----

|   | **UNITED        STATES**                                                                                                                                                                         |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | **SECURITIES        AND EXCHANGE COMMISSION**                                                                                                                                                    |
|   | **WASHINGTON,        D.C. 20549**                                                                                                                                                                |
|   |                                                                                                                                                                                             |
|   | **FORM 10-Q**                                                                                                                                                                                    |
|   |                                                                                                                                                                                             |
| x | ** QUARTERLY REPORT PURSUANT        TO SECTION 13 OR 15(d)**                                                                                                                                |
|   | ** OF THE SECURITIES        EXCHANGE ACT OF 1934**                                                                                                                                          |
|   |                                                                                                                                                                                             |
|   | **For the Quarterly Period Ended        March 31, 2003**                                                                                                                                         |
|   |                                                                                                                                                                                             |
|  ̈ | ** 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: 000-24767**                                                                                                                                                     |
|   |                                                                                                                                                                                             |
|   | **B****RIDGE****T****ECHNOLOGY,****I****NC.**                                                                                                                                                    |
|   | (Exact        name of registrant as specified in its charter)                                                                                                                                    |

| **Nevada**                             | **59-3065437**             |
|----------------------------------------|----------------------------|
| (State or        other jurisdiction of | (I.R.S.        Employer    |
| incorporation        or organization)  | Identification        No.) |

|                                                                                                                                                                      |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **12601        Monarch Street, Garden Grove,        California     92841**                                                                            |
| (Address        of principal executive        offices)                         (Zip Code) |
|                                                                                                                                                                      |
| Registrant’s        telephone number, including area code: **(714)        891-6508**                                                                            |
|                                                                                                                                                                      |

| Indicate by        check mark whether the registrant (1) has filed all        reports required to be filed by Section 13 or 15(d) of        the Securities 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.    Yes x    No  ̈ |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| Indicate by check mark whether the        registrant is an accelerated filer (as defined in Rule        12b-2 of the Exchange Act).    Yes  ̈    No x                                                                                                                                                                                                                                                                |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| The number of shares outstanding of        the registrant’s common stock as of March 31, 2003        was 10,898,110.                                                                                                                                                                                                                                                                                                                                             |

----

| Table of Contents |   |   |   | FORM 10-Q |
|-------------------|--------|--------|--------|-----------|

Bridge Technology, Inc. andSubsidiaries

**FORM 10-Q**

INDEX 

|                                      |
|--------------------------------------|
| PART I.        Financial Information |   |   |
|                                 | Item 1.        Financial        Statements | 1 |   |
|                                 | Item 2. Management’s        Discussion and Analysis of Financial Condition and        Results of Operations | 6 |   |
|                                 | Item 3.        Quantitative        and Qualitative Disclosures About Market Risk | 7 |   |
|                                 | Item 4. Controls and Procedures | 8 |   |
|                                 |   |   |   |
| PART II.        Other Information    |   |   |
|                                 | Item 1.        Legal        Proceedings | 9 |   |
|                                 | Item 2. Changes in Securities        and Use of Proceeds | 9 |   |
|                                 | Item 3.        Defaults Upon        Senior Securities | 9 |   |
|                                 | Item 4. Submission of Matters to        a Vote of Security Holders | 9 |   |
|                                 | Item 5.        Other        Information | 10 |   |
|                                 | Item 6. Exhibits and Reports on        Form 8-K | 10 |   |
|                                 |   |   |   |
|                                 | This 10-Q document including the        accompanying footnotes and financial statements have not        been reviewed as required by the Securities and Exchange        Commission (“SEC”) Rules and Regulations. |   |   |
| Signatures                           | 10 |   |
|                                      |
|                                 |   |   |   |

| Table of Contents |  | FORM 10-Q |
|-------------------|--|-----------|

**PART I.FINANCIAL INFORMATION**

**ITEM 1. FINANCIALSTATEMENTS.**

Bridge Technology, Inc. and Subsidiaries

Consolidated Balance Sheets

|                                                   |                                                                                                                                                               |   |       | December        31, |   |   |       | March        31, |   |
|--------------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------|---------------------|--------|--------|------------|------------------|--------|
|                                                   |                                                                                                                                                               |   |       | 2002                |   |   |       | 2003             |   |
|                                                   |                                                                                                                                                               |   |       | (Audited)           |   |   |       | (Unaudited)      |   |
|                                                   |                                                                                                                                                               |   |       |                     |   |   |       |                  |   |
| **ASSETS**                                             |                                                                                                                                                               |   |       |                |   |   |       |             |
| Current        assets:                                 |                                                                                                                                                               |   |       |                |   |   |       |             |
|                                                   | Cash        and cash equivalents                                                                                                                                   |   | $          | 1,324,118           |   |   | $          | 2,855,073        |   |
|                                                   | Accounts receivable,        less allowance for doubtful accounts of $293,143 and        $331,555 respectively                                                      |   |       | 9,175,912           |   |   |       | 7,498,259        |   |
|                                                   | Tax        refund receivable                                                                                                                                       |   |       | 127,560             |   |   |       | 90,044           |   |
|                                                   | Other receivables                                                                                                                                                  |   |       | 272,388             |   |   |       | 358,022          |   |
|                                                   | Inventory,        net                                                                                                                                              |   |       | 8,135,790           |   |   |       | 7,472,655        |   |
|                                                   | Assets of subsidiaries        held for sale                                                                                                                        |   |       | 3,170,060           |   |   |       | 3,170,060        |   |
|                                                   |                                                                                                                                                               |   |       |                     |   |   |       |                  |   |
| Total        current assets                            |                                                                                                                                                               |   | 22,205,828 |                |   |   | 21,444,113 |             |
|                                                   |                                                                                                                                                               |   |       |                |   |   |       |             |
| Property        and equipment, net                     |                                                                                                                                                               |   | 384,699    |                |   |   | 370,885    |             |
| Goodwill, net of amortization of $1,242,917            |                                                                                                                                                               |   | 1,949,417  |                |   |   | 1,949,417  |             |
| Investments                                            |                                                                                                                                                               |   | 39,996     |                |   |   | 39,996     |             |
| Other assets                                           |                                                                                                                                                               |   | 86,772     |                |   |   | 86,772     |             |
|                                                   |                                                                                                                                                               |   |       |                     |   |   |       |                  |   |
| Total assets                                           |                                                                                                                                                               | $      | 24,666,712 |                |   | $      | 23,891,183 |             |
|                                                   |                                                                                                                                                               |   |       |                     |   |   |       |                  |   |
| **LIABILITIES AND        SHAREHOLDERS’ EQUITY**   |                                                                                                                                                               |   |       |                |   |   |       |             |
| Current        liabilities:                            |                                                                                                                                                               |   |       |                |   |   |       |             |
|                                                   | Bank        overdraft                                                                                                                                              |   | $          | 131,209             |   |   | $          | -                |   |
|                                                   | Notes payable                                                                                                                                                      |   |       | 3,708,072           |   |   |       | 2,850,066        |   |
|                                                   | Accounts        payable                                                                                                                                            |   |       | 6,648,157           |   |   |       | 6,920,627        |   |
|                                                   | Income taxes payable                                                                                                                                               |   |       | 60,022              |   |   |       | 60,022           |   |
|                                                   | Deferred        income tax                                                                                                                                         |   |       | 2,817               |   |   |       | 3,713            |   |
|                                                   | Accrued liabilities                                                                                                                                                |   |       | 1,591,797           |   |   |       | 1,415,845        |   |
|                                                   | Shareholder        loan                                                                                                                                            |   |       | 2,050,000           |   |   |       | 2,150,000        |   |
|                                                   | Current portion of        loans due to related party                                                                                                               |   |       | 79,950              |   |   |       | 79,950           |   |
|                                                   | Liabilities        of subsidiaries held for sale                                                                                                                   |   |       | 3,623,117           |   |   |       | 3,623,117        |   |
|                                                   |                                                                                                                                                               |   |       |                     |   |   |       |                  |   |
| Total current liabilities                              |                                                                                                                                                               |   | 17,895,141 |                |   |   | 17,103,340 |             |
|                                                   |                                                                                                                                                               |   |       |                |   |   |       |             |   |
| Related party loan, less current portion               |                                                                                                                                                               |   | 884,054    |                |   |   | 879,435    |             |
|                                                   |                                                                                                                                                               |   |            |                |   |   |            |             |
| Total liabilities                                      |                                                                                                                                                               |   | 18,779,195 |                |   |   | 17,982,775 |             |
|                                                   |                                                                                                                                                               |   |            |                |   |   |            |             |
| **Minority interest**                                  |                                                                                                                                                               |   | 920,331    |                |   |   | 838,322    |             |
| **Commitments        and Contingencies**               |                                                                                                                                                               |   |       |                |   |   |       |             |
| **Shareholders’ equity**                          |                                                                                                                                                               |   |       |                |   |   |       |             |
|                                                   | Common stock; par        value $0.01 per share, authorized 100,000,000 shares,        10,898,110 and 10,898,110 shares issued and outstanding,        respectively |   |       | 108,981             |   |   |       | 108,981          |   |
|                                                   | Additional        paid-in capital                                                                                                                                  |   |       | 10,097,579          |   |   |       | 10,097,579       |   |
|                                                   | Related party        receivable                                                                                                                                    |   |       | (340,000            | )      |   |       | (340,000         | )      |
|                                                   | Treasury        stock, 66,000 shares at cost                                                                                                                       |   |       | (2,000              | )      |   |       | (2,000           | )      |
|                                                   | Current Year Net        Income                                                                                                                                     |   |       | -                   |   |   |       | 96,397           |   |
|                                                   | Retained        earnings (accumulated deficit)                                                                                                                     |   |       | (4,868,477          | )      |   |       | (4,868,477       | )      |
|                                                   | Accumulated other        comprehensive loss                                                                                                                        |   |       | (28,897             | )      |   |       | (22,394          | )      |
|                                                   |                                                                                                                                                               |   |       |                     |   |   |       |                  |   |
| Total        shareholders’ equity                 |                                                                                                                                                               |   | 4,967,186  |                |   |   | 5,070,086  |             |
|                                                   |                                                                                                                                                               |   |       |                     |   |   |       |                  |   |
| Total        liabilities and shareholders’ equity |                                                                                                                                                               | $      | 24,666,712 |                |   | $      | 23,891,183 |             |
|                                                   |                                                                                                                                                               |   |       |                     |   |   |       |                  |   |

*See accompanying notes toconsolidated financial statements.*

| Table of Contents |  | 1 |  | FORM 10-Q |
|-------------------|--|---|--|-----------|

Bridge Technology, Inc. and Subsidiaries

Consolidated Statements of Operations

|                                                                                   |                                           |   |       | Three Months Ended |   |
|----------------------------------------------------------------------------------------|------------------------------------------------|--------|------------|--------------------|--------|
|                                                                                   |                                           |   |       |                    |   |
|                                                                                   |                                           |   |       | Mar.        31,    |   |   |   | Mar.        31, |   |
|                                                                                   |                                           |   |       | 2002               |   |   |   | 2003 |   |
|                                                                                   |                                           |   |       | (Unaudited)        |   |   |   | (Unaudited) |   |
|                                                                                   |                                           |   |       |                    |   |   |   |  |   |
| Net sales                                                                              |                                           | $      | 26,232,598 |               |   | $ | 19,283,573 |   |
|                                                                                   |                                           |   |       |               |   |   |   |   |
| Cost of sales                                                                          |                                           |   | 24,745,005 |               |   |   | 18,273,939 |   |
|                                                                                   |                                           |   |       |                    |   |   |   |  |   |
| Gross profit                                                                           |                                           |   | 1,487,593  |               |   |   | 1,009,634 |   |
|                                                                                   |                                           |   |       |               |   |   |   |   |   |
| Selling, general and administrative expense                                            |                                           |   | 1,250,972  |               |   |   | 841,780 |   |
|                                                                                   |                                           |   |            |               |   |   |  |   |
| Income from operations                                                                 |                                           |   | 236,621    |               |   |   | 167,854 |   |
|                                                                                   |                                           |   |       |               |   |   |   |   |
| Other income (expense):                                                                |                                           |   |       |               |   |   |   |   |
|                                                                                   | Interest income        (expense), net          |   |       | (193,863           | )      |   |   | (23,747 | ) |
|                                                                                   | Other        income                            |   |       | 54,857             |   |   |   | 8,693 |   |
|                                                                                   | Gain on sale of        investment              |   |       | 320,871            |   |   |   | - |   |
|                                                                                   |                                           |   |       |                    |   |   |   |  |   |
| Income        before income taxes                                                      |                                           |   | 418,486    |               |   |   | 152,800 |   |
|                                                                                   |                                           |   |       |               |   |   |   |   |   |
| Income        taxes provision                                                          |                                           |   | 61,204     |               |   |   | 38,412 |   |
|                                                                                   |                                           |   |       |                    |   |   |   |  |   |
| Net income        (loss)                                                               |                                           |   | 357,282    |               |   |   | 114,388 |   |
|                                                                                   |                                           |   |       |               |   |   |   |   |   |
| Minority        interest                                                               |                                           |   | 32,952     |               |   |   | 17,991 |   |
|                                                                                   |                                           |   |       |                    |   |   |   |  |   |
| Net income        (loss) applicable to common shares                                   |                                           | $      | 324,330    |               |   | $ | 96,397 |   |
|                                                                                   |                                           |   |       |                    |   |   |   |  |   |
| Basic        weighted average number of common stock outstanding                       |                                           |   | 10,863,186 |               |   |   | 10,898,110 |   |
|                                                                                   |                                           |   |            |               |   |   |  |   |
| Basic        earnings (loss) per share                                                 |                                           | $      | 0.03       |               |   | $ | 0.01 |   |
|                                                                                   |                                           |   |            |               |   |   |  |   |
| Diluted        weighted average number of common stock outstanding                     |                                           |   | 10,863,186 |               |   |   | 10,898,110 |   |
|                                                                                   |                                           |   |            |               |   |   |  |   |
| Diluted        earnings per share                                                      |                                           | $      | 0.03       |               |   | $ | 0.01 |   |
|                                                                                   |                                           |   |            |               |   |   |  |   |
| Comprehensive        income (loss) and its components consist of the        following: |                                           |   |       |               |   |   |   |   |
|                                                                                   | Net        income (loss)                       |   | $          | 324,330            |   |   | $ | 96,397 |   |
|                                                                                   | Foreign currency        translation adjustment |   |       | -                  |   |   |   | - |   |
|                                                                                   |                                           |   |       |                    |   |   |   |  |   |
|                                                                                   | Comprehensive income        (loss)             |   | $          | 324,330            |   |   | $ | 96,397 |   |
|                                                                                   |                                           |   |       |                    |   |   |   |  |   |

*See accompanying notes toconsolidated financial statements.*

| Table of Contents |  | 2 |  | FORM 10-Q |
|-------------------|--|---|--|-----------|

Bridge Technology, Inc. and Subsidiaries

Consolidated Statements of Cash Flows

Increase (Decrease) in Cash and Cash Equivalents

|                                                                       |                                                                                                      |                                                                         |                       |     | Three Months Ended |      |
|----------------------------------------------------------------------------|-----------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------|----------------------------|----------|--------------------|-----------|
|                                                                       |                                                                                                      |                                                                         |                       |     |                    |      |
|                                                                       |                                                                                                      |                                                                         |                       |     | Mar.        31,    |      |   | Mar.        31, |   |
|                                                                       |                                                                                                      |                                                                         |                       |     | 2002               |      |   | 2003 |   |
|                                                                       |                                                                                                      |                                                                         |                       |     | (Unaudited)        |      |   | (Unaudited) |   |
|                                                                       |                                                                                                      |                                                                         |                       |     |                    |      |   |  |   |
| **Cash flows from operating activities from        continuing operations** |                                                                                                      |                                                                         |                       |     |               |      |
|                                                                       | Net income        (loss)                                                                                  | $                                                                            | (218,881                   | )        | $                  | 96,397    |   |
|                                                                       | Adjustments to reconcile net income (loss) to        net cash provided by (used in) operating activities: |                                                                         |                       |     |               |      |   |
|                                                                       |                                                                                                      | Depreciation        and amortization                                         |                       | 144,725  |               |      | 14,332 |   |
|                                                                       |                                                                                                      | Provision for doubtful accounts                                              |                       | 5,677    |               |      | 38,412 |   |
|                                                                       |                                                                                                      | (Gain)        loss on sale of investment                                     |                       | (320,856 | )                  |      | - |   |
|                                                                       |                                                                                                      | Deferred taxes                                                               |                       | (3,457   | )                  |      | 896 |   |
|                                                                       |                                                                                                      | Minority        interest                                                     |                       | 32,952   |               |      | (82,009 | ) |
|                                                                       |                                                                                                      | Increase (decrease) from changes in operating        assets and liabilities: |                       |     |               |      |   |   |
|                                                                       |                                                                                                      |                                                                         | Trade receivables          |     | 3,277,246          |      |   | 1,639,241 |   |
|                                                                       |                                                                                                      |                                                                         | Inventory                  |     | (9,305,107         | )         |   | 663,135 |   |
|                                                                       |                                                                                                      |                                                                         | Other receivables          |     | 27,205             |      |   | (85,634 | ) |
|                                                                       |                                                                                                      |                                                                         | Other        assets        |     | 6,803              |      |   | - |   |
|                                                                       |                                                                                                      |                                                                         | Accounts payable           |     | 1,570,100          |      |   | 272,470 |   |
|                                                                       |                                                                                                      |                                                                         | Accrued        liabilities |     | 1,014,128          |      |   | (175,952 | ) |
|                                                                       |                                                                                                      |                                                                         | Income taxes payable       |     | 101,468            |      |   | 37,516 |   |
|                                                                       |                                                                                                      |                                                                         |                       |     |                    |      |   |  |   |
|                                                                       | Net cash        provided by (used in) operating activities                                                |                                                                         | (3,667,997                 | )        |               | 2,418,804 |   |
|                                                                       |                                                                                                      |                                                                         |                       |     |                    |      |   |  |   |
| **Cash        flows from investing activities**                            |                                                                                                      |                                                                         |                       |     |               |      |
|                                                                       | Purchase of property and equipment                                                                        |                                                                         | (8,883                     | )        |               | (518      | ) |
|                                                                       | Repayment        from (advance to) shareholder                                                            |                                                                         | -                          |     |               | 100,000   |   |
|                                                                       | Due from related party                                                                                    |                                                                         | 9,356                      |     |               | -         |   |
|                                                                       | Proceeds        from sale of investment                                                                   |                                                                         | 325,424                    |     |               | -         |   |
|                                                                       |                                                                                                      |                                                                         |                       |     |                    |      |   |  |   |
| Net cash        used in investing activities                               |                                                                                                      | 325,897                                                                      |                       |     | 99,482             |      |
|                                                                       |                                                                                                      |                                                                         |                       |     |                    |      |   |  |   |
|                                                                       |                                                                                                      |                                                                         |                       |     |               |      |   |   |   |
| **Cash flows from financing activities**                                   |                                                                                                      |                                                                         |                       |     |               |      |
|                                                                       | Bank        overdraft                                                                                     |                                                                         | 13,108                     |     |               | (131,209  | ) |
|                                                                       | Repayments on loans payable                                                                               |                                                                         | (11,550                    | )        |               | -         |   |
|                                                                       | Proceeds        from shareholder loans                                                                    |                                                                         | 2,818,215                  |     |               | -         |   |
|                                                                       | Repayments on shareholder loans                                                                           |                                                                         | (30,000                    | )        |               | -         |   |
|                                                                       | Repayments        on line of credit                                                                       |                                                                         | (100,000                   | )        |               | (858,006  | ) |
|                                                                       | Repayments on related party                                                                               |                                                                         | (10,128                    | )        |               | (4,619    | ) |
|                                                                       |                                                                                                      |                                                                         |                       |     |                    |      |   |  |   |
| Net cash provided by financing activities                                  |                                                                                                      | 2,679,645                                                                    |                       |     | (993,834           | )         |
|                                                                       |                                                                                                      |                                                                         |                       |     |                    |      |   |  |   |
| **Effect of exchange rate changes on cash**                                |                                                                                                      | (233                                                                         | )                          |     | 6,503              |      |
|                                                                       |                                                                                                      |                                                                         |                       |     |                    |      |   |  |   |
| **Net increase in cash and cash equivalents**                              |                                                                                                      | (662,688                                                                     | )                          |     | 1,530,955          |      |
|                                                                       |                                                                                                      |                                                                         |                       |     |               |      |   |   |   |
| **Cash and cash equivalents,** beginning of        period                  |                                                                                                      | 2,413,295                                                                    |                       |     | 1,324,118          |      |
|                                                                       |                                                                                                      |                                                                         |                       |     |                    |      |   |  |   |
| **Cash and cash equivalents,** end of period                               | $                                                                                                         | 1,750,607                                                                    |                       | $        | 2,855,073          |      |
|                                                                       |                                                                                                      |                                                                         |                       |     |                    |      |   |  |   |
| **Supplemental        information:**                                       |                                                                                                      |                                                                         |                       |     |               |      |
|                                                                       | **Cash paid during the year for:**                                                                        |                                                                         |                       |     |               |      |   |
|                                                                       |                                                                                                      | Interest                                                                     | $                          | 39,391   |               | $         | 75,644 |   |
|                                                                       |                                                                                                      | Income taxes                                                                 |                       | 2,586    |               |      | - |   |
|                                                                       |                                                                                                      |                                                                         |                       |     |                    |      |   |  |   |

*See accompanying notes toconsolidated financial statements.*

| Table of Contents |  | 3 |  | FORM 10-Q |
|-------------------|--|---|--|-----------|

Bridge Technology, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

(Unaudited)

**Organization and Business**

Bridge Technology, Inc. (“theCompany”) was incorporated under the laws of the State ofNevada on April 15, 1969. Starting from April 1997, theCompany registered to do business in the State of California andis primarily engaged in development and distribution of varioushardware, software, and peripheral products used in computersystems and sales to value added resellers and systemintegrators. 

As of December 31, 2002, the Company has thefollowing subsidiaries:

|   |                                              |   | Ownership |   |                                                                |
|--------|---------------------------------------------------|--------|-----------|--------|---------------------------------------------------------------------|
|   |                                              |   |           |   |                                                                |
|   | Bridge        R&D, Inc.                       |   | 100%      |   | Established        on June 1, 1997                                  |
|   | Newcorp Technology        Limited (in Japan)      |   | 100%      |   | Merged on November 1,        1997                                   |
|   |                                              |   | 15%       |   | 85%        disposed in 2001                                         |
|   | PTI Enclosures, Inc.                              |   | 100%      |   | Merged on December 14,        1998                                  |
|   | Newcorp        Technologies, Inc. (USA)           |   | 100%      |   | Established        on March 23, 1999, inactive                      |
|   | Pacific Bridge Net                                |   | 80%       |   | Established on August 16,        1999 and ceased operation in 2000. |
|   | CMS        Technology Ltd.                        |   | 90%       |   | Acquired        on January 3, 2000 (60%)                            |
|   |                                              |   |      |   | Acquired        on May 15, 2000 (30%)                               |
|   | Autec Power Systems, Inc.                         |   | 100%      |   | Merged on December 1,        1999 discontinued operation            |
|   | Bridge        Technology Co., Ltd., Ningbo, China |   | 100%      |   | Established        on May 28, 2001 discontinued operation           |

**Note 1. Basis of Presentation**

This 10-Q document including the accompanyingfootnotes and financial statements have not been reviewed asrequired by the Securities and Exchange Commission(“SEC”) Rules and Regulations.

The accompanying unaudited consolidatedfinancial statements have been prepared in accordance withgenerally accepted accounting principles for interim financialinformation and with the instructions to Form 10-Q and Article 10of Regulation S-X. Accordingly, they do not include all theinformation and footnotes required by generally acceptedaccounting principles for complete financial statements. In theopinion of management, all adjustments (consisting of normalrecurring adjustments) considered necessary for fair presentationhave been included. Operating results for the three months periodended March 31, 2003 are not necessarily indicative of theresults that may be expected for the year ending December 31,2003. For further information, refer to the consolidatedfinancial statements and footnotes thereto included in theCompany’s annual report on Form 10-K for the year endedDecember 31, 2002.

The accompanying unaudited consolidatedfinancial statements have been prepared assuming that the Companywill continue as a going concern. During the year ended December31, 2002, the Company incurred a net loss of $580,112 and usedcash of $5,689,774 in its operations. Management has undertakencertain actions in an attempt to improve the Company’sliquidity and return the Company to profitability. 

During the year ended December 31, 2002, theCompany incurred a net loss of $580,112 and generated $5,689,774in its continuing operations. Additionally, on July 24, 2002, theCompany entered into a loan modification and extension agreementwith a commercial bank for the outstanding balance of $4 millionat December 31, 2001, which was reduced by $100,000 payment madein April of 2002. Pursuant to the terms of the new agreement,monthly interest only payments are to be made through maturity,$50,000 was paid in September 2002 and a required $1,000,000repayment was made in December 2002. The Company owns 90% of allissued and outstanding shares in CMS and pledged 65% of allissued and outstanding shares in CMS against this outstandingbalance and the maturity date of the note has been extended untilNovember 30, 2002. The outstanding balance at December 31, 2002was $2,850,066 was to mature on June 30, 2003. The Company hasnot repaid the bank for amounts due under the line of credit andtherefore is in default. On October 20, 2003 the Company enteredinto a forbearance agreement and release agreement with the bank.Pursuant to the terms of the agreement the bank is willing toforbear from foreclosure on its security interests and otherwiseexercising any and all of its rights and remedies in law orequity in order to allow the Company time to cure the defaultunder the note and to pay the obligations of the Company to thebank under the note until December 31, 2003. Additionally, theCompany upon reporting its earnings for the nine month periodending September 30, 2003, expects to enter into a new creditfacility with an international bank, the proceeds of which wouldpay off in full the existing obligations with its current bank.While several banks have given the Company indications ofinterest provided that the Company reports earnings for the firstnine months of 2003. No assurances can be given that the Companywill successfully complete the refinancing plans.

Management believes that the Company does havethe economic ability to maintain and grow its operations for theforeseeable future. In addition to its General Bank negotiationsfor a loan extension to December 31, 2003, the Company isnegotiating with James Djen, the Company’s President, toconvert his $1,000,000 demand loan into equity in order toimprove the Company’s working capital position. Mr. Djen, asof December 31, 2002, has agreed to convert $200,000 into equitywhich was effected in May 2003. In addition, the Company hasnegotiated an increase in its credit facility with a Hong Kongbank from $1,500,000 to $7,000,000. Operationally,management’s plans include continuing actions to cut or curbnonessential expenses and focusing on improving sales. Noassurances can be given that the Company will be successful inextending or modifying its line of credit or that the Companywill be able to maintain profitable operations.

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**Note 2. Reclassification**

Certain amounts in the consolidated financialstatements for March 31, 2002 have been reclassified to conformto the March 31, 2003 presentation. Such reclassification had noeffect on shareholders’ equity as previously reported.

**Note 3. Earnings Per Share Computation**

We compute earnings per share in accordancewith Statement of Financial Accounting Standard’sBoard’s No. 128 which requires presentation of basic anddiluted earnings per share. Basic earnings per share is computedby dividing income or loss available to common shareholders bythe weighted average number of common shares outstanding for thereporting period. Diluted earnings per share reflects thepotential dilution that could occur if securities or othercontracts, such as stock options and warrants to issue commonstock, were exercised or converted into common stock.

The computation of the weighted-average commonshares used in the computation of basic and diluted net loss pershare is based on 10,898,110 shares for the three months endedMarch 31, 2003. Potential dilutive securities were not includedin the EPS calculation since their effect would be antidilutive.Potential dilutive securities consisted of outstanding stockoptions and stock warrants. The computations of the weightedaverage common shares used in the computation of basic anddiluted net income per share is based on 10,898,110 and10,863,186 shares, respectively, for the three months ended March31, 2002, respectively.

**Note 4. Income Taxe**s

As of December 31, 2002, a valuation allowancehas been provided for that portion of the net deferred tax assetwhich management cannot determine, with reasonable certainty,that the benefit will be realized. One of the subsidiaries of theCompany has net operating loss carryforwards which are separatereturn year losses in the amount of approximately $157,191, andwill begin to expire in 2008. On December 14, 1998, thesubsidiary had a change in ownership as defined under InternalRevenue Code Section 382. The net operating loss carryforward issubject to an annual limitation.

**Note 5. Inventory**

Inventory consists of:****

|                                  |   | December        31, |   |   | March        31, |   |
|---------------------------------------|--------|---------------------|--------|--------|------------------|--------|
|                                  |   | 2002                |   |   | 2003             |   |
|                                  |   |                     |   |   |                  |   |
| Service        parts                  | $      | 782,125             |   | $      | 781,544          |   |
| Work in progress                      |   | 161,403             |   |   | 300,252          |   |
| Finished        goods                 |   | 7,448,344           |   |   | 6,685,353        |   |
| Reserve for obsolete        inventory |   | (256,082            | )      |   | (294,494         | )      |
|                                  |   |                     |   |   |                  |   |
|                                  | $      | 8,135,790           |   | $      | 7,472,655        |   |
|                                  |   |                     |   |   |                  |   |

**Note 6. Goodwill**

Effective January 1, 2002, the Companyadopted SFAS No. 142 Goodwill and Other Intangible Assets.Under SFAS No. 142, goodwill and indefinite life intangibleassets are no longer amortized but will be reviewed annually, ormore frequently if impairment indicators arise, for impairment.The Company discontinued the amortization of its goodwillbalances effective January 1, 2002. The initial testing ofgoodwill for possible impairment was completed inAugust 2002, and no impairment was indicated.

In accordance with SFAS No. 142, priorperiod amounts are not restated. A reconciliation of reported netloss from continuing operations to net loss from continuingoperations adjusted for the exclusion of amortization of goodwilland indefinite life intangible assets follows:

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|                                                               |                                   |       | March 31, |   |
|--------------------------------------------------------------------|----------------------------------------|------------|-----------|--------|
|                                                               |                                   |       |           |   |
|                                                               |                                   |       | 2002      |   |   | 2003 |   |
|                                                               |                                   |       |           |   |   |  |   |
| Reported net income (loss)                                         | $                                      | 324,330    |      | $      | 96,397 |   |
|                                                               | Add back: Goodwill        amortization |       | -         |   |   | - |   |
|                                                               |                                   |       |           |   |   |  |   |
| Adjusted        net income (loss)                                  |                                   | 324,330    |      |   | 96,397 |   |
|                                                               |                                   |       |      |   |   |   |   |
| Basic        weighted average number of common stock outstanding   |                                   | 10,863,186 |      |   | 10,898,110 |   |
|                                                               |                                   |       |      |   |   |   |   |
| Basic        earnings (loss) per share                             |                                   | 0.03       |      |   | 0.01 |   |
|                                                               |                                   |       |      |   |   |   |   |
| Adjusted        earnings (loss) per share                          |                                   | 0.03       |      |   | 0.01 |   |
|                                                               |                                   |       |      |   |   |   |   |
| Diluted        weighted average number of common stock outstanding |                                   | 10,863,186 |      |   | 10,898,110 |   |
|                                                               |                                   |       |      |   |   |   |   |
| Diluted        earnings (loss) per share                           |                                   | 0.03       |      |   | 0.01 |   |
|                                                               |                                   |       |      |   |   |   |   |
| Adjusted        diluted earnings (loss) per share                  |                                   | 0.03       |      |   | 0.01 |   |
|                                                               |                                   |       |           |   |   |  |   |

 

**ITEM 2.MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONAND RESULTS OF OPERATIONS.**

Except for historical information containedherein, the matters set forth in this report are forward-lookingstatements within the meaning of the “safe harbor”provisions of the Private Securities Litigation Act of 1995.These forward-looking statements are subject to risks anduncertainties that may cause actual results to differ materially.The Company disclaims any obligations to update theseforward-looking statements.

**Results of Operations in ContinuingBusiness for the Three Months Ended March 31, 2003 as Compared tothe Three Months Ended March 31, 2002**

Net sales of $19,283,573 for the three monthsended March 31, 2003 decreased by $8,006,294, representingapproximately a 29.3% decrease, over net sales of $26,232,598 forthe same period of 2002. The decrease was due primarily to thedecrease in PTI Enclosures, Inc. (“PTI”) sales for thequarter ended March 31, 2003. PTI sales decreased byapproximately $562,686 due to a weak overall economy and softcustomer demand in the United States. The decrease in PTI saleswas partially offset by increases in sales relating to theCompany’s distribution business in United States.

Asia revenues for the three months ended March31, 2003 were $14,742,447 compared to $21,535,196 for the threemonths ended March 31, 2002, an decrease of $6,792,749 or 31.5%.Decreases relate primarily to decreased sales volume at CMSTechnology Limited. (“CMS”)

United States revenues for the three monthsended March 31, 2003 were $4,541,126 compared to $4,697,402 forthe three months ended March 31, 2002, a decrease of $156,276 or3.3%. Decreases relate primarily to decreased sales at PTI.

Revenues for the Company’s distributionbusinesses were $18,796,569 for the three months ended March 31,2003 compared to $25,182,908 for the three months ended March 31,2002, an decrease of $6,386,339 or 25.4%. Decreases relateprimarily to decreased sales volume at CMS Technology Limited.Also, Bridge R&D, Inc. sales increased due to a large salesto distributors during the three months ended March 31, 2003.

Revenues for the Company’s manufacturingbusinesses were $487,004 for the three months ended March 31,2003 compared to $1,049,690 for the three months ended March 31,2002, a decrease of $562,686 or 53.6%. The decrease relatesprimarily to decreased sales at PTI.

Gross profit for the three months ended March31, 2003 was $1,057,634, decreasing by $429,959 and representingapproximately a 33.3% decrease, compared to $1,487,593 for thesame period of 2002. The reason for this decrease is due mainlyto the decrease in sales of PTI for the quarter ended March 31,2003. Gross profit as a percentage of net sales declined from5.5% for the three months ended March 31, 2003 to 5.7% for thethree months ended March 31, 2002. The decrease is dueprincipally due to the lower margin generated through the salesof PTI.

Asia gross profit as a percentage of sales forthe three months ended March 31, 2003 was 4.5% compared to 4.4%for the three months ended March 31, 2002.

United States gross profit as a percentage ofsales for the three months ended March 31, 2003 was 8.7% comparedto 11.3% for the three months ended March 31, 2002. The decreaseis primarily attributable to decreased gross margins at BridgeR&D, Inc.

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Gross profits for the Company’sdistribution businesses as a percentage of sales for the threemonths ended March 31, 2003 was 4.9% compared to 5.1% for thethree months ended March 31, 2002.

Gross profits for the Company’smanufacturing businesses as a percentage of sales for the threemonths ended March 31, 2003 was 28.0% compared to 19.3% for thethree months ended March 31, 2002. The decrease is primarilyattributable to increased gross margins at PTI. 

Selling, general and administrative expensesdecreased by $409,192 to $841,780 in the three months ended March31, 2003 compared to $1,250,972 for the three months ended March31, 2002. As a percentage of revenue, these expenses decreasedfrom 4.8% in the three months ended March 31, 2002 to 4.4% in thethree months ended March 31, 2003. The decline is due to the costsaving effort implemented by management for the quarter endedMarch 31, 2003. Cost saving efforts included cutbacks inoperating expenses such as travel expense and purchases ofsupplies.

Income from operation decreased from income of$236,621 for the three months ended March 31, 2002 to income of$167,854 in the three months ended March 31, 2003. The decreaseprimarily reflects the decline in sales at PTI and CMS. Incomefrom operations as a percentage of revenue is 0.9% for the threemonths ended March 31, 2002 and 2003.

Net interest expense decreased by $169,339 from$193,863 for the three months ended March 31, 2002 to netinterest expense of $24,524 for the three months ended March 31,2003. The decrease is mainly the result of decreased borrowingsfrom commercial bank, lower prime rate and retro-adjustments onshareholders loans’ interest rate during the three monthsended March 31, 2003.

Other income decreased by $46,164 from $54,857for the three months ended March 31, 2002 to $8,693 for the threemonths ended March 31, 2003.

Net income decreased by $227,933 from netincome of $324,330 for the three months ended March 31, 2002 tonet income of $96,397 for the three months ended March 31, 2003.This result reflects an income of $0.03 per share for the threemonths ended March 31, 2002 to an income of $0.01 per share forthe three months ended March 31, 2003.

**Capital Resources and Liquidity**

The Company’s capital requirements havebeen and will continue to be significant and its cash and cashequivalents have been sufficient to cover its cash flow fromoperations. At March 31, 2003, the Company had working capitalapproximately $4,340,773 and cash of $2,855,073 compared to aworking capital of approximately $4,310,687 and cash of$1,324,118 at December 31, 2002.

Net cash provided by operating activities forthe three months ended March 31, 2003 was $2,418,804 as comparedto $3,667,997 used in operating activities for the three monthsended March 31, 2002. The difference is mainly due to decrease inaccounts receivable in inventory.

Net cash provided in investing activities forthe three months ended March 31, 2003 was $99,482 mainly from theproceeds from sale of investment, as compared to $325,897 netcash used in investing activities for the three months endedMarch 31, 2002 for the investment in China and other affiliates.

Net cash used in financing activities for thethree months ended March 31, 2003 was $993,834 as compared to$2,679,645 in the three months ended March 31, 2002. Thesignificant change is attributable to repayment on line of creditand shareholder loans.

Management believes that the Company does havethe economic where withal to maintain its operations for theforeseeable future. Management in October 2003 has obtained aloan extension with its U.S. Bank to December 31, 2003 and CMSTechnology Ltd., Hong Kong has obtained an increase line ofcredit with its Hong Kong Bank from $1,500,000 to $7,000,000.Additionally, management is negotiating with the Company’smajor shareholders to convert a portion of the Company’sindebtedness to them into equity in order to improve theCompany’s working capital position. Operationally,management’s plans include continuing actions to cut or curbnonessential expenses and focusing on improving sales channeldistribution sales both in China and the United States.

**Effects of Inflation**

The Company believes that inflation has not hada material effect on its net sales and results of operations.

**Effects of Fluctuation in ForeignExchange Rates**

The Company continues to buy products andservices from foreign suppliers. The Company contracts for suchproducts and services in U.S. dollars, thus eliminating thepossible effect of currency fluctuations. However, there iscontinuous risk in market demand fluctuations with CMSTechnology’s operations in China. To date the risk has beenminimal.

**ITEM 3.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.**

Bridge Technology, Inc. develops and procuresproducts in the United States, Japan and Hong Kong, and theCompany sells primarily in North America and Asia. As a result,financial results could be affected by factors such as changes inforeign currency exchange rates or weak economic conditions inforeign markets. Since our Company’s products are generallyinitially priced in U.S. Dollars and translated to local currencyamounts, a strengthening of the dollar could make ourCompany’s products less competitive in foreign markets.

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**ITEM 4.CONTROLS AND PROCEDURES.**

| 1.     |   | Evaluation of disclosure        controls and procedures                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   | In light of The Sarbanes-Oxley Act of        2002 and current developments in the financial world, the        Board of Directors and specifically the Audit Committee        has caused the updating of the Company’s accounting        disclosure controls and procedures under Rules 13(a)-15        and 15(d)-15 under the Securities Exchange Act of 1934.        James Djen, CEO and John T. Gauthier, CFO have evaluated        these disclosure controls and procedures and conclude        that they are adequate and effective as of September 30,        2003, the date of their evaluation. |
| 2.     |   | The Company has made no        significant changes in internal controls other than        updating its quarterly monitoring review.                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |

**Limitations on the Effectiveness ofControls**

The Company’s management, including theChief Executive Officer, does not expect that our disclosurecontrols and procedures or our internal controls will prevent allerror and fraud. A control system, no matter how well conceivedand operated, can provide only reasonable, not absolute,assurance that the objectives of the control system are met.Further, the design of a control system must reflect the factthat there are resource constraints, and the benefits of controlsmust be considered relative to their costs. Because of theinherent limitations in all control systems, no evaluation ofcontrols can provide absolute assurance that all control issuesand instances of fraud, if any, within the company have beendetected. These inherent limitations include the realities thatjudgements in decision-making can be faulty, and that breakdownscan occur because of simple error or mistake. Additionally,controls can be circumvented by the individual acts of somepersons, by collusion of two or more people, or by managementoverride of the control. The design of any system of controlsalso is based in part upon certain assumptions about thelikelihood of future events, and there can be no assurance thatany design will succeed in achieving its stated goals under allpotential future conditions, over time, control may becomeinadequate because of changes in conditions, or the degree ofcompliance with the policies or procedures may deteriorate.Because of the inherent limitations in a cost-effective controlsystem, misstatements due to error or fraud may occur and not bedetected.

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**PART II.OTHER INFORMATION**

**ITEM 1. LEGALPROCEEDINGS.**

The Company is a party to legal actions thathave arisen in the normal course of business. These actionsinclude the following: 

On October 1, 2001, a complaint was filed bythe Trustee in the U.S. Bankruptcy Court against John Harwer,former President of the Company and the Company for allegedtransfer of assets, technology, trade secrets, confidentialinformation and business opportunities from Allied Web, acorporation owned by John Harwer which he had placed intoliquidation under the Federal Bankruptcy laws on April 6,2000.  The case has entered the trial phase with the initialhearing centering on $1,800,000 in claims between the partieswhich did not involve Bridge Technology, Inc. The trial judge hasordered the case back to mediation in connection with theseclaims on November 17, 2003. Management at December 31, 2002 andSeptember 22, 2003 was unable to assess the possibility ofincurring future liability for this matter and therefore did notrecord any accrued liability. Management continues to take theposition that no liability will accrue to the Company and nocontingency has been provided.  The company has incurred inexcess of $300,000 to date in legal fees to defend itself. The Company plans to sue the Directors and Officers insurancecarrier for reimbursement. There is no assurance that anyclaim for legal fees reimbursement will be successful.

On May 19, 2003, a complaint was filed inSuperior Court in Santa Ana, California, against the Company withits CFO and its former President, John Harwer in connection withthe private sale of Bridge Technology, Inc. common stock. Mr. Harwer had facilitated the private sale of Bridge Technology,Inc. stock for an investor.  The purchasers are attemptingerroneously to involve Bridge in this private transaction whichwill fail.  In addition the same investors purchased sharesof a private corporation, Esyon Corporation, from either JohnHarwer or Esyon Corporate, and are attempting erroneously toinvolve Bridge Technology, Inc. in this private transaction whichwill also fail.  The action is presently in the demurrer andearly discovery stages. Management has not set aside anycontingency reserve, as Bridge Technology, Inc., is expected tobe removed from this action.

On November 14, 2001, a complaint was filed byOppenheimer Wolff & Donnelly, LLP against the Company for$100,000 in alleged legal fees which was settled in the 1stquarter of 2003 for $40,000 payable in ten equal installments.The Company has complied with the terms of the settlementagreement by making the monthly payments in a timely manner.

On April 16, 2002, Danton Mak, Esq., filed acomplaint in the Los Angeles superior Court against Autec PowerSystems, Inc. (“Autec”) for $136,000 in fees allegedlyowed by Autec. This matter was settled in July 2002 for $108,000payable in four (4) equal installments of $27,000. The Companyhas complied with the terms of settlement agreement with thefinal payment having been made in September 2002.

On April 24, 2002, Mason Tarkeshian filed acomplaint against the Company for approximately $2,000,000 infees and damages on an acquisition that never closed. The Companysettled this matter in 2002 by issuance of a common stockpurchase warrant for 30,000 shares of the Company common stock ata strike price of $0.55 per share.

On December 12, 2001, a former shareholder ofAutec Power Systems, Inc., filed a complaint in Ventura CountySuperior Court against the principal shareholder and formerChairman of the Company, Winston Gu. Autec and the Companyalleging that the complainant did not receive his pro-rata sharesof Bridge Technology, Inc.’s common stock in the exchange of100% of the shares of Autec. The Company believes the complaintis without merit as to Bridge Technology, Inc. and did not recordany accrued liability for this matter at December 31, 2002. Thecase was arbitrated in November 2003 and the decision is pending.

The Company is engaged in various ongoing legalproceedings incidental to its normal business activities. TheCompany is unable, however, to predict the outcome of thesematters, or reasonably estimate a range if possible losses giventhe current status of litigation.

 

**ITEM 2. CHANGESIN SECURITIES AND USE OF PROCEEDS.**

None.

 

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

There are no defaults upon senior securities.

 

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

There are no matters submitted to a vote ofsecurity holders.

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**ITEM 5. OTHERINFORMATION.**

None.

 

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

|   | Exhibit Number |   |   | Description |
|--------|----------------|--------|--------|-------------|
|   |                |   |   |             |
|   | EX-31.A        |   |   |        | Certifications of Chief        Executive Officer Pursuant to Section 302 of the        Sarbanes-Oxley Act of 2002 |
|   | EX-31.B        |   |   |        | Certifications of Chief        Financial Officer Pursuant to Section 302 of the        Sarbanes-Oxley Act of 2002 |
|   | EX-32          |   |   |        | Certifications of Chief        Executive Officer and Chief Financial Officer Pursuant to        Section 906 of the Sarbanes-Oxley Act of 2002 |

 

****Signature****

 

Pursuant to the requirements of the SecuritiesExchange Act of 1934, the registrant caused this report to besigned on its behalf by the undersigned thereunto dulyauthorized. 

|   |   |                    |   | Bridge Technology, Inc. |
|--------|--------|-------------------------|--------|-------------------------|
|   |   |                    |   |                    |   |   | (Registrant) |
|   |   |                    |   |                    |   |   |
|   |   |                    |   |                    |   |   |   |   |
|   |   | Date: December 18, 2003 |   |                    |   |   |   | /s/ John T. Gauthier |
|   |   |                    |   |                    |   |   |   |  |
|   |   |                    |   |                    |   |   |   | John T. Gauthier |
|   |   |                    |   |                    |   |   |   | *Chief Financial        Officer* |
|   |   |                    |   |                    |   |   |   |   |
|   |   |                    |   |                    |   |   |   |   |
|   |   |                    |   |                    |   |   |   |   |
|   |   | Date: December 18, 2003 |   |                    |   |   |   | /s/ James Djen |
|   |   |                    |   |                    |   |   |   |  |
|   |   |                    |   |                    |   |   |   | James Djen |
|   |   |                    |   |                    |   |   |   | *Chief Executive        Officer* |

 

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