SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, D C 20549

                                   FORM 10Q/A
                                 AMENDMENT NO. 1

                   QUARTERLY REPORT UNDER SECTION 13 OR 15(D)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                    FOR THE QUARTERLY PERIOD ENDED  MARCH 31, 2001

                        COMMISSION FILE NUMBER  33-19584

                              POWERCOLD CORPORATION
        (Exact name of small business issuer as specified in its charter)

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

                               103 GUADALUPE DRIVE
                               CIBOLO, TEXAS 78108
                    (Address of principal executive offices)

                                  210-659-8450
                         (Registrant's telephone number)

Check whether the issuer (1) filed all reports required to be filed by Section13
or  15(d)  of  the Securities Exchange Act of 1934 during the preceding 12months
(or  for  such  shorter  period  that  the  registrant was required to file such
reports),  and  (2) has been subject to such filing requirements for the past 90
days.    (X)  Yes  (  )  No

Indicate  the number of shares outstanding of the Registrant's Common Stock, par
value  $0.001  -  13,090,383  shares  outstanding  at  March  31,  2001
























<PAGE> 1
                       POWERCOLD CORPORATION AND SUBSIDARIES
                                    FORM 10Q/A
                        FOR THE PERIOD ENDED MARCH 31, 2001


                                      INDEX
                                      -----




PART  I.     FINANCIAL  INFORMATION                                         PAGE

     ITEM  1:     FINANCIAL  STATEMENTS  (UNAUDITED)

          Accountant's Review Report                                           4

          Consolidated Balance Sheets                                          5

          Consolidated  Statements  of  Operations                             6

          Consolidated Statement of Changes in Stockholders' Equity            7

          Consolidated Statements  of Cash Flows                               8

          Notes  to  Consolidated  Financial Statements                       10

     ITEM  2:     MANAGEMENT'S  DISCUSSION  AND  ANALYSIS  OF
     FINANCIAL  CONDITION  AND  RESULTS  OF  OPERATIONS.                      25



PART  II.   OTHER  INFORMATION                                                30

     ITEM  1.     LEGAL  PROCEEDINGS.                                         30

     ITEM  2.     CHANGES  IN  SECURITIES.                                    30

     ITEM  3.     DEFAULTS  UPON  SENIOR  SECURITIES.                         30

     ITEM  4.     SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.        30

     ITEM  5.     OTHER  INFORMATION.                                         30

     ITEM  6.     EXHIBITS  AND  REPORTS  ON  FORM  8-K.                      30

Signtures                                                                     31















<PAGE> 2
                       POWERCOLD CORPORATION AND SUBSIDARIES
                                    FORM 10Q/A
                        FOR THE PERIOD ENDED MARCH 31, 2001

PART I - Financial Information

Item 1 - Financial Statements





                              POWERCOLD CORPORATION
                        CONSOLIDATED FINANCIAL STATEMENTS
                                 MARCH 31, 2001





                              WILLIAMS & WEBSTER PS
                          CERTIFIED PUBLIC ACCOUNTANTS
                        BANK OF AMERICA FINANCIAL CENTER
                           W 601 RIVERSIDE, SUITE 1940
                                SPOKANE, WA 99201
                                 (509) 838-5111




                              POWERCOLD CORPORATION

                                TABLE OF CONTENTS

                                 March 31, 2001



ACCOUNTANTS  REVIEW  REPORT                                              1


FINANCIAL  STATEMENTS

     Consolidated  Balance  Sheets                                       2

     Consolidated  Statements  of  Operations                            3

     Consolidated  Statement  of  Stockholders' Equity (Deficit)         4

     Consolidated  Statements  of  Cash  Flows                           5


NOTES  TO  CONSOLIDATED  FINANCIAL  STATEMENTS                           6









<PAGE> 3






To  the  Board  of  Directors
PowerCold  Corporation
Cibolo,  Texas


                           ACCOUNTANT'S REVIEW REPORT
                           --------------------------


We  have  reviewed  the  accompanying  consolidated  balance  sheet of PowerCold
Corporation  as  of  March  31, 2001, and the related consolidated statements of
operations,  stockholders' equity (deficit), and cash flows for the three months
then  ended.  All  information  included  in  these  financial statements is the
representation  of  the  management  of  PowerCold  Corporation.

We conducted our review in accordance with standards established by the American
Institute  of  Certified  Public  Accountants.  A  review  of  interim financial
information  consists principally of applying analytical procedures to financial
data  and  making  inquiries of persons responsible for financial and accounting
matters.  It  is  substantially  less  in scope than an audit in accordance with
auditing  standards  generally  accepted  in  the  United States of America, the
objective  of  which  is  the  expression  of an opinion regarding the financial
statements  taken  as  a whole.  Accordingly, we do not express such an opinion.

Based  on our review, we are not aware of any material modifications that should
be  made  to  the  accompanying  financial statements in order for them to be in
conformity with accounting principles generally accepted in the United States of
America.

The  consolidated financial statements for the year ended December 31, 2000 were
audited  by  us  and  we  expressed an unqualified opinion on them in our report
dated  March  9, 2001.  We have not performed any auditing procedures since that
date.

The  accompanying  financial  statements  have  been  prepared assuming that the
Company  will  continue as a going concern.  As discussed in Note 3, the Company
has  sustained  substantial  operating  losses  in  recent  years  and  has used
substantial  amounts  of working capital in its operations.  These factors raise
substantial  doubt  about  the Company's ability to continue as a going concern.
Management's  plans  regarding  those matters also are described in Note 3.  The
financial  statements  do not include any adjustments that might result from the
outcome  of  this  uncertainty.



Williams  &  Webster,  P.S.
Certified  Public  Accountants
Spokane,  Washington

May  11,  2001






<PAGE> 4
POWERCOLD CORPORATION
CONSOLIDATED BALANCE SHEETS

                                                  March 31,      December 31,
                                                    2001           2000
       ASSETS                                    (Unaudited)      (Audited)
                                                -------------   -------------
Current  assets:
  Cash                                          $     27,773    $    106,864
  Trade accounts receivable, net of allowance        117,296          38,665
  Inventory                                          217,863         241,272
  Prepaid expenses                                   352,500         307,500
                                                -------------   -------------
   Total current assets                              715,432         694,301

Property and equipment, net                           78,774          73,570
Patent rights and related technology, net          1,164,792       1,195,627
Goodwill, net                                         36,935          27,392
Deposits                                               8,970           7,705
                                                -------------   -------------
     Total assets                               $  2,004,903    $  1,998,595
                                                =============   =============

                      LIABILITIES AND STOCKHOLDERS' EQUITY
Current  liabilities:
  Accounts payable and accrued expenses         $    195,852    $    195,460
  Account payable - related party                     13,349          10,567
  Deferred revenue                                    43,000             -
  Commissions payable                                 50,623          42,240
  Advances from affiliate                             45,348          73,636
  Notes payable                                       42,502          43,328
  Acquisition-related payable                        200,000         200,000
  Capital lease payable                                2,752           3,419
                                                -------------   -------------
   Total current liabilities                         593,426         568,650
                                                -------------   -------------

Long-term  liabilities:
  Notes payable, net of current portion              140,000             -
                                                -------------   -------------
  Capital lease payable, net of current portion        6,826           6,826
                                                -------------   -------------

Commitments and contingencies                        168,300         168,300

Stockholders'  equity:
  Convertible, preferred stock, series A
    $0.001 par value, 5,000,000 authorized, no
    shares issued and outstanding, respectively          -               -
  Common stock, $0.001 par value, 200,000,000
    shares authorized, 13,090,383 and 12,669,383
    shares issued and outstanding, respectively       13,090          12,669
  Additional paid-in capital                       8,421,724       8,252,727
  Accumulated deficit                             (7,328,963)     (7,001,077)
  Stock subscriptions receivable                      (9,500)         (9,500)
                                                -------------   -------------
   Total stockholders' equity                      1,096,351       1,254,819
                                                -------------   -------------
Total liabilities and stockholders' equity      $  2,004,903    $  1,998,595
                                                =============   =============

         See accompanying notes and accountant's review report.
<PAGE> 5
POWERCOLD  CORPORATION
CONSOLIDATED  STATEMENTS  OF  OPERATIONS

                                                  Three Months Ended March 31,
                                                 ------------------------------
                                                      2001            2000
                                                   (Unaudited)     (Unaudited)
                                                 --------------  --------------
REVENUES
     Product  sales                              $     282,477   $      28,708
     Services                                           34,933          14,190
                                                 --------------  --------------
          Total  Revenues                              317,410          42,898

COST  OF  REVENUES                                     273,797          44,821
                                                 --------------  --------------
GROSS  PROFIT  (LOSS)                                  43,613           (1,923)
                                                 --------------  --------------

OPERATING  EXPENSES
     Sales  and  marketing                             50,794              -
     General  and  administrative                      223,541         295,352
     Depreciation  and  amortization                    39,062          33,195
                                                 --------------  --------------
          Total  Operating  Expenses                   313,397         328,547
                                                 --------------  --------------

LOSS  FROM  OPERATIONS                                (269,784)       (330,470)

OTHER  INCOME  (EXPENSES)
     Royalty  income                                    44,785             -
     Interest  income                                    1,996             -
     Interest  expense                                 (15,834)        (11,317)
     Financing  expense                                (40,000)            -
     Loss  on  impairment  of  assets                  (49,049)            -
     Other                                                 -            (1,322)
                                                 --------------  --------------
          Total  Other  Income  (Expenses)             (58,102)        (12,639)
                                                 --------------  --------------

LOSS  BEFORE  INCOME  TAX                             (327,886)       (343,109)

INCOME  TAX  EXPENSE                                       -               -
                                                 --------------  --------------
NET  LOSS                                        $    (327,886)  $    (343,109)
                                                 ==============  ==============

LOSS PER COMMON SHARE, BASIC AND DILUTED         $       (0.03)  $       (0.04)
                                                 ==============  ==============
WEIGHTED AVERAGE NUMBER OF COMMON SHARES
  OUTSTANDING,  BASIC  AND  DILUTED                 12,955,583       8,222,811
                                                 ==============  ==============









         See accompanying notes and accountant's review report.
<PAGE> 6
POWERCOLD  CORPORATION
CONSOLIDATED  STATEMENT  OF STOCKHOLDERS'  EQUITY

<TABLE>
<CAPTION>

                        Preferred Stock          Common Stock                                                        Total
                    -------------------------  ----------------------==  Additional    Accum-        Stock           Stock-
                    Number of                  Number of                 Paid-in         ulated      Subscriptions    holders.
                    Shares       Amount        Shares         Amount     Capital        Deficit      Receivable      Equity
                    -----------  ------------  -----------  -----------  ------------  ------------  --------------  -----------
<C>                 <S>          <S>           <S>          <S>          <S>           <S>           <S>            <S>
Balance,
Dec. 31, 1999     1,250,000  $   1,250    7,876,641  $   7,876  $6,044,092  $(5,681,882) $    (9,500)  $361,836
Stock issued for
  cash at an
  average of $0.87
  per  share            -          -      1,329,602      1,330   1,156,670          -            -    1,158,000
Stock issued as
  prepaid consulting
  fees at $0.50
  per  share            -          -        615,000        615     306,885          -            -      307,500
Stock issued for
  services at an
  average of $0.058
  per  share            -          -        593,355        593     296,085          -            -      296,678
Perferred stock
  converted to
  common stock
  at  par        (1,250,000)    (1,250)   1,354,785       1,355       (105)         -            -          -
Stock issued and
  options exercised
  in exchange for
  technology license
  at $0.50 per share    -          -        100,000         100     49,900          -            -       50,000
Stock issued and
  options exercised
  in exchange for
  debt at $0.50
  per share             -          -        800,000         800    399,200          -            -      400,000
Net loss for
  year ended
  Dec. 31, 2000         -          -            -           -          -     (1,319,195)         -   (1,319,195)
                    -----------  ------------  -----------  -----------  ------------  ------------  --------------  -----------
Balance,
 Dec. 31, 2000          -          -     12,669,383     12,669   8,252,727   (7,001,077)      (9,500)  1,254,819
Stock issued
  for consulting
  services, private
  placement services
  and accrued
  compensation
  at $0.50 per share    -          -        280,000       280      139,720          -            -       140,000
Cost of private
  placement             -          -            -         -        (50,000)         -            -     (50,000)
Stock issued
  as interest and
  financing fees at
  $0.50 per share       -          -        106,000       106       52,894          -            -       53,000
Stock issued in
  payment of account
  payable at $0.75
  per  share            -          -         35,000        35       26,383          -            -       26,418
Net loss for
  quarter ended
  March  31,  2001      -           -           -         -            -       (327,886)         -     (327,886)
                    -----------  ------------  -----------  -----------  ------------  ------------  --------------  -----------
Balance,
 March 31, 2001
  (unaudited)          -     $      -    13,090,383  $  13,090  $8,421,724  $(7,328,963) $   (9,500)  $1,096,351
                 ==========  ==========  ==========  =========  ==========  ===========  ===========  ==========
</TABLE>



         See accompanying notes and accountant's review report.

<PAGE> 7
POWERCOLD  CORPORATION
CONSOLIDATED  STATEMENTS  OF  CASH  FLOWS

                                                  Three Months Ended March 31,
                                                 ------------------------------
                                                      2001            2000
                                                   (Unaudited)     (Unaudited)
                                                 --------------  --------------
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net  loss                                      $    (327,886)  $    (343,109)
  Adjustments to reconcile net loss to net cash
    used  in  operating  activities:
      Depreciation and amortization                     39,062          33,195
      Loss on impairment of intangible assets           49,049             -
      Issuance of common stock for services             20,000         139,065
      Issuance of common stock for current debt         26,418             -
      Issuance of stock for interest on debt            13,000             -
      Issuance of stock for financing expense           40,000             -
  (Increase) decrease  in  assets:
    Accounts  receivable                               (78,631)         24,899
    Inventories                                         23,409             -
    Prepaid expenses and other current assets          (45,000)            -
  Increase (decrease) in liabilities:
    Accounts  payable  and  accrued  expenses            4,997          86,280
    Accounts  payable,  related  party                   2,781             -
    Deferred  revenue                                   43,000             -
    Commissions  payable                                 8,383             -
    Deposits                                            (1,265)            -
                                                 --------------  --------------
Net  cash  used  in  operating  activities            (182,683)        (59,670)
                                                 --------------  --------------

CASH  FLOWS  FROM  INVESTING  ACTIVITIES:
  Purchase  of  property  and  equipment                (6,625)            -
  Payments  on  capital lease                             (667)            -
  Cash  payments  to  affiliate                        (43,290)            -
  Proceeds  from  advance  from  affiliate              15,000          32,944
                                                 --------------  --------------
Net cash provided by (used in) investing
  Activities                                           (35,582)         32,944
                                                 --------------  --------------

CASH  FLOWS  FROM  FINANCING  ACTIVITIES:
  Proceeds  from  borrowing                            140,000             -
  Repayment  of  short-term  borrowings                   (826)            -
  Proceeds from issuance of shares under
    private  placement                                     -           376,000
                                                 --------------  --------------
Net cash provided by (used in) financing
  Activities                                           139,174         376,000
                                                 --------------  --------------
Net  increase  (decrease)  in  cash                    (79,091)        349,274

Cash  at  beginning  of  year                          106,864          14,464
                                                 --------------  --------------
Cash  at  end  of  period                        $      27,773   $     363,738
                                                 ==============  ==============




         See accompanying notes and accountant's review report.
<PAGE> 8
POWERCOLD  CORPORATION
CONSOLIDATED  STATEMENTS  OF  CASH  FLOWS  (continued)


                                                  Three Months Ended March 31,
                                                 ------------------------------
                                                      2001            2000
                                                   (Unaudited)     (Unaudited)
                                                 --------------  --------------

Supplemental  cash  flow  information:
      Interest  paid                             $         -     $      11,317
                                                 ==============  ==============
      Income  taxes paid                         $         -     $         -
                                                 ==============  ==============

NON-CASH  TRANSACTIONS:
  Issuance of common stock as prepayment for
    consulting  services                         $      45,000   $         -

  Issuance of common stock for services          $      20,000   $     139,065

  Issuance of stock for financing and
    interest expense                             $      53,000   $        -

  Issunace of stock for satisfaction of
    accounts  payable                            $      26,418   $        -

  Issuance of stock for accrued wages            $      25,000   $        -

  Issuance of stock for private placement costs  $      50,000   $        -






























See accompanying notes and accountant's review report.
<PAGE> 9
                             POWERCOLD CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 MARCH 31, 2001

NOTE  1  -  ORGANIZATION  AND  DESCRIPTION  OF  BUSINESS

PowerCold  Corporation,  formerly  International  Cryogenic Systems Corporation,
(the  Company)  was  incorporated  on  October  7,  1987 in the State of Nevada.
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  Company  develops,  manufactures  and  markets
proprietary  equipment  to  achieve  significant electric power cost savings for
commercial   and   industrial   firms.    PowerCold's   energy   efficient   and
environmentally  safe  products  are  designed  to  reduce  power  costs for air
conditioning,  refrigeration and on-site building power. 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 industry. The second line
is  the design and production of unique products for the refrigeration industry.
The  third  is   consulting  engineering  services,   including  process  safety
management  compliance,  and  ammonia  refrigeration  and  carbon dioxide system
design.

On  December  28,  1992, the Company acquired the patent rights (U.S. Patent No.
5,501,269) and related engineering and technology to a process of quick freezing
food  products, and cleaning and treating various nonfood products. This process
was accomplished by using a circulating cryogenic liquid in a closed pressurized
vessel system.  The patent acquisition was made in exchange for 2,414,083 shares
of the company's common stock.  Two directors of the Company were also directors
of  the  company  selling  the  patent  rights.

On  August  4,  1995, the Company acquired Nauticon, Inc., including its related
technology  and  assets for 900,000 shares and 300,000 options (expired July 31,
2000)  of  the  Company's  stock.  The  assets currently include U.S. Patent No.
5,501,269 issued on March 26, 1996, and entitled Condenser Unit, and U.S. Patent
No. 5,787,722 issued August 4, 1998, and entitled Heat Exchange Unit.

On  May  18,  1998,  the Company incorporated a wholly owned subsidiary, Channel
Freeze  Technologies,  Inc.,  to acquire intellectual property rights of Channel
Ice  Technologies.  The Company has produced its first unit with this technology
(see  Note  16)  and  is  awaiting  its  sale.

The  Company  formed Alturdyne Energy Systems, Inc. in September 1999 to support
the  natural gas engine driven water chiller business.  Subsequently, the entity
has  not  been  in  operation  because  of  lack  of  operating  capital.

















<PAGE> 10
                             POWERCOLD CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 MARCH 31, 2001

NOTE  2  -  SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES

On  December  1,  2000, the Company acquired Ultimate Comfort Systems, Inc., the
technology  rights,  patent  rights  (U.S.  Patent  No.  5,183,102), and license
agreement  for  integrated  piping technology for a heating and air conditioning
system.  This  acquisition  gave the Company exclusive, non-transferrable United
States transfer rights to the technology and all related assets. This technology
was  then  placed  into  a newly formed, wholly-owned subsidiary of the Company,
Ultimate  Comfort  Systems.  See  Note  5.

This  summary  of  significant  accounting  policies  is  presented to assist in
understanding  the financial statements.  The financial statements and notes are
representations  of  the  Company's  management,  which is responsible for their
integrity  and  objectivity.  These  accounting  policies  conform to accounting
principles  generally  accepted  in  the  United States of America and have been
consistently  applied  in  the  preparation  of  the  financial  statements.

Accounting  Methods
-------------------
The  Company's  financial  statements  are  prepared using the accrual method of
accounting.

Use  of  Estimates
------------------
The  process  of  preparing  financial  statements in conformity with accounting
principles  generally  accepted in the United States of America requires the use
of  estimates  and  assumptions  regarding certain types of assets, liabilities,
revenues,   and  expenses.   Such  estimates  primarily   relate  to   unsettled
transactions  and   events  as  of  the   date  of  the  financial   statements.
Accordingly, upon settlement, actual results may differ from estimated amounts.

Interim  Financial  Statements
------------------------------
The  interim financial statements as of and for the period ended March 31, 2001,
included herein, have been prepared for the Company without audit.  They reflect
all  adjustments,  which are, in the opinion of management, necessary to present
fairly  the  results  of operations for these periods.  All such adjustments are
normal  recurring  adjustments.  The  results  of  operations  for  the  periods
presented  are  not necessarily indicative of the results to be expected for the
full  fiscal  year.

Principles  of  Consolidation
-----------------------------
The  consolidated  financial  statements include the accounts of the Company and
its  wholly  owned  subsidiaries, after elimination of the intercompany accounts
and  transactions.  Wholly  owned subsidiaries of the Company are listed in Note
12.











<PAGE> 11
                             POWERCOLD CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 MARCH 31, 2001

NOTE  2  -  SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES  (CONTINUED)

Reclassification
----------------
Certain  amounts  from  prior  periods  have been reclassified to conform to the
current  period  presentation.  This reclassification has resulted in no changes
to  the  Company's  accumulated  deficit  or  net  losses  presented.

Cash  and  Cash  Equivalents
----------------------------
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.

Inventories
-----------
Inventories  are  stated at the lower of cost or market on a first-in, first-out
basis.  See  Note  7.

Fair  Value  of  Financial  Instruments
---------------------------------------
The  Company's  financial  instruments  as defined by SFAS No. 107, "Disclosures
about Fair Value of Financial Instruments," include cash, advances to affiliate,
trade accounts receivable, accounts payable, accrued expenses and notes payable.
All  instruments are accounted for on a historical cost basis, which, due to the
short  maturity of these financial instruments, approximates fair value at March
31,  2001

Derivative  Instruments
-----------------------
In  June  1998,  the  Financial  Accounting  Standards Board issued Statement of
Financial  Accounting  Standards  ("SFAS")  No.  133, "Accounting for Derivative
Instruments  and  Hedging Activities."  This standard establishes accounting and
reporting  standards  for  derivative  instruments, including certain derivative
instruments  embedded  in  other  contracts,  and  for  hedging  activities.  It
requires  that  an  entity  recognize  all  derivatives  as   either  assets  or
liabilities in the balance sheet and measure those instruments at fair value.

At March 31, 2001, the Company has not engaged in any transactions that would be
considered  derivative  instruments  or  hedging  activities.

Property  and  Equipment
------------------------
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.  See Note 7.

Concentration  of  Credit  Risk
-------------------------------
The  Company  maintains  its cash in one commercial account at a major financial
institution.  Although  the financial institution is considered creditworthy and
has  not  experienced  any  losses  on  its  deposits, at December 31, 2000, the
Company's  cash  balance  exceeded  Federal Deposit Insurance Corporation (FDIC)
limits  by  $6,864.




<PAGE> 12
                             POWERCOLD CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 MARCH 31, 2001

NOTE  2  -  SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES  (CONTINUED)

Impaired  Asset  Policy
-----------------------
In  March  1995,  the Financial Accounting Standards Board issued statement SFAS
No.  121  titled  "Accounting for Impairment of Long-lived Assets." In complying
with  this  standard,  the  Company  reviews  its long-lived assets quarterly to
determine  if  any  events  or  changes  in  circumstances have transpired which
indicate  that  the  carrying  value  of  its assets may not be recoverable. The
Company  determines  impairment  by comparing the undiscounted future cash flows
estimated  to  be  generated by its assets to their respective carrying amounts.
At  March  31,  2001, the Company concluded that all of the unamortized goodwill
associated  with  its  purchase  of  Rotary Power was impaired and, accordingly,
recognized  a  loss  on  impairment  of  $49,049.

The  Company  does  not believe any other adjustments are needed to the carrying
value  of  its  assets  at  March  31,  2001.

Goodwill
--------
Goodwill  represents  the  excess of the purchase price and related direct costs
over  the  fair  value of net assets acquired as of the date of the acquisition.
Goodwill  is  amortized  on  a  straight-line  basis over 10 years.  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.

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

Bad  Debts
----------
The  Company estimates bad debts utilizing the allowance method, based upon past
experience  and  current market conditions.  At December 31, 2000, the allowance
for  doubtful  accounts  was  $6,478.  At  March  31,  2001,  this  amount  was
reclassified  to  bad  debt  expense.

Research  and  Development
--------------------------
Research  and  development  expenses  are charged to operations as incurred. The
cost  of  intellectual  property  purchased  from  others  that  is  immediately
marketable or that has an alternative future use is capitalized and amortized as
intangible  assets.  Capitalized  costs  are  amortized  using the straight-line
method  over  the  estimated  economic  life, typically 10 years, of the related
asset.  The  Company periodically reviews its capitalized patent costs to assess
recoverability  based  on the projected undiscounted cash flows from operations.
Impairments  are  recognized in operating results when a permanent diminution in
value  occurs.








<PAGE> 13
                             POWERCOLD CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 MARCH 31, 2001

NOTE  2  -  SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES  (CONTINUED)

Advertising  Expenses
---------------------
Advertising  expenses  consist  primarily  of  costs  incurred  in  the  design,
development,  and  printing  of Company literature and marketing materials.  The
Company  expenses  all  advertising  expenditures  as  incurred.

Stock  Based  Compensation
--------------------------
The  Company  accounts  for stock issued for compensation in accordance with APB
25,   "Accounting   for  Stock   Issued  to  Employee."   Under  this  standard,
compensation cost is the difference between the exercise price of the option and
fair  market of the underlying stock on the grant date.  In accordance with SFAS
No. 123, "Accounting for Stock Based Compensation," the Company provides the pro
forma  effects  on net income and earnings per share as if compensation had been
measured  using  the  "fair  value  method"  described  therein.

Compensated  Absences
---------------------
Employees  of the Company are entitled to paid vacation, sick, and personal days
off, depending on job classification, length of service, and other factors.  The
Company  accrues  vacation  expense throughout the year and, if employees do not
utilize  their  allotment,  the Company will cash out all unused pay on the last
calendar  day  of  the  year.

Income  Taxes
-------------
The  Company  accounts  for  income  taxes  in  accordance  with  SFAS  No. 109,
"Accounting  for  Income  Taxes,"  which  requires  recognition  of deferred tax
liabilities  and  assets for the expected future tax consequences of events that
have  been  included  in  the  financial  statements or tax returns.  Under this
method,  deferred  tax  liabilities  and  assets  are  determined  based  on the
difference  between  the  financial  statements  and  tax  basis  of  assets and
liabilities using statutory income tax rates in effect for the year in which the
differences  are  expected  to  reverse.

Earnings  Per  Share
--------------------
On  January  1,  1998,  the  Company  adopted  SFAS  No. 128, which provides for
calculation  of  "Basic"  and  "Diluted" earnings per share.  Basic earnings per
share  includes  no dilution and is computed by dividing net income available to
common  shareholders  by  the weighted average common shares outstanding for the
period.  Diluted earnings per share reflect the potential dilution of securities
that  could share in the earnings of an entity similar to fully diluted earnings
per  share.  Although  there  were common stock equivalents outstanding at March
31,  2001,  they  were  not  included  in  the calculation of earnings per share
because  they  would  have  been  considered  anti-dilutive.










<PAGE> 14
                             POWERCOLD CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 MARCH 31, 2001

NOTE  3  -  GOING  CONCERN

The  accompanying  consolidated  financial  statements  have  been  prepared  in
conformity with accounting principles generally accepted in the United States of
America,  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 March 31, 2001, intangible assets comprise a material portion 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  5.  The  ultimate  outcome  of these uncertainties cannot presently be
determined.   Management  is  actively  seeking  additional   equity  financing.
Additionally,  management  believes  that  the prior year's acquisitions and the
acquisition  of  Ultimate  Comfort  Systems  technology will lead to the overall
structure  necessary  to  fulfill  the  Company's  current  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.

NOTE  4  -  RELATED  PARTY  TRANSACTIONS

The  Company  has  received  funding on several occasions from Simco Group, Inc,
("Simco"),  a  separate  legal entity wholly-owned by the Company's chairman and
chief  executive  officer.

During  2000,  Simco converted $400,000 of its loans to the Company into 800,000
shares  of  the  Company's  common  stock.  See  Note  10.

The Company's directors receive an annual payment of $2,500 for directors' fees.
Two of the Company's officers are entitled to receive a minimum commission of 2%
but  not  to  exceed  5% on any direct sales of the Company.  A third officer is
entitled to receive the highest of 3% commission on the Company's gross revenues
or  5%  on  the  Company's gross operating profits, or $10,000 per month.  These
employees also have the option to purchase shares of common restrictive stock of
the  Company  at  50%  of  bid  price 30 days after receiving payments for these
services.  In  order  to  obtain  these  benefits,  the  employees  must perform
services for a period of three years effective on date of agreement or receive a
pro  rata  share  based  on  years  of  service.  No additional commissions were
accrued  related  to  the  agreements  at  December  31,  2000,  1999  and 1998.
















<PAGE> 15
                             POWERCOLD CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 MARCH 31, 2001

NOTE  5  -  ACQUISITIONS

Acquisition  of  Heating  and  Air  Conditioning  System  Technology
--------------------------------------------------------------------
On  December 1, 2000, the Company acquired the technology rights, patent rights,
and  license  agreement  for  integrated piping technology for a heating and air
conditioning   system.    This   acquisition   gave  the    Company   exclusive,
non-transferrable  United  States  transfer  rights  to  the  technology and all
related assets.  In this transaction, the Company paid $65,000 cash, assumed two
lines  of  credit  (see  Note  8), forgave a payment of $28,571 from projects in
process,  issued  100,000  shares  of  its  common  stock (see Note 10), granted
150,000  of  stock  options  at $1.00 per share (see Note 11), and agreed to the
payment  of  royalties  at  no  more  than  $3,000  per  month for one year.  In
addition, the Company hired the seller of the technology for an annual salary of
$70,000,  with  annual  renewals,  based  upon performance as defined within the
purchase  agreement.  This  technology  was  then  placed  into  a newly formed,
wholly-owned  subsidiary  of  the  Company,  Ultimate  Comfort  Systems.

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 has been impaired at March 31, 2001.  See
Note  2.

NOTE  6  -  INVENTORY

Inventories  at  March  31, 2001 and December 31, 2000 consist of the following:

                            March 31, 2001         December 31, 2000
                            --------------         -----------------

Materials inventory         $     109,442          $     132,851
Finished goods inventory          108,421                108,421
                            --------------         -----------------
                            $     217,863          $     241,272
                            ==============         =================

Finished  goods inventory consists of the specialized quick freezing unit of the
Company's  Channel  Freeze  Technology,  Inc.  subsidiary.















<PAGE> 16
                             POWERCOLD CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 MARCH 31, 2001

NOTE  7  -  PROPERTY,  EQUIPMENT  AND  INTANGIBLES

Property  and  equipment  is  summarized  as  follows:

                                 March 31, 2001       December 31, 2000
                                 --------------       -----------------

Machinery and equipment          $     93,966          $     87,342
Prototypes and molds                   71,030                71,030
Furniture and fixtures                  7,614                 7,614
                                 --------------       -----------------

Total Property and Equipment          172,610               165,986

Less: Accumulated Depreciation         93,836                92,416
                                 --------------       -----------------

Net Property and Equipment       $     78,774         $      73,570
                                 ==============       =================

Depreciation  expense  for  the three months ended March 31, 2001 and year ended
December  31,  2000,  was  $1,420  and  $7,616,  respectively.

The  Company's  intangible  assets  are  summarized  as  follows:

                                 March 31, 2001       December 31, 2000
                                 --------------       -----------------

Patents and related technology   $   1,684,001        $     1,684,001
Goodwill                               105,269                105,269
                                 --------------       -----------------

Total Intangibles                    1,789,270              1,789,270

Less:  Accumulated Amortization        587,543                566,251
                                 --------------       -----------------

Net Intangibles                  $   1,201,727        $     1,223,019
                                 ==============       =================

NOTE  8  -  NOTES  PAYABLE

At  March  31,  2001,  notes  payable  consisted  of  the  following:

A  note  payable  to  Southtrust  Bank,  secured  by  G.  Briley,  the Company's
president,  for  $5,913  with  an  annual interest rate of 14.99%.  This note is
payable  in  March  2002.

Two  lines  of credit were assumed as part of the consideration for the December
2000  acquisition  of  a technology license and intellectual property. (See Note
5.)  One  line  of  credit was payable to Royal Bank of Canada for $34,014 U.S.,
and  the  second  to  T.  D.  Bank  for  $3,401  U.S.






<PAGE> 17
                             POWERCOLD CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 MARCH 31, 2001

NOTE  9  -  PREFERRED  STOCK

The  Company  is  authorized  to  issue  5,000,000  shares  of  $0.001 par value
preferred stock, which contains no voting privileges.  Shareholders are entitled
to cumulative dividends, and each share of preferred stock may be converted into
the  Company's  common  stock.

At  December  31,  1999  and 1998, the Company had 1,250,000 shares of preferred
stock  issued  and  outstanding.   This  stock  was  designated  as  Series  "A"
Convertible Preferred Stock and was issued to a single investor.  This stock has
a  par  value  of  $0.001  per  share  and  a stated value of $0.80 per share in
liquidation  and  has  preference  over  common  stock  in  liquidation.

Each  issued and outstanding share of Series "A" Convertible Preferred Stock was
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.

On  June  30,  2000,  100%  of  the Company's outstanding Series "A" Convertible
Preferred  Stock  was  converted  to the Company's common stock.  The conversion
resulted in the issuance of 1,354,785 shares of the Company's common stock at an
approximate  conversion  rate of one share of preferred stock for 1.08 shares of
common  stock.  At  December 31, 2000 and at March 31, 2001, the Company did not
have  any  shares  of  preferred  stock  outstanding.

NOTE  10  -  COMMON  STOCK

Upon  incorporation,  the  Company was authorized to issue 200,000,000 shares of
its  $0.001  par  value  common  stock.

During  the three months ended March 31, 2001, the Company issued 280,000 shares
of  common  stock  at  $0.50  per share for consulting and other services and as
compensation,  106,000  shares  of  common  stock at $0.50 for financing fees of
$40,000  and  interest  of  $13,000, and issued 35,000 shares of common stock at
$0.75  per  share  to  satisfy  outstanding  debt.

During  the year ended December 31, 2000, the Company issued 4,792,742 shares of
its  common  stock of which 1,329,602 shares were issued for cash of $1,158,000,
615,000  shares  for prepaid consulting valued at $307,500, 593,355 for services
valued  at $296,678, 100,000 shares for a technology license (see Note 5) valued
at  $50,000,  and  800,000  shares  for  debt  valued  at  $400,000.  A total of
1,480,000  shares  were  issued  to  officers,  directors,  or affiliates of the
Company  and  are subject to transfer restrictions as defined by Rule 144 of the
Securities  Act  of  1933.  In  addition,  1,354,785  shares were issued for the
conversion of 100% of the Company's Series "A" Convertible Preferred Stock.  See
Note  9.












<PAGE> 18
                             POWERCOLD CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 MARCH 31, 2001

NOTE  11  -  STOCK  BASED  COMPENSATION  AND  STOCK  OPTIONS

During  1998, the Company authorized and issued a total of 650,000 options at an
exercise  price  of $0.50 per share for employee compensation.  The Company also
issued a total of 400,000 options during 1998 as consideration for acquisitions.
During  1999,  the Company authorized and issued a total of 1,004,558 options at
an  exercise price of $0.50 for employee compensation.  During 2000, the Company
authorized and issued a total of 750,000 options at an average exercise price of
$1.20  for  investment funding, and 250,000 options at an average exercise price
of  $0.50  as  compensation.

The  significant  characteristics  of  these  options are summarized as follows:

The  Company  applies  APB  Opinion  No.  25  in  accounting  for  options  and,
accordingly,  recognized  no compensation cost for its stock options in 2000 and
1999.  The  following  reflect the Company's pro-forma net loss and net loss per
share  had  the  Company  determined  compensation  costs based upon fair market
values of options at the grant date, as well as the related disclosures required
by  SFAS  123.
                                     Number of Shares   Weighted Average
                                     Under Option       Exercise Price
                                     ----------------   ----------------
Exercisable, December 31, 1999             2,454,558    $        1.01
                                     ================   ================
Outstanding, January 1, 2000               2,454,558    $        1.01
     Granted                               1,000,000             0.77
     Exercised                              (450,000)            0.50
     Forfeited                                   -               -
     Expired                                (700,000)            2.29
                                     ----------------   ----------------
Outstanding, March 31, 2001                2,304,558    $        0.74
                                     ================   ================
Exercisable, March 31, 2001                2,304,558    $        0.74
                                     ================   ================

At  March 31, 2001, exercise prices for outstanding options ranged from $0.50 to
$3.00.  The  weighted average contractual life remaining of such options was 2.3
years.

In  accordance with Statement on Financial Accounting Standard No. 123, the fair
value  of the options granted was estimated using the Black-Scholes Option Price
Calculation.  The  following  assumptions  were made to value the stock options:

                                               2000
                                           -----------
          Risk-free Interest Rate             5.25%
          Expected Life                      3 years
          Expected Volatility                 105%

The Black-Scholes option valuation model was developed for use in estimating the
fair  value  of traded options, which have no vesting restrictions and are fully
transferable.  In  addition, option valuation models require the input of highly
subjective  assumptions  including the expected stock price volatility.  Because
the  Company's  employee   stock  options  have  characteristics   significantly
different  from  those  of  trade options, and because changes in the subjective
input assumptions can materially affect the fair value estimate, in management's
opinion,  the  existing  models  do  not  necessarily  provide a reliable single
measure  of  the  fair  value  of  its  employee  stock  options.
<PAGE> 19
                             POWERCOLD CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 MARCH 31, 2001

NOTE  11  -  STOCK  BASED  COMPENSATION  AND  STOCK  OPTIONS  (CONTINUED)

Pro  forma  net  income and earnings per share had the Company accounted for its
options  under  the  fair  value  method  of  SFAS  123  is  as  follows:

                                       December 31, 2000
                                       -----------------

      Net loss as reported             $    (1,322,123)
      Adjustment required by SFAS 123         (287,273)
                                       -----------------

      Pro forma net loss               $    (1,609,396)
                                       =================

      Pro forma net loss per share,
        Basic and diluted              $         (0.16)
                                       =================

NOTE  12  -  REPORTABLE  SEGMENTS

PowerCold  currently  has  six  reportable  segments:  Nauticon  Inc.,  RealCold
Products,  Inc.,  Technicold  Services,  Inc.,  Rotary  Power  Enterprise, Inc.,
Channel  Freeze Technologies, Inc., and Ultimate Comfort Systems, Inc.  Nauticon
Inc. 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  technicians  and supervisors. 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.  Channel Freeze Technologies, Inc. generates
revenue  through  the  manufacture  and sale of bulk freezing systems.  Ultimate
Comfort  Systems,  Inc.  holds  the technology rights, patent rights and license
agreement  for  an integrated piping technology for heating and air conditioning
systems.  Ultimate  Comfort  Systems,  Inc.  also  provides  consulting services
related  to  this  technology.






















<PAGE> 20
                             POWERCOLD CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 MARCH 31, 2001

NOTE  12  -  REPORTABLE  SEGMENTS  (CONTINUED)

Segment  information  for the three months ended March 31, 2001 and for the year
ended  December  31,  2000  are  as  follows:

                                          March 31, 2001       December 31, 2000
                                          --------------       -----------------
Revenues:
  Ultimate Comfort Systems, Inc.          $     209,965        $            -
  Nauticon, Inc.                                    -                     3,754
  RealCold Products, Inc.                        95,251                 309,111
  Technicold Services, Inc.                      12,194                  82,175
  Rotary Power Enterprises, Inc.                    -                       -
  Channel Freeze Technologies, Inc.                 -                       -
  Corporate                                         -                       -
                                          --------------       -----------------
    TOTAL REVENUES                        $     317,410        $        395,040
                                          ==============       =================
Operating  income  (loss):
  Ultimate Comfort Systems, Inc.          $       6,752        $            -
  Nauticon, Inc.                                (18,692)                (33,331)
  RealCold Products, Inc.                      (201,303)               (504,144)
  Technicold Services, Inc.                       2,642                (109,771)
  Rotary Power Enterprises, Inc.                (43,927)               (109,025)
  Channel Freeze Technologies, Inc.             (25,489)               (215,808)
  Corporate                                     (10,233)               (439,575)
                                          --------------       -----------------
    TOTAL OPERATING LOSS                  $    (269,784)       $     (1,411,654)
                                          ==============       =================
Identifiable  assets:
  Ultimate Comfort Systems, Inc.          $     200,880        $        152,415
  Nauticon, Inc.                                297,659                 280,375
  RealCold Products, Inc.                       158,078                 132,371
  Technicold Services, Inc.                      54,089                 120,833
  Rotary Power Enterprises, Inc.                 80,027                  75,386
  Channel Freeze Technologies, Inc.             834,496                 848,777
  Corporate                                     379,674                 388,438
                                          --------------       -----------------
    TOTAL IDENTIFIABLE ASSETS             $   2,004,903        $      1,998,595
                                          ==============       =================

Depreciation  and  amortization:
  Ultimate Comfort Systems, Inc.          $       2,648        $            -
  Nauticon, Inc.                                 18,403                  83,046
  RealCold Products, Inc.                           642                     900
  Technicold Services, Inc.                       3,023                  12,090
  Rotary Power Enterprises, Inc.                     65                     334
  Channel Freeze Technologies, Inc.              14,281                  57,124
  Corporate                                         -                       -
                                          --------------       -----------------
TOTAL DEPRECIATION AND AMORTIZATION       $      39,062        $        153,494
                                          ==============       =================






<PAGE> 21
                             POWERCOLD CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 MARCH 31, 2001

NOTE  12  -  REPORTABLE  SEGMENTS  (CONTINUED)

All  of  the Company's assets are held within the United States and all material
revenue  was  generated  within  the  United  States.

PowerCold's  reportable  segments  are  strategic   business  units  that  offer
different  products  or  services.  They  are  managed  separately  because each
business  requires  different  technology  and  marketing  strategies.

NOTE  13  -INCOME  TAXES

The  Company  incurred net operating losses for income tax purposes of $719,000,
$778,000,  and $1,055,000 for the years ended December 31, 2000, 1999, and 1998,
respectively.  The  Company  utilized  approximately  $365,000 as a carryback to
1996  to  reduce  the  federal  tax  provision  in that year.  The Company's net
operating  loss  carryforwards  for   income  tax  purposes  are   approximately
$2,929,000,  which will expire on various dates through the year 2020.  At March
31,  2001,  the  Company's  net  operating  losses  increased  by  approximately
$327,000.

NOTE  14  -LEASES

Capital  Lease
--------------
In  1999,  the Company acquired a forklift, which was financed through a capital
lease.  This  capital  lease  is  payable  in monthly installments of $297, with
interest  at  9.5%,  through  April  2004.  Aggregate  yearly maturities of this
capital  lease  for  the  years  after  March  31,  2001  are  as  follows:

                              Year          Amount
                              ----          ------

                              2001          $2,094
                              2002           3,018
                              2003           3,298
                              2004           1,166
                                            ------

                                 Total      $9,576
                                            ======

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 for the year ended December 31, 2001 was $100,231 and for the
three  months  ended  March  31,  2000  was  $25,058.

Future  minimum  rental  commitments  as  of  March  31,  2001  were as follows:

                               Year ending December 31,
                                         2001              $   100,231
                                         2002                   50,891
                                                           ------------
                                                           $   151,122
                                                           =============


<PAGE> 22
                             POWERCOLD CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 MARCH 31, 2001

NOTE  15  -  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  carrying  value  at December 31, 1998) 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, 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.

On  August  31,  2000, Nauticon Inc. and its former president agreed upon a full
and  final  settlement of the lawsuit mentioned above.  This settlement resulted
in  a  gain  for  the  Company  of  $88,600  which was recorded as other income.


NOTE  16  -  SUBSIDIARY  -  CHANNEL  FREEZE  TECHNOLOGIES,  INC.

On  May  18,  1998,  Channel  Freeze  Technologies,  Inc. (CFTI) was formed as a
wholly-owned  subsidiary  of  the  Company  to  accommodate  the  acquisition of
intellectual  property  assets  related to Channel Ice Technology.  On September
15,  1998, the Company entered into an agreement to acquire eighty percent (80%)
of the assets (primarily patents) of Channel Ice Technologies from SIR Worldwide
LLC  (SIR)  for  $850,000  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  from  the  date  of  closing.  After  the  Company  made cash payments of
$550,000  in  1998 and $100,000 in 1999, the remaining acquisition liability was
$200,000  at  December  31,  2000.  The agreement  also required  the Company to
issue  two-thirds of  the stock of CFTI to SIR,  which would  leave  the Company
with only a one-third ownership in CFTI.  The board of  directors of the Company
passed a resolution approving the issuance of two-third of  the shares  of stock
of CFTI to SIR; however, the shares were never issued.  The  agreement  provided
the Company  the ability to increase (buy back) their ownership interest  (up to
80%)  in CFTI  by making  additional  payments  totaling  $5,950,000.  For  each
$1 million dollars in Channel Ice Technology unit sales, PowerCold shall acquire
an  additional  1%  equity  interest in CFTI for each payment  of $85,000, up to
a maximum ownership interest by PowerCold in CFTI of 80%.

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.

Since  1999, the Company has maintained its investment in CFTI as a wholly owned
subsidiary.  The  patent  and  intellectual  property owned by the subsidiary is
consolidated  with  the  Company's  other  activities.





<PAGE> 23
                             POWERCOLD CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 MARCH 31, 2001

NOTE  17  -  COMMITMENTS  AND  CONTINGENCIES

Officers  and  Directors  Compensation
--------------------------------------
See  Note  4  relating  to  contingent  compensation  to  Company  directors and
officers.

Accounts  Payable
-----------------
The  Company  has trade accounts payable that date back to 1996.  Management had
tried  to contact these vendors to arrange settlement agreements.  The amount in
commitments  and  contingencies  are the balances from vendors that could not be
contacted  or  did  not  respond  to  management's  correspondence.

Royalty  Agreement
------------------
See  Note  5  regarding  December  1,  2000  royalty  agreement.









































<PAGE> 24
                       POWERCOLD CORPORATION AND SUBSIDARIES
                                    FORM 10Q/A
                        FOR THE PERIOD ENDED MARCH 31, 2001

ITEM  2.     MANAGEMENT'S  DISCUSSION  AND  ANALYSIS  OF  FINANCIAL
CONDITION  AND  RESULTS  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

POWERCOLD CORPORATION -  is a solution provider of energy efficient products for
users of industrial and commercial refrigeration systems world-wide. 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. The
Company  is  acquiring synergistic businesses, and marketing alliances are being
formed  with major utility companies and established refrigeration companies for
these  products  and  services.

The  Company's  business operations are supported by a management team with over
(150)  year's experience. The Company maintains administrative corporate offices
in  Cibolo, Texas, and Philadelphia, Pennsylvania. Engineering and manufacturing
facilities  are  located  in  Cibolo,  Texas.

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  -  providing  superior products and services through related acquisitions
and  joint  ventures.

POWERCOLD  COMPANIES:

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  also  supports  Channel  Freeze
Technologies  by  designing  and  packaging  their  accompanying  refrigeration
systems.  There  are  proposed  alliances  with  other  refrigeration companies,
whereas  RealCold  Products  will  package various components adding value for a
total  turnkey  industrial  refrigeration  system.


<PAGE> 25
                       POWERCOLD CORPORATION AND SUBSIDARIES
                                    FORM 10Q/A
                        FOR THE PERIOD ENDED MARCH 31, 2001

NAUTICON  INC. - manufactures and markets a product line of patented evaporative
heat  exchange  systems  for  the  HVAC  and  refrigeration  industry.  Nauticon
Evaporative Condenser Line of Products include new innovative configurations; EV
Cool  Air  Conditioners  up  to 80 tons, EV Chill Water Chillers 0.75kw per ton,
40-80  tons  with  chilled water pumps included and multiple compressors, and EV
Frig  medium  temperature  +18F up to 420,000 BTU/hr, low temperature -20F up to
360,000  BTU/hr, and low ambient temperature control standard.  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  save  power  cost  in  the  refrigeration  industry  by 20% to 30%, and are
environmental  friendly, making these units contribute to the utilities needs to
reduce  power  demand  and  support the environment. There are over 170 customer
systems  installed.

TECHNICOLD  SERVICES,  INC.  - offers consulting engineering services, including
process  safety  management  compliance  and  ammonia  refrigeration  and carbon
dioxide  system  design.  TSI  also  provides  operation, maintenance and safety
seminars  for  ammonia  refrigeration  technicians  and  supervisors.

ULTIMATE  COMFORT  SYSTEMS,  INC.  -  was  formed as a new Power Cold subsidiary
effective  January  1,  2001,  to  design,  engineer,  package  and market a new
patented  technology  for  an  energy  efficient  heating,  ventilating  and air
conditioning  (HVAC)  system  for  commercial and office buildings.  The Company
licensed  the  technology  from  Energy  Engineering,  Inc.  on  an  exclusive
non-transferable  basis.  Steve Clark, president of Energy Engineering, Inc. was
named  president  of  Ultimate  Comfort  Systems,  Inc.

The  technology  was  developed  and  patented  by Steve Clark and Montana Power
Company  who  saw  the  need  to  reduce  peak  energy costs. The Wingate Inn in
Bozeman,  MT,  one  of  16  installed  and proven significant energy cost saving
commercial  customers  has  actually  experienced  a  44%  energy  savings.  The
technology  has received distinguished recognition in the energy field including
a  first  place  Commercial Buildings Award from the American Society of Heating
Refrigeration  and  Air  Conditioning  Engineers  (ASHRAE),  the  Department  of
Energy's  Tomorrow's  Energy  Today  Award  and  the 1999 Canadian Energy Award.

Combined  with  the  company's current products, the new Ultimate Comfort System
technology  is  expected  to  consistently  reduce  heating and air conditioning
energy  costs  to  customers by up to 40%. The primary market initially targeted
for  this  technology is the hospitality industry, which includes hotels, motels
and managed care facilities that can realize significant power cost-savings with
PowerCold's  air  conditioning  and  heating  equipment.  PowerCold believes the
market  for  this  new HVAC technology includes over 1,000 new buildings planned
for  construction  by  major  motel/hotel  chains  in  the  next  three  years.

CHANNEL  FREEZE  TECHNOLOGIES,  INC.  -  was formed as a PowerCold subsidiary to
support  the  assets  of  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> 26
                       POWERCOLD CORPORATION AND SUBSIDARIES
                                   FORM 10Q/A
                        FOR THE PERIOD ENDED MARCH 31, 2001

ROTARY  POWER ENTERPRISE, INC. - was formed as a PowerCold entity to support the
Natural  Gas  Business  from  Rotary Power International. The business includes:
assets  including intellectual property, inventory and manufacturing capability;
a  marketing  agreement  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 a Distributor and
Manufacturing  License  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 a major sales agreement for OEM applications
for  the  oil  and gas industry in Western Canada.  The sales agreement for (100
small  65 HP and 60 large 500 HP) natural gas engines valued some $5 million are
scheduled  for  delivery  to  a  major Canadian oil and gas operation in Western
Canada.

ALTURDYNE  ENERGY  SYSTEMS - A PowerCold Company formed to support the marketing
and  manufacturing of natural gas engine driven water chillers. The Company also
has  a  Strategic  Alliance with Alturdyne for manufacturing and marketing their
respective  products.  The added expertise of RealCold Products' engineering and
manufacturing  enhances  the  existing  chiller  business,  where there are some
Alturdyne  140  chiller  systems  installed.

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. Alturdyne's added expertise is in the
design  and  production  of  rotary  engines.

RESULTS  OF  OPERATIONS  -  FIRST  QUARTER  2000

The  Company's Consolidated Statements of Operations for the first quarter ended
March  31,  2001  compared  to  the  first  quarter  ended  March  31,  2000:

Total Revenue for the three months period ended March 31, 2001 increased 739% to
$317,410  from  $42,898  for  the  same  period  ended  March  31,  2000.

Operating Loss for the three months period ended March 31, 2001 decreased 18% to
$269,784  from  $330,470  for  the  same  period  ended  March  31,  2000O.

Net  Loss  for  the  three  months  period  ended March 31, 2001 decreased 4% to
$327,886  from  $343,109  for  the  same  period  ended  March  31,  2000.

Net Loss per share for the three months period ended March 31, 2001 decreased to
$0.03  from  $0.04  for  the  same  period  ended  March  31,  2000.

Net  loss per share was based on weighted average number of shares of 12,955,583
for  March  31, 2001 compared to 8,222,811 for the same three-month period ended
March  31,  2000.

The  current quarter loss for sales and marketing and general and administrative
operating  expense  was  due  to  increased  sales  and  marketing activity, and
maintaining  general  Company  operating  overhead including additional specific
engineering  and marketing costs for the various product lines.  The Company has
restructured  its  operations to comply with its current productive product line
of Evaporative Condensers.  The company received a royalty payment from WittCold
Systems  for  $44,785  for  CO2  equipment  sales.


<PAGE> 27
                       POWERCOLD CORPORATION AND SUBSIDARIES
                                     FORM 10Q/A
                        FOR THE PERIOD ENDED MARCH 31, 2001

Current  revenue  backlog  pending  some  final purchase orders, as of March 31,
2001, was some $1,498,004.  $608,936 of the Ultimate Comfort Systems hotel/motel
equipment  backlog  will  not  be  delivered until the fourth quarter due to new
building  construction.   Management  believes  that  product sales and revenues
will  continue  to  improve  because  of new marketing and sales support and new
sales  programs  being  implemented.  Numerous  proposals  are continually being
quoted  to  prospective  customers  for  all  product  lines. Gross margins will
continue  to  improve as the Company begins to capture economies of scale; sales
volume  increases  and  manufacturing  production  cycles  shorten  and  overall
production  methods  improve.

The  Company's sales and revenue throughout year should continue to increase due
to  the  increased  volume of customer proposals for the newly designed Nauticon
Evaporative Condenser Line of Products, which include EV Cool, air conditioning,
EV  Chill,  chilled  water, and EV Frig, refrigeration systems.  Currently there
are  some $1.8M in customer sales proposal quotations for some 45 Nauticon units
and  chiller  packages.

The  Company  has  enhanced its Channel Freeze system design, which includes new
features  that  simplifies  standard  product manufacture costs and provides the
customer  greater  production  capacity. The Company finally envisions a greater
market  opportunity  with  its newly designed product for freezing block ice and
various  food  products.  The  Company has over $6M in sales proposal quotations
out  to  customers.

Management believes that the new added subsidiary, Ultimate Comfort Systems will
eventually  become  the  largest  major  revenue  producer for the Company.  The
initial  target sales market is the hospitality industry: hotels/motels, nursing
homes  and  extended  care  facilities.  The hotel/motel industry is planning to
build  some 1,000 new buildings over the next three years. The Company currently
has  five  on-going  projects  under contact or in engineering design for nearly
$1M.

The  Company's  Consolidated  Balance Sheet as of the second quarter ended March
31,  2001  compared  to  year  end  December  31,  200:

The  Company's  Consolidated  Balance  Sheets as of March 31, 2001 and March 31,
2000  respectively:   Total  current  assets increased to $715,432 for 2001 from
$647,555 for 2000; Total assets increased to $2,004,903 for 2001 from $1,925,542
for  2000;  total liabilities decreased to $593,426 for 2001 from $1,339,527 for
2000;  total  stockholders' equity increased to $1,096,351 for 2001 and $586,015
for  2000;  and the long term convertible debt increased to $140,000 for a total
of  $146,826.

The  assets  have  remained  relatively  close  since the first quarter of 2000.
Asset  fluctuation  was due to changes in cash and inventory. The major decrease
in  liabilities  was  supported  by  a  major  reduction of accounts payable and
advances  from  an affiliate. Commitments and contingencies of some $168,300 are
from  old  outstanding  accounts  payable from the previous Nauticon operations.
Management  believes that these contingency debts will be written off over time.








<PAGE> 28
                       POWERCOLD CORPORATION AND SUBSIDARIES
                                     FORM 10Q/A
                        FOR THE PERIOD ENDED MARCH 31, 2001

Channel  Freeze  sales  and revenue continues to be slow, because of the limited
marketing  experience  and  lack  of product credibility in the marketplace. The
Company  has  enhanced  and  built  its  new Channel Freeze system design, which
includes  new  features  that  simplifies standard product manufacture costs and
provides  the  customer  greater  production  capacity.   The  Company   finally
envisions  a  greater  market  opportunity  with  its newly designed product for
freezing  block  ice  and  various  food products.  Management believes that the
product  is  now  ready  for  customer  delivery  and acceptance and foresees an
increase  in  new  business.

Effective   as  January  1,  2001,  the  Company  was   granted   the  exclusive
nontransferable  United States license for all Technology developed and patented
as  a  heating and air conditioning system, (U.S. Patent No. 5,183,102) known as
the  Integrated  Piping  System  Technology.  Ultimate Comfort Systems, Inc. was
formed  as  a  new  Power  Cold subsidiary effective January 1, 2001, to design,
engineer,  package  and  market the new patented technology for energy efficient
heating,  ventilating  and  air  conditioning  (HVAC) systems for commercial and
office  buildings.

The  Company  issued  a  total  of 421,000 shares of new common restricted stock
during  the  first  quarter  ending  March  31,  2001  for services rendered the
Company:  100,000  shares issued for prior year private placement costs, 180,000
shares  issued  for  consulting  services,  35,000  shares  issued  for accounts
payable, 26,000 shares issued for interest on convertible debt and 80,000 shares
issued  for  deferred  loan  costs.

Historically  the  Company issues restricted common shares for private placement
funding  on  a  negotiated  basis  up  to minimum of a 50% discount off the then
current  share  price,  and the Company also issues restricted common shares for
expenses,  payables and service rendered based on a discount up to a 50% off the
share  price  within  the  quarter issued according to the value of the service.

Management  believes  that  its working capital may not be totally sufficient to
support both its current operations and growth plans for additional acquisitions
and  joint  ventures  for  the  near  future.  Management  has implemented a new
operating  plan providing guidance for cash management and revenue growth.  Also
during  the  past  few  months  the Company has raised limited private placement
capital for current production cash requirements, and foresees continued private
placement  funding  to  meet production needs for the remainder of the year. The
Company  is also currently seeking investor proposals to obtain additional major
financing  to  support  its  future  growth  plans  and  acquisitions.

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.

Effective  March  30,  2001,  for a twelve month period, the company has engaged
Legg  Mason  Wood Walker, Incorporated, Corporate Finance, to serve as financial
advisor  to  the  Company  for  related  investment  banking  services.  In such
capacity, Legg Mason shall be available for advice, and shall advise the Company
with  respect  to  such financial matters as the Company shall from time to time
request,  including  matters  relating  to  (a)  capital  raising,  whether from
institutional  and  other investors  or lenders or from the private placement of
debt instruments or equity securities, (b)  public offerings  of debt  or equity
securities, (c) the structure of debt or equity financings, (d) acquisitions and
other business ventures, (e) stockholder and  securities  dealer  relations, and
(f)  commercial  banking  relations.
<PAGE> 29
                       POWERCOLD CORPORATION AND SUBSIDARIES
                                     FORM 10Q/A
                        FOR THE PERIOD ENDED MARCH 31, 2001

SUBSEQUENT  EVENT:

The  Company  Board  of Directors approved the nomination Joseph A. Lopez as its
Chief Financial Officer and Director of the Company effective as of May 1, 2001.

Joseph  Lopez  currently  provides  merger,  acquisition  and  leveraged  buyout
services  to  corporations  and  senior management teams as managing director of
Rhoades  &  Associates,  a  company  he  formed  in  1986.  Lopez was previously
managing  director  of  AMEV  Capital  where  he was responsible for generating,
structuring and negotiating leveraged buyouts. Prior to his service with AMEV he
was  a  partner  and  international  coordinator of mergers and acquisitions for
Deloitte Haskins & Sells (now Deloitte & Touche). Lopez also served as president
of  a  $100  million transportation and warehousing company where he reorganized
the  administrative  and  financial functions and developed long range strategic
objectives for the company. J Joseph Lopez received his BBA from Pace University
and  MBA  from  New  York  University.

PART  11.  OTHER  INFORMATION

ITEM  1.     LEGAL  PROCEEDINGS.

Management  of  the Company filed legal action against Sir WorldWide relating to
the  acquisition  of  the  Channel  Ice  product  and  related patents.  After a
prolonged debate referencing the virtues of the Channel Ice product, the Company
is  seeking  damages for product misrepresentation and breaches of the contract.
The  Company  has  incurred  financial  losses,  since  the asset acquisition in
September  1998,  because  of  product  design  and  product  credibility in the
marketplace.

ITEM  2.     CHANGES  IN  SECURITIES

          None.

ITEM  3.     DEFAULTS  UPON  SENIOR  SECURITIES.

          None.
ITEM  4.     SUBMISSION  OF  MATTERS  TO  A  VOTE  OF  SECURITY  HOLDERS

          None.

ITEM  5.     OTHER  INFORMATION.

          None.

ITEM  6     EXHIBITS  AND  REPORTS  ON  FORM  8-K.

          8-K  Filed  April  2,  2001  -  Investment  Banker
          8-K  Filed  April 20,  2001  -  Chief Financial Officer










<PAGE> 30
                       POWERCOLD CORPORATION AND SUBSIDARIES
                                     FORM 10Q/A
                        FOR THE PERIOD ENDED MARCH 31, 2001




SIGNATURES

In  accordance with the requirements of the Securities and Exchange Act of 1934,
the  registrant  has  duly  caused this report to be signed on its behalf by the
undersigned,  thereunto  duly  authorized.


POWERCOLD  CORPORATION



/s/ Francis L. Simola
-------------------------------------
FRANCIS  L.  SIMOLA
PRESIDENT  AND  CEO
DATE:  JUNE 11,  2001