----

|   | **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        June 30, 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 June 30, 2003        was 12,098,110.                                                                                                                                                                                                                                                                                                                                                             |

----

| 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 | 5 |   |
|                                 | Item 3.        Quantitative        and Qualitative Disclosures about Market Risk | 8 |   |
|                                 | Item 4. Controls and Procedures | 8 |   |
|                                 |   |   |   |
| PART II.        Other Information    |   |   |
|                                 | Item 1.        Legal        Proceedings | 10 |   |
|                                 | Item 2. Changes in Securities        and Use of Proceeds | 10 |   |
|                                 | Item 3.        Defaults Upon        Senior Securities | 10 |   |
|                                 | Item 4. Submission of Matters to        a Vote of Security Holders | 10 |   |
|                                 | Item 5.        Other        Information | 10 |   |
|                                 | Item 6. Exhibits and Reports on        Form 8-K | 11 |   |
|                                 |   |   |   |
|                                 | 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                           | 11 |   |
|                                      |
|                                 |   |   |   |

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

**PART I.FINANCIAL INFORMATION**

**ITEM 1. FINANCIALSTATEMENTS**

Bridge Technology, Inc. and Subsidiaries

Consolidated Balance Sheets

|                                                   |                                                                                                                                                               |   |       | December        31, |   |   |       | June        30, |   |
|--------------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------|---------------------|--------|--------|------------|-----------------|--------|
|                                                   |                                                                                                                                                               |   |       | 2002                |   |   |       | 2003            |   |
|                                                   |                                                                                                                                                               |   |       | (Audited)           |   |   |       | (Unaudited)     |   |
|                                                   |                                                                                                                                                               |   |       |                     |   |   |       |                 |   |
| **ASSETS**                                             |                                                                                                                                                               |   |       |                |   |   |       |            |
| Current        assets:                                 |                                                                                                                                                               |   |       |                |   |   |       |            |
|                                                   | Cash        and cash equivalents                                                                                                                                   |   | $          | 1,324,118           |   |   | $          | 841,086         |   |
|                                                   | Accounts receivableless allowance for        doubtful accounts of $293,143 and $172,308 respectively                                                               |   |       | 9,175,912           |   |   |       | 9,507,217       |   |
|                                                   | Tax        refund receivable                                                                                                                                       |   |       | 127,560             |   |   |       | 58,418          |   |
|                                                   | Advances to employees                                                                                                                                              |   |       | -                   |   |   |       | 12,972          |   |
|                                                   | Other        receivables                                                                                                                                           |   |       | 272,388             |   |   |       | 374,064         |   |
|                                                   | Inventory, net                                                                                                                                                     |   |       | 8,135,790           |   |   |       | 8,828,181       |   |
|                                                   | Assets        of subsidiaries held for sale                                                                                                                        |   |       | 3,170,060           |   |   |       | 3,170,060       |   |
|                                                   |                                                                                                                                                               |   |       |                     |   |   |       |                 |   |
| Total current assets                                   |                                                                                                                                                               |   | 22,205,828 |                |   |   | 22,791,998 |            |
|                                                   |                                                                                                                                                               |   |       |                |   |   |       |            |
| Property and equipment, net                            |                                                                                                                                                               |   | 384,699    |                |   |   | 346,300    |            |
| Goodwill,        net of amortization of $1,242,917     |                                                                                                                                                               |   | 1,949,417  |                |   |   | 1,949,417  |            |
| Investments                                            |                                                                                                                                                               |   | 39,996     |                |   |   | 19,996     |            |
| Other        assets                                    |                                                                                                                                                               |   | 86,772     |                |   |   | 86,772     |            |
|                                                   |                                                                                                                                                               |   |       |                     |   |   |       |                 |   |
| Total        assets                                    |                                                                                                                                                               | $      | 24,666,712 |                |   | $      | 25,194,483 |            |
|                                                   |                                                                                                                                                               |   |       |                     |   |   |       |                 |   |
| **LIABILITIES AND SHAREHOLDERS’        EQUITY**   |                                                                                                                                                               |   |       |                |   |   |       |            |
| Current liabilities:                                   |                                                                                                                                                               |   |       |                |   |   |       |            |
|                                                   | Bank overdraft                                                                                                                                                     |   |       | 131,209             |   |   |       | -               |   |
|                                                   | Notes        payable                                                                                                                                               |   |       | 3,708,072           |   |   |       | 2,850,066       |   |
|                                                   | Accounts payable                                                                                                                                                   |   |       | 6,648,157           |   |   |       | 7,979,087       |   |
|                                                   | Income        taxes payable                                                                                                                                        |   |       | 60,022              |   |   |       | 60,021          |   |
|                                                   | Deferred income tax                                                                                                                                                |   |       | 2,817               |   |   |       | 1,921           |   |
|                                                   | Accrued        liabilities                                                                                                                                         |   |       | 1,591,797           |   |   |       | 1,661,717       |   |
|                                                   | Shareholder loan                                                                                                                                                   |   |       | 2,050,000           |   |   |       | 1,818,725       |   |
|                                                   | 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 |                |   |   | 18,074,604 |            |
|                                                   |                                                                                                                                                               |   |       |                |   |   |       |            |   |
| Related        party loan, less current portion        |                                                                                                                                                               |   | 884,054    |                |   |   | 875,005    |            |
|                                                   |                                                                                                                                                               |   |            |                |   |   |            |            |
| Total        liabilities                               |                                                                                                                                                               |   | 18,779,195 |                |   |   | 18,949,609 |            |
|                                                   |                                                                                                                                                               |   |            |                |   |   |            |            |
| **Minority        interest**                           |                                                                                                                                                               |   | 920,331    |                |   |   | 852,376    |            |
| **Shareholders’ equity**                          |                                                                                                                                                               |   |       |                |   |   |       |            |
|                                                   | Common stock; par        value $0.01 per share, authorized 100,000,000 shares,        10,898,110 and 12,098,110 shares issued and outstanding,        respectively |   |       | 108,981             |   |   |       | 120,981         |   |
|                                                   | Additional        paid-in capital                                                                                                                                  |   |       | 10,097,579          |   |   |       | 10,310,580      |   |
|                                                   | Related party        receivable                                                                                                                                    |   |       | (340,000            | )      |   |       | (340,000        | )      |
|                                                   | Treasury        stock, 66,000 shares at cost                                                                                                                       |   |       | (2,000              | )      |   |       | (2,000          | )      |
|                                                   | Current Year Net        Income                                                                                                                                     |   |       | -                   |   |   |       | 193,808         |   |
|                                                   | Retained        earnings (accumulated deficit)                                                                                                                     |   |       | (4,868,477          | )      |   |       | (4,868,477      | )      |
|                                                   | Accumulated other        comprehensive loss                                                                                                                        |   |       | (28,897             | )      |   |       | (22,394         | )      |
|                                                   |                                                                                                                                                               |   |       |                     |   |   |       |                 |   |
| Total        shareholders’ equity                 |                                                                                                                                                               |   | 4,967,186  |                |   |   | 5,392,498  |            |
|                                                   |                                                                                                                                                               |   |       |                     |   |   |       |                 |   |
| Total        liabilities and shareholders’ equity |                                                                                                                                                               | $      | 24,666,712 |                |   | $      | 25,194,483 |            |
|                                                   |                                                                                                                                                               |   |       |                     |   |   |       |                 |   |

*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 |   |       | Six Months Ended |   |
|----------------------------------------------------------------------------------------|------------------------------------------------------------|------------|--------------------|--------|------------|------------------|--------|
|                                                                                   |                                                       |       |                    |   |       |                  |   |
|                                                                                   |                                                       |       | June        30,    |   |       | June        30,  |   |   | June        30, |   |   | June        30, |   |
|                                                                                   |                                                       |       | 2002               |   |       | 2003             |   |   | 2002 |   |   | 2003 |   |
|                                                                                   |                                                       |       | (Audited)          |   |       | (Unaudited)      |   |   | (Audited) |   |   | (Unaudited) |   |
|                                                                                   |                                                       |       |                    |   |       |                  |   |   |  |   |   |  |   |
| Net sales                                                                              | $                                                          | 25,533,290 |               | $      | 23,012,848 |             | $      | 51,765,888 |   | $ | 42,296,421 |   |
|                                                                                   |                                                       |       |               |   |       |             |   |   |   |   |   |   |
| Cost of sales                                                                          |                                                       | 24,409,297 |               |   | 21,918,877 |             |   | 49,154,302 |   |   | 40,192,816 |   |
|                                                                                   |                                                       |       |                    |   |       |                  |   |   |  |   |   |  |   |
| Gross profit                                                                           |                                                       | 1,123,993  |               |   | 1,093,971  |             |   | 2,611,586 |   |   | 2,103,605 |   |
|                                                                                   |                                                       |       |               |   |       |             |   |   |   |   |   |   |   |
| Selling, general and administrative expense                                            |                                                       | 1,433,978  |               |   | 1,073,062  |             |   | 2,684,950 |   |   | 1,914,842 |   |
|                                                                                   |                                                       |            |               |   |            |             |   |  |   |   |  |   |
| Income (loss) from operations                                                          |                                                       | (309,985   | )                  |   | 20,909     |             |   | (73,364 | ) |   | 188,763 |   |
|                                                                                   |                                                       |       |               |   |       |             |   |   |   |   |   |   |
| Other income (expense):                                                                |                                                       |       |               |   |       |             |   |   |   |   |   |   |
|                                                                                   | Interest income        (expense), net                      |       | (263,699           | )      |       | (20,020          | )      |   | (457,562 | ) |   | (43,767 | ) |
|                                                                                   | Gain        on sale of investment                          |       | 215,556            |   |       | 131,275          |   |   | 536,427 |   |   | 131,275 |   |
|                                                                                   | Other income                                               |       | 51,759             |   |       | 9,135            |   |   | 106,616 |   |   | 17,828 |   |
|                                                                                   |                                                       |       |                    |   |       |                  |   |   |  |   |   |  |   |
| Income        (loss) before income taxes                                               |                                                       | (306,369   | )                  |   | 120,390    |             |   | 112,117 |   |   | 105,336 |   |
|                                                                                   |                                                       |       |               |   |       |             |   |   |   |   |   |   |   |
| Income        taxes provision                                                          |                                                       | 23,559     |               |   | 29,834     |             |   | 84,763 |   |   | 68,246 |   |
|                                                                                   |                                                       |       |                    |   |       |                  |   |   |  |   |   |  |   |
| Net income        (loss)                                                               |                                                       | (329,928   | )                  |   | 111,465    |             |   | 27,354 |   |   | 225,853 |   |
|                                                                                   |                                                       |       |               |   |       |             |   |   |   |   |   |   |   |
| Minority        interest                                                               |                                                       | (12,466    | )                  |   | 14,054     |             |   | (45,417 | ) |   | 32,045 |   |
|                                                                                   |                                                       |       |                    |   |       |                  |   |   |  |   |   |  |   |
| Net income        (loss) applicable to common shares                                   | $                                                          | (342,394   | )                  | $      | 97,411     |             | $      | (18,063 | ) | $ | 193,808 |   |
|                                                                                   |                                                       |       |                    |   |       |                  |   |   |  |   |   |  |   |
| Basic        weighted average number of common shares outstanding                      |                                                       | 10,863,186 |               |   | 12,098,110 |             |   | 10,863,186 |   |   | 12,098,110 |   |
|                                                                                   |                                                       |            |               |   |            |             |   |  |   |   |  |   |
| Basic        earnings (loss) per share                                                 | $                                                          | (0.03      | )                  | $      | 0.008      |             | $      | (0.001 | ) | $ | 0.016 |   |
|                                                                                   |                                                       |            |               |   |            |             |   |  |   |   |  |   |
| Diluted        weighted average number of common shares outstanding                    |                                                       | 10,875,467 |               |   | 12,098,110 |             |   | 10,869,360 |   |   | 12,098,110 |   |
|                                                                                   |                                                       |            |               |   |            |             |   |  |   |   |  |   |
| Diluted        earnings (loss) per share                                               | $                                                          | (0.03      | )                  | $      | 0.008      |             | $      | (0.001 | ) | $ | 0.016 |   |
|                                                                                   |                                                       |            |               |   |            |             |   |  |   |   |  |   |
| Comprehensive        income (loss) and its components consist of the        following: |                                                       |       |               |   |       |             |   |   |   |   |   |   |
|                                                                                   | Net        income (loss)                                   | $          | (342,394           | )      | $          | 97,411           |   | $ | (18,063 | ) | $ | 193,808 |   |
|                                                                                   | Foreign currency        translation adjustment, net of tax |       | (1,618             | )      |       | -                |   |   | (1,851 | ) |   | - |   |
|                                                                                   |                                                       |       |                    |   |       |                  |   |   |  |   |   |  |   |
|                                                                                   | Comprehensive income        (loss)                         | $          | (344,012           | )      | $          | 97,411           |   | $ | (19,914 | ) | $ | 193,808 |   |
|                                                                                   |                                                       |       |                    |   |       |                  |   |   |  |   |   |  |   |

*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

|                                                       |                                                                                                      |                                                                                |                        |     | Six Months Ended |     |
|------------------------------------------------------------|-----------------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------|-----------------------------|----------|------------------|----------|
|                                                       |                                                                                                      |                                                                                |                        |     |                  |     |
|                                                       |                                                                                                      |                                                                                |                        |     | June        30,  |     |   | June        30, |   |
|                                                       |                                                                                                      |                                                                                |                        |     | 2002             |     |   | 2003 |   |
|                                                       |                                                                                                      |                                                                                |                        |     | (Audited)        |     |   | (Unaudited) |   |
| **Cash flows from operating activities**                   |                                                                                                      |                                                                                     |                        |     |                  |     |
|                                                       | Net income        (loss)                                                                                  | $                                                                                   | (1,128,897                  | )        | $                | 193,808  |   |
|                                                       | Adjustments to reconcile net income (loss) to        net cash provided by (used in) operating activities: |                                                                                |                        |     |             |     |   |
|                                                       |                                                                                                      | Depreciation        and amortization                                                |                        | 258,471  |             |     | 40,034 |   |
|                                                       |                                                                                                      | Provision for doubtful accounts                                                     |                        | 82,259   |             |     | 135,247 |   |
|                                                       |                                                                                                      | (Gain)        loss on sale of investment                                            |                        | (536,373 | )                |     | 20,000 |   |
|                                                       |                                                                                                      | Provision for slow moving inventory                                                 |                        | 231,000  |             |     | - |   |
|                                                       |                                                                                                      | Stock        compensation                                                           |                        | 15,453   |             |     | - |   |
|                                                       |                                                                                                      | Minority interest                                                                   |                        | 45,418   |             |     | (67,955 | ) |
|                                                       |                                                                                                      | Increase        (decrease) from changes in operating assets and        liabilities: |                        |     |             |     |   |   |
|                                                       |                                                                                                      |                                                                                | Restricted        cash      |     | (317,495         | )        |   | - |   |
|                                                       |                                                                                                      |                                                                                | Trade receivables           |     | 4,262,022        |     |   | (466,552 | ) |
|                                                       |                                                                                                      |                                                                                | Inventory                   |     | 3,410,680        |     |   | (692,391 | ) |
|                                                       |                                                                                                      |                                                                                | Deferred income taxes       |     | (896             | )        |   | (896 | ) |
|                                                       |                                                                                                      |                                                                                | Other        receivables    |     | 44,565           |     |   | (114,648 | ) |
|                                                       |                                                                                                      |                                                                                | Other current assets        |     | (166,309         | )        |   | - |   |
|                                                       |                                                                                                      |                                                                                | Accounts        payable     |     | (11,084,824      | )        |   | 1,330,930 |   |
|                                                       |                                                                                                      |                                                                                | Accrued liabilities         |     | 927,658          |     |   | 69,919 |   |
|                                                       |                                                                                                      |                                                                                | Income        taxes payable |     | 122,466          |     |   | 69,142 |   |
|                                                       |                                                                                                      |                                                                                |                        |     |                  |     |   |  |   |
|                                                       | Net cash provided by (used in) operating        activities                                                |                                                                                | (3,834,802                  | )        |             | 516,638  |   |
|                                                       |                                                                                                      |                                                                                |                        |     |                  |     |   |  |   |
| **Cash flows from investing activities**                   |                                                                                                      |                                                                                |                        |     |             |     |
|                                                       | Purchase        of property and equipment                                                                 |                                                                                | (94,350                     | )        |             | (1,635   | ) |
|                                                       | Due from related party                                                                                    |                                                                                | (1,052                      | )        |             | (231,275 | ) |
|                                                       | Proceeds        from sale of investment                                                                   |                                                                                | 645,094                     |     |             | -        |   |
|                                                       |                                                                                                      |                                                                                |                        |     |                  |     |   |  |   |
| Net cash        provided by (used in) investing activities |                                                                                                      | 549,692                                                                             |                        |     | (232,910         | )        |
|                                                       |                                                                                                      |                                                                                |                        |     |                  |     |   |  |   |
|                                                       |                                                                                                      |                                                                                |                        |     |             |     |   |   |   |
| **Cash flows from financing activities**                   |                                                                                                      |                                                                                |                        |     |             |     |
|                                                       | Bank        overdraft                                                                                     |                                                                                | 29,557                      |     |             | (131,209 | ) |
|                                                       | Repayments on loans payable                                                                               |                                                                                | (23,216                     | )        |             | -        |   |
|                                                       | Proceeds        from line of credit                                                                       |                                                                                | 604,076                     |     |             | -        |   |
|                                                       | Repayments on line of credit                                                                              |                                                                                | (100,000                    | )        |             | (858,006 | ) |
|                                                       | Proceeds        from related party loans                                                                  |                                                                                | 2,818,215                   |     |             | 200,000  |   |
|                                                       | Repayments of related party loans                                                                         |                                                                                | (563,237                    | )        |             | (9,048   | ) |
|                                                       | Proceeds        from stock purchase                                                                       |                                                                                | -                           |     |             | 25,000   |   |
|                                                       |                                                                                                      |                                                                                |                        |     |                  |     |   |  |   |
| Net cash        provided by (used in) financing activities |                                                                                                      | 32,765,395                                                                          |                        |     | (773,263         | )        |
|                                                       |                                                                                                      |                                                                                |                        |     |                  |     |   |  |   |
| **Effect        of exchange rate changes on cash**         |                                                                                                      | (1,851                                                                              | )                           |     | 6,503            |     |
|                                                       |                                                                                                      |                                                                                |                        |     |                  |     |   |  |   |
| **Net        increase in cash and cash equivalents**       |                                                                                                      | (521,566                                                                            | )                           |     | (483,032         | )        |
|                                                       |                                                                                                      |                                                                                |                        |     |             |     |   |   |   |
| **Cash        and cash equivalents,** beginning of period  |                                                                                                      | 2,413,295                                                                           |                        |     | 1,324,118        |     |
|                                                       |                                                                                                      |                                                                                |                        |     |                  |     |   |  |   |
| **Cash        and cash equivalents,** end of period        | $                                                                                                         | 1,891,729                                                                           |                        | $        | 841,086          |     |
|                                                       |                                                                                                      |                                                                                |                        |     |                  |     |   |  |   |
| **Supplemental        information:**                       |                                                                                                      |                                                                                |                        |     |             |     |
|                                                       | **Cash paid during the year for:**                                                                        |                                                                                |                        |     |             |     |   |
|                                                       |                                                                                                      | Interest                                                                            | $                           | 376,907  |             | $        | 119,016 |   |
|                                                       |                                                                                                      |                                                                                |                        |     |                  |     |   |  |   |

*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 June 30, 2003 are not necessarily indicative of the resultsthat may be expected for the year ending December 31, 2003. Forfurther information, refer to the consolidated financialstatements and footnotes thereto included in the Company’sannual report on Form 10-K for the year ended December 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. Djenconverted $200,000 into equity which was effected in May 2003. Inaddition, the Company has negotiated an increase in its creditfacility with a Hong Kong bank from $1,500,000 to $7,000,000.Operationally, management’s plans include continuing actionsto cut or curb nonessential expenses and focusing on improvingsales. No assurances can be given that the Company will besuccessful in extending or modifying its line of credit or thatthe Company will be able to maintain profitable operations.

**Note 2. Income Taxes**

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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. 

**Note 3. Shareholders’ Equity**

On May 12, 2003, the Company converted $200,000of shareholder loans by James Djen into 1,000,000 shares of theCompany’s common stock at $0.20 per share.

On May 19, 2003, the Company issued 200,000shares of common stock for $25,000.

**Note 4. Inventory**

|                                  |   | December        31, |   |   | June        30, |   |
|---------------------------------------|--------|---------------------|--------|--------|-----------------|--------|
|                                  |   | 2002                |   |   | 2003            |   |
|                                  |   |                     |   |   |                 |   |
| Service        parts                  | $      | 782,125             |   | $      | 768,411         |   |
| Work in progress                      |   | 161,403             |   |   | 269,502         |   |
| Finished        goods                 |   | 7,448,344           |   |   | 8,174,391       |   |
| Reserve for obsolete        inventory |   | (256,082            | )      |   | (384,123        | )      |
|                                  |   |                     |   |   |                 |   |
|                                  | $      | 8,135,790           |   | $      | 8,828,181       |   |
|                                  |   |                     |   |   |                 |   |

**Note 5. 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:

|                                                               |                                   |       | June 30, |   |
|--------------------------------------------------------------------|----------------------------------------|------------|----------|--------|
|                                                               |                                   |       |          |   |
|                                                               |                                   |       | 2002     |   |   | 2003 |   |
|                                                               |                                   |       |          |   |   |  |   |
| Reported net income (loss)                                         | $                                      | (18,063    | )        | $      | 193,808 |   |
|                                                               | Add back: Goodwill        amortization |       | -        |   |   | - |   |
|                                                               |                                   |       |          |   |   |  |   |
| Adjusted        net income (loss)                                  |                                   | (18,063    | )        |   | 193,808 |   |
|                                                               |                                   |       |     |   |   |   |   |
| Basic        weighted average number of common stock outstanding   |                                   | 10,869,360 |     |   | 12,098,110 |   |
|                                                               |                                   |       |     |   |   |   |   |
| Basic        earnings (loss) per share                             |                                   | (0.001     | )        |   | 0.016 |   |
|                                                               |                                   |       |     |   |   |   |   |
| Adjusted        earnings (loss) per share                          |                                   | (0.001     | )        |   | 0.016 |   |
|                                                               |                                   |       |     |   |   |   |   |
| Diluted        weighted average number of common stock outstanding |                                   | 10,869,360 |     |   | 12,098,110 |   |
|                                                               |                                   |       |     |   |   |   |   |
| Diluted        earnings (loss) per share                           |                                   | (0.001     | )        |   | 0.016 |   |
|                                                               |                                   |       |     |   |   |   |   |
| Adjusted        diluted earnings (loss) per share                  |                                   | (0.001     | )        |   | 0.016 |   |
|                                                               |                                   |       |          |   |   |  |   |

The Company engaged a third-party appraisalfirm to conduct a valuation on the impairment of goodwill inAugust 2002. Based on the result of valuation report provided bythe valuation service firm, no impairment was recognized as ofJune 30, 2002.

**Item 2. Management’s Discussionand Analysis of Financial Condition and 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. 

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***Results of Operations for the ThreeMonths Ended June 30, 2003 as Compared to the Three Months EndedJune 30, 2002***

Net sales of $23,012,848 for the three monthsended June 30, 2003 decreased by $2,520,442, representingapproximately a 9.87% decrease, over net sales of $25,533,290 forthe same period of 2002. The decrease was due primarily to thedecrease of approximately $948,572 in U.S. operations andapproximately $1,571,870 in Asia operations.

Asia revenue for the three months ended June30, 2003 were $18,729,880 compared to $20,301,750 for the threemonths ended June 30, 2002, a decrease of $1,571,870 or 7.74%.The decrease relates primarily to lower sales volume at CMSTechnology Limited (“CMS”). 

United States revenues for the three monthsended June 30, 2003 were $4,282,968 compared to $5,231,540 forthe three months ended June 30, 2002, a decrease of $948,572 or18.13%. Decreases relate primarily to decreased sales at PTIEnclosures, Inc. (“PTI”).

Revenues for the Company’s distributionbusinesses were $22,473,477 for the three months ended June 30,2003 compared to $24,575,198 for the three months ended June 30,2002, a decrease of $2,101,721 or 8.6%. The decrease relatesprimarily to decreased sales volume at CMS.

Revenues for the Company’s manufacturingbusinesses were $539,371 for the three months ended June 30, 2003compared to $958,092 for the three months ended June 30, 2002, adecrease of $418,721 or 43.7%. The decrease relates primarily todecreased sales at PTI.

Gross profit for the three months ended June30, 2003 was $1,093,971 decreasing by $30,022 and representingapproximately a 2.67% decrease, compared to $1,123,993 for thesame period of 2002. The reason for this decrease is due mainlyto the decrease in sales of PTI and CMS for the quarter endedJune 30, 2003. Gross profit as a percentage of net sales inclinedfrom 4.4% for the three months ended June 30, 2002 to 4.8% forthe three months ended June 30, 2003. The increase is principallydue to the higher margin generated through the sales of ClassicTrading, Inc. (“CTI”).

Asia gross profit as a percentage of sales forthe three months ended June 30, 2003 was 4.1% compared to 4.0%for the three months ended June 30, 2002.

United States gross profit as a percentage ofsales for the three months ended June 30, 2003 was 7.4% comparedto 5.8% for the three months ended June 30, 2002. The increase isprimarily attributable to increased gross margins at CTI.

Gross profits for the Company’sdistribution businesses as a percentage of sales for the threemonths ended June 30, 2003 was 4.5% compared to 3.9% for thethree months ended June 30, 2002. 

Gross profits for the Company’smanufacturing businesses as a percentage of sales for the threemonths ended June 30, 2003 was 16.3% compared to 16.4% for thethree months ended June 30, 2002.

Selling, general and administrative expensesdecreased by $360,916 to $1,073,062 in the three months endedJune 30, 2003 compared to $1,433,978 for the three months endedJune 30, 2002. As a percentage of revenue, these expensesdecreased from 4.7% in the three months ended June 30, 2002 to4.6% in the three months ended June 30, 2003.

Revenues from operations increased from a lossof $309,985 for the three months ended June 30, 2002 to revenueof $20,909 in the three months ended June 30, 2003. The increaseprimarily reflects the cost savings efforts instituted in 2003.Loss from operations as a percentage of revenue decreased from1.2% for the three months ended June 30, 2002 to a revenue fromoperations as a percentage of revenue to 0.1% for the threemonths ended June 30, 2003.

Net interest expense decreased by $243,679 from$263,699 for the three months ended June 30, 2002 to net interestexpense of $20,020 for the three months ended June 30, 2003. Thedecrease is mainly the result of decreased borrowings fromshareholders and commercial bank and lower interest rate duringthe three months ended June 30, 2003. The decrease also reflectedretro-adjustments on interest rate for shareholders’ loans.

Other income decreased by $75,146 from $215,556for the three months ended June 30, 2002 to $140,410 for thethree months ended June 30, 2003. The main source for thisdecrease is due to lower investment gain in 2003.

Net loss decreased by $440,304 from net loss of$342,893 for the three months ended June 30, 2002 to net gain of$97,411 for the three months ended June 30, 2003. These resultsreflect a loss of $0.03 per share for the three months ended June30, 2002 to a gain of $0.008 per share for the three months endedJune 30, 2003.

***Results of Operations for the SixMonths Ended June 30, 2003 as Compared to the Six Months EndedJune 30, 2002***

Net sales of $42,296,421 for the six monthsended June 30, 2003 decreased by $9,469,467, representingapproximately a 18.3% decrease, over net sales of $51,765,888 forthe same period of 2002. The decrease was due primarily to thedecrease of approximately $1,104,848 in U.S. operations andapproximately $8,364,619 in Asia operations.

Asia revenue for the six months ended June 30,2003 were $33,472,327 compared to $41,836,946 for the six monthsended June 30, 2002, a decrease of $8,364,619 or 20%. Decreasesrelate primarily to decreased sales volume at CMS.

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United States revenues for the six months endedJune30, 2003 were $8,824,094 compared to $9,928,942 for the sixmonths ended June 30, 2002, a decrease of $1,104,848 or 11.1%.Decreases relate to decreased sales at PTI.

Revenues for the Company’s distributionbusinesses were $41,270,046 for the six months ended June 30,2003 compared to $49,758,106 for the six months ended June 30,2002, a decrease of $8,488,060 or 17.1%. Decreases relateprimarily to decreased sales volume at CMS.

Revenue for the Company’s manufacturingbusinesses were $1,026,375 for the six months ended June 30, 2003compare to $2,007,782 for the six months ended June 30, 2002, adecrease of $981,407 or 48.9%. The decrease relates to decreasedsales at PTI.

Gross profit for the six months ended June 30,2003 was $2,103,605 decreasing by $507,981 and representingapproximately a 19.45% decrease, compared to $2,611,586 for thesame period of 2002. The reason for this decrease is due mainlyto the decrease in sales of PTI for the six months ended June 30,2003. Gross profits as a percentage of net sales are 5.0% for thesix months ended June 30, 2002 and 2003.

Asia gross profit as a percentage of sales forthe six months ended June 30, 2003 was 4.3% compared to 4.2% forthe six months ended June 30, 2002.

United States gross profit as a percentage ofsales for the six months ended June 30, 2003 was 7.6% compared to8.4% for the six months ended June 30, 2002.

Gross profits for the Company’sdistribution businesses as a percentage of sales for the sixmonths ended June 30, 2003 was 4.6% compared to 4.5% for the sixmonths ended June 30, 2002. 

Gross profits for the Company’smanufacturing businesses as a percentage of sales for the sixmonths ended June 30, 2003 was 21.8% compared to 17.9% for thesix months ended June 30, 2002. The increase is attributable toincreased gross margins at PTI.

Selling, general and administrative expensesdecreased by $770,108 to $1,914,842 in the six months ended June30, 2003 compared to $2,684,950 for the six months ended June 30,2002. As a percentage of revenue, these expenses decreased 28.7%in the six months ended June 30, 2003. The decline is due to thecost saving effort implemented by management for the six monthsended June 30, 2003. Cost saving efforts included significantlayoffs at PTI as well as cutbacks in operating expenses such astravel expense and purchases of supplies.

Revenues from operations increased from$(73,364) for the six months ended June 30, 2002 to $188,763 inthe six months ended June 30, 2003. The increase primarilyreflects the increase in profitability at PTI. Revenues fromoperations as a percentage of revenue increased from (0.14)% forthe six months ended June 30, 2002 to a revenue from operationsas a percentage of revenue to 0.44% for the six months ended June30, 2003.

Net interest expense decreased by $413,795 from$457,562 for the six months ended June 30, 2002 to net interestexpense of $43,767 for the six months ended June 30, 2003. Thedecrease is mainly the result of decreased borrowings fromshareholders and commercial bank and lower interest rate duringthe six months ended June 30, 2003. The decrease also reflectedretro-adjustments on interest rate for shareholders’ loans.

Other income decreased by $625,215 from$643,043 for the six months ended June 30, 2002 to $149,103 forthe six months ended June 30, 2003. The main source for thisdecrease is due to lower investment gain in 2003. 

Net income increased by $211,871 from net lossof $18,063 for the six months ended June 30, 2002 to net incomeof $193,808 for the six months ended June 30, 2003. These resultsreflect a loss of $0.001 per share for the six months ended June30, 2002 to an income of $0.016 per share for the six monthsended June 30, 2003.

**Liquidity and Capital Resources**

The Company’s capital requirements havebeen and will continue to be significant and its cash and cashequivalents have been sufficient. At June 30, 2003, the Companyhad working capital approximately $5,392,498 and cash of $841,086compared to a working capital of approximately $4,311,000 andcash of $1,324,000 at December 31, 2002.

Net cash provided by operating activities forthe six months ended June 30, 2003 was $516,638 as compared to$3,834,802 used in operating activities for the six months endedJune 30, 2002. The difference is mainly due to decrease ininventory, trade receivables and accounts payable.

Net cash used in investing activities for thesix months ended June 30, 2003 was $232,910 mainly fromtransfering shareholder’s loan to Company stock, as comparedto $549,692 net cash used in investing activities for the sixmonths ended June 30, 2002 for the investment in China.

Net cash used in financing activities for thesix months ended June 30, 2003 was $773,263 as compared to$2,765,395 in the six months ended June 30, 2002. The significantchanges are attributable to repayment on line of credit andshareholder loans.

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Management believes that the Company does havethe economic where-withal to maintain its operations for theforeseeable future. In July, 2002 the Company entered into a loanmodification and extension agreement with a commercial bank forits outstanding balance of $4 million at December 31, 2001, whichwas reduced by $100,000 payment made in 2002. Pursuant to theterms of the new agreement, monthly interest only payments are tobe made through maturity, $50,000 is due by September 15, 2002and no less than $1,000,000 is due on November 30, 2002. TheCompany owns 90% of all issued and outstanding shares in CMS andpledged 65% of all issued and outstanding shares in CMS againstthis outstanding balance and the maturity date of the note hasbeen extended until November 30, 2002. However, if the Companymakes all of the foregoing payments on a timely basis and has nototherwise defaulted on the loan, the maturity date for theremaining unpaid principal balance will be extended until June30, 2003. In addition, management is negotiating with theCompany’s major shareholders to convert a portion of theCompany’s indebtedness to them into equity in order toimprove the Company’s working capital position.Operationally, management’s plans include continuing actionsto cut or curb non-essential expenses and focusing on improvingthe sales of Autec. No assurance can be given that the Companywill be successful in extending or modifying its line of creditbeyond June 30, 2003 or that the Company will be able to returnto profitable operations. Looking for alternatives, the Companyis currently seeking a global financing agreement with a majorinternational bank to replace existing credit lines in U.S. andHong Kong. No assurance can be given that the alternative fundingsource will be available.

**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 denominated by U.S. dollars, thuseliminating the possible effect of currency fluctuations.

**Newly Issued Accounting Standards**

In June 2001, Financial Accounting StandardBoard issued Statement of Financial Accounting Standards, No.143, “Accounting for Asset Retirement Obligations,”(“SFAS No. 143”). FAS No. 143 is effective for fiscalyears beginning after June 15, 2002. SFAS No. 143 requires thatany legal obligation related to the retirement of long-livedassets be quantified and recorded as a liability with theassociated asset retirement cost capitalized on the balance sheetin the period it is incurred when a reasonable estimate of thefair value of the liability can be made. Management of theCompany expects that the adoption of SFAS No. 143 will be adoptedon their effective dates and that the adoption will not result inany material effects on its financial statements.

In April 2002, the FASB issued SFAS No. 145,“Rescission of FASB Statements No. 4, 44, and 64, Amendmentof FASB Statement No. 13, and Technical Corrections”. Thisstatement eliminates the current requirement that gains andlosses on debt extinguishment must be classified as extraordinaryitems in the income statement. Instead, such gains and losseswill be classified as extraordinary items only if they are deemedto be unusual and infrequent, in accordance with the current GAAPcriteria for extraordinary classification.

In addition, SFAS 145 eliminates aninconsistency in lease accounting by requiring that modificationsof capital leases that result in reclassification as operatingleases be accounted for consistent with sale-leaseback accountingrules. The statement also contains other nonsubstantivecorrections to authoritative accounting literature. The changesrelated to debt extinguishment will be effective for fiscal yearsbeginning after May 15, 2002, and the changes related to leaseaccounting will be effective for transactions occurring after May15, 2002. Adoption of this standard will not have any immediateeffect on the Company’s consolidated financial statements.The Company will apply this guidance prospectively. In June 2002,the FASB issued SFAS No. 146, “Accounting for CostsAssociated with Exit or Disposal Activities,” whichaddresses accounting for restructuring and similar costs. SFASNo. 146 supersedes previous accounting guidance, principallyEmerging Issues Task Force (“EITF”) Issue No. 94-3.SFAS No. 146 requires that the liability for costs associatedwith an exit or disposal activity be recognized when theliability is incurred. Under EITF No. 94-3, a liability for anexit cost was recognized at the date of a companys commitment toan exit plan. SFAS No. 146 also establishes that the liabilityshould initially be measured and recorded at fair value.Accordingly, SFAS No. 146 may affect the timing of recognizingfuture restructuring costs as well as the amount recognized. Theprovisions of SFAS 146 are to be applied prospectively to exit ordisposal activities initiated after December 31, 2002. Managementbelieves that the adoption of this standard will not have anyimmediate effect on the Company’s consolidated financialstatements.

**ITEM 3. QUANTITATIVE AND QUALITATIVEDISCLOSURES ABOUT MARKET RISK.**

Bridge Technology, Inc. develops and procuresproducts in the United States, Japan and Hong Kong, and theCompany sells primarily in North America, Asia and Europe. As aresult, financial results could be affected by factors such aschanges in foreign currency exchange rates or weak economicconditions in foreign markets. Since our Company’s productsare generally initially priced in U.S. Dollars and translated tolocal currency amounts, a strengthening of the dollar could makeour Company’s products less competitive in foreign markets.

**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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |

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**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. OTHERINFORMATION**

 

**ITEM 1. LEGAL PROCEEDINGS**

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.

**ITEM 5. OTHERINFORMATION**

None.

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**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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