Technoconcepts 10QSB 2005 Q3 Quarterly report (small business)

U.S. SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-QSB

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2005

Commission File Number 333-90682

TechnoConcepts, Inc.

(Exact name of small business issuer as specified in its charter)

Colorado

84-1605055

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer Identification No.)

6060 Sepulveda Blvd. Suite 202

Van Nuys, Ca. 91411

(Address of principal executive offices)

(818) 988-3364

(Registrant's telephone number including area code)

15531 Cabrito Road

Van Nuys, CA 91406

(Former name and former address, if changed since last report)

Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

[X ] Yes [ ] No

As of June 30, 2005, the Registrant had 27,015,035 shares of common stock, no par value, outstanding.

Transitional Small Business Disclosure format:

Yes [ ] No [ X ]

INDEX

Page No.

Part I: Financial Information

Item 1. Financial Statements

Consolidated balance sheets, June 30, 2005 (unaudited)

Consolidated statements of operations and comprehensive loss,

nine and three months ended June 30, 2005, Nine and three

three months ended June 30, 2005 and May 26, 2003 (inception)

through June 30, 2005 (unaudited)

Consolidated statements of cash flows, nine months ended June 30, 2005,

nine months ended June 30, 2004 and May 26, 2003 (inception)

through June 30, 2005 (unaudited)

Notes to consolidated financial statements (unaudited)

Item 2. Management's Discussion and Analysis or Plan of Operations

Item 3. Controls and Procedures

Part II. Other Information

Item 1. Legal Proceedings

Item 2. Changes in Securities

Item 3. Defaults Upon Senior Securities

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

Item 5. Other Information

Item 6. Exhibits

Signatures

PART I. Financial Information

ITEM 1. FINANCIAL STATEMENTS

TechnoConcepts, Inc.

And Subsidiaries

(A Corporation In The Development Stage)

Consolidated Balance Sheets

June 30,

September 30,

2005

2004

(Unaudited)

ASSETS

Current assets:

Cash

$ 349,752

$ 66,558

Marketable securities

1,400,000

Accounts receivable, net of allowance for doubtful

accounts of $562,170 and $0, respectively

697,917

Inventory, net of reserves of $566,937

741,726

Prepaid expenses

140,390

727

Total current assets

3,329,785

67,285

Fixed assets, net

337,309

28,743

Other assets:

Intellectual property and patents

8,000,000

Goodwill and other intangible assets

6,329,179

Deposits

42,356

Other assets

67,020

Debt issuance costs, net

306,488

82,875

Total assets

$18,412,137

$8,178,903

See accompanying notes to financial statements.

TechnoConcepts, Inc.

And Subsidiaries

(A Corporation In The Development Stage)

Consolidated Balance Sheets

June 30,

September 30,

2005

2004

(Unaudited)

LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:

Accounts payable

$ 2,291,141

$ 9,000

Due to related parties

258,175

160,000

Convertible notes payable

921,985

Leases payable – current portion

13,752

Accrued expenses payable

686,819

258,989

Accrued advertising costs

224,739

Total current liabilities

3,474,626

1,349,974

Leases payable, net of current portion

41,675

Convertible notes payable,

net of unamortized debt issuance costs of $2,254,673

1,520,222

Total liabilities

5,036,523

1,349,974

Shareholders' equity:

Preferred stock, no par value, 10,000,000

shares authorized, 32,000 and 32,000 shares

issued and outstanding

Series B Preferred, 800 authorized, 800 and 0

issued and outstanding

2,000,000

Common stock, no par value, 50,000,000

shares authorized 27,015,035 and 24,852,671 shares

issued and outstanding

27,015

24,852

Additional paid in capital

19,469,813

9,048,984

Subscriptions receivable

(4,008)

Deficit accumulated during the development stage

(8,121,246)

(2,240,931)

Total stockholders' equity

13,375,614

6,828,929

Total liabilities and shareholders' equity

$18,412,137

$8,178,903

See accompanying notes to financial statements.

TechnoConcepts, Inc.

And Subsidiaries

( A Corporation In The Development Stage)

Consolidated Statements of Operations

(Unaudited)

May 26, 2003

Nine months ended June 30,

Three months ended June 30,

(Date of Inception)

2005

2004

2005

2004

To June 30, 2005

Revenues:

Earned revenue

345,121

Cost of goods sold

270,425

Gross Profit

74,696

Operating expenses:

General and administrative

4,441,706

1,830,676

2,784,693

407,308

6,429,732

Total operating loss

(4,367,010)

(1,830,676)

(2,709,997)

(407,308)

(6,355,036)

Other income (expense):

Other income

3,000

Debt issuance costs

(1,163,491)

(465,681)

(1,364,759)

Interest expense, net

(299,814)

(70,278)

(354,451)

Net loss

(5,830,315)

(1,830,671)

(3,245,956)

(407,307)

(8,071,246)

Dividends on preferred stock

50,000

Net loss available to

common shareholders

$(5,880,315)

$(1,830,671)

$(3,295,956)

$(407,307)

$(8,121,246)

Other comprehensive loss:

Net loss

$(5,880,315)

$(1,830,671)

$(3,295,956)

$(407,307)

$(8,121,246)

Unrealized holding loss on

investment securities

83,026

Total comprehensive loss

$(5,880,315)

$(1,830,671)

$(3,212,930)

$(407,307)

$(8,121,246)

Weighted shares outstanding:

Basic

25,831,129

20,950,449

26,087,779

20,950,449

Diluted

25,831,129

20,950,449

26,087,779

20,950,449

Loss per share:

Basic

$(.23)

$(.09)

$(.13)

$(.02)

Diluted

(.23)

(.09)

(.13)

(.02)

See accompanying notes to financial statements.

TechnoConcepts, Inc.

And Subsidiaries

( A Corporation In The Development Stage)

Consolidated Statements of Cash Flows

(Unaudited)

October 1, 2004

October 1, 2003

May 26, 2003

to June 30,

June 30,

(Date of Inception)

2005

2004

To June 30, 2005

Cash flows from operating activities:

Net loss

$ (5,880,315)

$(1,830,671)

$(8,121,246)

Adjustments to reconcile net loss from operations to

net cash used in operating activities:

Depreciation

21,682

2,845

23,238

Amortization of debt costs

1,247,168

1,448,436

Shares issued for services

909,713

1,173,573

909,713

Changes in operating assets and liabilities:

Decrease in accounts receivable

170,476

Decrease in inventory

190,754

Increase in other assets

(909)

(1,636)

(Decrease) increase in accounts payable

(14,996)

4,171

467,329

Increase in accrued expenses

80,746

495,267

Net cash flows from operating activities

(3,275,681)

(650,082)

(4,417,669)

Cash flows from investing activities:

Net Borrowings from related parties

(157,974)

(10,000)

(157,974)

Acquisition of fixed assets

(271,982)

(18,961)

(302,111)

Net cash flows from investing activities

(429,956)

(28,961)

(460,085)

Cash flows from financing activities:

Proceeds from notes payable

3,975,000

904,985

5,213,675

Debt acquisition costs

(445,800)

Proceeds from preferred shares

600,000

Net borrowings from bank

(143,200)

Repayment of long-term debt

(1,177)

Stock subscriptions received

4,008

Net cash flows from financing activities

3,988,831

904,985

5,227,506

Net change in cash and cash equivalents

283,194

225,942

349,752

Cash and cash equivalents, beginning of period

66,558

160,765

Cash and cash equivalents, end of period

$ 349,752

$ 386,707

$ 349,752

Supplemental cash flow information:

Interest paid

$ --

Income taxes paid

$ --

Non-cash investing and financing activities

Acquisition of intellectual property

8,000,000

Shares issued in payment of consulting fees

464,348

Shares issued for conversion of convertible debt

and interest

1,233,883

1,549,816

See accompanying notes to financial statements.

TechnoConcepts, Inc.

And Subsidiaries

( A Corporation In The Development Stage)

Notes to Financial Statement

June 30, 2005

NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Interim Financial Information - The unaudited condensed consolidated financial statements have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission. The information furnished herein reflects all adjustments (consisting of normal recurring accruals and adjustments) which are, in the opinion of management, necessary to fairly present the operating results for the respective periods. Certain information and footnote disclosures normally presented in annual consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been omitted pursuant to such rules and regulation s. The condensed consolidated financial statements should be read in conjunction with the description of business and management's plan of operations, contained in the Company's Annual Report on Form 10-KSB/A for the year ended September 30, 2004, and the financial statement information contained in the Company's quarterly reports on Form 10-QSB/A for the quarter ended December 31, 2004. The results of operations for the nine months and three months ended June 30, 2005 are not necessarily indicative of the results that may be expected for the year ending September 30 2005, or for any future period.

Except as follows, the accounting policies followed by the Company are set forth in Note 1 to the Company's financial statements included in its Annual Report on Form 10-KSB/A for the fiscal year ended September 30, 2004.

Organization

In April 2005, Asante Acquisition Corp. (“Acquisition Corp.”) was formed in the State of California as a wholly owned subsidiary of the Company. Acquisition Corp. was formed primarily to acquire the assets of Asante Technology Corp. In May 2005, Technoconcepts (Hong Kong) Ltd. (“Techno HK”) was formed in the Republic of China as a wholly owned subsidiary Techno HK was formed primarily to establish a business presence in the Far East.

Basis for Presentation

The consolidated financial statements include the accounts of the Company and it’s wholly- owned subsidiaries, Acquisition Corp. and Techno HK. All material intercompany transactions have been eliminated in consolidation.

TechnoConcepts, Inc.

And Subsidiaries

( A Corporation In The Development Stage)

Notes to Financial Statement

June 30, 2005

NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Marketable Securities - The Company accounts for marketable securities in accordance with Statement of Financial Accounting Standards (“SFAS”) No. 115 "Accounting for Certain Investments in Debt, and Equity Securities". Under this standard, certain investments in debt and equity securities are reported at fair value. The Company's marketable securities, which consist primarily of common stock, are being reported as securities available for sale.

The unrealized loss on these securities is reflected as a separate component of shareholders’ equity and any changes in their value are included in comprehensive loss. The value of these securities at June 30, 2005 is as follows:

Cost

$1,400,000

Cumulative unrealized loss

$1,400,000

Intellectual Property - Intellectual property consists of patents, copyrights and trademarks purchased from TechnoConcepts (CA). The Company anticipates that many, if not all of these intellectual property assets will be usable solely in development of the Company’s current products and based upon the current state of the Company’s technology, the Company estimates that the useful life of each these intangible assets will be five years. Upon the products reaching salability, the Company will amortize these assets over a five-year period on a straight-line basis (approximately $1,600,000 per year). The Company anticipates these products reach salability during the quarter ending December 31, 2005.

Goodwill and other intangible assets - In connection with the Company’s acquisition of Asante’s assets, the Company acquired intangibles and goodwill. The Company is currently in the process of valuing the related assets. Upon completion of the valuation, the Company will segregate the assets into their components and report under the appropriate accounting principles for each asset.

Debt Issuance Costs - Debt issuance costs are the costs incurred relating to the convertible notes. The costs are amortized over the term of the related indebtedness.

Revenue recognition -Revenue from product sales to customers is recognized, including freight charges billed to customers, when a definite arrangement exists, the product has been shipped to the customer, acceptance terms, if any, have been fulfilled, no significant contractual obligations remain outstanding, the price is fixed or determinable, and collection is considered probable. Reserves are provided for estimated returns at the time the related revenue is recorded. Sales to distributors are generally subject to agreements allowing certain rights of return and price protection with respect to unsold merchandise held by the distributor. Reserves for distributor returns are established based on historical returns experience at the time the related revenue is recorded. Reserves for price protection are established based on actual price reduction programs. Additionally, the Company provides reserves for incentive rebates to distributors, warranty obligations and cooperative advertising at the time the related revenue is recorded.

TechnoConcepts, Inc.

And Subsidiaries

( A Corporation In The Development Stage)

Notes to Financial Statement

June 30, 2005

NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Concentration of credit risk - Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash equivalents and accounts receivable. Accounts receivable are typically unsecured and are derived from worldwide distributor and customer revenues. The Company performs ongoing credit evaluations of its customers and maintains reserves for potential credit losses; historically, such losses have been within management's expectations. The Company maintains substantially all its cash balances in a limited number of financial institutions. The balances are insured by the Federal Deposit Insurance Corporation up to $100,000. At June 30, 2005, the Company's uninsured cash balances totaled $159,328.

Inventory -Inventory is stated at the lower of standard cost, which approximates actual cost (on a first-in, first-out basis), or market. Appropriate adjustments of the inventory values are provided for slow moving and discontinued products based upon future expected sales and committed inventory purchases.

Research and development costs - Research and development costs are expensed as incurred. Research and development of new software products and enhancements to existing software products are expensed as incurred until technological feasibility has been established. The Company believes its current process for developing software is essentially completed concurrently with the establishment of technological feasibility. Software costs incurred after the establishment of technological feasibility have not been material to date and therefore have been expensed.

Stock Based Compensation - In October 1995, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standards (SFAS) No. 123, “Accounting for Stock-Based Compensation”. The Company currently accounts for its stock-based compensation plans using the accounting prescribed by Accounting Principles Board Opinion No. 25, “Accounting for Stock Issued to Employees”. As the Company is not required to adopt the fair value based recognition provisions prescribed under SFAS No. 123, as amended, it has elected only to comply with the disclosure requirements set forth in the statement which includes disclosing pro forma net income (loss) and earnings (loss) per share as if the fair value based method of accounting had been applied.

The fair value of each option grant was estimated on the date of the grant using the Black-Scholes option-pricing model with the following weighted average assumptions for the fiscal year ended September 30, 2004: expected volatility of 70%; risk free interest rate of between 3.36% and 3.69%; and expected lives of 5 years.

The effects of applying SFAS No. 123, as amended, in the above pro forma disclosures are not indicative of future amounts as they do not include the effects of awards granted prior to Fiscal 1996. Additionally, future amounts are likely to be affected by the number of grants awarded since additional awards are generally expected to be made at varying amounts.

TechnoConcepts, Inc.

And Subsidiaries

( A Corporation In The Development Stage)

Notes to Financial Statement

June 30, 2005

NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Stock Based Compensation (continued) -The pro forma net loss and loss per share consists of the following:

	Nine Months Ended
	June 30,	June 30,
	2005	2004

Net loss as reported	$ (5,830,315)	$ (1,830,671)
Effect of stock options, net of tax	(414,604)	--

Proforma net loss	$ (6,244,919)	$ (1,830,671)
Proforma diluted loss per share	$ (0.24 )	$ (0.09 )

NOTE 2 SERIES B PREFERRED STOCK

The Company has designated 800 shares of the preferred stock as "Series B Preferred Stock". Shares of Series B Preferred Stock have no par value and rank senior to all series of preferred stock and common stock.

Shares of Series B Preferred Stock will bear dividends, payable quarterly at the rate of ten per cent per annum or $250.00 per Preferred Share. Such dividends shall be payable in cash or common stock, as the Board of Directors shall determine.

Each share of Series B Preferred Stock is convertible, at the option of the holder thereof, at any time into 1,000 shares of Common Stock, subject to certain anti-dilution adjustments. The shares of Series B Preferred Stock are automatically converted into shares of common stock on the third anniversary of the issuance date unless the shares of the Company’s common stock are not quoted on the Nasdaq National or Small Cap markets.

In the event of any liquidation, dissolution or winding up of the Company, either voluntary or involuntary, the holders of the Series B Preferred Stock shall be entitled to receive, prior and in preference to any distribution of any of the assets of the Company to the holders of Common Stock by reason of their ownership thereof, an amount per share equal to the sum of $2,500 for each outstanding share of Series B Preferred Stock plus accrued and unpaid dividends (as adjusted for stock dividends, stock distributions, splits, combinations or recapitalizations).

The holders of the Series B Preferred Stock shall have the right to vote on an as-converted basis, with the Common Stock on all matters submitted to a vote of stockholders.

TechnoConcepts, Inc.

And Subsidiaries

( A Corporation In The Development Stage)

Notes to Financial Statement

June 30, 2005

NOTE 2 SERIES B PREFERRED STOCK (continued)

The shares of Series B Preferred Stock are redeemable, at the option of the holders, for 125% of the par value, plus all accrued and unpaid dividends, if the Company (i)fails to issue shares of Common Stock to a holder upon conversion of any Preferred Shares, and such failure continues for ten (10) Business Days; (ii) breaches, in a material respect, any material term or condition of the Company’s Certificate of Incorporation or any other agreement, document, certificate or other instrument delivered in connection with the transactions contemplated by the Preferred Stock Securities Purchase Agreement and such breach continues for a period of five (5) Business Days after written notice thereof to the Company; or (iii) any material representation or warranty made by the Company in any agreement, document, certificate or other instrument deliver ed to the Preferred Stock Buyer prior to the date of issuance is inaccurate or misleading in any material respect as of the date such representation or warranty was made due to voluntary action undertaken by the Company or a failure by the Company to take action.

NOTE 3 RELATED PARTY TRANSACTIONS

Two founders of the Company have performed consulting services for which the Company has paid consulting fees. For the period ended December 31, 2003, consulting services of $500,000 were provided by these founders. In addition these founders received 1,109,184 shares in the original capitalization of the Company.

NOTE 4 GOING CONCERN

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. The Company has a cumulative loss from operations of $8,071,246 and a cumulative negative cash flow from operations of $4,417,669, which raises doubt about its ability to continue as a going concern. These financial statements do not include any adjustment that might result from the outcome of this uncertainty.

The Company’s ability to continue as a going concern is dependent upon successfully raising funds through debt and equity financing and ultimately achieving profitable operations. Towards these ends, the Company raised $5,775,000 through two offerings of securities in November 2004. There is no assurance that the Company will be successful in its efforts to raise additional proceeds or achieve profitable operations. The financial statements do not include any adjustments that might result from the outcome of this uncertainty

TechnoConcepts, Inc.

And Subsidiaries

( A Corporation In The Development Stage)

Notes to Financial Statement

June 30, 2005

NOTE 5 CONVERTIBLE DEBENTURES

On November 17, 2004 the Company entered into a securities purchase agreement (the "Purchase Agreement"), a registration rights agreement, and a security agreement with certain institutional investors (the "Buyers"). Pursuant to the Purchase Agreement, the Company agreed to sell, and the Buyers agreed to purchase, 7% Secured Convertible Debentures (the “Debentures”) in the aggregate principal amount of $3,775,000 and warrants (“Warrants”) exercisable for a total of 608,000 shares of the Company’s common stock, par value $.001 per share ("Common Stock"), one half of which are exercisable at $3.50 per share and one half of which are exercisable at $4.00 per share. Net proceeds to the Company from this transaction were approximately $3,442,000, after the payment of commissions and expenses.

The Debentures are due and payable on November 17, 2006 and are convertible into shares of Common Stock at $2.50 per share, subject to certain customary anti-dilution adjustments. Interest on the Debentures is due quarterly on the last day of each calendar quarter and may, at the Company’s discretion, be paid in cash or shares of Common Stock assuming certain conditions are satisfied (including, that the shares of Common Stock issuable upon conversion of the Debentures have been registered for resale to the public with the Securities and Exchange Commission). In addition, the Company may require the conversion of the Debentures into shares of Common Stock if certain conditions are satisfied, including without limitation, that the average trading price of the Common Stock exceeds $7.00 per share for not less than 22 consecutive trading days. On the first day of each m onth commencing on December 1, 2005, the Company is required to redeem one-twelfth of the original principal amount of the Debentures.

As of June 30, 2005 the convertible debentures consisted of the following:

Convertible debentures

3,775,000

Less: unamortized conversion costs

(2,254,778)

1,520,222

TechnoConcepts, Inc.

And Subsidiaries

( A Corporation In The Development Stage)

Notes to Financial Statement

June 30, 2005

NOTE 6 PREFERRED STOCK PURCHASE AGREEMENT

In addition, the Company entered into a securities purchase agreement also dated as of November 17, 2004, with an institutional investor, pursuant to which the Company sold 800 shares of Series B Preferred Stock of the Company and Warrants exercisable for a total of 320,000 shares of the Company’s common stock for consideration of $2,000,000. The Warrants are identical to the Warrants issued to the Buyers.

NOTE 7 PAYMENT OF STOCK SUBSCRIPTION

In December 2004, the stock subscriptions receivable totaling $4,008 were paid.

NOTE 8 LEASE

The Company leases its office facilities under an operating lease that expires in 2008 next five years. Future minimum rentals on the leases are as follows:

	Year ended September 30,
	2005	$ 53,955
	2006	175,662
	2007	180,934
	2008	75,411
		$485,962

NOTE 9 ACQUISITION

On June 2, 2005, TechnoConcepts, Inc. (the "Company"), through its wholly-owned subsidiary, Asante Acquisition Corp. (“Acquisition Corp.”) acquired substantially all of the assets (collectively, the “Asante Assets”) of Asante Technologies, Inc. (“Asante”). The acquisition of the Asante Assets was consummated pursuant to an Agreement and Plan of Acquisition among Asante, the Company, and Acquisition Corp. dated as of February 25, 2005. In connection with the acquisition, Acquisition Corp. purchased the Asante Assets, which included certain patents, trademarks and other intellectual property rights along with cash and cash equivalents, accounts receivable, inventory, property, plant, equipment and other capital assets, in exchange for 1,161,170 restricted shares of the Company’s common stock. The consideration paid by Acquisition Corp. to acquire the Asante Assets will increase in the event that Acquisition Corp. achieves certain net sales targets. If Acquisition Corp. achieves net sales of at least $20,000,000 during the period between July 1, 2005 and June 30, 2006, the Company will issue additional restricted shares of its common stock with a market value equal to $1,500,000 (as determined by reference to the average of the closing bid prices for shares of the Company’s common stock during the last ten trading days prior to June 30, 2006). If Acquisition Corp. achieves net sales of at least $30,000,000 during the period between July 1, 2006 and June 30, 2007, the Company will issue additional restricted shares of its common stock with a market value equal to $1,500,000 (as determined by reference to the average of the closing bid prices for shares of the Company’s common stock during the last ten trading days prior to June 30, 2007).

TechnoConcepts, Inc.

And Subsidiaries

( A Corporation In The Development Stage )

Notes to Financial Statement

June 30, 2005

NOTE 10 COMMON STOCK

During the nine months ended June 30, 2005, the Company issued the following shares of common stock. The value of each share issuance was determined using the closing price of the common stock of the company on the date of issuance.

1,161,170 shares for acquisition of Asante Acquisition Corp.

229,714 shares for consulting services.

769,186 shares for conversion of $1,122,000 of notes payable and $110,500 of accrued interest payable.

NOTE 11 FOREIGN SALES

During the nine months ended June 30, 2005, sales by region were broken down as follows:

89%

Europe

Others

NOTE 12 SUBSEQUENT EVENTS

The Company has negotiated a revolving line of credit for its wholly owned subsidiary for an amount up to the lesser of (a) $750,000 or (b) up to 90% of eligible accounts receivable. Interest will be at 10% per annum, based on a 360-day year. The maturity date will be 1 year from the date of documentation or the closing date of TechnoConcept’s next financing or series of financings which in the aggregate total no less than $4,000,000.

The Company also negotiated a subordinated revolving line of credit. Advances under the line of credit shall be made from time to time at the request of the Company but the aggregate amount of outstanding advances shall not exceed $1,000,000.00 at any time. The outstanding principal of all advances under the line of credit will bear interest at the rate of interest of ten (10%) percent per annum. Prior to the maturity date, the holder may, at its option, elect to cancel the outstanding principal balance of all advances under the line of credit and all accrued interest thereon and convert such indebtedness into shares of TCI Common Stock at a share price that is the lesser of (a) $4.25 or (b) the same share price paid at the next round of equity investment in TCI. These conversion rights shall be non-callable. Conversion stock into which the Borrower’ ;s indebtedness is convertible shall be entitled to “piggy back” rights in the next registration of TCI’s Common Stock.

NOTE 12 SUBSEQUENT EVENTS, Continued

On July 15, 2005, the Company entered into an amendment (the “Amendment”) of certain of the Debentures issued pursuant to the Purchase Agreement in order to amend the default provisions thereof. The Amendment extended the period of time within which the Company’s Resale Registration Statement may be declared effective by the Securities and Exchange Commission without triggering an “Event of Default” from 240 days from the Closing Date to 300 days from the Closing Date and also eliminated the cross default provisions of the Debenture relating to the Company’s covenant to timely file the Resale Registration Statement as set forth in the Registration Rights Agreement.

ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS

Except for historical information, the material contained in this Management’s Discussion and Analysis or Plan of Operation is forward-looking. For the purposes of the Safe Harbor protection for forward-looking statements provided by the Private Securities Litigation Reform Act of 1995, readers are urged to review the list of certain important factors set forth in “Cautionary Statement for Purposes of the “Safe Harbor Provision of the Private Securities Litigation Reform Act of 1995” contained in the Company’s annual report on Form 10-KSB for the fiscal year ended September 30, 2004, which may cause actual results to differ materially from those described.

As of June 30, 2005, the Company has a working capital deficit of $144,841, cumulative losses from operations of $8,121,246 and a cumulative negative cash flow from operations of $4,417,669. We expect our cash requirements will increase significantly throughout our current fiscal year, as we continue our research and development efforts, hire and expand our staff, expand our leased facilities, and attempt to execute on our business strategy through working capital growth and capital expenditures. The amount and timing of cash requirements will depend on market acceptance of our products and the resources we devote to researching and developing, marketing, selling and supporting our products. We believe that our current cash and cash equivalents on hand should be sufficient to fund our operations for at least the next 4 months. Thereafter, if current sources are not sufficient to meet our needs, we may seek additional equity or debt financing. In addition, any material acquisition of complementary businesses, products or technologies or material joint venture could require us to obtain additional equity or debt financing. There can be no assurance that such additional financing would be available on acceptable terms, if at all. If we raise additional funds through the issuance of equity securities the percentage ownership of our stockholders would be reduced. If we are unable to raise sufficient funds on acceptable terms we may not succeed in executing our strategy and achieving our business objective. In particular, we could be forced to limit our product development and marketing activities, forego attractive business opportunities and we may lose the ability to respond to competitive pressures.

Plan of Operations

We have not earned any revenues to date on our core True Software Radio technology. The Company’s strategy is to become a leading provider of wireless communication technology by offering True Software Radio ASICs and chipsets to major telecommunications equipment and component suppliers for integration into their wireless communications products.

To date the Company has entered into three preliminary agreements with potential strategic partners for the joint development of True Software Radio handset components. None of the preliminary agreements assure that the Company will realize any revenue from the sale or license of its products or technology.

The Company intends to seek to establish strategic relationships with both component manufacturers and “total solution” providers. The Company believes that incorporation of its True Software Radio technology will enable its industry partners to provide less expensive service along with seamless roaming and global interoperability, thereby enabling new and enhanced services and applications such as mobile e-commerce, position location, mobile multimedia web browsing, including music and video downloads, public safety and homeland security. Elements of the Company’s strategy include:

Selling to the Portable Device Market

The Company anticipates opportunities in the portable device market (defined here as the aggregation of handsets, PDAs, and other niche wireless access devices), which include:

Sales of True Software Radio “engines” (essentially very small wireless “motherboards”) to portable device manufacturers;

Non-recurring engineering fees for integration services to large manufacturers that want to adopt True Software Radio technology into their products and license fees based upon units sold under their own brand names (embedded products); and

OEM licensing agreements for physical/data link layer software to handset manufacturers.

The Company has not entered into definitive agreements of the type referred to above as of the date of this report.

Selling to the Base Station Market

The Company believes that True Software Radio technology will contribute to the obsolescence of conventional wireless technology. The True Software Radio transceiver is capable of providing at least three times the capacity of a conventional unit, making the per-channel cost equal to roughly one-third. The Company anticipates revenue generation from the base station market primarily from four sources:

Base station transceiver hardware sales;

Licensing of base station software for physical and data link layer processing to infrastructure makers;

Strategic partnerships for international deployment of base station systems;

Non-recurring engineering (NRE) fees for the development of custom interfaces to the Company’s physical/data link layer software to government agencies and to their contractors.

The Company has not entered into definitive agreements of the type referred to above as of the date of this report.

Government Uses

The Company’s True Software Radio technology can provide seamless communications between various service branches and between allied forces in joint operations across all bands, including satellite communications. The Company is pursuing direct sales and strategic partnerships (none of which have been consummated as of the date of this report) with major contractors such as Lockheed-Martin, General Dynamics, TRW, BAE Systems, Northrop Grumman, Rockwell Collins, Boeing, and others.

Public Safety

The Company’s True Software Radio technology can provide seamless communications between various local public safety agencies that otherwise may not be able to “talk” to one another during an emergency. The Company is actively seeking strategic partnerships with contractors that are involved in providing interoperability wireless communication for State and Federal public safety and emergency agencies and for the Department of Homeland Security.

Accelerating Growth through Partnering and Acquisition

Because the highly competitive wireless communication technology marketplace is changing rapidly, the Company wishes to broaden and build depth in its planned product/service lines as quickly as possible. The Company also recognizes the need to achieve critical mass with a global presence in order to establish a leadership position in the market. To that end, the Company’s strategic initiatives include:

Preemptively developing partnerships and relationships with processor companies, and wireless communication service providers, emphasizing multiple protocol capabilities and supporting multi-vendor purchase strategies by service providers;

Preemptively developing strategic partnerships with one or more major digital signal processor suppliers;

Developing and maintaining an integrated development team with system, hardware, and software/firmware expertise;

Preemptively developing partnerships and relationships with RF semiconductor service providers and distributing high volume components on an OEM (remarked) basis through one or more of these firms;

Licensing older designs while continuing to develop new hardware and software; and

Developing leading edge software and firmware.

The Company also recognizes that consummating strategic acquisitions can help expand the Company's geographic presence, and obtain specialized management and technical talent. To this end, the Company will consider acquiring companies that will help enable the Company to accelerate growth, accelerate technical development and commercialization of True Software Radio, add complementary product and service lines, diversify the Company into new markets, expand the Company’s geographic presence, acquire capable management, gain new technical capabilities, and/or gain a larger share of the existing market.

On February 25, 2005, TechnoConcepts, Inc. entered into an Agreement and Plan of Acquisition (the “Agreement”) with Asanté Technologies, Inc. (“Asanté”). Pursuant to the Agreement, TechnoConcepts acquired all of the assets and business of Asanté and substantially all of the liabilities of Asanté in exchange for 1,161,170 shares of TechnoConcepts’ restricted common stock, valued, for purposes of this transaction, at $4.30 per share for an aggregate value of $5 million. In addition, the Agreement includes a two year earn-out provision whereby TechnoConcepts will issue additional shares of its restricted common stock worth $1,500,000 in each year of 2005 and 2006 if certain revenue goals are achieved.

To date, the company has expended substantial amounts to upgrade its products through research and development and has received patents and is in the process of applying for additional patents for its products. The company expects these expenditures for research and development to continue for the indefinite future as the company improves and adapts its products.

The Company currently has nineteen full time employees and anticipates having to increase its staff substantially in the future in order to execute the Company’s strategy.

RESULTS OF OPERATIONS - Period Ended June 30, 2005

Revenues

Net sales for the nine months ended June 30, 2005 $345,121. Sales were generated by our wholly owned subsidiary subsequent to the acquisition on June 2, 2005. Overall sales revenues continue to be subject to heavy competitive pressures negatively impacting selling prices of networking products and delay of products from vendors. Management however, anticipates that revenues will improve compared to the period just ended.

Cost of Sales and Gross Profit

Cost of sales for the nine months ended June 30, 2005 was $270,425. Gross profit for the same period was $74,696. The Company's gross profit as a percentage of net sales was to 22%. Management feels this will increase due to a different sales mix in the upcoming quarter with increased sales of products with better gross profit. Management anticipates a gross profit of at least 40% in future quarters.

General and Administrative Expenses

We incurred General and Administrative expenses of $4,441,706, an increase of $ 2,611,030 over the same period ended June 30, 2004 in which we incurred $1,830,676, as a result of increased overhead expenses including investor relations, investment banking fees, consulting costs, engineering costs, research and development costs and professional fees. Included in this increase was $931,395 of non cash items.

Income Taxes

The Company has recorded no provision or benefit for federal and state income taxes for the nine month period ended June 30, 2005, due primarily to a valuation allowance being established against the Company's net deferred tax assets which consist primarily of net operating loss carry-forwards. The Company has recorded a full valuation allowance against its net deferred tax assets as sufficient uncertainty exists regarding their recoverability.

Off Balance Sheet Arrangements

During the nine months ended June 30, 2005 the Company did not engage in any off-balance sheet arrangements as defined in Item 303(c) of the SEC's Regulation S-B.

ITEM 3. CONTROLS AND PROCEDURES

We maintain disclosure controls and procedures (as defined in Exchange Act Rule 13a-15(e) and 15d-15(e)) that are designed to ensure that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding the required disclosure.

In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management necessarily is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

As required by SEC Rule 13a-15(b), we carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the quarterly period covered by this report.

Based on the foregoing, our Chief Executive Officer and Chief Financial Officer have concluded that our current disclosure controls and procedures are effective to provide reasonable assurance that information is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding the required disclosure. The Company was late in the filing of several current reports on Form 8-K during the year. The Company has instituted additional disclosure controls and has hired additional staff and professionals to prevent future late filings.

There has been no significant change in our internal control over financial reporting during our most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

ITEM 1. Legal Proceedings.

None.

ITEM 2. Changes in Securities and Use of Proceeds

None.

ITEM 3. Defaults Upon Senior Securities.

None

ITEM 4. Submission of Matters to a Vote of Security Holders.

None.

ITEM 5. Other Information.

None.

ITEM 6. Exhibits

31.1

Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2

Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

Certification of Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. Section 1350

SIGNATURES

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

Date: August 19, 2005

TECHNOCONCEPTS, INC.

(formerly Technology Consulting Partners, Inc.)

By: /s/ Antonio E. Turgeon

Antonio E. Turgeon

Chief Executive Officer

Date: August 19, 2005

By: /s/ Michael Handelman

Michael Handelman

Chief Financial Officer

Technoconcepts Inactive 10QSB2005 Q3 Quarterly report (small business)