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U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

Form 10-QSB

|    |  |                                                                                         
|--- |  | ----------------------------------------------------------------------------------------
|[X] |  | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 
|    |  |                                                                                         
|    |  | For the quarterly period ended September 30, 2002                                       
|    |  | OR                                                                                      
|[ ] |  | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period fromto.

COMMISSION FILE NUMBER: 0-16011

UST LIQUIDATING CORPORATION (F/K/A USTMAN TECHNOLOGIES, INC.)

---

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


|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|California                                                     |  | 95-2873757                          
|                                                               |  |                                     
|(State or other jurisdiction of
incorporation or organization) |  | (I.R.S. Employer
Identification No.)
|                                                               |  |                                     
|536 Pacific Avenue San Francisco, California                   |  | 94133                               
|                                                               |  |                                     
|(Address of principal executive offices)                       |  | (Zip Code)                          
|                                                               |  |                                     
|Issuers telephone number:                                     |  | (415) 989-7770                      

Former name, former address and former fiscal year, if changed since last
report: N/A

Indicate by check mark whether the issuer (1) has filed all annual, quarterly
and other reports required to be filed by Section 13 or 15(d) of the 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

State the number of shares outstanding of each of the issuers classes of
common equity, as of November 2, 2002 were 22,298,598 shares, no par value.





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TABLE OF CONTENTS



|                                                               |  |  |  |  |  |  |  | 
|-------------------------------------------------------------- |  |  |  |  |  |  |  | 
|INDEPENDENT ACCOUNTANTS REPORT                               
|PART I  FINANCIAL INFORMATION                                
|ITEM 1. FINANCIAL STATEMENTS                                  
|CONDENSED CONSOLIDATED BALANCE SHEET                          
|CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS               
|CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS               
|NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
|ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS                  
|ITEM 3. CONTROLS AND PROCEDURES                               
|PART II  OTHER INFORMATION                                   
|ITEM 1. LEGAL PROCEEDINGS                                     
|ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS             
|ITEM 3. DEFAULTS UPON SENIOR SECURITIES                       
|ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS   
|ITEM 5. OTHER INFORMATION                                     
|ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K                      
|EX-99.1 Certification of Chief Executive Officer              
|Ex-99.2 Certification of Chief Financial Officer              



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INDEPENDENT ACCOUNTANTS REPORT

The Board of Directors and Shareholders
UST Liquidating Corporation

We have reviewed the accompanying condensed consolidated balance sheet of UST
Liquidating Corporation and subsidiaries as of September 30, 2002, and the
related condensed consolidated statements of operations and cash flows for the
three-month periods ended September 30, 2002 and 2001. These condensed
consolidated financial statements are the responsibility of the Companys
management.

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

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

GELFOND HOCHSTADT PANGBURN, P.C.

Denver, Colorado
November 11, 2002

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PART I  FINANCIAL INFORMATION




ITEM 1. FINANCIAL STATEMENTS




UST LIQUIDATING CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEET
SEPTEMBER 30, 2002
(UNAUDITED)

|                                                                                                                                                       |                                                         |   |             |                                      |           |  |  | 
|------------------------------------------------------------------------------------------------------------------------------------------------------ | ------------------------------------------------------- | - | ----------- | ------------------------------------ | --------- |  |  | 
|                                                                                                                                                       |                                                         |   |             | ASSETS                               |           |  |  | 
|Current assets:                                                                                                                                        |                                                         |   |             |                                     
|                                                                                                                                                       | Cash                                                    |   | $           | 62,000                               |          
|                                                                                                                                                       | Prepaid expenses                                        |   |             | 25,000                               |          
|                                                                                                                                                       | Receivable from purchaser, net of allowance of $200,000 |   |             | 1,379,000                            |          
|                                                                                                                                                       | Deferred income taxes                                   |   |             | 419,000                              |          
|                                                                                                                                                       |                                                         |   |             |                                     
|Total current assets                                                                                                                                   |                                                         |   |             |                                      | 1,885,000 | 
|                                                                                                                                                       |                                                         |   |             |                                     
|Other assets                                                                                                                                           |                                                         |   |             |                                      | 11,000    | 
|                                                                                                                                                       |                                                         |   |             |                                     
|                                                                                                                                                       |                                                         | $ | 1,896,000   |                                     
|                                                                                                                                                       |                                                         |   |             |                                     
|                                                                                                                                                       |                                                         |   |             | LIABILITIES AND SHAREHOLDERS EQUITY |           |  |  | 
|Current liabilities:                                                                                                                                   |                                                         |   |             |                                     
|                                                                                                                                                       | Accounts payable and accrued expenses                   |   | $           | 16,000                               |          
|                                                                                                                                                       | Estimated costs to liquidate                            |   |             | 225,000                              |          
|                                                                                                                                                       | Deferred gain and interest, current portion             |   |             | 1,379,000                            |          
|                                                                                                                                                       |                                                         |   |             |                                     
|Total current liabilities                                                                                                                              |                                                         |   | 1,620,000   |                                     
|Estimated costs to liquidate, net of current portion                                                                                                   |                                                         |   | 224,000     |                                     
|                                                                                                                                                       |                                                         |   |             |                                     
|Total liabilities                                                                                                                                      |                                                         |   | 1,844,000   |                                     
|                                                                                                                                                       |                                                         |   |             |                                     
|Shareholders equity:                                                                                                                                  |                                                         |   |             |                                     
|Series A preferred stock, no par value; 1,000,000 shares
authorized; 9,717 shares issued and outstanding; remaining
liquidation preference, $6,589,000 |                                                         |   | 52,000      |                                     
|Common stock, no par value: 25,000,000 shares authorized,
22,298,598 shares issued and outstanding                                                     |                                                         |   | 12,286,000  |                                     
|Class A common stock, no par value; 15,000,000 shares
authorized, none issued and outstanding                                                          |                                                         |   |            |                                     
|Class B common stock, no par value; 15,000,000 shares
authorized, none issued and outstanding                                                          |                                                         |   |            |                                     
|Accumulated deficit                                                                                                                                    |                                                         |   | (12,286,000 | )                                   
|                                                                                                                                                       |                                                         |   |             |                                     
|Total shareholders equity                                                                                                                             |                                                         |   | 52,000      |                                     
|                                                                                                                                                       |                                                         |   |             |                                     
|                                                                                                                                                       |                                                         | $ | 1,896,000   |                                     
|                                                                                                                                                       |                                                         |   |             |                                     

See accompanying notes.

3



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UST LIQUIDATING CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
THREE MONTHS ENDED SEPTEMBER 30, 2002 AND 2001
(UNAUDITED)

|                                                                                |                 |   |            |   |      |   |            |       | 
|------------------------------------------------------------------------------- | --------------- | - | ---------- | - | ---- | - | ---------- | ----- | 
|                                                                                |                 |   | 2002       |   | 2001
|                                                                                |                 |   |            |   |     
|Selling, general and administrative expenses                                    |                 | $ | 6,000      |   |      | $ | 21,000     |      
|                                                                                |                 |   |            |   |      |   |            |      
|Other income:                                                                   |                 |   |            |   |      |   |            |      
|                                                                                | Interest income |   |            |  |      |   |            | 2,000 | 
|                                                                                |                 |   |            |   |      |   |            |      
|                                                                                |                 |   |           |   |      |   | 2,000      |      
|                                                                                |                 |   |            |   |      |   |            |      
|Loss before income tax                                                          |                 |   | (6,000     | ) |      |   | (19,000    | )    
|Income tax benefit                                                              |                 |   |           |   |      |   | 7,000      |      
|                                                                                |                 |   |            |   |      |   |            |      
|Net loss                                                                        |                 | $ | (6,000     | ) |      | $ | (12,000    | )    
|                                                                                |                 |   |            |   |      |   |            |      
|Basic and diluted net loss per share applicable
to common shareholders (note 3) |                 | $ |           |   |      | $ |           |      
|                                                                                |                 |   |            |   |      |   |            |      
|Weighted average shares outstanding                                             |                 |   | 22,298,598 |   |      |   | 22,298,598 |      
|                                                                                |                 |   |            |   |      |   |            |      

See accompanying notes.

4



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UST LIQUIDATING CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
THREE MONTHS ENDED SEPTEMBER 30, 2002 AND 2001
(UNAUDITED)

|                                                |  |      |        |      |  |   |         |  
|----------------------------------------------- |  | ---- | ------ | ---- |  | - | ------- | -
|                                                |  | 2002 |        | 2001
|                                                |  |      |        |     
|Cash provided by (used in) operating activities |  | $    | 7,000  |      |  | $ | (53,000 | )
|                                                |  |      |        |      |  |   |         |  
|Increase (decrease) in cash                     |  |      | 7,000  |      |  |   | (53,000 | )
|Cash, beginning of period                       |  |      | 55,000 |      |  |   | 371,000 |  
|                                                |  |      |        |      |  |   |         |  
|Cash, end of period                             |  | $    | 62,000 |      |  | $ | 318,000 |  
|                                                |  |      |        |      |  |   |         |  

See accompanying notes

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UST LIQUIDATING CORPORATION




NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

THREE MONTHS ENDED SEPTEMBER 30, 2002 AND 2001

1. BASIS OF PRESENTATION:



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The condensed consolidated financial statements of UST Liquidating
Corporation, formerly USTMAN Technologies, Inc. (the Company) included in
this Form 10-QSB, have been prepared by the Company without audit. Effective
September 21, 2000, holders of the majority of the Companys issued and
outstanding common stock adopted a plan of liquidation. Although certain
information and footnote disclosures normally included in financial
statements prepared in accordance accounting principles generally accepted in
the United States of America have been condensed or omitted, the Company
believes that the disclosures are adequate to make the information presented
not misleading. The accompanying condensed consolidated financial statements
should be read in conjunction with the audited financial statements and notes
thereto included in the Companys Annual Report on Form 10-KSB for the fiscal
year ended June 30, 2002.



| |                                                                                                                                                                                                                                                                                                                                                                                                            
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | In the opinion of management, all adjustments necessary for a fair
presentation of the results of operations for the three-month periods ended
September 30, 2002 and 2001, consist only of normal and recurring
adjustments, except for those described below. The results of operations for
the interim periods presented are not necessarily indicative of the results
to be expected for the full year.

2. SALE OF COMPANY ASSETS, PLAN OF LIQUIDATION, AND MANAGEMENTS PLANS:



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | On September 21, 2000, the Company sold substantially all of its assets, net
of certain liabilities, to Veeder-Root Service Company (Veeder-Root), a
wholly-owned subsidiary of Danaher Corporation (a publicly-traded company)
for an adjusted purchase price of $16,589,000, subject to additional
adjustment based on the terms of the Definitive Asset Purchase Agreement (the
Agreement). Of the total purchase price, $1,500,000 was held back by
Veeder-Root to secure indemnity obligations of the Company, of which a
reserve of $200,000 has been applied against the receivable at September 30,
2002. One-half of the holdback was to have been paid to the Company in April
2002. However, the amount was held pending resolution of matters concerning
existing claims against the Company. The Company believes it has resolved
these matters, and the Company expects to collect the net holdback balance of
$1,300,000 within the next nine months. The holdback bears interest at the
prevailing published money market rate available from Citibank in New York
City. Interest receivable at September 30, 2002, is $79,000, which has been
recorded as deferred revenue.



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The assets sold by the Company included all assets of the Company and its
subsidiaries except for cash and cash equivalents, the capital stock of the
Companys subsidiaries, and the assets of Toxguard Systems (which have no
carrying value at September 30, 2002). In addition, Veeder-Root assumed
substantially all liabilities and obligations of the Company, except those of
Toxguard Systems, the unpaid principal and accrued interest due under the
Companys credit facility with Fleet National Bank (f/k/a BankBoston), the
obligation under the Series A Preferred Stock liquidation preference, and
certain other liabilities including transaction costs incurred in connection
with the Veeder-Root transaction, and income taxes.



| |                                                                                                                                                                                                                                                                                                                                                  
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Cash proceeds from the sale to Veeder-Root of $15,089,000 were used to repay
the outstanding $1.75 million term loan and accrued interest to Fleet
National Bank, pay approximately $450,000 of costs incurred in connection
with the Veeder-Root transaction, and pay $12,277,000 of the liquidation
preference of the Series A Preferred Stock.

6



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UST LIQUIDATING CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

THREE MONTHS ENDED SEPTEMBER 30, 2002 AND 2001

2. SALE OF COMPANY ASSETS, PLAN OF LIQUIDATION, AND MANAGEMENTS PLANS
(CONTINUED):



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Sagaponack Partners, L.P., a private investment firm based in San Francisco
and New York, and its foreign affiliate, Sagaponack International Partners,
L.P. (collectively Sagaponack, or the Investors) own all of the Series A
Preferred Stock and beneficially own greater than 50% of the Companys common
stock. It is not expected that there will be funds available for distribution
to the common stockholders. Any proceeds to be received upon the release of
the held back portion of the sales price are to be used to pay costs
associated with preserving the value of the Companys remaining assets
(primarily proceeds from the sale), to pay costs associated with winding up
the Companys business, and to make additional distributions in accordance
with the Series A Preferred Stock liquidation preference.



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | As a result of the Veeder-Root sale, the Company no longer has any ongoing
business operations, and subsequent to September 21, 2000, the Company
terminated executive management and employee positions. On August 16, 2000,
in contemplation of and conditioned upon the closing of the Veeder-Root
transaction, the Companys board of directors unanimously approved a plan of
liquidation (the Plan of Liquidation). The Plan of Liquidation provides
that subsequent to September 21, 2000, the Company will no longer engage in
any business, but will only act to preserve the value of the remaining assets
in order to make distributions to the Series A Preferred shareholders and
wind up the Companys business, at which time the Company is to cease to
exist as an operating entity. At September 30, 2002, the Company has
recorded a $449,000 reserve for estimated liquidation costs, which primarily
represent estimated costs to defend the Company against existing legal claims
(Note 4).



| |                                                                                                                                                                                                                                                                                               
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The carrying values of the Companys financial instruments at September 30,
2002, approximate estimated fair values. It is at least reasonably possible
that the amounts expected to be realized in the liquidation process will
change in the near term, and these changes could be material.

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:



| |                  
| | -----------------
| | USE OF ESTIMATES:



| |                                                                                                                                                                                                                                                                                                                                                               
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The preparation of the consolidated financial statements in conformity with
accounting principles generally accepted in the United States of America
requires management to make estimates and assumptions that affect the amounts
reported in the consolidated financial statements and accompanying notes.
Actual results could differ from those estimates.



| |                 
| | ----------------
| | PREFERRED STOCK:



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | As disclosed in Note 2, the Company is in the process of liquidating, which
consists of settling all outstanding assets and liabilities, and distributing
any remaining net proceeds to its shareholders. Distributions are first made
to Series A preferred shareholders to satisfy the liquidation preference on
the Series A preferred stock. At September 30, 2002, the Series A preferred
stock has a liquidation preference of $6,589,000, and the estimated proceeds
from liquidation are not expected to exceed the Series A preferred stock
liquidation; therefore, no distributions are expected to be made to the
common shareholders. As a result, earnings and losses for the three-month
periods ended September 30, 2002 and 2001, have been allocated to the
preferred shareholders.

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UST LIQUIDATING CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

THREE MONTHS ENDED SEPTEMBER 30, 2002 AND 2001

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):



| |                    
| | -------------------
| | EARNINGS PER SHARE:



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | SFAS No. 128, Earnings Per Share, requires dual presentation of basic and
diluted earnings per share, with a reconciliation of the numerator and
denominator of the diluted income per share computation. Basic income per
share is computed using the weighted average number of common shares
outstanding during the period. Diluted earnings per share is computed using
the weighted average number of common and dilutive common equivalent shares
outstanding during the period. Common equivalent shares consist of the shares
issuable upon the exercise of stock options under the treasury stock method.
Stock options and warrants are not considered in the calculation, as the
impact of the potential common shares would be to increase income per share
and decrease loss per share.



| |                                                                                                                                                                                                                                                                                                                                                                                                            
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | For the three-month periods ended September 30, 2002 and 2001, net income
(loss) available to common shareholders is $0 due to the allocation of all
net income to the preferred shareholders. The allocation of all net income to
the preferred shareholders is due to their liquidation preference exceeding
the amount of net income, resulting in no net income being available to
common shareholders.



| |              
| | -------------
| | INCOME TAXES:



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Deferred income taxes are provided based on the estimated future tax effects
of differences between financial statement carrying amounts and the tax bases
of existing assets and liabilities using statutory tax rates expected to be
in effect in the period in which the deferred tax item is expected to be
settled. Deferred tax assets are reduced by a valuation allowance if, based
on the weight of available evidence, it is more likely than not that some
portion or all of the deferred tax assets may not be realized.

4. COMMITMENTS AND CONTINGENCIES:



| |                                       
| | --------------------------------------
| | TRANSACTIONS WITH INVESTORS AND OTHERS



| |                                                                                                                                                                                          
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The Company incurred board of directors fees of $15,000 for the three months
ended September 30, 2001. There were no directors fees earned during the
quarter ended September 30, 2002.



| |           
| | ----------
| | LITIGATION



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | In June 2000, a class action complaint was filed against the Company and
certain other parties on behalf of certain common shareholders of the Company
(the Plaintiffs), alleging that the Company and other parties breached
their fiduciary duty to the Companys common shareholders in connection with
the Veeder-Root sale. The Plaintiffs also filed a derivative claim alleging
corporate waste. In August 2000, the Plaintiffs filed a motion for a
preliminary injunction, which was denied in a court hearing held on September
18, 2000. The Company and certain other parties subsequently filed a demurrer
to Plaintiffs complaints contending that Plaintiffs failed to state a valid
cause of action, which was granted in October 2000.

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UST LIQUIDATING CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

THREE MONTHS ENDED SEPTEMBER 30, 2002 AND 2001

4. COMMITMENTS AND CONTINGENCIES (CONTINUED):



| |                       
| | ----------------------
| | LITIGATION (CONTINUED)



| |                                                                                                                                                                                                                                                                                                                                                                  
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The Plaintiffs filed a notice of appeal regarding the demurrer and
voluntarily dismissed the derivative claim alleging corporate waste, which
the trial court dismissed. On November 21, 2001, the California Court of
Appeals reversed the trial court with respect to the demurrer and ruled that
the plaintiffs could assert a personal, non-derivative claim.



| |                                                                                                                                                                                                                                                                                                                                                              
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The Company intends to continue to contest this case vigorously; however, it
is too early at this time to determine the ultimate outcome of this matter
and the extent of the Companys exposure. At September 30, 2002, the Company
has accrued approximately $380,000 of estimated legal costs expected to be
incurred in connection with this contingency.

9



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ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS

This report contains certain statements which are forward looking statements
under federal securities laws that are based on the beliefs of management as
well as assumptions made by and information currently available to management.
Forward looking statements appear throughout Item 2 of Part I, Managements
Discussion and Analysis of Financial Condition and Results of Operations
concerning UST Liquidating Corporations Financial Condition and Liquidity.
Certain factors could cause actual results to differ materially from those in
the forward-looking statements including without limitation, (i) continuation
of historical patterns of demand for UST Liquidating Corporations products and
UST Liquidating Corporations ability to meet demand, (ii) actions by
competitors, including without limitation new product introductions (iii) and
general economic conditions. UST Liquidating Corporation does not intend to
update these forward looking statements.

RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2002 AND 2001

The Company recognized selling, general and administrative expenses of $6,000
and $21,000 for the three months ended September 30, 2002 and 2001,
respectively. The expense for the three months ended September 30, 2002
consisted of insurance expense as compared to insurance expense and directors
fees for the same period in 2001. In addition, the Company recognized interest
income of $2,000 for the three months ended September 30, 2001.

FINANCIAL CONDITION AND LIQUIDITY

On September 21, 2000, the Company sold substantially all of its assets, net of
certain liabilities, to Veeder-Root in accordance with the terms of the
definitive asset purchase agreement (the Agreement) executed by the parties
on July 21, 2000. Upon the closing of the sale, the Company ceased day-to-day
operations, all of which were assumed by Veeder-Root. There will not be any
proceeds available for distribution to the holders of the Companys common
stock. The Company intends to eventually wind up its affairs and liquidate and
dissolve the Company. The Company believes that revenues and expenses
subsequent to the transaction will represent a minimal continuing impact to the
Company.

Pursuant to the Agreement, the Company sold substantially all of the assets of
the Company to Veeder-Root for an adjusted purchase price of $16,589,000,
subject to additional adjustment based on the terms of the Agreement. Of the
total purchase price, $1,500,000 has been held back by Veeder-Root to secure
indemnity obligations of the Company. At September 30, 2002, a reserve of
$200,000 has been applied against the receivable. One-half of the holdback was
to have been paid to the Company in April 2002. However, the amount was held
pending resolution of matters concerning existing claims against the Company.
The Company believes it has resolved these matters, and the Company expects to
collect the net holdback balance of $1,300,000 within the next nine months. The
holdback of $1,500,000 bears interest at the prevailing published money market
rate available from Citibank in New York City.

On August 16, 2000, the Companys board of directors unanimously approved a
Plan of Liquidation. The Plan of Liquidation provides that after the sale, the
Company will not engage in any business, except for preserving the net value of
the Companys remaining assets (primarily proceeds from the sale) in order to
make distributions to the Series A Preferred shareholders and wind up the
Companys business, at which time the Company is to cease to exist as an
operating entity. At September 30, 2002, the Company has recorded a $449,000
reserve for estimated liquidation costs, which primarily represent estimated
costs to defend the Company against legal claims.

Management believes cash of $62,000 at September 30, 2002 as well as proceeds
expected to be received from purchaser (approximately $1.38 million at
September 30, 2002) are expected to be sufficient to fund the estimated costs
to liquidate for the next twelve months.

10



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ITEM 3. CONTROLS AND PROCEDURES

On November 5, 2002 (Evaluation Date), the Companys management concluded its
evaluation of the effectiveness of the design and operation of the Companys
disclosure controls and procedures. As of the Evaluation Date, the Companys
Co-Chairmen of the Board of Directors concluded that the Company maintains
disclosure controls and procedures that are effective in providing reasonable
assurance that information required to be disclosed in the Companys reports
under the Securities Act of 1934 (Exchange Act) is recorded, processed,
summarized and reported within the time periods specified in the SECs rules
and forms, and that such information is accumulated and communicated to the
Companys management, including its Co-Chairmen of the Board of Directors, as
appropriate, to allow timely decisions regarding required disclosure. The
Companys management necessarily applied its judgment in assessing the costs
and benefits of such controls and procedures, which, by their nature, can
provide only reasonable assurance regarding managements control objectives.
There have been no significant changes in the Companys internal controls or in
other factors that could significantly affect these controls subsequent to the
Evaluation Date.

11



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##### Table of Contents






PART II  OTHER INFORMATION




ITEM 1. LEGAL PROCEEDINGS

In June 2000, a class action complaint was filed against the Company and
certain other parties on behalf of certain common shareholders of the Company
(the Plaintiffs), alleging that the Company and other parties breached their
fiduciary duty to the Companys common shareholders in connection with the
Veeder-Root sale. The Plaintiffs also filed a derivative claim alleging
corporate waste. In August 2000, the Plaintiffs filed a motion for a
preliminary injunction, which was denied in a court hearing held on September
18, 2000. The Company and certain other parties subsequently filed a demurrer
to Plaintiffs complaints contending that Plaintiffs failed to state a valid
cause of action, which was granted in October 2000.

The Plaintiffs filed a notice of appeal regarding the demurrer and voluntarily
dismissed the derivative claim alleging corporate waste, which the trial court
dismissed. On November 21, 2001, the California Court of Appeals reversed the
trial court with respect to the demurrer and ruled that the plaintiffs could
assert a personal, non-derivative claim.

The Company intends to continue to contest this case vigorously; however, it is
too early at this time to determine the ultimate outcome of this matter and the
extent of the Companys exposure. At September 30, 2002, the Company has
accrued approximately $380,000 of estimated legal costs expected to be incurred
in connection with this contingency.




ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS

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



|(a) |  | Exhibits
|--- |  | --------



| |                                                                         
| | ------------------------------------------------------------------------
| | 99.1 Certification by Chief Executive Officer pursuant to 18 U.S.C. 1350
|
| | 99.2 Certification by Chief Financial Officer pursuant to 18 U.S.C. 1350

12



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##### Table of Contents



SIGNATURES

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

| |  |                   |  |    |  |                                         
| |  | ----------------- |  | -- |  | ----------------------------------------
| |  |                   |  |    |  | UST Liquidating Corporation
(Registrant)
| |  |                   |  |    |  |                                         
| |  | November 12, 2002 |  | By |  | /s/ MARC A. WEISMAN                     
| |  |                   |  |    |  |                                         
| |  |                   |  |    |  | Marc A. Weisman
Director                
| |  |                   |  |    |  |                                         
| |  | November 12, 2002 |  | By |  | /s/ BARRY S. ROSENSTEIN                 
| |  |                   |  |    |  |                                         
| |  |                   |  |    |  | Barry S. Rosenstein
Director            

13



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##### Table of Contents



CERTIFICATION PURSUANT TO RULE 13A-14 OR 15D-14 OF THE SECURITIES EXCHANGE ACT
OF 1934, AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Marc A. Weisman, certify that:



| | 1. |  | I have reviewed this quarterly report on Form 10-QSB of UST
Liquidating Corporation;                                                                                                                                                                                                                                          
| | -- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | 2. |  | Based on my knowledge, this quarterly report does not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to
the period covered by this quarterly report;
|
| | 3. |  | Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and
cash flows of the registrant as of, and for, the periods presented in
this quarterly report.                   
|
| | 4. |  | The registrants other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and
we have:                                                                                                     



| | a) |  | designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us during the period in
which this quarterly report is being prepared;
| | -- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | b) |  | evaluated the effectiveness of the registrants disclosure
controls and procedures as of a date within 90 days prior to the
filing date of this quarterly report; and                                                                            
|
| | c) |  | presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of that date;                                                                                    



| | 5. |  | The registrants other certifying officers and I have disclosed to
the registrants auditors and the audit committee of registrants board
of directors (or persons performing the equivalent function):
| | -- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | a) |  | all significant deficiencies in the design or operation of
internal controls which could adversely affect the registrants
ability to record, process, summarize and report financial data and
have identified for the registrants auditors any material weaknesses
in internal controls; and
| | -- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | b) |  | any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrants
internal controls; and                                                                                                                                        



| | 6. |  | The registrants other certifying officers and I have indicated in
this quarterly report whether or not there were significant changes in
internal controls or in other factors that could significantly affect
internal controls subsequent to the date of our most recent evaluation,
including any corrective actions with regard to significant deficiencies
and material weaknesses.
| | -- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Date: November 12, 2002

|                                                 
|-------------------------------------------------
|/s/ MARC A. WEISMAN                              
|                                                 
|Marc A. Weisman
Co-Chairman of Board of Directors

14



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##### Table of Contents



CERTIFICATION PURSUANT TO RULE 13A-14 OR 15D-14 OF THE SECURITIES EXCHANGE ACT
OF 1934, AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Barry S. Rosenstein, certify that:



| | 1. |  | I have reviewed this quarterly report on Form 10-QSB of UST
Liquidating Corporation;                                                                                                                                                                                                                                          
| | -- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | 2. |  | Based on my knowledge, this quarterly report does not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to
the period covered by this quarterly report;
|
| | 3. |  | Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and
cash flows of the registrant as of, and for, the periods presented in
this quarterly report.                   
|
| | 4. |  | The registrants other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and
we have:                                                                                                     



| | a) |  | designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us during the period in
which this quarterly report is being prepared;
| | -- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | b) |  | evaluated the effectiveness of the registrants disclosure
controls and procedures as of a date within 90 days prior to the
filing date of this quarterly report; and                                                                            
|
| | c) |  | presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of that date;                                                                                    



| | 5. |  | The registrants other certifying officers and I have disclosed to
the registrants auditors and the audit committee of registrants board
of directors (or persons performing the equivalent function):
| | -- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | a) |  | all significant deficiencies in the design or operation of
internal controls which could adversely affect the registrants
ability to record, process, summarize and report financial data and
have identified for the registrants auditors any material weaknesses
in internal controls; and
| | -- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | b) |  | any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrants
internal controls; and                                                                                                                                        



| | 6. |  | The registrants other certifying officers and I have indicated in
this quarterly report whether or not there were significant changes in
internal controls or in other factors that could significantly affect
internal controls subsequent to the date of our most recent evaluation,
including any corrective actions with regard to significant deficiencies
and material weaknesses.
| | -- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Date: November 12, 2002

|                                                     
|-----------------------------------------------------
|/s/ BARRY S. ROSENSTEIN                              
|                                                     
|Barry S. Rosenstein
Co-Chairman of Board of Directors

15