BRTE Brightec Inc (CE)

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

(Mark One)

[X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934

For the quarterly period ended September 30, 2008

or

[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934

Commission File Number: 033-55254-27

 Nevada 87-0438637
------------------------------- ------------------
(State or other jurisdiction of (IRS Employer
 incorporation or organization) Identification No.)

Securities registered pursuant to Section 12(b) of the Exchange Act: None

Securities registered pursuant to Section 12(g) of the Exchange Act:

Check whether the Company (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 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.

[X] Yes [ ] No

Indicate by check mark whether the Company is a shell company (as defined in Rule 12b-2 of the Exchange Act).

[ ] Yes [X] No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer", "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer [ ] Accelerated filer [ ] Non-accelerated filer [ ] Smaller reporting company [X]
(Do not check if a smaller reporting company)

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.

 Number of shares outstanding
 Class as of November 13, 2008
------------------------------ -----------------------------
Common stock, $0.001 par value 144,342,837

INDEX

 Page Number

Note Regarding Forward Looking Statements 3

Part I. Financial Information

 Item 1. Financial Statements

 Condensed Consolidated Balance Sheets at September 30, 2008
 (Unaudited) and December 31, 2007 (Audited) 4

 Condensed Consolidated Statements of Operations and
 Accumulated Deficit and Comprehensive Loss for the
 Three- and Nine Month Periods Ended
 September 30, 2008 and 2007 (Unaudited) 5

 Consolidated Statements of Cash Flows for the Nine Month
 Periods Ended September 30, 2008 and 2007 (Unaudited) 6

Notes to Condensed Consolidated Financial Statements (Unaudited) 7 - 12

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 13 - 18

Item 3. Quantitative and Qualitative Disclosures About Market Risk 18

Item 4T. Controls and Procedures 18

Part II. Other Information

Item 1. Legal Proceedings 19

Item 2. Unregistered Sales of Equity and Use of Proceeds 19

Item 3. Defaults upon Senior Securities 19

Item 4. Submission of Matters to a Vote of Security Holders 19

Item 5. Other Information 19

Item 6. Exhibits 20

Signatures 21

Note Regarding Forward Looking Statements:

This Form 10-Q and other reports filed by the Company from time to time with the U.S. Securities and Exchange Commission (the "SEC"), as well as the Company's press releases, contain or may contain forward-looking statements. The information provided is based upon beliefs of, and information currently available to, the Company's management, as well as estimates and assumptions made by the Company's management. Statements that are not statements of historical fact may be deemed to be forward-looking statements. Forward-looking statements can be identified by the use of forward-looking terminology such as "believes," "may," "should," "anticipates," "estimates," "expects," "future," "intends," "hopes," "plans," or the negative thereof. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that could cause actual results of the Company to vary materially from historical results or from any future results expressed or implied in such forward-looking statements.

Any statements contained in this Form 10-Q that do not describe historical facts, including without limitation statements concerning expected revenues, earnings, product introductions and general market conditions, may constitute forward-looking statements. Any such forward-looking statements contained herein are based on current expectations, but are subject to a number of risks and uncertainties that may cause actual results to differ materially from expectations. The factors that could cause actual future results to differ materially from current expectations include, but are not limited to, the following: the Company's ability to raise the financing required to support the Company's operations; the Company's ability to establish its intended operations; fluctuations in demand for the Company's products and services; the Company's ability to manage its growth; the Company's ability to develop, market and introduce new and enhanced products on a timely basis; the Company's ability to attract customers; and the ability of the Company to compete successfully in the future. Any forward-looking statements should be considered in light of those factors.

The Company files periodic reports with the SEC, as well as current reports on Form 8-K, proxy or information statements and other reports required of publicly held reporting companies. The public may read and copy any materials the Company files with the SEC at the SEC's Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549. The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC also maintains an Internet site that contains the reports, proxy and information statements, and other information that the Company files electronically with the SEC, which is available on the Internet at www.sec.gov. Further information about the Company and its subsidiary may be found at www.brightec.com.

 PART I. FINANCIAL INFORMATION
 ITEM 1. FINANCIAL STATEMENTS

 Brightec, Inc. and Subsidiary
 Condensed Consolidated Balance Sheets
 September 30, 2008 and December 31, 2007
 September 30, December 31,
 2008 2007
 ------------ ------------
 (Unaudited) (Audited)
 ASSETS
Current assets
 Cash $ 25,568 $ 32,464
 Accounts receivable -- 3,936
 Inventory 370,486 213,578
 Prepaid expenses 53,024 11,675
 ------------ ------------
 TOTAL CURRENT ASSETS 449,078 261,653
 ------------ ------------

Office and photographic equipment 27,984 23,511
 Less: accumulated depreciation (24,381) (23,511)
 ------------ ------------
 3,603 --
 ------------ ------------

Deposit 3,033 2,041
Deferred offering costs -- 20,085
 ------------ ------------
 3,033 22,126
 ------------ ------------

 TOTAL ASSETS $ 455,714 $ 283,779
 ============ ============

 LIABILITIES AND STOCKHOLDERS' DEFICIT

Current liabilities
 Line of credit $ 650,000 $ 700,000
 Accounts payable 93,814 105,881
 Accrued liabilities (including related party interest of
 $36,652 and $16,417 as of September 30, 2008 and
 December 31, 2007, respectively) 439,603 317,669
 Advances due to related party 1,614,660 809,150
 ------------ ------------
 TOTAL CURRENT LIABILITIES 2,798,077 1,932,700
 ------------ ------------
Stockholders' deficit
 Preferred stock -- --
 Common stock 144,343 144,093
 Additional paid-in capital 12,485,890 12,485,390
 Deferred compensation expense (28,662) (50,807)
 Accumulated deficit (15,142,449) (14,426,481)
 Accumulated other comprehensive income 198,515 198,884
 ------------ ------------
 TOTAL STOCKHOLDERS' DEFICIT (2,342,363) (1,648,921)
 ------------ ------------

 TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT $ 455,714 $ 283,779
 ============ ============

The accompanying notes are an integral part of these condensed consolidated financial statements.

 Brightec, Inc. and Subsidiary
 Condensed Consolidated Statements of Operations
 and Accumulated Deficit and Comprehensive Loss

 For the Three Months Ended For the Nine Months Ended
 ------------------------------ ------------------------------
 September 30, September 30, September 30, September 30,
 2008 2007 2008 2007
 ------------- ------------- ------------- -------------
 (Unaudited) (Unaudited) (Unaudited) (Unaudited)
Sales $ 2,234 $ 2,153 $ 11,503 $ 7,403

Cost of sales 1,644 1,141 8,737 3,791
 ------------- ------------- ------------- -------------

Gross profit 590 1,012 2,766 3,612
 ------------- ------------- ------------- -------------

Operating expenses
 Research and development 12,758 32,706 84,476 87,951
 Selling and marketing 51,143 45,153 155,603 126,496
 General and administrative (including
 related party consulting expenses of
 $7,551, $1,642, $22,489 and $1,642,
 respectively) 139,163 133,916 352,020 571,293
 ------------- ------------- ------------- -------------
 203,064 211,775 592,099 785,740
 ------------- ------------- ------------- -------------

Operating loss (202,474) (210,763) (589,333) (782,128)
 ------------- ------------- ------------- -------------

Other Income (Expense)
 Interest income -- -- 6 37
 Interest expense (including related party
 interest expense of $8,738, $5,512,
 $20,234 and $10,390, respectively (44,354) (38,734) (126,641) (109,752)
 Financing costs -- -- -- (128,680)
 ------------- ------------- ------------- -------------
 (44,354) (38,734) (126,635) (238,395)
 ------------- ------------- ------------- -------------

Net loss (246,828) (249,497) (715,968) (1,020,523)

Accumulated deficit - beginning (14,895,621) (13,834,273) (14,426,481) (13,063,247)
 ------------- ------------- ------------- -------------

Accumulated deficit - ending $ (15,142,499) $ (14,083,770) $ (15,142,499) $ (14,083,770)
 ============= ============= ============= =============

Basic and diluted net loss per share $ -- $ -- $ -- $ (0.01)
 ============= ============= ============= =============

Weighted average number of shares used
in the computation of basic and diluted net
loss per share 144,342,837 141,577,620 144,264,082 132,421,726
 ============= ============= ============= =============

COMPREHENSIVE LOSS

 Net loss $ (246,828) $ (249,497) $ (715,968) $ (1,020,523)

 Foreign currency translation adjustment 786 301 (369) 2,081
 ------------- ------------- ------------- -------------

 Comprehensive loss $ (246,042) $ (249,196) $ (716,337) $ (1,018,442)
 ============= ============= ============= =============

The accompanying notes are an integral part of these condensed consolidated financial statements.

 Brightec, Inc. and Subsidiary
 Condensed Consolidated Statements of Cash Flows

 For the Nine Months Ended
 ----------------------------
 September 30, September 30,
 2008 2007
 ------------ ------------
 (Unaudited) (Unaudited)
Cash flows from operating activities

Net loss $ (715,968) $ (1,020,523)

 Adjustments to reconcile net loss to net cash used for
 operating activities:
 Amortization of deferred stock based compensation 22,895 1,642
 Accrued interest on advances from related party 20,234 10,390
 Depreciation and amortization expense 870 --
 Amortization of deferred financing costs -- 44,369
 Write-off of deferred offering costs 20,085 --
 General and administrative expenses associated with
 stock based transactions -- 60,500
 Selling and marketing expenses associated with stock
 based transactions -- 22,500
 Financing costs associated with stock based transactions -- 128,680
 Accrued interest on note receivable - related party -- (37)
 Changes in operating assets and liabilities:
 (Increase) decrease in:
 Accounts receivable 3,936 (510)
 Inventory (156,908) (153,607)
 Prepaid expenses (41,349) (1,089)
 Deposit (992) 744
 Increase (decrease) in:
 Accounts payable (12,067) 60,000
 Accrued liabilities 101,700 43,007
 ------------ ------------
 Net cash used for operating activities (757,564) (803,934)
 ------------ ------------

Cash flows from investing activities
 Purchases of property and equipment (4,473) --
 Repayment of note receivable - related party -- 11,030
 ------------ ------------
 Net cash provided by (used for) investing activities (4,473) 11,030
 ------------ ------------

Cash flows from financing activities
 Advances received from related party 805,510 802,400
 Repayment of advances from line of credit (50,000) --
 Repayment of advances from related party -- (19,250)
 Payment of deferred offering costs -- (20,085)
 ------------ ------------
 Net cash provided by financing activities 755,510 763,065
 ------------ ------------

Effects of changes in foreign exchange rates (369) 2,081
 ------------ ------------

 Net decrease in cash (6,896) (27,758)

Cash - beginning 32,464 51,836
 ------------ ------------

Cash - ending $ 25,568 $ 24,078
 ============ ============

See NOTE 13 for supplemental cash flow information.

The accompanying notes are an integral part of these condensed consolidated financial statements.

Brightec, Inc. and Subsidiary

Notes to Condensed Consolidated Financial Statements

(Unaudited)

NOTE 1 - OPERATIONS
Brightec, Inc. ("Brightec" or the "Company") develops and markets luminescent films incorporating luminescent or phosphorescent pigments (the "Luminescent Products"). These pigments absorb and reemit visible light producing a "glow" which accounts for the common terminology "glow in the dark." The Luminescent Products will be sold primarily as a printable luminescent film designed to add luminescence to existing or new products. The Company uses third parties for manufacturing, and markets and sells graphic quality printable luminescent films. These films are based on the Company's proprietary and patented technology, which enables prints to be of photographic quality by day and luminescent under low light or night conditions. The Company expects that its Luminescent Products will be available for sale in a number of versions appropriate for commonly used commercial and personal printing technology, including offset printing, laser or inkjet printing, plus a variety of "print on demand" digital technologies. The Company offers its products in sheets and rolls.

NOTE 2 - INTERIM FINANCIAL STATEMENTS
The accompanying unaudited condensed consolidated financial statements at September 30, 2008 and for the three- and nine month periods then ended includes the accounts of the Company and its wholly-owned subsidiary, Brightec S.A. (the "Subsidiary"), a Swiss corporation. All inter-company transactions and balances have been eliminated in consolidation. These unaudited condensed consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements included in our Annual Report on Form 10-KSB for the year ended December 31, 2007, and include all adjustments, necessary to make the financial statements not misleading. Certain footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States ("GAAP") have been condensed or omitted in accordance with rules of the Securities and Exchange Commission (the "SEC") for interim reporting. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements included in our Annual Report on Form 10-KSB for the year ended December 31, 2007.

NOTE 3 - LIQUIDITY, MANAGEMENT PLANS AND GOING CONCERN
The Company had a working capital deficit of $2,348,999 and an accumulated deficit of $15,142,449 at September 30, 2008, and recurring net losses since inception. The ability of the Company to continue to operate as a going concern is primarily dependent upon the ability of the Company to raise the necessary financing, to effectively produce and market Brightec's products at competitive prices, to establish profitable operations and to generate positive operating cash flows. If the Company fails to raise funds, or the Company is unable to generate operating profits and positive cash flows, there are no assurances that the Company will be able to continue as a going concern and it may be unable to recover the carrying value of its assets.

In 2006 the Company entered into a $750,000 Loan and Security Agreement (the "Loan Agreement") with Ross/Fialkow Capital Partners, LLP, Trustee of the Brightec Capital Trust ("Ross/Fialkow") and borrowed $650,000. During 2007, the Company borrowed an additional $50,000 under the Loan Agreement and on September 25, 2008, repaid $50,000 of the previous borrowings. As of September 30, 2008, the remaining funds available under the Loan Agreement were $100,000. See NOTE 8
- LINE OF CREDIT.

The Company's president has been funding its cash requirements as needed through unsecured, interest bearing cash advances. For the period January 1, 2008 through September 30, 2008, the spresident has made unsecured cash advances of $795,000 and paid other operating liabilities of $10,510. See NOTE 7 - RELATED PARTY TRANSACTIONS.

Management believes that it will continue to be successful in generating the necessary financing to fund the Company's operations throughout the 2008 calendar year; however, unless alternative sources of funding are identified, the Company will be totally dependent on its president to finance its operations. Due to the recent turmoil in the global economy, it is uncertain that those funds will be available when the Company requires them and there is no guarantee that the president will continue such financing.

Brightec, Inc. and Subsidiary Notes to Condensed Consolidated Financial Statements - continued

(Unaudited)

NOTE 4 - EARNINGS (LOSS) PER SHARE
The Company computes earnings or loss per share in accordance with Statement of Financial Accounting Standard ("SFAS") No. 128, "Earnings per Share." Basic earnings per share, is computed by dividing income available to common stockholders by the weighted average number of common shares outstanding. Diluted earnings per share reflects the potential dilution that could occur if securities or other agreements to issue common stock were exercised or converted into common stock, only in the periods in which the effect is dilutive. The following securities have been excluded from the calculation of net loss per share, as their effect would be anti-dilutive:

 For the Three Months For the Nine Months
 Ended September 30, Ended September 30,
 ---------------------------- ----------------------------
 2008 2007 2008 2007
 ------------ ------------ ------------ ------------
 (Unaudited) (Unaudited) (Unaudited) (Unaudited)
Warrants (weighted average) 6,320,832 6,320,832 6,320,832 6,366,925
 ============ ============ ============ ============

Convertible debt (weighted average) 5,801,630 5,416,667 5,822,688 5,416,667
 ============ ============ ============ ============

Stock options (weighted average) 20,500,000 23,847,183 20,500,000 24,586,915
 ============ ============ ============ ============

NOTE 5 - INVENTORIES
Inventories are stated at the lower of cost (first-in, first-out) or market value and consist of the following at September 30, 2008 and December 31, 2007, respectively:

 September 30, December 31,
 2008 2007
 ------------ ------------
 (Unaudited) (Audited)
Raw materials $ 31,942 $ 23,728
Work in process 175,237 122,699
Finished goods 163,307 67,151
 ------------ ------------
 $ 370,486 $ 213,578
 ============ ============

NOTE 6 - INCOME TAXES
The Company has not calculated the tax benefits of its net operating losses as of September 30, 2008 and December 31, 2007 since it does not have the required information. The Company has not filed its federal and state corporate tax returns for years ended December 31, 2007, 2005, 2004, 2003, 2002 and 2000. The tax returns filed for 2006 and 2001 (if permitted by statute) will need to be amended. Due to the uncertainty over the Company's ability to utilize these operating losses, any deferred tax assets, when determined, would be fully offset by a valuation allowance.

NOTE 7 - RELATED PARTY TRANSACTIONS

Brightec, Inc. and Subsidiary Notes to Condensed Consolidated Financial Statements - continued

(Unaudited)

All such advances bear interest at the Internal Revenue Service short term "Applicable Federal Rate" (2.36% and 3.81% at September 30, 2008 and December 31, 2007, respectively) calculated and accrued monthly. As of September 30, 2008 and December 31, 2007, accrued interest owed on the unsecured cash advances was $36,652 and $16,417, respectively. Interest expense incurred for the three- and nine month periods ended September 30, 2008 and 2007 was $8,738, $5,512, $20,234 and $10,390, respectively.

NOTE 8 - LINE OF CREDIT
On June 8, 2006, the Company entered into the Loan Agreement with Ross/Fialkow, in the amount of $750,000. The Loan Agreement, which was scheduled to expire on June 30, 2008, was extended until December 31, 2008 under an agreement dated June 16, 2008. The Company incurred a $2,500 renewal fee for the extension. Advances from the line of credit bear interest at 20% per annum. The principal amount of the loan plus accrued but unpaid interest, if any, is convertible at any time prior to payment at the election of Ross/Fialkow, into the Company's common stock at the rate of $0.12 per share. Such shares carry piggy-back registration rights. All assets of the Company have been pledged, including the assets of the Subsidiary.

As of September 30, 2008 and December 31, 2007, the outstanding balance on the line of credit was $650,000 and $700,000, respectively. Interest expense was $35,612, $33,222, $106,390 and $99,362 for the three- and nine month periods ended September 30, 2008 and 2007, respectively.

NOTE 9 - ACCRUED EXPENSES
At September 30, 2008 and December 31, 2007, accrued expenses consisted of the following:

 September 30, December 31,
 2008 2007
 ------------ ------------
 (Unaudited) (Audited)
Executive officer compensation $ 300,000 $ 187,500
Professional fees 51,341 47,554
Employee compensation 30,000 35,000
Interest (including related party interest of $36,652 and $16,714
 as of September 30, 2008 and December 31, 2007, respectively) 48,152 28,306
Payroll and other taxes 9,979 13,896
Purchases -- 4,772
Other 131 641
 ------------ ------------

 $ 439,603 $ 317,669
 ============ ============

Brightec, Inc. and Subsidiary Notes to Condensed Consolidated Financial Statements - continued

(Unaudited)

NOTE 10 - CAPITAL STOCK

As previously discussed, on March 14, 2008, the Company agreed to issue 250,000 shares of its common stock valued at $750 to Agoracom pursuant to the IR Agreement. The value of the stock issuance was recognized as deferred compensation and is being amortized over twelve months (the term of the IR Agreement). As of September 30, 2008, the unamortized balance of deferred compensation, related to the IR Agreement was $344.

As of September 30, 2008 and December 31, 2007, the unamortized balance of deferred compensation expense was $28,662 and $50,807, respectively.

NOTE 11 - COMMITMENT
The Company entered into a new three-year operating lease for its office space effective July 1, 2008, expiring on June 30, 2011. The annual rent is $33,600 in the first year, $35,000 in the second year and $36,400 in the third year. In addition to the standard lease terms, the landlord has agreed to re-carpet and re-paint the occupied space.

The required security deposit increased from $2,041 to $3,033. At the end of the initial three-year term, the Company has the option to extend the lease (the "Extension Option") for an additional three-year term by giving the landlord

Brightec, Inc. and Subsidiary Notes to Condensed Consolidated Financial Statements - continued

(Unaudited)

nine months advance notice of its intent to do so. Upon the commencement of the Extension Option, the monthly rent will be equal to the fair market rent for the premises but not less than the rent for the most recent term increased by $1 per square foot per year.

As of September 30, 2008, the minimum required lease payments under the new operating lease, are as follows:

 Twelve month
 period ended Amount
------------------ ------------
September 30, 2009 $ 33,950
September 30, 2010 35,350
September 30, 2011 27,300
 ------------
 $ 96,600
 ============

NOTE 12 - RECENT ACCOUNTING PRONOUNCEMENTS
On January 1, 2008, the Company adopted SFAS No. 157, "Fair Value Measurements." SFAS No. 157 defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles and expands disclosure about fair value measurement. The Company does not anticipate that the adoption of this pronouncement will have a material impact on its financial condition or results of its operations.

On January 1, 2008, the Company adopted SFAS No. 159, "The Fair Value Option for Financial Assets and Financial Liabilities - Including an Amendment of FASB Statement No. 115," which permits a company to measure certain financial assets and financial liabilities at fair value that were not previously required to be measured at fair value. We have not elected to measure any financial assets and financial liabilities at fair value which were not previously required to be measured at fair value. Therefore, the adoption of this standard has had no effect on the Company's financial position or the results of its operations.

In December 2007, the Financial Accounting Standards Board (the "FASB") issued SFAS No. 141(R), "Business Combinations (revised 2007)." SFAS No. 141(R) applies the acquisition method of accounting for business combinations established in SFAS No. 141 to all acquisitions where the acquirer gains a controlling interest, regardless of whether consideration was exchanged. Consistent with SFAS No. 141, SFAS No. 141(R) requires the acquirer to fair value the assets and liabilities of the acquiree and record goodwill on bargain purchases, with the main difference the application to all acquisitions where control is achieved. SFAS No. 141(R) is effective for financial statements issued for fiscal years beginning after December 15, 2008. The Company will adopt SFAS No. 141(R) on January 1, 2009; however, the Company does not anticipate that the adoption will have a material impact on its financial condition or results of its operations.

In December 2007, the FASB issued SFAS No. 160, "Noncontrolling Interests in Consolidated Financial Statements - an amendment of ARB No. 51." SFAS No. 160 requires companies with noncontrolling interests to disclose such interests clearly as a portion of equity but separate from the parent's equity. The noncontrolling interest's portion of net income must also be clearly presented on the income statement. SFAS No. 160 is effective for financial statements issued for fiscal years beginning after December 15, 2008. The Company will adopt SFAS No. 160 as of January 1, 2009; however, it does not anticipate that the adoption will have a material impact on its financial condition or results of its operations.

In February 2008, the FASB issued FASB Staff Position 157-2, "Effective Date of FASB Statement No. 157," which delays the effective date of SFAS No. 157 until January 1, 2009, for all nonfinancial assets and nonfinancial liabilities, except for items that are recognized or disclosed at fair value in the financial statements on a recurring basis (at least annually). The Company believes the adoption of the delayed items of SFAS No. 157 will not have a material impact on its financial statements.

In March 2008, the FASB issued SFAS No. 161, "Disclosures about Derivative Instruments and Hedging Activities - an amendment of FASB Statement No. 133." SFAS No. 161 gives financial statement users better information about the

Brightec, Inc. and Subsidiary Notes to Condensed Consolidated Financial Statements - continued

(Unaudited)

reporting entity's hedges by providing for qualitative disclosures about the objectives and strategies for using derivatives, quantitative data about the fair value of and gains and losses on derivative contracts, and details of credit-risk-related contingent features in their hedged positions. SFAS No. 161 is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008, with early application encouraged, but not required. The Company will adopt SFAS No. 161 as of January 1, 2009; however, it does not anticipate that the adoption of SFAS No. 161 will have a material effect on its financial statements.

The Company does not believe that any other recently issued, but not yet effective, accounting standard if currently adopted would have a material effect on the accompanying financial statements.

NOTE 13 - SUPPLEMENTAL CASH FLOW INFORMATION

 For the Nine Months Ended
 --------------- ------------
 September 30, September 30,
 2008 2007
 ------------ ------------
 (Unaudited) (Unaudited)
Supplemental disclosure of cash flow information

 Cash paid during the period for interest $ 106,783 $ 110,113
 ============ ============

Non-cash activities

 Issuance of common stock related to investor relations
 agreement $ 750 $ --
 ============ ============

 Issuance of warrants related to private placements $ -- $ 4,244
 ============ ============

 Issuance of common stock for services $ -- $ 60,000
 ============ ============

 Issuance of common stock in satisfaction of accrued
 liabilities - related party $ -- $ 150,000
 ============ ============

 Issuance of common stock in satisfaction of advances
 from related party $ -- $ 210,000
 ============ ============

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion of the our financial condition and results of our operations should be read in conjunction with the Condensed Consolidated Financial Statements and Notes thereto included elsewhere in this Quarterly Report on Form 10-Q and our Annual Report on Form 10-KSB for the year ended December 31, 2007. This Quarterly Report on Form 10-Q contains forward-looking statements based on our current expectations, assumptions, estimates and projections about us and our industry. These forward-looking statements are usually accompanied by words such as "believes," "may," "should," "anticipates," "estimates," "expects," "future," "intends," "hopes," "plans," and similar expressions, and the negative thereof. Forward-looking statements involve risks and uncertainties and our actual results may differ materially from the results anticipated in these forward-looking statements as a result of certain factors.

CRITICAL ACCOUNTING POLICIES
Certain of our accounting policies are particularly important to the portrayal and understanding of our financial position and results of operations and require us to apply significant judgment in their application. As a result, these policies are subject to an inherent degree of uncertainty. In applying these policies, we use our judgment in making certain assumptions and estimates. Our critical accounting policies, which consist of revenue recognition, accounts receivable reserves, inventories, derivative instruments (including stock options) and income taxes are described in our Annual Report on Form 10-KSB for the year ended December 31, 2007. There have been no material changes to our critical accounting policies as of and for the three- and nine month periods ended September 30, 2008.

OVERVIEW
We develop and market luminescent films incorporating luminescent or phosphorescent pigments (the "Luminescent Products"). These pigments absorb and re-emit visible light producing a "glow" which accounts for the common terminology "glow in the dark." Our Luminescent Products have been and will be sold primarily as a printable luminescent film designed to add luminescence to existing or new products. We manufacture, through third-party manufacturers, market and sell graphic quality printable luminescent films. These films are based on our proprietary and patented technology that enables prints to be of photographic quality by day and luminescent by night. Our Luminescent Products are available for sale in a number of versions appropriate for commonly used commercial and personal printing technology, including offset printing or inkjet printing, plus a variety of "print on demand" digital technologies. We currently offer our products in sheets and rolls.

We completed the process of redesigning our website and began to introduce our new product lines to the marketplace. We started introducing our new products to the market in September 2007. During the first and second quarters of 2007, as a result of our anticipated new product lines introduction, we began building our inventory to meet the anticipated product demand.

Products that we introduced by the end of the 2007 included a line of new and improved printing quality inkjet sheets of different formats, which are being sold in small packs and bulk packs for the home, office and photographic digital printing market, a line of inkjet rolls and sheets for the wide format digital printing market, and a line of offset sheets and "flexo" for the commercial printing market. Offset printing refers to the printing technique where an inked image is transferred from a plate to a rubber blanket, and then to a printing surface. "Flexo," and industry term, refers to the printing method whereby a print is made by creating a positive mirror master of the image as a 3D relief. A measured amount of ink is put on the surface of the printing plate. The print surface then rotates, contacting the print material which transfers the ink.

We achieved our goal of launching our new website in September 2007 and we began to introduce our new product line shortly thereafter. We anticipated introducing a new product line every subsequent month and having all of our currently planned products introduced to the market by the end of 2007. However, due to a manufacturing complication, we were forced into re-working our manufacturing process, which caused us not to be able to introduce all of the new product lines that we had anticipated.

As previously discussed, we had been building the volume of our inventory for the anticipated product demand once we introduced our new product line through our website. We continued our attempts to further reduce our product cost; however, during the second quarter of 2008, we changed our focus to developing a sales and marketing effort since further cost reductions could not be achieved because of the rising cost of our raw materials.

We continued to build our inventory in the second quarter of 2008 in anticipation of generating 100% of our marketing materials in the third quarter to be used in a major sales and marketing effort that we plan to begin in the fourth quarter of 2008. These marketing materials, some of which were professionally printed in September 2008, will shorten our marketing cycle as we will be able to present any of our products on demand. We will also have our cost structure in place in the fourth quarter of 2008 so that we can quote the customer on demand.

Our major sales and marketing effort will involve targeting several market segments, including, but not limited to puzzles and games, children's stickers, home decor, electronics (e.g. device "skins"), trading cards and sports collectibles. This effort will concentrate primarily on our Luminescent Product that is used to enhance an existing product, but may also include targeting consumers of our vinyl product which would be used primarily to produce signs and banners.

In order to fund this effort, the Company intends to attempt to raise funds through the issuance of debt and/or equity. Until we can raise the necessary capital, the primary funding of our sales and marketing effort will come from our president, as long as he has the funds available to do so. Due to the recent turmoil in the global economy, it is uncertain that those funds will be available when we require them and there is no guarantee that the president will continue such financing.

If those funds should become unavailable, we would need to curtail our sales and marketing effort or focus on fewer target markets until we are successful and alternative funding is found.

ABILITY TO CONTINUE AS A GOING CONCERN
We have a working capital deficit of approximately $2,349,000, an accumulated deficit of approximately $15,142,000 at September 30, 2008 and recurring negative operating cash flows since inception. Our future viability is dependent upon our ability to obtain additional debt and/or equity financing and achieve profitability in future operations. These circumstances raise substantial doubt about our ability to continue as a going concern. Our auditors have included a "going concern" qualification in their auditor's report for the year ended December 31, 2007. Such a "going concern" qualification may make it more difficult for us to raise funds when needed.

We believe we have the ability to obtain additional funds from new investors, our principal stockholders and employees through the issuance of additional debt, equity securities and/or the exercise of warrants and stock options; however, until we identify alternative sources of funding, we will be totally dependent on our president to fund our operations. We do not have any current plans to access typical sources of credit until our sales volume increases and we have no plans to make significant investments in property, plant or equipment. Our president has made $830,000 in unsecured cash advances to us through November 7, 2008 and we anticipate receiving significant additional unsecured advances from our president for the remainder of fiscal 2008 as well as into fiscal 2009 as we begin our previously discussed sales and marketing efforts.

There can be no assurances that we will be able to raise the funds we require, or that if such funds are available, that they will be available on commercially reasonable terms. Our ability to continue to operate as a going concern is primarily dependent upon our ability to generate the necessary debt and/or equity financing to effectively market and produce our products, to establish profitable operations and to generate positive operating cash flows. If we fail to raise funds or are unable to generate operating profits and positive cash flows, there are no assurances that we will be able to continue as a going concern and we may be unable to recover the carrying value of our assets.

Due to the recent turmoil in the global economy, it is uncertain that the necessary funds will be available when we require them. We feel that we may benefit from, and take advantage of, the recent economic uncertainty. As it becomes more difficult for companies to stay in business, they will need to find more creative and unique ways to differentiate themselves from their competition. Those companies will be more open to our products as they try to maintain their market share.

We believe that we will be successful in generating the necessary financing to fund our operations through the 2008 calendar year. Accordingly, we believe that no adjustments or reclassifications of our recorded assets and liabilities are necessary at this time.

RESULTS OF OPERATIONS

THREE- AND NINE MONTH PERIODS ENDED SEPTEMBER 30, 2008 COMPARED WITH THREE- AND NINE MONTH PERIODS ENDED SEPTEMBER 30, 2007

For the nine month period ended September 30, 2008, the increase in our revenue was due to an increase in the number of commercial sales we made and because of a specialized promotional product that we manufactured and delivered in the first quarter of 2008.

During the third quarter of 2008 we had no commercial sales of our Luminescent Products as we concentrated on building our inventory in anticipation of producing our marketing samples for our previously discussed sales and marketing effort planned for the fourth quarter.

The decrease in our gross profit for the nine month period ended September 30, 2008 was due to the aforementioned inventory shrinkage and cost overruns with respect to the specialized promotional product that we manufactured and delivered in the first quarter of 2008.

The decrease for the nine month period ended September 30, 2008 was offset by specific costs incurred relating to a necessary change in the primary raw materials used in manufacturing our Luminescent Products. The change required us to change our manufacturing process.

The increase for the three- and nine month period ended September 30, 2008 is primarily related to the increased allocation of employee compensation costs to sales and marketing as the result of relieving certain general and administrative duties from our sales and marketing staff. Those general and administrative duties were shifted to an outside accounting consultant. The increase is also attributable to higher material costs to produce our sales and marketing samples with our new raw materials.

As previously discussed, we anticipate beginning a major sales and marketing effort targeting consumers that use our Luminescent Products to enhance an existing product, such as a puzzle or a game, stickers, home decoration, "skins" for electronic products, trading cards and other sports collectibles. Our sales and marketing costs will increase significantly as our marketing samples are

produced in the third quarter and our sales and marketing effort begins in the fourth quarter. We anticipate that the cost of this sales and marketing effort will be approximately $500,000 to $750,000, which includes, but is not limited to, the costs to produce all of our marketing collateral and samples, travel costs, employee compensation, and website updates and revisions. We also anticipate this sales and marketing effort will extend though a significant portion of 2009. Through September 30, 2008, we have incurred approximately $35,750 in costs related to this sales and marketing effort.

The increase for the three month period ended September 30, 2008 is primarily related to a one-time charge to write-off deferred offering costs of $20,085 incurred in 2006 related to our Stand-By Equity Distribution Agreement, the proceeds of which we do not believe we will be able to maximize, within the proscribed time period, due to our current per-share stock price. This increase was offset by decreases in payroll and payroll related costs due to higher allocations to selling and marketing.

The decrease for the nine month period ended September 30, 2008 is primarily due to a change in salary allocation to allocate more employee compensation costs to selling and marketing and research and development. In addition, we incurred non-recurring legal and accounting fees in the first quarter of 2007 related to our amended quarterly and annual reports filed with the SEC. The first quarter of 2007 also included the amortization of deferred financing costs related to our Loan and Security Agreement (the "Loan Agreement") with Ross/Fialkow Capital Partners, LLP, Trustee of the Brightec Capital Trust ("Ross/Fialkow").

General and administrative costs include consulting fees of $7,551, $1,642, $22,489 and $1,642 for the three- and nine month periods ended September 30, 2008, related to a two-year consulting contract with a significant stockholder, commencing on September 11, 2007.

OTHER INCOME (EXPENSE)

As a result of the modifications, we recognized financing costs of $128,680 for the nine month period ended September 30, 2007.

For the three- and nine month periods ended September 30, 2008 and 2007, we incurred interest of $35,389, $33,222, $106,390, and $99,362, respectively, on our Loan Agreement with Ross/Fialkow. We also incurred interest on cash advances from our president of $8,738, $5,512, $20,234 and $10,390, respectively. For the three- and nine month periods ended September 30, 2008 and 2007, we incurred other miscellaneous interest costs of $4, $0, $17 and $0, respectively.

LIQUIDITY AND CAPITAL RESOURCES AS OF SEPTEMBER 30, 2008
Since inception, our operations have not generated sufficient cash flow to satisfy our capital needs. We have financed our operations primarily through the private sale of shares of our common stock, warrants to purchase shares of our common stock and debt securities. Our net working capital deficit at September 30, 2008 was $2,348,999 compared to a deficit of $1,671,047 as of December 31, 2007.

The current financing for our operations is derived solely from unsecured, interest bearing cash advances from our president. While we believe that he will be able to continue funding our operations, there is no guarantee that he will have the ability to continue to do so. In light of the recent economic turmoil in the global credit markets, our president may not be able to fund our operations on a timely basis to enable us to take advantage of various economic opportunities. We do have the ability to borrow $100,000 under our Loan Agreement with Ross/Fialkow (see NOTE 8 - LINE OF CREDIT in the notes to our condensed consolidated financial statements included in this Form 10-Q); however, it is inadequate based on our current and estimated future funding requirements.

Due to the recent turmoil in the global economy, it is uncertain that the necessary funds will be available when we require them. We feel that we may benefit from, and take advantage of, the recent economic uncertainty. As it becomes more difficult for companies to stay in business, they will need to find more creative and unique ways to differentiate themselves from their competition. Those companies will be more open to our products as they try to maintain their market share.

In addition, our current sales and marketing efforts will require substantial funding beyond our current operating requirements. We currently intend to attempt raising capital from various sources; however, we feel that we will be unable to attract the necessary debt and/or equity financing unless our current sales and marketing efforts are successful and until additional commercial and retail sales can be generated to demonstrate that there is a market for our Luminescent Products beyond our current limited successes.

As previously discussed, we estimate that it will require $500,000 to $750,000 in additional funding, to be used for various purposes, to make this sales and marketing effort successful. The ability of our president to fund this effort, or fund it timely, may influence how successful our sales and marketing effort is and consequently, affect our ability to attract future debt and/or equity financing for future operations.

Our authorized capital stock consists of 245,000,000 shares of common stock, of which 144,342,837 shares were issued and outstanding at September 30, 2008. The number of shares issued excludes shares of common stock to be issued upon the exercise of outstanding options and warrants.

Cash decreased to $25,568 at September 30, 2008 from $32,464 at December 31, 2007.

Net cash used for operating activities for the nine months ended September 30, 2008 was $757,564. The primary reason for the cash usage was to fund the loss for the period and build our inventory in anticipation of our upcoming sales and marketing campaign in the fourth quarter of 2008.

Net cash used for investing activities for the nine months ended September 30, 2008 amounted to $4,473 and represented the purchase of a new computer and new computer software to be used in our sales and marketing efforts.

Net cash provided by financing activities for the nine months ended September 30, 2008 was $755,510. The net cash provided was derived from unsecured, interest bearing cash advances received from our president of $805,510 net of repayment of advances from our line of credit of $50,000.

The Company entered into a new three-year operating lease for its office space effective July 1, 2008 and expiring on June 30, 2011. The annual rent is $33,600 in the first year, $35,000 in the second year and $36,400 in the third year. In addition to the standard lease terms, the landlord has agreed to re-carpet and re-paint the occupied space.

The required security deposit increased from $2,041 to $3,033. At the end of the initial three-year term, the Company has the option to extend the lease (the "Extension Option") for an additional three-year term by giving the landlord nine-months advance notice of its intent to do so. Upon the commencement of the Extension Option, the monthly rent will be equal to the fair market rent for the premises but not less than the rent for the most recent term increased by $1 per square foot per year.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

As a "smaller reporting company" defined by Item 10 of Regulation S-K, we are not required to provide this information.

ITEM 4T. CONTROLS AND PROCEDURES

Based on an evaluation under the supervision and with the participation of the Company's management, the Company's principal executive officer and principal financial officer (one individual) have concluded that the Company's disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended ("Exchange Act") were effective as of the date of this report to ensure that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission rules and forms and (ii) accumulated and communicated to the Company's management, including its principal executive officer and principal financial officer (one individual), as appropriate to allow timely decisions regarding required disclosure.

There were no changes in the Company's internal control over financial reporting during the third quarter of 2008, which were identified in connection with management's evaluation required by paragraph (d) of Rules 13a-15 and 15d-15 under the Exchange Act, that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

There are no material legal proceedings pending to which the Company is a party or to which any of its properties are subject.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Not Applicable

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

Not Applicable

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

Not Applicable

ITEM 5. OTHER INFORMATION

Not Applicable

ITEM 6. EXHIBITS

Number Description of Exhibit
------ ----------------------

10.30 Standard Form Commercial Lease dated September 12, 2008
 between Brightec, Inc. and William Dolan on behalf of
 Pleasant Street Realty Trusts I & II E-1 - E-5

 31 Certification of Chief Executive Officer and Chief Financial
 Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of
 2002 (filed herewith). E-6

 32 Certification of Chief Executive Officer and Chief Financial
 Officer pursuant to 18 U.S.C. Section 1350, as adopted
 pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
 (filed herewith). E-7

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

BRIGHTEC, INC.

Date: November 13, 2008 By: /s/ Patrick Planche
 -------------------------------------
 Patrick Planche
 President, Chief Executive Officer,
 Treasurer and Chief Financial Officer

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