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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



FORM 10-Q /A

Amendment
 2

(Mark One)



[X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934  For the quarterly period ended June 30, 2004



or



[  ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934  For the transition period from _________ to _________



Commission File Number: 000-30709



POWERCOLD CORPORATION

(Exact name of registrant as specified in its charter)



NEVADA

23-2582701

(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)



PO Box 1239

115 CANFIELD ROAD

LA VERNIA, TEXAS

78121

(Address of principal executive offices)

(Zip Code)



830-779-5213

(Registrant's telephone number, including area code)



Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the 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 by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).

Yes  [  ] No  [X]



APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS:



Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.   [  ] Yes    [  ] No



APPLICABLE ONLY TO CORPORATE ISSUERS:



Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. Common Stock, par value $0.001  22,367,792 shares outstanding at June 30, 2004.





SEC 1296 (1-04)  Potential persons who are required to respond to the collection of information contained in this form are not required to respond unless the form displays a currently valid OMB number.





Page 1 of 23



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POWERCOLD CORPORATION AND SUBSIDIARIES

FORM 10Q /A

JUNE 30, 2004



INDEX



Page

PART I.  FINANCIAL INFORMATION



Item 1:

Consolidated Financial Statements





Consolidated Balance Sheets

3



Consolidated Statements of Operations

4



Consolidated Statements of Cash Flows

6



Condensed Notes to Consolidated Financial Statements

7



Item 2:

Management's Discussion and Analysis of

Financial Condition and Results of Operations.

1 2



Item 3:

Quantitative and Qualitative Disclosures About Market Risk.

20



Item 4.

Controls and Procedures.

20



PART II.   OTHER INFORMATION



Item 1.

Legal Proceedings.

2 2



Item 2.

Changes in Securities.

2 2



Item 3.

Defaults Upon Senior Securities.

2 2



Item 4.

Submission of Matters to a Vote of Security Holders.

2 2



Item 5.

Other Information.

2 2



Item 6.

Exhibits and Reports on Form 8-K.219



Signature

2 3



Certifications

2 4

























Page 2 of 23



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POWERCOLD CORPORATION AND SUBSIDIARIES

FORM 10Q /A

JUNE 30, 2004

PART I - FINANCIAL INFORMATION



ITEM 1.  CONSOLIDATED FINANCIAL STATEMENTS



POWERCOLD CORPORATION

CONSOLATATED BALANCE SHEET

|                                              |                                                                |                                                      |                            |                       |                      |              |             |           |               |              |           |           |          
|--------------------------------------------- | -------------------------------------------------------------- | ---------------------------------------------------- | -------------------------- | --------------------- | -------------------- | ------------ | ----------- | --------- | ------------- | ------------ | --------- | --------- | ---------
|                                              |                                                                |                                                      |                            |                       |                      |              |             |           |               |              |           |           |          
|                                              |                                                                |                                                      |                            |                       |                      |              |             |           |               |              |           |           |          
|                                              |                                                                |                                                      |                            |                       |                      |              | June 30,    |           |               | December 31, |           |          
|                                              |                                                                |                                                      |                            |                       |                      |              | 2004        |           |               | 2003         |           |           | 2002     
|                                              |                                                                |                                                      |                            |                       |                      |              | (Unaudited) |           |               |              |           |           |          
|                                              |                                                                |                                                      |                            |                       |                      |              |             |           |               |              |           |           |          
|CURRENT ASSETS                                |                                                                |                                                      |                            |                       |                      |              |             |          
|                                              | Cash                                                           |                                                      |                            | $                     | 254,658              | $            |             | 374,678   | $             |              | 88,613   
|                                              | Trade accounts receivable, net of allowance                    |                                                      | 4,984,880                  |                       |                      | 2,388,495    |             |           | 296,179      
|                                              | Costs and estimated earnings in excess                         |                                                      |                            |                       |                      |              |             |           |              
|                                              |                                                                | on contracts in progress                             |                            | 0                     |                      |              | 245,535     |           |               | 0           
|                                              | Inventory                                                      |                                                      |                            | 135,345               |                      |              | 11,156      |           |               | 180,433     
|                                              | Prepaid expenses                                               |                                                      | 161,382                    |                       |                      | 100,118      |             |           | 3,875        
|                                              |                                                                |                                                      | Total Current Assets       |                       | 5,536,265            |              |             | 3,119,982 |               |              | 569,100  
|                                              |                                                                |                                                      |                            |                       |                      |              |             |           |               |              |           |           |          
|                                              | Property and equipment, net                                    |                                                      | 239,449                    |                       |                      | 135,858      |             |           | 130,598      
|                                              | Patent rights and related technology, net                      |                                                      | 1,266,113                  |                       |                      | 1,306,731    |             |           | 926,716      
|                                              | Securities available for sale                                  |                                                      | 19,317                     |                       |                      | 19,317       |             |           | 38,800       
|                                              | Deposits                                                       |                                                      |                            | 10,828                |                      |              | 10,828      |           |               | 5,661       
|                                              |                                                                |                                                      | Total Other Assets         |                       | 1,535,707            |              |             | 1,472,734 |               |              | 1,101,775
|                                              |                                                                |                                                      |                            |                       |                      |              | 0           |           |               | 0            |           |           | 13,675   
|                                              |                                                                |                                                      |                            |                       |                      |              |             |           |               |              |           |           |          
|                                              |                                                                |                                                      |                            | TOTAL ASSETS          | $                    | 7,071,972    | $           |           | 4,592,716     | $            |           | 1,684,550
|                                              |                                                                |                                                      |                            |                       |                      |              |             |           |               |              |           |           |          
|CURRENT LIABILITIES                           |                                                                |                                                      |                            |                       |                      |              |             |          
|                                              | Accounts payable and accrued expenses                          | $                                                    | 1,002,852                  | $                     |                      | 1,253,030    | $           |           | 335,250      
|                                              | Billings in excess of costs and estimated earnings             |                                                      |                            |                       |                      |              |             |           |              
|                                              |                                                                | on contracts in progress                             |                            | 1,888,120             |                      |              | 947,807     |           |               | 0           
|                                              | Commissions and royalty payable                                |                                                      | 8,180                      |                       |                      | 8,180        |             |           | 55,066       
|                                              | Accounts payable, related party                                |                                                      | 389,236                    |                       |                      | 417,236      |             |           | 196,760      
|                                              | Convertible debt, net of discounts                             |                                                      | 1,684,014                  |                       |                      | 334,014      |             |           | 34,014       
|                                              | Current portion of capital lease payable                       |                                                      | 0                          |                       |                      | 630          |             |           | 3,321        
|                                              |                                                                | Total Current Liabilities                            |                            | 4,972,402             |                      |              | 2,960,897   |           |               | 624,411     
|                                              |                                                                |                                                      |                            |                       |                      |              |             |           |               |              |           |           |          
|CAPITAL LEASE PAYABLE, net of current portion |                                                                | 0                                                    |                            |                       | 0                    |              |             | 600      
|                                              |                                                                |                                                      |                            |                       |                      |              |             |           |               |              |           |           |          
|COMMITMENTS AND CONTINGENCIES                 |                                                                | 69,417                                               |                            |                       | 69,417               |              |             | 277,903  
|                                              |                                                                |                                                      |                            |                       |                      |              |             |           |               |              |           |           |          
|STOCKHOLDERS' EQUITY                          |                                                                |                                                      |                            |                       |                      |              |             |          
|                                              | Convertible preferred stock, Series A, $0.001                  |                                                      |                            |                       |                      |              |             |           |              
|                                              |                                                                | par value; 5,000,000 shares authorized, no           |                            |                       |                      |              |             |           |               |             
|                                              |                                                                | shares issued and outstanding                        |                            | 0                     |                      |              | 0           |           |               | 0           
|                                              | Common stock, $0.001 par value; 200,000,000 shares authorized, |                                                      |                            |                       |                      |              |             |           |              
|                                              |                                                                | 22,367,792, 21,576,750 and 18,442,066, shares issued |                            |                       |                      |              |             |          
|                                              |                                                                | and outstanding, respectively                        |                            | 22,368                |                      |              | 21,577      |           |               | 18,442      
|                                              | Additional paid-in capital                                     |                                                      | 18,376,704                 |                       |                      | 17,210,471   |             |           | 13,840,318   
|                                              | Stock options and warrants                                     |                                                      | 898,213                    |                       |                      | 588,507      |             |           | 504,998      
|                                              | Accumulated deficit                                            |                                                      | (17,286,449)               |                       |                      | (16,277,470) |             |           | ( 13,620,922)
|                                              | Accumulated other comprehensive income                         |                                                      | 19,317                     |                       |                      | 19,317       |             |           | 38,800       
|                                              |                                                                |                                                      | Total Stockholders' Equity |                       | 2,030,153            |              |             | 1,562,402 |               |              | 781,636  
|                                              |                                                                |                                                      |                            |                       |                      |              |             |           |               |              |           |           |          
|                                              |                                                                |                                                      |                            | TOTAL LIABILITIES AND |                      |              |             |           |               |              |           |          
|                                              |                                                                |                                                      |                            |                       | STOCKHOLDERS' EQUITY | $            | 7,071,972   | $         |               | 4,592,716    | $         |           | 1,684,550



See accompanying condensed notes.







Page 3 of 23



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POWERCOLD CORPORATIOIN

CONSOLADATED STATEMENT OF OPERATIONS

THREE MONTHS ENDED JUNE 30, 2004



|POWERCOLD CORPORATION                                        |                                          |                               |            |                             |            |            
|------------------------------------------------------------ | ---------------------------------------- | ----------------------------- | ---------- | --------------------------- | ---------- | -----------
|CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
|                                                             |                                          |                               |            |                             |            |            
|                                                             |                                          |                               |            |                             |            |            
|                                                             |                                          |                               |            | Three Months Ended June 30, |            |            
|                                                             |                                          |                               |            | 2004                        |            | 2003       
|                                                             |                                          |                               |            | (Unaudited)                 |            | (Unaudited)
|REVENUES                                                     |                                          |                               |            |                             |            |            
|                                                             | Contracts including equipment            | $                             | 2,125,955  |                             | 0          |            
|                                                             | Equipment                                |                               | 235,155    |                             | 2,138,976  |            
|                                                             |                                          | Total Revenues                |            | 2,361,110                   |            | 2,138,976  
|                                                             |                                          |                               |            |                             |            |            
|COST OF REVENUES                                             |                                          |                               |            |                             |            |            
|                                                             | Direct labor and equipment-contracts     |                               | 1,678,490  |                             | 0          |            
|                                                             | Direct labor and material-equipment      |                               | 53,034     |                             | 1,758,372  |            
|                                                             | Warranty expense                         |                               | 46,841     |                             | 0          |            
|                                                             | Manufacturing supplies                   |                               | 8,167      |                             | 0          |            
|                                                             | Shipping and handling                    |                               | 41,569     |                             | 0          |            
|                                                             |                                          | Total Cost of Revenues        |            | 1,828,101                   |            | 1,758,372  
|                                                             |                                          |                               |            |                             |            |            
|GROSS PROFIT                                                 |                                          | 533,009                       |            | 380,604                     |            | 171,860    
|                                                             |                                          |                               |            |                             |            |            
|OPERATING EXPENSES                                           |                                          |                               |            |                             |            |            
|                                                             | Sales, marketing and advertising         |                               | 28,898     |                             | 4,147      |            
|                                                             | General and administrative               |                               | 743,914    |                             | 751,275    |            
|                                                             | Research and development                 |                               | 15,883     |                             | 0          |            
|                                                             | Legal and accounting                     |                               | 132,716    |                             | 0          |            
|                                                             | Depreciation and amortization            |                               | 32,793     |                             | 46,063     |            
|                                                             |                                          | Total Operating Expenses      |            | 954,204                     |            | 801,485    
|                                                             |                                          |                               |            |                             |            |            
|LOSS FROM OPERATIONS                                         |                                          | (421,195)                     |            | (420,881)                   |            | (677,682)  
|                                                             |                                          |                               |            |                             |            |            
|OTHER INCOME (EXPENSES)                                      |                                          |                               |            |                             |            |            
|                                                             | Interest income                          |                               | 467        |                             | 59         |            
|                                                             | Interest and financing  expense          |                               | (154,340)  |                             | (953)      |            
|                                                             | Other income (expense)                   |                               | 1,374      |                             | 237,529    |            
|                                                             |                                          | Total Other Income (Expenses) |            | (154,340)                   |            | 236,635    
|                                                             |                                          |                               |            |                             |            |            
|LOSS BEFORE INCOME TAX                                       |                                          | (575,535)                     |            | (184,246)                   |            | (678,597)  
|                                                             |                                          |                               |            |                             |            |            
|INCOME TAX EXPENSE                                           |                                          | 0                             |            | 0                           |            | 0          
|                                                             |                                          |                               |            |                             |            |            
|LOSS FROM CONTINUING OPERATIONS                              |                                          | (575,535)                     |            | (184,246)                   |            | (678,597)  
|                                                             |                                          |                               |            |                             |            |            
|LOSS FROM DISCONTINUED OPEATIONS                             |                                          | 0                             |            | 0                           |            | (659,461)  
|                                                             |                                          |                               |            |                             |            |            
|NET LOSS                                                     |                                          | (575,535)                     |            | (184,246)                   |            | (1,338,058)
|                                                             |                                          |                               |            |                             |            |            
|OTHER COMPREHENSIVE INCOME (LOSS)                            |                                          |                               |            |                             |            |            
|                                                             | Unrealized gain (loss) on investments    |                               | 0          |                             | 0          |            
|                                                             |                                          |                               |            |                             |            |            
|COMPREHENSIVE LOSS                                           | $                                        | (575,535)                     |            | (184,246)                   |            | (1,706,658)
|                                                             |                                          |                               |            |                             |            |            
|                                                             |                                          |                               |            |                             |            |            
|NET LOSS PER COMMON SHARE:                                   |                                          |                               |            |                             |            |            
|                                                             | BASIC AND DILUTED, CONTINUING OPERATIONS | $                             | (0.03)     |                             | (0.01)     |            
|                                                             |                                          |                               |            |                             |            |            
|WEIGHTED AVERAGE NUMBER OF                                   |                                          |                               |            |                             |            |            
|                                                             | COMMON SHARES OUTSTANDING,               |                               |            |                             |            |            
|                                                             | BASIC AND DILUTED                        |                               | 21,805,083 |                             | 19,202,066 |            



See accompanying condensed notes.



Page 4 of 23



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POWERCOLD CORPORATIOIN

CONSOLADATED STATEMENT OF OPERATIONS

SIX MONTHS ENDED JUNE 30, 2004

|POWERCOLD CORPORATION                                        |                                          |                               |            |                           |            |            
|------------------------------------------------------------ | ---------------------------------------- | ----------------------------- | ---------- | ------------------------- | ---------- | -----------
|CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
|                                                             |                                          |                               |            |                           |            |            
|                                                             |                                          |                               |            |                           |            |            
|                                                             |                                          |                               |            | Six Months Ended June 30, |            |            
|                                                             |                                          |                               |            | 2004                      |            | 2003       
|                                                             |                                          |                               |            | (Unaudited)               |            | (Unaudited)
|REVENUES                                                     |                                          |                               |            |                           |            |            
|                                                             | Contracts including equipment            | $                             | 4,239,183  |                           | 0          |            
|                                                             | Equipment                                |                               | 363,030    |                           | 3,251,310  |            
|                                                             |                                          | Total Revenues                |            | 4,602,213                 |            | 3,251,310  
|                                                             |                                          |                               |            |                           |            |            
|COST OF REVENUES                                             |                                          |                               |            |                           |            |            
|                                                             | Direct labor and equipment-contracts     |                               | 3,157,987  |                           | 0          |            
|                                                             | Direct labor and material-equipment      |                               | 105,175    |                           | 2,677,850  |            
|                                                             | Warranty expense                         |                               | 99,254     |                           | 0          |            
|                                                             | Manufacturing supplies                   |                               | 12,653     |                           | 0          |            
|                                                             | Shipping and handling                    |                               | 65,906     |                           | 0          |            
|                                                             |                                          | Total Cost of Revenues        |            | 3,440,975                 |            | 2,677,850  
|                                                             |                                          |                               |            |                           |            |            
|GROSS PROFIT                                                 |                                          | 1,161,238                     |            | 573,460                   |            | 235,480    
|                                                             |                                          |                               |            |                           |            |            
|OPERATING EXPENSES                                           |                                          |                               |            |                           |            |            
|                                                             | Sales, marketing and advertising         |                               | 209,995    |                           | 100,081    |            
|                                                             | General and administrative               |                               | 1,411,818  |                           | 1,205,402  |            
|                                                             | Research and development                 |                               | 21,157     |                           | 0          |            
|                                                             | Legal, accounting and consulting         |                               | 167,471    |                           | 0          |            
|                                                             | Depreciation and amortization            |                               | 52,368     |                           | 71,131     |            
|                                                             |                                          | Total Operating Expenses      |            | 1,862,809                 |            | 1,376,614  
|                                                             |                                          |                               |            |                           |            |            
|LOSS FROM OPERATIONS                                         |                                          | (701,571)                     |            | (803,154)                 |            | (1,511,185)
|                                                             |                                          |                               |            |                           |            |            
|OTHER INCOME (EXPENSES)                                      |                                          |                               |            |                           |            |            
|                                                             | Royalty income                           |                               | 0          |                           | 0          |            
|                                                             | Interest income                          |                               | 467        |                           | 119        |            
|                                                             | Interest and financing  expense          |                               | (309,249)  |                           | (1,195)    |            
|                                                             | Other income (expense)                   |                               | 1,374      |                           | 237,597    |            
|                                                             |                                          | Total Other Income (Expenses) |            | (307,408)                 |            | 236,521    
|                                                             |                                          |                               |            |                           |            |            
|LOSS BEFORE INCOME TAX                                       |                                          | (1,008,979)                   |            | (566,633)                 |            | (1,508,698)
|                                                             |                                          |                               |            |                           |            |            
|INCOME TAX EXPENSE                                           |                                          | 0                             |            | 0                         |            | 0          
|                                                             |                                          |                               |            |                           |            |            
|LOSS FROM CONTINUING OPERATIONS                              |                                          | (1,008,979)                   |            | (566,633)                 |            | (1,508,698)
|                                                             |                                          |                               |            |                           |            |            
|LOSS FROM DISCONTINUED OPEATIONS                             |                                          | 0                             |            | 0                         |            | (667,723)  
|                                                             |                                          |                               |            |                           |            |            
|NET LOSS                                                     |                                          | (1,008,979)                   |            | (566,633)                 |            | (2,176,421)
|                                                             |                                          |                               |            |                           |            |            
|OTHER COMPREHENSIVE INCOME (LOSS)                            |                                          |                               |            |                           |            |            
|                                                             | Unrealized gain (loss) on investments    |                               | 0          |                           | (19,483)   |            
|                                                             |                                          |                               |            |                           |            |            
|COMPREHENSIVE LOSS                                           | $                                        | (1,008,979)                   |            | (586,116)                 |            | (2,545,021)
|                                                             |                                          |                               |            |                           |            |            
|                                                             |                                          |                               |            |                           |            |            
|NET LOSS PER COMMON SHARE:                                   |                                          |                               |            |                           |            |            
|                                                             | BASIC AND DILUTED, CONTINUING OPERATIONS | $                             | (0.05)     |                           | (0.03)     |            
|                                                             |                                          |                               |            |                           |            |            
|WEIGHTED AVERAGE NUMBER OF                                   |                                          |                               |            |                           |            |            
|                                                             | COMMON SHARES OUTSTANDING,               |                               |            |                           |            |            
|                                                             | BASIC AND DILUTED                        |                               | 21,754,805 |                           | 19,102,066 |            

See accompanying condensed notes.



Page 5 of 23



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POWERCOLD CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

|POWERCOLD CORPORATION                         |                                                          |                                       |              |           |             |                           |             |            
|--------------------------------------------- | -------------------------------------------------------- | ------------------------------------- | ------------ | --------- | ----------- | ------------------------- | ----------- | -----------
|CONSOLIDATED STATEMENTS OF CASH FLOWS         |                                                          |                                       |              |           |             |                           |            
|                                              |                                                          |                                       |              |           |             | Six Months Ended June 30, |             |            
|                                              |                                                          |                                       |              |           |             | 2004                      |             | 2003       
|                                              |                                                          |                                       |              |           |             | (Unaudited)               |             | (Unaudited)
|CASH FLOWS FROM OPERATING ACTIVITIES:         |                                                          |                                       |              |           |             |                           |            
|Net loss                                      |                                                          |                                       |              | $         | (1,008,979) | $                         | (566,633)   |            
|Loss from discontinued operations             |                                                          |                                       | 0            |           | 0           |                           | 667,723    
|Net loss from continuing operations           |                                                          |                                       | 91,008,979)  |           | (566,633)   |                           | (1,508,698)
|Adjustments to reconcile net loss to net cash |                                                          |                                       |              |           |             |                           |            
|                                              | used in operating activities:                            |                                       |              |           |             |                           |             |            
|                                              | Depreciation and amortization                            |                                       |              |           | 52,368      |                           | 54,265      |            
|                                              | Impairment of goodwill                                   |                                       |              |           | 0           |                           | 16,866      |            
|                                              | Forgiveness of debt                                      |                                       |              |           | 0           |                           | (196,324)   |            
|                                              | Issuance of common stock for services                    |                                       |              | 188,250   |             | 145,800                   |             | 378,750    
|                                              | Issuance of common stock for compensation                |                                       |              |           |             | 0                         |             | 30,000     
|                                              | Warrants issued for interest                             |                                       |              |           | 309,706     |                           | 0           |            
|                                              | (Increase) decrease in assets:                           |                                       |              |           |             |                           |             |            
|                                              |                                                          | Accounts receivable                   |              |           |             | (2,596,385)               |             | (2,413,680)
|                                              |                                                          | Costs in excess of billings           |              |           |             | 245,535                   |             | 0          
|                                              |                                                          | Receivable from related party         |              |           | 0           |                           | 0           |            
|                                              |                                                          | Inventories                           |              |           |             | (124,189)                 |             | (13,543)   
|                                              |                                                          | Prepaid expenses                      |              |           |             | 0                         |             | (56,125)   
|                                              | Increase (decrease) in liabilities:                      |                                       |              |           |             |                           |             |            
|                                              |                                                          | Accounts payable and accrued expenses |              |           | (250,178)   |                           | 1,662,139   |            
|                                              |                                                          | Accounts payable, related party       |              |           | (28,000)    |                           | 0           |            
|                                              |                                                          | Deferred revenue                      |              |           |             | 0                         |             | 207,937    
|                                              |                                                          | Billings in excess of costs           |              |           |             | 940,313                   |             | 0          
|                                              |                                                          | Commitments and contingencies         |              |           | 0           |                           | 0           |            
|Net cash used in operating activities         |                                                          |                                       | ( 2,271,559) |           | (1,159,298) |                           | (1,130,348)
|                                              |                                                          |                                       |              |           |             |                           |             |            
|CASH FLOWS FROM INVESTING ACTIVITIES:         |                                                          |                                       |              |           |             |                           |            
|                                              | Purchase of property and equipment                       |                                       |              | (115,341) |             | (5,416)                   |             | (7,234)    
|                                              | Paid royalities                                          |                                       |              |           | 0           |                           | 0           |            
|                                              | Deposits                                                 |                                       |              |           | 0           |                           | (-13,808)   |            
|                                              | Investment in discontinued operations                    |                                       |              | 0         |             | 0                         |             | (364,743)  
|Net cash used in investing activities         |                                                          |                                       | (115,341)    |           | (19,224)    |                           | (766,457)  
|                                              |                                                          |                                       |              |           |             |                           |             |            
|CASH FLOWS FROM FINANCING ACTIVITIES:         |                                                          |                                       |              |           |             |                           |            
|                                              | Principal payments on capital lease                      |                                       |              | (632)     |             | -1,195)                   |             | (3,009)    
|                                              | Proceeds from issuance of shares under private placement |                                       | 670,309      |           | 1,975,001   |                           | 2,131,162  
|                                              | Loans, related party, net                                |                                       |              |           | 0           |                           | (44,524)    |            
|                                              | Proceeds from short-term borrowings                      |                                       |              | 1,597,203 |             | 5,000                     |             | 0          
|Net cash provided by  financing activities    |                                                          |                                       | 2,266,880    |           | 1,934,282   |                           | 2,123,648  
|                                              |                                                          |                                       |              |           |             |                           |             |            
|Net increase (decrease) in cash               |                                                          |                                       |              | (120,020) |             | 755,760                   |             | 226,843    
|Cash at beginning of year                     |                                                          |                                       |              | 374,678   |             | 93,372                    |             | 290,174    
|                                              |                                                          |                                       |              |           |             |                           |             |            
|Cash at end of year                           |                                                          |                                       | $            | 254,658   | $           | 849,132                   |             | 517,017    

See Accompanying notes



Page 6 of 23



---





|POWERCOLD CORPORATION                             |                                           |   |         |         |         |   |        
|------------------------------------------------- | ----------------------------------------- | - | ------- | ------- | ------- | - | -------
|CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED) |                                           |   |         |         |         |  
|                                                  |                                           |   |         |         |         |   |        
|                                                  |                                           |   |         |         |         |   |        
|SUPPLEMENTAL CASH FLOW INFORMATION:               |                                           |   |         |         |         |  
|                                                  | Interest paid                             |   |         | $       | 0       | $ | 0      
|                                                  | Income taxes paid                         |   |         | $       | 0       | $ | 0      
|                                                  |                                           |   |         |         |         |   |        
|NON-CASH TRANSACTIONS:                            |                                           |   |         |         |         |   |        
|                                                  | Issuance of common stock for debt         | $ | 100,000 | $       | 0       | $ | 0      
|                                                  | Issuance of common stock for compensation | $ | 0       | $       | 0       | $ | 208,750
|                                                  | Issuance of common stock for services     | $ | 188,250 | $       | 145,800 | $ | 408,750
|                                                  | Warrants issued for interest              |   | $       | 309,706 | $       | 0 | $      
|                                                  |                                           |   |         |         |         |   |        







































































Page 7 of 23



---





POWERCOLD CORPORATION

CONDENSED NOTES TO CONSOLIDATED

INTERIM FINANCIAL STATEMENTS

JUNE 30, 2004



NOTE 1 BASIS OF PRESENTATION

The foregoing unaudited consolidated interim financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q/A as promulgated by the Securities and Exchange Commission.  Accordingly, these financial statements do not include all of the disclosures required by generally accepted accounting principles for complete financial statements.  These unaudited consolidated interim financial statements should be read in conjunction with the audited consolidated financial statements for the period ended December 31, 2003.  In the opinion of management, the unaudited consolidated interim financial statements furnished herein include all adjustments, all of which are of a normal recurring nature, necessary for a fair statement of the results for the interim period presented.



The preparation of financial statements in accordance with generally accepted accounting principles requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities known to exist as of the date the financial statements are published, and the reported amounts of revenues and expenses during the reporting period.  Uncertainties with respect to such estimates and assumptions are inherent in the preparation of the Company's financial statements; accordingly, it is possible that the actual results could differ from these estimates and assumptions that could have a material effect on the reported amounts of the Company's financial position and results of operations.



NOTE  2- CONTRACTS IN PROGRESS



For the six months ended June 30, 2004 contract amounts, costs, estimated earnings, and the related billings to date on completed contracts and contracts in progress were as follows:

|                                                |                  
|----------------------------------------------- | -----------------
|                                                | Contract Revenues
|Total activity                                  | $ 2,125,955      
|                                                |                  
|Contracts completed during the six month period | $ 1,470,237      
|                                                |                  
|Contracts in progress at June 30, 2004          | $  655,718       



Contracts in progress as of June 30, 2004 were as follows:



Cumulative costs to date

$507,687

Cumulative gross profit to date

148,031

Cumulative revenue earned

655,718

Less progress billings to date

2,543,837



Net over billings

$1,888,119



The following is included in the accompanying balance sheet under these captions as of June 30, 2004:



Costs and estimated earnings on contracts in

progress in excess of billings

$-0-

Billings in excess of costs and estimated earnings

on contracts in progress net over billings

$1,888,119





Page 8 of 23



---



POWERCOLD CORPORATION

CONDENSED NOTES TO CONSOLIDATED

INTERIM FINANCIAL STATEMENTS

JUNE 30, 2004



NOTE  3  STOCK-BASED COMPENSATION AND STOCK OPTIONS



During the three months ended June 30, 2004, the Company granted 25,000 common stock options for a Company employee with an exercise price of $1.50 per share expires June 2007, and 50,000 common stock options for services with an exercise price of $3.50 per share which expires May 2006.



The Company applies APB Opinion No. 25 in accounting for options and, accordingly, recognized no compensation cost for its stock options in 2004, 2003 and 2002.  The following reflects the Company's pro forma net loss and net loss per share as if the Company had determined compensation costs based upon fair market values of options at the grant date, as well as the related disclosures required by SFAS 123:



|                                                |   | Six Months Ended June 30, 2004 |   | Year Ended December 31, 2003 |   | Year Ended December 31, 2002
|----------------------------------------------- | - | ------------------------------ | - | ---------------------------- | - | ----------------------------
|Net loss as reported                            | $ | (1,008,979)                    | $ | ( 2,656,548)                 | $ | ( 4,291,443)                
|Adjustment required by SFAS 123                 |   | (232,008)                      |   | (492,597)                    |   | (553,975)                   
|Pro forma net loss                              | $ | (1,240,987)                    | $ | ( 3,149,145)                 | $ | ( 4,845,418)                
|Pro forma net loss per share,
basic and diluted | $ | (0.06)                         | $ | (0.16)                       | $ | (0.28)                      



|                                                           |  | Number of Shares Under Option |  |   | Weighted Average Exercise Price
|---------------------------------------------------------- |  | ----------------------------- |  | - | -------------------------------
|Outstanding and exercisable, December 31, 2001             |  | 3,680,058                     |  |   | 0.84                           
|Granted                                                    |  | 530,833                       |  |   | 1.22                           
|Exercised                                                  |  | -                             |  |   | -                              
|Rescinded or expired                                       |  | (127,500)                     |  |   | .88                            
|Outstanding and exercisable at December 31, 2002           |  | 4,083,391                     |  |   | 1.06                           
|Granted                                                    |  | 712,725                       |  |   | 1.37                           
|Exercised                                                  |  | (300,000)                     |  |   | 0.50                           
|Rescinded or expired                                       |  | (456,333)                     |  |   | 1.06                           
|Outstanding at December 31, 2003                           |  | 4,039,783                     |  |   | 1.16                           
|Granted                                                    |  | 327,188                       |  |   | 2.31                           
|Exercised                                                  |  | (210,000)                     |  |   | 1.00                           
|Rescinded or expired                                       |  | (100,000)                     |  |   | 0.50                           
|Outstanding at June 30, 2004                               |  |                               |  |   |                                
|Exercisable at June 30, 2004                               |  | 4,056,971                     |  | $ | 1.28                           
|                                                           |  |                               |  |   |                                
|Weighted average fair value of options granted during 2004 |  |                               |  | $ | 0.95                           



NOTE  4  -  COMMON STOCK



During the three months ended June 30, 2004, the Company issued 666,042 common stock shares for equity; 210,000 options were exercised for cash of $210,000; 309,375 shares valued at $460,309 for private placements; 66,667 shares of common stock for the conversion of debt in the amount of $100,000; and 80,000 shares valued at $76,000 for financial and management consulting services.





Page 9 of 23



---



POWERCOLD CORPORATION

CONDENSED NOTES TO CONSOLIDATED

INTERIM FINANCIAL STATEMENTS

JUNE 30, 2004



NOTE  5 -  WARRANTS



During the three months ended June 30, 2004, the Company issued 165,000 common stock warrants exercisable at $1.50 per share, as consideration for extension a bridge loan for Philadelphia Brokerage Corporation clients, and 31,406 common stock warrants exercisable at $2.50 per share for equity private placements.  These warrants expire in June 2007.  The fair market value of the warrants was estimated at
 $172,990
 on the date of grant using the Black Scholes Calculation.  The following assumptions were made in estimating fair value:  risk-free interest of 4%, volatility of 75%, expected life of one and five years and no expected dividends.



NOTE  6 - SUBSEQUENT EVENT:



On July 30, 2004 the Company filed a Form 8-K stating:



On July 29, 2004 the Registrant authorized the sale to the Laurus Master Fund, Ltd. (Laurus Funds), of a Convertible Term Note in the principal amount of Five Million Dollars, which is convertible into the Company's common stock at an initial fixed conversion price of $1.87 per share.   Laurus Master Fund also acquired a Common Stock Purchase Warrant for the purchase of up to 615,000 shares of Common Stock, exercisable at a price of $2.63 for 300,000 shares and $3.07 for 315,000 shares until July 29, 2007. The purchase agreement also granted certain registration rights.  Closing and funding occurred on July 30, 2004.



Copies of the Securities Purchase Agreement, Secured Convertible Term Note, Common Stock Purchase Warrant and Registration Rights Agreement are filed as exhibits to this report and are incorporated herein by reference.



The
 note,
 which
 matures
 on
 July
 29,
 2007,
 bears
 interest
 at
 the
 prime
 rate
 of
 interest
 plus
 1
 percentage
 point,
 with
 a
 minimum
 interest
 rate
 of
 5%
 and
 a
 maximum
 rate
 of
 8%.
   The
 note
 is
 convertible
 into
 common
 stock
 with
 a
 conversion
 price
 of
 $1.87
 on
 July
 29,
 2004,
 subject
 to
 conversion
 by
 Laurus
 as
 well
 as
 an
 automatic
 conversion.
   The
 fixed
 conversion
 price
 of
 $1.87
 per
 share
 is
 applicable
 when
 the
 PowerCold
 stock
 average
 closing
 price
 for
 the
 five
 days
 prior
 to
 the
 repayment
 is
 at
 or
 above
 110%
 of
 the
 fixed
 conversion
 price.
   Conversion
 at
 less
 than
 the
 fixed
 conversion
 price
 is
 set
 at
 90%
 of
 the
 average
 of
 the
 five
 lowest
 trading
 days
 in
 the
 22
 trading
 days
 prior
 to
 the
 conversion
 date.
   The
 fixed
 price
 cannot
 be
 less
 than
 $1.10
 per
 share.
 The
 beneficial
 conversion
 feature
 of
 this
 note
 has
 been
 recorded
 additional
 paid-in
 capital
 of
 $569,106
 and
 as
 a
 discount
 to
 the
 note,
 amortizable
 over
 three
 years.
   At
 December
 31,
 2004
 $79,042
 has
 been
 amortized.
   The
 Company
 also
 retains
 the
 right
 to
 prepay
 the
 note
 at
 125%
 of
 the
 unpaid
 balance
 for
 12
 months
 from
 July
 29,
 2004;
 115%
 of
 the
 unpaid
 balance
 for
 12-24
 months
 from
 July
 29,
 2004;
 and
 110%
 of
 the
 unpaid
 balance
 after
 24
 months
 from
 July
 29,
 2004.
 As
 consideration
 for
 investment
 banking
 services
 in
 connection
 with
 the
 securities
 purchase
 agreement,
 the
 Company
 paid
 4.29%
 of
 the
 gross
 proceeds
 to
 Laurus
 Capital
 Management,
 LLC,
 (an
 affiliate
 of
 Laurus
 Master
 Fund,
 Ltd),
 who
 received
 consideration
 for
 investment
 banking
 services
 in
 connection
 with
 the
 securities
 purchase
 agreement.
 Laurus
 Capital
 Management
 LLC
 is
 the
 entity
 that
 exercises
 voting
 and
 investment
 power
 on
 behalf
 of
 Laurus
 Master
 Fund,
 Ltd,
 the
 selling
 shareholder,
 0.04%
 to
 Loeb
 &
 Loeb,
 LLP
 a
 California
 limited
 liability
 partnership
 as
 the
 escrow
 agent
 for
 the
 transaction
 and
 8.5%
 of
 the
 gross
 proceeds
 to
 the
 Dragonfly
 Capital
 Partners,
 LLC
 (an
 affiliate
 of
 Oberon
 Group,
 LLC,
 a
 North
 Carolina
 Limited
 Liability
 Company).



Laurus
 can
 convert
 to
 equity
 any
 portion
 of
 the
 principal
 balance
 and
 accrued
 but
 unpaid
 interest
 subject
 to
 the
 limitations
 of
 the
 35%
 aggregate
 trading
 limit
 for
 the
 22
 days
 prior
 to
 redemption
 and
 the
 4.99%
 total
 holdings
 limitation
 with
 the
 only
 exceptions
 being
 default
 and
 prior
 75
 day
 notification
 by
 Laurus
 that
 they
 will
 exceed
 the
 4.99%
 ownership
 limitation
 but
 will
 be
 restricted
 to
 a
 19.99%
 limitation
 not
 to
 exceed
 4,457,995
 shares.





Page 10 of 23



---





POWERCOLD CORPORATION

CONDENSED NOTES TO CONSOLIDATED

INTERIM FINANCIAL STATEMENTS

JUNE 30, 2004



Monthly
 amortizing
 payments
 of
 the
 aggregate
 principal
 amount
 outstanding
 under
 the
 note
 begin
 on
 February
 1,
 2005
 in
 the
 amount
 of
 $166,667
 plus
 interest.
 The
 Company
 has
 recorded
 a
 discount
 on
 the
 note
 for
 deferred
 financing
 costs
 of
 $641,500
 which
 will
 be
 amortized
 over
 the
 life
 of
 the
 loan.
   Amortization
 expense
 at
 December
 31,
 2004
 was
 $53,460.



The
 Company
 also
 agreed
 to
 file
 a
 registration
 statement
 within
 45
 days
 from
 July
 29,
 2004,
 registering
 the
 number
 of
 shares
 underlying
 the
 secured
 convertible
 term
 note
 and
 the
 warrants,
 and
 to
 have
 that
 registration
 statement
 declared
 effective
 with
 the
 Securities
 and
 Exchange
 Commission
 within
 120
 days
 from
 July
 29,
 2004.
   In
 the
 event
 that
 the
 registration
 statement
 is
 not
 declared
 effective
 by
 the
 Securities
 and
 Exchange
 Commission
 by
 the
 required
 deadline,
 the
 Company
 is
 obligated
 to
 pay
 to
 Laurus
 Master
 Fund
 1%
 of
 the
 original
 principal
 amount
 of
 the
 convertible
 note,
 for
 each
 30-day
 period,
 or
 portion
 thereof,
 during
 which
 the
 registration
 statement
 is
 not
 effective.





Page 11 of 23



---





POWERCOLD CORPORATION AND SUBSIDIARIES

FORM 10Q /A

JUNE 30, 2004



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.                  . 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.   The
 following
 Managements
 Discussion
 and
 Analysis
 (MD&A)
 is
 intended
 to
 help
 the
 reader
 understand
 PowerCold
   Corporation.The
   MD&A
 is
 provided
 as
 a
 supplement
 to,
 and
 should
 be
 read
 in
 conjunction
 with,
 our
 financial
 statements
 an
 the
 accompanying
 notes
 (Notes).



The
 accompanying
 consolidated
 financial
 statements
 contemplate
 continuation
 of
 the
 Company
 as
 a
 going
 concern.
   At
 June
 30,
 2004
 the
 Company
 had
 an
 accumulated
 deficit
 of
 $17,286,449
 and
 recurring
 losses
 from
 operations
 for
 each
 year
 presented.
   Property,
 equipment,
 accounts
 receivables
 and
 intangibles
 comprise
 a
 material
 portion
 of
 the
 Company's
 assets.
 Accounts
 receivable
 as
 of
 June
 30,
 2004
 are
 $4,984,880
 with
 reported
 revenue
 for
 the
 six
 month
 period
 ended
 June
 30,
 2004
 at
 $4,602,213.
 The
 recovery
 of
 these
 assets
 is
 dependent
 upon
 collection
 of
 outstanding
 receivables
 and
 achieving
 profitable
 operations.
   The
 ultimate
 outcome
 of
 these
 uncertainties
 cannot
 presently
 be
 determined.
   We
 actively
 seek
 sufficient
 financing
 to
 achieve
 profitability.
   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.



GENERAL FINANCIAL ACTIVITY



PowerCold Corporation, (PowerCold)® (OTCBB: PWCL), designs, develops and markets energy efficient heating, ventilating and air conditioning systems (HVAC) and energy related products for commercial use. Air conditioning and refrigeration are two of the more energy intensive operational costs many businesses face.   Increasing power costs and clean air regulations have forced corporations of all sizes to focus both on energy savings and indoor air quality.  PowerCold's proprietary energy efficient products provide a clean comfort air environment and significantly reduce power costs by up to 50% for air conditioning, refrigeration and on-site building power.



PowerCold operations include four wholly owned subsidiary companies with respective operating divisions: PowerCold Products, Inc., (PCP) supports product development, engineering and manufacturing.  PowerCold ComfortAir Solutions, Inc., (PCS) supports sales and marketing offering turnkey high efficiency HVAC solutions for commercial buildings, including major hotel chains, national restaurant and retail store chains, extended care facilities and office buildings. There are two operating divisions of PCS; Applied Building Technology (ABT) supports related engineering and design build HVAC applications andPowerCold Energy Systems (PES) which supports related energy products including generators and engine driven chillers. PowerCold Technology LLC, (PCT) licenses technology and intellectual property to third party entities on a non-exclusive basis.  PowerCold International, Ltd., (PCI), a new operating subsidiary company effective July 1, 2003, markets all company products and system applications worldwide through various alliances and marketing agencies.  PowerCold has also established alliances with various companies in the industry to market and manufacture related HVAC and Energy products.



The Company derives its revenues from four principal product line applications:  The first is proprietary applications for the HVAC industry which includes a patented four pipe integrated piping system for large commercial buildings and turnkey HVAC systems for light commercial national chain store applications.  The second is a line of evaporative condensers, heat exchange systems and fluid coolers for the HVAC and refrigeration industry.  The third is the design and packaging of custom chiller systems for the HVAC and





Page 12 of 23



---



POWERCOLD CORPORATION AND SUBSIDIARIES

FORM 10Q /A

JUNE 30, 2004



refrigeration industry. The fourth is energy products including generators, engine driven chillers and engineering services.



Subsidiary Companies:



PowerCold Products, Inc.PowerCold Products (PCP) provides product research and development, engineering and manufacturing of patented evaporative condensers and heat exchange systems for the heating, ventilation and air condition (HVAC) and refrigeration industry.  PCP supports the Companys Nauticon® and EV ChillTM product lines with engineering design, manufacturing and packaging for its products.  PCP also supports custom refrigeration systems by designing, engineering and packaging special customer orders.



The Nauticon patented products are innovative in design, use new material technology, are simple to manufacture, and have a low operating cost.  They are used for evaporative condensers, fluid coolers, sub-coolers, commercial and industrial refrigeration system components, and custom refrigeration products for commercial and industrial applications.  Nauticon products can reduce power cost for air condition and refrigeration applications by up to 40%.   The
 efficiency
 of
 water
 cooled
 condenser
 technology
 is
 well
 understood
 in
 the
 industry
 and
 is
 the
 preferred
 method
 in
 large
 central
 chiller
 plants
 reducing
 kW
 per
 ton
 of
 cooling
 for
 chilled
 water
 air
 conditioning
 from
 a
 typical
 1.08
 kW/ton
 at
 a
 suction
 temperature
 of
 45
 F
 and
 condensing
 temperature
 of
 130
 F
 for
 air
 cooled
 condensers
 to
 0.67
 kW/ton
 at
 a
 suction
 temperature
 of
 45
 F
 and
 condensing
 temperature
 of
 95
 F
 for
 evaporative
 (water)
 cooled
 condenser,
 a
 38%
 reduction
 in
 kW
 demand.
 Capacity
 and
 power
 consumption
 is
 estimated
 from
 data
 published
 in
 the
 ASHRAE
 1996
 Handbook,
 HVAC
 Systems
 and
 Equipment
 Handbook,
 Chapter
 34.6,
 Fig.
 1
 Capacity
 and
 Power-Input
 curves
 for
 Typical
 Hermetic
 Reciprocating
 Compressor
 Capacity
 and
 power
 consumption
 is
 estimated
 from
 data
 published
 in
 the
 ASHRAE
 2004
 Handbook,
 HVAC
 Systems
 and
 Equipment
 Handbook,
 Chapter
 34.6,
 Fig.
 2
 Capacity
 and
 Power-Input
 curves
 for
 Typical
 Hermetic
 Reciprocating
 Compressor.
  PowerCold has continued to invest in and improve the Nauticon product line, greatly expanding its product offerings ranging from a single 10-ton unit up to 300-ton or more multi-unit systems. The company has three patents related to the Nauticon product line.



PowerCold ComfortAir Solutions, Inc.  PowerCold ComfortAir Solutions, Inc., (PCS) supports sales and marketing for all U.S. operations offering high efficiency design build HVAC solutions for new and retro-fit commercial buildings, including major hotel chains, national restaurant and retail store chains, extended care facilities, and office buildings. PCS provides these national accounts with turnkey solutions for the design, engineering and installation of energy efficient HVAC solutions. The Companys services are specifically targeted toward large national accounts, such as hospitality providers and national retailers who standardize their HVAC systems across all of their properties.



In December 2000, PowerCold acquired the technology rights, patent rights, and a license agreement for integrated piping technology for a heating and air conditioning system. This acquisition gave the Company exclusive, non-transferable United States transfer rights to the technology and all related assets. In 2003, PowerCold filed for its own, exclusive, enhanced related patent, Environmental Air Treatment System, for worldwide use that supports all of the Companys unique technology including desiccant and solar energy systems.



The design build approach continues to grow in popularity within the construction industry and is expected to become the predominant method of project delivery for PowerCold ComfortAir Solution, Inc. by 2005.  In January 2004, the Company set up a National Contractors Alliance (NCA) program to provide additional revenue opportunities as the design build program gains momentum with its new alliance partners.  The NCA is a turnkey design build program that brings together a nationwide network of contractors, engineers, architects, subcontractors and equipment suppliers to design, build, and equip facilities with the Companys proprietary HVAC systems.  The turnkey design build approach offers greater design flexibility, lower installation costs, equipment longevity, ease of service, and minimizes cost overruns and delays.







Page 13 of 23



---



POWERCOLD CORPORATION AND SUBSIDIARIES

FORM 10Q /A

JUNE 30, 2004



PCS expects significant growth to come from this multi-market channel once the national account agrees to use PowerColds system in both new and existing locations. The Company currently has installed seventeen of the large building systems in three major hotel chains and various extended care facilities and has installed over thirty retail national chain accounts in the U.S.



Applied Building Technology- In August 2002, the Company acquired all the assets of Applied Building Technology, a supplier of complete standardized heating, ventilation and air conditioning packages for commercial buildings.  This new acquisition gives the Company a major entrée into the vast market for small commercial HVAC systems for national chain accounts.  Increasing power costs and clean air regulations have forced corporations with chain store operations to focus on energy savings and indoor air quality.



The company introduced two new applications to support the national chain store business: The BreezeMaster system, designed for use by large chain retail and fast food stores, is a closed loop cooler that prevents moisture buildup that can lead to legionella and other respiratory diseases associated with standard evaporative condensers. This is a critical application for the high volume 10 to 30 ton commercial rooftop unit market where small footprint, weight and height are an issue. The other application is the new proprietary DesertMaster total energy fresh air system. The system uses cool or warm exhaust air being circulated out of a building to cool or heat incoming outside fresh air. The desiccant section is then used to remove the moisture from all the public spaces, 24 hours per day seven days per week. The DesertMaster is highly energy efficient, eliminating the need for approximately 20% of additional air conditioning equipment.



Air
 conditioning
 systems
 are
 sized
 for
 a
 combination
 of
 two
 cooling
 loads:
 latent
 (air
 humidity)
 and
 sensible
 (cooling
 of
 space
 air).
 The
 latent
 cooling
 load
 can
 account
 for
 as
 much
 as
 30%
 to
 50%
 of
 air
 conditioning
 requirements.
 Conventional,
 refrigeration-based
 air
 conditioning
 is
 electrical-energy
 intensive.
 Desiccant
 dehumidification
 removes
 humidity
 from
 ventilation
 air.
 Therefore,
 air
 conditioning
 requirements
 are
 reduced
 to
 meet
 the
 demands
 of
 sensible
 cooling
 and
 smaller
 air-conditioning
 plants
 are
 required.
 Reducing
 humidity
 in
 the
 air
 handling
 system
 and
 the
 building
 spaces
 during
 the
 cooling
 season
 will
 improve
 indoor
 air
 quality
 by
 preventing
 condensation
 in
 equipment
 and
 reducing
 the
 growth
 and
 propagation
 of
 micro-organisms.



Desiccant
 augmented
 cooling
 systems
 are
 energy
 efficient
 and
 environmentally
 benign.
   Desiccant
 dehumidification
 could
 reduce
 total
 residential
 electricity
 demand
 by
 as
 much
 as
 25%
 in
 humid
 regions,
 providing
 a
 drier,
 more
 comfortable,
 and
 cleaner
 air
 environment
 {NREL(2000)
 Advanced
 desiccant
 cooling
 and
 dehumidification
 program,
 National
 Renewable
 Energy
 Laboratory,
 http://www.nrel.gov/desiccantcool/intro.htm.



PowerCold Energy Systems - The Company originally formed Alturdyne Energy Systems to support its natural gas engine driven chillers and its rotary engine generator business. The name was changed to PowerCold Energy Systems in November 2002.  In September 2002 the Company acquired an exclusive license from Alturdyne to manufacture, package, market, develop and use intellectual property for the natural gas engine driven chillers and the natural gas rotary engine gen-set for a period not to exceed ten years.  The Company pre-paid Alturdyne $400,000 in royalty payments against the first $8,000,000 in anticipated sales as part of an exclusive license.  In September 2003 Alturdyne purchased 63 rotary engines from PowerCold for $460,000. Subsequently, the prepaid royalty and the rotary engine receivable were combined and structured as an outright purchase of the engine driven chiller technology.



The installation of combined heat and power (CHP) technology has grown in use over the last ten years. The technology and intellectual property acquired by the Company will significantly enhance the Companys ability to offer customers complete packaged solutions for their HVAC and power generation needs.  The engine driven chillers include standard and custom packaging of natural gas, electric and diesel-fueled engine driven chillers used for HVAC system applications.



PowerCold International Ltd.  The Company was incorporated as a new operating subsidiary effective July 1, 2003.  PowerCold International markets all company products and system applications worldwide through



Page 14 of 23



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POWERCOLD CORPORATION AND SUBSIDIARIES

FORM 10Q /A

JUNE 30, 2004



various alliances and marketing agencies.  Agents and alliances are being organized in various countries worldwide to market and support the companys products and application systems.  Two alliances include: Shun Cheong Electrical Engineering Co., Ltd., Hong Kong, and Industrias Polaris S. A., Monterrey, Mexico.



PowerCold Technology, LLC - The Company was recently formed on February 12, 2004 pursuant to the LLC Act and other applicable laws of the State of Nevada. All assets of the Company related to patent rights, trade names, trademarks, copyrights, licenses, trade secrets, inventions, intellectual proprietary rights and know-how will be owned by PowerCold Technology, LLC, a wholly owned subsidiary company of PowerCold Corporation. PowerCold Technology will license assets to PowerCold subsidiary companies and other third party companys world wide on a non-exclusive basis.



Products:

Nauticon Evaporative Condensers - The Company envisions worldwide market demand for its proprietary evaporative condensing systems used in air conditioning systems. The Nauticon patented products are innovative in design, use new material technology, are simple to manufacture, and have a low operating cost. They are used for evaporative condensers, fluid coolers, sub-coolers, refrigeration system components and custom refrigeration products for commercial and industrial use. Nauticon products can reduce power cost in the air condition and refrigeration industry by up to 40% compared to typical, standard air cooled condensers utilized on many refrigeration and air conditioning systems smaller than 200 ton capacity.  Nauticon units have superior features; they are free of water treatment chemicals, self-cleaning coils that shed scale, low-maintenance evaporative condensers. Nauticons primary advantage is energy savings, yielding EER ratings as high as 18 even as the industry, through regulation, changes to lower efficiency refrigerants. Nauticon products could revolutionize the refrigeration industry by providing a cost effective alternative to the much less efficient air cooled condenser typically utilized on commercial roof top refrigeration and AC units. The industry faces serious changes for the first time in years due to energy and environmental concerns worldwide.



HVAC Systems  PowerCold owns the exclusive U.S. technology rights for an integrated piping technology system for heating, ventilating and air conditioning systems (HVAC). The first principle of the patented HVAC system are the existing pipes, as the delivery system, to provide hot and chilled water to individual fan coil units. The proprietary technology is designed to utilize the fire sprinkler piping to circulate the cooling water around the building.  In addition, the domestic hot water lines also distribute heating energy.



The dual use of the piping systems provides cost effective, high quality, compressor-free guest rooms for the hospitality industry.  The PowerCold ComfortAir system provides the precise comfort control of four-pipe air conditioning at a lower capital cost.  Installation and construction costs are comparable to conventional through-the-window Package Terminal Air Conditioners (PTAC) units.The Ultimate Comforts System also avoids the discomfort of poor temperature/humidity control and sleepless nights from noisy compressor cycling. High quality chiller systems, designed and packaged by PowerCold Products provide installations with energy efficient design features, reliability and ease of maintenance. PowerColds HVAC systems provide energy saving operating advantages through the use of energy efficient equipment and energy recovery technology.



PowerColds Energy Efficient HVAC and Refrigeration Technologies Can Significantly Cut Peak Power Demand and Costs:  Deregulated electricity during the hot summer peak-power-demand-days can cost 10-100 times more than normal. Commercial customers demand-surcharges, which are based on their peak-power usage during the 20-30 days per year when temperatures soar to 95° + F, can represent 30-50% of their total electric bill in some parts of the country. Consequently, reducing peak power demand during these few days could significantly reduce or eliminate surcharge costs.  Commercial air conditioning and refrigeration (accounting for $7 billion of 2000s $37 billion in peak-power demand costs) are the Companys initial target markets. America is well entrenched with air condition and refrigeration systems, but there is a great niche market for the Company's unique and innovative evaporative condensers and chiller products. PowerCold and its related entities have the refrigeration engineering expertise and new innovative products that are needed and in demand today to save significant energy costs for an industry that hasn't seen many changes in the last 50 - 60 years.



Page 15 of 23



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POWERCOLD CORPORATION AND SUBSIDIARIES

FORM 10Q /A

JUNE 30, 2004



Significant Events During Second Quarter 2004:



On April 6, 2004 the Company announced that it has developed a unique Fluid Cooler Package of various sizes that incorporates DuPonts CaltrelÒ engineered polymeric materials. DuPont Canada, Inc. and E.I. du Pont de Nemours and Company and PowerCold Corporation entered into a joint Development Agreement and a License Agreement relating to DuPont CaltrelÒ Fluid Energy Transfer System Applications on May 9, 2003. Pursuant to the terms of an Agreement, PowerCold selected Fluid Coolers as a Field for a Project Application and DuPont has agreed to this Field selection for an exclusive three-year period provided PowerCold meets certain Performance Metrics.



On April 8, 2004 the Company announced today it applied to the U.S. Patent Office for a new modular design heat exchanger patent that features superior modular and flexible designed plastic components. Utilizing polymeric materials provides additional value and innovation to PowerColds portfolio of products.  Plastic components create a new platform for PowerCold to deliver its innovative and cost-effective HVAC solutions to customers.



On May 5, 2004 the Company announced that its wholly owned subsidiary, PowerCold ComfortAir Solutions, Inc. (PCS) signed a sales and distribution agreement with Amcot Cooling Tower Corporation, Rancho Cucamonga, CA, a global supplier of high-performance fiberglass cooling towers.



Amcots parent company, Liang Chi Industry Co. Ltd., Taiwan, one of the largest manufacturers of cooling towers in the world is interested in marketing PowerColds new fluid cooler design concept for the Asian market.  Liang Chi has 8 factories throughout Southeast Asia with 42 years experience manufacturing fiberglass-cooling towers. Amcots fiberglass cooling towers are engineered for cost efficiency and high performance and have been used for many years with great success due to their low maintenance requirements, resistance to moisture, light weight and material properties that allow a wide range of operating water temperatures.



On June 15, 2004 the Company announced that its wholly owned subsidiary PowerCold ComfortAir Solutions, Inc. (PCS) was awarded several new national retail store and restaurant chain contracts that will generate more than $2,000,000 in additional revenue. Additionally, a marketing agreement with First Energy Group, LLC and the signing of Conditioned Environments, Inc., as new members of the Companys National Contractors Alliance, increases PowerColds market coverage across the U.S.



PCS is redesigning new HVAC systems for several national restaurant chain accounts including Chick-Fil-A, Popeyes Chicken, and Bob OGradys. The redesigned HVAC systems will improve air quality, reduce humidity, and resolve ventilation and temperature concerns. In addition to restaurant chain accounts, PCS received new contracts from top national drug store chains, Walgreen and Eckerd.  Other new contracts awarded in May include a Sonic Drive-In restaurant, Lakeland, FL, two HVAC systems for Ice Kube Systems ice skating rinks in Canada, a medical building in Denver, CO, a hotel in Nevada, and ten additional Nauticon units for Trane Corporation.



On June 23, 2004 the Company announced today that it has expanded its product line and now offers Direct Digital Control systems with the Companys patented HVAC packages for commercial buildings.  Direct Digital Control systems, known as DDC systems, log electronic temperature measurements and compare them to the desired settings (set-points).  The system then calculates an appropriate response if the two arent equal, and sends out new signals to correct for any difference.   Typically, DDC systems are approximately 10-15% of the total HVAC package.  PCS is currently installing DDC systems with several of its custom HVAC applications.  These installations are expected to generate additional revenue in excess of $1,000,000 over the next twelve months.   .
   Projections
 regarding
 revenue
 and
 income
 should
 not
 be
 considered
 a
 certainty
 and
 in
 fact
 projections
 may
 not
 be
 met
 at
 all.





Page 16 of 23



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POWERCOLD CORPORATION AND SUBSIDIARIES

FORM 10Q /A

JUNE 30, 2004



On June 29, 2004 the Company announced, at its request, the Berlin-Bremen Stock Exchange has delisted and ceased trading in PowerCold stock at the close of business on June 28, 2004 on the exchange.  On June 14, 2004, PowerCold had requested that the Berlin-Bremen Stock Exchange and the listing broker, Berliner Freiverkehr (Aktien) AG, immediately remove PowerCold from the exchange. The Company is reviewing possible remedies against individuals or firms responsible for the unauthorized listing and remains vigilant regarding future unauthorized listings on any exchange.



Subsequent Events:



On July 22, 2004 the Company announced that it received up to a $25 Million financing program from a major commercial mortgage corporation. The finance program provides the Company and its customers with a significant funding source for its patented energy saving HVAC systems. The new financing program is effective immediately and will be used primarily by PowerCold ComfortAir Solutions, Inc., a PowerCold company, for its commercial customers that include the hospitality, healthcare, leisure, and retail industries.



On July 29, 2004 the Company authorized the sale to Laurus Funds a Convertible Term Note in the principal amount of Five Million Dollars, which is convertible into the Company's common stock at an initial fixed conversion price of $1.87 per share.   Laurus Master Fund also acquired a Common Stock Purchase Warrant for the purchase of up to 615,000 shares of Common Stock, exercisable at a price of $2.63 for 300,000 shares and $3.07 for 315,000 shares until July 29, 2007.  The purchase agreement also granted certain registration rights.  Closing and funding occurred on July 30, 2004.



RESULTS OF OPERATIONS  Second Quarter 2004



The Company's Consolidated Statement of Operations for the second quarter ended June 30, 2004 compared to the second quarter ended June 30, 2003:



Total Revenue for the three-month period ended June 30, 2004 increased 10.4% to $2,361,110 from $2,138,976 for the same quarter the prior year, and for the six-month period ended June 30, 2004 increased 41.5% to $4,602,213 from $3,251,310 for the same period the prior year.



Operating Loss for the three-month period ended June 30, 2004 increased $314.00 to ($421,195) from ($420,881) for the same quarter the prior year, and for the six-month period ended June 30, 2004 decreased 11.5% to ($701,571) from ($803,154) for the same period the prior year.



Net Loss for the three-month period ended June 30, 2004 increased 212% to ($575,535) from ($184,246) for the same quarter the prior year, and for the six-month period ended June 30, 2004 increased 78.1% to ($1,008,979) from ($566,633) for the same period the prior year.  Net Operating Losses from continuing operations included one-time respective charges of $154,340 for the quarter and $309,249 for the six months ended June 30, 2004 for debt funding services. It is expected that quarter operating losses will continue to decline as revenue increases and operating expenses remain stable.   Projections
 regarding
 revenue
 and
 income
 should
 not
 be
 considered
 a
 certainty
 and
 in
 fact
 projections
 may
 not
 be
 met
 at
 all.



Net Loss Per Share for the three-month period ended June 30, 2004 increased to ($0.03) form ($0.01) for the same quarter the prior year, and for the six-month period ended June 30, 2004 increased to ($0.05) from ($0.03) for the same period the prior year. Net loss per share was based on weighted average number of shares of 21, 805,083 for the three month period ended June 30, 2004 and 19,202,066 for the three month period ended June 30, 2003.



The Companys sales and revenue continue to grow during the first half 2004.  Total revenue of $4,602,213 for the six months ended through June 30, 2004 exceeded the total annual revenue of $4,070,476 for 2003 and $1,505,890 for 2002.  The Company anticipates new contracts to exceed $9 million through the third quarter



Page 17 of 23



---



POWERCOLD CORPORATION AND SUBSIDIARIES

FORM 10Q /A

JUNE 30, 2004



2004 and has over $35 million in proposals in process with various national account customers.   The majority of PowerCold ComfortAir Solutions engineering design proposals are for large commercial building projects that revolve over a six to twelve month contract cycle and are recognized as revenue on a percentage of completion basis. The Company expects to close new contract proposals at a 10% - 15% rate per quarter    and
 generate
 revenue
 from
 those
 contracts
 through
 the
 following
 six
 
 fifteen
 month
 installation
 cycle
 based
 upon
 the
 historical
 closure
 rate
 for
 the
 company
 over
 the
 last
 two
 years.
 We
 anticipate
 reduced
 losses
 with
 increased
 revenue
 but
 will
 not
 attain
 profitability
 in
 the
 third
 quarter
 of
 2004
 as
 it
 is
 unlikely
 that
 gross
 margins
 will
 improve
 in
 the
 near
 term.
   Projections
 regarding
 revenue
 and
 income
 should
 not
 be
 considered
 a
 certainty
 and
 in
 fact
 projections
 may
 not
 be
 met
 at
 all.
 The market for commercial HVAC systems for retail national chain stores and restaurant accounts continues to expand with the recent addition of four new chains.



PowerCold Products production facility has continued to improve its operations with an emphasis on cost reduction programs and new sales initiatives focused on volume markets for Fluid Coolers and Evaporative Condensers.  Major new engineering and marketing programs related to the new plastic products have been implemented with direct emphasis on OEM companies. Newly designed fluid coolers that use DuPonts CaltrelÒ plastic tubing have been shipped to a national restaurant chain and to one of the worlds largest fluid cooler OEM.   Some of the value and benefits of the new plastic tubing to OEM companies are: improved coil scale shedding over copper tubing, superior corrosion resistance of the coil compared to copper construction, lower water usage, and lower maintenance cost.



Operating expenses increased 19.1% to $954,204 for the quarter and for the six months increased 35.3% to $1,862,809.  Operating expenses increased primarily from additional one-time accounting and legal expense related to new financing, and higher expense for sales and marketing as compared to the prior year six month period.  General administrative costs increased $265,364 due to one-time charges related to the installation of new enterprise accounting software, communications related improvements and compliance programs.  None of these issues are expected to affect future reporting periods.  Additional adjustments related to specific product cost issues are being implemented and will reflect greater profit margins going forward ,
 however
 there
 is
 no
 guarantee
 that
 existing
 margins
 can
 be
 maintained
 or
 improved
..  Lower than anticipated R & D expenditures for plastic products contributed to cost containment as several products under development have advanced to the field test and marketing stage.



The Company's Consolidated Balance Sheet as of the second quarter ended June 30, 2004 compared to year ending December 31, 2003:



Total current assets increased 77.4% to $5,536,265 for the second quarter ended June 30, 2004 compared to $3,119,982 for the year ending December 31, 2003.  Total assets increased 54.0% to $7,071,972 for the second quarter ended June 30, 2004 compared to $4,592,716 for the year ending December 31, 2003.  Total Current Liabilities increased 67.9% to $4,972,402 for the second quarter ended June 30, 2004 compared to $2,960,897 for the year ending December 31, 2003. Total stockholders' equity increased 29.9% to $2,030,153 for the second quarter ended June 30, 2004 compared to $1,562,402 for the year ending December 31, 2003.



The increase in assets was mainly due to the rise of Accounts Receivable primarily from large design projects. Two
 disputes,
 one
 with
 the
 general
 contractor
 that
 was
 fired
 from
 the
 job
 and
 the
 other
 when
 the
 general
 contractor
 quit
 resulted
 in
 $287,558
 being
 uncollectible
 are
 a
 direct
 result
 of
 failure
 to
 collect
 based
 upon
 a
 pay
 when
 paid
 clause
 in
 a
 contract.
   At
 June
 30,
 2004
 uncollected
 retentions
 from
 contracts
 in
 progress
 totaled
 $281,337
 and
 collection
 is
 dependant
 upon
 various
 factors
 including
 the
 release
 of
 retentions
 held
 back
 from
 the
 general
 contractor
 by
 the
 owner,
 lien
 releases
 from
 subcontractors,
 liability
 insurance
 confirmation,
 punch
 list
 completion,
 warranty
 coverage,
 etc.,
 and
 may
 delay
 the
 collection
 for
 one
 to
 twelve
 months
 after
 the
 contract
 completion.
   Change
 orders
 beyond
 the
 scope
 of
 the
 original
 contracts
 are
 slow
 to
 collect
 from
 the
 general
 contractor.
 Uncollected
 receivables
 for
 completed
 contracts,
 including
 retentions
 on
 these
 contracts,
 totaled
 $1,335,815
 at
 June
 30,
 2004.
 Claims
 totaling
 $331,137
 against
 payment
 bonds
 issued
 on
 the
 behalf
 of
 general
 contractors
 will
 be
 filed
 in
 the
 near
 future.
 Approximately
 45%
 of
 the
 outstanding
 receivables
 at
 June
 30,
 2004



Page 18 of 23



---



POWERCOLD CORPORATION AND SUBSIDIARIES

FORM 10Q /A

JUNE 30, 2004



have
 a
 collection
 problem
 and
 may
 require
 litigation
 or
 arbitration
 to
 collect.
  Accounts Receivable currently exceeds Accounts Payable by $3,982,028 and has increased by $1,454,686 from the previous quarterly reporting period on $2,743,777 in second quarter revenue.  Inventory increased by $128,143 in the same time period.  Accounts Payable increased by $237,121 from the end of the previous quarter in part as a result of an investment in increased inventory to support increasing Nauticon sales volume and shipments to new chain store accounts. The substantial increase in receivables and to a lesser extent the increased inventory has put significant pressure upon the cash flow. A substantial reduction in past due Accounts Receivables and increased cash flow from completed installations is expected in the third and fourth quarters 2004.  The increase in liabilities since December 31, 2003 was mainly due to  the increase of Billings in Excess of Costs and Estimated Earnings on Contracts in Progress by $940,313 at the end of Q2.  Commitments and contingencies of $69,417 are from old outstanding accounts payable from the previous RealCold Products and Nauticon operations.  Management believes that these contingency debts will be written off over time.



During the three months ended June 30, 2004, the Company issued 666,042 common stock shares for equity; 210,000 options were exercised for cash of $210,000; 309,375 shares valued at $460,309 for private placements; 66,667 shares of common stock for the conversion of debt in the amount of $100,000; and 80,000 shares valued at $76,000 for financial and management consulting services.



Liquidity and Capital Resources:  At June 30, 2004, the Companys working capital increased to $563,863 from a $159,083 position at December 31, 2003 as a result of the higher accounts receivable during the second quarter.  Cash decreased from $374,678 at year-end to $254,658 as of June 30, 2004.  Inventory movement increased to $135,345 as the demand for product increased.  Purchasing agreements with suppliers, coupled with the use of common parts throughout the product lines should minimize further growth in inventory levels and at the same time reduce the cost of  product sold, improving the gross profit margin.  Record quarterly sales drove accounts receivable to new levels.



Status of Operations: Management intends to continue to utilize and develop the intangible assets of the Company.  At June 30, 2004, intangible assets comprised 17.4% of the Company's assets.  The recovery of these intangible assets is dependent upon achieving profitable operations. 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.  Management believes that its working capital is sufficient to support its growth plans for 2004.  The Company recently became the beneficiary of up to a $25 Million financing program from a major commercial mortgage corporation, which provides the Company and its customers a leasing credit facility.  And the Company also recently received $5 million in convertible debt financing on July 30, 2004.



The Company recently applied to the U.S. Patent Office for a new modular design heat exchanger patent that features superior modular and flexible designed plastic components.  Utilizing polymeric materials provides additional value and innovation to PowerColds portfolio of products.  Plastic components create a new platform for PowerCold to deliver energy efficient and cost-effective HVAC solutions for its customers.



A new patent application (third Nauticon® patent) which was filed in 2002 was recently submitted for an international filing as an enhanced evaporative condenser. Management believes that the additional development cost related to the new patent application will protect the companys intellectual property and improve opportunities for increased revenues and profits for the Companys Nauticon product line. Patents and acquired technology are amortized on a straight line basis over a 15 year life commencing with the beginning of product sales.













Page 19 of 23



---



POWERCOLD CORPORATION AND SUBSIDIARIES

FORM 10Q /A

JUNE 30, 2004



ITEM 3:

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKRT RISK



The company, at the present time, has no exposure to market risk sensitive instruments entered into for trading purposes and instruments related to interest rate risk, foreign currency exchange rate risk, commodity price risk, and other relevant market risks, such as equity price risk.



ITEM 4.  CONTROLS AND PROCEDURES



QUARTERLY EVALUATION OF THE COMPANY'S DISCLOSURE CONTROLS AND INTERNAL CONTROLS.

The Company maintains disclosure controls and procedures designed to ensure that information required to be disclosed in reports filed under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the specified time periods. As of the end of the period covered by this report, PowerColds Chief Executive Officer (CEO) and PowerColds Chief Financial Officer (CFO) evaluated, with the participation of PowerColds management, the effectiveness of the Companys disclosure controls and procedures. Based on the evaluation, which disclosed no significant deficiencies or material weaknesses, PowerColds Principal Executive and Principal Financial Officer each concluded that the Companys disclosure controls and procedures are effective. There were no changes in the Companys internal controls over financial reporting that occurred during the Companys most recent fiscal quarter that may have materially affected, or are reasonably likely to materially affect, the Companys internal control over financial reporting.

CEO and CFO CERTIFICATIONS.



Appearing immediately following the Signatures section of this Quarterly Report there are two separate forms of "Certifications" of the CEO.  The second form of Certification is required in accord with Section 302 of the Sarbanes-Oxley Act of 2002 (the Section 302 Certification).  This section of the Quarterly Report, which you are currently reading is the information concerning the Controls Evaluation referred to in the Section 302 Certifications and this information should be read in conjunction with the Section 302 Certifications for a more complete understanding of the topics presented.



DISCLOSURE CONTROLS AND INTERNAL CONTROLS.



Disclosure Controls are procedures that are designed with the objective of ensuring that information required to be disclosed in our reports filed under the Securities Exchange Act of 1934 (Exchange Act), such as this Quarterly Report, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's (SEC) rules and forms.  Disclosure Controls are also designed with the objective of ensuring that such information is accumulated and communicated to our management, including the CEO and CFO, as appropriate to allow timely decisions regarding required disclosure.  Internal Controls are procedures which are designed with the objective of providing reasonable assurance that (1) our transactions are properly authorized; (2) our assets are safeguarded against unauthorized or improper use; and (3) our transactions are properly recorded and reported, all to permit the preparation of our financial statements in conformity with generally accepted accounting principles.



LIMITATIONS ON THE EFFECTIVENESS OF CONTROLS.



The Company's management, including the CEO and CFO, does not expect that our Disclosure Controls or our Internal Controls will prevent all error and all fraud.  A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met.  Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs.  Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any,





Page 20 of 23



---



POWERCOLD CORPORATION AND SUBSIDIARIES

FORM 10Q /A

JUNE 30, 2004



within the Company have been detected.  These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake.  Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control.  The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed achieving its stated goals under all potential future conditions; over time, control may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate.  Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.



SCOPE OF THE CONTROLS EVALUATION.



The CEO and CFO evaluation of our Disclosure Controls and our Internal Controls included a review of the controls' objectives and design, the controls' implementation by the Company and the effect of the controls on the information generated for use in this Quarterly Report.  In the course of the Controls Evaluation, we sought to identify data errors, controls problems or acts of fraud and to confirm that appropriate corrective action, including process improvements, were being undertaken.  This type of evaluation will be done on a quarterly basis so that the conclusions concerning controls effectiveness can be reported in our Quarterly Reports on Form 10-Q and Annual Report on Form 10-K.  Our Internal Controls are also evaluated on an ongoing basis by our independent auditors in connection with their audit and review activities.  The overall goals of these various evaluation activities are to monitor our Disclosure Controls and our Internal Controls and to make modifications as necessary; our intent in this regard is that the Disclosure Controls and the Internal Controls will be maintained as dynamic systems that change (including with improvements and corrections) as conditions warrant.



Among other matters, we sought in our evaluation to determine whether there were any "significant deficiencies" or "material weaknesses" in the Company's Internal Controls, or whether the Company had identified any acts of fraud involving personnel who have a significant role in the Company's Internal Controls.  This information was important both for the Controls Evaluation generally and because items 5 and 6 in the Section 302 Certifications of the CEO and CFO require that the CEO and CFO disclose that information to our Board's Audit Committee and to our independent auditors and to report on related matters in this section of the Quarterly Report.  In the professional auditing literature, "significant deficiencies"  are referred to as "reportable conditions"; these are control issues that could have a significant adverse effect on the ability to record, process, summarize and report financial data in the financial statements.  A "material weakness" is defined in the auditing literature as a particularly serious reportable condition where the internal control does not reduce to a relatively low level the risk that misstatements caused by error or fraud may occur in amounts that would be material in relation to the financial statements and not be detected within a timely period by employees in the normal course of performing their assigned functions.  We also sought to deal with other controls matters in the Controls Evaluation, and in each case if a problem was identified, we considered what revision, improvement and/or correction to make in accord with our on-going procedures.



In accord with SEC requirements, the CEO and CFO note that, since the date of the Controls Evaluation to the date of this Quarterly Report, there have been no significant changes in Internal Controls or in other factors that could significantly affect Internal Controls, including any corrective actions with regard to significant deficiencies and material weaknesses.



CONCLUSIONS.



Based upon the Controls Evaluation, our CEO and CFO have concluded that, subject to the limitations noted above, our Disclosure Controls are effective to ensure that material information relating to PowerCold Corporation, Inc. and its subsidiaries is made known to management, including the CEO and CFO, particularly during the period when our periodic reports are being prepared, and that our Internal Controls are effective to provide reasonable assurance that our financial statements are fairly presented in conformity with generally accepted accounting principles.



Page 21 of 23



---



POWERCOLD CORPORATION AND SUBSIDIARIES

FORM 10Q /A

JUNE 30, 2004



PART II. OTHER INFORMATION



Item 1.  Legal Proceedings.



Two Company subsidiaries, PowerCold Products, Inc. and PowerCold ComfortAir Solutions, Inc. f/k/a Ultimate Comfort Systems Inc., as Third-Party Defendants, are involved in a multi third-party law-suit, ERA Refrigeration Company, Inc., Plaintiff vs. Nicholas Ladopoulos, et al., Defandants, and Yahara Crossing, LLC; Windsor Commons, LLC; Progressive Designs, LLC; All Star Properties, Third Party Plaintiffs vs. Steve Clark, PowerCold Products, Inc., Total Comfort Solutions, Inc. and PowerCold ComfortAir Solutions, Inc   relating to a 1999 third-party design of two HVAC systems; this installation was inherited by PowerCold ComfortAir Solutions and chiller equipment manufactured by PowerCold Products, Inc. and installed by a local third-party mechanical contractor. ThirdParty Plaintiffs are asking for a full refund of the contract purchase price.  The suite was filed with the court on February 2, 2004. The Plaintiff did not purchase the equipment from PowerCold or any of its subsidiary companies.  In the Companys opinion the system design by others and not the equipment provided by PowerCold to other third party defendants is at fault. Lawsuit Case Code No. 03-CV-3452, Case Code: 30301, Dane County, Wisconsin, Circuit Court Branch 9.



A Company subsidiary, PowerCold ComfortAir Solutions, Inc., is a Defendant in a law-suit for certain fees claimed in the amount of $16,170.00 by the Plaintiff (Big Sky Plumbing & Heating vs. PowerCold ComfortAir Solutions, Inc and Ultimate Comfort Solutions), a local mechanical contractor, for installation of a third party designed cooling system, which the Defendant states are not acceptable. Big Sky Plumbing & Heating submitted invoices to PowerCold ComfortAir Solutions in excess of the $4,000 authorized for services performed.  The suite was filed on March 30, 2004.  PowerCold has made an offer to settle for only the services authorized.  PowerCold ComfortAir Solutions inherited this installation from a previous licensed technology application. Lawsuit Cause No. ADV-2004-151, Montana First Judicial District Court, Lewis & Clark County.



It is the opinion of management that these two matters will not have any major material adverse effect on the Company as third party engineering designs are deemed by the Company to be the cause of the problems and not the equipment provided by the PowerCold.



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.

Exhibits and Reports on Form 8-K.

(a)   Exhibits

No.

Description

Exhibit 31.1

Certification of Francis L. Simola, President and Chief Executive Officer pursuant to 18 U.S.C. 1350.

Exhibit 31.2

Certification of Joseph C. Cahill, Chief Financial Officer pursuant to 18 U.S.C. 1350.

Exhibit 32.1

Certification of Francis L. Simola, President and Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

Exhibit 32.2

Certification of Joseph C. Cahill, Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

(b)   Reports on Form 8-K relating to the quarter ended; (Subsequently to June 30, 2004)

8 -K   July 30, 2004   -   $5 Million Financial Deal



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POWERCOLD CORPORATION AND SUSIDIARIES

FORM 10-Q /A

June 30, 2004



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:    April
 29,
 2005









































































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