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 June 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
 Class outstanding as of July 30, 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 June 30, 2008
 (Unaudited) and December 31, 2007 (Audited) 4

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

 Consolidated Statements of Cash Flows for the
 Three- and Six Month Periods Ended June 30, 2008
 and 2007 (Unaudited) 6

Notes to Condensed Consolidated Financial Statements

 (Unaudited) 7 - 11

Item 2. Management's Discussion and Analysis of Financial
 Condition and Results of Operations 12 - 16

Item 3. Quantitative and Qualitative Disclosures About
 Market Risk 17

Item 4T. Controls and Procedures 17

Part II. Other Information

Item 1. Legal Proceedings 18

Item 2. Unregistered Sales of Equity and Use of Proceeds 18

Item 3. Defaults upon Senior Securities 18

Item 4. Submission of Matters to a Vote of Security Holders 18

Item 5. Other Information 18

Item 6. Exhibits 19

Signatures 20

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
 June 30, 2008 and December 31, 2007

 June 30, December 31,
 2008 2007
 ------------ ------------
 (Unaudited) (Audited)
 ASSETS
Current assets
 Cash $ 5,280 $ 32,464
 Accounts receivable 689 3,936
 Inventory 340,571 213,578
 Prepaid expenses 15,268 11,675
 ------------ ------------
 TOTAL CURRENT ASSETS 361,808 261,653
 ------------ ------------

Office and photographic equipment 27,984 23,511
 Less: accumulated depreciation (24,008) (23,511)
 ------------ ------------
 3,976 --
 ------------ ------------

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

 TOTAL ASSETS $ 387,910 $ 283,779
 ============ ============
 LIABILITIES AND STOCKHOLDERS' DEFICIT

Current liabilities
 Line of credit $ 700,000 $ 700,000
 Accounts payable 70,389 105,881
 Accrued liabilities (including related party interest of $27,913
 and $16,417 as of June 30, 2008 and December 31, 2007,
 respectively) 382,035 317,669
 Advances due to related party 1,339,546 809,150
 ------------ ------------
 TOTAL CURRENT LIABILITIES 2,491,970 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 (36,401) (50,807)
 Accumulated deficit (14,895,621) (14,426,481)
 Accumulated other comprehensive income 197,729 198,884
 ------------ ------------
 TOTAL STOCKHOLDERS' DEFICIT (2,104,060) (1,648,921)
 ------------ ------------

 TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT $ 387,910 $ 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 Six Months Ended
 ------------------------------ ------------------------------
 June 30, June 30, June 30, June 30,
 2008 2007 2008 2007
 ------------- ------------- ------------- -------------
 (Unaudited) (Unaudited) (Unaudited) (Unaudited)
Sales $ 884 $ 3,391 $ 9,269 $ 5,250

Cost of sales 460 1,899 7,093 2,650
 ------------- ------------- ------------- -------------

Gross profit 424 1,492 2,176 2,600
 ------------- ------------- ------------- -------------
Operating expenses
 Research and development 38,636 37,551 71,718 55,245
 Selling and marketing 48,643 57,999 104,460 81,343
 General and administrative (including
 (related party consulting expenses of
 $7,469, $0, $14,938 and $0,
 respectively 119,182 259,384 212,857 437,377
 ------------- ------------- ------------- -------------
 206,461 354,934 389,035 573,965
 ------------- ------------- ------------- -------------

Operating loss (206,037) (353,442) (386,859) (571,365)
 ------------- ------------- ------------- -------------

Other Income (Expense)
 Interest income 6 -- 6 37
 Financing costs -- (128,680) -- (128,680)
 Interest expense (including related party
 interest of $5,266, $3,848, $11,496 and
 $4,878, respectively) (40,668) (36,400) (82,287) (71,018)
 ------------- ------------- ------------- -------------
 (40,662) (165,080) (82,281) (199,661)
 ------------- ------------- ------------- -------------

Net loss (246,699) (518,522) (469,140) (771,026)

Accumulated deficit - beginning (14,648,922) (13,315,751) (14,426,481) (13,063,247)
 ------------- ------------- ------------- -------------

Accumulated deficit - ending $ (14,895,621) $ (13,834,273) $ (14,895,621) $ (13,834,273)
 ============= ============= ============= =============

Basic and diluted net loss per share $ -- $ -- $ -- $ (0.01)
 ============= ============= ============= =============
Weighted average number of shares used in
computation of basic and diluted net loss per
share 144,342,837 130,709,870 144,224,052 127,767,901
 ============= ============= ============= =============

COMPREHENSIVE LOSS

 Net loss $ (246,699) $ (518,522) $ (469,140) $ (771,026)

 Foreign currency translation adjustment 360 6,221 (1,155) 1,780
 ------------- ------------- ------------- -------------

 Comprehensive loss $ (246,339) $ (512,301) $ (470,295) $ (769,246)
 ============= ============= ============= =============

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 Six Months Ended
 ----------------------------
 June 30, June 30,
 2008 2007
 ------------ ------------
 (Unaudited) (Unaudited)
Cash flows from operating activities

Net loss $ (469,140) $ (771,026)
 Adjustments to reconcile net loss to net cash used for
 operating activities:
 Amortization of deferred stock based compensation 15,156 --
 Accrued interest on advances from related party 11,496 4,878
 Depreciation and amortization expense 497 --
 Amortization of deferred financing costs -- 44,369
 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 3,247 (510)
 Inventory (126,993) (143,321)
 Prepaid expenses (3,593) (16,360)
 Deposit -- 744
 Increase (decrease) in:
 Accounts payable (35,492) 22,716
 Accrued liabilities 52,870 56,036
 ------------ ------------
 Net cash used for operating activities (551,952) (590,831)
 ------------ ------------
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 530,396 590,000
 Repayment of advances from related party -- (11,030)
 Payment of deferred offering costs -- (20,085)
 ------------ ------------
 Net cash provided by financing activities 530,396 558,885
 ------------ ------------

Effects of changes in foreign exchange rates (1,155) 1,780
 ------------ ------------

 Net decrease in cash (27,184) (19,136)

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

Cash - ending $ 5,280 $ 32,700
 ============ ============
See NOTE 12 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 Product"). These pigments absorb and reemit visible light producing a "glow" which accounts for the common terminology "glow in the dark." The Luminescent Product 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 Product 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 STATMENTS
The accompanying unaudited condensed consolidated financial statements at June 30, 2008 and for the three- and six 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. In our opinion, 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 $2,130,162 and an accumulated deficit of $14,895,621 at June 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 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. As of June 30, 2008, the remaining funds available under the Loan Agreement were $50,000. See NOTE 8
- LINE OF CREDIT.

The Company's president has been funding its cash requirements as needed through unsecured cash advances. For the period January 1, 2008 through July 30, 2008, the president has made unsecured cash advances of $520,000 and paid other operating liabilities of $10,396. 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. There is no guarantee that the president will continue such financing.

NOTE 4 - EARNINGS (LOSS) PER SHARE
The Company computes earnings or loss per share in accordance with 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 reflect 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

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

(Unaudited)

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 Six Months
 Ended June 30, Ended June 30,
 --------------------------- ----------------------------
 2008 2007 2008 2007
 ------------ ------------ ------------ ------------
 (Unaudited) (Unaudited) (Unaudited) (Unaudited)

Warrants (weighted average) 6,320,832 6,320,832 6,320,832 6,390,353
 ============ ============ ============ ============

Convertible debt (weighted average) 5,833,333 5,416,667 5,833,333 5,416,667
 ============ ============ ============ ============

Stock options (weighted average) 20,500,000 24,962,911 20,500,000 24,962,911
 ============ ============ ============ ============

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

 June 30, December 31,
 2008 2007
 ------------ ------------
 (Unaudited) (Audited)
Raw materials $ 70,924 $ 23,728
Work in process 95,846 122,699
Finished goods 173,801 67,151
 ------------ ------------

 $ 340,571 $ 213,578
 ============ ============

NOTE 6 - INCOME TAXES
The Company has not calculated the tax benefits of its net operating losses as of June 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, 2005, 2004, 2003, 2002 and 2000. The tax return filed for 2001 will need to be amended, if permitted by statute. 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

All such advances bear interest at the Internal Revenue Service short term "Applicable Federal Rate" (2.06% and 3.81% at June 30, 2008 and December 31, 2007, respectively) calculated and accrued monthly. As of June 30, 2008 and December 31, 2007, accrued interest owed on the unsecured cash advances was $27,913 and $16,417, respectively. Interest expense incurred for the three- and six month periods ended June 30, 2008 and 2007 was $5,266, $3,848, $11,496 and $4,878, respectively.

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

(Unaudited)

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 June 30, 2008 and December 31, 2007, the outstanding balance on the line of credit was $700,000. Interest expense was $35,389, $32,552, $70,778 and $66,140 for the three- and six month periods ended June 30, 2008 and 2007, respectively.

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

 June 30, December 31,
 2008 2007
 ------------ ------------
 (Unaudited) (Audited)
Executive officer compensation $ 262,500 $ 187,500
Professional fees 41,118 47,554
Employee compensation 30,000 35,000
Interest (including related party interest of $27,913 and $16,714
 as of June 30, 2008 and December 31, 2007, respectively) 39,580 28,306
Payroll and other taxes 8,430 13,896
Purchases -- 4,772
Other 407 641
 ------------ ------------

 $ 382,035 $ 317,669
 ============ ============

NOTE 10 - CAPITAL STOCK

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

(Unaudited)

Directors would be expressly authorized, at its discretion, to adopt resolutions to issue shares, to fix the number of shares and to change the number of shares constituting any series and to provide for or change the voting powers, designations, preferences and relative, participating, optional or other special rights, qualifications, limitations or restrictions thereof, including dividend rights (including whether the dividends are cumulative), dividend rates, terms of redemption (including sinking fund provisions), redemption prices, conversion rights and liquidation preferences of the shares constituting any series of the preferred stock, in each case without any further action or vote by the stockholders. The Board of Directors would be required to make any determination to issue shares of preferred stock based on its judgment as to the best interests of the Company and its stockholders. There were no shares of preferred stock issued and outstanding at June 30, 2008 or December 31, 2007.

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 June 30, 2008, the unamortized balance of deferred compensation, related to the IR Agreement was $533.

As of June 30, 2008 and December 31, 2007, the unamortized balance of deferred compensation expense was $36,401 and $50,807, respectively.

NOTE 11 - RECENT ACCOUNTING PRONOUNCEMENTS
In March 2008, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards No. 161 ("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 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 does not anticipate that the adoption of SFAS No. 161 will have a material effect on its financial statements.

In April 2008, the FASB issued FASB Staff Position ("FSP") No FAS 142-3, "Determination of the Useful Life of Intangible Assets" to improve the consistency between the useful life of a recognized intangible assets under SFAS No. 142, "Goodwill and Other Intangible Assets," and the period of expected cash flows used to measure the fair value of the asset under SFAS No. 141 (revised 2007), "Business Combinations," and other guidance under GAAP. The Company does not anticipate that the adoption of this FSP will have a material effect on its financial statements. The FSP is effective for financial statements issued for fiscal years beginning after December 15, 2008, and interim periods within those years. Early adoption is prohibited.

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

(Unaudited)

In May 2008, the FASB issued SFAS No. 162, "The Hierarchy of Generally Accepted Accounting Principles" ("SFAS No. 162"). SFAS No. 162 identifies the sources of accounting principles and provides entities with a framework for selecting the principles used in the preparation of financial statements that are presented in conformity with GAAP. The FASB believes the GAAP hierarchy should be directed to entities because it is the entity (not its auditors) that is responsible for selecting accounting principles for financial statements that are presented in conformity with GAAP. The adoption of SFAS No. 162 is not expected to have a material impact on the Company's financial statements.

Management 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 12 - SUPPLEMENTAL CASH FLOW INFORMATION

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

 Cash paid during the period for interest $ 71,001 $ 77,334
 ============ ============

Non-cash activities

 Issuance of common stock related to investor relations
 agreement $ 750 $ --
 ============ ============
 Issuance of common stock related to capital raise $ -- $ 4,244
 ============ ============
 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 six month periods ended June 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," an 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, which will be professionally printed, 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 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, we intend to begin making proposals to potential Swiss and United States investors in the fourth quarter of 2008, to generate capital; however, we will most likely not close an investment until the first quarter of 2009. Until we close an investment, 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. 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 $2,130,000, an accumulated deficit of approximately $14,896,000 at June 30, 2008 and recurring negative operating cash flows since inception. Our future viability is dependent upon our ability to obtain additional 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. Our president has made approximately $630,000 in unsecured cash advances to us through August 1, 2008 and we anticipate significant additional unsecured advances from our president for the remainder of 2008 into 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 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. 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 SIX MONTH PERIODS ENDED JUNE 30, 2008 COMPARED WITH THREE- AND SIX MONTH PERIODS ENDED JUNE 30, 2007

For the six month period ended June 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 second quarter of 2008 we had no commercial sales of our Luminescent Product 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 six month period ended June 30, 2008 was due to cost overruns with respect to the specialized promotional product that we manufactured and delivered in the first quarter of 2008.

The increase for the six month periods ended June 30, 2008 was primarily due to specific costs incurred relating to a necessary change in the primary raw materials used in manufacturing our Luminescent Product. The change required us to change our manufacturing process.

The increase for the six month period ended June 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 and 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 Product 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 the costs to produce all of our marketing samples. We also anticipate this sales and marketing effort will extend through a significant portion of 2009.

General and administrative costs include consulting fees of $7,469 and $14,938 for the three- and six month periods ended June 30, 2008, related to a two-year consulting contract with a significant stockholder, commencing on September 11, 2007. We did not have a consulting contract with this stockholder for the comparable time periods of 2007.

OTHER INCOME (EXPENSE)

As a result of the modifications, we recognized financing costs of $128,680 for the three- and six month periods ended June 30, 2007.

For the three- and six month periods ended June 30, 2008 and 2007, we incurred interest of $35,389, $32,552, $70,778, and $66,140, respectively, on our Loan Agreement with Ross/Fialkow. We also incurred interest on unsecured cash advances from our president of $5,266, $3,848, $11,496 and $4,878, respectively. For the three months ended June 30, 2008, we incurred other miscellaneous interest costs of $13.

LIQUIDITY AND CAPITAL RESOURCES AS OF JUNE 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. We have generated, from inception through June 30, 2008, cumulative net cash proceeds from the sale of our equity of approximately $4.9 million. Our net working capital deficit at June 30, 2008 was $2,130,162 compared to a deficit of $1,671,047 as of December 31, 2007.

Our authorized capital stock consists of 245,000,000 shares of common stock, of which 144,342,837 shares were issued and outstanding at June 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 $5,280 at June 30, 2008 from $32,464 at December 31, 2007.

Net cash used for operating activities for the six months ended June 30, 2008 was $551,952. 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 six months ended June 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 six months ended June 30, 2008 was $530,396. The net cash provided was solely from unsecured cash advances received from our president.

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

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
------ ----------------------

 31 Certification of Chief Executive Officer and Chief Financial
 Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of
 2002 (filed herewith). E-1

 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-2

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: August 14, 2008 By: /s/ Patrick Planche
 -------------------------------------
 Patrick Planche
 President and Chief Executive Officer

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