** **

**SECURITIESAND EXCHANGE COMMISSION**

** **

**WASHINGTON, D.C.  20549**

 

**FORM 10-QSB**

 

| **ý**                                             | **QUARTERLY  REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**  |
|--------------------------------------------------------|-----------------------------------------------------------------------------------------------|
|                                                   |
| **For the quarterly period  ended June 30, 2003** |
|                                                   |
| **or**                                                 |
|                                                   |
| **o**                                                  | **TRANSITION  REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934** |

 

**For the transition periodfrom                      to                      **

 

**Commission file number:000-50146**

 

**NUCOTEC, INC.**

(Name of Small Business Issuer as specificin its Charter)

 

| **Nevada**                                                      |   | **94-3409645**                        |
|-----------------------------------------------------------------|--------|---------------------------------------|
| (State or Other Jurisdiction of  Incorporation or Organization) |   | (I.R.S. Employer  Identification No.) |
|                                                            |   |                                  |
| **1080 S.E. 3rd  Avenue, Ft. Lauderdale, Florida**              |   | **33316**                             |
| (Address of Principal Executive Offices)                        |   | (Zip Code)                            |

 

Issuer’s telephone number, including areacode:  **(954)356 8111**

 

**N/A**

(Formername, former address and former fiscal year, if changed since last report)

 

Indicate by check mark whether the issuer (1) hasfiled all reports required to be filed by Section 13 or 15(d) of the SecuritiesExchange Act of 1934 during the preceding 12 months (or for such shorterperiods that the registrant was required to file such reports), and (2) hasbeen subject to such filing requirements for the past 90 days.  Yes ý  No o

 

As of August 8, 2003, the number of shares ofCommon Stock outstanding was 6,076,000.

 

Transitional Small Business Disclosure Format(check one):  Yes o  No ý

 

 

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**TABLE OF CONTENTS**

 
| **PART I – FINANCIAL INFORMATION**                                                                         |
|-----------------------------------------------------------------------------------------------------------------|
|                                                                                                            |   |
| ITEM 1 CONSOLIDATED FINANCIAL STATEMENTS                                                                        |
|                                                                                                            |   |
| ITEM 2 MANAGEMENT’S DISCUSSION AND ANALYSIS OF  CONSOLIDATED FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
|                                                                                                            |   |
| ITEM  3 CONTROLS AND PROCEDURES                                                                                 |
|                                                                                                            |   |
| **PART II – OTHER INFORMATION**                                                                            |
|                                                                                                            |   |
| ITEM  1 LEGAL PROCEEDINGS                                                                                       |
|                                                                                                            |   |
| ITEM  2 CHANGES IN SECURITIES                                                                                   |
|                                                                                                            |   |
| 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                                                                        |
|                                                                                                            |   |
| SIGNATURES                                                                                                      |

 

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**NUCOTEC, INC. AND SUBSIDIARY**

 

**CONSOLIDATED BALANCE SHEET -JUNE 30, 2003**

 

**(UNAUDITED)**

 
| **ASSETS**                                                                                            |   |    |   |    |   |
|-------------------------------------------------------------------------------------------------------|--------|---------|--------|---------|--------|
|                                                                                                  |   |    |   |    |   |
| **Current assets:**                                                                                   |   |    |   |    |   |
| Cash                                                                                                  |   | $       | 9,919  |    |   |   |
|                                                                                                  |   |    |   |    |   |
| Total current assets                                                                                  |   |    |   | $       | 9,919  |   |
|                                                                                                  |   |    |   |    |   |
| **LIABILITIES AND STOCKHOLDERS’  DEFICIT**                                                       |   |    |   |    |   |
|                                                                                                  |   |    |   |    |   |
| **Current liabilities:**                                                                              |   |    |   |    |   |
| Accounts payable and accrued expenses                                                                 |   | $       | 33,771 |    |   |   |
| 10% Notes payable, related parties, due  through April 30, 2004                                  |   | 40,000  |   |    |   |
|                                                                                                  |   |    |   |    |   |
| Total current liabilities                                                                             |   |    |   | $       | 73,771 |   |
|                                                                                                  |   |    |   |    |   |
| **Stockholders’ deficit:**                                                                       |   |    |   |    |   |
| Common stock; $.001 par value; 10,000,000  shares authorized; 6,076,000 shares issued and outstanding |   | 6,076   |   |    |   |
| Additional paid-in capital                                                                            |   | 17,424  |   |    |   |
| Accumulated deficit                                                                                   |   | (87,352 | )      |    |   |
|                                                                                                  |   |    |   |    |   |
| Total stockholders’ deficit                                                                      |   |    |   | (63,852 | )      |
|                                                                                                  |   |    |   |    |   |
|                                                                                                  |   |    |   | $       | 9,919  |   |

 

The accompanying notes from an integral part ofthese consolidated financial statements.

 

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**NUCOTEC, INC. AND SUBSIDIARY**

 

**CONSOLIDATED STATEMENTS OFOPERATIONS**

 
|                                                                          |   | **Six months ended  June 30, 2003** |    | **Six months ended  June 30, 2002** |   | **Three months ended  June 30, 2003** |   | **Three months ended  June 30, 2002** |    |
|-------------------------------------------------------------------------------|--------|------------------------------------------|---------|------------------------------------------|--------|--------------------------------------------|--------|--------------------------------------------|---------|
|                                                                          |   | **(unaudited)**                          |    | **(unaudited)**                          |   | **(unaudited)**                            |   | **(unaudited)**                            |    |
|                                                                          |   |                                     |    |                                     |   |                                       |   |                                       |    |
| **Net revenue**                                                               |   | $                                        | 3,337   |                                     | $      | 241                                        |   | $                                          | 1,940   |   | $ | — |   |
|                                                                          |   |                                     |    |                                     |   |                                       |   |                                       |    |
| **Operating expenses**                                                        |   | 57,351                                   |    | 10,925                                   |   | 25,661                                     |   | 6,075                                      |    |
|                                                                          |   |                                     |    |                                     |   |                                       |   |                                       |    |
| **Net loss**                                                                  |   | $                                        | (54,014 | )                                        | $      | (10,684                                    | )      | $                                          | (23,721 | ) | $ | (6,075 | ) |
|                                                                          |   |                                     |    |                                     |   |                                       |   |                                       |    |
| **Weighted average number  of common shares outstanding - basic and diluted** |   | 6,076,000                                |    | 6,076,000                                |   | 6,076,000                                  |   | 6,076,000                                  |    |
|                                                                          |   |                                     |    |                                     |   |                                       |   |                                       |    |
| **Net loss per share**                                                        |   | $                                        | (0.01   | )                                        | $      | (0.00                                      | )      | $                                          | (0.00   | ) | $ | (0.00 | ) |

 

The accompanying notes from an integral part ofthese consolidated financial statements.

 

2

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**NUCOTEC, INC. ANDSUBSIDIARY**

 

**CONSOLIDATED STATEMENTS OFCASH FLOWS**

 
|                                                   |   | **Six months  ended  June 30,  2003** |    | **Six months  ended  June 30,  2002** |   |
|--------------------------------------------------------|--------|--------------------------------------------|---------|--------------------------------------------|--------|
|                                                   |   | **(unaudited)**                            |    | **(unaudited)**                            |   |
|                                                   |   |                                       |    |                                       |   |
| **Cash flows used for  operating activities:**         |   |                                       |    |                                       |   |
| Net loss                                               |   | $                                          | (54,014 | )                                          | $      | (10,684 | ) |
|                                                   |   |                                       |    |                                       |   |
| **Changes in assets and  liabilities:**                |   |                                       |    |                                       |   |
| **(Increase) decrease in  assets:**                    |   |                                       |    |                                       |   |
| Accounts receivable                                    |   | 58                                         |    | 183                                        |   |
| Other current assets                                   |   | 202                                        |    | (172                                       | )      |
|                                                   |   |                                       |    |                                       |   |
| **Increase (decrease) in  liabilities -**              |   |                                       |    |                                       |   |
| accounts payable and accrued expenses                  |   | 28,560                                     |    | (2,185                                     | )      |
|                                                   |   |                                       |    |                                       |   |
| Total adjustments                                      |   | 28,820                                     |    | (2,174                                     | )      |
|                                                   |   |                                       |    |                                       |   |
| Net cash used for operating activities                 |   | (25,194                                    | )       | (12,858                                    | )      |
|                                                   |   |                                       |    |                                       |   |
| **Cash flows provided by  financing activities-**      |   |                                       |    |                                       |   |
| proceeds from notes payable,  officer-stockholders     |   | 25,000                                     |    | —                                     |   |
|                                                   |   |                                       |    |                                       |   |
| **Net decrease in cash**                               |   | (194                                       | )       | (12,858                                    | )      |
| **Cash**, beginning of  period                         |   | 10,113                                     |    | 29,970                                     |   |
|                                                   |   |                                       |    |                                       |   |
| **Cash,** end of period                                |   | $                                          | 9,919   |                                       | $      | 17,112 |   |
|                                                   |   |                                       |    |                                       |   |
| **Supplemental disclosure  of cash flow information:** |   |                                       |    |                                       |   |
| Income taxes paid                                      |   | $                                          | —  |                                       | $      | — |   |
| Interest paid                                          |   | $                                          | —  |                                       | $      | — |   |

 

The accompanying notes from an integral part ofthese consolidated financial statements.

 

3

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**PART I****– FINANCIAL INFORMATION**

 

#### **NUCOTEC, INC. AND SUBSIDIARY**

####  

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

 

#### **SIX MONTHS ENDED JUNE 30,2003 AND 2002**

####  

**(1)****                                ****Summary of Significant AccountingPolicies:**

 

**Business Activity:**

 

Nucotec, Inc. and its subsidiary, Salty’sWarehouse, Inc. (collectively, the “Company”) sell various home and automobileelectronic equipment, computer accessories and supplies to the general publicthrough its website – http://www.saltyswarehouse.com.

 

**Organization:**

 

Nucotec, Inc. was incorporated in the State of Nevada onOctober 8, 2001.

 

**Plan ofReorganization:**

 

During May 2002,Nucotec, Inc. (“Nucotec”) entered into a plan of reorganization, whereby,Nucotec issued 912,000 shares of its common stock in exchange (the “Exchange”)for 80% of the outstanding common stock of Salty’s Warehouse, Inc. (“Salty’s),a Florida Corporation.  The twoprincipal shareholders of Nucotec immediately prior to the Exchange, wereWinthrop Venture Management, Inc. and Lady Jean Charters, Inc.  These two principal shareholders also hadmajority management and voting control of Salty’s, by virtue of commonownership, prior to the Exchange.  Afterthe Exchange, the majority shareholders of Winthrop Venture Management, Inc.and Lady Jean Charters, Inc. maintained significant control of the combinedentities.  As such, this businesscombination has been accounted for as a reorganization of companies undercommon control in a manner similar to a pooling of interest, whereby thecarrying value of the net assets of Salty’s was transferred to Nucotec,pursuant to Statement of Financial Accounting Standards No. 141 – *“Business Combinations.”*

 

The accompanyingconsolidated financial statements present the financial information of thecombined entities as of the beginning of the earliest period presented.  All significant intercompany accounts andtransactions have been eliminated in consolidation.

 

**Interim Financial Statements:**

 

The accompanyingconsolidated financial statements include all adjustments (consisting of onlynormal recurring accruals), which are, in the opinion of management, necessaryfor a fair presentation of the results of operations for the periods presented.Interim results are not necessarily indicative of the results to be expectedfor the full year ending December 31, 2003. The financial statementsshould be read in conjunction with the audited financial statements included inthe annual report of Nucotec, Inc. and Subsidiary. (the “Company”) on Form10-KSB for the year ended December 31, 2002.

 

4

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#### **Going Concern:**

 

The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplate continuation of the Company as a going concern.  However, the Company has no established source of material revenue, has incurred a net loss of $36,413 in 2002 and $54,014 for the six months ended June 30, 2003. As of June 30, 2003, the Company had negative working capital of $63,582 and net capital deficit of $63,852.  These matters raise substantial doubts about the Company’s ability to continue as a going concern. These consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts, or amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

 

Management plans to take the following steps that it believes will be sufficient to provide the Company with the ability to continue in existence:

 

•                  Management intends to continue to raise additional financing through private equity financing, loans from officer-stockholders or other means and interests that it deems necessary, with a view to moving forward and sustaining a prolonged growth in its strategy phases.

 

•                  The Company plans to raise additional operating funds through equity or debt financings.  The Company has applied to have its securities quoted on the Over-the-Counter Bulletin Board maintained by the National Association of Securities Dealers, Inc. The Company believes that should it be successful in causing its securities to be so quoted, it will improve its chances of raising funds through either equity or debt financings.  However, there can be no assurance that the Company’s securities will become quoted on the Over-the-Counter Bulletin Board.  The Company may not be able to arrange for loans or other forms of financings on favorable terms.  The Company intends to raise working capital from a variety of sources, including from investors who are associates of the Company’s management, or by waiting until a public market develops for shares of the Company’s common stock. There is no assurance that the Company will be able to arrange for financing and has not, to date, had any substantive discussions with any third parties regarding such financing.

 

**Revenue Recognition:**

 

TheCompany accounts for revenues pursuant to SAB 101 – “Revenue Recognition” andEITF 99-19 – “Reporting Revenue Gross as a Principal versus Net as anAgent.”  Net revenue as an agentfrom the sale of products (consisting primarily of automobile electronicequipment, home electronics, computer accessories and supplies) are recognizedwhen title to the products are transferred to the customer (product shipment) and only when no further contingencies ormaterial performance obligations are warranted and, thereby, have earned theright to receive and retain reasonably assured payments.

 

5

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**Use of Estimates:**

 

The preparation offinancial statements in conformity with accounting principles generallyaccepted in the United States of America requires management to make estimatesand assumptions that affect the reported amounts of assets and liabilities anddisclosure of contingent assets and liabilities at the date of the financialstatements and the reported amounts of revenues and expenses during thereporting period.  Actual results coulddiffer from those estimates.

 

**Other Comprehensive Income:**

 

Statement of FinancialAccounting Standards No. 130, “Reporting Comprehensive Income” (“SFAS 130”),established new rules for the reporting and display of comprehensive loss andits components, which requires unrealized gains or losses on the Company’savailable for sale securities, currency translation adjustments and minimumpension liability to be included in other comprehensive income.  Other comprehensive income consisted only ofnet income (loss).

 

**Net Loss Per Share:**

 

Net loss per share hasbeen computed using the weighted average number of common shares outstandingduring 2003 and 2002.  There were nocommon stock equivalents.

 

**Incentiveand Stock Nonqualified Option Plan:**

 

Pro forma information regarding the effect onoperations as required by SFAS 123 and SFAS 148, has been determined as if theCompany had accounted for its employee stock options under the fair valuemethod of that statement. Pro forma information, using the Black-Scholes methodat the date of grant, is based on the following assumptions:

 

| Expected life           |   | 10 Years |   |
|-------------------------|--------|----------|--------|
| Risk-free interest rate |   | 5.5      | %      |
| Dividend yield          |   | —   |   |
| Volatility              |   | 50       | %      |

 

This option valuation model requires input ofhighly subjective assumptions. Because the Company’s employee stock optionshave characteristics significantly different from those of traded options, andbecause changes in the subjective input assumptions can materially affect thefair value estimate, in management’s opinion, the existing model does notnecessarily provide a reliable single measure of fair value of its employeestock options.

 

For purposes of SFAS 123 proforma disclosures, the estimated fair value of the options is amortized toexpense over the option’s vesting period. No expense was recognized under APB25. The Company’s pro-forma information is as follows:

 

6

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**Incentive and Stock Nonqualified Option Plan Continued:**

 
|                                          |   | **June 30,  2003** |     | **June 30,  2002** |   |
|-----------------------------------------------|--------|-------------------------|----------|-------------------------|--------|
|                                          |   |                    |     |                    |   |
| Net  loss, as reported                        |   | $                       | (54,014  | )                       | $      | (10,684 | ) |
|                                          |   |                    |     |                    |   |
| Stock  compensation calculated under SFAS 123 |   | $                       | (425,000 | )                       | $      | — |   |
|                                          |   |                    |     |                    |   |
| Pro-forma  net loss                           |   | $                       | (479,014 | )                       | $      | (10,684 | ) |
|                                          |   |                    |     |                    |   |
| Basic and diluted  historical loss per share  |   | $                       | (0.01    | )                       | $      | (0.00 | ) |
|                                          |   |                    |     |                    |   |
| Pro-forma  basic and diluted loss per share   |   | $                       | (0.08    | )                       | $      | (0.00 | ) |

 

 

**(2)****                                ****NetRevenue:**

 

A summary of net revenueby product category, for the six months ended June 30, 2003 and 2002, areas follows:

 
|                               |   | **2003** |   | **2002** |   |
|------------------------------------|--------|----------|--------|----------|--------|
| Home  electronics                  |   | $        | 15,395 |     | $      | 6,440 |   |
| Automobile  electronics            |   | 13,540   |   | 18,511   |   |
| Computer  supplies and accessories |   | 3,322    |   | 1,648    |   |
|                               |   |     |   |     |   |
|                               |   | 32,257   |   | 26,599   |   |
| Less  cost of revenue              |   | 28,920   |   | 26,358   |   |
|                               |   |     |   |     |   |
| Net  revenue as an agent           |   | $        | 3,337  |     | $      | 241 |   |

 

**(3)****                                ****SubsequentEvent:**

 

On August 8, 2003,the Company received $30,000 from and issued two promissory notes for a total of$30,000 to two of its officers. The notes are due on August 8, 2004 withprincipal and interest payable on a monthly basis at 10% per annum. 

 

7

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ITEM 2.     MANAGEMENT’SDISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

 

The following discussion and analysis should beread in conjunction with the Company’s financial statements, including thenotes thereto, appearing elsewhere in this Report.

 

THE FOLLOWING INFORMATION CONTAINS CERTAIN FORWARD-LOOKINGSTATEMENTS OF MANAGEMENT OF THE COMPANY. FORWARD-LOOKING STATEMENTS ARESTATEMENTS THAT ESTIMATE THE HAPPENING OF FUTURE EVENTS AND ARE NOT BASED ONHISTORICAL FACT.  FORWARD-LOOKINGSTATEMENTS MAY BE IDENTIFIED BY THE USE OF FORWARD-LOOKING TERMINOLOGY,SUCH AS “MAY,” “COULD,” “EXPECT,” “ESTIMATE,” “ANTICIPATE,” “PLAN,” “PREDICT,”“PROBABLE,” “POSSIBLE,” “SHOULD,” “CONTINUE,” OR SIMILAR TERMS.  THE FORWARD-LOOKING STATEMENTS SPECIFIED INTHE FOLLOWING INFORMATION HAVE BEEN COMPILED BY OUR MANAGEMENT ON THE BASIS OFASSUMPTIONS MADE BY MANAGEMENT AND CONSIDERED BY MANAGEMENT TO BEREASONABLE.  OUR FUTURE OPERATINGRESULTS, HOWEVER, ARE IMPOSSIBLE TO PREDICT AND NO REPRESENTATION, GUARANTY, ORWARRANTY IS TO BE INFERRED FROM THOSE FORWARD-LOOKING STATEMENTS.

 

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

 

Management’s Discussion and Analysis of theConsolidated Financial Condition and Results of Operations discusses theCompany’s consolidated financial statements, which have been prepared in accordancewith accounting principles generally accepted in the United States ofAmerica.  The preparation of theseconsolidated financial statements requires management to make estimates andassumptions that affect the reported amounts of assets and liabilities at thedate of the financial statements and the reported amounts of revenues andexpenses during the reporting period. On an on-going basis, management evaluates its estimates and judgments,including those related to financing operations, and contingencies andlitigation.  Management bases itsestimates and judgments on historical experience and on various other factorsthat are believed to be reasonable under the circumstances, the results ofwhich form the basis for making judgments about the carrying value of assetsand liabilities that are not readily apparent from other sources.  Actual results may differ from theseestimates under different assumptions or conditions.  The most significant accounting estimates inherent in thepreparation of the Company’s consolidated financial statements includeestimates as to the appropriate carrying value of certain assets andliabilities which are not readily apparent from other sources, primarilyaccruals for operating costs, and the classification of net operating loss andtax credit carryforwards.  Theseaccounting policies are fully described at relevant sections in the discussionand analysis and in the notes to the financial statements included in our Form10-KSB report for the year ended December 31, 2002 filed on March 28,2003.

 

**Overview**

 

Nucotec,Inc was incorporated in Nevada on October 8, 2001 in order to serve as aholding company for Salty’s Warehouse, Inc., which sells consumer electronicsproducts and other name brand consumer products over the Internet.

 

On May 10, 2002, Nucotec entered into a Planof Reorganization, whereby, Nucotec acquired 80% of the outstanding commonstock of Salty’s Warehouse (seea discussion of this transaction under “Business”).  This business combination has been accounted for in a mannersimilar to pooling of interest, whereby the carrying value of the net assets ofSalty’s Warehouse was transferred to Nucotec, pursuant to FASB 141 – *“Business Combinations.” *The accompanying consolidated financial statementshave been restated to present the financial information of the combinedentities as of the beginning of the earliest period presented.  All significant intercompany accounts andtransactions have been eliminated in consolidation.

 

8

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**Results of Operations for the Sixand Three Months Ended June 30, 2003 Compared To The Six and Three MonthsEnded June 30, 2002 (unaudited)**

 

**Revenue**

 

Ournet revenue was $3,337 for the six months ended June 30, 2003 compared to$241 for the six months ended June 30, 2002.  All revenues were from the sale of products on the Salty’sWarehouse web site.  Our low revenuesare the result of a sluggish economy and the competitive environment in whichwe operate.  While we believe thatrevenues will eventually increase, there can be absolutely no assurance that wewill achieve profitability or any other results expressed or implied in anyforward looking statements.  Our netrevenue is net of the wholesale price and shipping charges paid by Salty’s Warehouseto its suppliers for products sold on the web site.  In the beginning of 2002, Yahoo! started charging Salty’sWarehouse a one half percent transaction based fee for every product sold overthe web site, further increasing these costs netted against revenues.

 

Ournet revenue was $1,940 for the three months ended June 30, 2002 comparedto $0 for the three months ended June 30, 2002.  All revenues were from the sale of products on the Salty’sWarehouse web site.  Our low revenuesare the result of a sluggish economy and the competitive environment in whichwe operate.

 

**Operating Expenses**

 

Our operating expenses for the six months endedJune 30, 2003 were $57,351 compared to $10,925 for the six months endedJune 30, 2002.  Expenses consistedprimarily of general operating expenses and professional fees.  The increase in general operating expensesfrom 2002 to 2003 is mostly due to legal and accounting fees incurred in early2003 in connection with our Form 10 KSB.

 

Our operating expenses for the three months endedJune 30, 2002 were $25,661 compared to $6,075 for the three months endedJune 30, 2002.  Expenses consistedprimarily of general operating expenses and professional fees.  The increase in general operating expensesfrom 2002 to 2003 is mostly due to legal and accounting fees incurred in early2003 in connection with our Form 10 KSB.

 

**Net Loss**

 

We had a net loss of $54,014 or basic and dilutednet loss per common share of ($0.01) for the six months ended June 30,2003 compared to a net loss of $10,684 or basic and diluted net loss per commonshare of ($0.00) for the six months ended June 30, 2002.

 

We had a net loss of $23,721 or basic and dilutednet loss per common share of ($0.00) for the three months ended June 30,2003 compared to a net loss of $6,075 or basic and diluted net loss per commonshare of ($0.00) for the three months ended June 30, 2002.

 

## **Liquidity And CapitalResources**

##  

As of June 30, 2003, we had a net workingcapital deficit of $63,852 as compared with positive working capital of $5,891at June 30, 2002.

 

Net cash used for operating activities was $25,194for the six months ended June 30, 2003 compared to $12,858 for the sixmonths ended June 30, 2002.

 

9

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Salty’s Warehouse generally does not hold theproducts we sell in inventory.  Netrevenue as an agent from the sale of products (consisting primarily ofautomobile electronic equipment, home electronics, computer accessories andsupplies) is recognized when title to the products are transferred to thecustomer (product shipment) and only when no further contingencies or materialperformance obligations are warranted and, thereby, have earned the right toreceive and retain reasonably assured payments.  At the time a customer orders a product on our web site, thecustomer pays for the product by credit card. If the credit card is Visa or Mastercard we usually receive the fundswithin twenty-four hours.  However ifthe credit card is American Express or Discover, we receive the funds as partof an aggregated payment from the respective credit card company once amonth.  The supplier invoices us whenthe product is actually shipped on terms requiring us to pay within 30 days.  So in most transactions, we will havealready received payment from the customer before we must pay the supplier forthe product that this customer has ordered. Therefore, we do not have any significant capital requirements toreplenishing inventory.

 

Our only internal sources of liquidity are our bankaccounts and the future revenues we may receive from the sale of products onour web site.  Our only external sourceof liquidity is loans from our management. We do not have any material commitments for capital expenditures.

 

Due to numerous economic and competitive risks, anyor all of which may have a material adverse impact upon our operations, therecan be no assurance that we will be able to successfully generate significantrevenues or achieve a level of profits which will permit us to stay inbusiness.  However, we believe cashgenerated from net revenues, together with the $25,000 loaned to us bymanagement in April 2003, and $30,000 loaned to us by management inAugust 2003, will be sufficient to fund all our general and administrativeexpenses for the next six months.

 

## **Fluctuations in Operating Results; Seasonality**

##  

Annual and quarterly fluctuations in ourconsolidated results of operations may be caused by the timing and quantity oforders from our customers.  Our futureresults also may be affected by a number of factors, including our ability tooffer our products at competitive prices and to anticipate customerdemands.  Our results may also beaffected by economic conditions in the geographical areas in which we operate.  All of the foregoing may result insubstantial unanticipated quarterly earnings shortfalls or losses.  Due to all of the foregoing, we believe thatperiod-to-period comparisons of our results of operations are not necessarilymeaningful and should not be relied upon as indicative of future performance.

 

## **Inflation**

##  

We believe that our revenue and consolidatedresults of operations have not been significantly impacted by inflation sincewe began operations.

 

**ITEM 3****.****    ****CONTROLS AND PROCEDURES**

 

Our President and Chief Financial Officer (the “CertifyingOfficers”) are responsible for establishing and maintaining disclosure controlsand procedures for the Company.  TheCertifying Officers have designed such disclosure controls and procedures toensure that material information is made known to them, particularly during theperiod in which this report was prepared. The Certifying Officers have evaluated the effectiveness of theCompany’s disclosure controls and procedures as of the end of the periodcovered by of this report and believe that the Company’s disclosure controlsand procedures are effective based on the required evaluation.  During the period covered by this report,there were no changes in internal controls that materially affected, or arereasonably likely to materially affect,

 

10

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 theCompany’s internal control over financial reporting.

 

**PART II****– OTHER INFORMATION**

 

**ITEM 1.****    ****LEGAL****PROCEEDINGS**

 

To the best knowledge of management, there are nolitigation matters pending or threatened against us or Salty’s Warehouse.

 

**ITEM 2.****    ****CHANGES****IN SECURITIES**

 

None.

 

**ITEM 3.****    ****DEFAULTS****UPON SENIOR SECURITIES**

 

None.

 

**ITEM 4****.****    ****SUBMISSIONOF MATTERS TO A VOTE OF SECURITY HOLDERS**

 

None.

 

**ITEM 5****.****                            ****OTHER INFORMATION**

 

None.

 

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

 

**(a)****                                 ****Exhibits**

 
| 10.1   |   | Promissory Note from Earl T. Shannon, dated  August 8, 2003                                                                                                                           |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                       |
| 10.2   |   | Promissory Note from Steven W. Hudson, dated  August 8, 2003                                                                                                                          |
|   |   |                                                                                                                                                                                       |
| 31.1   |   | Certification of President Pursuant to the  Securities Exchange Act of 1934, Rules 13a-14 and 15d-14, as adopted pursuant  to Section 302 of the Sarbanes-Oxley Act of 2002                |
|   |   |                                                                                                                                                                                       |
| 31.2   |   | Certification  of Chief Financial Officer Pursuant to the Securities Exchange Act of 1934,  Rules 13a-14 and 15d-14, as adopted pursuant to Section 302 of the Sarbanes-Oxley  Act of 2002 |
|   |   |                                                                                                                                                                                       |
| 32.0   |   | Certification Pursuant to 18 U.S.C. Section 1350,  as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002                                                                    |

 

**(b)****                                 ****Reportson Form 8-K**

 

None.

 

11

 

**SIGNATURES**

 

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

 
|                        | NUCOTEC, INC. |
|-----------------------------|---------------|
|                        |          |
|                        |          |
| DATED: August 14, 2003 | By:           | /s/ Earl T. Shannon |   |
|                        |          | Earl T. Shannon |
|                        |          | President, Director |
|                        |          | (Principal Executive Officer) |
|                        |          |
|                        |          |
| DATED: August 14, 2003 | By:           | /s/ Scott W. Bodenweber |   |
|                        |          | Scott W. Bodenweber |
|                        |          | Chief Financial Officer, Director |
|                        |          | (Principal Financial Officer and Principal  Accounting Officer) |

 

12

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