1

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

                                   FORM 10-QSB

(Mark One)

    [X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
        EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2004

                                       OR

    [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
        For the transition period from ____________ to _______________


                          Commission file number 1-7636

                             THE CATTLESALE COMPANY
           (Exact name of small business as specified in its charter)

      Delaware                                   74-1605174
State or other jurisdiction of      (I.R.S. Employer Identification No.)
incorporation or organization)

                            9901 IH10 West, Suite 800
                          San Antonio, Texas 78230-2292
                    (Address of principal executive offices)

                                 (210) 558-2898
                           (Issuer's telephone number)

          -----------------------------------------------------------------
              (Former Name, former address and former fiscal year,
                         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 Securities  Exchange Act of 1934 during the preceding
12 months (or for such shorter  period that the  registrant was required to file
such reports), and (2) has been subject to such filing requirements for the past
90 days. Yes X . No___.

                APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
                   PROCEEDINGS DURING THE PRECEDING FIVE YEARS

     Check whether the registrant filed all documents and reports required to be
filed by Section 12, 13, or 15(d) of the Exchange Act after the  distribution of
securities under a plan confirmed by a court. Yes X No___ -

                      APPLICABLE ONLY TO CORPORATE ISSUERS

     State the number of shares  outstanding of each of the issuer's  classes of
common equity, as of the latest practicable date 23,077,574

     Transitional Small Business Disclosure Format (Check one): Yes ___ No _X__

     SEC2334(1-04)  Persons who are to respond to the  collection of information
contained  in this form are not required to respond  unless the form  displays a
currently valid OMB control number.


                                       1


                             THE CATTLESALE COMPANY
                                AND SUBSIDIARIES



                                      INDEX




                                                                   Page
                                                                  Number

Part I.  Financial Information

Item 1.  Financial Statements

    Consolidated Balance Sheets
     June 30, 2004 and December 31, 2003                             3

    Consolidated Statements of Operations
     Quarter and Six Months Ended June 30, 2004 and 2003             4

    Consolidated Statements of Cash Flows
     Six Months Ended June 30, 2004 and 2003                         5

    Notes to Consolidated Financial Statements                       6


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

Item 3.   Controls and Procedures                                   15



Part II.   Other Information

Item 6.  Exhibits and Reports on Form 8-K                           16

Signature                                                           17
---------
Certifications                                                      18
--------------


                                       2

                          PART I. FINANCIAL INFORMATION


Item 1. Financial Statements



CONSOLIDATED BALANCE SHEETS
The CattleSale Company and Subsidiaries

                                                                               (In thousands, except share data)
-------------------------------------------------------------------------------------------------------------------

                                                                                (unaudited)
                                                                               June 30, 2004       Dec. 31, 2003

Assets
Current assets:
                                                                                                    
   Cash and cash equivalents                                                    $      1           $      30
   Accounts receivable, net                                                           50                  64
   Inventory                                                                         116                 ---
   Other current assets                                                               64                  60
   -----------------------------------------------------------------------------------------------------------
   Total current assets                                                              231                 154
Fixed assets, net                                                                    106                 108
Goodwill                                                                             708                 708
Other intangible assets                                                              484                  --
Other assets, net                                                                    132                 137
--------------------------------------------------------------------------------------------------------------
         Total Assets                                                           $  1,661           $   1,107
==============================================================================================================
Liabilities and Stockholders' Equity
Current liabilities:
   Accounts payable                                                             $    722           $     334
   Accrued expenses                                                                  434                 232
    Notes payable                                                                    140                 109
    ----------------------------------------------------------------------------------------------------------
   Total current liabilities                                                       1,296                 675

Deferred federal income tax                                                           --                 400
------------------------------------------------------------------------------------------------------------
         Total Liabilities                                                      $  1,296           $   1,075
==============================================================================================================

Stockholders' equity:
Series A Preferred stock, $0.01 par value.  Shares authorized,
    500,000; 250,000 shares issued and outstanding in 2004 and 2003
    (liquidation preference $2,500,000)                                         $      2           $     2
Series B Preferred stock, $0.01 par value.  Shares authorized,
    4,000,000; 2,676,044  shares issued and outstanding in 2004
   and 2,381,406 in 2003   (liquidation preference $26,760,440)                       27                24
Common stock, $0.01 par value.  Shares authorized 50,000,000;
    shares issued and outstanding 23,077,574 in 2004 and 20,353,700 in 2003.         231               204
Paid in capital                                                                    8,685             8,026
Accumulated deficit                                                               (8,580)           (8,224)
--------------------------------------------------------------------------------------------------------------
   Total stockholders' equity                                                   $    365           $    32
--------------------------------------------------------------------------------------------------------------
         Total Liabilities and Stockholders' Equity                             $  1,661            $1,107
==============================================================================================================

See accompanying Notes to Consolidated Financial Statements.


                                       3






CONSOLIDATED STATEMENTS OF OPERATIONS
The CattleSale Company and Subsidiaries
(Unaudited)


                                                                             (In thousands, except share data)
                                                                      Quarter Ended               Six Months Ended
----------------------------------------------------------------------------------------------------------------------------
                                                          June 30, 2004       June 30, 2003    June 30, 2004   June 30, 2003
                                                          -------------       -------------    -------------   -------------
                                                                               (Restated)                       (Restated)
Revenue:
                                                                                                         
  Service, net                                              $       0         $      8         $       1       $      10
  --------------------------------------------------------------------------------------------------------------------------
Total revenue                                               $       0                8         $       1              10

Operating costs and expenses:
  Selling, general and administrative                              410              559               717            898
   Patent Litigation Trust expenses                                 --               57                --             57
---------------------------------------------------------------------------------------------------------------------------
  Total operating costs and expenses                        $      410         $    616         $     717      $     955
---------------------------------------------------------------------------------------------------------------------------
  Operating loss                                                  (410)            (608)             (716)          (945)

Non-operating income (expense):
  Interest expense                                                 (4)              --               (59)             --
  Other, net                                                        5                6                19              15
--------------------------------------------------------------------------------------------------------------------------
  Loss before income taxes                                       (409)            (602)             (756)           (930)
--------------------------------------------------------------------------------------------------------------------------
Income tax benefit                                                 --               --               400             --
--------------------------------------------------------------------------------------------------------------------------
Net  (loss)                                                 $    (409)        $   (602)        $    (356)           (930)
=============================================================================================================================
Preferred stock dividends paid or accumulated                    (168)            (169)             (332)           (234)
Net loss applicable to common shareholders adjusted
for preferred stock accumulated                                  (577)            (771)             (688)         (1,164)
Basic and Diluted Loss  Per Common Share:                       $(.03)           $(.04)            $(.03)          $(.07)

Average Common Shares Outstanding:
    Basic and Diluted                                         22,533,068      19,577,894        21,513,136     16,662,843





See accompanying Notes to Consolidated Financial Statements.

                                       4



CONSOLIDATED STATEMENTS OF CASH FLOWS
The CattleSale Company and Subsidiaries
(Unaudited)
                                                                                         (In Thousands)
                                                                                        Six Months Ended
                                                                                 June 30, 2004      June 30, 2003


Cash flows from operating activities:
                                                                                             
Net  loss                                                                         $  (356)         $   (930)
   Adjustments to reconcile net loss to net
     cash used in operating activities:
     Depreciation and amortization                                                     24                21
     Amortization of debt discount                                                     50                --
     Special Compensation paid in Common Stock                                         40                --
     Deferred income tax benefit                                                     (400)               --
  Changes in assets and liabilities:
     (Increase) decrease in prepaids                                                   (3)               62
     (Increase) decrease in receivables                                                14               (12)
     Increase (decrease) in accounts payable and accrued expenses                     471                (8)
     Other, net                                                                         6                 5
                                                                                        -                 -
       Net cash used in operating activities                                      $  (154)        $    (862)

Cash flows from investing activities:
   Acquisition Costs                                                                   --              (150)
                                                                                       --              -----
        Net cash provided by (used in) investing activities                            --              (150)

Cash flows from financing activities:
Sale of common stock                                                                  125                --
                                                                                      ---                --
Net cash provided from financing activities                                           125                --
                                                                                                         --

Net  decrease in cash and cash equivalents                                            (29)           (1,012)
Cash and cash equivalents at beginning of period                                       30             1,236
                                                                                       --             -----
Cash and cash equivalents at end of period                                        $     1         $     224
                                                                                  ============    ============

Cash payments for:
    Interest                                                                      $   --          $      --
    Income taxes                                                                  $   --          $      --

See accompanying Notes to Consolidated Financial Statements.

The changes in operating assets and liabilities resulting from the acquisition
transactions on February 25, 2003 and June 7, 2004 are not considered in
determining net cash provided from operating activities.






                                       5


                     THE CATTLESALE COMPANY AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements
                      (In thousands, except per share data)
                                   (Unaudited)

1.  Summary of Significant Accounting Policies

Liquidity and Going Concern

     The Company  will not have  sufficient  cash  resources to satisfy its cash
requirements  for 2004,  including  the  payment of certain of its June 30, 2004
obligations, without an infusion of additional cash. In November and December of
2003,  the Company  received  short term financing of $125 to partially fund its
operations. These notes matured in January and February of 2004, and the Company
is currently in default on these notes.  In  addition,  an  additional  $125 was
received during the first six months of 2004 as a private placement  investment,
also to  partially  fund its  operations.  Prior to the  acquisition  of CowTek,
Inc.("CowTek"),  as more  fully  described  in  Note 2,  the  Company  had  been
primarily  operating through one agent located in the Northwestern region of the
United States,  who was primarily  responsible for generating most of the cattle
transactions  in 2003.  The selling  season for that region is  generally in the
summer and fall with deliveries occurring in the fall and winter.  Consequently,
subsequent  to year end, the source of cash inflows to the Company has primarily
been from the private investment,  which is not sufficient to meet the Company's
cash  requirements.  While the  Company  has been  seeking  to expand  its agent
network to include more coverage  throughout the United  States,  in view of the
acquisition  of CowTek,  the  Company  has  elected to  temporarily  suspend its
internet  cattle  trading  operations  and to devote its  limited  resources  in
expanding the CowTek operations.  In addition,  the Company is exploring several
opportunities   to  provide   cash   infusions   from  equity  and   acquisition
transactions.  While the Company is simultaneously  seeking additional  "bridge"
investments  to fund its operations  until more longer term capital  investments
are received,  if at all, there can be no assurance that  additional  short term
and/or longer term  financing will be received and that the Company will be able
to fulfill its obligations or continue operations.

     As  described,  the Company will  require an  additional  cash  infusion to
continue as a going concern. Pending such a cash infusion, the Company is unable
to recruit  additional  agents and support its existing  cattle auction  trading
service  operations.  The  assumption  that the Company will continue as a going
concern  is  required  by  generally  accepted   accounting   principles  unless
liquidation  appears imminent.  Management's  plans are to resume and expand the
auction trading services, and integrate them with the services to be provided by
CowTek,  subject  to  its  obtaining  sufficient  private  placement  financing.
Management  further  believes that with the requisite cash to resume  activities
that is contemplated in the going concern assumption,  the $708 goodwill arising
from the CattleSale  acquisition has not been impaired.  It is possible that the
going concern  assumption  will prove to be invalid,  in which case the goodwill
might not provide value equal to the carrying amount.  Furthermore,  the Company
will perform its scheduled valuation of goodwill at December 31, 2004. Continued
inactivity  might erode the business value of the CattleSale  name and operation
which could result in an impairment loss at that time.

     On  April 9,  2004,  the  Company,  along  with  co-tenants  Canal  Capital
Corporation and Plaza Securities Company LP, entered into a settlement agreement
with the  landlord  of its New  York  office  lease.  The  settlement  agreement
provides for,  among other things,  termination of the lease in its entirety and
full  release  of all of the  parties.  The  release  was  contingent  upon  the


                                       6


forfeiture of the Company's and co-tenants' security deposits and the payment of
two months rent.  While the Company  satisfied  its portion of the first month's
rent,  the  Company's  portion of the second  month's rent was paid  directly by
certain of the  Company's  directors  and will be  reimbursed to them from first
monies  received by the Company from future cash  infusions,  if  received.  The
terms of the original lease provided for lease termination in October, 2009.

Cash and Cash Equivalents

     Cash equivalents include short-term, highly-liquid money market accounts or
debt investments with overnight  maturities and, as a result, the carrying value
approximates fair value because of the short maturity of those instruments.

Revenue Recognition and Restatement

     Effective  February 25, 2003, the Company provided auction trading services
through  the  internet  to  producers  of beef and  dairy  cattle.  The  Company
typically  received a consignment fee from the producer at the time the producer
entered into a listing agreement with the Company.  If the listing resulted in a
sale, this fee was refunded to the seller as a credit to the  commission.  If no
sale occured,  the Company retained the consignment fee.  Commissions were based
on a  percentage  of the selling  price of the cattle,  subject to a minimum per
head charge.  Commission  revenue was recognized  upon delivery of the cattle to
the buyer.

     Commissions, paid by the Company to its regional representatives, typically
60% to 80% of the Company's  commission  revenue,  was recorded as selling costs
when the Company recorded the related revenue.

     The Company  generally  paid the seller  prior to its  collection  from the
buyer  and  thereby  had  credit  risk for  amounts  greatly  in  excess  of its
commission revenue. Although not contractually bound, the Company also may have,
in certain circumstances, absorbed losses from buyer rejection.

     The previous management of the Subsidiaries before their acquisition by the
Company  had taken the  position  that the  billings  to the  sellers  should be
reported as the Subsidiaries'  revenue, the amounts paid to the sellers reported
as the cost of sales and the net retained by the Subsidiaries  reported as gross
profit.

     The Company continued previous management's policy in preparing its interim
financial  statements  for the periods ended March 31, June 30 and September 30,
2003.  After review of the  Subsidiaries'  current  method of operations and the
structuring  of its  transactions,  management  had concluded that reporting the
Company's  net  commission  as revenue is more  appropriate.  The  statements of
operations  for the three and six months ended June 30, 2003 have been  restated
to reflect net  commission  as revenue.  The change had no effect on net loss or
loss per share.

Inventory

     The Company  recorded the inventory,  consisting of  approximately  50% raw
materials and 50% finished goods, associated with the acquisition of CowTek, Inc
at the  estimated  fair market value.  The Company will record future  inventory
transactions at cost on a First-In First-Out (FIFO) basis.

                                       7

Use of Estimates

     The  preparation  of financial  statements  in  conformity  with  generally
accepted  accounting  principles  requires  management  to  make  estimates  and
assumptions  that affect the amounts  reported in the financial  statements  and
accompanying notes. Actual results could differ from those estimates.

2.  Acquisitions

         A.  CowTek

     The  Company  acquired  the cattle  identification,  traceability  and data
management division of CowTek,  Inc. "CowTek"),  effective June 7, 2004. CowTek,
headquartered in Brule,  Nebraska, is the developer of ISO Memory tag technology
with  a   proprietary   distributive   database   management   system   for  the
identification  and  traceability  of  individual  cattle  records.   Management
believes that the addition of the CowTek technology  provides the Company with a
revenue producing business unit and will also eventually give the CattleSale.com
trading  platform  a  significant  advantage  as the  first  electronic  trading
platform in the country that will offer traceable  source verified cattle as one
of its product choices. To date,  CowTek's sales have principally  resulted from
beta test sites.

     The  Company  did not  expend any cash in  acquiring  CowTek.  Rather,  the
purchase price consisted of:

(a)  $3 Million Dollars face amount (300,000)  shares of The CattleSale  Company
     ("CTLE")  $10  Series  B  Cumulative,   Convertible  Preferred  Stock.
(b)  1,000,000 CTLE Common Stock warrants  exercisable at $0.12 for 2 years;
(c)  1,000,000 CTLE Common Stock warrants exercisable at $0.50 for 3 years;
(d)  2,000,000 CTLE Common Stock warrants exercisable at $0.75 for 3 years; and

     The following table  summarizes the estimated fair values of the assets and
liabilities  of CowTek at the date of  acquisition.  While the Company is in the
process of determining  and  quantifying  the breakdown of the intangible  asset
between  software and patented  technology,  the Company does not anticipate any
significant   changes  to  the   purchase   price   allocation.   Pending   this
determination,  the Company has not yet determined the estimated useful lives of
the assets.  This determination  would have no material effect on the results of
operations for the three and six months ended June 30, 2004.

                                                          Date of Acquisition
        Inventory                                                $116
        Equipment, Furniture & Fixtures                            22
        Intangible Assets                                         484
        -------------------------------------------- --------------------------
            Total Assets Acquired                                 622

        Current Liabilities Assumed                               126

           Net Assets Acquired                                   $496

     The  total  transaction  value  of  $496  included  300,000  shares  of the
Company's  Series B Preferred Stock  convertible into 2,175,000 shares of Common
Stock valued at the price of the Common Stock for a representative period before
and after the  announcement  of the terms of the transaction as well as the fair
market  value of the  4,000,000  warrants  issued to purchase  the common  stock
calculated by using a Black Scholes model.

                                       8

Pro Forma Financial Information

     The accompanying  unaudited  condensed pro forma statement of operations of
the Company  for the six month  period  ended June 30, 2004 gives  effect to the
acquisition of CowTek as if it had occurred on January 1, 2004.

     The pro forma financial  information is not  necessarily  indicative of the
operating  results that would have occurred had the  acquisition  of CowTek been
consummated as of January 1, 2004, nor is the information necessarily indicative
of future operating results.



                     The CattleSale Company and Subsidiaries
                        Pro Forma Statement of Operations
                     For the six months ended June 30, 2004
                                 ($'s in 000's)


                                                         As Reported         Adjustments        Pro Forma

                                                                                            
         Net Sales                                      $      1             $    18 (1)         $    19
         Cost of Sales                                         -                  27 (1)              27
         -------------------------------------------------------------------------------------------------

           Gross Profit                                        1                  (9)                 (8)

         Selling, general and                                717                  97 (1)             819
                    administrative expenses                                        5 (2)
----------------------------------------------------------------------------------------------------------

         Operating loss                                 $   (716)            $  (111)            $  (827)

         Non-operating income (expense):
         Interest income (expense)                           (59)                 --                 (59)
         Other, net                                           19                  --                  19
         Income Tax Benefit                                  400                                     400
         -------------------------------------------------------------------------------------------------
              Net loss                                  $   (356)            $  (111)            $  (467)
                                                           ======              ======              ======

         Cumulative dividend on preferred stock             (332)                                   (364) (3))
         Net loss available to common shareholders      $   (688)                               $   (831)
                                                        =========                               =========

         Net loss per common share                      $   (.03)                               $  (.04)
                                                        =========                               ========


Average common shares outstanding:
        Basic and Fully Diluted                        21,513,136                              21,513,136


Notes to the Pro Forma Statement of Operations
(1)  Reflects the actual results of CowTek for the period January 1, 2004 through June 6, 2004.
(2)  Reflects  depreciation  expense on the fair value of CowTek's  fixed assets  acquired  for the period  January 1,
     2004 through June 6, 2004.
(3)  Assumes  300,000  shares of series B preferred  stock were  outstanding  for the entire period of January 1, 2004
     through June 30, 2004.



                                       9


     The estimated pro forma effect on the Company's  results of operations  for
the year ending  December  31, 2003 had the  acquisition  occurred on January 1,
2003 is as follows:


                                                            2003
                                              Historical             Pro Forma
Revenue (net of $5,481 gross historical
         billings in 2003)                      $113                    $153

Net loss                                      (1,830)                 (2,107)
Loss per share                                  (.13)                   (.15)

B. ID Comm

     On April 22, 2004, the Company entered into a letter of intent to acquire a
45 percent equity  position in IDComm,  Inc.("IDComm").  IDComm has  proprietary
software  for  Distributed  Database  Technology  using RF Tags and 2-D  Barcode
structures.  IDComm has successfully  implemented its  SmartWare(TM)  technology
along with read/write  hardware into the cattle industry  through CowTek,  Inc.,
which  CattleSale  has  acquired  and of  which a major  investor  also  holds a
majority interest in IDComm. IDComm presently is developing programs targeted at
six  industries.  Two of these are for maintenance  and  identification  systems
using RF Tag technology and one is targeted for large values used extensively in
the power generation and refinery industry.  Large equipment companies,  such as
farm  equipment  and  trucking,  also  have  a  need  for  this  type  of ID and
maintenance  record  keeping  capability.  A specific  product for the  shipping
industry is being  targeted  using the  SmartWare(TM)  technology to replace the
Bill-Of-Lading  paperwork,  which will  modernize and  streamline the import and
export of product worldwide.

     The  proposed  acquisition  is  structured  around the  issuance of 150,000
shares of The CattleSale Company's $10 Convertible Preferred Stock B and 500,000
stock options of The CattleSale  Company's common stock exercisable at $.25. The
proposed  transaction  is expected to close in the third  quarter of 2004 and is
contingent on final due diligence,  a definitive purchase agreement and approval
of both companies' board of directors.

     The letter of intent also  provides  The  CattleSale  Company with a 5 year
option,  beginning 12 months after closing, to purchase an additional 10% of the
common  stock of IDComm at fair  market  value to be defined  in the  definitive
Purchase Agreement.

3.  Non-operating Income (Expense)



                                               Quarter Ended                                  Six Months Ended
                                     6/30/04                 6/30/03                  6/30/04                  6/30/03
                                                                                                     
Interest earned                      $ --                    $  1                     $ --                     $  2
Imputed interest                        6                       4                       12                       12
Interest expense                       (4)                     --                      (59)                      --
Other                                  (1)                      1                        7                        1
                                    ---------               --------                 --------                  -------
                                     $  1                    $  6                    $ (40)                     $ 15



4.  Accounts Receivable

     The Company has a receivable from Vugate, Inc. ("Vugate"), the buyer of its
videoconferencing  business. This receivable consists of a note with a remaining
face amount of $174 that is payable out of certain Vugate cash flows.  This note


                                       10


is carried on the balance sheet at $154, $50 of which is classified as a current
asset,  which  represents  the  present  value of the  estimated  payments  at a
discount rate of 12.5% per annum.  The Company imputed  interest income at 12.5%
per annum on the adjusted balance on a prospective  basis beginning in the first
quarter of 2002.  While the Company  currently  believes that the  receivable is
fully collectible,  it is reasonably possible that the note will be collected at
a slower or faster rate than  estimated  or that a portion of the note will turn
out to be uncollectible.

     As of March 31, 2004, the Company had a $909  receivable  from the Dynacore
Patent  Litigation  Trust  (the  "Trust")  plus $221 of  accrued  interest.  The
collection of the receivable was solely  dependent upon the success or favorable
settlement of the Patent Litigation.  In view of the summary judgment granted to
the  defendants in the Patent  Litigation on February 11, 2003, an allowance for
the full amount of the  receivable  was recorded as of December  31,  2002.  The
trust  appealed  this ruling and on March 31, 2004,  the United  States Court of
Appeals for the Federal Circuit rejected the appeal.  As a result of the loss of
the appeal,  the amounts were  written off in the quarter  ended March 31, 2004.
The Company had not recorded the accrued interest as income.

     Because of the lack of specific  payment terms and comparable  instruments,
it is not  practicable  to estimate the fair value of the note  receivable  from
Vugate except that the  comparatively  low market interest rates as of March 31,
2004 make it likely that the fair value exceeds the carrying amount.

5.  Accrued Expenses
                                            June 30, 2004          Dec 31, 2003
                                            -------------          ------------
Salaries, commissions, bonuses
    and other benefits                        $  271                  $  81
Accrued professional fees                        148                    133
Other                                             15                     18
                                                 --                      --
                                              $  434                  $  232
                                                ====                    ====

6.  Commitments and Contingencies

     From  time to time,  the  Company  is a  defendant  in  lawsuits  generally
incidental to its business. The Company is not currently aware of any such suit,
which if decided adversely to the Company,  would result in a material liability
in relation to the financial position and results of operations.

     As a result of the March 31, 2004 ruling rejecting the appeal of the Patent
Litigation  described  in  Footnote  3,  the  District  Court  must  rule on the
defendants'  motions for taxable costs and attorneys'  fees. The Company and the
Trust  believe  that they acted in good faith in bringing  and  prosecuting  the
Action and that they have valid  defenses to and arguments  against  defendants'
motions.  Although the Company and the Trust believe the motions for  attorneys'
fees to be without merit, there can be no assurance that the District Court will
rule in favor of the  Company and the Trust.  The  Company and the Trust  cannot
predict  (i) when the  District  Court  will  rule on  defendants'  motions  for
attorneys' fees, (ii) how the District Court will rule on the motion,  and (iii)
the amount of any attorneys' fees if awarded by the District Court.  However,  a
ruling against the Company may have a material adverse effect on the Company.

     In addition,  the Company was obligated to loan the Trust up to $1 million.
At June 30, 2004,  $909 had been advanced.  As a result of the rejected  appeal,
Trust financial obligations up to the remaining commitment of $91 may be claimed
against the Company.



                                       11


     As of June 30,  2004,  the Company  only has  month-to-month  leases on its
remaining  premises.  Rent  expense  was $8 and $38 for the three and six months
ended June 30, 2004 respectively.

7.  Notes Payable

     As of June 30,  2004,  there were three notes  payable  outstanding  with a
total  face  amount of $132.  All three  bear  interest  at 8% per  annum,  with
maturities  ranging from January 15, 2004 through  February 15, 2004. In 2003, a
total of 275,000 shares of the Company's common stock were issued in conjunction
with the  issuance  of these  notes.  The debt  discount  on these notes of $47,
including $40 representing proceeds allocated to the stock issued, was amortized
over the maturity life of the notes.

     Currently,  the Company is in payment  default on all of these  notes.  Two
notes were amended in the first quarter of 2004 to include  default  interest of
12% for all unpaid amounts after the maturity date as well as the issuance of an
additional  135,000  shares of the  Company's  common stock that were assigned a
value of $27 based on the quoted prices on the day of the amendments.

     Because the borrowings  had been made recently,  and the fact that they are
due  immediately,  as of June 30,  2004 the  estimated  fair  value of the notes
approximates carrying value.

8.  Federal Income Taxes

     Included in the results for the six month  period  ended June 30, 2004 is a
one time  income tax  benefit of $400.  The  income tax  benefit  relates to the
reversal  of  deferred  tax   liabilities   associated   with  certain   foreign
subsidiaries  which the  Company  divested  in  Fiscal  Year 2000 as part of its
reorganization  under Chapter 11. The Company has  re-evaluated  its exposure to
these taxes and does not believe it will incur any future tax liability  related
to these former foreign subsidiaries.

9.  Stockholders' Equity

    A rollforward of the Company's Common shares outstanding is as follows:
    Balance as of 3/31/04                       21,360,907
    Private Placement Investment-$75 Received    1,266,667
    Employee Compensation--$41 Expensed            450,000
                                                 ---------
    Balance as of 6/30/04                       23,077,574

10.  Stock Options

     As part of the CowTek  Acquisition  agreement,  options to purchase 450,000
shares of the Company's  common stock were granted to a former  CowTek  employee
pursuant to an eighteen month employment agreement. Each of the 450,000 options,
which fully vest at the end of the eighteen month employment term,  provides for
the issuance of one share of the  Company's  common stock at .10 per share.  The
options were valued at $16 per a Black  Scholes  calculation  but in  accordance
with Company policy and with APB 25 to record the options at intrinsic value, no
financial  statement  recognition  has been made.  Had the Company  recorded the
options as compensation expense pursuant to FASB 123, there would be no material
effect on the Company's financial statements for the period ended June 30, 2004.

                                       12


11.  Certain Relationships and Related Transactions

     During the quarter ended June 30, 2004, the Company incurred  approximately
$99 of consulting, public relations, and investment banking services rendered by
MPI  Venture  Management,  LLC.  ("MPI").  Messrs.  David W.  Pequet and Mark A.
Margason, both Company directors, are also principals of MPI

     Item 2.  Management's  Discussion  and Analysis of Financial  Condition and
Results of Operations
     (for the three and six months ended June 30, 2004 and 2003)
     ($ in thousands)

Results of Operations

     For the  quarter  and six month  period  ended June 30,  2004,  the Company
reported  a net loss of $409 and $356 and an  operating  loss of $410 and  $716,
respectively. For the same periods, the Company reported non-operating income of
approximately $1 and expense of $40, respectively.

     For the  quarter  ended June 30,  2004,  the Company had revenue of $0. The
Company  has  been  primarily   operating  through  one  agent  located  in  the
Northwestern  region of the United  States,  who was primarily  responsible  for
generating most of the cattle  transactions in 2003. The selling season for that
region is generally in the summer and fall with deliveries occurring in the fall
and winter. Therefore,  until more agents are enlisted,  revenue will be limited
to this cyclical selling season.

     Included in the results for the six month  period  ended June 30, 2004 is a
one time  income tax  benefit of $400.  The  income tax  benefit  relates to the
reversal  of  deferred  tax   liabilities   associated   with  certain   foreign
subsidiaries  which the  Company  divested  in  Fiscal  Year 2000 as part of its
reorganization  under Chapter 11. The Company has  re-evaluated  its exposure to
these taxes and does not believe it will incur any future tax liability  related
to these former foreign subsidiaries.

     For the  quarter  and six month  period  ended June 30,  2003,  the Company
reported  a net loss of $602  and  $930,  an  operating  loss of $608 and  $945,
recorded revenue of $8 and$10,  respectively.  For the same periods, the Company
reported non-operating income of approximately $6 and $15, respectively.

Financial Condition

     During  the  first  six  months  of  2004,  the  Company's  cash  and  cash
equivalents  decreased  approximately  $29 as a result of the payment of certain
operating  expenses for the first six months of 2004.  As of June 30, 2004,  the
Company had cash and cash equivalents of approximately $1.

     The Company  will not have  sufficient  cash  resources to satisfy its cash
requirements  for 2004,  including  the  payment of certain of its June 30, 2004
obligations, without an infusion of additional cash. In November and December of
2003,  the Company  received  short term financing of $125 to partially fund its
operations. These notes matured in January and February of 2004, and the Company
is currently in default on these notes.  In  addition,  an  additional  $125 was


                                       13


received during the first six months of 2004 as a private placement  investment,
also to  partially  fund its  operations.  Prior to the  acquisition  of CowTek,
Inc.("CowTek"),  as more  fully  described  in  Note 2,  the  Company  had  been
primarily  operating through one agent located in the Northwestern region of the
United States,  who was primarily  responsible for generating most of the cattle
transactions  in 2003.  The selling  season for that region is  generally in the
summer and fall with deliveries occurring in the fall and winter.  Consequently,
subsequent  to year end, the source of cash inflows to the Company has primarily
been from the private investment,  which is not sufficient to meet the Company's
cash  requirements.  While the  Company  has been  seeking  to expand  its agent
network to include more coverage  throughout the United  States,  in view of the
acquisition  of CowTek,  the  Company  has  elected to  temporarily  suspend its
internet  cattle  trading  operations  and to devote its  limited  resources  in
expanding the CowTek operations.  In addition,  the Company is exploring several
opportunities   to  provide   cash   infusions   from  equity  and   acquisition
transactions.  While the Company is simultaneously  seeking additional  "bridge"
investments  to fund its operations  until more longer term capital  investments
are received,  if at all, there can be no assurance that  additional  short term
and/or longer term  financing will be received and that the Company will be able
to fulfill its obligations or continue operations.

     As  described,  the Company will  require an  additional  cash  infusion to
continue as a going concern. Pending such a cash infusion, the Company is unable
to recruit  additional  agents and support its existing  cattle auction  trading
service  operations.  The  assumption  that the Company will continue as a going
concern  is  required  by  generally  accepted   accounting   principles  unless
liquidation  appears imminent.  Management's  plans are to resume and expand the
auction trading services, and integrate them with the services to be provided by
CowTek,  subject  to  its  obtaining  sufficient  private  placement  financing.
Management  further  believes that with the requisite cash to resume  activities
that is contemplated in the going concern assumption,  the $708 goodwill arising
from the CattleSale  acquisition has not been impaired.  It is possible that the
going concern  assumption  will prove to be invalid,  in which case the goodwill
might not provide value equal to the carrying amount.  Furthermore,  the Company
will perform its scheduled valuation of goodwill at December 31, 2004. Continued
inactivity  might erode the business value of the CattleSale  name and operation
which could result in an impairment loss at that time.

     As a result of the March 31, 2004 ruling rejecting the appeal of the Patent
Litigation  described  in  Footnote  3,  the  District  Court  must  rule on the
defendants'  motions for taxable costs and attorneys'  fees. The Company and the
Trust  believe  that they acted in good faith in bringing  and  prosecuting  the
Action and that they have valid  defenses to and arguments  against  defendants'
motions.  Although the Company and the Trust believe the motions for  attorneys'
fees to be without merit, there can be no assurance that the District Court will
rule in favor of the  Company and the Trust.  The  Company and the Trust  cannot
predict  (i) when the  District  Court  will  rule on  defendants'  motions  for
attorneys' fees, (ii) how the District Court will rule on the motion,  and (iii)
the amount of any attorneys' fees if awarded by the District Court.  However,  a
ruling against the Company may have a material adverse effect on the Company.

     In addition,  the Company was obligated to loan the Trust up to $1 million.
At June 30, 2004,  $909 had been advanced.  As a result of the rejected  appeal,
Trust financial obligations up to the remaining commitment of $91 may be claimed
against the Company.

                                       14

Cautionary Statement Regarding Risks and Uncertainties

     This Quarterly Report on Form 10-QSB contains "forward-looking  statements"
about the business,  financial  condition and prospects of the Company which are
intended  to be  covered  by the safe  harbors  created  by  Section  27A of the
Securities  Act of 1993, as amended and Section 21E of the  Securities  Exchange
Act of 1934. All statements that are not historical facts,  including statements
about management's beliefs or expectations, are forward looking statements. When
used in this Quarterly Report on Form 10-Q, the words  "believes,"  "estimates,"
"plans,"  "expects,"  "will," "may,"  "intends" and  "anticipates,"  and similar
expressions  as they relate to the Company or its  management,  are  intended to
identify forward-looking statements.

     The Company's  actual results could differ  materially from those indicated
by the forward looking  statements  because of various risks and  uncertainties,
including, without limitation, changes in competition,  economic conditions, new
product development, changes in tax and other governmental rules and regulations
applicable  to the Company and other risks  indicated in the  Company's  filings
with the Securities and Exchange  Commission  and normal  business  uncertainty.
These risks and  uncertainties are beyond the ability of the Company to control,
and in many cases, the Company cannot predict the risks and  uncertainties  that
could cause its actual results to differ  materially from those indicated by the
forward-looking statements.

     While  management  believes that its assumptions are reasonable at the time
forward  looking  statements  were made,  it is impossible to predict the actual
outcome of numerous factors, and, therefore, undue reliance should not be placed
on such  statements.  Forward looking  statements speak only as of the date they
are made and the  Company  does not  undertake  the  obligation  to update  such
statements in light of new  information  or future events that involve  inherent
risks and uncertainties.

Item 3. Controls and Procedures

     (a)  Within  the 90 days  prior to the  date of this  report,  the  Company
carried out an evaluation,  under the supervision and with the  participation of
the Company's  management,  including David S. Geiman and Phillip P. Krumb,  the
Company's chief executive officer and chief financial officer,  respectively, of
the  effectiveness  of the  design and  operation  of the  Company's  disclosure
controls and  procedures  pursuant to Exchange Act Rule 13a-14.  Based upon that
evaluation,  Messrs.  Geiman and Krumb  concluded that the Company's  disclosure
controls  and  procedures  are  effective  in timely  alerting  them to material
information  relating to the Company  (including its consolidated  subsidiaries)
required to be included in the Company's  periodic  filings with the  Securities
and Exchange Commission.

     (b) There  have  been no  significant  changes  in the  Company's  internal
controls  or in other  factors  that could  significantly  affect the  Company's
internal  controls   subsequent  to  the  date  the  Company  carried  out  this
evaluation,   including  any  corrective  actions  with  regard  to  significant
deficiencies and material weaknesses.

                                       15

                           PART II. OTHER INFORMATION


Item 6.  Exhibits and Reports on Form 8-K

           (a) Exhibits

     99.1  Certification  of the 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.

     (b) Reports on Form 8-K filed during the quarter ended June 30, 2004

     April 22,  2004 An 8-K was filed  announcing  the  Company's  entry  into a
Letter of Intent with IDComm, Inc.


                                       16


                                    SIGNATURE

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.



                             THE CATTLESALE COMPANY
                                  (Registrant)




DATE:  August 19, 2004                            /s/ Philip P. Krumb
                                                      -------------------
                                                      Phillip P. Krumb
                                                      Chief Financial Officer
                                                     (Chief Accounting Officer)



                                       17


Exhibit 99.1
                                  CERTIFICATION

I, David S. Geiman, Company, certify that:

     1. I have reviewed this  quarterly  report on Form 10-QSB of The CattleSale
Company;

     2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact  necessary to make
the statements made, in light of the  circumstances  under which such statements
were made, not  misleading  with respect to the period covered by this quarterly
report;

     3. Based on my knowledge,  the financial  statements,  and other  financial
information  included in this quarterly  report,  fairly present in all material
respects the financial  condition,  results of operations  and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;

     4. The  registrant's  other  certifying  officers and I are responsible for
establishing and maintaining  disclosure  controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

     a)   designed  such  disclosure  controls  and  procedures  to ensure  that
          material  information  relating  to  the  registrant,   including  its
          consolidated subsidiaries,  is made known to us by others within those
          entities,  particularly  during  the  period in which  this  quarterly
          report  is being  prepared;

     b)   evaluated the  effectiveness of the registrant's  disclosure  controls
          and procedures as of a date within 90 days prior to the filing date of
          this quarterly report (the "Evaluation Date"); and

     c)   presented  in  this  quarterly   report  our  conclusions   about  the
          effectiveness  of the disclosure  controls and procedures based on our
          evaluation as of the Evaluation Date;

     5. The registrant's other certifying  officers and I have disclosed,  based
on our most  recent  evaluation,  to the  registrant's  auditors  and the  audit
committee  of  registrant's  board  of  directors  (or  persons  performing  the
equivalent functions):

     a)   all  significant  deficiencies  in the design or operation of internal
          controls  which could  adversely  affect the  registrant's  ability to
          record,  process,   summarize  and  report  financial  data  and  have
          identified for the  registrant's  auditors any material  weaknesses in
          internal controls; and

     b)   any fraud, whether or not material,  that involves management or other
          employees who have a  significant  role in the  registrant's  internal
          controls; and

     6. The registrant's other certifying  officers and I have indicated in this
quarterly report whether there were significant  changes in internal controls or
in other factors that could significantly affect internal controls subsequent to
the date of our most recent  evaluation,  including any corrective  actions with
regard to significant deficiencies and material weaknesses.

Date: August 19, 2004

                                                /s/  David S. Geiman
                                             Name:   David S. Geiman
                                             Title:  Chief Executive Officer


                                       18

Exhibit 99.1


                                  CERTIFICATION

I, Phillip P. Krumb, Company, certify that:

     1. I have reviewed this  quarterly  report on Form 10-QSB of The CattleSale
Company;

     2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact  necessary to make
the statements made, in light of the  circumstances  under which such statements
were made, not  misleading  with respect to the period covered by this quarterly
report;

     3. Based on my knowledge,  the financial  statements,  and other  financial
information  included in this quarterly  report,  fairly present in all material
respects the financial  condition,  results of operations  and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;

     4. The  registrant's  other  certifying  officers and I are responsible for
establishing and maintaining  disclosure  controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

     a)   designed  such  disclosure  controls  and  procedures  to ensure  that
          material  information  relating  to  the  registrant,   including  its
          consolidated subsidiaries,  is made known to us by others within those
          entities,  particularly  during  the  period in which  this  quarterly
          report is being prepared;

     b)   evaluated the  effectiveness of the registrant's  disclosure  controls
          and procedures as of a date within 90 days prior to the filing date of
          this quarterly report (the "Evaluation Date"); and

     c)   presented  in  this  quarterly   report  our  conclusions   about  the
          effectiveness  of the disclosure  controls and procedures based on our
          evaluation as of the Evaluation Date;

     5. The registrant's other certifying  officers and I have disclosed,  based
on our most  recent  evaluation,  to the  registrant's  auditors  and the  audit
committee  of  registrant's  board  of  directors  (or  persons  performing  the
equivalent functions):

     a)   all  significant  deficiencies  in the design or operation of internal
          controls  which could  adversely  affect the  registrant's  ability to
          record,  process,   summarize  and  report  financial  data  and  have
          identified for the  registrant's  auditors any material  weaknesses in
          internal controls; and

     b)   any fraud, whether or not material,  that involves management or other
          employees who have a  significant  role in the  registrant's  internal
          controls; and

     6. The registrant's other certifying  officers and I have indicated in this
quarterly report whether there were significant  changes in internal controls or
in other factors that could significantly affect internal controls subsequent to
the date of our most recent  evaluation,  including any corrective  actions with
regard to significant deficiencies and material weaknesses.

Date: August 19, 2004

                                                /s/ Phillip P. Krumb
                                             Name:  Phillip P. Krumb
                                             Title:  Chief Financial Officer


                                       19

                           CERTIFICATIONS PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
                            (18 U.S.C. SECTION 1350)

     In connection  with the  Quarterly  Report of The  CattleSale  Company (the
"Company")  on Form 10-QSB for the quarter  ended March 31, 2004,  as filed with
the Securities and Exchange  Commission (the "Report"),  David S. Geiman,  Chief
Executive  Officer of the Company and Phillip P. Krumb,  Chief Financial Officer
of the Company, respectively, do each hereby certify, pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350), that to his knowledge:

(1)  The Report fully complies with the requirements of section 13 (a) or 15 (d)
     of the Securities  Exchange Act of 1934; and
(2)  The information  contained in the Report fairly  presents,  in all material
     respects, the financial condition and result of operations of the Company.


/s/ David S. Geiman
    David S. Geiman
    Chief Executive Officer



/s/Phillip P. Krumb
   Phillip P. Krumb
   Chief Financial Officer


     (A signed  original of this written  statement  required by Section 906 has
been provided to The  CattleSale  Company and will be retained by The CattleSale
Company and  furnished to the  Securities  and Exchange  Commission or its staff
upon request)