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U.S. SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549
 Form 10-QSB þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
 For the quarterly period ended September 30, 2004OR o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
 For the transition period from ____________ to ____________. COMMISSION FILE NUMBER: 0-16011 UST LIQUIDATING CORPORATION (F/K/A USTMAN TECHNOLOGIES, INC.) 
  California
    
    95-2873757(State or other jurisdiction of
incorporation or organization)
    
    (I.R.S. Employer
Identification No.)
 201 Post Street, Suite 100 San Francisco, California
    
    94108(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. þ Yes o No State the number of shares outstanding of each of the issuers classes of
common equity, as of November 12, 2004 were 22,298,598 shares, no par value.




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TABLE OF CONTENTS  PART I  FINANCIAL INFORMATIONITEM 1. FINANCIAL STATEMENTSITEM 2. MANAGEMENTS DISCUSSION AND ANALYSISITEM 3. CONTROLS AND PROCEDURESPART II  OTHER INFORMATIONITEM 1. LEGAL PROCEEDINGSITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDSITEM 3. DEFAULTS UPON SENIOR SECURITIESITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERSITEM 5. OTHER INFORMATIONITEM 6. EXHIBITS AND REPORTS ON FORM 8-KSIGNATURESExhibit IndexCertification Pursuant to Section 302Certification Pursuant to Section 302Certification Pursuant to Section 906Certification Pursuant to Section 906    Table of Contents  REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM 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, 2004, and the
related condensed consolidated statements of operations and cash flows for the
three-month periods ended September 30, 2004 and 2003. These interim condensed
consolidated financial statements are the responsibility of the Companys
management. We conducted our reviews in accordance with the standards of the Public Company
Accounting Oversight Board (United States). A review of interim financial
information consists principally of applying analytical procedures and making
inquiries of persons responsible for financial and accounting matters. It is
substantially less in scope than an audit conducted in accordance with
standards of the Public Company Accounting Oversight Board (United States), 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 interim condensed consolidated financial
statements referred to above 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, 2004 2




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PART I  FINANCIAL INFORMATION 
 ITEM 1. FINANCIAL STATEMENTS UST LIQUIDATING CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEET
SEPTEMBER 30, 2004
(UNAUDITED) ASSETSCurrent and total assets:Cash
    
    $
    936,000LIABILITIES AND SHAREHOLDERS EQUITYCurrent liabilities:Accounts payable
    
    $
    89,000Estimated costs of liquidation (Note 2)
    
    
    309,000Total current liabilities
    
    
    398,000Estimated costs of liquidation, net of current portion (Note 2)
    
    
    255,000Total liabilities
    
    
    653,000Contingency (Note 5)Shareholders equity (Notes 3 and 4):Series A preferred stock, no par value; 1,000,000 shares
authorized; 9,717 shares issued and outstanding; remaining
liquidation preference, $9,652,000
    
    
    283,000Common stock, no par value: 25,000,000 shares authorized,
22,298,598 shares issued and outstanding
    
    
    12,066,000Class 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
    
    
    (12,066,000
    )Total shareholders equity
    
    
    283,000Total liabilities and shareholders equity
    
    $
    936,000
 See notes to unaudited condensed consolidated financial statements. 3




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UST LIQUIDATING CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
THREE MONTHS ENDED SEPTEMBER 30, 2004 AND 2003
(UNAUDITED) 2004
    
    2003Estimated costs of liquidation
    
    $
    
    
    
    $
    (200,000
    )General and administrative expenses (Note 4)
    
    
    (3,000
    )
    
    
    (6,000
    )(3,000
    )
    
    
    (206,000
    )Other income:Gain on sale of
assets (Note 2)
    
    
    
    
    
    
    1,149,000Interest income (Note 2)
    
    
    2,000
    
    
    
    90,0002,000
    
    
    
    1,239,000(Loss)/Income before income tax
    
    
    (1,000
    )
    
    
    1,033,000Income tax expense
    
    
    
    
    
    
    (410,000
    )Net (loss) income
    
    $
    (1,000
    )
    
    $
    623,000Basic and diluted net (loss) income per share applicable
to common shareholders (Note 3)
    
    $
    0
    
    
    $
    0Weighted average number of common shares outstanding
    
    
    22,298,598
    
    
    
    22,298,598
 See notes to unaudited condensed consolidated financial statements. 4




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UST LIQUIDATING CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
THREE MONTHS ENDED SEPTEMBER 30, 2004 AND 2003
(UNAUDITED) 2004
    
    2003Net cash (used in) provided by operating
activities, and (decrease) increase in cash
    
    $
    (54,000
    )
    
    $
    1,239,000Cash, beginning of period
    
    
    990,000
    
    
    
    26,000Cash, end of period
    
    $
    936,000
    
    
    $
    1,265,000
 See notes to unaudited condensed consolidated financial statements. 5




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UST LIQUIDATING CORPORATION NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS THREE MONTHS ENDED SEPTEMBER 30, 2004 AND 2003  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, 2004.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, 2004 and 2003, 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. Interest accrued
on the holdback at the prevailing published money market rate available from
Citibank in New York City. In September 2003, the Company received cash of
$1,239,000. Of that amount, $1,149,000 represented payment of the receivable
and $90,000 represented interest. As a result, the Company recorded a
$1,149,000 gain during the quarter ended September 30, 2003. This gain was
previously deferred.Pursuant to an agreement regarding the September 2003 payment, a remaining
holdback balance of $150,000 is being held by Veeder-Root to cover costs they
may incur related to existing litigation against the Company (Note 5). Due to
uncertainty regarding the ultimate collection of this holdback receivable,
the remaining holdback has been allowed for at September 30, 2004.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. Proceeds received in September 2003 are to be
used to pay costs associated with preserving the value of the Companys
remaining assets, 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. 6




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UST LIQUIDATING CORPORATION NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED) THREE MONTHS ENDED SEPTEMBER 30, 2004 AND 2003  2.
    
    SALE OF COMPANY ASSETS, PLAN OF LIQUIDATION, AND
MANAGEMENTS PLANS (CONTINUED):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. Effective September
21, 2000, holders of the majority of the Companys issued and outstanding
common stock adopted 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, 2004, the Company has recorded a $564,000 accrual for estimated
liquidation costs, which primarily represents estimated costs to defend the
Company against existing legal claims (Note 5).The carrying values of the Companys assets and liabilities at September 30,
2004, 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 discussed above, 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 preferred shareholders. Distributions are
first made to Series A preferred shareholders to satisfy the liquidation
preference on the Series A preferred stock. At September 30, 2004, the
Series A preferred stock has a liquidation preference of $9,652,000, 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, (loss) earnings for the
three-month periods ended September 30, 2004 and 2003, have been allocated to
the preferred shareholders. 7




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UST LIQUIDATING CORPORATION NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) THREE MONTHS ENDED SEPTEMBER 30, 2004 AND 2003  3.
    
    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):EARNINGS (LOSS) PER SHARE:Statement of Financial Accounting Standards (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. The
Company had no common equivalent shares outstanding during the three months
ended September 30, 2004 and 2003.For the three months ended September 30, 2004 and 2003, net (loss) income
available to common shareholders is $0 due to the allocation of all net
(loss) income to the preferred shareholders. The allocation to the preferred
shareholders is due to their liquidation preference exceeding the amount of
total shareholders equity ($283,000). Therefore, the preferred shareholders
are being allocated all net (loss) income, resulting in no net (loss) income
being allocated to common shareholders (Note 2).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.
    
    RELATED PARTY TRANSACTIONS:CAPITAL TRANSACTION:During the quarter ended September 30, 2004, a member of the board of
directors provided services to the Company valued at approximately $3,000,
which has been recorded as general and administrative expense. These
services were primarily administrative and managerial in nature, and
performed in order to manage the Companys ongoing liquidation process and
litigation. The services were provided for no consideration, and therefore
this was accounted for as a capital transaction (an increase in shareholders
equity). Contributed services were not considered material during the
quarter ended September 30, 2003.OTHER:During the quarter ended September 30, 2003, Sagaponack paid on behalf of the
Company, an $11,250 liability owed to a third party. The Company reimbursed
this amount to Sagaponack in December 2003. 8




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5.
    
    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 transaction.After filing the complaint, the Plantiffs sought a preliminary injunction,
which was denied. Subsequently, defendants demurrer to the complaint was
sustained, without leave to amend. The Court of Appeal reversed, though it
did limit the scope of the Plaintiffs case, and the parties have been
litigating the case following the appellate court reversal. The parties
stipulated to class certification and the case is currently stayed pending
the Court of Appeals decision on certain discovery issues. A trial date has
been set for January 24, 2005. However, given the stay of the case, this
trial date will likely be continued. The Company is vigorously defending the
lawsuit. However, discovery is ongoing, and it is too early at this time to
determine the ultimate outcome of this matter and the nature and extent of
the Companys exposure.Included in the estimated costs of liquidation at September 30, 2004, is
approximately $500,000 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. UST Liquidating Corporation does not intend to
update these forward-looking statements. RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2004 AND 2003 The Company recognized $3,000 of general and administrative expense during the
three months ended September 30, 2004, compared to $6,000 during the three
months ended September 30, 2003. General and administrative expense during the
three months ended September 30, 2004 represents managements estimate of
services contributed by a member of the board of directors. These services
were primarily administrative and managerial in nature, and performed in order
to manage the Companys ongoing liquidation process and litigation. These
services were provided for no consideration, and therefore this was accounted
for as a capital transaction (an increase in shareholders equity).
Contributed services were not considered material during the three months ended
September 30, 2003. During the three months ended September 30, 2003, general and administrative
expense primarily represented insurance expense. During the three months ended
September 30, 2003, the Company also increased the estimated costs of
liquidation by $200,000, primarily for estimated legal costs. 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). Upon closing 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. 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 was held back by Veeder-Root to secure
indemnity obligations of the Company. In September 2003, the Company received
cash of $1,239,000. Of that amount, $1,149,000 represented payment of the
receivable and $90,000 represented interest. As a result, the Company recorded
a $1,149,000 gain on the sale of assets during the quarter ended September 30,
2003. This gain was previously deferred. Pursuant to an agreement regarding the September 2003 payment, a remaining
holdback balance of $150,000 is being held by Veeder-Root to cover costs they
may incur related to existing litigation against the Company (See Legal
Proceedings). Due to uncertainty regarding the ultimate collection of this
holdback receivable, the remaining holdback has been allowed for at September
30, 2004. Effective September 21, 2000, holders of the majority of the Companys issued
and outstanding common stock adopted a Plan of Liquidation. The Plan of
Liquidation provides that the Company is to no longer engage in any business,
except for preserving the net value of the Companys 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, 2004, the Company has recorded a $564,000
accrual for estimated liquidation costs, which primarily represents estimated
costs to defend the Company against legal claims. 10




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ITEM 3. CONTROLS AND PROCEDURES Within 90 days of the filing of this Form 10-QSB, an evaluation was carried out
by our Chairman of the Board of Directors of the effectiveness of our
disclosure controls and procedures. Disclosure controls and procedures that are
designed with the objective of ensuring that information required to be
disclosed in our reports filed under the Securities Exchange Act of 1934, such
as this Form 10-QSB, is recorded, processed, summarized and reported within the
time period specified in the Securities and Exchange Commissions rules and
forms. Based on that evaluation, our Chairmen of the Board of Directors
concluded that as of September 30, 2004, and as of the date that the evaluation
of the effectiveness of our disclosure controls and procedures was completed,
our disclosure controls and procedures were effective to satisfy the objectives
for which they are intended. There were no changes in our internal control over financial reporting
identified in connection with the evaluation performed that occurred during the
fiscal year covered by this report that has materially affected or is
reasonably likely to materially affect, our internal control over financial
reporting. 11




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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 transaction. After filing the complaint, the Plaintiffs sought a preliminary injunction,
which was denied. Subsequently, defendants demurrer to the complaint was
sustained, without leave to amend. The Court of Appeal reversed, though it did
limit the scope of the Plaintiffs case, and the parties have been litigating
the case following the appellate court reversal. The parties stipulated to
class certification and the case is currently stayed pending the Court of
Appeals decision on certain discovery issues. A trial date has been set for
January 24, 2005. However, given the stay of the case, this trial date will
likely be continued. The Company is vigorously defending the lawsuit. However,
discovery is ongoing, and it is too early at this time to determine the
ultimate outcome of this matter and the nature and extent of the Companys
exposure. Included in the estimated costs of liquidation at September 30, 2004, is
approximately $500,000 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 31.1
    
    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 200231.2
    
    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 200232.1
    
    Certification pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.32.2
    
    Certification pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
 12




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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)By
    /s/ Marc A. WeismanMarc A. WeismanDirectorNovember 15, 2004 By
    /s/ Barry S. RosensteinBarry S. RosensteinDirectorNovember 15, 2004 13




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Exhibit Index ExhibitNumber
    
    Description31.1
    
    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 200231.2
    
    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 200232.1
    
    Certification pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.32.2
    
    Certification pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.