U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB/A
(Amendment #1)
(MARK ONE)
(X) QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 - FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2005
( ) TRANSITION REPORT UNDER SECTION 13 OR 15 (d) OF THE EXCHANGE ACT OF
1934 FOR THE TRANSITION PERIOD FROM ______________TO_______________
COMMISSION FILE NUMBER 0-25380
ULTRADATA SYSTEMS, INCORPORATED
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(Exact name of small business issuer as specified in its charter)
Delaware 43-1401158
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(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
1240 Dielman Industrial Court, St. Louis, MO 63132
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(Address of principal executive offices) (Zip Code)
Issuer's telephone number, including area code: (314) 997-2250
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15 (d) of the Securities Exchange Act during the past 12 months
(or for such shorter period that the registrant was required to file such
reports) and (2) has been subject to such filing requirements for the past
90 days. Yes [X] No [ ]
State the number of shares outstanding of each of the issuer's classes of
common equity as of the latest practicable date.
Class Outstanding as of April 15, 2005
---------------------- --------------------------------
Common, $.01 par value 6,410,187
Transitional Small Business Disclosure Format Yes [ ] No [X]
Amendment #1
This amendment is being filed in order to modify the disclosure set
forth under Item 3- Controls and Procedures.
This amended Quarterly Report has not been updated, except for the
correction to Item 3. As a result, this amended Quarterly Report
contains forward-looking information which has not been updated for
events subsequent to the date of the original filing.
File Number
0-25380
ULTRADATA SYSTEMS, INCORPORATED
FORM 10-QSB
March 31, 2005
INDEX
PART I - FINANCIAL INFORMATION PAGE
Item 1. Condensed Unaudited Financial Statements
Condensed Balance Sheets at
March 31, 2005 and December 31, 2004 3.
Condensed Statements of Operations
for the three months ended March 31, 2005 and 2004 4.
Condensed Statements of Cash Flows
for the three months ended March 31, 2005 and 2004 5.
Notes to Condensed Financial Statements 6.
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 8.
PART II - OTHER INFORMATION 11.
Signatures 11.
-2-
ULTRADATA SYSTEMS, INCORPORATED
Condensed Balance Sheets
As of March 31, 2005 and December 31, 2004
March 31, December 31,
2005 2004
----------- ------------
Assets (Unaudited)
Current assets:
Cash $ 113,568 $ 385,966
Trade accounts receivable, net of
allowance for doubtful accounts of
$100 and $176,575, respectively 180,973 38,459
Inventories, net 113,251 89,890
Prepaid expenses 132,618 41,515
-------- --------
Total current assets 540,410 555,830
Property and equipment, net 27,363 30,458
Other assets 5,444 5,444
Total assets $ 573,217 $ 591,732
======== ========
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 56,527 $ 126,019
Accrued liabilities 80,896 585,967
-------- --------
Total current liabilities 137,423 181,986
Note payable - long term 6,164 -
-------- --------
Total liabilities 143,587 181,986
Stockholders' equity
Preferred Stock, $0.01 par value,
4,996,680 shares authorized, none
outstanding - -
Common stock, $.01 par value; 10,000,000
shares authorized; 6,410,187 shares
issued and outstanding March 31,2005
and December 31, 2004 64,102 64,102
Additional paid-in capital 9,221,022 9,121,022
Accumulated deficit (8,783,019) (8,659,418)
Deferred stock compensation (72,475) (115,960)
--------- ---------
Total stockholders' equity 429,630 409,746
--------- ---------
Total liabilities and stockholders'
equity $ 573,217 $ 591,732
========= =========
See accompanying summary of accounting policies and notes to financial
statements.
-3-
ULTRADATA SYSTEMS, INCORPORATED
Condensed Statements of Operations
Three months ended March 31, 2005 and 2004
2005 2004
----------- -----------
(Unaudited)
Net sales $ 83,825 $ 1,753,499
Cost of sales 43,902 895,608
--------- ---------
Gross profit 39,923 857,891
Selling expense 22,410 48,593
General and administrative expenses 99,584 260,208
Research and development expense 35,201 19,669
--------- ---------
Total operating expenses 157,195 328,470
--------- ---------
Operating (loss) profit (117,272) 529,421
Other income (expense):
Interest and dividend income 379 -
Interest expense (6,758) (5,257)
Other, net 50 131
--------- ---------
Total other expense (6,329) (5,126)
--------- ---------
Income (loss) before income tax expense (123,601) 524,295
Income tax expense - -
--------- ---------
Net income (loss) $ (123,601) $ 524,295
========= =========
Income (loss) per share:
Basic $ (0.02) $ 0.09
========= =========
Income (loss) per share:
Fully Diluted $ (0.02) $ 0.08
Weighted Average Shares Outstanding:
Basic 6,410,187 6,056,928
========= =========
Weighted Average Shares Outstanding:
Fully Diluted 6,410,187 6,195,646
========= =========
See accompanying summary of accounting policies and notes to financial
statements.
-4-
ULTRADATA SYSTEMS, INCORPORATED
Condensed Statements of Cash Flows
Three months ended March 31, 2005 and 2004
2005 2004
--------- ---------
(Unaudited)
Cash flows from operating activities:
Net (loss) income $ (123,601) $ 524,295
Adjustments to reconcile net income
(loss) to net cash provided by
(used in) operating activities:
Depreciation and amortization 4,461 3,352
Provision for doubtful accounts (176,282) 43
Stock issued for services 43,485 -
Reserve for inventory impairment 3,489 -
Non-cash Amortization of note payable
discount 6,164 -
Increase (decrease) in cash due to
changes in operating assets and
liabilities:
Trade accounts receivable, net 33,768 (389,114)
Inventories (26,850) (14,105)
Prepaid expenses and other current assets (91,103) (14,538)
Accounts payable (69,492) 66,310
Accrued expenses and other liabilities 24,929 4,711
-------- --------
Net cash (used in) provided by operating
activities (371,032) 180,954
-------- --------
Cash flows from investing activities:
Capital expenditures (1,366) -
-------- --------
Net cash used in investing activities (1,366) -
-------- --------
Cash flows from financing activities:
Exercise of employee stock options - 7,031
Payments on notes payable - (211,202)
Note payable - short term - 165,000
Common stock 100,000 -
-------- --------
Net cash provided by (used in) financing
activities 100,000 (39,171)
-------- --------
Net (decrease) increase in cash (272,398) 141,783
Cash at beginning of period 385,966 2,926
-------- --------
Cash at end of period $ 113,568 $ 144,709
======== ========
See accompanying summary of accounting policies and notes to financial
statements.
-5-
ULTRADATA SYSTEMS, INCORPORATED
Notes to Condensed Financial Statements
March 31, 2005 (Unaudited)
Summary of Significant Accounting Policies
Basis of Presentation
The accompanying interim condensed financial statements included herein
have been prepared by Ultradata Systems, Incorporated (the "Company"), without
audit in accordance with generally accepted accounting principles and pursuant
to the rules and regulations of the Securities and Exchange Commission for
interim financial information. Certain information and footnote disclosures
normally included in financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted pursuant to such
rules and regulations, although the Company believes that the disclosures made
are adequate to make the information presented not misleading.
In the opinion of management, the information furnished for the three-
month periods ended March 31, 2005 and 2004, respectively, includes all
adjustments, consisting solely of normal recurring accruals necessary for a
fair presentation of the financial results for the respective interim periods
and is not necessarily indicative of the results of operations to be expected
for the entire fiscal year ending December 31, 2005. It is suggested that the
interim financial statements be read in conjunction with the audited financial
statements for the year ended December 31, 2004, as filed with the Securities
and Exchange Commission on Form 10-KSB (Commission File Number 0-25380), from
which these statements were derived.
Use of Estimates
The financial statements have been prepared in conformity with generally
accepted accounting principles and, as such, include amounts based on informed
estimates and adjustments by management, with consideration given to
materiality. Actual results could vary from those estimates.
Note 1. Inventories
Inventories consist of the following:
March 31, December 31,
2005 2004
----------- ------------
(Unaudited)
Raw Materials, net of
obsolete $ 24,576 $ 4,966
Finished Goods, net of
obsolete 88,675 84,924
------- -------
Total $ 113,251 $ 89,890
======= =======
Obsolete inventory on hand $ 740,942 $ 738,826
Note 2. Prepaid Expenses
Prepaid expenses consist of the following:
March 31, December 31,
2005 2004
----------- ------------
(Unaudited)
Prepaid insurance $ 18,500 $ 6,015
Prepaid advertising 30,000 -
Prepaid expenses 84,118 35,500
-------- --------
$ 132,618 $ 41,515
======== ========
-6-
Note 3. Income (Loss) Per Share
For the three months ended March 31,
2005 2004
Basic
Numerator:
Net (loss) income $ (123,601) $ 524,295
-------- --------
Numerator for basic
loss) income per share $ (123,601) $ 524,295
======== ========
Denominator:
Weighted average common
shares 6,410,187 6,056,928
--------- ---------
Denominator for basic
(loss) income per share 6,410,187 6,056,928
========= =========
Basic (loss) income per
share $ (0.02) $ 0.09
Fully Diluted Numerator:
Net (loss) income $ (123,601) $ 524,295
--------- ---------
Numerator for fully diluted
(loss) income per share $ (123,601) $ 524,295
========= =========
Denominator:
Weighted average common
shares 6,410,187 6,056,928
Common stock equivalents - 138,718
--------- ---------
Denominator for fully
diluted (loss) income
per share 6,410,187 6,195,646
========= =========
Fully diluted (loss)
income per share $ (0.02) $ 0.08
Note 4. Note Payable
On February 17, 2005 Ultradata entered into a Securities Purchase
Agreement dated February 14, 2005 with Golden Gate Investors, Inc., which was
modified by an Addendum dated February 17, 2005. Ultradata sold to Golden Gate
a 43/4% Convertible Debenture and Warrants to Purchase Shares of Common Stock,
all for a purchase price of $300,000. The Company received proceeds of $100,000
of the purchase price, except that $50,000 of that sum is being held in escrow
for payment of the costs of preparing and filing a registration statement that
will permit Golden Gate to make a public resale of the shares into which the
Debenture is convertible and for which the Warrant is exercisable (the
"Registration Statement"). As a result of the beneficial conversion of the
debenture, the Company has allocated $100,000 of the debenture proceeds to
additional paid-in capital and recorded a discount of $100,000. The remainder
of the purchase price is payable when the Securities and Exchange Commission
declares the Registration Statement effective.
Interest that accrues on the Debenture, at 43/4% per annum, will be payable
monthly. The principal amount of the Debenture is payable in full on February
14, 2007. However, the holder of the Debenture has agreed that, in each month
after the Securities and Exchange Commission declares the Registration
Statement effective, the holder will convert at least 3% of the face amount of
the debenture into common stock. Similarly, the holder of the Warrant is
required to purchase at least 3% of the shares subject to the Warrant in each
month after the Securities and Exchange Commission declares the Registration
Statement effective.
-7-
The conversion provisions of the Debenture and the exercise provisions of
the Warrant are correlated so that the Debenture will be converted and the
Warrant exercised in like proportions. The result is that in any month in
which the holder converts the 3% minimum it will also exercise the 3% minimum
under the Warrant, which will result in it purchasing common stock for $99,000
($90,000 paid in cash and $9,000 of the Debenture principal converted). The
number of shares that will be purchased will equal the purchase price divided
by the lesser of (a) $1.25 or (b) 80% of the average of the three lowest volume
weighted average prices during the twenty trading days preceding conversion/
exercise. In total, the conversion of the Debenture and exercise of the
Warrant will result in Golden Gate purchasing Ultradata common stock for up
to $3,300,000 ($3,000,000 paid in cash and $300,000 of the Debenture principal
converted) during the period between the effective date of the Registration
Statement and February 14, 2007.
There are four conditions that may reduce the aggregate purchase price
paid by Golden Gate below $3,300,000:
1. If Golden Gate only converts the 3% minimum per month, the
February 14, 2007 payment date for the Debenture will occur before
full conversion and exercise have occurred.
2. The conversion and exercise provisions of the securities provide
that at no time may Golden Gate acquire ownership of more that 9.9% of
Ultradata's outstanding common stock.
3. If at the time of a conversion/exercise, the conversion price
would be less than $.40, then either (a) Ultradata may opt to redeem
the amount of principal that the holder presents for conversion at
125% of face value, or (b) if the conversion/exercise date is later
than November 11, 2005, the holder may elect to convert up to $100,000
of the Debenture without exercising the Warrant, either of which
events would reduce the aggregate purchases under the Debenture and
Warrant by 900% of the amount redeemed by Ultradata or converted
without exercise.
4. When the principal amount of the Debenture falls below $100,000,
Ultradata may redeem the remaining principal for its face value. In
that event, the aggregate purchase price paid by Golden Gate for
Ultradata common stock would be only $2,200,000.
During the three months ended March 31, 2005, the Company amortized
$6,164 of the note payable discount.
Note payable - face $100,000
Note payable - discount 93,854
-------
$ 6,164
=======
Note 5. Going Concern
As reflected in the accompanying financial statements, a major customer
of the Company has experienced deteriorating operations during 2004 and during
the second quarter of 2004 ceased ordering products from the Company. This
customer accounted 55.4% of sales during 2004. In addition the Company
terminated its agreements with AAA for the sale of its products using the AAA
logo to AAA retail locations. Although Management has a plan in place to
replace these lost customers, it is not yet clear that the plan will be
successful. The ability of the Company to continue as a going concern is
dependent on the Company's ability to further implement its business plan,
raise capital and generate revenues. The financial statements do not include
any adjustments that might be necessary if the Company is unable to continue
as a going concern.
The Company has continued its product design and development efforts to
introduce new products in 2005 and expects to introduce its Road GenieTM in
2005. Based on the success of the Talking Road Whiz with direct TV marketing,
the Company is proceeding with plans to market Road GenieTM by means of similar
commercials, with the Company marketing directly to consumers. This new
product represents an increase in technology compared to the Talking Road Whiz
and, in addition, can be enhanced to include a digital voice recorder for
additional value to the customer. The Company is also opening a new source of
revenue by developing the cell-phone Road Whiz application. Thus, the Company
has two different methods in work to enhance sales revenue. In addition, the
Company has obtained a loan and a commitment for additional equity capital for
up to $3.3 million (see Note 4). Management believes that actions presently
taken to obtain additional funding provide the opportunity for the Company to
continue as a going concern.
-8-
Note 6. Settlement of Office Max Receivable
On April 20, 2005 Office Max settled suit filed against them for the full
amount of the disputed receivable without interest. The first-quarter
financials reflect the reversal of the bad-debt expense of $176,475 recorded in
2004 when collection was uncertain.
ITEM 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
YOU SHOULD NOT RELY ON FORWARD LOOKING STATEMENTS
This quarterly report contains a number of forward-looking statements
regarding our future prospects. Among the forward-looking statements are
descriptions of our plans to introduce new products to the market, to expand
our customer base, to develop products for ease of travel, and to return our
company to profitability. These forward-looking statements are a true
statement of our present intentions, but are neither predictions of the future
nor assurances that any of our intentions will be fulfilled. Many factors
beyond our control could act against Ultradata in its efforts to develop and
market its products. Among these factors are:
* The fact that our financial resources are minimal and will not sustain
us past this year without continued success of the Road WhizTM family product
line;
* The fact that our lack of capital severely limits our ability to market
our products. As a result, the loss of a significant customer could imperil
the marketing of an entire product line;
* The difficulty of attracting mass-market retailers to seasonal products
like our Road Whiz(tm) product line.
There may also be factors that we have not foreseen which could interfere
with our plans. In addition, changing circumstances may cause us to determine
that a change in plans will be in the best interests of Ultradata. For this
reason, you should not place undue reliance on any of the forward-looking
statements in this report, as there is a significant risk that we will not be
able to fulfill our expectations for Ultradata.
OVERVIEW
The Company mission is to aid the road traveler with useful information
with products easy to use and affordable in price. Since 1987 we have been
engaged in the business of manufacturing and marketing handheld computers that
provide travel information. The products are based upon a data compression
technology that we developed, portions of which we have patented. Recent
developments in communications and speech technology have opened up new
opportunities for us to integrate our technology and create new products
merging these technologies with our own. The Company is completing
development of several new products which are based on adding significant
features to the successful Talking Road Navigator such as a Spanish-speaking
unit and a voice-recognition unit which allows for hands-free operation.
These new products are consistent with our goal of improved ease of use by the
consumer. The Spanish-speaking unit was completed in 2004 and initial
deliveries to customers have been made. The voice-recognition unit should be
completed and available for sale in the second quarter of 2005. The voice
recognition product is called the Road Genie Audio Navigation System and
represents a quantum jump in user convenience. We believe this product will
achieve significant success in 2005. We have produced a TV commercial to
enable selling the Road Genie directly to consumers. We will attempt to
repeat the success of the Talking Road Whiz through direct TV promotion.
Market testing is expected to begin in May 2005.
The Company has sold over 3 million of its low-cost handheld travel
computers, demonstrating that there is a market for travel information
products. To re-awaken that market with an improved product that speaks, the
Company has developed a Talking Road WhizTM. Significant deliveries of this
product began in September of 2003 and, the Company received significant
revenue in the last four months of 2003 from sales of this new addition to its
product line. Company earnings in the fourth quarter of 2003 were sufficient
to offset losses in the first three quarters of 2003. This success continued
in the first two quarters of 2004, which have traditionally been weak quarters
for Ultradata. Our growth was stalled, however, in the second half of 2004,
when our primary distributor and one significant customer both ceased placing
orders. We are now engaged in efforts to replace those lost sales.
-9-
Each of our consumer products is designed to allow the consumer to
access useful information stored in a convenient manner. Our handheld
computers generally sell at retail prices between $19.95 and $59.95 per
unit. The products have been available in retail mass-market chains,
catalogs, credit-card inserts, and other channels.
The goals of the Company's research and development investments are
targeted at attaining the right product at the right price. There are
over 125 million drivers in the U. S., and there is a great demand for
useful, easy-to-access information for convenience and safety on the road.
Low-cost products that achieve these benefits have a significant niche in
the marketplace. Thus far, Management feels the Company has barely
penetrated this huge, largely untapped market. The Company expects to
continue to exploit this niche over the next few years by bringing the
results of merged technologies to bear on the goals stated above with
significant impact on Company sales and profits. Ease of use and low cost
are major considerations. With the new voice-recognition unit, we believe
we are close to tapping this large market. The introduction of expensive
GPS navigation systems has brought more awareness to this category.
However, most consumers do not wish to pay over $500 or monthly fees for
directions. Our low-cost user-friendly products offer an affordable
alternative.
Another quite different channel is a cell-phone implementation of
the Road Whiz function. In this case, the user can download software to
his cell phone and use the Company's proprietary database and
functionality availability in the Road Whiz product by subscription on his
cell phone. We're in the process of completing development of an initial
implementation of the Road Whiz that functions on the user's cell phone.
We will market it to service providers as another feature available to
modern cell phone subscribers. The user will need no other hardware
beyond a current-generation cell phone. The cell-phone Road Whiz also has
the potential of enabling service discounts based on the user's location
needs. Information that there is a brand name motel, for example, with
rooms available 10 miles down the road can be provided to the user and
offered at a significant discount to that highly-targeted consumer. The
Company has a patent on electronic coupons for travelers that may be
significant as real-time targeting of travelers grows. The initial
implementation of this application will operate on a number of new models
of cell phones. Specific software is in development that will broaden the
list of models compatible with this capability. There will, therefore, be
a ramp-up over time of potential users. Because of the large number of
cell-phone users, we expect that small market penetration could produce
significant results for the Company.
RESULTS OF OPERATIONS
Three Months Ended March 31, 2005 Compared to Three Months Ended
March 31, 2004
Operating results for the first quarter of 2005 were significantly
lower than the first quarter of 2004.
Sales. During the first three months of 2005, net sales totaled
$83,825, as compared with $1,753,499 in sales recorded in the first
quarter of 2004, representing a 95.2% decrease. Although the first
quarter of 2004 was uncharacteristically strong, the 2005 results are weak
by historical standards. Orders for our Talking Road WhizTM product in
early 2004 continued strong from the holiday period, when it was first
introduced. The loss of two major customers in the latter half of 2004
continue to affect Company sales pending introduction of the Road Genie in
the second quarter of 2005.
Gross Profit. Gross profit margin for the current quarter was
$39,923, or 47.6% of sales compared to $857,891, or 48.9% of sales for the
first quarter of 2004. Gross profit as a percent of sales was comparable
on a lower base of sales.
S,G&A Expense. Selling expenses amounted to $22,410, or 26.7% of
sales, for the first quarter of 2005 as compared with $48,593, or 2.8% of
sales for the first quarter of 2004. The small base of sales, coupled
with expenses in preparation for marketing the Road Genie, has increased
this cost out of proportion to sales. We expect selling costs to be
higher in 2005 due to taking on the marketing tasks previously performed
by large-volume customers who garnered a higher margin while absorbing the
costs of advertising in various channels. However, the ratio of selling
costs to sales revenue should drop below 10% due to higher retail margins
for the Road Genie accruing directly to the Company.
General and administrative expenses were $99,584 for the first
quarter of 2005 as compared with $260,208 for the same quarter in 2004,
representing a decrease of 61.7%. This dramatic drop was due to the
settlement of a large outstanding bad debt that had been fully reserved in
2004 of $176,475. We expect general and administrative expense to return
to previous levels in subsequent quarters. Without this settlement,
general and administrative expenses would have been $276,059.
-10-
R&D Expense. Research and development expense in the first quarter
of 2005 was $35,201 as compared to $19,669 for the same quarter of 2004,
reflecting the development activities associated with the Road Genie and
software for the cell-phone application of our Road Whiz product. Work
has also proceeded to develop a low-cost digital voice recorder both as a
stand-alone product and as an additinal feature of the Road Genie.
The Company posted a net loss from operations of ($117,272) for the
quarter ended March 31, 2005 compared to a net profit from operations of
$529,421 for the quarter ended March 31, 2004.
Other Expense. Other expense for the first quarter of 2005 amounted
to ($6,329) compared with ($5,126) for the same period in 2004.
As a result of the foregoing, the Company posted a net loss of
($123,601), or ($0.02) per basic and diluted common share, for the three-
month period ended March 31, 2005, compared to a net profit of $524,295,
or $0.09 per basic common share and $0.08 per diluted common share, for
the three-month period ended March 31, 2004.
FINANCIAL CONDITION AND LIQUIDITY
The Company's financial status remains uncertain due to lack of
sales in recent quarters. Our cash position is roughly the same as at the
end of the first quarter 2004 but is on a downward trend rather than an
upward trend. Our backlog is significantly lower pending introduction of
the Road Genie in the second quarter of 2005.
Management is of the opinion that the Company's cash on hand and
revenues from operations are insufficient to meet the operational needs of
the Company for the next twelve months. Accordingly, management will rely
upon proceeds from debt financing until the Company is able to return to
profitabiity due to increasing sales of its new products for the holiday
season.
Financing activities produced $100,000 in the current quarter due to
the equity financing through Golden Gate Investors, as compared the first
quarter of 2004, in which the Company used a net of $39,171 after paying
down notes payable in the amount of $211,202 and taking out a short-term
loan of $165,000, which was paid off in April 2004 out of operational cash
flow. The Company plans to use additional proceeds from the financing
from Golden Gate Investors to produce and promote the Road Genie in coming
months and develop sales volume to return the Company to profitability.
The Company had $113,568 in cash on March 31, 2005 with accounts
receivable of $180,973.
The Company's current ratio at March 31, 2005 was 3.9:1 and its
working capital was $402,987.
The Company's backlog on May 9, 2005 was $16,492 as compared to
$791,360 at the same time in 2004. In addition, per an arrangement with
its overseas manufacturer, the Company expects to receive $88,000 in
royalty revenue in the second quarter from sales of Ultradata products by
the manufacturer directly to certain retailers in that quarter.
ITEM 3. Controls and Procedures
Evaluation of Disclosure Controls and Procedures: As of March 31,
2005, the Company's management carried out an evaluation, under the
supervision of the Company's Chief Executive Officer and the Chief
Financial Officer of the effectiveness of the design and operation of the
Company's system of disclosure controls and procedures pursuant to the
Securities and Exchange Act, Rule 13a-15(e) and 15d-15(e) under the
Exchange Act). Based upon that evaluation, the Chief Executive Officer
and Chief Financial Officer concluded that our disclosure controls and
procedures are effective to provide reasonable assurance that information
we are required to disclose in reports that we file or submit under the
Exchange Act is recorded, processed, summarized and reported within the
time periods specified in Securities and Exchange Commission 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 required disclosure.
Changes in internal controls: There were no changes in internal
controls over financial reporting that occurred during the period covered
by this report that have materially affected, or are reasonably likely to
materially effect, our internal control over financial reporting.
-11-
ULTRADATA SYSTEMS, INCORPORATED
10QSB
PART II - OTHER INFORMATION
Item 1. Legal Proceedings:
On February 14, 2005, Ultradata filed suit against Office Max,
Inc., in the Circuit Court of St. Louis County, State of Missouri, for the
collection of $190,320 outstanding on deliveries for Purchase Orders
placed with the Company plus 9% per annum interest from July 18, 2004. An
out-of-court settlement was agreed to on April 20, 2005 for the full
amount without interest.
Item 2. Changes in Securities and Small Business Issuer Purchase of
Equity Securities:
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 and Reports on Form 8-K:
Exhibits:
31. Rule 13a-14(a) Certification
32. Rule 13a-14(b) Certification
Reports on Form 8-K:
Report dated February 17, 2005 pursuant to Items 1.01, 2.03, and 3.02
reporting the financing arrangements with Golden Gate Investors, Inc.
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.
June 22, 2005 /s/ Monte Ross
--------------------------
Monte Ross, CEO
(Chief executive officer)
/s/ Ernest S. Clarke
------------------------------------
Ernest S. Clarke, President
(Principal financial and accounting
officer)