UNITED STATES


SECURITIES AND EXCHANGE COMMISSION


Washington, D.C. 20549





FORM 10-Q





(Mark One)


xQuarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934





For the quarterly period ended March 31, 2010





or




oTransition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934





Commission File Number: 033-55254-27





BRIGHTEC, INC.(Name of small business issuer in its charter)Nevada

87-0438637(State or other jurisdiction of

(IRS Employerincorporation or organization)

Identification No.)8C Pleasant Street South, First Floor, South Natick, MA 01760-5622(Address of principal executive offices, Zip code)(508) 647-9710(Issuer’s telephone number)Securities registered pursuant to Section 12(b) of the Exchange Act: NoneSecurities registered pursuant to Section 12(g) of the Exchange Act:Common Stock, $0.001 par value(Title of class)





Indicate by check mark whether the registrant (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.


x Yes o No





Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).


o Yes o No





Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).


o Yes x No





Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer, or a smaller reporting company.  See the definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.





Large accelerated filer
o
Accelerated filer oNon-accelerated filer
o (Do not check if a smaller reporting company)
Smaller reporting company x





Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.





Class

Number of shares outstanding as of May 19 2010Common stock, $0.001 par value

146,467,837








INDEX




Page NumberNote Regarding Forward Looking Statements

3Part I.
Financial InformationItem 1.
Financial Statements

4Condensed Consolidated Balance Sheets at March 31, 2010 (Unaudited) and December 31, 2009

4Condensed Consolidated Statements of Operations and Accumulated Deficit and Comprehensive Loss for the Three Month Periods Ended March 31, 2010 and 2009 (Unaudited)

5Consolidated Statements of Cash Flows for the Three Month Periods Ended March 31, 2010 and 2009 (Unaudited)

6Notes to Condensed Consolidated Financial Statements (Unaudited)

7-10Item 2.
Management’s Discussion and Analysis of Financial Condition and Results of Operations

11-15Item 3.
Quantitative and Qualitative Disclosures About Market Risk

15Item 4T.
Controls and Procedures

15Part II.
Other InformationItem 1.
Legal Proceedings

16Item 2.
Unregistered Sales of Equity and Use of Proceeds

16Item 3.
Defaults upon Senior Securities

16Item 4.
Removed and Reserved

16Item 5.
Other Information

16Item 6.
Exhibits

17Signatures

18





2


Note Regarding Forward Looking Statements:





This Form 10-Q and other reports filed by Brightec, Inc. (the “Company”) from time to time with the U.S. Securities and Exchange Commission (the “SEC”), as well as the Company’s press releases, contain or may contain forward-looking statements.  The information provided is based upon beliefs of, and information currently available to, the Company’s management, as well as estimates and assumptions made by the Company’s management.  Statements that are not statements of historical fact may be deemed to be forward-looking statements.  Forward-looking statements can be identified by the use of forward-looking terminology such as “believes,” “may,” “should,” “anticipates,” “estimates,” “expects,” “future,” “intends,” “hopes,” “plans,” or the negative thereof.  Such forward-looking statements involve known and unknown risks, uncertainties and other factors that could cause actual results of the Company to vary materially from historical results or from any future results expressed or implied in such forward-looking statements.





Any statements contained in this Form 10-Q that do not describe historical facts, including, without limitation, statements concerning expected revenues, earnings, product introductions and general market conditions, may constitute forward-looking statements.  Any such forward-looking statements contained herein are based on current expectations, but are subject to a number of risks and uncertainties that may cause actual results to differ materially from expectations.  The factors that could cause actual future results to differ materially from current expectations include, but are not limited to, the following: the Company’s ability to raise the financing required to support the Company’s operations; the Company’s ability to establish its intended operations; fluctuations in demand for the Company’s products and services; the Company’s ability to manage its growth; the Company’s ability to develop, market and introduce new and enhanced products on a timely basis; the Company’s ability to attract customers; and the ability of the Company to compete successfully in the future.  Any forward-looking statements should be considered in light of those factors.





The Company files periodic reports with the SEC, as well as current reports on Form 8-K, proxy or information statements and other reports required of publicly held reporting companies.  The public may read and copy any materials the Company files with the SEC at the SEC’s Public Reference Room at 100 F Street, N.E., Washington, D.C.  20549.  The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330.  The SEC also maintains an Internet site that contains the reports, proxy and information statements, and other information that the Company files electronically with the SEC, which is available on the Internet at www.sec.gov. Further information about the Company and its subsidiary may be found at www.brightec.com.




3




PART I.  FINANCIAL INFORMATION
 ITEM 1.  FINANCIAL STATEMENTS
  Brightec, Inc. and Subsidiary
 Condensed Consolidated Balance Sheets
 March 31, 2010and December 31, 2009




March 31, 2010


December 31, 2009(Unaudited)ASSETSCurrent assetsCash

$
21,760


$
1,314Accounts receivable, net


3,695



2,696Inventory


349,175



346,366Prepaid expenses


3,222



4,298TOTAL CURRENT ASSETS


377,852



354,674Office and photographic equipment


28,320



28,320Less: accumulated depreciation


(26,692
)


(26,291
)1,628



2,029Deposit


3,033



3,0333,033



3,033TOTAL ASSETS

$
382,513


$
359,736LIABILITIES AND STOCKHOLDERS’ DEFICITCurrent liabilitiesLine of credit

$
664,000


$
664,000Accounts payable


222,022



321,372Accrued interest (including related party interest of $58,719 and $55,870, respectively)


75,319



55,870Accrued compensation


656,700



617,500Accrued liabilities


86,920



56,575Advances due to related party


1,954,548



1,749,798TOTAL CURRENT LIABILITIES


3,659,509



3,465,115Stockholders’ deficitPreferred stock, $.001 par value - shares authorized
5,000,000; shares issued and outstanding 0


-



-Common stock, $.001 par value - shares authorized
245,000,000; shares issued and outstanding 146,467,837


146,468



146,468Additional paid-in capital


12,783,890



12,783,890Accumulated deficit


(16,402,263
)


(16,231,544
)Accumulated other comprehensive income


194,909



195,807TOTAL STOCKHOLDERS’ DEFICIT


(3,276,996
)


(3,105,379
)TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT

$
382,513


$
359,736




See  accompanying notes to unaudited condensed consolidated financial statements.




4




Brightec, Inc. and Subsidiary
 Condensed Consolidated Statements of Operations
 and Accumulated Deficit and Comprehensive Loss


For the Three Months EndedMarch 31, 2010


March 31, 2009(Unaudited)


(Unaudited)Sales

$
5,343


$
1,742Cost of sales


2,771



800Gross profit


2,572



942Operating expensesResearch and development


23,219



15,000Selling and marketing


48,451



61,932General and administrative (including related party consulting expenses of $0 and $7,551, respectively)


82,145



79,186153,815



156,118Operating loss


(151,243
)


(155,176
)Other Income (Expense)Interest expense (including related party$2,849 and $2,990, respectively)


(19,476
)


(35,632
)(19,476
)


(35,632
)Net loss


(170,719
)


(190,808
)Accumulated deficit – beginning


(16,231,544
)


(15,545,866
)Accumulated deficit – ending

$
(16,402,263
)

$
(15,736,674
)Basic and diluted net loss per share

$
—


$
—Weighted average number of shares usedin the computation of basic and diluted net loss per share


146,467,837



144,342,837COMPREHENSIVE LOSSNet loss

$
(170,719
)

$
(190,808
)Foreign currency translation adjustment


(898
)


914Comprehensive loss

$
(171,617
)

$
(189,894
)
  See  accompanying notes to unaudited condensed consolidated financial statements.
  5
  Brightec, Inc. and Subsidiary
 Condensed Consolidated Statements of Cash Flows


For the Three Months EndedMarch 31, 2010


March 31, 2009(Unaudited)


(Unaudited)Cash flows from operating activitiesNet loss

$
(170,719
)

$
(190,808
)Adjustments to reconcile net loss to net cash used foroperating activities:Amortization of deferred stock based compensation


—



7,740Accrued interest on advances from related party


2,849



2,990Depreciation and amortization expense


401



376Changes in operating assets and liabilities:(Increase) decrease in:Accounts receivable


(999
)


(188
)Inventory


(2,809
)


2,521Prepaid expenses


1,076



3,614Increase (decrease) in:Accounts payable


(99,350
)


18,738Accrued liabilities


86,145



104,461Net cash used in operating activities


(183,406
)


(50,556
)Cash flows from financing activitiesAdvances received from related party


204,750



28,000Advances from line of credit


—



14,000Net cash provided by financing activities


204,750



42,000Effects of changes in foreign exchange rates


(898
)


914Net increase (decrease) in cash


20,446



(7,642
)Cash at beginning of period


1,314



10,271Cash at end of period

$
21,760


$
2,629





See NOTE 11for supplemental cash flow information.




See  accompanying notes to unaudited condensed consolidated financial statements.




6





Brightec, Inc. and Subsidiary
 Notes to Condensed Consolidated Financial Statements - continued
 (Unaudited)




NOTE 1 – BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES





BUSINESS





Brightec, Inc. (“Brightec” or the “Company”) develops and markets luminescent films incorporating luminescent or phosphorescent pigments (the “Luminescent Products”). These pigments absorb and reemit visible light producing a “glow” which accounts for the common terminology “glow in the dark.” The Luminescent Product are sold primarily as a printable luminescent film designed to add luminescence to existing or new products. The Company uses third parties for manufacturing, and markets and sells graphic quality printable luminescent films. These films are based on the Company’s proprietary and patented technology, which enables prints to be of photographic quality by day and luminescent under low light or night conditions. The Company expects that its Luminescent Products will be available for sale in a number of versions appropriate for commonly used commercial and personal printing technology, including offset printing, laser or inkjet printing, plus a variety of “print on demand” digital technologies. The Company offers its products in sheets and rolls.





During 2009, the Company decided used its own products to develop a new line of products aimed at the retail market.  The products consist of children’s puzzles and stickers.  The Company believes these products provide an opportunity to enhance revenue growth.





NOTE 2 – INTERIM FINANCIAL STATMENTS




The accompanying unaudited condensed consolidated financial statements at March 31, 2010 and for the three month period then ended includes the accounts of the Company and its wholly-owned subsidiary, Brightec S.A. (the “Subsidiary”), a Swiss corporation.  All inter-company transactions and balances have been eliminated in consolidation. In our opinion, these unaudited condensed consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2009, and include all adjustments, necessary to make the financial statements not misleading. Certain footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States have been condensed or omitted in accordance with rules of the Securities and Exchange Commission for interim reporting. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2009.





NOTE 3 – LIQUIDITY, MANAGEMENT PLANS AND GOING CONCERN




The Company had a working capital deficit of approximately $3.28 million and an accumulated deficit of approximately $16.4 million at March 31, 2010 and has incurred recurring losses since inception.  The ability of the Company to continue to operate as a going concern is primarily dependent upon the ability of the Company to raise the necessary financing, to effectively produce and market Brightec’s products at competitive prices, to establish profitable operations and to generate positive operating cash flows.  If the Company fails to raise funds, or the Company is unable to generate operating profits and positive cash flows, there are no assurances that the Company will be able to continue as a going concern and it may be unable to recover the carrying value of its assets.





In 2006, the Company entered into a $750,000 Loan and Security Agreement (the “Loan Agreement”) with Ross/Fialkow Capital Partners, LLP, Trustee of the Brightec Capital Trust (“Ross/Fialkow”). As of March 31, 2010, the loan principal was $664,000 and the remaining funds available under the Loan Agreement were $86,000. See NOTE 8 – LINE OF CREDIT.





Mr. Planche, the Company’s chairman, president and chief executive officer has been funding the Company’s cash requirements as needed through unsecured cash advances.  For the period January 1, 2010 through March 31, 2010, Mr. Planche made unsecured cash advances of $204,750. From April 1, 2010 to May 19, 2010, Mr. Planche had made additional loans to the Company in the amount of $17,500. See NOTE 7 – RELATED PARTY TRANSACTIONS.





7


Brightec, Inc. and Subsidiary
 Notes to Condensed Consolidated Financial Statements - continued
 (Unaudited)


Management believes that it will continue to be successful in generating the necessary financing to fund the Company’s operations throughout the 2010 calendar year; however, unless alternative sources of funding are identified, the Company will be totally dependent on Mr. Planche to finance its operations.  Due to the recent turmoil in the global economy, it is uncertain that funds will be available when we require them and there is no guarantee that Mr. Planche will continue such financing.





NOTE 4 – EARNINGS (LOSS) PER SHARE




The Company computes earnings or loss per share in accordance with ASC 260, basic earnings per share, is computed by dividing income available to common stockholders by the weighted average number of common shares outstanding.  Diluted earnings per share reflect the potential dilution that could occur if securities or other agreements to issue common stock were exercised or converted into common stock, only in the periods in which the effect is dilutive.  The following securities have been excluded from the calculation of net loss per share, as their effect would be anti-dilutive:





For the Three MonthsEnded March 31,2010


2009(Unaudited)


(Unaudited)Warrants (weighted average)


6,320,832



6,320,832Convertible debt (weighted average)


5,533,333



5,736,111Stock options (weighted average)


20,500,000



20,500,000





NOTE 5 – INVENTORIES




Inventories are stated at the lower of cost (first-in, first-out) or market value and consist of the following at March 31, 2010 and December 31, 2009, respectively:





March 31, 2010


December 31, 2009(Unaudited)Raw materials and work in process

$
154,497


$
153,405Finished goods


194,678



192,961$
349,175


$
346,366




NOTE 6 – INCOME TAXES




The Company has not calculated the tax benefits of its net operating losses as of March 31, 2010 and December 31, 2009 since it does not have the required information. The Company has not filed its U.S. federal and state corporate tax returns for years ended December 31, 2009, 2008, 2007, 2005, 2004, 2003, 2002 and 2000. The tax returns filed for 2006 and 2001 (if permitted) will need to be amended.  Due to the uncertainty over the Company’s ability to utilize these operating losses, any deferred tax assets, when determined, would be fully offset by a valuation allowance.




NOTE 7 – RELATED PARTY TRANSACTIONS





Advances due to related party


At December 31, 2009, the Company owed Mr. Planche $1,749,798 in connection with unsecured cash advances made by him to the Company.  During the three month period ended March 31, 2010, Mr. Planche made advances to the Company of $204,750.  During the three month period ended March 31, 2010, the Company did not pay any of the outstanding advances.  At March 31, 2010, the Company owes Mr. Planche $1,954,548. From April 1, 2010 to May 19, 2010, Mr. Planche had made additional loans to the Company in the amount of $17,500.





8


Brightec, Inc. and Subsidiary
 Notes to Condensed Consolidated Financial Statements - continued
 (Unaudited)
  All such advances bear interest at the Internal Revenue Service short term “Applicable Federal Rate” (0.64% and 0.69% at March 31, 2010 and December 31, 2009, respectively) calculated and accrued monthly.  As of March 31, 2010 and December 31, 2009, accrued interest owed on the unsecured cash advances was $58,719 and $55,870, respectively.  Interest expense incurred for the three month periods ended March 31, 2010 and 2009 was $2,849 and $2,990 respectively.





Consulting agreement


On September 11, 2007, the Company issued 2,000,000 shares of common stock, valued at $60,000, as consideration for a two-year consulting contract with a significant stockholder.  These shares were issued at $0.03 per share, the closing price of the Company’s common stock on the aforementioned date.  For the three month periods ended March 31, 2010 and 2009, the Company recognized non-cash consulting expense of $0 and $7,551, respectively, related to the consulting agreement.  At March 31, 2010 and December 31, 2009, the Company owed $0 to this stockholder.





NOTE 8 – LINE OF CREDIT




The Company has a Loan Agreement with Ross/Fialkow in the amount of $750,000.  The principal amount of the loan plus accrued but unpaid interest, if any, is convertible at any time prior to payment at the election of Ross/Fialkow, into the Company’s common stock at the rate of $0.12 per share.  Such shares carry piggy-back registration rights.  All of the assets of the Company have been pledged, including the assets of the Company’s subsidiary.





The Company and Ross/Fialkow signed an Amendment and Waiver Agreement effective March 31, 2010, the significant terms of which are as follows:




1.
Maturity date: December 31, 20102.
Waiver of default: Ross/Fialkow waived the Company existing payment defaults and agreed to extend the grace period for curing such payment defaults until June 30, 2010.  All defaults were cured as of March 31, 2010.





At both March 31, 2010 and December 31, 2009, the outstanding balance on the line of credit was $664,000.  Interest expense was $16,600 and $32,642 for the three month periods ended March 31, 2010 and 2009, respectively.





NOTE 9 – RECENT ACCOUNTING PRONOUNCEMENTS





In January 2010, the Financial Accounting Standards Board issued amended standards that require additional fair value disclosures. These amended standards require disclosures about inputs and valuation techniques used to measure fair value as well as disclosures about significant transfers, beginning in the first quarter of 2010. Additionally, these amended standards require presentation of disaggregated activity within the reconciliation for fair value measurements using significant unobservable inputs (Level 3), beginning in the first quarter of 2011. We do not expect these new standards to significantly impact our consolidated financial statements.





In January 2010, the Company adopted the new provisions of ASU No. 2010-06, Fair Value Measurements and Disclosures (Topic 820), Improving Disclosures about Fair Value Measurements (“ASU No. 2010-06”). ASU No. 2010-06 provides revised guidance on improving disclosures about valuation techniques and inputs to fair value measurements. We do not expect these new standards to significantly impact our consolidated financial statements





9
 
 Brightec, Inc. and Subsidiary
 Notes to Condensed Consolidated Financial Statements - continued
 (Unaudited)


In February 2010, the FASB issued an amendment to accounting standards related to subsequent events. The amendment exempts Securities and Exchange Commission registrants from the requirement to disclose the date through which it has evaluated subsequent events for either original or restated financial statements. The standard is effective February 2010. The Company adopted this standard in February 2010. The adoption did not impact the Company’s consolidated financial position or results of operations, other than additional reporting requirements.





The Company does not believe that any other recently issued, but not yet effective, accounting standard if currently adopted would have a material effect on the accompanying financial statements.




NOTE 10 – FAIR VALUE OF FINANCIAL INSTRUMENTS




The Company’s financial instruments, consisting of cash, accounts payable and accrued expenses and debt obligations are carried at, or approximate, fair value because of their short-term nature or because they carry market rates of interest.





NOTE 11 – SUPPLEMENTAL CASH FLOW INFORMATION





For the Three Months EndedMarch 31, 2010


March 31, 2009(Unaudited)


(Unaudited)Supplemental disclosure of cash flow informationCash paid during the period for interest

$
27


$
—




10




ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 
 The following discussion of our financial condition and results of our operations should be read in conjunction with the Condensed Consolidated Financial Statements and Notes thereto included elsewhere in this Quarterly Report on Form 10-Q and our Annual Report on Form 10-K for the year ended December 31, 2009. This Quarterly Report on Form 10-Q contains forward-looking statements based on our current expectations, assumptions, estimates and projections about us and our industry. These forward-looking statements are usually accompanied by words such as “believes,” “may,” “should,” “anticipates,” “estimates,” “expects,” “future,” “intends,” “hopes,” “plans,” and similar expressions, and the negative thereof. Forward-looking statements involve risks and uncertainties and our actual results may differ materially from the results anticipated in these forward-looking statements as a result of certain factors.
 
 CRITICAL ACCOUNTING POLICIES
 
 Certain of our accounting policies are particularly important to the portrayal and understanding of our financial position and results of operations and require us to apply significant judgment in their application. As a result, these policies are subject to an inherent degree of uncertainty. In applying these policies, we use our judgment in making certain assumptions and estimates. Our critical accounting policies, which consist of revenue recognition, accounts receivable reserves, inventories, derivative instruments (including stock options) and income taxes are described in our Annual Report on Form 10-K for the year ended December 31, 2009. There have been no material changes to our critical accounting policies as of and for the three months ended March 31, 2010.
 
 OVERVIEW
 
 We develop and market luminescent films incorporating luminescent or phosphorescent pigments (the “Luminescent Products”). These pigments absorb and re-emit visible light producing a “glow” which accounts for the common terminology “glow in the dark”. Our Luminescent Products have been and will be sold primarily as a printable luminescent film designed to add luminescence to existing or new products. We manufacture through third-party manufacturers, market and sell graphic quality printable luminescent films. These films are based on our proprietary and patented technology that enables prints to be of photographic quality by day and luminescent by night. We expect that our Luminescent Products will be available for sale in a number of versions appropriate for commonly used commercial and personal printing technology, including offset printing or inkjet printing, plus a variety of “print on demand” digital technologies. We currently expect to offer our products in sheets and rolls.
 
 We completed the process of redesigning our website and began to introduce our new product lines to the marketplace. We started launching our new products in September 2007.
 
 Products that we introduced by the end of the 2007 included a line of new and improved printing quality inkjet sheets of different formats, which are being sold in small packs and bulk packs for the home, office and photographic digital printing market, a line of inkjet rolls and sheets for the wide format digital printing market, and a line of offset sheets and flexo rolls for the commercial printing market.
 
 We launched our new website in September 2007 and we began to introduce our new product line shortly thereafter. We anticipated having all of our currently planned products introduced to the market by the end of 2007. However, due to a manufacturing complication, we were forced into re-working our manufacturing process, which caused us not to be able to introduce all of the new product lines that we had anticipated.
 
 At the end of 2008, the Company has decided to add to its Brightec films product offering for 2009 a new line of finished products for children under the brand name PlayGloTM. This new PlayGloTM product line uses Brightec’s films, will be manufactured in the USA and will comprise puzzles and stickers. The Company has retained four Manufacturers Representative Firms (MRF’s) with a total of about 60 sales persons, to represent our PlayGloTM line of glow-in-the-dark puzzles and stickers. These four MRF’s cover the 30 State and the District of Columbia in the following territories:
 
 New England Region (6): Connecticut, Maine, Massachusetts, New Hampshire, Rode Island and Vermont.
 
 11
 
 Mid-Atlantic Region (7): Delaware, Maryland, New Jersey, New York, Pennsylvania, Northern Virginia and Washington, D.C.
 
 Midwest Region (7): Illinois, Indiana, Michigan, Minnesota, North Dakota and South Dakota and Wisconsin.
 
 Southeast and Southwest Region (11): Alabama, Arkansas, Florida, Georgia, Louisiana, Mississippi, North Carolina, Oklahoma, South Carolina, Tennessee and Texas.
  ABILITY TO CONTINUE AS A GOING CONCERN
 
 At March 31, 2010, we have a working capital deficit of approximately $3.28 million, an accumulated deficit of approximately $16.4 million and recurring losses since inception. Our future viability is dependent upon our ability to obtain additional debt and/or equity financing and achieve profitability in future operations. These circumstances raise substantial doubt about our ability to continue as a going concern. Our auditors have included a “going concern” qualification in their auditor’s report for the year ended December 31, 2009. Such a “going concern” qualification may make it more difficult for us to raise funds when needed.
 
 We believe we have the ability to obtain additional funds from new investors, our principal stockholders and employees through the issuance of additional debt, equity securities and/or the exercise of warrants and stock options. However, until we identify alternative sources of funding, we will be totally dependent on Mr. Planche to fund our operations. We do not have any current plans to access typical sources of credit until our sales volume increases and we have no plans to make significant investments in property, plant or equipment. Mr. Planche has made $1.95 million in unsecured cash advances to us through March 31, 2010.
 
 There can be no assurances that we will be able to raise the funds we require, or that if such funds are available, that they will be available on commercially reasonable terms. Our ability to continue to operate as a going concern is primarily dependent upon our ability to generate the necessary debt and/or equity financing to effectively market and produce our products, to establish profitable operations and to generate positive operating cash flows. If we fail to raise funds or are unable to generate operating profits and positive cash flows, there are no assurances that we will be able to continue as a going concern and we may be unable to recover the carrying value of our assets.
 
 Due to the recent turmoil in the global economy, it is uncertain that the necessary funds will be available when we require them. We feel that we may benefit from, and take advantage of, the recent economic uncertainty. As it becomes more difficult for companies to stay in business, we believe they will need to find more creative and unique ways to differentiate themselves from their competition. We believe those companies will be more open to our products as they try to maintain their market share.
 
 We believe that we will be successful in generating the necessary financing to fund our operations through the 2010 calendar year. Accordingly, we believe that no adjustments or reclassifications of our recorded assets and liabilities are necessary at this time.
 
 RESULTS OF OPERATIONS
 
 THREE MONTH PERIOD ENDED MARCH 31, 2010 COMPARED WITH THREE PERIOD ENDED MARCH 31, 2009
 
 Revenues
 Our revenues, net of returns, allowances and discounts, for the three period ended March 31, 2010 were $5,343, compared $1,742 for the comparable three month period of 2009. The increase in our revenue for the three month period ended March 31, 2010 was due to a sale of PlayGloTM puzzles and stickers.
 
 12
 During the first quarter of 2010, while we had one commercial sale of our Luminescent Product to a major stationery supplier, we concentrated our efforts on building inventory of our PlayGloTM line of products and their planned launch during the second quarter 2009. The launch of the line is now in effect and sales have been recorded during third quarter 2009.
 
 Gross Profit
 
 Our gross profit was $2,572 (48.1%) for the three month period ended March 31, 2010 compared to a gross profit of $942 (54.1%) for the comparable three month period in fiscal 2009. The decrease in our gross profit for the three month period ended March 31, 2010 was due to a sale of inventory with higher costs.
 
 Research and Development Expenses
 
 Research and development expenses were $23,219 for the three month period ended March 31, 2010, compared to $15,000 for the comparable three month period of 2009. This was an increased of $8,219 for the three month period.
 
 The increase for the three month period ended March 31, 2010 of $8,219 was primarily related to consulting costs incurred during the first quarter of $5,000.
 
 Selling and Marketing Expenses
 
 Selling and marketing expenses consist of payroll and related taxes, website maintenance costs, travel costs and fees paid in connection with promotional activities and press releases and shareholder communications. Selling and marketing expenses decreased $13,481 to $48,451 from $61,932 for the three month period ended March 31, 2010 compared with the three month period of 2009.
 
 The decrease for the three month period ended March 31, 2010 is primarily related to costs for promotional materials associated with our 2009 toy fair campaign that was not attended in 2010.
 
 We anticipate beginning a major sales and marketing effort in conjunction with the launch of the PlayGloTM line. This effort will target independent retailers in the toy, gift and book stores, as well as tourist, museum, science center, aquarium and zoo shops. Our sales and marketing costs will increase significantly as our marketing samples are produced and distributed in the third and fourth quarters. Our sales and marketing effort began in the second quarter 2009 with identifying our initial selection of our target group of independent retailers. We anticipate that the cost of our 2010 sales and marketing effort to be between $300,000 to $450,000, which includes, but is not limited to, the costs to produce all of our marketing collateral and samples, travel costs, employee compensation. This estimate is consistent with our original planned marketing efforts.
 
 General and Administrative
 
 General and administrative expenses consisted primarily of the compensation of our executive officer, other payroll and related taxes and benefits, deferred financing expenses and rent as well as legal and accounting fees. General and administrative expenses increased by $2,959 for the three month period ended March 31, 2010 to $82,145 from $79,186 for the comparable three month period of 2009.
 
 The increase for the three month period ended March 31, 2010 is primarily related to increases in rent, health care, partially offset by a reduction of consulting fees $7,551.
 
 General and administrative costs included consulting fees of $0 for the three month period ended March 31, 2010, related to a two-year consulting contract with a significant stockholder, commencing on September 11, 2007. The consulting contract fees with this stockholder for the three month period ended March 31, 2009 were $7,551.
 
 OTHER INCOME (EXPENSE)
 
 Interest Expense
 For the three month periods ended March 31, 2010 and 2009, interest expense was $19,476 and $35,632, respectively. Interest expense is dependent on the outstanding balance of our line of credit and the outstanding balance of unsecured cash advances we received from Mr. Planche, our president. The interest rate charged by Ross/Fialkow on the outstanding balances under the line of credit was reduced from 20% to 10% effective April 1, 2009. The interest rate charged by Mr. Planche is the Internal Revenue Service short term “Applicable Federal Rate.”
 
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 For the three months ended March 31, 2010 and 2009, we incurred interest on our loan agreement with Ross/Fialkow of $16,600 and $32,642, respectively. We also incurred interest on unsecured cash advances from our president of $2,849 and $2,990, respectively. For the three months ended March 31, 2010, we incurred other miscellaneous interest costs of $27.
 
 For the three month period ended March 31, 2010 and 2009, interest expense decreased by $16,156. Of this decrease in interest, $16,042 is attributed to the reduction in the interest rate on the outstanding balance of our line of credit, and $141 is attributable to the decrease in the interest rate on the outstanding balance of unsecured cash advances we received from Mr. Planche. The remaining change is attributable to a net increase in miscellaneous interest income expense of $27.
 
 Income Taxes
 
 We have not calculated the tax benefits of our net operating losses, since we do not have the required information. Due to the uncertainty over our ability to utilize these operating losses, any deferred tax assets, when determined, would be fully offset by a valuation allowance. The Company paid $456 along with its extension for a state tax return.
 
 LIQUIDITY AND CAPITAL RESOURCES AS OF MARCH 31, 2010
 
 Since inception, our operations have not generated sufficient cash flow to satisfy our capital needs. We have financed our operations primarily through the private sale of shares of our common stock, warrants to purchase shares of our common stock and debt securities. Our net working capital deficit at March 31, 2010 was $3.28 million compared to a deficit of $3.11 million as of December 31, 2009.
 
 The current financing for our operations is derived primarily from unsecured, interest bearing cash advances from Mr. Planche. While we believe that he will be able to continue funding our operations, there is no guarantee that he will have the ability to continue to do so. Mr. Planche has not committed to provide any additional cash advances to the Company. In light of the recent economic turmoil in the global credit markets, Mr. Planche may not be able to fund our operations on a timely basis to enable us to take advantage of various economic opportunities. We do have the ability to borrow $86,000 under our Loan Agreement with Ross/Fialkow (see NOTE 8 - LINE OF CREDIT in the notes to our condensed consolidated financial statements included in this Form 10-Q); however, it is inadequate based on our current and future funding requirements.
 
 Due to the continued turmoil in the global economy, it is uncertain that the necessary funds will be available when we require them. We feel that we may benefit from, and take advantage of, the recent economic uncertainty. As it becomes more difficult for companies to stay in business, we believe they will need to find more creative and unique ways to differentiate themselves from their competition. We believe those companies will be more open to our products as they try to maintain their market share.
 
 In addition, our current sales and marketing efforts will require substantial funding beyond our current operating requirements. We currently intend to attempt raising capital from various sources, however, we feel that we will be unable to attract the necessary debt and/or equity financing unless our current sales and marketing efforts are successful and until additional commercial and retail sales can be generated to demonstrate that there is a market for our Luminescent Products beyond our current limited successes.
 
 We estimate that it will require $300,000 - $450,000 in additional funding, to be used for various purposes, to make this sales and marketing effort successful. An ability to raise capital to fund this effort, or fund it timely, may influence how successful our sales and marketing effort is and consequently, affect our ability to attract future debt and/or equity financing for future operations.
 
 Cash increased to $21,760 at March 31, 2010 from $1,314 at December 31, 2009.
 
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 Net cash used for operating activities for the three months ended March 31, 2010 was $183,406. The primary reason for the cash usage was to fund the loss for the period.
 
 Net cash provided by financing activities for the three months ended March 31, 2010 was $204,750. The net cash provided was derived from unsecured cash advances received from our president of $204,750.
 
 From April 1, 2010 to May 19, 2010, Mr. Planche had made additional loans to the Company in the amount of $17,500 under the same terms previously described.
 
 Credit Availability
 
 We have a $750,000 Loan Agreement with Ross/Fialkow, as described in NOTE 8 – LINE OF CREDITof our condensed consolidated financial statements. We have borrowed $664,000 of the $750,000 available under this loan agreement. As of March 31, 2010, the outstanding balance under the line of credit was $664,000.
 
 Effects of Inflation
 
 We believe that our financial results have not been significantly impacted by inflation and price changes. We have experienced only minimally modest increases in the cost of transporting our inventory to and between our manufacturing vendors and our warehouse and the costs of shipping our Luminescent Products to purchasers, as our vendors have added fuel surcharges to our normal shipping costs.
 
 ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
 
 As a “smaller reporting company” defined by Item 10 of Regulation S-K, we are not required to provide this information.
 
 ITEM 4T. CONTROLS AND PROCEDURES
 
 Evaluation of Disclosure Controls and Procedures
 
 Based on an evaluation under the supervision and with the participation of the Company’s management, the Company’s principal executive officer and principal financial officer (one individual) have concluded that the Company’s disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (“Exchange Act”) were effective as of September 30, 2009 to ensure that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission rules and forms and (ii) accumulated and communicated to the Company’s management, including its principal executive officer and principal financial officer (one individual), as appropriate to allow timely decisions regarding required disclosure.
 
 Changes in Internal Control Over Financial Reporting
 
 There were no changes in the Company’s internal control over financial reporting during the first quarter of 2010, which were identified in connection with management’s evaluation required by paragraph (d) of Rules 13a-15 and 15d-15 under the Exchange Act, that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
 
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 PART II. OTHER INFORMATION
 
 ITEM 1. LEGAL PROCEEDINGS
 
 There are no material legal proceedings pending to which the Company is a party or to which any of its properties are subject.
 
 ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
 
 None
 
 ITEM 3. DEFAULTS UPON SENIOR SECURITIES
 
 None
 
 ITEM 4. REMOVED AND RESERVED
 
 None
 
 ITEM 5. OTHER INFORMATION
 
 None
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 ITEM 6. EXHIBITS
  Number

Description of Exhibit31

Certification of Chief Executive Officer and Chief Financial Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).32

Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith).
 
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 SIGNATURE
 
 Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
  BRIGHTEC, INC.Date: May 24, 2010
By:
/s/ Patrick PlanchePatrick Planche, President, Chief Executive

Officer, Treasurer, Director Chief Financial Officer, Principal Executive Officer and Principal Financial and Accounting Officer
  18