**SECURITIES AND EXCHANGE COMMISSION**

 

**WASHINGTON, D.C.  20549**

 

**FORM 10-QSB/A**

 

**ý****          ****QUARTERLY REPORT PURSUANT TOSECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**

 

**For the quarterly period endedSeptember 30, 2003**

 

**or**

 

**o****          ****TRANSITION REPORT PURSUANTTO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**

 

**For the transition period from                          to                          **

 

**Commission file number: 000-50146**

 

**NUCOTEC, INC.**

(Name of Small Business Issuer as specific in itsCharter)

 

| **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 area  code:  **(954) 356 8111**      |
|                                                                                |
| **N/A**                                                                             |
| (Former name, former address and former fiscal  year, if changed since last report) |

 

Indicate by checkmark whether the issuer (1) has filed all reports required to be filed bySection 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding12 months (or for such shorter periods that the registrant was required to filesuch reports), and (2) has been subject to such filing requirements for thepast 90 days.  Yes ý No o

 

As of December 3, 2003,the number of shares of Common Stock outstanding was 6,076,000.

 

Transitional SmallBusiness 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                              |                                                                                                     |

 

ii

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**NUCOTEC, INC. AND SUBSIDIARY**

 

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

 

**(UNAUDITED)**

 
| **ASSETS**                                                                                            |   |     |   |    |   |
|-------------------------------------------------------------------------------------------------------|--------|----------|--------|---------|--------|
|                                                                                                  |   |     |   |    |   |
| **Current assets:**                                                                                   |   |     |   |    |   |
| Cash                                                                                                  |   |     |   | $       | 5,279  |   |
|                                                                                                  |   |     |   |    |   |
| **LIABILITIES AND STOCKHOLDERS’ DEFICIT**                                                        |   |     |   |    |   |
|                                                                                                  |   |     |   |    |   |
| **Current liabilities:**                                                                              |   |     |   |    |   |
| Accounts payable and accrued expenses                                                                 |   | $        | 19,466 |    |   |   |
| 10% Notes payable, related parties, due  through August 8, 2004                                       |   | 70,000   |   |    |   |
|                                                                                                  |   |     |   |    |   |
| Total current liabilities                                                                             |   |     |   | $       | 89,466 |   |
|                                                                                                  |   |     |   |    |   |
| **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                                                                                   |   | (107,687 | )      |    |   |
|                                                                                                  |   |     |   |    |   |
| Total stockholders’ deficit                                                                      |   |     |   | (84,187 | )      |
|                                                                                                  |   |     |   |    |   |
|                                                                                                  |   |     |   | $       | 5,279  |   |
|                                                                                                       |        |          |        |         |        |  |  |

 

The accompanying notes form an integral part of these consolidatedfinancial statements.

 

1

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**NUCOTEC, INC. AND SUBSIDIARY**

 

**CONSOLIDATED STATEMENTS OF OPERATIONS**

 
|                                                                          |   | **Nine months ended  September 30, 2003** |       | **Nine months ended  September 30, 2002** |       | **Three months ended  September 30, 2003** |       | **Three months ended  September 30, 2002** |       |
|-------------------------------------------------------------------------------|--------|-------------------------------------------|------------|-------------------------------------------|------------|--------------------------------------------|------------|--------------------------------------------|------------|
|                                                                          |   | **(unaudited)**                           |       | **(unaudited)**                           |       | **(unaudited)**                            |       | **(unaudited)**                            |       |
|                                                                          |   |                                      | ** ** |                                      | ** ** |                                       | ** ** |                                       | ** ** |
| **Net revenue**                                                               |   | $                                         | 4,618      |                                      | $          | 4,944                                      |       | $                                          | 1,281      |   | $ | 1,519 |   |
|                                                                          |   |                                      |       |                                      |       |                                       |       |                                       |       |
| **Operating expenses**                                                        |   | 78,967                                    |       | 12,740                                    |       | 21,346                                     |       | 15,100                                     |       |
|                                                                          |   |                                      |       |                                      |       |                                       |       |                                       |       |
| **Net loss**                                                                  |   | $                                         | (74,349    | )                                         | $          | (7,796                                     | )          | $                                          | (20,065    | ) | $ | (13,581 | ) |
|                                                                          |   |                                      |       |                                      |       |                                       |       |                                       |       |
| **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 form an integral part of these consolidatedfinancial statements.

 

2

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**NUCOTEC, INC. AND SUBSIDIARY**

 

**CONSOLIDATED STATEMENTS OF CASH FLOWS**

 
|                                                   |   | **Nine months  ended  September 30,  2003** |    | **Nine months  ended  September 30,  2002** |   |
|--------------------------------------------------------|--------|---------------------------------------------|---------|---------------------------------------------|--------|
|                                                   |   | **(unaudited)**                             |    | **(unaudited****)**                         |   |
|                                                   |   |                                        |    |                                        |   |
| **Cash flows used for  operating activities:**         |   |                                        |    |                                        |   |
| Net loss                                               |   | $                                           | (74,349 | )                                           | $      | (7,796 | ) |
|                                                   |   |                                        |    |                                        |   |
| **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                  |   | 14,255                                      |    | (12,851                                     | )      |
|                                                   |   |                                        |    |                                        |   |
| Total adjustments                                      |   | 14,515                                      |    | (12,840                                     | )      |
|                                                   |   |                                        |    |                                        |   |
| Net cash used for operating activities                 |   | (59,834                                     | )       | (20,636                                     | )      |
|                                                   |   |                                        |    |                                        |   |
| **Cash flows provided by  financing activities-**      |   |                                        |    |                                        |   |
| proceeds from notes payable, related  parties          |   | 55,000                                      |    | —                                      |   |
|                                                   |   |                                        |    |                                        |   |
| **Net decrease in cash**                               |   | (4,834                                      | )       | (20,636                                     | )      |
| **Cash**, beginning of  period                         |   | 10,113                                      |    | 29,970                                      |   |
|                                                   |   |                                        |    |                                        |   |
| **Cash,** end of period                                |   | $                                           | 5,279   |                                        | $      | 9,334 |   |
|                                                   |   |                                        |    |                                        |   |
| **Supplemental disclosure  of cash flow information:** |   |                                        |    |                                        |   |
| Income taxes paid                                      |   | $                                           | —  |                                        | $      | — |   |
| Interest paid                                          |   | $                                           | —  |                                        | $      | — |   |

 

The accompanying notes form an integral part of these consolidatedfinancial statements.

 

3

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**PART I – FINANCIAL INFORMATION**

 

**NUCOTEC,INC. AND SUBSIDIARY**

 

**NOTES TO CONSOLIDATED FINANCIALSTATEMENTS**

 

**NINEMONTHS ENDED SEPTEMBER 30, 2003 AND 2002**

 

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

 

**Business Activity:**

 

Nucotec,Inc. and its subsidiary, Salty’s Warehouse, Inc. (collectively, the “Company”)sell various home and automobile electronic equipment, computer accessories andsupplies to the general public through its website –http://www.saltyswarehouse.com.

 

**Organization:**

 

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

 

**Plan of Reorganization:**

 

DuringMay 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.  Thetwo principal 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 the carryingvalue of the net assets of Salty’s was transferred to Nucotec, pursuant toStatement of Financial Accounting Standards No. 141 – *“Business Combinations.”*

 

Theaccompanying consolidated financial statements present the financialinformation of the combined entities as of the beginning of the earliest periodpresented.  All significant intercompanyaccounts and transactions have been eliminated in consolidation.

 

**Interim Financial Statements:**

 

Theaccompanying consolidated financial statements include all adjustments(consisting of only normal recurring accruals), which are, in the opinion ofmanagement, necessary for a fair presentation of the results of operations forthe periods presented. Interim results are not necessarily indicative of theresults to be expected for the full year ending December 31, 2003. Thefinancial statements should be read in conjunction with the audited financialstatements included in the annual report of Nucotec, Inc. and Subsidiary. (the“Company”) on Form 10-KSB for the year ended December 31, 2002.

 

4

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**GoingConcern:**

 

Theaccompanying consolidated financial statements have been prepared in conformitywith 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 establishedsource of material revenue, has incurred a net loss of $31,531 in 2002 and$74,349 for the nine months ended September 30, 2003. As of September 30, 2003,the Company had negative working capital of $84,187 and net capital deficit of$107,687.  These matters raisesubstantial doubts about the Company’s ability to continue as a going concern.These consolidated financial statements do not include any adjustments relatingto the recoverability and classification of recorded asset amounts, or amountsand classification of liabilities that might be necessary should the Company beunable to continue as a going concern.

 

Managementplans to take the following steps that it believes will be sufficient toprovide the Company with the ability to continue in existence:

 

•      Management intends to continue to raiseadditional financing through private equity financing, loans fromofficer-stockholders or other means and interests that it deems necessary, witha view to moving forward and sustaining a prolonged growth in its strategyphases.

 

•      The Company plans to raise additionaloperating funds through equity or debt financings.  The Company’s common stock is now quoted on the Over-the-CounterBulletin Board maintained by the National Association of Securities Dealers,Inc. The Company believes that this will improve its chances of raising fundsthrough either equity or debt financings. The Company may not be able to arrange for loans or other forms offinancings on favorable terms.  TheCompany intends to raise working capital from a variety of sources, includingfrom investors who are associates of the Company’s management, or by waitinguntil a public market develops for shares of the Company’s common stock. Thereis no assurance that the Company will be able to arrange for financing and hasnot, to date, had any substantive discussions with any third parties regardingsuch financing.

 

**Revenue Recognition:**

 

The Company accounts for revenues pursuant to SAB 101 –“Revenue Recognition” and EITF 99-19 – “Reporting Revenue Gross as a Principalversus Net as an Agent.”  Net revenue as an agentfrom the sale of products (consisting primarily of automobile electronic equipment,home electronics, computer accessories and supplies) are recognized when titleto 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:**

 

Thepreparation of financial statements in conformity with accounting principlesgenerally accepted in the United States of America requires management to makeestimates and assumptions that affect the reported amounts of assets andliabilities and disclosure of contingent assets and liabilities at the date ofthe financial statements and the reported amounts of revenues and expensesduring the reporting period.  Actualresults could differ from those estimates.

 

**Other Comprehensive Income:**

 

Statementof Financial Accounting Standards No. 130, “Reporting Comprehensive Income”(“SFAS 130”), established new rules for the reporting and display ofcomprehensive loss and its components, which requires unrealized gains orlosses on the Company’s available for sale securities, currency translationadjustments and minimum pension liability to be included in other comprehensiveincome.  Other comprehensive incomeconsisted only of net income (loss).

 

**Net Loss Per Share:**

 

Netloss per share has been computed using the weighted average number of commonshares outstanding during 2003 and 2002. There were no common stock equivalents.

 

**Incentive and Stock Nonqualified Option Plan:**

 

Proforma information regarding the effect on operations as required by SFAS 123and SFAS 148, has been determined as if the Company had accounted for itsemployee stock options under the fair value method of that statement. Pro formainformation, using the Black-Scholes method at the date of grant, is based onthe following assumptions:

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

 

Thisoption valuation model requires input of highly subjective assumptions. Becausethe Company’s employee stock options have characteristics significantlydifferent from those of traded options, and because changes in the subjectiveinput assumptions can materially affect the fair value estimate, inmanagement’s opinion, the existing model does not necessarily provide areliable single measure of fair value of its employee stock options.

 

Forpurposes of SFAS 123 pro forma disclosures, the estimated fair value of theoptions is amortized to expense over the option’s vesting period. No expensewas recognized under APB 25. The Company’s pro-forma information is as follows:

 

6

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|                                          |   | **September  30, 2003** |     | **September30, 2002** |   |
|-----------------------------------------------|--------|------------------------------|----------|-----------------------|--------|
|                                          |   |                         |     |                  |   |
| Net loss, as reported                         |   | $                            | (74,349  | )                     | $      | (31,531 | ) |
|                                          |   |                         |     |                  |   |
| Stock compensation calculated under SFAS  123 |   | $                            | (425,000 | )                     | $      | — |   |
|                                          |   |                         |     |                  |   |
| Pro-forma net loss                            |   | $                            | (499,349 | )                     | $      | (31,531 | ) |
|                                          |   |                         |     |                  |   |
| 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:**

 

Asummary of net revenue by product category, for the nine months ended September30, 2003 and 2002, are as follows:

 
|                              |   | **2003** |   | **2002** |   |
|-----------------------------------|--------|----------|--------|----------|--------|
|                              |   |     |   |     |   |
| Home electronics                  |   | $        | 20,311 |     | $      | 9,059 |   |
| Automobile electronics            |   | 18,112   |   | 21,530   |   |
| Computer supplies and accessories |   | 3,514    |   | 3,168    |   |
|                              |   |     |   |     |   |
|                              |   | 41,937   |   | 33,757   |   |
| Less cost of revenue              |   | 37,319   |   | 28,813   |   |
|                              |   |     |   |     |   |
| Net revenue as an agent           |   | $        | 4,618  |     | $      | 4,944 |   |

 

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

 

On November 12, 2003, the Company received$7,500 from and issued a promissory note for $7,500 to one of itsofficers.  The note is due on November12, 2004 with principal and interest at 10% per annum payable upon maturity. 

 

7

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**ITEM2****.****          MANAGEMENT’S DISCUSSIONAND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.**

 

The followingdiscussion and analysis should be read in conjunction with the Company’sfinancial statements, including the notes thereto, appearing elsewhere in thisReport.

 

THE FOLLOWINGINFORMATION CONTAINS CERTAIN FORWARD-LOOKING STATEMENTS OF MANAGEMENT OF THECOMPANY. FORWARD-LOOKING STATEMENTS ARE STATEMENTS THAT ESTIMATE THE HAPPENINGOF FUTURE EVENTS AND ARE NOT BASED ON HISTORICAL FACT.  FORWARD-LOOKING STATEMENTS MAY BE IDENTIFIEDBY THE USE OF FORWARD-LOOKING TERMINOLOGY, SUCH AS “MAY,” “COULD,” “EXPECT,”“ESTIMATE,” “BELIEVE,” “ANTICIPATE,” “PLAN,” “PREDICT,” “PROBABLE,” “POSSIBLE,”“SHOULD,” “CONTINUE,” OR SIMILAR TERMS. THE FORWARD-LOOKING STATEMENTS SPECIFIED IN THE FOLLOWING INFORMATIONHAVE BEEN COMPILED BY OUR MANAGEMENT ON THE BASIS OF ASSUMPTIONS MADE BYMANAGEMENT AND CONSIDERED BY MANAGEMENT TO BE REASONABLE.  OUR FUTURE OPERATING RESULTS, HOWEVER, AREIMPOSSIBLE TO PREDICT AND NO REPRESENTATION, GUARANTY, OR WARRANTY IS TO BEINFERRED FROM THOSE FORWARD-LOOKING STATEMENTS.

 

**Critical Accounting Policies and Estimates**

 

Management’sDiscussion and Analysis of the Consolidated Financial Condition and Results ofOperations discusses the Company’s consolidated financial statements, whichhave been prepared in accordance with accounting principles generally acceptedin the United States of America.  Thepreparation of these consolidated financial statements requires management tomake estimates and assumptions that affect the reported amounts of assets andliabilities at the date of the financial statements and the reported amounts ofrevenues and expenses during the reporting period.  On an on-going basis, management evaluates its estimates andjudgments, including those related to financing operations, and contingenciesand litigation.  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 these estimatesunder different assumptions or conditions. The most significant accounting estimates inherent in the preparation ofthe Company’s consolidated financial statements include estimates as to theappropriate carrying value of certain assets and liabilities which are notreadily apparent from other sources, primarily accruals for operating costs,and the classification of net operating loss and tax credit carryforwards.  These accounting policies are fullydescribed at relevant sections in the discussion and analysis and in the notesto the financial statements included in our Form 10-KSB report for the yearended December 31, 2002 filed on March 28, 2003.

 

**Overview**

 

Nucotec, Inc wasincorporated in Nevada on October 8, 2001 in order to serve as a holdingcompany for Salty’s Warehouse, Inc., which sells consumer electronics productsand other name brand consumer products over the Internet.

 

On May 10, 2002,Nucotec entered into a Plan of Reorganization, whereby, Nucotec acquired 80% ofthe outstanding common stock of Salty’s Warehouse(see a discussion of this transaction under “Business”).  This business combination has been accountedfor in a manner similar to pooling of interest, whereby the carrying value ofthe net assets of Salty’s Warehouse was transferred to Nucotec, pursuant toFASB 141 – *“Business Combinations.” *The accompanying consolidatedfinancial statements have been restated to present the financial information ofthe combined entities as of the beginning of the earliest periodpresented.  All significant intercompanyaccounts and transactions have been eliminated in consolidation.

 

8

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**Results of Operations for the Nine and Three Months EndedSeptember 30, 2003 Compared To The Nine and Three Months Ended September 30,2002 (unaudited)**

 

**Revenue**

 

Our net revenuewas $4,618 for the nine months ended September 30, 2003 compared to $4,944 forthe nine months ended September 30, 2002. All revenues were from the sale of products on the Salty’s Warehouse website.  Our low revenues are the resultof a sluggish economy and the competitive environment in which we operate.  While we believe that revenues willeventually increase, there can be absolutely no assurance that we will achieveprofitability or any other results expressed or implied in any forward lookingstatements.  Our net revenue is net ofthe wholesale price and shipping charges paid by Salty’s Warehouse to itssuppliers for products sold on the web site. Yahoo! started charging Salty’s Warehouse a one half percent transactionbased fee for every product sold over the web site, further increasing thesecosts netted against revenues.

 

Our net revenuewas $1,281 for the three months ended September 30, 2003 compared to $4,703 forthe three months ended September 30, 2002. All revenues were from the sale of products on the Salty’s Warehouse website.  We believe our low revenues arethe result of a sluggish economy and the competitive environment in which weoperate.

 

**Operating Expenses**

 

Our operatingexpenses for the nine months ended September 30, 2003 were $78,967 compared to$36,475 for the nine months ended September 30, 2002.  Expenses consisted primarily of general operating expenses andprofessional fees.  The increase ingeneral operating expenses from 2002 to 2003 is mostly due to legal andaccounting fees incurred in early 2003 in connection with our Annual Report onForm 10-KSB.

 

Our operatingexpenses for the three months ended September 30, 2003 were $21,346 compared to$25,550 for the three months ended September 30, 2002.  Expenses consisted primarily of generaloperating expenses and professional fees. The increase in general operating expenses from 2002 to 2003 is mostlydue to legal and accounting fees incurred in early 2003 in connection with ourAnnual Report on Form 10-KSB.

 

**Net Loss**

 

We had a net lossof $74,349 or basic and diluted net loss per common share of $0.01 for the ninemonths ended September 30, 2003 compared to a net loss of $31,531 or basic anddiluted net loss per common share of $0.01 for the nine months ended September30, 2002.

 

We had a net lossof $20,065 or basic and diluted net loss per common share of $0.00 for thethree months ended September 30, 2003 compared to a net loss of $20,847 orbasic and diluted net loss per common share of $0.00 for the three months endedSeptember 30, 2002.

 

**Liquidity And Capital Resources**

 

As of September30, 2003, we had a net working capital deficit of $84,187 as compared with anet working capital deficit of $4,956 at September 30, 2002.

 

Net cash used foroperating activities was $59,834 for the nine months ended September 30, 2003compared to $28,533 for the nine months ended September 30, 2002.

 

9

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Salty’s Warehousegenerally does not hold the products we sell in inventory.  Net revenue as an agent from the sale ofproducts (consisting primarily of automobile electronic equipment, homeelectronics, computer accessories and supplies) is recognized when title to theproducts are transferred to the customer (product shipment) and only when nofurther contingencies or material performance obligations are warranted and,thereby, have earned the right to receive and retain reasonably assuredpayments.  At the time a customer ordersa product on our web site, the customer pays for the product by creditcard.  If the credit card is Visa orMastercard we usually receive the funds within twenty-four hours.  However if the credit card is American Expressor Discover, we receive the funds as part of an aggregated payment from therespective credit card company once a month. The supplier invoices us when the product is actually shipped on termsrequiring us to pay within 30 days.  Soin most transactions, we will have already received payment from the customerbefore we must pay the supplier for the product that this customer hasordered.  Therefore, we do not have anysignificant capital requirements to replenishing inventory.

 

Our only internalsources of liquidity are our bank accounts and the future revenues we mayreceive from the sale of products on our web site.  Our only external source of liquidity is loans from ourmanagement.  We do not have any materialcommitments for capital expenditures.

 

Due to numerouseconomic and competitive risks, any or all of which may have a material adverseimpact upon our operations, there can be no assurance that we will be able tosuccessfully generate significant revenues or achieve a level of profits whichwill permit us to stay in business.  However,we believe cash generated from net revenues, together with the $25,000 loanedto us by management in April 2003, $30,000 loaned to us by management in August2003, and $7,500 loaned to us by management in November 2003 will be sufficientto fund all our general and administrative expenses for the next three months.

 

**Fluctuations in Operating Results;Seasonality**

 

Annual andquarterly fluctuations in our consolidated results of operations may be causedby the timing and quantity of orders from our customers.  Our future results also may be affected by anumber of factors, including our ability to offer our products at competitiveprices and to anticipate customer demands. Our results may also be affected by economic conditions in thegeographical areas in which we operate. All of the foregoing may result in substantial unanticipated quarterlyearnings shortfalls or losses.  Due toall of the foregoing, we believe that period-to-period comparisons of ourresults of operations are not necessarily meaningful and should not be reliedupon as indicative of future performance.

 

**Inflation**

 

We believe thatour revenue and consolidated results of operations have not been significantlyimpacted by inflation since we began operations.

 

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

 

Our President andChief Financial Officer (the “Certifying Officers”) are responsible forestablishing and maintaining disclosure controls and procedures for theCompany.  The Certifying Officers havedesigned such disclosure controls and procedures to ensure that materialinformation is made known to them, particularly during the period in which thisreport was prepared.  The CertifyingOfficers have evaluated the effectiveness of the Company’s disclosure controlsand proceduresas of the end of the period covered by of this report and believe thatthe Company’s disclosure controls and procedures are effective based on therequired evaluation.  During the periodcovered by this report, there were no changes in internal controls thatmaterially affected, or are reasonably likely to materially affect, theCompany’s internal control over financial reporting.

 

10

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**PART II****– OTHER INFORMATION**

 

**ITEM 1****.****         ****LEGALPROCEEDINGS**

 

To the bestknowledge of management, there are no litigation matters pending or threatenedagainst us or Salty’s Warehouse.

 

**ITEM 2****.****         ****CHANGESIN SECURITIES**

 

None.

 

**ITEM 3****.****         ****DEFAULTSUPON SENIOR SECURITIES**

 

None.

 

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

 

None.

 

**ITEM5****.****          OTHER INFORMATION**

 

None.

 

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

 
| **(a)** |   | **Exhibits**                                                                                                                                                                               |
|---------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|    |   |                                                                                                                                                                                       |
| 10.1    |   | Promissory  Note from Earl T. Shannon, dated November 12, 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      |   | Certification  Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the  Sarbanes-Oxley Act of 2002                                                                   |
|    |   |                                                                                                                                                                                       |
| **(b)** |   | **Reports on Form 8-K**                                                                                                                                                                    |
|    |   |                                                                                                                                                                                       |
| None.   |

 

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**SIGNATURES**

 

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

 
|                     | NUCOTEC,  INC. |
|--------------------------|----------------|
|                     |           |
|                     |           |
| DATED:  December 3, 2003 | By:            | /s/  Earl T. Shannon |   |
|                     |           | Earl  T. Shannon |
|                     |           | President,  Director |
|                     |           | (Principal  Executive Officer) |
|                     |           |
|                     |           |
| DATED:  December 3, 2003 | By:            | /s/  Scott W. Bodenweber |   |
|                     |           | Scott  W. Bodenweber |
|                     |           | Chief  Financial Officer, Director |
|                     |           | (Principal  Financial Officer and Principal  Accounting Officer) |

 

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