The natural gas engines enhance the customers' economic benefits
by  reducing  energy costs while supporting the environment with a clean burning
energy  source.  Supermarkets,  as the initial target market, have seven natural
gas  engine  screw compressor systems installed. The systems currently provide a
minimum  of  15%  energy  savings with one engine per store. The market includes
over  30,000  supermarkets  that consume 4% of the electrical energy used in the
US.  Also,  through  associated overseas markets there is a complementary demand
and  need  for low cost energy for similar refrigeration systems in remote areas
of  the  world.

Other  target  markets  for  the  rotary  engines  include:  Large  cold storage
facilities, food processing plants, ice rinks and natural gas wellhead, pipeline
and  distribution network. Packaged industrial refrigeration systems produced by
RealCold  Products will now use natural gas rotary engines instead of competitor
engines.  A  packaged,  commercial  air  conditioning  system was designed using
natural  gas  rotary  engine  and  the  Nauticon evaporative condenser for large
building  facilities.

Channel  Freeze  Technologies,  Inc. was formed as a new PowerCold entity, which
acquired  80%  of the assets of Channel Ice Technologies, a proprietary patented
and  economical multi-purpose freezing system, suitable for virtually any liquid
or   semi-liquid  product,   that  is  inherently  more  efficient   than  prior
technologies  in  a variety of industries including; block ice - for ice plants,
fish  and  produce industries; food and food byproducts - for food suppliers and
their  leftover  byproducts,  fruit  and  juice  products.  The most notable new
application  is  for  highly  efficient  management  of  liquid  and semi-liquid
industrial  waste  products  for  municipal  water,  pulp  and  paper plants and
utilities.  The  freeze-thaw  process;  waste is frozen, the water in the frozen
sludge  drains  almost  immediately during thaw, and the remaining materials are
than  disposed  of  at  greatly reduced cost, recycled or sold off.  Very swift,
economical freezing of the products is much more cost effective, up to one-third
the  cost,  than  with  bulk,  blast  freezing  or  drum  freezing.

Alturdyne  Energy  Systems,  Inc. - A Letter of Agreement has been signed by The
Company  to  acquire  Alturdyne  Energy  Systems from Alturdyne, a San Diego, CA
based  company.  A formal Agreement was signed and a $50,000.00 deposit was paid
to  Alturdyne. Alturdyne Energy Systems as a wholly subsidiary of PowerCold will
market  natural  gas  engine  driven  water chillers, pumps, air compressors and
generators. RealCold Products will manufacture the water chillers under the name
ALTURCOLD.




<PAGE>                                  5
                              POWERCOLD CORPORATION
                                   FORM 10-KSB
                      For the year ended December 31, 1999


AFFILIATE  -  In  December 1996 the Company agreed in principal to merge/acquire
Rotary  Power  International,  Inc.  The Company initially acquired a 30% equity
interest  in  RPI  (2M shares of common stock for $1M), and proposed a merger of
the  companies  in  a  stock  for  stock transaction, whereby RPI would become a
wholly  owned  subsidiary  of  the  Company.  A Plan of Agreement and Merger was
signed  with  Rotary Power International, Inc. ("RPI") on March 21, 1997 subject
to RPI shareholder approval.  Each shareholder of RPI was to receive .363 shares
of  the  Company's  common  stock  (1.56M  shares)  upon  shareholder  approval.

On  July  21,  1997,  the Company and Rotary Power International, Inc. agreed to
amend  Section  1.2  -  The  Closing  by  extending  the Agreement an additional
forty-five  (45)  days. The First Amendment to the Plan and Agreement of Merger,
the extension on the Plan and Agreement of Merger between the Company and Rotary
Power  International,  Inc., expired on September 5, 1997, accordingly, the Plan
and  Agreement  of  Merger  is  no  longer  in  effect.

There  were  two  major  reasons for the acquisition of RPI. - The refrigeration
industry  desires  packaged  refrigeration  systems and RPI'S engines add growth
value  to our products along with packaging ability. Current deregulation of gas
and  electric  utilities is creating major competitive changes in energy use and
costs.  RPI'S  natural  gas  engines enhance the customers' economic benefits by
reducing  energy  costs  while  supporting  the environment with a clean burning
energy  source.  Through  associated  markets  overseas there is a complementary
demand  and need for energy, (portable generators) and for refrigeration and CO2
systems  in  remote areas of the world. RPI primarily marketed engines to the US
government.  The  Company  now  had  the  opportunity  to commercialize a proven
product that has tens of millions of dollars and years of development experience
behind  it.

Since the Company initially entered into an Agreement to merge with Rotary Power
International,  Inc.,  there  was  a  continuing deterioration in Rotary Power's
negative  cash  flow  from  operations.  Funding  provided  by the Company, that
initially  invested  $1,000,000  in  equity  and the $1,000,000 in proceeds from
bondholders,  was  not  sufficient  to support daily cash flow needs through the
first  (5)  months  of  1997. The Company did not have any obligation to support
Rotary  Power  with  any  additional  financing.  The Company voluntarily loaned
Rotary  Power  $100,000  for  back due rent on the building, $75,000 for the May
interest  payment  on  bond debt, and on June 19, 1997 the Company loaned Rotary
Power  an  additional $41,767 due employees for payroll. In June 1997 Management
decided  not  to  loan  Rotary  Power  any additional funds for two reasons; the
uncertainty  of  Rotary Power's collateral for the Company's financing and after
receiving   documentation   from  Company's   General  Counsel   based   on  his
investigation    of   Rotary   Power,   which   recently    uncovered   probable
misrepresentation  of  material  financial  information  by  RPI to PowerCold in
December  1996  and  thereafter.  Consequently, Rotary Power International, Inc.
requires  additional  funding  for its daily operations. Therefore, the economic
viability  and  long-term  future of Rotary Power International, Inc. depends on
its  ability  to  obtain  additional  sources  of financing, and there can be no
assurance that such financing can be obtained on acceptable terms or at all.  In
November  1997, a new president took over operations of Rotary Power. Subsequent
events  have  led  to  the  restructure  of  the  bond  debt  and  creditors.






<PAGE>                                  6
                              POWERCOLD CORPORATION
                                   FORM 10-KSB
                      For the year ended December 31, 1999

STRATEGIC  ALLIANCE

Alturdyne - An innovative manufacturer of standby diesel generator sets, turbine
and  rotary  generator  sets,  pumps  and  natural  gas  engine-driven chillers.
Alturdyne  is  an  approved  vendor for all the "Baby Bells" telephone companies
that  are  regulated  to  maintain standby power. This regulation results in the
telephone  companies  purchasing  a  significant  number of generator sets every
year.  There are over 3600 units installed, and Alturdyne provides service field
support for these systems and other manufactured units. The generator set market
is  a  major  new  and replacement market for rotary engines where Alturdyne has
extensive  manufacturing  experience.

Alturdyne's  strength  lies   in  its  power  engineering   personnel,  who  are
knowledgeable  in  the  generator  set business, telephone company applications,
small  turbines,  rotaries  and  chillers.  Their capabilities and experience in
developing  low  cost,  customer  power  packages  that meet specific needs have
established Alturdyne's excellent reputation in the industry.  Alturdyne's added
expertise  is  in  the  design  and  production  of  rotary  engines.

Intermagnetics  General  Corporation  (Amex:  IMG) - Purchased for $1,000,000 an
aggregate  of  1,250,000  shares  of the Company's Series A Preferred Stock, par
value $0.001 per share; and PowerCold granted Intermagnetics General Corporation
a  purchase  option  to  acquire  up  to  50% of the fully diluted equity of the
Company.  The  purchase  option,  which  expired, was exercisable at a per share
price  of the lesser of $3.00 or a market price calculation of the common stock,
for  an  option  term  no  later  than  March  31,  1999.

Intermagnetics  is  the  largest  integrated  developer  and manufacturer in the
United States, of superconducting LTS and HTS magnets, wire and cable as well as
associated  low-temperature  refrigeration  equipment,  and radio-frequency (RF)
coils,  the  combination  of  which  is  essential  to successful application of
superconductivity  such  as  Magnetic  Resonance  Imaging  (MRI). The Company is
dedicated  to the development and commercialization of applied superconductivity
and  refrigeration  systems. The Company also supplies permanent magnet systems,
materials  separation  equipment  and  FRIGC(R) refrigerants as replacements for
ozone-depleting  refrigerants.

The  strategic  alliance with IMG complimented both companies and supported each
other's  desire  and  needs  with their respective energy efficient products and
services.  PowerCold  has  key personnel, industry contacts and unique products,
and  Intermagnetics  General  has  the  management  and  financial  strength and
complimenting  products.  Although  this  new  emerging  opportunity had all the
necessary  ingredients  for  success,  to  date the strategic alliance was never
fully  implemented  by  the  companies.

MANAGEMENT

PowerCold's management philosophy and structure supports decentralized authority
and operations, profit and loss accountability, incentive driven performance and
compensation,  and  total  customer satisfaction.  Management has over 150 years
business  experience.  Their  extensive  experience and background is adequately
related  to  the  business.  CEO  -  over  35  years experience in marketing and
management; COO - over 40 years experience in manufacturing and marketing in the
refrigeration  and power industry; CTO - over (40) years technical experience in
refrigeration  engineering  and  design;  a  well-known expert consultant in the
refrigeration  industry.  The subsidiary companies include experienced marketing
and  technical  management  and  support  personnel.

<PAGE>                                  7
                              POWERCOLD CORPORATION
                                   FORM 10-KSB
                      For the year ended December 31, 1999


The  Company's  management  objective  is  to  become  a  major force with niche
products in the multi-billion dollar refrigeration industry and energy business.
The  Company's  goal  is  to  achieve profitable growth and increase shareholder
value  by  increasing  its  line  of  superior  products  and  services, through
acquisitions  and  joint  ventures  of  related  products  and  companies.

The  Company  maintains  corporate  offices  in  Cibolo, Texas, and an executive
office   in   Philadelphia,   Pennsylvania.   Administrative,  engineering   and
manufacturing  facilities  are  located  in  Cibolo,  Texas.

PRODUCTS:

INDUSTRIAL  REFRIGERATION  PACKAGES  -  RealCold  Products,  Inc. a wholly owned
subsidiary  of  the  Company,  designs and packages commercial refrigeration and
freezer  systems.  RealCold  Products was reorganized with its new name in March
1997,  replacing  RealCold  Systems  Inc. and RealCold Maintenance Systems, Inc.
RealCold  Products  supports  all  engineering  and  manufacturing of commercial
refrigeration  packages and its freezer systems. Custom innovative refrigeration
products  include  the  following:  ammonia   recovery  and  recycling   system,
non-chemical  water  treating  system,  liquid  recirculating  packages,  and
refrigeration  system  vessels.

Complimenting  the  various  product  lines, the Company intends to market other
various related industry products including automated ice systems, which produce
low  cost  block  and  sized  ice.

COMPETITION  -  varies  from  small industrial refrigeration manufactures to the
very   large  companies   in  the  industry,   all  competing  for   this  multi
billion-dollar  industry.  The  Company  envisions an enormous market demand for
refrigeration  systems in third world countries. America is well entrenched with
refrigeration  systems,  but  there  is  a  great niche market for the Company's
unique  and  innovative  refrigeration  and  freezer products. PowerCold and its
related entities have the refrigeration engineering expertise and new innovative
products  that  are  needed and in demand today for an industry that hasn't seen
many  changes  in  the  last  30  -  40  years.

EVAPORATIVE  HEAT EXCHANGE SYSTEMS - Nauticon Inc., a wholly owned subsidiary of
PowerCold  manufactures  and markets a product line of evaporative heat exchange
systems  for the HVAC and refrigeration industry.  The new patented products are
innovative  and  unique  in  design,  use new material technology, are simple to
manufacture,  and  have low operating costs. They are used for condensers, fluid
coolers,  booster  coolers,  and  cooling  towers.

Condensers  for  both  Refrigeration  and HVAC - Capacities range from 60,000 to
525,000  BTU  for  refrigeration  condensing.  Refrigerants  may be at different
incoming  temperatures as would be normal for multi-circuit applications. Copper
coils  are  compatible  with  all  refrigerants  except  ammonia.

Fluid  Coolers  - Water. oil, glycol - anything compatible with the copper coils
can  be cooled according to each thermal characteristics. The separate coils can
handle  different  liquids  at  the  same  time,  according  to  needs.






<PAGE>                                  8

                              POWERCOLD CORPORATION
                                   FORM 10-KSB
                      For the year ended December 31, 1999

Booster  Coolers  -  Applies  to   new  or  existing  applications.   Especially
advantageous  in  systems  now  short  of capacity, as it can be inserted in the
existing  cooling loop to circumvent the need for an entirely new system.  Gives
low  cost  additional  cooling to refrigerants or liquids plus the multi-circuit
ability.

Cooler  Tower  - Several important differences set this cooling tower apart from
others. Hot water is dispersed through Nauticon's unique "cyclone" water heads -
there  are no sprinkler moving arms to break, stall or clog.  No bottom openings
to  attract  debris,  thus  polluting  the  system.

Unique  low  cost  manufacturing  procedures  are  essentially the same for each
product,  which  is offered in four varieties. This is attributed to communality
of  parts  and  manufacturing.  Manufacturing  processes and techniques are both
simple  and  well  worked  out  utilizing  low  cost  labor.

Its  primary advantage is energy savings, yielding extremely high EER ratings to
not  only  better,  but  to  offset  the  regulated  change  to  low  efficiency
refrigerants.  To  be  sold  as a replacement or new applications and to also be
offered  packaged  with  compressors.

COMPETITION -  Nauticon products could revolutionize the refrigeration industry;
an industry that faces serious changes for the first time in years due to energy
and  environmental  concerns  worldwide.  The Nauticon application should reduce
these  traditional  concerns  and  enhance  the  industry's  growth. The Company
believes  that  it  has  a  truly unique product concept that serves a very wide
arena  of  commercial  applications  for  the  national  market  as  well as the
international  market.  Initial  marketing  of  the  Nauticon  systems  will  be
primarily  the mid-range systems because there is much less competition, a great
advantage  to  Nauticon  and its unique patented product. The larger and smaller
size  systems  are  marketed  by  some of the major competitors in the industry;
larger  systems  by  Evapco  and BAC, smaller systems by York and Carrier. These
competitors  are  well  established and have substantially greater financial and
other  resources  than  Nauticon.

CHANNEL  FREEZE - patented Automated Bulk Freezing System has many applications.
Automated  block ice production. Automated freezing of food and food by-products
in  bulk, i.e., orange juice, offal, etc. Freeze/thaw (BiofreezeTM) applications
that  reduces  the  cost  to  process  residual sludge by up to 50%. This system
minimizes  landfill  costs  and water treatment costs. This application is being
researched  at  this  time. The technology has been proven many times usually in
areas  where  nature  supplies the freezing during winter and thawing in summer.
BiofreezeTM  automates  this process. There are literally thousands of potential
users  of this product. The Channel Ice System replaces the now obsolete can-ice
plants,  many  of which are over 50 years old. There are some 500 can-ice plants
still  operating  in the US. However the major market for Channel Ice is export.
Block  ice  is  still  in  demand  outside  the  US.

The  Channel  Freeze bulk freezing system, which has been tested freezing single
strength  orange  juice,  can also be employed to freeze other food and non-food
products,  such  as red meat, gravies, seafood, fruit, eggs, etc. Channel Freeze
is  working  with  a  large  chicken producer to replace their existing Vertical
Plate  Freezers,  which freeze chicken byproducts. Freezing time tests are being
performed  now.  This is a market that has considerable potential as the Channel
Freeze  unit  provides  the  following  features:


<PAGE>                                  9
                              POWERCOLD CORPORATION
                                   FORM 10-KSB
                      For the year ended December 31, 1999


COMPETITION  -  Block  Ice - Small packaged manual block ice plants manufactured
bv  various people in the U.S.  Up to five or ten tons of ice per day.  A manual
block  ice plant manufactured in Mexico with sizes up to 100 ton per day or ice.
Bulk  Freezing  -  Vertical  plate freezer manufacturers: York Food Systems  -US
(manual),  Gram - Denmark (manual), Technal - France (semi-automatic), APV-Baker
Ltd  -  Jackstone,  England  (manual), Dole - U.S. (manual), Blast Freezers - US
(manual).

ENGINE  DRIVEN  CHILLERS

In  1991  Alturdyne  began manufacturing engine driven chillers as a new product
line.  Chillers  are  cooling  systems  normally  used  for  buildings, offices,
schools,  hospitals  or  factories and provide 30 to 1100 tons of chilled water.
Currently  99%  of  the  chillers  manufactured  are  driven by electric motors.
However, there is a growing demand for natural gas engine driven chillers due to
deregulation  of  the  electric  and gas utilities. In some areas of the country
electric power is very expensive and operating on natural gas can save thousands
of  dollars  a  year  for  user.  Also in some areas gas companies provide large
rebates  to  natural gas users which helps reduce the higher capital cost of the
chiller.  A  natural  gas  engine  is more expensive than a very high production
electrical motor and this difference makes engine driven chillers more difficult
to  sell  unless  there  is  an  early pay off through cost savings on the users
energy  bill.  Applications  with co-fueled diesel engines are in development by
Alturdyne.

Since  1991, Alturdyne has developed 22 standard chiller models rated from 30 TO
300  tons  that  are certified by Environmental Test Labs which is comparable to
the  UL listing. Designs have been made for units rated from 30 to 1100 tons and
several  large units placed into service. Alturdyne has have sold over 140 units
to  date  and that places us in second place for this industry. Tecochill is the
industry leader, and while they enjoy sponsorship by Gas Research Institute they
utilize  short  life  automotive  derivative  engines  as  opposed  to long life
Caterpillar  industrial  engines  used  by  Alturdyne.

While  the  Alturdyne  chiller  products  have  been  a  technical  success, the
competitive marketplace has limited its financial success.  Therefore, Alturdyne
has  recently  sold  off  the  Chiller Business to PowerCold.  PowerCold has the
refrigeration  expertise and resources and the rotary power engine as a solution
integrator  to  economically produce the chillers.  Alturdyne and PowerCold have
entered  into is a strategic alliance for packaging PowerCold rotary engines and
Alturdyne  generator  sets  for  the  power  industry  market.
















<PAGE>                                  10
                              POWERCOLD CORPORATION
                                   FORM 10-KSB
                      For the year ended December 31, 1999


ROTARY  POWER  NATURAL  GAS  ENGINES  OFFERS:
     20.000  Hour  engine  reliability
     Low  fixed  maintenance  cost
     Few  moving  parts
     Low  noise
     Compact  configuration
     Wide  horsepower  range  20-15OOHP
     2000 to 42OORPM variable speed capability  (>1OOHP - 36OORPM  maximum)
     Internal  gear  drives  shaft  at  three  times  rotor  speed
     No  external  gearing  required
     Light  weight
     Low  vibration
     No  special  or  massive  foundations  required
     Minimal  structural  bases  required
     Black  start  capability
     Only  control  circuit  power  required
     Eliminates  new  electrical  feeders  in  many  new  installations

NGRE  driven  rotating equipment and Systems are applicable to a wide variety of
industrial uses, and offer customers large savings in electrical costs from both
energy  and  demand  savings.  A  NGRE,  providing  on-site utilities, burns the
minimum  annual gas flows required to allow sites to buy "transport" natural gas
rather  than  more  expensive commercial gas. The combination of natural gas and
electrical  energy  allows  the customer to balance its utility consumption on a
daily,  weekly,   monthly   or  annual  basis.   RPI  feels  that   the   unique
characteristics  of  natural  gas  powered  engines  allows them to successfully
compete  in  market  sectors  where  low  maintenance  and  high  speed rotating
equipment  is  predominant  or  is  rapidly  taking  over  the market from older
reciprocating  equipment.

Air  conditioning  -  screw  compressors
Refrigeration  -  screw  compressors
Plant  air  compression  systems  -  screw  compressors
Natural  Gas  compression  systems  -  screw  compressors
Mobile  power  units  -  Permanent  Magnet  Generators
Stationary  peaking  power  supplies  -  generators

65  SERIES  NATURAL  GAS  ENGINE

The  65  Series  twin  rotor  Natural Gas Rotary Engine. Model RN-065x2-NA, is a
natural  gas engine derived from Mazda Motor Corporations RX-7 automotive rotary
engine.  The  basic  block  incorporates  unique internal parts and features for
meeting  the  20,000  hour life demanded by the industrial market; i.e., ceramic
apex  seals,  strengthened  stationary gears. More durable water pump and longer
life  elastomers.  The  engine  is  rated  at 8OHP on natural gas at 4200RPM. It
incorporates  an  IMPCO  natural  gas  carburetor  and  specially  tuned  intake
manifold.










<PAGE>                                  11
                              POWERCOLD CORPORATION
                                   FORM 10-KSB
                      For the year ended December 31, 1999

580  SERIES  NATURAL  GAS  ENGINE

The  580  Series  family  of  twin  rotor  Natural  Gas Rotary Engine, which are
produced  by  Rotary  Power  International  Inc.,  is derived from the extensive
military development of the 580 Series diesel/multi-fuel engines since 1977. The
initial  580  Series  Natural  Gas Rotary Engine development has been for a twin
rotor  engine  rated  at  500HP  at  36OORPM.  This  will  provide  the power to
generators  for  peak  power  shaving.  The  four  rotor  (composed of two 5OOHP
modules) rated at 1000HP and the six rotor (three 5OOHP two rotor modules) rated
at  1 5OOHP complete the family. The 580 natural gas engine runs on low pressure
natural  gas  and  does not use expensive high pressure fuel injection equipment
and  costly  turbochargers  found  on  diesel  engines,  thus  offering  a  very
competitive  natural  gas  power  plant  for  industrial  applications.

ITEM  2.     DESCRIPTION  OF  PROPERTY

The  Company  maintains  its corporate office in Cibolo, Texas, and an executive
office  in Philadelphia, Pennsylvania. The Cibolo facility is 32,000 sq. ft. and
houses  administrative,  engineering  and  manufacturing  operations.

The  Company  owns  and  maintains  no  properties.  Properties  are leased on a
short-term basis. Management believes that the Company's facilities are adequate
for its operations and are maintained in good condition. The Company is aware of
the  growth  potential  of  its  operating facilities and is currently reviewing
other  plant  facilities  near  their  respective  locations.

ITEM  3.     LEGAL  PROCEEDINGS

Management of the Company is seeking to recoup damages from the former president
and  director  of  Nauticon,  in  connection  with Nauticon's acquisition by the
Company.  Related  to this matter is the ownership of certain patents. It is the
opinion  of  management that this matter will not have any adverse effect on the
Company  at  this  time,  because the Company legally acquired all the assets of
Nauticon  including  the  patents in exchange for stock. The former president of
Nauticon  has  filed  a  counter  claim  against  the  Company  and  two Company
Executives/Directors.  Because of the financial and managerial problems incurred
by  the  previous management, Nauticon has incurred bad debts and certain claims
have  been  filed  against  Nauticon.

ITEM  4.     SUBMISSION  OF  MATTERS  TO  A  VOTE  OF  SECURITY  HOLDERS

On October 11, 1999, the following majority shareholders of the Company voted in
favor  of  election  of Company Directors to a new three year term by a majority
vote  of  3,840,583 votes or 51.1% of the outstanding 7,518,653 common shares of
the  Company:

     Simco Group, Inc.,  Francis L. Simola & Family     2,611,846  Shares
     George  C.  Briley                                   652,602  Shares
     Terrence  J.  Dunne                                  414,135  Shares
     Jack  Kazmar                                         162,000  Shares

The  following  were  elected Directors of the Company to serve for three years.
     Francis  L.  Simola
     George  C.  Briley
     Jack  Kazmar
     Carl  H.  Rosner


<PAGE>                                  12
                              POWERCOLD CORPORATION
                                   FORM 10-KSB
                      For the year ended December 31, 1999


Intermagnetics  General Corporation's investment in the Company entitled them to
have  a  position on the Board of Directors.  Mr. Carl Rosner was never formally
elected  a director of the Company prior to this election.  Subsequently Carl H.
Rosner  has  resigned  as  a  Company  director.

                                   PART  II

ITEM  5.     MARKET  FOR  COMMON  EQUITY  AND  RELATED  STOCKHOLDERS  MATTERS

The  Company's Common Stock is traded on the OTC Electronic Bulletin Board under
the  trading  symbol PWCL. As of December 31, 1999, there were approximately 280
record  holders  of  the  Company's  Common  Stock.

The  following  table  sets  forth the high and low sale prices of the Company's
Common  Stock as reported by one of the market makers for the periods indicated.
<TABLE>
                                   1999                1998
                            -----------------   -----------------
                              High      Low       High      Low
                            --------  -------   --------   ------
     <S>                    <C>       <C>       <C>        <C>
     First  Quarter          1 3/8       5/8     1 1/2        1/4
     Second  Quarter         2         1         1 7/8      1 1/4
     Third  Quarter          1 7/8       5/8     2          1
     Fourth  Quarter         1           1/2     1 1/4        7/8
</TABLE>
The  Company  has  paid no cash dividends to date, and it does not intend to pay
any cash dividends in the foreseeable future. The present policy of the Board of
Directors is to retain any future earnings and provide for the Company's growth.

ITEM  6.     MANAGEMENT'S  DISCUSSION  AND  ANALYSIS  OR  PLAN  OF  OPERATIONS

Forward  looking statements made herein are based on current expectations of the
Company  that  involves  a  number  of risks and uncertainties and should not be
considered  as guarantees of future performance. These statements are made under
the  Safe  Harbor  Provisions of the Private Securities Litigation Reform Act of
1995.  The factors that could cause actual results to differ materially include;
interruptions  or  cancellation  of  existing  contracts,  impact of competitive
products  and  pricing, product demand and market acceptance risks, the presence
of  competitors  with  greater  financial  resources  than  the Company, product
development  and  commercialization risks and an inability to arrange additional
debt  or  equity  financing.

GENERAL  FINANCIAL  ACTIVITY

REALCOLD  PRODUCTS,  INC.  -  designs  and  manufactures unique energy efficient
packaged  products  for  the  refrigeration  industry.  RealCold  Products  also
supports Rotary Power Enterprise and Alturdyne Energy Systems by engineering and
packaging  their  products.  RealCold  Products will also support Channel Freeze
Technologies  by  designing  and  packaging  their  accompanying   refrigeration
systems.  Management  believes that the recent acquisition of Channel Freeze and
Alturdyne  Energy  Systems should provide improved revenues and profits (subject
to  sufficient  working  capital)  for RealCold Products in 2000, based upon its
expertise  in  custom  manufacturing  systems. There are proposed alliances with
other  refrigeration  companies,  whereas RealCold Products will package various
components  adding  value  for  a  total  turnkey  refrigeration  system.

<PAGE>                                  13
                              POWERCOLD CORPORATION
                                   FORM 10-KSB
                      For the year ended December 31, 1999

During  1999,  RealCold  Products has generated some $10M in customer proposals.
Because  of  insufficient  working  capital for raw materials and labor directly
needed  for  RealCold,  sales  and  revenue  was  greatly impaired.  The working
capital  shortage  for  RealCold  Products  was  mainly due because of the large
amounts  of Company funds that was used for the promotion and support of the new
Channel  Freeze  business.

NAUTICON  INC. - manufactures and markets a product line of patented evaporative
heat exchange systems for the HVAC and refrigeration industry.  The new patented
products  are  innovative  and unique in design, use new material technology, is
simple  to  manufacture,  and  have  a  low  operating  cost.  They are used for
condensers, fluid coolers, subcoolers, and cooling towers. Nauticon products can
produce  power  cost  in  the  refrigeration industry by 20% to 30% making these
units  contribute to the utilities' needs to reduce power demand. There are over
150  systems  installed.

Management believes that Nauticon did not meet its sales and revenue projections
in 1999 due to lack of operating cash flow and limited marketing support because
of  the  concentrated  support  on  the  Channel Freeze business.  PowerCold has
funded  Nauticon  over  $1M  in  operating  capital,  but  the  Company has been
continually hindered by major operating and legal expenses due to previous inept
management.  Because  of  the  major  operating  losses   incurred  by  previous
management,  Nauticon does not have sufficient resources to continue operations.
The  Nauticon product technology was licensed to RealCold Products for a two and
one  half  per  cent  royalty  fee  on  product  sales.

ROTARY  POWER  ENTERPRISE, INC. - was formed (September 1998) as a new PowerCold
entity  to acquire the Natural Gas Business from Rotary Power International. The
agreement  includes:  the  business  assets   including  intellectual  property,
inventory  and  manufacturing  capability; a marketing agreement with one of the
world's  largest  supplier of supermarket refrigeration equipment, for marketing
the  natural  gas  engine  screw  compressor  systems to supermarkets; the North
American  rights  to the small 65 series Mazda natural gas engine block, subject
to  Mazda Agreement; and an exclusive Distributor Agreement for the Rotary Power
580  series  engines  form  Rotary  Power  International,  Inc.

The  Company  has  delivered fourteen 65 HP engines and one 500 HP engine on its
major  sales  agreement  with  Kem Equipment Company, an engine packager for OEM
applications  for  the  oil  and  gas  industry  in  Western  Canada.  The Sales
Agreement  is  for  (100  small  65  HP and 60 large 500 HP) natural gas engines
valued  by  management at over $5 million.  The major application is for oil and
gas  field  systems.  The  initial (160) engines are scheduled for delivery to a
major  Canadian  oil  and  gas  operation  in  Western  Canada.

CHANNEL  FREEZE  TECHNOLOGIES, INC. - was formed (September 1998) as a PowerCold
subsidiary  to  acquire  80% of the assets of Channel Ice Technologies.  Channel
Ice  produces  a  proprietary  patented  and  economical  multi-purpose freezing
system,  suitable  for  virtually  any  liquid  or  semi-liquid product, that is
inherently  more  efficient  than  prior technologies in a variety of industries
including;  block  ice  -  for ice plants, fish and produce industries; food and
food  byproducts  -  for food suppliers and their leftover byproducts, fruit and
juice  products.  The  most  notable  new  application  is  for highly efficient
management  of  liquid  and  semi-liquid industrial waste products for municipal
water,  pulp  and paper plants and utilities.  The freeze-thaw process; waste is
frozen,  the  water  in the frozen sludge drains almost immediately during thaw,
and  the  remaining  materials  are  than  disposed  of at greatly reduced cost,
recycled  or  sold.

<PAGE>                                  14
                              POWERCOLD CORPORATION
                                   FORM 10-KSB
                      For the year ended December 31, 1999


Since  the acquisition, Channel Freeze had to overcome changes in product design
and  engineering and limited marketing experience and product credibility in the
marketplace,  therefore  did not meet its sales and revenue projections in 1999.
Channel  Freeze has generated over $10M in proposal quotations.  The new Channel
Freeze  management  support  team  believes  that  the  product is now ready for
customer  delivery  and  acceptance.

ALTURDYNE  ENERGY  SYSTEMS  -  PowerCold  signed a Letter of Agreement (December
1998),  to  acquire  a  division  of  Alturdyne that produces natural gas engine
driven  water chillers. The new company Alturdyne Energy System, Inc. was formed
in  September  1999.  The  Company  also  announced  a  Strategic  Alliance with
Alturdyne  for  manufacturing  and  marketing  of  their  respective  products.

Alturdyne  is  an  innovative  manufacturer  of  standby  diesel generator sets,
turbine and rotary generator sets, pumps and natural gas engine-driven chillers.
Alturdyne's  strength  lies   in  its  power  engineering   personnel,  who  are
knowledgeable  in  the  generator  set business, telephone company applications,
small  turbines,  rotaries  and  chillers.  Their capabilities and experience in
developing  low  cost,  customer  power  packages  that meet specific needs have
established Alturdyne's excellent reputation in the industry.  Alturdyne's added
expertise  is  in  the  design  and  production  of  rotary  engines.

Alturdyne Energy Systems, as an Alturdyne division installed over (140) chillers
systems.  The manufacturing operations have been moved to the Company's facility
in  Cibolo,  Texas.  The  added  expertise  of RealCold Products engineering and
manufacturing  should  enhance  the  existing  chiller   business  and  generate
additional  revenue  for  the  Company  in  2000.

RESULTS  OF  OPERATIONS

The  following  table's  sets  forth  the  company's  results  of operation as a
percentage  of  net  sales  for  the  periods  indicated  below:

<TABLE>
                                         Year  Ended  December  31,
                                        ----------------------------
                                          1999      1998      1997
                                        --------  --------  --------
<S>                                     <C>       <C>      <C>

Revenue                                   100.0%   100.0%     100.0%
Cost  of  revenue                          77.3     89.7       83.3
Gross  margin                              22.7     10.3       16.7
Operating  expenses                      (189.3)  (282.5)    (453.9)
Operating  income  (loss)                (166.6)  (272.1)    (437.2)
Other  income  (expense)                  (13.2)  (102.0)      22.0
Net  income  (loss)                      (198.9)  (382.2)    (694.1)
</TABLE>









<PAGE>                                  15
                              POWERCOLD CORPORATION
                                   FORM 10-KSB
                      For the year ended December 31, 1999



FISCAL  1999  AND  1998  RESULTS  -  The  Company's  Consolidated  Statements of
Operations  for  the fiscal year ended December 31, 1999 compared to fiscal year
ended  December  31,  1998:  Total  revenue  for 1999 was  $541,238  compared to
$442,172  for  1998;  operating  loss   of  ($901,762)  for   1999  compared  to
($1,203,301)  for  1998;  and  net loss of ($1,076,900) or ($0.15) per share for
1999  compared  to a net loss of ($1,690,187) or ($0.27) per share for 1998. Net
income  (loss)  per  share  was  based  on  weighted average number of shares of
7,106,638for  1999  compared  to  6,376,647  for  1998.

The  Company's  Consolidated Balance Sheets as of December 31, 1999 and December
31, 1998 respectively: Total current assets were $598,030 for 1999 and  $853,996
for 1998; total  assets were  $1,732,824 for 1999 and $2,321,970 for 1998; total
liabilities   were   $1,139,636  for  1999  and   $1,164,377  for   1998;  total
stockholders'  equity  was  $  593,188  for  1999  and  $1,157,593  for  1998.

The company's revenues and  expenses resulted in an operating loss  ($1,076,900)
for  1999 compared to an operating loss of ($1,203,301) for 1998, these are both
operating  losses.  The Company's operating loss in 1999 was 25.1% less than the
operating  loss  in  1998, and the net loss for 1999 was 36.3% less than the net
loss  in  1998.  The decrease in operating losses was due to a reduction of some
$224  thousand  in  general  and  administrative  expenses.

LIQUIDITY  AND  CAPITAL  RESOURCES

At December 31, 1999, the Company's working capital was ($541,606) compared with
($310,381) at December 31, 1998.  The decrease was primarily attributable to the
Company's  increase in liabilities. The company's cash resources at December 31,
1999  were  $14,455  reflecting  an  decrease  in cash resources from $21,781 at
December  31,  1998.

Simco  Group,  Inc.,  a  wholly  owned affiliate of Francis L Simola, CEO of the
Company  has  financed  the  Company  on  several  occasions since the Company's
inception.  Simco  Group has never received or requested payment of any interest
from  the  Company for providing said financing.  In 1999 the Board of Directors
elected  to give Simco group 8% interest on outstanding loans to the Company. As
of  December 31, 1999 there was an outstanding loan of $365,254 due Simco Group.
Management believes that without the continuos financial support of Simco Group,
the  Company  would  never  have  remained  in  business.

The  Board of Directors unanimously approved establishing Simco Group, Inc. with
fiduciary responsibility for the Company, effective December 27, 1994.  On April
15,  1996,  the  Board of Directors again voted unanimously to have Simco Group,
Inc. continue to support the financial needs of the Company and its subsidiaries
whenever  necessary; making loans and borrowing money for the Companies, selling
personal  stock  or  assets of Francis Simola to support the Company, or to make
loans  to  support  financial  transactions  of  the  Company.

Because  of  these financial transactions, Simco Group, Inc. knowingly knew that
it  may be at financial risk, loosing personal interest and principal money, and
incurring  losses  due  in  personal  stock  transactions.

The  Company  issued a total of 1,042  shares of new common restricted shares in
1999.  483,000  shares  were issued for satisfaction of recorded liabilities for
expenses  and  services  rendered.  559,000  shares  were  issued  for  cash.


<PAGE>                                  16
                              POWERCOLD CORPORATION
                                   FORM 10-KSB
                      For the year ended December 31, 1999


STATUS OF OPERATIONS - Management intends to continue to utilize and develop the
intangible  assets of the Company. It is Management's opinion that the Company's
cash  flow  generated  from  current intangible assets is not impaired, and that
recovery  of  its  intangible  assets,  upon which profitable operations will be
based,  will  occur.

Company operating revenues and profit should increase in 2000 because of the new
products  from  acquisitions.  Management  believes that its working capital may
not  be  sufficient  to  support  its  operations and growth plans, therefore to
support the Company's growth and goals, management is seeking additional funding
for  this  purpose.

PREVIOUS  FINANCIAL  ACTIVITY  -  1998

Forward  looking statements made herein are based on current expectations of the
Company  that  involves  a  number  of risks and uncertainties and should not be
considered  as guarantees of future performance. These statements are made under
the  Safe  Harbor  Provisions of the Private Securities Litigation Reform Act of
1995.  The factors that could cause actual results to differ materially include;
interruptions  or  cancellation  of  existing  contracts,  impact of competitive
products  and  pricing, product demand and market acceptance risks, the presence
of  competitors  with  greater  financial  resources  than  the Company, product
development  and  commercialization risks and an inability to arrange additional
debt  or  equity  financing.

RESULTS  OF  OPERATIONS  -  1998

The  following  table's  sets  forth  the  company's  results  of operation as a
percentage  of  net  sales  for  the  periods  indicated  below:
<TABLE>
                                         Year  Ended  December  31,
                                        ----------------------------
                                          1998      1997      1996
                                        --------  --------  --------
<S>                                     <C>       <C>      <C>
Revenue                                   100.0%    100.0%    100.0%
Cost  of  revenue                          89.7      83.3      62.8
Gross  margin                              10.3      16.7      37.2
Operating  expenses                      (282.5)   (453.9)     76.7
Operating  income  (loss)                (272.1)   (437.2)    (39.5)
Other  income  (expense)                 (102.0)     22.0     200.2
Net  income  (loss)                      (382.2)   (694.1)    152.2
</TABLE>














<PAGE>                                  17
                              POWERCOLD CORPORATION
                                   FORM 10-KSB
                      For the year ended December 31, 1999


FISCAL  1998  AND  1997  RESULTS  -  The  Company's  Consolidated  Statements of
Operations  for  the fiscal year ended December 31, 1998 compared to fiscal year
ended  December  31,  1997:  Total  revenue  for 1998 was  $ 442,172 compared to
$391,819  for  1997;  operating  loss  of  ($1,203,301)  for  1998  compared  to
($1,713,203)  for  1997;  and  net loss of ($1,690,187) or ($0.27) per share for
1998  compared  to a net loss of ($2,719,633) or ($0.46) per share for 1997. Net
income  (loss)  per  share  was  based  on  weighted average number of shares of
6,376,647  for  1998  compared  to  5,893,000  for  1997.

The  Company's  Consolidated Balance Sheets as of December 31, 1998 and December
31,  1997  respectively:  Total  current  assets  were  $853,996  for  1998  and
$1,581,736  for  1997;  total assets were $2,321,970 for 1998 and $2,229,357 for
1997;  total  liabilities  were $1,164,377 for 1998 and $817,191 for 1997; total
stockholders'  equity  was  $1,157,593  for  1998  and  $1,412,166  for  1997.

The  company's  revenues and expenses resulted in an operating loss ($1,203,301)
for  1998 compared to an operating loss of ($1,713,203) for 1997, these are both
operating  losses.  The  Company's  operating loss in 1998 was 30% less than the
operating loss in 1997, and the net loss for 1998 was 38% less than the net loss
in  1997.  The  decrease  in  operating losses was due to a reduction of some $1
million in general and administrative expenses; and the decrease in the net loss
was  due  to the write-off of the failed merger with Rotary Power International,
Inc.  in  1997.

LIQUIDITY  AND  CAPITAL  RESOURCES

At December 31, 1998, the Company's working capital was ($310,381) compared with
$764,545  at  December 31, 1997.  The decrease was primarily attributable to the
Company's  write-off  of  $557,145  as  of  December  31,  1998,  in  marketable
securities  that  were  permanently  impaired.  The  company's cash resources at
December  31,  1998  were  $21,781 reflecting an increase in cash resources from
$2,274  at  December  31,  1997.

Simco  Group,  Inc.,  a  wholly  owned affiliate of Francis L Simola, CEO of the
Company  has  financed  the  Company  on  several  occasions since the Company's
inception.  Simco  Group has never received or requested payment of any interest
from the Company for providing said financing.  Management believes that without
the  continuos  financial  support  of Simco Group, the Company would never have
remained  in  business.

The  Board of Directors unanimously approved establishing Simco Group, Inc. with
fiduciary responsibility for the Company, effective December 27, 1994.  On April
15,  1996,  the  Board of Directors again voted unanimously to have Simco group,
Inc. continue to support the financial needs of the Company and its subsidiaries
whenever  necessary; making loans and borrowing money for the Companies, selling
personal  stock  or  assets of Francis Simola to support the Company, or to make
loans  to  support  financial  transactions  of  the  Company.

Because  of  these financial transactions, Simco Group, Inc. knowingly knew that
it  may  be  at  financial  risk, loosing personal interest money, and incurring
losses  due  in  personal  stock  transactions.






<PAGE>                                  18
                              POWERCOLD CORPORATION
                                   FORM 10-KSB
                      For the year ended December 31, 1999


At  December  31, 1997, the Company had $597,300, ($607,960 in 1996) held by and
invested  in an account in the name of Simco. These funds were invested in short
and  long-term liquid marketable securities; these funds have been classified as
advances  to affiliate. Simco has guaranteed the Company a mini-mum 8% return on
these  funds.  During 1998, Simco paid the Company interest of $49,284, ($48,000
in  1997  and  $12,000  in  1996).  Management  believes  these terms reflect an
arms-length  transactions.

In  early 1998, a major security investment decreased in value substantially and
quickly  due  to  uncontrolled market conditions.  Simco Group, at its own risk,
used  its own money to support the investment during 1998, and continued to fund
and  support  the  Company  as needed.  Simco also paid interest to the Company.
Management and a majority of the Directors decided to write -off, as of December
31,  1998,  the  loss  of  $557,145.

During  1998,  the  Company  issued 120,000 restricted shares of common stock to
Simco  as  compensation  at  an  expense  of  $30,000. The Company also recorded
$60,000  related  to  payment for expenses and $120,000 for services and $75,000
for  consulting services provided for the three new acquisitions of Rotary Power
Enterprise,  Channel  Freeze  Technologies  and Alturdyne Energy Systems.  These
amounts  were  credited  to  the  investment  account  funds to reduce the loss.

During  1997,  the  Company  issued  120,000  restricted  shares of common stock
(150,000  shares  in  1996) to Simco in satisfaction of prior years' liabilities
related  to  expenses and consulting services provided. During 1997, the Company
recorded expense of $48,000 related to the issuance of 120,000 restricted shares
as payment for expenses and consulting services provided. The shares were issued
at 50% of the bid price on date of issuance varying from $.30 to $.625 per share
during  1997.

In  September  1998,  the  Company  received  $1,000,000  through  the sale of a
redeemable,  convertible,  preferred series A Preferred Stock, $0.001 par value,
$0.80  stated  value.  1,250,000  preferred  shares  are issued and outstanding.

The  Company issued a total of 838,867 shares of new common restricted shares in
1998.  117,647  shares  were  issued at $0.85 per share for a private placement,
which  raised  $100,000.  100,000 shares were issued for an acquisition at $0.63
per  share.  19,000  shares  were  issued  to the Company Directors at $0.50 per
share.  285,000  shares  were  issued  to  key  executives as compensation at an
average  of  $0.33  per  share.  317,220  share  were issued for satisfaction of
recorded  liabilities  for  expenses  and  services  rendered.

STATUS OF OPERATIONS - Management intends to continue to utilize and develop the
intangible  assets of the Company. It is Management's opinion that the Company's
cash  flow  generated  from  current intangible assets is not impaired, and that
recovery  of  its  intangible  assets,  upon which profitable operations will be
based,  will  occur.

Company  operating  revenues  and  profit  should  increase  because  of the new
acquisitions.  Management  believes  that   its  working   capital  may  not  be
sufficient  to support its operations and growth plans, therefore to support the
Company's  growth  and  goals, management is seeking additional funding for this
purpose.




<PAGE>                                  19
                              POWERCOLD CORPORATION
                                   FORM 10-KSB
                      For the year ended December 31, 1999


YEAR  2000  ISSUES

The company has formed a committee to investigate any liabilities resulting from
the  Y2K problem. The Company's internal computer systems and programs are being
reviewed  to  make sure they are up to date. If any are not in compliance, steps
are  being  taken  to  upgrade  the  programs  from  the  manufacturers. Any new
computers  and/or  software programs to be purchased this year will be purchased
as  Y2K complied. This same procedure will be addressed for all office equipment
as  well.  Questionnaires  are being sent to the Company's vendors and materials
suppliers  to  determine  their compliance and actions in place to do so. We are
targeting  June  1,  1999  to  be  complete  with  all  compliance  actions.


ITEM  7.     FINANCIAL  STATEMENTS  AND  SUPPLEMENTARY  DATA

Power  Cold  Corporation  and  subsidiaries  consolidated  financial  statements
incorporated  in  this  annual  report  Form  10KSB.

ITEM  8.     CHANGES  IN  AND  DISAGREEMENTS  WITH  ACCOUNTANTS  ON
ACCOUNTING  AND  FINANCIAL  DISCLOSURE

During  the registrant's fiscal year ending December 31, 1999 and the subsequent
period  up  to  the  date  of  the  former  accountants  release,  there were no
disagreements  with  the  former  accountant nor with the current account on any
matter of accounting principles or practices, financial statement disclosures or
auditing  scope  of  procedure.

                                   PART  III

ITEM  9.     DIRECTORS,  EXECUTIVE  OFFICERS,  PROMOTERS  AND  CONTROL  PERSONS
The  directors  and  executive  officers  of  the  Company  are  as  follows:

<TABLE>
NAME                    AGE     POSITION                       PERIOD  SERVED
-------------------     ---     --------------------------     -----------------
<C>                     <S>     <S>                            <S>
Francis  L.  Simola.     60     Chairman  of  the  Board       January  1,  1993
President  and  CEO

George  C.  Briley       74     Director,  and  CTO
                                Secretary,  Treasurer           September  1,  1994
                                President:
                                Technicold  Services,  Inc.     September  1,  1994
                                RealCold  Products,  Inc        September  1,  1994
                                Nauticon,  Inc.                 October  1,  1998
                                Channel Freeze
                                   Technologies, Inc.           October  1,  1998

H.  Jack  Kazmar         68     Director  and  COO              October  1,  1998
                                President:
                                Rotary  Power Enterprise, Inc.  October  1,  1998
                                Alturdyne Energy Systems, Inc.  September  1,  1999
</TABLE>
A  summary  of  the business experience and background of the Company's officers
and  directors  is  set  forth  below.


<PAGE>                                  20
                              POWERCOLD CORPORATION
                                   FORM 10-KSB
                      For the year ended December 31, 1999

FRANCIS  L.  SIMOLA    Mr.  Simola  has  been  Chairman,  CEO  and  President of
PowerCold since the Company's inception in January 1993. Mr. Simola's background
and  experience  includes; over 28 years in the computer industry with positions
in various marketing and management operations with Unisys Corporation, formerly
Burroughs  Corporation;  over  15 years as a consultant and principal in various
high-tech  companies.  Mr.  Simola  is  the founder and president of Simco Group
Inc.,  a private investment company that controls a major interest in PowerCold.
Simco  provides  services  consisting  of  financing,  marketing  and management
consulting  for  small technical start-up companies that have proven specialized
niche  products.  Mr.  Simola  is  a  graduate of Peirce Business College with a
degree in Marketing and Management, and attended Villanova University and Drexel
University Evening College for additional course studies in Finance and Business
Administration.

GEORGE  C.  BRILEY    Mr.  Briley  has  been  a  director of the PowerCold since
September  1994,  and  is President of RealCold Products, Inc., and President of
Technicold  Services, Inc., PowerCold subsidiary companies.  Mr. Briley has over
forty-seven  years  experience in engineering and marketing in the refrigeration
industry.  After  receiving  his BSEE at Louisiana Polytechnic University, Summa
Cum  Laude,  Mr.  Briley  was  employed by York Corp. for twelve years, where he
attended  the York Engineering Training Program.  At York he served as a Project
Engineer and Sales Manager prior to management positions as a Branch Manager and
Regional Manager. He then served with Frick Company for two years as Field Sales
Manager.  Mr.  Briley  was  employed for thirteen years with Lewis Refrigeration
Company,  as   Vice  President   and  Board  Member;  and   fifteen  years  with
Refrigeration  Engineering  Corp.  (RECO),  as  Vice  President,  Marketing  and
Research  and  Board  Member.  While serving Lewis and RECO, he helped build the
companies  into  multi  million  dollar  organizations,  where  they   designed,
engineered,  manufactured,  installed   and  serviced  industrial  refrigeration
systems.  Mr.  Briley  holds  four  US patents, and is a Registered Professional
Engineer  in five states. He is the author of many articles and papers regarding
all  aspects  of   industrial  refrigeration.   His  services  on   professional
organizations  include;  Founding  President  of  the International Institute of
Ammonia   Refrigeration   (IIAR);   Fellow   in  American  Society   of  Heating
Refrigeration  and  Air Conditioning Engineers (ASHRAE), fellow and life member;
Chairman  and  member  of  many  committees,  and  a  member  at  present of the
ANSI-ASHRAE  15-1993  "Safety  Code  for  Air  Conditioning  and Refrigeration".

H.  JACK  KAZMAR  - Marketing Consultant with Rotary Power International, Inc. -
1993  -  1997.  Mr.  Kazmar  is  also  a  representative  for  several specialty
heating  and air  conditioning  products.  Previously  he  worked at ICC as Vice
President of Sales and  Marketing.  Mr.  Kasmar  has  had  more  than  30  years
experience in the commercial heating, ventilation and air conditioning equipment
industry.  From 1981  till  1969,  Jack  Kasmar  was  President  and  co-founder
of  Skil-Aire Corporation,  a  manufacturer of  standardized commercial heating,
ventilation  and  air  conditioning  products.  From  1971  to 1981,  Mr. Kasmar
served  in  a  number  of  positions of  increasing  responsibility  at  Fedders
Corporation, including General Manager  of  Residential and  Commercial Products
Division  and  Airtemp  Applied.  Prior to  joining  Fedders,  he  held  various
positions with Worthington Corporation in  direct sales and  field management in
NYC, Washington D. C., Baltimore and Philadelphia  areas.  Jack  Kasmar  holds a
Bachelor  of  Science - Mechanical Engineering from Lafayette College in Easton,
Pennsylvania.

Directors  of  the  Company  are  elected  every  three  years.  Officers of the
Company,  elected by the Board of Directors, serve annually. There are no family
relationships  among  the  Directors  and  Officers  of  the  Company.

<PAGE>                                  21
                              POWERCOLD CORPORATION
                                   FORM 10-KSB
                      For the year ended December 31, 1999


ITEM  10.     EXECUTIVE  COMPENSATION

No  Officer  or  Director  of  the  parent  Company  received any cash salary as
compensation  during  the  year  ended  1999.

Mr.  Simola/Simco  Group  received 120,000 shares of common restricted stock for
services rendered the Company for 1999.  Simco Group received $60,000 related to
payment  due for expenses, which has accumulated with  loans due Simco Group for
a  total  due  of  $365,254.00 loaned  the  Company.

Mr.  Simola  worked  100%  of  his  time  for  PowerCold.

ITEM  11.     SECURITY  OWNERSHIP  OF  CERTAIN  BENEFICIAL  OWNERS  AND
MANAGEMENT

The  following  table  sets forth information as of December 31, 1999, regarding
the number of shares of the Company's common stock beneficially owned by (i) all
beneficial  owners  of  five percent (5%) or more of common stock, and (ii) each
director.  (iii)  beneficial  owner  of  outstanding  preferred  stock.

<TABLE>
NAME  AND  ADDRESS                    AMOUNT  AND  NATURE           PERCENT
OF  BENEFICIAL  OWNER               OF BENEFICIAL OWNERSHIP (1)     OF CLASS (2)
---------------------               ---------------------------     ------------
<S>                                 <C>                             <C>
George  C.  Briley                         652,602                     8.29%
  17  Pembroke  Lane
  San  Antonio,  TX.  78240
Terrence  J.  Dunne                        438,488                     5.57%
  West 717 Sprague Ave. No. 1100
  Spokane,  Washington  99204
Robert  E.  Jenkins                        403,728                     5.13%
  2903  Hillview  Road
  Austin,  Texas  78703
H.  Jack  Kazmar                           162,000                     2.06%
  36  West  Beechcroft  Road
  Short  Hills,  NJ  07078
Francis  L.  Simola  and  (3)            1,058,596                    13.44%
  Veronica  M.  Simola
  9408  Meadowbrook  Ave.
  Philadelphia,  Pa.  19118
Simco  Group,  Inc.  (4)                 1,146,500                   14.56%
  650  Sentry  Parkway,  Ste.1
  Blue  Bell,  PA.  19422
Total  Common  Stock                     3,861,914                   49.03%
--------------------                     ---------                   ------
Intermagnetics  General  Corporation     1,250,000                  100.00%
450  Old  Niskayuna  Road
Latham,  NY  12110
Total  Preferred  Stock                  1,250,000                  100.00%
-----------------------                  ---------                  -------
</TABLE>

(1)  The  nature  of  beneficial  ownership  for  all  shares is sole voting and
investment  power.
(2)  The  per  cent  of  class  is  all  common  stock  and  preferred  stock.

<PAGE>                                  22
                              POWERCOLD CORPORATION
                                   FORM 10-KSB
                      For the year ended December 31, 1999

ITEM  12.     CERTAIN  RELATIONSHIPS  AND  RELATED  TRANSACTIONS

(3)  Includes  minor  children
(4)  Simco  Group  Inc.,  a  privately  held Nevada Corporation, (100%) owned by
Francis  L.  Simola and  Veronica  M.  Simola.

ITEM  13.     EXHIBITS  AND  REPORTS

(A)     FINANCIAL  STATEMENTS  AND  SCHEDULES

Exhibits:  None

Financial  Statements  exhibited  herein  the  Annual  Report on Form 10-KSB and
are  filed  as  a  part  hereof.


(B)  REPORTS  ON  FORM  8-K:

     8-K  May  7,  1999  -  Resignation  of  Registrants  Director
     8-K  December  12,  1999  -  Changes  in  Registrants Certifying Accountant

                                     SIGNATURES

Pursuant  to  the  requirements  of  Section  13  of 15(d) of the Securities and
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its  behalf  by  the  undersigned,  thereunto  duly  authorized.

                                   POWERCOLD  CORPORATION

Dated:    April  14,  2000

                                   By:  __________________________
                                        Francis  L.  Simola
                                        President  and (Chief Executive Officer)

Pursuant  to  the  requirements of the Securities and Exchange Act of 1934, this
report  has  been  signed  below  by  the  following  persons  on  behalf of the
Registrant  and  in  the  capacities  and  on  the  date  indicated.


Dated:  April  14,  2000

                                   By:  __________________________
                                        Francis  L.  Simola
                                        Director  and  President


                                   By:  __________________________
                                        George  C.  Briley
                                        Director,  Secretary  and  Treasurer


                                   By:  __________________________
                                        H  Jack  Kazmar
                                        Director



<PAGE>                                  23
                              POWERCOLD CORPORATION
                                   FORM 10-KSB
                      For the year ended December 31, 1999




                          R.  E.  BASSIE  &  CO.,  P.C.
                         CERTIFIED  PUBLIC  ACCOUNTANTS
                          A  PROFESSIONAL  CORPORATION

                              POWERCOLD CORPORATION
                                AND SUBSIDIARIES

                        CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 1999 AND 1998

                           (WITH INDEPENDENT AUDITORS'
                                 REPORT THEREON)

                      POWERCOLD CORPORATION AND SUBSIDIARIES
                                      INDEX


Independent  Auditors'  Report

Consolidated  Financial  Statements:

Balance  Sheets  -  December  31,  1999  and  1998

Statements  of  Operations  -  Years  ended  December  31,  1999  and  1998

Statements of Stockholders' Equity - Years ended December 31, 1999 and 1998

Statements  of  Cash  Flows  -  Years  ended December  31,  1999  and  1998

Notes  to  Consolidated  Financial  Statements

























<PAGE>                                  24

R.  E.  BASSIE  &  CO.,  P.C.
CERTIFIED  PUBLIC  ACCOUNTANTS
A  PROFESSIONAL  CORPORATION

7171  Harwin  Drive,  Suite  306
Houston,  Texas  77036-2197
Tel:  (713)  266-0691  Fax:  (713)  266-0692
E-Mail:  Rebassie@aol.com

                          INDEPENDENT AUDITORS' REPORT
                          ----------------------------

The  Board  of  Directors
PowerCold  Corporation:

We  have  audited  the  consolidated  balance sheet of PowerCold Corporation and
subsidiaries as of December 31, 1999, and the related consolidated statements of
operations,  changes  in  stockholders'  equity,  and  cash flows for year ended
December   31,  1999.    These  consolidated   financial   statements   are  the
responsibility of the Company's management.  Our responsibility is to express an
opinion  on  these  consolidated  financial  statements based on our audit.  The
consolidated  financial statements of the Company for 1998 were audited by other
auditors,  whose  report, dated March 5, 1999, included an explanatory paragraph
describing  the  uncertainty  of  the  recovery of the Company's primary assets,
comprising  patent  rights  and  related  technology of $441,078 and goodwill of
$125,925.

We conducted our audit in accordance with generally accepted auditing standards.
Those  standards require that we plan and perform the audit to obtain reasonable
assurance  about  whether   the  financial  statements   are  free  of  material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing  the  accounting  principles  used  and  significant estimates made by
management,  as well as evaluating the overall financial statement presentation.
We  believe  that  our  audit  provides  a  reasonable  basis  for  our opinion.

In  our opinion, the consolidated financial statements referred to above present
fairly,  in  all  material  respects,  the  financial  position of PowerCold and
subsidiaries  as  of  December  31, 1999 and the results of their operations and
their  cash flows for the year then ended, in conformity with generally accepted
accounting  principles.

As  shown  in  the consolidated financial statements, the Company incurred a net
loss  of  $1,076,900  for  1999  and  $1,690,187 for 1998.  At December 31, 1999
current  liabilities  exceed  current  assets  by $531, 997.  These factors, and
other  discussed  in  note  4  to  the  consolidated  financial statements raise
substantial  doubt  about  the Company's ability to continue as a going concern.
The consolidated financial statements do not include any adjustments relating to
the  recoverability  and  classification  of recorded assets, or the amounts and
classification  of  liabilities that might be necessary in the event the Company
cannot  continue  in  existence.

/s/  R.  E.  Bassie  &  Co.,  P.C.

Houston,  Texas
March  30,  2000





<PAGE>                                25
                       POWERCOLD CORPORATION AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                           December 31, 1999 and 1998
<TABLE>
                                               1999              1998
                                         ---------------    --------------
<S>                                      <C>                <C>
ASSETS:
Current  assets:
    Cash and cash equivalents            $      14,455      $      21,781
    Restricted cash (note 14)                      -              400,000
    Trade accounts receivable, net of
      allowance for doubtful accounts
      of $ 81,778 in 1999 and $84,533
      in 1998                                   150,791             6,313
    Receivable from Channel Freeze
      Technologies                              274,910               -
    Receivables from related parties              1,312            72,618
    Interest receivable                             -               9,918
    Refundable income taxes                      52,222           124,156
    Inventories                                  34,993           156,699
    Prepaid expenses                             69,347            62,511
                                         ---------------    --------------
          Total current assets                  598,030           853,996

    Investment in securities available for
      sale (note 13)                                -              32,500
    Investment in affiliate (note 2)            621,092           825,988
    Property and equipment, net of
      accumulated depreciation(note 11)          24,301            42,483
    Patent rights and related technology
       net (note 2)                             374,003           441,078
    Goodwill, net (note 2)                     115,398            125,925
                                         ---------------    --------------
           Total assets                  $    1,732,824     $   2,321,970
                                         ===============    ==============

</TABLE>






















See  accompanying  notes  to  consolidated  financial  statements.

<PAGE>                                26
                       POWERCOLD CORPORATION AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                                   (Continued)
                           December 31, 1999 and 1998
<TABLE>
                                               1999              1998
                                         ---------------    --------------
<S>                                      <C>                <C>

LIABILITIES AND STOCKHOLDERS' EQUITY:
Current  liabilities:
    Accounts payable and accrued expenses       472,533           397,934
    Advances from affiliates (note 10)          365,254               -
    Notes payable (note 2)                      200,000           300,000
    Short-term borrowing (note 15)               21,378           424,203
    Commissions payable                          67,298            42,240
    Current installments of long-term
       debt (note 16)                             3,564               -
                                         ---------------    --------------
           Total current liabilities          1,130,027         1,164,377

    Long-term debt, less current
       installments (note 16)                     9,609               -
                                         ---------------    --------------
           Total liabilities                  1,139,636         1,164,377
                                         ---------------    --------------

Stockholders' equity (notes 2 and 8):
    Convertible, preferred stock series A,
      $.001 par value, $1,000,000 in
      liquidation, 1,250,000 shares
      authorized, issued, and outstanding         1,250             1,250
    Common stock, $.001 par value.
      Authorized 200,000,000 shares:
      issued and outstanding,
      7,876,641 shares in 1999 and
      6,834,136 shares in 1998                    7,876             6,834
    Additional paid-in capital                6,044,092         5,534,274
    Accumulated deficits                     (5,451,530)       (4,376,265)
                                         ---------------    --------------
                                                601,688         1,166,093
    Less receivable for stock
      subscription                               (8,500)           (8,500)
                                         ---------------    --------------
          Total stockholders' equity            593,188         1,157,593

Commitments and contingent liabilities              -                 -
                                         ---------------    --------------
Total liabilities and
    stockholders' equity                 $    1,732,824     $   2,321,970
                                         ===============    ==============

</TABLE>







See  accompanying  notes  to  consolidated  financial  statements.

<PAGE>                                27
                      POWERCOLD CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                      Years ended December 31, 1999 and 1998
<TABLE>
                                               1999              1998
                                         ---------------    --------------
<S>                                      <C>                <C>
Revenues
   Product sales                         $      442,545     $     148,659
   Services                                      98,693           293,513
                                         ---------------    --------------
           Total revenues                       541,238           442,172
                                         ---------------    --------------
Cost of Revenue:
   Product sales                                349,804           119,532
   Services                                      68,403           276,923
                                         ---------------    --------------
            Total cost of revenue               418,207           396,455
                                         ---------------    --------------
Gross margin                                    123,031            45,717

Operating  expenses:
   Sales and marketing                              -             509,464
   General and administrative                   916,127           502,590
   Allowance for doubtful accounts               (2,755)           81,778
   Research and development                         -              55,229
   Depreciation and amortization                111,421            99,957
                                         ---------------    --------------
            Total operating expenses          1,024,793         1,249,018
                                         ---------------    --------------

Operating loss                                 (901,762)       (1,203,301)

Other income (expense)
   Interest and other income                        -             137,393
   Interest and other expense                   (71,676)          (31,289)
   Write-off of advances to affiliate               -            (557,145)
                                         ---------------    --------------
            Total other income (expense)        (71,676)         (451,041)
                                         ---------------    --------------

Loss before losses of
   unconsolidated affiliates                   (973,438)       (1,654,342)

Equity in loss of
   unconsolidated affiliates (note 3)          (103,462)          (35,845)
                                         ---------------    --------------
Net loss                                 $   (1,076,900)    $  (1,690,187)
                                         ===============    ==============

Basic  earnings  per  common  share:
   Loss from operations                  $        (0.14)    $       (0.19)
                                         ===============    ==============

   Net income (loss)                     $        (0.15)     $      (0.27)
                                         ===============    ==============

   Weighted average shares                    7,106,638          6,376,647
                                         ===============    ==============
</TABLE>
 See  accompanying  notes  to  consolidated  financial  statements.

<PAGE>                                28
                    POWERCOLD CORPORTATION AND SUBSIDIARIES
                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                     Years ended December  31, 1999 and 1998


*begin 8 pt type*
<TABLE>
                                                       Additional                     Stock          Total
                            Preferred      Common        Paid-in     Accumulated   Subscription   Stockholders'
                              Stock         Stock        Capital       Deficit      Receivable       Equity
                           ------------  ------------  ------------  ------------  -------------  --------------
<S>                        <C>           <C>           <C>           <C>           <C>            <C>
Balance, December 31, 1997 $       -     $     5,995   $ 4,100,799   $(2,686,078)        (8,500)  $  1,412,216

Issuance of preferred
  stock Series A                 1,250           -         978,246           -              -          979,496
Issuance of common stock
  for cash                         -             118        99,882           -              -          100,000

Issuance of common stock
  for services                     -             621       293,447           -              -          294,068

Issuance of common stock
  for purchase of
  subsidiary                        -            100        62,900            -             -          63,000

Amounts due from stockholders       -            -          (1,000)           -             -          (1,000)

Net earnings                        -            -             -       (1,690,187)          -      (1,690,187)
                           ------------  ------------  ------------  ------------  -------------  --------------

Balance, December 31, 1998        1,250        6,834     5,534,274     (4,376,265)       (8,500)    1,157,593

Issuance of common stock
  for services                     -             483       161,627            -             -         162,110

Issuance of common stock
  for cash                         -             559       348,191           -              -         348,750

Net earnings                       -             -             -      (1,075,265)           -      (1,075,265)
                           ------------  ------------  ------------  ------------  -------------  --------------

Balance, December 31, 1999       1,250         7,876   $ 6,044,092   $(5,451,530)  $     (8,500)  $    593,188
                           ============  ============  ============  ============  =============  =============
</TABLE>
*end 8pt type*





















See  accompanying  notes  to  consolidated  financial  statements.


<PAGE>                                29
                     POWERCOLD CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                     Years ended December 31, 1999 AND 1998

<TABLE>
                                               1999              1998
                                         ---------------    --------------
<S>                                      <C>                <C>
Cash flows from operating activities:
   Net earnings (loss)                   $   (1,075,265)    $  (1,690,187)
   Adjustments to reconcile net
     earnings (loss) to net cash
     used in operating activities:
       Depreciation and amortization             95,784            99,937
       Gain on sale of investment
        in unconsolidated affiliate                 -              (37,121)
       Loss realized on disposition
        of subsidiary                               -                6,028
       Equity in loss of
        unconsolidated affiliates                   -               35,845
      Write-off of advances to affiliate            -              557,145
      Provision (credit) for
        doubtful accounts                           -               76,815
      Issuance of common stock
         for services                           162,110            294,068
      (Increase) decrease in
        accounts receivable                    (226,588)            10,098
      (Increase) decrease inventories           121,706            (87,617)
      Increase in prepaid expenses               (6,836)           (49,349)
      Increase (decrease) in accounts
        payable and accrued expenses             75,259             66,007
      Increase in accrued salaries
        and  related liabilities                    -               42,240
      Decrease in amount due to
        third-party payors                          -              (74,156)
                                         ---------------    --------------
Net cash used in operating activities          (853,830)          (750,247)
                                         ---------------    --------------

Cash  flows  from  investing  activities:
   Purchase of property and equipment               -               (3,637)
   Cash received from acquired subsidiaries         -             (572,095)
   Proceeds from sale of investment
     in unconsolidated affiliate                    -               44,984
   Cash released from escrow related
     to sale of  subsidiary                         -              200,000
   Proceeds from sale of securities
      available for sale                         32,500           (234,152)
   Release of restriction of cash               400,000                -
   Purchase of securities available
     for sale                                       -               81,716
   (Increase) decrease in advances
     to affiliate                               365,254            160,347
                                         ---------------    --------------
Net cash provided by (used in)
   investing activities                         797,754          (322,837)
                                         ---------------    --------------
</TABLE>


See  accompanying  notes  to  consolidated  financial  statements.

<PAGE>                                30

                     POWERCOLD CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                  (Continued)
                     Years ended December 31, 1999 AND 1998

<TABLE>
                                               1999              1998
                                         ---------------    --------------
<S>                                      <C>                <C>

Cash flows from financing activities:
   Proceeds from short-term borrowings              -              25,061
   Principal payments on short-term
     notes payable                             (300,000)          (11,966)
   Proceeds from issuance of shares
     under private placement                    348,750           100,000
   Proceeds from sales of
    preferred stock                                 -             979,496
                                         ---------------    --------------
Net cash provided by financing
   activities                                    48,750         1,092,591
                                         ---------------    --------------

Net increase in cash                             (7,326)           19,507

Cash at beginning of year                        21,781             2,274
                                         ---------------    --------------
Cash at end of year                      $       14,455     $      21,781
                                         ===============    ==============

Supplemental schedule of cash flow
   information:
      Interest paid                      $       50,628     $      25,261
                                         ===============    ==============
      Cash paid for income taxes         $       71,934     $      74,156
                                         ===============    ==============
   Noncash  investing  activities:

      Unrealized gain (loss) on
        securities available for sale    $          -       $          50
                                         ===============    ==============
   Noncash  financing  activities:
       Issuance of common stock for
          purchase of subsidiary         $          -       $      63,000
                                         ===============    ==============
   Direct financing provided for
      investment in unconsolidated
      affiliate                          $          -       $     300,000
                                         ===============    ==============

</TABLE>








See  accompanying  notes  to  consolidated  financial  statements.

<PAGE>                                31
                     POWERCOLD CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 1999 and 1998

(1)     SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES

THE  COMPANY

PowerCold  Corporation,  formally  International  Cryogenic Systems Corporation,
(the  "Company")  was incorporated on October 7, 1987 in the state of Nevada and
operates  in  one  business  market,  the   development,  design,   manufacture,
distribution,  and  servicing of refrigeration systems.  The Company derives its
revenues from three principal product lines.  The first is a line of evaporative
heat  exchange  systems for the HVAC and refrigeration and carbon dioxide system
design.  As  part  of  this  product  line, the company also provides operation,
maintenance,  and  safety  seminars  for  ammonia  refrigeration technicians and
supervisors.  The third line is the design and production of unique products for
the  refrigeration  industry.

On  December  28,  1992, The Company acquired the patent rights (U.S. Patent No.
4,928,492) and related engineering and technology to a process of quick freezing
food  products,  and  cleaning  and treating various nonfood products by using a
circulating cryogenic liquied in a closed pressurized vessel system, in exchange
for  2,414,083  shares  of common stock.  Two directors of the Company were also
directors  of  the  company  selling  such  patent  rights.

PRINCIPLES  OF  CONSOLIDATION

The  consolidated  financial  statements include the accounts of the Company and
its  wholly-owned  subsidiaries,  after elimination of Intercompany accounts and
transactions.   Wholly-owned  subsidiaries  of   the  Company  in  1999  include
Technicold  Services,  Inc.;  RealCold Products, Inc.; Nauticon Inc.; and Rotary
Power  Enterprise,  Inc.

PROPERTY  AND  EQUIPMENT  AND  DEPRECIATION

Property  and  equipment  are  stated  at  cost.  Depreciation  of  property and
equipment is calculated using the straight-line method over the estimated useful
lives  of  the  assets,  which  range  from  three  to  ten  years.

EARNINGS  PER  SHARE

Earnings  (losses)  per common share have been computed by dividing net earnings
(losses)  by the weighted average number of common shares outstanding during the
respective  periods.

STATEMENTS  OF  CASH  FLOWS

For  purposes  of the statements of cash flows, the Company considers all highly
liquid  investments  with original maturities of three months or less to be cash
equivalents.

USE  OF  ESTIMATES

The  preparation  of  financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect  certain  reported  amounts and disclosures.  Accordingly, actual results
could  differ  from  those  estimates.




<PAGE>                                32
                     POWERCOLD CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 1999 and 1998


RECLASSIFICATIONS

Certain 1998 amounts have been reclassified to conform to the 1999 presentation.

RESEARCH  AND  DEVELOPMENT

Research  and  development  expenses are charged to operations as incurred.  The
cost  of  intellectual  property  purchased  from  others  that  are immediately
marketable  or that have an alternative future use are capitalized and amortized
as  intangible  assets.  Capitalized costs are amortized using the straight-line
method  over  the  estimated  economic  life  of the related asset, typically 10
years.  At December 31, 1999 and 1998, capitalized patent development costs, net
of amortization, were $374,003 and $441,078, respectively.  Amortization expense
was $67,075 for the year ended December 31, 1999 and $67,075 for the years ended
December  31,  1998.  The  Company  periodically  reviews its capitalized patent
costs  to  assess  recoverability based on the projected undiscounted cash flows
from  operations.  Impariments  are  recognized  in  operating  results  when  a
permanent diminution in value occurs.  During 1997, patents, net of amortization
of  $508,100  were  deemed  to  be  impaired,  and  were  charged to general and
administrative  operating  expenses.

REVENUE  RECOGNITION

The Company recognizes revenue from product sales upon shipment to the customer.
Service  revenue  is  recognized  when  services  are  performed  and  billable.

GOODWILL

Goodwill  represents  the  excess  of the purchase price and relatd direct costs
over  the  fair  value of net assets acquired as of the date of the acquisition.
Goodwill  is  amortized  on a straigt-line basis over 10 years.  Amortization of
goodwill  amounted  to $10,527 and $10,527 for the years ended December 31, 1999
and 1998 respectively.  Accumulated amortization amounted to $52,634 and $42,108
at  December  31,  1999 and 1998 respectively.  The Company periodically reviews
its goodwill to assess recoverability based on projected undiscounted cash flows
from  operations.  Impairments  are  recognized  in  operating  results  when  a
permanent  diminution  in  value  occurs.

(2)     ACQUISITIONS  AND  INVESTMENT  IN  AFFILIATE

     ACQUISITION  OF  ROTARY  POWER  ENTERPRISE,  INC.

Pursuant  to  the  terms  of  the  Rotary  Power  Enterprise,  Inc.  acquisition
agreement,  effective  October  1,  1998,  the  Company issued 100,000 shares of
common  stock  in  exchange  for  100%  of the outstanding stock of Rotary Power
Enterprise,  Inc.  Rotary  Power Enterprise, Inc. was formed during 1998 for the
purpose  of  developing  a  new  product  line  for  PowerCold.  The acquisition
resulted  in  goodwill  of  $65,399  which is being amortized on a straight-line
basis  over  10  years:

Purchase  price                                                          $65,399
Fair  Value  of  net  asset acquired                                        -
                                                                     -----------
Excess  of  purchase  price  over  fair value of net assets acquired     $65,399
                                                                     ===========


<PAGE>                                33
                     POWERCOLD CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 1999 and 1998


INVESTMENT  IN  AFFILIATE

On  December   24,  1996,  the   Company  agreed   to  invest  in  Rotary  Power
International,  Inc.  ("RPI")  the  sum  of $1,000,000 in exchange for 2,000,000
shares  of RPI common stock.  As the Company's investment in RPI represents less
than  a  50%  interest  in  RPI,  the  equity method was used to account for the
Company's interest in RPI.  The Company advanced additional funds of $216,768 to
RPI  during  1997.  Because  of  RPI's  deteriorating  financial  condition  and
increasing  losses,  management  of  the  Company  wrote  off  its   outstanding
investment  and  advances  to  RPI  during  1997,  totaling  $789,175.

On  September  15,  1998,  the  Company acquired a one-third interest in Channel
Freeze  Technologies,  Inc.  ("CFTI")  in  exchange  for $850,000 which was paid
$550,000  in  cash  and a note payable of $300,000 to SIR Worldwide LLC ("SIR"),
and  options for SIR to purchase 400,000 shares of PowerCold stock at a price of
$2.50  per  share, for a period not to exceed two years.  CFTI was formed during
1998  to accommodate the acquisition of intellectual property related to Channel
Ice Technology Units.  PowerCold has the right to earn up to 80.00% ownership in
CFTI,  as  CFTI  makes  royalty payments to SIR.  The payments are structured to
provide  a  maximum  of  70 payments of $85,000 each to SIR totaling $5,950,000.
For  each  $1,000,000 in Channel Ice Technology Unit sales, and a payment of the
related  $85,000  in  royalties  to  SIR,  PowerCold  will receive an additional
one-seventh  of  the  additional  46.67%  ownership  necessary to achieve 80.00%
ownership  of  CFTI,  after all recquired payments are made to SIR.  During 1999
$100,000  was paid to SIR Worldwide LLC (SIR) to be applied against the $300,000
note  payable.

Also,  as  part  of  the  purchase  agreement,  CFTI  has  agreed  to additional
compensation  to  SIR  by  payment  of either a 10% net fee payment or a 13% net
sales  fee  payment.

Ten  percent net fee payments are payments of 10% of the net gross invoice price
on  all  Channel  Ice  Technology  Units  sold  to  distributors.

Thirteen  percent  net fee payments are payments of 13% of the net gross invoice
price  on  all  Channel  Ice  Technology  Units  of  direct  sales to end users.

Financial information for Channel Freeze Technologies, Inc. is summarized below:

                                 Dec.  31,  1999           Dec.  31,  1998
                                 ---------------           ---------------

Current  assets                     $(266,958)                $    1,610
Noncurrent  assets                    774,817                    836,869
                                 ---------------           ---------------
     Total  assets                  $ 512,788                 $  838,479
                                 ===============           ===============










<PAGE>                                34
                     POWERCOLD CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 1999 and 1998


(3)     LITIGATION

Management of the Company is seeking to recoup damages from the former president
and  shareholder of Nauticon Inc. in connection with Nauticon Inc.'s acquisition
by  the  company.  Related  to  this  matter is the ownership of certain patents
($374,003  and  $441,078   carrying  value  at   December  31,  1999   and  1998
respectively)  and  the  amount  of compensation owed to the former Nautico Inc.
shareholder  ($88,600  accrued  and  included  in  accounts  payable and accrued
expenses  at  December 31, 1999 and 1998).  The former Nauticon Inc. shareholder
was granted options to purchase 133,763 shares of common stock of the company at
$1.50  per  share  (increasing to $2.00 per share before expiring in July 2000).
Nauticon  Inc.  is a defendant in several lawsuits filed by suppliers.  Nauticon
Inc.  denies  any  liability.  Counsel  has  advised  that it is not possible to
project  the  outcome  at  this time.  It is the opinion of management that this
matter  will  not  have  a  material  adverse  effect on the Company's financial
position  or  results  of  operations.

(4)     GOING  CONCERN

The  accompanying  consolidated  financial  statements  have  been  prepared  in
conformity  with  generally  accepted  accounting principles, which contemplates
continuation  of  the  Company  as  a  going  concern.  However, the Company has
sustained  substantial operating losses in recent years and the Company has used
substantial amounts of working capital in its operations.  At December 31, 1999,
current  liabilities  exceed  current  assets  by $531,997 and intangible assets
comprise  a  material  protion  of  the Company's assets.  The recovery of these
intangible  assets  is  dependent  upon  achieving   profitable  operations  and
favorable  resolution  of the matter discussed in note.  The ultimate outcome of
these  uncertainties  cannot  presently  be  determined.  Management is actively
seeking additional equity financing.  Additionally, management believes that the
current  year  acquisitions  will  lead  to  the  overall structure necessary to
fulfill  the  Company's  strategic  plans.

In  view  of  these matters, realization of a major portion of the assets in the
accompanying  balance  sheet  is  dependent  upon  continued  operations  of the
Company,  and  the  success  of its future operations.  Management believes that
actions presently being taken to obtain additional equity financing and increase
sales,  provide  the  opportunity  to  continue  as  a  going  concern.

(5)     YEAR  2000  ISSUE

The  Year  2000 issue is the result of computer programs being written using two
digits rather than four to define a specific year.  Absent corrective actions, a
computer  program  that  has  date-sensitive software may recognize a date using
"00"  as  the  year 1900 rather than the year 2000.  This could result in system
failures  or  miscalculations  causing  disruptions  to  various  activities and
operations.

The  Company  primarily uses licensed software products in its operations with a
significant  portion  of  processes  and  transactions  centralized  in  several
particular  accounting  software  packages.






<PAGE>                                35
                     POWERCOLD CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 1999 and 1998

(6)     REPORTABLE  SEGMENTS

PowerCold  currently  has  four  reportable  segments:  Nauticon  Inc.; RealCold
Products,  Inc.;  Technicold  Services,  Inc.; and Rotary Power Enterprise, Inc.
Nauticon  Inc.  offers  a  product line of evaporative heat exchange systems for
HVAC  and  refrigeration  industry.  Technicold Services, Inc. offers consulting
engineering services, including process safety management compliance and ammonia
regrigeration  technicians  and  supervisors.  RealCold  Products,  Inc. offered
custom industrial refrigeration packages and merchant carbon dioxide plants in a
joint  venture with the Wittemann Company, Inc.  RealCold Products, Inc. designs
and  produces  unique  products  for  the  refrigeration industry.  Rotary Power
Enterprise,  Inc.  provides  customized  rotary  engines  to  power a variety of
chiller  and  refrigeration  systems.  Segment  information  for the years ended
December  31,  1999  and  1998  as  follows:

<TABLE>
<S>                                           <C>               <C>
Net  revenues                                     1999             1998
                                               ---------        ---------
     Nauticon  Inc.                            $  91,006        $ 112,522
     RealCold  Products  Inc.                    212,596          224,477
     Technicold  Services,  Inc.                  50,611          105,173
     Rotary  Power  Enterprises,  Inc.           187,025                0
                                               ---------        ---------
                                               $ 541,238        $ 442,172
                                               =========        =========

     Operating  income  (loss)
          Nauticon  Inc.                       $(222,868)       $(461,212)
          RealCold  Products  Inc.              (146,565)         (79,689)
          Technicold  Services,  Inc.              7,538           (5,943)
          Rotary  Power  Enterprises,  Inc.      (35,597)          (7,671)
          Other  income (expenses)               (20,112)         (19,225)
                                               ---------        ---------
                                               $(417,604)       $(573,770)
                                               ==========       ==========

     Identifiable  assets
          Nauticon  Inc.                       $ 385,927        $ 545,060
          RealCold  Products  Inc.               144,651           76,304
          Technicold  Services,  Inc.             59,473          240,359
          Rotary  Power  Enterprises,  Inc.      129,993           96,563
                                               ---------        ---------
                                               $ 720,044        $ 958,286
                                               =========        =========

</TABLE>











<PAGE>                                36
                     POWERCOLD CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 1999 and 1998

(7)     STOCK  BASED  COMPENSATION

During  1999,  the Company authorized and issued a total of 1,004,558 options at
an exercies price of $.50 per share for employee compensation.  During 1998, the
Company authorized and issued a total of 600,000 options at an exercise price of
$.60  per  share, for employee compensation.  The Company also issued a total of
$460,000 options during 1998 for goods and services.  Since the Company accounts
for  the  compensation  cost  associated  with  the issuance of stock options to
employees  for  compensation under APB25, no compensation cost was recognized in
income  during  the  years  ended  December  31,  1999  and  December  31, 1998.

Stock and stock options issued goods and services are valued based upon the fair
value  of  the  consideration  received.


<TABLE>
Total  and  Weighted  Average  Exercise  Price  of  Options
 -----------------------------------------------------------

                                                       Weighted Average
              1999                         Total       Exercise Price
------------------------------------    -----------    -----------------
<S>                                     <C>            <C>
Outstanding at January 1, 1999           1,660,000           $1.24
Outstanding at December 31, 1999         2,554,558            1.00
Exercisable at December 31, 1999         2,554,558            1.00
Granted at December 31, 1999             2,554,558            1.00
Exercised at December 31, 1999                 -
Forfeited at December 31, 1999                 -
Expired  during  1999                          -

                                                       Weighted Average
              1998                         Total       Exercise Price
------------------------------------    -----------    -----------------
Outstanding  at  January  1,  1998         300,000           $1.75
Outstanding  at  December  31,  1998     1,660,000            1.24
Exercisable  at  December  31,  1998     1,660,000            1.24
Granted  at  December  31,  1998         1,660,000            1.24
Exercised  at  December  31,  1998             -
Forfeited  at  December  31,  1998             -
Expired  during  1998                          -

</TABLE>

Valuing  per  SFAS  123, par 22, the weighted average exercise price is $1.00 at
December  31,  1999.  Average price for 1999 was $.90 with volitity of .47.  The
fair  value  of  options  granted  during  1999  was  approximately  $250,000.











<PAGE>                                37
                     POWERCOLD CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 1999 and 1998

(8)     PREFERRED  STOCK

The  Company  currently  has  1,250,000 shares of preferred stock outstanding at
December  31,  1999.  This stock is designated as Series A Convertible Preferred
Stock  and was issued to a single investor.  This stock has a par value of $.001
per share and a stated value of $.80 per share in liquidation and has preference
over  common  stock  in  liquidation.

The  stock  is  convertible  at the option of the holder at a rate determined by
dividing $1.00 by the conversion price.  Each share of stock shall automatically
be  converted into shares of common stock at the then effective conversion price
on  September  14,  2002.  Each  share  of  the  stock may, at the option of the
Company,  be converted into shares of common stock at 120% of the then effective
conversion  price.

Holders  of  Series  A  Convertible  Preferred Stock are entitled to a number of
votes  per  share  equal to the number of shares of common stock into which each
such  share  of  Series  A  Convertible  Preferred  Stock held by such holder is
convertible  at  the  time  of  such  vote.

Each  issued and outstanding share of Series A Convertible Preferred Stock shall
be  entitled  to  receive  cumulative preferential dividends, payable in cash or
common  stock  at  the  option  of the Company, at the annual rate of $0.064 per
share,  payable  quarterly.

(9)     FEDERAL  INCOME  TAX  EXPENSE

There  is  no  federal  income tax expense for the year ended December 31, 1999.

Income  tax  expense  from  continuing  operations differs from the amount which
would  be provided by applying the statutory federal income tax rates because of
the  following:

<TABLE>
                                                Years  Ended  December  31,
                                                ---------------------------
                                                    1999           1998
                                                ------------   ------------
<S>                                             <C>            <C>
Computed at the expected statutory rate         $  (366,528)   $  (574,664)
Nondeductible  items  and  other  permanent
     differences                                        938            654
Change  in  valuation  allowance                    365,590        574,010
                                                ------------   ------------
Prior  year  unrecognized  deferred  tax asset  $         0    $         0
                                                ============   ============
</TABLE>











<PAGE>                                38
                     POWERCOLD CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 1999 and 1998


The  temporary  differences  that  result in deferred tax assets are as follows:

<TABLE>
                                                        December  31,
                                                ---------------------------
                                                    1999           1998
                                                ------------   ------------
<S>                                             <C>            <C>
Deferred  tax  assets:
     Accrued  wages  payable to shareholder     $         0     $        0
     Write-off  of  intangible  assets              334,686        334,686
     Losses related to unconsolidated affiliate     413,700        413,700
     Loss  on  write-off  of  impaired  stock       189,430        189,430
     Net  operating  loss  carryforward             852,199        486,609
                                                ------------   ------------

     Gross  deferred  tax  assets                 1,790,015      1,424,425
     Valuation  allowance                        (1,790,015)    (1,424,425)
                                                ------------   ------------
Net  deferred  tax  assets                      $         0    $         0
                                                ============   ============
</TABLE>

A  $961,085  tax  net  operating loss was incurred for the year end December 31,
1999.  The Company's net operating loss carryforwards for income tax purposes is
approximately $1,790,015, of which $358,015 expires in 2019, $1,055,000 in 2018,
and  $377,000  in  2012.

(10)     ADVANCE  TO  AFFILIATE

     Simco  advanced  $365,254  in  1999  to  PowerCold  at 8% rate of interest.

(11)     PROPERTY  AND  EQUIPMENT

Property  and  equipment is summarized as follows at December 31, 1999 and 1998:
<TABLE>
                                                    1999           1998
                                                ------------   ------------
<S>                                             <C>            <C>
     Machinery  and  equipment                       26,877         12,540
     Prototypes  and  molds                          73,420         71,030
     Furniture  and  fixtures                         8,804          9,894
                                                ------------   ------------
          Total  property  and  equipment           109,101         93,464
     Less  accumulated  depreciation  and            84,800         50,981
                                                ------------   ------------
          Net  property  and  equipment         $    24,301    $    42,483
                                                ============   ============
</TABLE>
Depreciation  expense  was  $33,819  and  $20,700 in 1999 and 1998 respectively.







<PAGE>                                39
                     POWERCOLD CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 1999 and 1998


(12)     CURRENT  LIABILITIES

     Included  in  accrued  expenses  at  December  31,  1999  are the following
     amounts:  accrued  payroll  $71,000  and  $88,600 related to the litigation
     discussed  in  Note  21.

(13)     AVAILABLE-FOR-SALE  INVESTMENTS

Investments include the following securities available for sale at  December 31,
1999:

                               Years                       Gross      Gross
                                 To      Fair           Unrealized   Unrealized
                              Maturity   Value   Cost      Gains      Losses
                              --------   -----   ----   ----------   ----------

Corporate equity securities
  -  common  stock                 -     $  0    $  0   $       0    $       0
                             =========   =====   ====   ==========   ==========

     Proceeds,  gross realized gains, and gross realized losses from the sale of
     securities classified as available for sale for the year ended December 31,
     1999  were  $32,500,  $0  and  $0  respectively.

(14)     RESTRICTED  CASH

During  1999,  a  $400,000 certificate of deposit was used to pay off short term
borrowing.  There  was  no  restricted  cash  as  of  December  31,  1999.

(15)     SHORT-TERM  BORROWINGS

As  of December 31, 1999, short-term borrowing consisted of a loan from Security
National  Bank  at  a  9.5%  rate  of  interest.

(16)     LONG-TERM  DEBT

     Long-term  debt  is  summarized  as  follows:

<TABLE>
                                                        December  31,
                                                ---------------------------
                                                    1999           1998
                                                ------------   ------------
<S>                                             <C>            <C>
     Note  payable  to  a  bank  at  9.5%
          due  April  10,  2004                 $    13,173    $       -

     Less  current  maturities  of  long-
          term  debt                                  3,564            -
                                                ------------   ------------
     Long-term  debt,  excluding
          current  maturities                   $     9,609    $       -
                                                ============   =============
</TABLE>



<PAGE>                                40
                     POWERCOLD CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 1999 and 1998


(17)     COMMITMENTS

     OPERATING  LEASES

The  Company  leases  certain  sales  offices,  plant space, and equipment under
operating lease agreements which expire at various times throughout 2002.  Total
rent  expense  was  $95,322  and  $100,902  in  1999  and  1998  respectively.

Future  minimum  rental  commitments  as  of  December 31, 1999 were as follows:

     Year  ending  December  31,
     2000                              $102,934
     2001                              $100,231
     2002                              $ 50,891
                                       --------
                                       $254,056
                                       ========

(18)     LITIGATION

Management of the Company is seeking to recoup damages from the former president
and  shareholder of Nauticon Inc. in connection with Nauticon Inc.'s acquisition
by  the  Company.  Related  to  this  matter is the ownership of certain patents
($441,078  and  $508,153  carrying  value  at  December  31,  1998  and  1997
respectively)  and  the  amount of compensation owed to the former Nauticon Inc.
shareholder  ($88,600  accrued  and  included  in  accounts  payable and accrued
expenses  at  December 31, 1998 and 1997).  The former Nauticon Inc. shareholder
was granted options to purchase 133,763 shares of common stock of the Company at
$1.50  per  share  (increasing to $2.00 per share before expiring in July 2000).
Nauticon  Inc.  is a defendant in several lawsuits filed by suppliers.  Nauticon
Inc.  denies  any  liability.  Counsel  has  advised  that it is not possible to
project  the  outcome  at  this time.  It is the opinion of management that this
matter  will  not  have  a  material  adverse  effect on the Company's financial
position  or  results  of  operations.

(19)     EARNINGS  PER  SHARE

Diluted  earnings  per share is not presented due to the loss from operations in
he  years  presented.  In  accordance  with  the  requirements  of  SFAS 128, no
potential  common  shares  are  included in the computation of diluted per share
amounts  due  to  the  loss  from  continued  operations.  Options  to  purchase
2,554,558  shares  of  common  stock  were  outstanding  at December 31, 1999 at
exercise  prices  ranging  from $0.50 per share to $2.50 per share, but were not
included  because they would have been anti-dilutive to the loss from continuing
operations.  The  options  expire  over  the  period from April 30, 1999 through
February  7,  2001.  Preferred  dividends  of  $20,000 increase the loss used to
calculate  earnings  per  share.