**U.S.SECURITIES AND EXCHANGE COMMISSION**

**Washington,D.C. 20549**

 

**FORM 10-QSB/A**

 
| **x**      | ** ** | **QUARTERLY REPORT UNDER SECTION 13 OR  15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**                                                                                                                                                                                                                                                                                                                                                              |
|------------|------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ** ** | ** ** | ** **                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| ** ** | ** ** | **For the  quarterly period ended March 31, 2008**                                                                                                                                                                                                                                                                                                                                                                                                       |
| ** ** | ** ** | ** **                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| **o**      | ** ** | **TRANSITION REPORT UNDER SECTION 13  OR 15(d) OF THE EXCHANGE ACT**                                                                                                                                                                                                                                                                                                                                                                                |
| ** ** | ** ** | ** **                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| ** ** | ** ** | **For the  transition period from                                  to                                       ** |
| ** ** | ** ** | ** **                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| ** ** | ** ** | **Commission  File number 001-10320**                                                                                                                                                                                                                                                                                                                                                                                                                         |

 

**Tempco, Inc.**

(Exact name of smallbusiness issuer as specified in its charter)

 

| **Nevada**                                         | ** ** | **13-3465289**      |
|----------------------------------------------------|------------|---------------------|
| (State or other jurisdiction of                    |       | (I.R.S. Employer    |
| incorporation of organization)                     |       | Identification No.) |
|                                               |       |                |
| **7625 East Via Del Reposa, Scottsdale, AZ 85258** |
| (Address of principal executive offices)           |

 

**(480) 272-8745**

(Issuer’s telephonenumber)

 

**NETTime Solutions, Inc.**

(Former name, formeraddress and former fiscal year, if changed since last report)

 

Check whether the issuer (1) filedall reports required to be filed by Section 13 or 15(d) of theExchange Act during the past 12 months (or for such shorter period that theregistrant was required to file such reports), and (2) has been subject tosuch filing requirements for the past 90 days.  Yes x   No o

 

Indicate by check markwhether the registrant is a shell company (as defined in Rule 12b-2 of theExchange Act).   Yes o   No x

 

State the number ofshares outstanding of each of the issuer’s classes of common equity, as of thelatest practicable date: At June 26, 2008, the issuer had outstanding11,403,711 shares of Common Stock, par value $.005 per share.

 

Transitional SmallBusiness Disclosure Format:  Yes o   No x

 

 

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**EXPLANATORYNOTE**

 

ThisAmendment No. 1 on Form 10-QSB/A (this “Amendment”) amends theQuarterly Report on Form 10-QSB for the quarter ended March 31, 2008filed on May 20, 2008 (the “Original Filing”). This Amendment is beingfiled primarily to revise Part I Item 3 “Controls and Procedures” andvarious typographical errors. In addition, in connection with the filing ofthis Amendment and pursuant to the rules of the Securities and ExchangeCommission, we are including with this Amendment certain currently datedcertifications.

 

Exceptas described above, no other changes have been made to the Original Filing.This Amendment has not resulted in any changes to our previously reportedfinancial results. This Amendment continues to speak as of the date of theOriginal Filing, and we have not updated the disclosures contained in thisAmendment to reflect any events that occurred at a date subsequent to theOriginal Filing.

 

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**TABLEOF CONTENTS**

 
| ** **                                                                                                                        | ** ** | ** **                                                      | ** ** | **PAGE**   |
|-----------------------------------------------------------------------------------------------------------------------------------|------------|-----------------------------------------------------------------|------------|------------|
| ** **                                                                                                                        | ** ** | ** **                                                      | ** ** | ** ** |
| **PART I -  FINANCIAL INFORMATION**                                                                                          | ** ** | 2                                                               |
| Item 1.                                                                                                                           |       | Financial  Statements                                           |       | 2          |
| Condensed  Consolidated Balance Sheets as of March 31, 2008 (unaudited) and  June 30, 2007                              |       | 2                                                               |
| Unaudited  Condensed Consolidated Statements of Operations for the Three and Nine Months  Ended March 31, 2008 and 2007      |       | 3                                                               |
| Unaudited  Condensed Consolidated Statement of Shareholders’ Equity (Deficit) for the  Nine Months Ended March 31, 2008 |       | 4                                                               |
| Unaudited  Condensed Consolidated Statements of Cash Flows for the Nine Months Ended  March 31, 2008 and 2007                |       | 5                                                               |
| Notes to Unaudited Condensed Consolidated Financial  Statements                                                                   |       | 6                                                               |
| Item 2.                                                                                                                           |       | Management’s  Discussion and Analysis or Plan of Operation |       | 11         |
| Item 3.                                                                                                                           |       | Controls and  Procedures                                        |       | 12         |
|                                                                                                                              |       |                                                            |       |       |
| **PART II  - OTHER INFORMATION**                                                                                             | ** ** | 13                                                              |
| Item 1.                                                                                                                           |       | Legal  Proceedings                                              |       | 13         |
| Item 2.                                                                                                                           |       | Unregistered  Sales of Equity Securities and Use of Proceeds    |       | 13         |
| Item 3.                                                                                                                           |       | Defaults Upon Senior Securities                                 |       | 13         |
| Item 4.                                                                                                                           |       | Submission of Matters to a Vote of Security Holders             |       | 13         |
| Item 5.                                                                                                                           |       | Other information                                               |       | 14         |
| Item 6.                                                                                                                           |       | Exhibits                                                        |       | 14         |
| Signatures                                                                                                                        |       | 15                                                              |

 

1

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#### **PART I FINANCIAL INFORMATION**

#### ** **

**Item 1-Financial Statements**

 

#### **TEMPCO, INC. AND SUBSIDIARIES**

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

 
| ** **                                                                                                                    | ** ** | **March 31,** | ** ** | **June 30,** | ** ** |
|-------------------------------------------------------------------------------------------------------------------------------|------------|--------------------|------------|-------------------|------------|
| ** **                                                                                                                    | ** ** | **2008**           | ** ** | **2007**          | ** ** |
| ** **                                                                                                                    | ** ** | ** **         | ** ** | ** **        | ** ** |
| **ASSETS**                                                                                                                    | ** ** | ** **         | ** ** | ** **        | ** ** |
| Current assets:                                                                                                               |       |               |       |              |       |
| Cash and cash  equivalents                                                                                                    |       | $                  | 24,665     |              | $          | 40,000 |   |
| Current assets  of discontinued operations, net                                                                               |       | —             |       | 1,233,881         |       |
| Total current  assets                                                                                                         |       | 24,665             |       | 1,273,881         |       |
|                                                                                                                          |       |               |       |              |       |
| Long term assets  of discontinued operations                                                                                  |       | —             |       | 328,827           |       |
| Note receivable                                                                                                               |       | 200,000            |       | —            |       |
| Accrued interest  receivable                                                                                                  |       | 2,750              |       | —            |       |
| Total assets                                                                                                                  |       | $                  | 227,415    |              | $          | 1,602,708 |   |
| ** **                                                                                                                    | ** ** | ** **         | ** ** | ** **        | ** ** |
| **LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)**                                                                       | ** ** | ** **         | ** ** | ** **        | ** ** |
| Current  Liabilities:                                                                                                         |       |               |       |              |       |
| Accounts payable                                                                                                              |       | $                  | 6,246      |              | $          | — |   |
| Current  liabilities of discontinued operations                                                                               |       | —             |       | 2,320,869         |       |
| Total current  liabilities                                                                                                    |       | 6,246              |       | 2,320,869         |       |
|                                                                                                                          |       |               |       |              |       |
| Long term  liabilities of discontinued operations                                                                             |       | —             |       | 909,442           |       |
| Total  liabilities                                                                                                            |       | 6,246              |       | 3,230,311         |       |
|                                                                                                                          |       |               |       |              |       |
| Common stock  subject to registration rights (351,923) shares                                                                 |       | —             |       | 207,635           |       |
|                                                                                                                          |       |               |       |              |       |
| Commitments:                                                                                                                  |       | —             |       | —            |       |
|                                                                                                                          |       |               |       |              |       |
| Stockholders’  equity (deficit):                                                                                         |       |               |       |              |       |
| Common stock,  $.005 par value 50,000,000 authorized; 8,903,711 and 15,030,481 outstanding,  net of 6,478,693 treasury shares |       | 76,913             |       | 75,153            |       |
| Contributed  capital                                                                                                          |       | 12,160,029         |       | 9,889,188         |       |
| Accumulated  deficit                                                                                                          |       | (11,173,422        | )          | (11,799,579       | )          |
| Treasury stock,  at cost (6,478,693 shares)                                                                                   |       | (842,351           | )          | —            |       |
| Total  stockholders’ equity (deficit)                                                                                    |       | 221,169            |       | (1,835,238        | )          |
| Total  liabilities and stockholders’ equity (deficit)                                                                    |       | $                  | 227,415    |              | $          | 1,602,708 |   |

 

The AccompanyingNotes are an Integral Part of the Financial Statements

 

2

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TEMPCO, INC. ANDSUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

 
| ** **                                                    | ** ** | **Three Months Ended** | ** ** | **Nine Months Ended** | ** ** |
|---------------------------------------------------------------|------------|----------------------------------|------------|---------------------------------|------------|
| ** **                                                    | ** ** | **March 31,**               | ** ** | **March 31,**              | ** ** |
| ** **                                                    | ** ** | **2008**                         | ** ** | **2007**                        | ** ** | **2008** | ** ** | **2007** | ** ** |
|                                                          |       |                             |       |                            |       |   |   |   |   |
| Costs and  Expenses                                           |       |                             |       |                            |       |   |   |   |   |
| General and  administrative                                   |       | $                                | 21,581     |                            | $          | — |   | $ | 21,581 |   | $ | — |   |
| Operating loss                                                |       | (21,581                          | )          | —                          |       | (21,581 | ) | — |   |
| Interest income                                               |       | 4,850                            |       | 17                              |       | 8,196 |   | 3,321 |   |
| Net income  (loss) from continuing operations                 |       | (16,731                          | )          | 17                              |       | (13,385 | ) | 3,321 |   |
| Discontinued  operations:                                     |       |                             |       |                            |       |   |   |   |   |
| Income (loss)  from discontinued operations                   |       | (35,889                          | )          | 1,624,767                       |       | 639,542 |   | 932,830 |   |
|                                                          |       |                             |       |                            |       |   |   |   |   |
| Net income  (loss)                                            |       | $                                | (52,620    | )                               | $          | 1,624,784 |   | $ | 626,157 |   | $ | 936,151 |   |
|                                                          |       |                             |       |                            |       |   |   |   |   |
| Basic and  diluted net income (loss) per common share:        |       |                             |       |                            |       |   |   |   |   |
| Loss from  continuing operations                              |       | $                                | —     |                            | $          | — |   | $ | — |   | $ | — |   |
| Income from  discontinued operations                          |       | —                           |       | 0.11                            |       | 0.04 |   | 0.06 |   |
|                                                          |       |                             |       |                            |       |   |   |   |   |
| Basic and  diluted earnings per share                         |       | $                                | —     |                            | $          | 0.11 |   | $ | 0.04 |   | $ | 0.06 |   |
|                                                          |       |                             |       |                            |       |   |   |   |   |
| Basic and  diluted weighted average common shares outstanding |       | 11,395,316                       |       | 14,884,459                      |       | 14,063,107 |   | 14,737,090 |   |

 

The AccompanyingNotes are an Integral Part of the Financial Statements

 

3

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TEMPCO, INC. ANDSUBSIDIARIES

CONDENSED CONSOLIDATEDSTATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT)

FOR THE NINE MONTH PERIOD ENDED MARCH 31,2008

(UNAUDITED)

 
| ** **                                            | ** ** | **Common Stock** | ** ** | **Treasury Stock** | ** ** | **Contributed** | ** ** | **Accumulated** | ** ** | ** **  | ** ** |
|-------------------------------------------------------|------------|-----------------------|------------|-------------------------|------------|-----------------|------------|-----------------|------------|-------------|------------|
| ** **                                            | ** ** | **Shares**            | ** ** | **Amount**              | ** ** | **Shares**      | ** ** | **Amount**      | ** ** | **Capital** | ** ** | **Deficit** | ** ** | **Total** | ** ** |
|                                                  |       |                  |       |                    |       |            |       |            |       |        |       |   |   |   |   |
| Balance at  June 30, 2007                        |       | 15,030,481            |       | $                       | 75,153     |            | —     |            | $          | —      |       | $ | 9,889,188 |   | $ | (11,799,579 | ) | $ | (1,835,238 | ) |
| Stock based  compensation                             |       | —                |       | —                  |       | —          |       | —          |       | 42,062      |       | — |   | 42,062 |   |
| Reclassification  of restricted shares to equity      |       | 351,923               |       | 1,760                   |       | —          |       | —          |       | 205,875     |       | — |   | 207,635 |   |
| Shares  surrendered in relation to Asset Sale         |       | —                |       | —                  |       | (6,478,693      | )          | (842,351        | )          | —      |       | — |   | (842,351 | ) |
| Contributed  capital adjustment related to Asset Sale |       | —                |       | —                  |       | —          |       | —          |       | 2,022,904   |       | — |   | 2,022,904 |   |
| Net income                                            |       | —                |       | —                  |       | —          |       | —          |       | —      |       | 626,157 |   | 626,157 |   |
| Balance at  March 31, 2008                       |       | 15,382,404            |       | $                       | 76,913     |            | (6,478,693 | )               | $          | (842,351    | )          | $ | 12,160,029 |   | $ | (11,173,422 | ) | $ | 221,169 |   |

 

The AccompanyingNotes are an Integral Part of the Financial Statements

 

4

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#### **TEMPCO,INC. AND SUBSIDIARIES**

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

## **(UNAUDITED)**

## ** **

| ** **                                                    | ** ** | **Nine Months Ended** | ** ** |
|---------------------------------------------------------------|------------|---------------------------------|------------|
| ** **                                                    | ** ** | **March 31,**              | ** ** |
| ** **                                                    | ** ** | **2008**                        | ** ** | **2007** | ** ** |
|                                                          |       |                            |       |   |   |
| **Cash  flows from operating activities**                     |       |                            |       |   |   |
| Net income                                                    |       | $                               | 626,157    |   | $ | 936,151 |   |
| Adjustments to  reconcile net income to net cash              |       |                            |       |   |   |
| Provided (used)  by operating activities:                     |       | —                          |       | — |   |
| Gain on Asset  Sale                                           |       | (1,200,000                      | )          | (2,012,035 | ) |
| Loss on disposal  of fixed assets                             |       | 45,609                          |       | — |   |
| Depreciation                                                  |       | 75,916                          |       | 111,694 |   |
| Amortization of  deferred loan costs                          |       | 197,246                         |       | — |   |
| Stock based  compensation                                     |       | 42,062                          |       | 95,372 |   |
| Common stock,  stock options and warrants issued for services |       | —                          |       | 148,000 |   |
| Inventory  relinquished as part of asset sale                 |       | —                          |       | (283,603 | ) |
| Changes in  Assets and Liabilities:                           |       |                            |       |   |   |
| Accounts  receivable                                          |       | (35,517                         | )          | 775,550 |   |
| Inventory                                                     |       | (3,613                          | )          | 511,901 |   |
| Deferred loan  costs and other current assets                 |       | 217,056                         |       | 70,073 |   |
| Other assets                                                  |       | (14,236                         | )          | 157,440 |   |
| Accrued interest  receivable                                  |       | (2,750                          | )          | — |   |
| Accounts payable                                              |       | (249,710                        | )          | (117,414 | ) |
| Accrued  liabilities                                          |       | (268,083                        | )          | (72,664 | ) |
| Deferred revenue                                              |       | (257,121                        | )          | (296,879 | ) |
| Net Cash  Provided (Used) by Operating Activities             |       | (826,984                        | )          | 23,586 |   |
|                                                          |       |                            |       |   |   |
| **Cash  flows from investing activities**                     |       |                            |       |   |   |
| Purchase of  property and equipment                           |       | (3,472                          | )          | (23,826 | ) |
| Proceeds from  sale of assets                                 |       | 1,000,000                       |       | 665,024 |   |
| Cash  relinquished in asset sale                              |       | (397,472                        | )          | — |   |
| Restricted cash  held in escrow                               |       | —                          |       | (250,000 | ) |
| Net Cash  Provided by Investing Activities                    |       | 599,056                         |       | 391,198 |   |
|                                                          |       |                            |       |   |   |
| **Cash  flows from financing activities:**                    |       |                            |       |   |   |
| Reypayment of  debt                                           |       | (26,108                         | )          | (733,021 | ) |
| Proceeds from  debt                                           |       | —                          |       | 318,341 |   |
| Proceeds from  exercise of options and warrants               |       | —                          |       | 4,200 |   |
| Net Cash  Provided Used by Financing Activities               |       | (26,108                         | )          | (410,480 | ) |
|                                                          |       |                            |       |   |   |
| Net change in  cash and cash equivalents                      |       | (254,036                        | )          | 4,304 |   |
|                                                          |       |                            |       |   |   |
| Cash and cash  equivalents at beginning of year               |       | 278,701                         |       | 615,204 |   |
| Cash and cash  equivalents at end of period                   |       | $                               | 24,665     |   | $ | 619,508 |   |
|                                                          |       |                            |       |   |   |
| Supplemental  Disclosures:                                    |       |                            |       |   |   |
| Cash paid for  income taxes                                   |       | $                               | —     |   | $ | — |   |
| Cash paid for  interest                                       |       | $                               | 101,117    |   | $ | 326,951 |   |

## ** **

The AccompanyingNotes are an Integral Part of the Financial Statements

 

5

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#### ** **

#### **TEMPCO,INC. AND SUBSIDIARIES**

## **NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

 

**SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**

 

Note A - Basis of Presentation and Interim Consolidated FinancialStatements

 

Tempco, Inc., a Nevada corporation, is a holdingcorporation, as a result of the sale of substantially all of our net operatingassets in February 2008, which is described in further detail in Note Bbelow. We do not have any ongoing business operations and are functioning as a “shell”corporation following such sale.  Thehistorical results of the divested business related to the Asset Sale haveaccordingly been classified as discontinued operations in these condensedconsolidated financial statements.

 

In February 2008, the Company filed a Certificate ofAmendment to its Articles of Incorporation with the Nevada Secretary of Stateto change the corporate name of NETtime Solutions, Inc., a Nevada corporation,to Tempco, Inc.  The effective date ofthe parent corporate name change was February 4, 2008.  The Company filed a Second Amendment to theArticles of Incorporation with the Arizona Corporation Commission to change thecorporate name of its wholly-owned subsidiary, NETtime Solutions, Inc., anArizona corporation, to Tempco, Inc.  Theeffective date of the subsidiary corporate name change was also February 4,2008.

 

Unless the context indicates otherwise, references tothe Company in this report shall include Tempco, Inc. (the parent companyorganized in Nevada), Tempco, Inc. (our wholly-owned subsidiary organized inArizona) and NetEdge Devices, LLC, an Arizona limited liability company (ourwholly-owned subsidiary).

 

The accompanying unaudited condensed consolidatedfinancial statements of Tempco, Inc. and subsidiaries have been preparedin accordance with generally accepted accounting principles (“GAAP”), pursuantto the rules and regulations of the Securities and Exchange Commission,and are unaudited.  Accordingly, they donot include all the information and footnotes required by GAAP for completefinancial statements.  In the opinion ofmanagement, all adjustments (which include only normal recurring adjustments)necessary for a fair presentation of the results for the interim periodspresented have been made.  The resultsfor the nine month period ended March 31, 2008, may not be indicative ofthe results for the entire year.  Thesefinancial statements should be read in conjunction with the Company’s AnnualReport on Form 10-KSB for the fiscal year ended June 30, 2007.

 

The preparation of financial statements in conformitywith GAAP requires management to make estimates and assumptions that affect thereported amounts of assets and liabilities and disclosure of contingent assetsand liabilities at the date of the financial statements and the reportedamounts of revenues and expenses during the reporting period.  Actual results could differ materially fromthese estimates.

 

Note B – Asset Sale:

 

The Company has had a history of losses fromoperations and due to the Company’s financial condition and inability to continueongoing operations with current cash flow, along with debt obligations, theCompany’s Board of Directors and management determined that the sale ofsubstantially all of our operating assets and liabilities (the “Asset Sale”)would be in the best interest of the Company’s stockholders.

 

On August 31, 2007, the Board of Directors approvedthe Asset Sale pursuant to the terms of the Memorandum of Understanding, datedSeptember 24, 2007 (the “Memorandum of Understanding”). Under the terms of theMemorandum of Understanding, certain insiders of the Company, including all ofthe members of the Company’s Board of Directors, the President and ChiefExecutive Officer, together with certain other shareholders of the Company,collectively referred to as the “Contributors,” formed NETtime Solutions, LLC(the “Buyer”) for the purpose of consummating the Asset Sale and acquiringsubstantially 

 

6

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#### **TEMPCO,INC. AND SUBSIDIARIES**

## **NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

 

all of the netassets of the Company. The Contributors contributed certain issued andoutstanding shares of the Company that they collectively held to NETtimeSolutions, LLC pursuant to the terms of the limited liability company operatingagreement governing NETtime Solutions, LLC. Accordingly, on February 4, 2008,we completed the sale of substantially all of our net assets and the net assetsof our two operating subsidiaries, NETtime Solutions, Inc., an Arizonacorporation and NetEdge Devices, LLC, an Arizona limited liability company, tothe Buyer for consideration valued at approximately $1,042,000, which consistedof the following:

 

(i)      6,478,693 shares which were to be delivered to theSeller at Closing.

(ii)     An unsecured promissory note in the aggregateprincipal amount of $200,000. The promissory note bears interest at the rate of9%, with principal and interest due on February 4, 2011.

 

Includedin the liabilities assumed by the Buyer were approximately $500,000 of trade payables and $1,500,000of short and long-term notes.  No gain or loss was recorded in relation to thetransaction because the Asset Sale was with a related party.  Accordingly, the excess of the fair value ofthe consideration received over the net assets disposed of has been treated asa capital contribution.  The followingtable summarizes the consideration received and the net assets disposed of:

 
| Fair value of  6,478,693 shares received                                             |   | $         | 842,351   |   |
|--------------------------------------------------------------------------------------|--------|-----------|-----------|--------|
| Promissory note  receivable                                                          |   | 200,000   |      |
|                                                                                 |   |      |      |
| Total fair value  of consideration received                                          |   | $         | 1,042,351 |   |
|                                                                                 |   |      |      |
| Cash                                                                                 |   | $         | 397,472   |   |
| Accounts  receivable                                                                 |   | 736,595   |      |
| Inventory                                                                            |   | 70,579    |      |
| Property and  Equipment, net                                                         |   | 175,591   |      |
| Other assets                                                                         |   | 62,253    |      |
| Total assets  disposed of                                                            |   | 1,442,490 |      |
|                                                                                 |   |      |      |
| Accounts payable                                                                     |   | 295,146   |      |
| Accrued liabilities                                                                  |   | 326,792   |      |
| Deferred revenue                                                                     |   | 307,055   |      |
| Notes  payable-related parties                                                       |   | 1,494,050 |      |
|                                                                                 |   |      |      |
| Total current  liabilities disposed of                                               |   | 2,423,043 |      |
|                                                                                 |   |      |      |
| Net liabilities  disposed of                                                         |   | $         | (980,553  | )      |
|                                                                                 |   |      |      |
| Excess of the  fair value of the consideration received over the net assets disposed |   | $         | 2,022,904 |   |

 

Note C- Discontinued Operations

 

As a result of the Asset Sale, all prior periodbalances have been reclassified to reflect the assets and liabilities and theresults of operations as discontinued operations.

 

7

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#### **TEMPCO,INC. AND SUBSIDIARIES**

## **NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

 

Assetsand liabilities of discontinued operations as of June 30, 2007 consist ofthe following:

 
| Cash                                   |   | $         | 278,701   |   |
|----------------------------------------|--------|-----------|-----------|--------|
| Accounts receivable                    |   | 501,078   |      |
| Inventory                              |   | 66,966    |      |
| Property and  Equipment, net           |   | 293,644   |      |
| Other assets                           |   | 462,319   |      |
| Total assets  disposed of              |   | $         | 1,602,708 |   |
|                                   |   |      |      |
| Accounts payable                       |   | $         | 551,102   |   |
| Accrued  liabilities                   |   | 594,875   |      |
| Deferred revenue                       |   | 564,176   |      |
| Notes payable-related  parties         |   | 610,716   |      |
|                                   |   |      |      |
| Total current  liabilities disposed of |   | 2,320,869 |      |
|                                   |   |      |      |
| Long-term notes  payable               |   | 909,442   |      |
|                                   |   |      |      |
| Total  liabilities disposed of         |   | $         | 3,230,311 |   |

 

Included in Discontinued Operations for the threemonths ended March 31, 2008 and 2007 are revenues of $239,109 and$1,371,372, respectively. Revenues included in discontinued operations for thenine months ended March 31, 2008 and 2007 are $1,526,220 and $4,904,304.Net income (loss) reflected in discontinued operations for the three monthsended March 31, 2008 and 2007 is $(35,889) and $1,624,767, respectively.For the nine months ended March 31, 2008 and 2007, net income included indiscontinued operations is $639,542 and $932,830, respectively.

 

Note D - Income (Loss) Per Share:

 

Basicincome (loss) per share of common stock was computed bydividing the net income (loss) by the weighted average number of shares ofcommon stock outstanding during the period.

 

Dilutedincome (loss) per share is computed based on the weighted average number ofshares of common stock and dilutive securities outstanding during theperiod.  Dilutive securities are optionsand warrants that are freely exercisable into common stock at less than theprevailing market price. Dilutive securities are not included in the weightedaverage number of shares when inclusion would increase the earnings per shareor decrease the loss per share.  For thethree and nine months ended March 31, 2008 and 2007, no securities wereincluded in weighted average shares outstanding as the effect would beanti-dilutive.

 

Note E - Stock Based Compensation:

 

Effective July 1,2005, the Company adopted the fair value recognition provisions of Statement ofFinancial Accounting Standards Board No. 123(R), “Share–Based Payment,” usingthe modified prospective-transition method. Under this transition method, compensation expense recognized for thethree months ended and nine months ended March 31, 2008 and 2007  includes: (a) compensation expense for all share-based payments granted priorto, but not yet vested as of June 30, 2005 based on the grant date fairvalue estimated in accordance with the original provisions of SFAS 123 and (b) compensationexpense for all share-based payments granted subsequent to June 30, 2005,based on the grant date fair value estimated in accordance with the provisionsof SFAS 123 (R).  The fair valueof option grants is estimated as of the date of grant utilizing theBlack-Scholes option-pricing model and amortized to expense over the options’vesting period net of estimated forfeitures.

 

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#### **TEMPCO,INC. AND SUBSIDIARIES**

## **NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

 

In July 2007, the Company issued 152,767 options to the members ofthe board. Those options have an exercise price of $.16 and were fully vestedon the date of grant. In February, 2008, the Company issued 1,500,000 optionsto the new members of the board. These options vest over a period of 13 months,and have an exercise price of $.09. The options were valued using the followingassumptions:

 
| Risk Free Rate:   |   | 2.1%-4%   |
|-------------------|--------|-----------|
| Volatility:       |   | 138%-160% |
| Expected life     |   | 3 Years   |
| Expected dividend |   | 0%        |

 

A summary of options activity for the period ended March 31, 2008is as follows:

 
| Outstanding at  June 30, 2007  |   | 2,289,489  |   |
|-------------------------------------|--------|------------|--------|
|                                |   |       |   |
| Granted                             |   | 1,652,767  |   |
| Exercised                           |   | —     |   |
| Forfeited                           |   | (1,216,000 | )      |
|                                |   |       |   |
| Outstanding at  March 31, 2008 |   | 2,726,256  |   |

 

Due to the Asset Sale, 1,216,000 unvestedoptions which had previously been issued to employees were forfeited. As such,in the current period, the Company has reversed compensation expense in theamount of $34,875.

 

Note F - New Accounting Pronouncements:

 

In December 2007,the Financial Accounting Standards Board issued Statement of FinancialAccounting Standards No. 160, “Non-controlling Interests in ConsolidatedFinancial Statements—an amendment of Accounting Research Bulletin No. 51”(“SFAS 160”). SFAS 160 establishes new accounting and reporting standards forthe noncontrolling interest in a subsidiary and for the deconsolidation of asubsidiary. SFAS No. 160 is effective for fiscal years beginning on orafter December 15, 2008. The Company does not believe that SFAS 160 willhave a material impact on its consolidated financial statements.

 

In December 2007,the Financial Accounting Standards Board issued Statement of FinancialAccounting Standards No. 141 (revised 2007), “Business Combinations” (“SFAS141(R)”). SFAS 141(R) will change the accounting for businesscombinations. Under SFAS No. 141(R), an acquiring entity will be requiredto recognize all the assets acquired and liabilities assumed in a transactionat the acquisition-date fair value with limited exceptions. SFAS No. 141(R) willchange the accounting treatment and disclosure for certain specific items in abusiness combination. SFAS No. 141(R) applies prospectively tobusiness combinations for which the acquisition date is on or after thebeginning of the first annual reporting period beginning on or after December 15,2008. SFAS 141(R) will impact the Company in the event of any futureacquisition.

 

In February 2007,the Financial Accounting Standards Board issued Statement of FinancialAccounting Standards No. 159, “The Fair Value Option for Financial Assetsand Financial Liabilities—Including an amendment of Statement of FinancialAccounting Standards Statement No. 115” (“SFAS 159”), which permitsentities to choose to measure many financial instruments and certain otheritems at fair value at specified election dates. A business entity is requiredto report unrealized gains and losses on items for which the fair value optionhas been elected in earnings at each subsequent reporting date. This statementis expected to expand the use of fair value measurement. SFAS 159 is effectivefor financial statements issued for fiscal years beginning after November 15,2007, and interim periods within those fiscal years. The Company has notdetermined the impact of SFAS 159 on its financial position or results ofoperations.

 

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#### **TEMPCO,INC. AND SUBSIDIARIES**

## **NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

 

In September 2006, the Financial AccountingStandard Board issued a Statement of Financial Accounting Standards No. 157,“Fair Value Measurements” (“SFAS 157”). The Statement defines fair value,establishes a framework for measuring fair value in accordance with GAAP, andexpands disclosures about fair value measurements.  This Statement is effective for financialstatements issued for fiscal years beginning after November 15, 2007, andinterim periods within those fiscal years. The adoption of SFAS 157 is notexpected to have a material affect on our financial position or results ofoperations.

 

In March 2008, the FASB issued SFAS No. 161,“Disclosures about Derivative Instruments and Hedging Activities, an amendmentof FASB Statement No. 13*3*” (“SFAS 161”),which establishes, among other things, the disclosure requirements forderivative instruments and hedging activities. SFAS 161 requiresqualitative disclosures about objectives and strategies for using derivatives,quantitative disclosures about fair value amounts of and gains and losses onderivative instruments, and disclosures about credit-risk-related contingentfeatures in derivative agreements. SFAS 161 is effective for fiscalperiods and interim periods beginning after November 15, 2008.  We are currently evaluating theimpact SFAS 161 will have on our financial statement disclosures.

 

Note G – Subsequent Events:

 

On April 15, 2008, the Company closed on grossproceeds of $250,000 in a private placement through the sale of 2,500,000shares of common stock.  The shares inthe private placement were offered and sold solely to accredited investors inreliance on the exemption from registration provided by Rule 506 of RegulationD under the Securities Act of 1933, as amended. Source Capital Group, Inc. acted as the sole placement agent in theprivate placement.  In connection withthe private placement, the Company paid Source Capital Group (i) a cash salescommission of $25,000 (representing 10% of the gross proceeds raised in theprivate placement) and (ii) warrants to purchase 250,000 shares of common stock(representing 10% of the aggregate number of shares of common stock sold in theprivate placement), with each warrant having an exercise price of $0.12 pershare, exercisable until April 15, 2013.

 

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**Item 2. Management’s Discussion and Analysis or Plan of Operation.**

 

**Overview**

 

This quarterly report on Form 10-QSB covers the quarterly periodended March 31, 2008.  On February 4,2008, our shareholders approved the proposed sale of substantially all of ournet assets, and the net assets of our two operating subsidiaries, to a newlyformed private company called NETtime Solutions, LLC (the “Buyer”) forconsideration valued at $1,042,351, which consisted of the following:

 

(i)      6,478,693 shares which were to be delivered to theSellers at Closing.

(ii)     An unsecured promissory note in theaggregate principal amount of $200,000. The promissory note bears interest atthe rate of 9%, with principal and interest due on February 4, 2011.

 

Included in the liabilities assumed by the Buyer were approximately$620,000 of trade payables and accrued liabilities and $1,494,050 of notespayable-related parties. No gain or loss was recorded in relation to thetransaction because the Asset Sale was with a related party. Accordingly, theexcess of the fair value of the consideration received over the net assetsdisposed of, which totaled $2,022,904, has been treated as a capitalcontribution.

 

As a result ofthis sale transaction, the Company now has no operating business and is, ineffect, a “shell” company with no significant liabilities and minimalcash.  Our new management team and boardof directors intends to commence looking for a private company that it canmerge with or acquire and that has an operating business that will helpincrease shareholder value.  No suchcompany has yet been identified and there is no assurance of any success inthis regard.  Your review of thisquarterly report should be read with the above facts in mind.

 

### **Critical Accounting Policies**

### ** **

Our significant accounting policies are described inthe audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-KSBfor the year ended June 30, 2007. We believe our most critical accounting policies is the valuation ofstock-based compensation and classification.

 

  Determining the appropriate fair value model andcalculating the fair value of share-based payment awards requires the input ofhighly subjective assumptions, including the expected life of the share-basedpayment awards and stock price volatility. The assumptions used in calculatingthe fair value of share-based payment awards represent management’s bestestimates, but these estimates involve inherent uncertainties and theapplication of management judgment. As a result, if factors change and we usedifferent assumptions, our stock-based compensation expense could be materiallydifferent in the future. In addition, we are required to estimate the expectedforfeiture rate and only recognize expense for those shares expected to vest.If our actual forfeiture rate is materially different from our estimate, thestock-based compensation expense could be significantly different from what wehave recorded in the current and prior periods.

 

We now plan to seek to find and acquire or merge with a private companywith an operating business that we believe will result in an increase in ourshareholder value. No such company has yet been identified and there is noassurance of any success in this regard. Therefore, we have reported ourhistorical operations as discontinued operations within the accompanyingcondensed consolidated financial statements for all periods presented.

 

### **Dueto the private placement that was completed in April 2008, we believe thatthe Company has sufficient capital to fund our operations for the next twelvemonths or until such earlier time that we identify a business with which tomerge or acquire. **

 

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### **Results of Operationsfor the Three and Nine Months Ended March 31, 2008 and 2007**

### ** **

As discussed above, on February 4, 2008, we completed the sale ofall of substantially all of our net assets. In completing this transaction, theCompany has become a “shell” company; having no operating business or source ofrevenues and only nominal assets and the historical results of the divestedbusiness related to the Asset Sale have accordingly been classified asdiscontinued operations in these condensed financial statements. Accordingly,the loss from continuing operations consists of general and administrativeexpenses for all periods presented.

 

**Item 3. Controls and Procedures.**

 

*Disclosure Controls and Procedures*. During and subsequent to the reportingperiod, and under the supervision and with the participation of our management,including our principal executive and financial officer, we conducted anevaluation of our disclosure controls and procedures that were in effect at theend of the period covered by this report. Disclosure controls and procedures isdefined under Rule 13a-15(e) of the Securities Exchange Act of 1934 (the “Act”)as those controls and other procedures of an issuer that are designed to ensurethat the information required to be disclosed by the issuer in the reports itfiles or submits under the Act is recorded, processed, summarized and reported,within the time periods specified in the Commission’s rules and forms.Disclosure controls and procedures include, without limitation, controls andprocedures designed to ensure that information required to be disclosed by anissuer in the reports that it files or submits under the Act is accumulated andcommunicated to the issuer’s management, including its principal executiveofficer and principal financial officer, or persons performing similarfunctions, as appropriate to allow timely decisions regarding requireddisclosure. Based on their evaluation, our principal executive officer andprincipal financial and accounting officer have concluded that our disclosurecontrols and procedures that were in effect on March 31, 2008 were effective toensure that information required to be disclosed in our reports to be filed underthe Exchange Act is accumulated and communicated to management, including thechief executive officer and chief financial officer, to allow timely decisionsregarding disclosures and is recorded, processed, summarized and reportedwithin the time periods specified in the Securities and Exchange Commission’srules and forms.

 

*Changes in Internal Control Over FinancialReporting*. Theterm “internal control over financial reporting” is defined under Rule13a-15(f) of the Act and refers to the process of a company that is designedby, or under the supervision of, the issuer’s principal executive and principalfinancial officers, or persons performing similar functions, and effected bythe issuer’s board of directors, management and other personnel, to providereasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance withgenerally accepted accounting principles and includes those policies andprocedures that: (i) pertain to the maintenance of records that in reasonabledetail accurately and fairly reflect the transactions and dispositions of theassets of the issuer; (ii) provide reasonable assurance that transactions arerecorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles, and that receipts andexpenditures of the issuer are being made only in accordance withauthorizations of management and directors of the issuer; and (iii) providereasonable assurance regarding the prevention or timely detection ofunauthorized acquisition, use or disposition of the issuer’s assets that couldhave a material effect on the financial statements.

 

During the third quarter of fiscal year 2008 we discontinued all operationsand became a “shell company”, without employees or significant financialtransactions. There were no other changes in our internal controls overfinancial reporting during the nine months ended March 31, 2008 that havematerially affected, or are reasonably likely to materially affect, ourinternal control over financial reporting

 

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# **FORWARD-LOOKING INFORMATION**

# ** **

The statements contained in this Quarterly Report on Form 10-QSBthat are not historical fact are forward-looking statements (as such term isdefined in the Private Securities Litigation Reform Act of 1995), within themeaning of Section 27A of the Securities Act of 1933, as amended, and Section 21Eof the Securities Exchange Act of 1934, as amended.  The forward-looking statements containedherein are based on current expectations that involve a number of risks anduncertainties.  These statements can beidentified by the use of forward-looking terminology such as “believes,” “expects,”“may,” “will,” “should,” or “anticipates,” or the negative thereof or othervariations thereon or comparable terminology, or by discussions of strategythat involve risks and uncertainties. The Company wishes to caution the reader that these forward-looking statementsthat are not historical facts are only predictions.  No assurances can be given that the futureresults indicated, whether expressed or implied, will be achieved.  While sometimes presented with numericalspecificity, these projections and other forward-looking statements are basedupon a variety of assumptions relating to the business of the Company, which,although considered reasonable by the Company, may not be realized.  Because of the number and range ofassumptions underlying the Company’s projections and forward-lookingstatements, many of which are subject to significant uncertainties andcontingencies that are beyond the reasonable control of the Company, some ofthe assumptions inevitably will not materialize, and unanticipated events andcircumstances may occur subsequent to the date of this report.  These forward-looking statements are based oncurrent expectations and the Company assumes no obligation to update thisinformation.  Therefore, the actualexperience of the Company and the results achieved during the period covered byany particular projections or forward-looking statements may differsubstantially from those projected. Consequently, the inclusion of projections and other forward-lookingstatements should not be regarded as a representation by the Company or anyother person that these estimates and projections will be realized, and actualresults may vary materially.  There canbe no assurance that any of these expectations will be realized or that any ofthe forward-looking statements contained herein will prove to be accurate.

 

##### **PART II– OTHER INFORMATION**

##### ** **

**Item 1. Legal Proceedings.**

 

The Company is from time to time involved in legal proceedings arisingfrom the normal course of business.   Asof the date of this report, the Company is not currently involved in any legalproceedings.

 

**Item2. Unregistered Sales of Equity Securities and Use of Proceeds.**

 

On April 15, 2008, the Company obtained gross proceeds of $250,000 in aprivate placement through the sale of 2,500,000 shares of common stock.  The shares in the private placement wereoffered and sold solely to accredited investors in reliance on the exemptionfrom registration provided by Rule 506 of Regulation D under the Securities Actof 1933, as amended.  Source CapitalGroup, Inc. acted as the sole placement agent in the private placement.  In connection with the private placement, theCompany paid Source Capital Group (i) a cash sales commission of $25,000(representing 10% of the gross proceeds raised in the private placement) and(ii) warrants to purchase 250,000 shares of common stock (representing 10% ofthe aggregate number of shares of common stock sold in the private placement),with each warrant having an exercise price of $0.12 per share, exercisableuntil April 15, 2013.

 

**Item3. Defaults Upon Senior Securities**

 

Therehave been no defaults with respect to any indebtedness of the Company.

 

**Item4. Submission of Matters to a Vote of Security Holders**

 

1.            To sell substantially all of the assets of the Company,including the assets of its wholly-owned subsidiaries, NETtime Solutions, Inc.,an Arizona corporation, and NetEdge Devices, LLC, an Arizona limited liabilitycompany, to NETtime Solutions, LLC, an Arizona limited liability company;

 

2.            To amend the Company’s Articles of Incorporationto change the Company’s name to “Tempco, Inc.”.

 

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Theshareholders approved both matters.  Thevote for the asset sale was 9,977,185 votes for, 35,000 votes against, with14,550 votes abstaining.  The vote forthe name changes was 9,990,651 votes for, 35,000 votes against, with 1,084votes abstaining.

 

Asa covenant of the Asset Sale, all of the officers and directors of the Companyresigned with positions with the Company and Stanley L. Schloz, Fred Bursteinand Anthony Silverman were appointed as the directors of the Company.  Mr. Schloz was named as President andTreasurer while Mr. Burstein was elected as Vice President.  Mr. Stephen T. Meadow was electedSecretary.  Mr. Schloz and Mr. Bursteinwere each granted stock options to acquire 600,000 shares of the Company’scommon stock, and Mr. Meadow was granted stock options to acquire 300,000shares of the Company’s common stock, all at an exercise price of $0.09 pershare, the market value of the Company’s common stock on the date the stockoptions were granted.

 

**Item5. Other information**

 

N/A

 

**Item 6. Exhibits**

 

(a)       Thefollowing exhibits are filed herewith pursuant to Regulation S-B.

 
| 31     |   | Section 302  Certification of Chief Executive and Financial Officer |
|--------|--------|--------------------------------------------------------------------------|
|   |   |                                                                     |
| 32     |   | Section 906  Certification                                          |

 

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SIGNATURES

 

In accordance with therequirements of the Securities Exchange Act of 1934, the registrant caused thisreport to be signed on its behalf by the undersigned, thereunto dulyauthorized.

 
|                                | TEMPCO, INC.                                         |
|-------------------------------------|------------------------------------------------------|
|                                |                                                 |   |
|                                |                                                 |   |
| Dated:  July 2, 2008 |                                                 |   |
|                                | By                                                   | /s/ Stanley L. Schloz |
|                                | Stanley L. Schloz                                    |
|                                | President and Chief Executive and  Financial Officer |

 

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