**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


**Washington,
      D.C. 20549**





**FORM
        10-KSB/A**


**(Amendment
        No. 1)**





(Mark
      One)





x  ANNUAL
      REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934





For
      the
      fiscal year ended:  **December
      31, 2006**





OR





£  TRANSITION
      REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934





For
      the
      transition period from ________ to ________





Commission
      File No. **000-51819**





**ULTITEK,
      LTD.**


(Name
      of
      small business issuer in its charter)


**Nevada**
              
              **20-2556241**(State
                  or other jurisdiction of incorporation or organization)
              
              (I.R.S.
                  Employer Identification No.)**560
                  Sylvan Avenue, EnglewoodCliffs, New Jersey**
              
              **07632**(Address
                  of principal executive offices)
              
              (Zip
                  Code)


Issuer’s
      telephone number: **(201)
      541-1700**





Copies
      to :


The
      Sourlis Law Firm


Virginia
      K. Sourlis, Esq.


The
      Galleria


2
      Bridge
      Avenue


Red
      Bank,
      New Jersey 07701


(732)
      530-9007


www.SourlisLaw.com





Securities
      registered under Section 12(b) of the Act:  None





Securities
      registered under Section 12(g) of the Exchange Act: Common Stock, par value
      $0.0001 per share





Check
      whether the issuer is not required to file reports pursuant to Section 13 or
      15(d) of the Exchange Act. £





Check
      whether the registrant (1) filed all reports required to be filed by Section
      13
      or 15(d) of the Exchange Act during the past 12 months (or for such shorter
      period that the registrant was required to file such reports), and (2) has
      been
      subject to such filing requirements for the past 90 days. Yes £ No x





Check
      if
      there is no disclosure of delinquent filers in response to Item 405 of
      Regulation S-B contained in this form, and no disclosure will be contained,
      to
      the best of registrant’s knowledge, in definitive proxy or information
      statements incorporated by reference in Part III of this Form 10-KSB or any
      amendment to this Form 10-KSB. £





Check
      whether the registrant is a shell company (as defined in Rule 12b-2 of the
      Exchange Act). Yes £ No x





State
      issuer’s revenues for most recent fiscal year: $1,871,988





State
      the
      aggregate market value of the voting and non-voting common equity held by
      non-affiliates computed by reference to the price at which the common equity
      was
      sold, or the average bid and asked price of such common equity, as of a
      specified date within the past 60 days. (See definition of affiliate in Rule
      12b-2 of the Exchange Act). Approximately $2,385,647 based on an aggregate
      amount of 17,040,333 shares of Common Stock at a sales price of $0.14 on March
      27, 2007 .





State
        the
        number shares outstanding of each of the issuer’s classes of common equity, as
        of the latest practicable date: As of May 14, 2007, there were 74,431,933
        shares
        of common stock issued and outstanding.





**DOCUMENTS
      INCORPORATED BY REFERENCE:**





None








**TABLE
      OF CONTENTS**





**EXPLANATORY
                    NOTE**
                
                **4****FORWARD-LOOKING
                    STATEMENTS**
                
                **4****PART
                    I**
                
                **4****Item
                    1. Description of Business.**
                
                4***History***
                
                4***Common
                    Stock***
                
                4***Our
                    Principal Products and Services***
                
                5***Revenue***
                
                6***Summary
                    Financial Information***
                
                6***Security
                    Features***
                
                7***Background***
                
                7*Technology*
                
                8***Competition***
                
                8***Our
                    Marketing Strategy***
                
                10***Competitive
                    Edge***
                
                10***Registered
                    Patents***
                
                11***Pricing
                    Strategy***
                
                11***Promotion
                    Strategy***
                
                12***Employees***
                
                12***Available
                    Information***
                
                12**Item
                    2. Description of Property.**
                
                13**Item
                    3. Legal Proceedings.**
                
                13**Item
                    4. Submission of Matters to a Vote of Security
                    Holders.**
                
                13**PART
                    II**
                
                13**Item
                    5. Market for Common Equity, Related Stockholder Matters and
                    Issuer
                    Purchases of Equity Securities.**
                
                13***Our
                    Common Stock***
                
                13***Dividend
                    Policy***
                
                15***Transfer
                    Agent***
                
                15***Recent
                    Sales of Unregistered Securities***
                
                16***Securities
                    Authorized for Issuance under Equity Compensation
                    Plans***
                
                16**Item
                    6. Management’s Discussion and Analysis or Plan of
                    Operation.**
                
                17***Basis
                    of Presentation***
                
                17***Business
                    Overview***
                
                17***Industry
                    Overview***
                
                17***Market
                    Trends***
                
                18***Liquidity
                    and Capital Resources***
                
                18***Results
                    of Operations***
                
                19***Research
                    and Development***
                
                19***Off-Balance
                    Sheet Arrangements***
                
                20***Critical
                    Accounting Policies & Estimates***
                
                20**RISKS
                    ASSOCIATED WITH OUR BUSINESS**
                
                22**Item
                    7. Financial Statements.**
                
                24
  2
  **Item
                    8. Changes in and Disagreements with Accountants on Accounting
                    and
                    Financial Disclosure.**
                
                24**Item
                    8A. Controls and Procedures**
                
                25Item
                    8B. Other Information.
                
                25**PART
                    III**
                
                **25****Item
                    9. Directors, Executive Officers, Promoters, Control Persons
                    and Corporate
                    Governance; Compliance with Section 16(a) of the Exchange
                    Act.**
                
                25***Compliance
                    with Section 16(a) of the Securities Exchange Act of
                    1934***
                
                26***Code
                    of Ethics***
                
                27**Item
                    10. Executive Compensation.**
                
                27**2006
                    Summary Compensation Table**
                
                27**Indemnity**
                
                28**Director
                    Compensation**
                
                28**Employment
                    Agreements**
                
                28**Item
                    11. Security Ownership of Certain Beneficial Owners and Management
                    and
                    Related Stockholder Matters.**
                
                29**Item
                    12. Certain Relationships and Related Transactions, and Director
                    Independence**
                
                31**Item
                    13. Exhibits and Reports on Form 8-K**
                
                31**Item
                    14. Principal Accountant Fees and Services**
                
                32**SIGNATURES**
                
                **33**


3





**EXPLANATORY
        NOTE**





We
        are
        filing this Amendment No. 1 to our Annual Report on Form 10-KSB for the fiscal
        year ended December 31, 2006 (File No.: 000-51819) filed with the Commission
        on
        April 17, 2007 (the “Original 10-KSB”) to file Exhibit 23.1 pursuant to which
        our independent public accounting firm consents to the incorporation by
        reference their audit report included herein in our Registration Statement
        on
        Form S-8 (File No.: 333-141532) filed with the Commission on March 23, 2007.
        Additionally, the consolidated financial statements have been revised to
        reflect
        subsequent events previously not disclosed to our independent registered
        public
        accounting firm.





Except
        for the changes described above and updating the beneficial ownership table
        in
        Item 11, this Form 10-K/A does not amend or update the Original Form
        10-KSB.




**FORWARD-LOOKING
      STATEMENTS**





Certain
      statements made in this Annual Report on Form 10-KSB are “forward-looking
      statements” (within the meaning of the Private Securities Litigation Reform Act
      of 1995) regarding the plans and objectives of management for future operations.
      Such statements involve known and unknown risks, uncertainties and other factors
      that may cause actual results, performance or achievements of Ultitek, Ltd.,
      a
      Nevada corporation (the “Company”) to be materially different from any future
      results, performance or achievements expressed or implied by such
      forward-looking statements. The forward-looking statements included herein
      are
      based on current expectations that involve numerous risks and uncertainties.
      The
      Company’s plans and objectives are based, in part, on assumptions involving the
      continued expansion of business. Assumptions relating to the foregoing involve
      judgments with respect to, among other things, future economic, competitive
      and
      market conditions and future business decisions, all of which are difficult
      or
      impossible to predict accurately and many of which are beyond the control of
      the
      Company. Although the Company believes its assumptions underlying the
      forward-looking statements are reasonable, any of the assumptions could prove
      inaccurate and, therefore, there can be no assurance the forward-looking
      statements included in this Report will prove to be accurate. In light of the
      significant uncertainties inherent in the forward-looking statements included
      herein, the inclusion of such information should not be regarded as a
      representation by the Company or any other person that the objectives and plans
      of the Company will be achieved.




**PART
      I**





**Item
      1. Description of Business.**





***History***





Ultitek,
      Ltd. (OTCBB: UITK.OB) was incorporated in the state of Delaware on January
      11,
      2005. On March 11, 2005, the Company was reincorporated in the State of Nevada.





Also
      on
      March 11, 2005, the Company entered into a merger agreement with Transport
      Automation Information Systems, a Russian company (“TAIS”), pursuant to which we
      acquired all of the issued and outstanding shares of TAIS in exchange for
      15,000,000 shares of the Company’s common stock. In connection with the merger,
      TAIS became a wholly-owned subsidiary of the Company. We operate all of our
      business through TAIS.





Located
      in Russia, TAIS owns, operates, sells and maintains an airline operating,
      reservation and distribution software system in Eastern Europe. TAIS is one
      of
      the largest multi-hosting airline reservation companies in the world based
      upon
      the number of airlines currently utilizing the system.




***Common
      Stock*** ******





As
      of
      March 12, 2007, our common stock has been listed for trading on the OTC Bulletin
      Board under the ticker symbol, “UITK.OB.” Prior to such listing, our common
      stock had been trading on the Pink Sheets maintained by the NASD under the
      symbol “UITK.PK.” Stocks traded on the OTCBB and Pink Sheets are usually thinly
      traded, highly volatile, and not followed by analysts. Investors in our common
      stock may experience a loss or liquidity problem with their share
      holdings.





4





***Our
      Principal Products and Services***





We
      operate a completely independent reservation, global distribution, and airline
      operation system. Essentially, computer reservation systems and global travel
      distribution systems were partly or completely owned and hosted by a few large
      airlines. The remaining airlines are guests using these systems to have their information
      stored on the system hosted by a competitor who charges significant
      user  fees
      while accumulating proprietary and confidential information of the guest
      airline.  There
      are
      approximately ten large airlines with their own system, which host the
      other 990
      regional, mid-size and small airlines. We have a product that will provide these
      airlines a state-of-the-art system that is efficient, less costly and allows
      them to maintain
      their proprietary information.





The
      Company’s software, known as the ULTITEK System, consists of the following
      systems:




· Computerized
        Reservation System .
        The
        Computer Reservations System (“CRS”) is the module primarily designed to
        maintain seats inventory for airlines and to assist travel agencies book
        seats
        and other travel. The CRS has a wide range of travel agency solutions, with
        an
        easy graphical interface including tools to run a travel agency
        productively.




· Global
        Distribution System .
        The
        Global Distribution System (“GDS”) is designed to disseminate flight schedules,
        seating availability, and pricing information electronically to customers.
        GDS
        provides solutions that meet the booking needs of travel agencies or in-house
        corporate travel departments.




· Airline
        Operations System .
        The
        Airline Operations System (“AOS”) allows a subscriber airline to manage every
        aspect of the airline’s operations.




· Departure
        Control System. The
        Departure Control System (“DCS”) controls passenger registration and
        identification, boarding passes and seating assignments.




The
      ULTITEK System will also include (a) a complete accounting system, including
      revenue management, yield management, accounts payable, accounts receivable,
      general ledger and cost accounting; (b) inventory control for the number
      of seats
      available on a flight; (c) inventory control for spare parts and other
      miscellaneous components; (d) maintenance; (e) fixed assets; (f) purchasing;
      (g)
      airport departure control (including control of boarding passes); (h)
      inter-airline clearing facility with electronic funds transfer; (i) aircraft
      dispatching; (j) crew management/scheduling; (k) airplane equipment inventory;
      (l) miscellaneous supplies and logistics; (m) inter-city long haul bus
      station/scheduling/reservation system; (n) reservations via Internet; (o)
      theater tickets sales; (p) multilingual features; (q) access to hotel
      reservations; (r) access to car rental reservations; (s) access to other tour
      operators; (t) frequent flyer programs; and (u) charter airline management
      modules.





The
      ULTITEK System is currently accredited by International Air Transport
      Association (“IATA”) defined as a Computerized Reservation System, and has an
      IATA-designated code. The ULTITEK System communicates with most distribution
      systems worldwide.





The
      ULTITEK System initially will be available in English and Russian. Subsequently,
      language modules will include French, German, Spanish, and other languages,
      as
      necessary, for ease of use and to support international marketing efforts at
      an
      anticipated cost ranging from $300,000 to $500,000 per additional language
      module.





The
      ULTITEK System also offers (i) compatibility with standard technologies to
      facilitate integration into any agency environment; (ii) travel documents,
      ranging from a single ticket for multi airline bookings to boarding passes,
      car
      vouchers, itinerary information, invoices and tickets; and (iii) a
      state-of-the-art, real time approach to distributed data-bases.




5





Travel
      agents and the general public will have multiple communication paths, including
      Internet access to each of the appropriate system modules all of which will
      have
      security features allowing only authorized personnel to perform functions and
      access information based upon their security level. Seamless connectivity is
      a
      key to the ULTITEK System. Currently, travel agents usually access a database
      that holds comprehensive information which is submitted and updated on a set
      schedule by travel providers. The ULTITEK System will enable agents to connect
      directly and seamlessly into a real-time system that has the most up-to-date
      information about availability, rates, conditions, etc.





ULTITEK
      will provide a virtual private network based on the Internet. This feature
      will
      provide the ULTITEK Systems with the ability to issue tickets for trips
      involving the subscriber airline or multiple airlines and act as a
      clearinghouse. Tickets may be issued as e-tickets, smart-card tickets, or via
      hard copy at a travel agency. This feature allows corporations to make their
      own
      reservations and issue tickets at the travel agency of their
      choice.





Communication
      capabilities are an important part of our product. There will be a
      state-of-the-art virtual private network communications infrastructure for
      a
      global network. This design approach generates significant communications
      savings to the subscriber airline. All that is required is dual high-speed
      Internet connection. The ULTITEK global network connections will link providers
      and users. It will be designed to support the massive, high-speed transmission
      of data, voice and video, with numerous back-up and security mechanisms to
      route
      data around the world. There will also be a diverse array of promotional
      opportunities for airlines and tour operators, ranging from weather forecasts
      to
      destination city information.





Hardware
      sales will be offered as a service, if requested by the subscriber.





***Revenue***





We
      generate revenue through our licensing of the ULTITEK System to subscriber
      airlines and through our support and maintenance fees and consulting agreements.
      We currently have approximately 24 licensing agreements with reservation centers
      throughout the former Soviet Union servicing 62 airlines and over 5,000 travel
      agents. We also license our software directly to three airlines in the former
      Soviet Union which includes us providing support services to them on a time
      and
      material basis. Our agreements provide for a one time lump sum licensing fee
      ranging between $10,000 and $100,000 depending on the number of locations,
      volume of passengers, number of servers, number of computers and the like.
      In
      addition, we offer separate maintenance agreements based on time and material,
      which agreements are renewable annually, and we sell upgrades of our software
      to
      the reservation centers, airports, theaters and our other customers.





As
      of
      December 31, 2006, we had a net loss of $7,411,167 and a stockholders’ deficit
      of $325,731, causing our auditors to express their doubt as to our ability
      to
      continue as a going concern.





***Summary
      Financial Information***





The
      table
      below summarizes (i) our audited balance sheet at December 31, 2006, compared
      to
      December 31, 2005 and (iii) our statement of operations for the audited year
      ended December 31, 2006 compared to December 31, 2005. Prior to our acquisition
      of TAIS on March 11, 2005, we were a non-operating “shell” corporation. For
      financial statement purposes, the merger has been reflected as though it
      occurred on January 1, 2004 and the historical statements prior to the date
      of
      merger are those of TAIS.





These
      amounts are shown as restated. See Note A to the Consolidated Financial
      Statements included in this Registration Statement on Form 10-SB:




**At**
              **December
                31,****2006**
            
            **2005****(Audited)**
            
            **(Audited)*****Balance
                Sheet:***Cash
            
            $
            6,900
            
            $
            60,324Total
                Assets
            
            $
            1,081,935
            
            $
            896,646Total
                Liabilities
            
            $
            1,407,606
            
            $
            535,659Total
                Stockholders’ Equity (Deficit)
            
            $
            (325,731
            )
            $
            360,987




6




**For
                the Fiscal Year Ended**
              **December
                31,****2006**
            
            **2005****(Audited)**
            
            **(Audited)*****Statement
                of Operations***:Revenue
            
            $
            1,871,988
            
            $
            1,171,797Net
                Loss
            
            $
            (7,411,167
            )
            $
            (1,029,012
            )Net
                Loss Per Share of Common Stock
            
            $
            (0.11
            )
            $
            (0.03
            )




***Security
      Features***





The
      ULTITEK System provides airlines the technology infrastructure required for
      implementing improved security procedures. The distributed, confederated
      database technology provides data warehousing capabilities that can be used
      as a
      repository of government agency provided information (photographs and other
      data) about known terrorists and other individuals posing a threat or risk
      to
      carriers and their passengers. This data can be used to identify possible
      threats when reservations and/or bookings are made and to notify appropriate
      authorities as well as to flag gate agents and airport security
      officers.





Because
      the system is Web enabled and readily handles images, passenger identify checks
      (assuming availability of base data and compliance with all applicable
      international conventions, local laws and civil liberty protections in force
      in
      each host location) can be implemented at the check in counter, where presented
      photo ids can be verified against documents of record in the system, and at
      the
      boarding gate to assure that a boarding pass issued to one individual is not
      being presented by another.




***Background***





In
      1968,
      Aeroflot, the largest airline in the world, commenced development of a system
      to
      operate its entire operation. The system was named SIREN I. In 1972, the system
      was installed in all Moscow airports. In 1982, the system was upgraded and
      SIREN
      II was released on Russian-based mainframes. Moscow alone handles 20 million
      passengers a year on this system. In 1989, after the Soviet Union break up,
      a
      company called TAIS was established and the existing development team stayed
      on
      and created a new version of the system on a UNIX based operating system thereby
      making it capable of running on any modern hardware platform available in the
      world. TAIS maintained and enhanced the system and currently supports over
      30
      computer reservation centers with 62 airlines and over 5,000 travel agents.





In
      March
      2005, through a share exchange agreement, we obtained 100% of the stock in
      TAIS.
      Since the 1940s, airlines have sought to automate and streamline their
      reservations systems and develop markets via electronic-mechanical services
      and
      systems. In 1978, the travel industry changed dramatically when the U.S.
      deregulated its airlines and let carriers set whatever routes and rates they
      wanted. This sparked a series of competitive fare wars and customer incentive
      plans. Subsequently, the same deregulation occurred in Europe and Asia.
      Deregulation has been a stimulus for airline growth worldwide. This combination
      will lead to continued market growth for Computerized Reservation System and
      Global Distribution System  providers.
      Also, the Internet continues to provide market growth potential.




7





Regional
      airlines, which initially filled the voids by big airlines after deregulation,
      have found several material advantages by being smaller. However, the advantages
      do not include the expensive reservation systems that are owned by their large
      competitors.





Because
      we are neither airline-owned nor affiliated, our subscriber airlines can rely
      on
      the confidentiality of their proprietary information. Confidentiality,
      significant price savings and state-of-the-art technology will make us an
      attractive option for any size airline.




***Technology***




The
      ULTITEK System is based on multi-tier client server technology, which is far
      ahead of the mainframe-based technology of our competitors. The cost per
      transaction using a mainframe-based technology is higher because it is more
      expensive to maintain and program, than using a UNIX service based machine
      that
      involves new technology and less expensive to maintain and program. The database
      and server applications are hosted on high availability UNIX servers (systems
      available from all manufacturers), or on Intel based platforms running LINUX
      or
      SCO UNIX. Since our system is Web enabled, the user’s access to the system can
      be through any computer capable of running a Web browser with 128-bit
      encryption. In a multi-client server technology, multiple users can be on the
      same system accessing the same or different information through passwords and
      permissions granted. The applications are written in Basic, C and C++, all
      of
      which are well documented and easily maintained. Relational database technology
      replicated across globally distributed and confederated servers assures security
      and disaster recovery. Inter-server and server to client communications are
      provided by Internet-based virtual private network technology. Clients can
      also
      access the system via private networks and/or point-to-point communications.
      Our
      customers will have the option of acquiring and operating their own system,
      or
      of having their system hosted by us at our three globally distributed data
      centers. We will also provide hot back up and disaster recovery services for
      customers that operate their own data centers. Our hot back up service
      encompasses three computer system back-ups located in three different parts
      of
      the world, Moscow, United States and France. Our hot back up service provides
      an
      automatic switch over to one of these three computer systems should any one
      of
      our customers’ experience an emergency and the need to continue using the
      system. Our back up system is “hot” meaning in the event of an emergency; the
      system recognizes the problem and automatically switches the customer’s system
      over to one of the back up systems so the customer can continue utilizing the
      service without having to do anything.





We
      do not
      expect to incur significant research and development expenses with respect
      to
      our software. At this point, we do not anticipate significant changes in
      research and development for our software. Consequently, any significant
      increases in research and development will be predicated entirely upon the
      particular circumstances of any acquisitions that we make, including the state
      of development of the technology, the complexity and the requirement for
      modification or integration with other solutions.




***Competition***





A
      wave of
      code-sharing agreements (which allow carriers to book each others ’ seats)
      and powerful scheduling and marketing pacts between top airlines has created
      a
      tight market for Computerized Reservation Systems and Global Distribution
      Systems.





The
      Computerized Reservation System and Global Distribution System industry major
      market participants that control the industry which are airline related or
      owned
      are:





(i)  Sabre





Sabre
      is
      a publicly traded company (Symbol: TSG). Formerly American Airlines Holdings
      owned approximately 85% of Sabre and spun it off as a separate company. Sabre
      controls a major portion of the travel reservations industry. Formerly operating
      as The Sabre Group Holdings, this Fort Worth, Texas based group operates one
      of
      the world ’ s
      largest
      computerized travel reservations system (CRS). Sabre handles more than 400
      million bookings each year and is used by travel agencies and corporate travel
      departments to book airline tickets and make rental car and hotel reservations.
      Individual consumers can accomplish the same by using Sabre ’ s
      Travelocity web site, a service that includes currency converters, destination
      guides, maps and weather forecasts. To expand its international profile Sabre
      formed a joint venture with Abacus International to manage travel in the
      Asia-Pacific region. To date, however, Sabre has little presence in Asia and
      Africa. The Company ’ s
      customers are primarily located in the United States, Europe, Canada and Latin
      America, and are concentrated in the travel industry.





8




(ii)  Galileo





Galileo
      is owned by Cendant, the hospitality company. The Rosemont, Illinois-based
      Company operates one of the world’s largest computerized travel reservations
      system (CRS) for the travel industry behind Sabre. The Company completed
      approximately 350 million bookings in 1998, representing an estimated $60
      billion in travel services. The Company has grown through acquisitions,
      including Apollo Travel Services, Swissair ’ s
      Traviswiss system, and KLM ’ s
      Galileo
      Netherlands operations.





(iii)  Amadeus





Currently,
      Amadeus is not a reservation system but one of the largest Global Distribution
      System (GDS) companies in the world. A global travel distribution system
      distributes travel information. It is estimated that over $700 million was
      spent
      initially to develop this distribution system. On October 1, 1999 Amadeus
      completed an IPO to raise 900 million Euros to complete this project. Founded
      in
      1987, and fully operational from 1992, Amadeus became a public listed company
      in
      1999. Currently, three founder airline shareholders hold 59.92% of the company
      in the following proportions: Air France (23.36%), Iberia (18.28%) and Lufthansa
      (18.28%). The remaining 40.08% of shares are held publicly. Operations are
      located in Europe.





(iv)  Worldspan





Worldspan
      is owned by affiliates of Delta Air Lines, Inc., Northwest Airlines and Trans
      World Airlines, Inc. Its world headquarters is located in Atlanta, Georgia
      with
      international headquarters in London, England, which services and supports
      customers in Europe, Africa, the Middle East and the Asia Pacific. Worldspan
      International, Inc., Toronto, Canada and Worldspan de Mexico, Mexico City are
      its subsidiaries.





(v)  Abacus





Established
      in May 1988, with its headquarters in Singapore, Abacus International Holdings,
      which has a 65 percent stake in Abacus International, is jointly owned by Asian
      airlines - All Nippon Airways, Cathay Pacific Airways, China Airways, EVA
      Airways, Garuda Indonesia, Hong Kong Dragon Airlines, Malaysia Airlines,
      Philippine Airlines, Royal Brunei Airlines, Silk Air and Singapore Airlines.
      In
      February 1998, Sabre, formed a strategic alliance with Abacus by taking a 35
      percent equity investment in Abacus. Abacus ’ core
      Computerized Reservation System functions focuses on the distribution of
      airline, hotel, car rental and cruise companies. Abacus also provides
      travel-related information through the Timatic regulations, facilities for
      credit card validation, currency conversion and the checking of excess baggage
      rates.





(vi)  Gabriel





Gabriel
      Passenger Management is the world ’ s
      largest
      international multi-hosting systems, providing users with passenger reservation
      and management information. Most of its business is done in Europe. Operating
      on
      a shared mainframe system, customers are charged on a transaction basis and
      the
      company claims it keeps the security and confidentiality of its customers in
      mind. It has links to associated modules such as fares, check in, baggage,
      and
      ticketing. Gabriel is owned by consortium of airlines.





(vii)  Other
      hosted solutions





Several
      large airlines provide hosting facility for the inventory system to the small
      airlines. That means the entire database of their routes, schedules, statistics
      and other very sensitive data are completely available to the competing
      airline.





9





***Our
      Marketing Strategy***





We
      plan
      to capitalize on our strategy by providing the industry a complete turnkey
      solution to airlines (initially, small to medium sized airlines). This solution
      will encompass the Computerized Reservation System, Global Distribution System,
      Airline Operations System and Departure Control System  requirements
      of airlines. Heretofore, airlines without the resources to fund their own
      information technology utilize the resources of larger airlines or subscribed
      to
      Sabre, Galileo, Worldspan, etc., to meet their needs. Moreover, the systems
      work
      on large mainframe computers and all application requirements are not
      integrated. Our solution was developed on state of the art hardware and software
      and is totally integrated. The result is a solution that is less expensive,
      more
      comprehensive and more flexible than the present competition.





TAIS
      maintained and enhanced the system and currently supports over 24 computer
      reservation centers with 62 airlines and over 5,000 travel agents. We directly
      license our software to three airlines in the former Soviet Union which includes
      us support services to them on a time and material basis.





We
      will
      grant a nonexclusive license of the ULTITEK System to a subscriber airline
      which
      can use the system independently or have it hosted by us which is an independent
      airline service provider as opposed to being hosted by a competitor
      airline.





Our
      strategy is to:





(a)
            Focus
                on the Airline Carrier market
                segment;




(b)
            Provide
                direct public Internet based reservations and
                ticketing;




(c)
            Emphasize
                system sales and distribution access to travel agencies after initial
                market penetration has been
                achieved;




(d)
            Provide
                Internet/Intranet/Extranet based corporate travel
                systems;




(e)
            Provide
                a suite of products to the travel
                industry.




The
      marketing strategy is based on the fact that we will provide the only
      alternative in an oligopolistic marketplace. A marketing program for the product
      will be launched to establish image awareness. Our suite of products is designed
      to work together and offer strong flexible controls. Subscriber airlines will
      be
      most receptive to a totally integrated and independent computerized travel
      reservations system (CRS) and an airline operations system (AOS). We also allow
      subscriber airlines to target specific travel agents with customized offers
      to
      maximize the value of strategic promotions, incentives and deals.





We
      will
      develop a suite of browser-based corporate products to draw a share of ever
      increasing Internet bookings. Our most important initial group of customers
      will
      be airlines that are now captives of their high-priced competitors.
      Additionally, travel agents and other travel related segments will be targeted
      utilizing our Global Distribution System. Over 5,000 travel agents currently
      use
      the present system on which our product is based.





After
      aircraft, information technology is the largest cost component of an airline.
      We
      will focus on high-technology software, services and networking and sell to
      the
      large, medium and small airlines.




***Competitive
      Edge***





Our
      product has handled more passengers than any other airline information system.
      Our product is a state of the art software system with a relational database
      that allows us to adopt the latest customer needs. Our main competitors use
      mainframes which are expensive and antiquated and can’t perform such tasks
      without great expense and delay. In addition, mainframe based reservation
      systems were never designed to respond to high speed automated relational
      queries driven by hundreds of millions of users.





Our
      competitive advantages include:




(i)
            airline
                independence;




10




(ii)
            our
                own secure environment;




(iii)
            total
                solution including Computerized Reservation System, Global Distribution
                System, Airline Operations System;




(iv)
            purchase
                and hosted solutions available;




(v)
            hardware
                independent;




(vi)
            lower
                cost;




(vii)
            Internet,
                Extranet and Intranet solutions;




(viii)
            Multi-lingual
                user interfaces;




(ix)
            Customized
                solutions; and




(x)
            Disaster
                recovery support.





***Registered
      Patents***




We
      have
      the following registered patents with the Russian Federation Agency for Patents
      and Trademarks:




980401
      -
“Agent” subsystem for reservation


980402
      -
“Station” reservations administrator station


980403
      -
“Resurs” inventory control subsystem


990270
      -
“TEMUL98” Terminal emulator


990271
      -
“Sirin” Multi-hosting interface


990272
      -
“SP” Network processor


2002611315
      - “SIRIN” Airline Global Distribution System


2002611388
      - “TARAS” Tariff subsystem for “SIRIN”


2004610897
      - “Autovokzal-2” Intercity Bus Terminal Management System





***Pricing
      Strategy***





Our
      product pricing is determined by its focus on entering an oligopolistic market.
      We will aim at the 1,000 strong airline markets with prices which will generate
      significant savings to airlines. We do not expect that any price changes by
      competitors will affect our ability to license our product because airlines
      prefer their information and data independence over pricing.





The
      ULTITEK System is licensed by module. The average licensing agreement to the
      small airline is anticipated to generate approximately $10 million in licensing
      fees over the life of the license agreement. Financing and leasing programs
      are
      available.





Leasing
      is the standard approach and we will provide leasing referral assistance to
      airlines. The lease is amortized over a five-year period. During this period
      the
      above sample airline would spend $25 million on a conventional computerized
      travel reservations system (CRS) without the additional benefit of owning the
      system and having a complete airline operations module that covers from
      reservations to accounting. Over a ten year term the subscriber would save
      almost twenty million dollars in cost.





As
      with
      most major software installations, there will be a maintenance charge of 1.5%
      or
      $150,000 per month based on the list price of software.





There
      will be a royalty charge of 1% or $100,000 per year on the sale of a system.
      We
      anticipate that our revenue generated by licensing agreements, installation
      charges; ongoing maintenance fees will increase as we expand outside the Soviet
      Union. Currently there are only a few competitors outside of the Soviet Union
      who offer much higher prices; therefore, we believe we can offer a better
      software product at commercially reasonable and competitive prices.




11





If
      an
      airline chooses to be hosted by us, there will be transaction charges that
      are
      much lower than those charged by current Computerized Reservation
      System  providers.
      Pricing will reflect a minimum fee per booking.





We
      are
      not in the business of selling hardware but will assist new customers in
      addressing hardware requirements if so requested. In such events, we will make
      hardware available either for sale or for lease from the hardware
      vendor.





Consulting
      contracts for custom enhancements and modifications are anticipated to generate
      significant revenue. Today, an average hourly rate is well in excess of $200
      per
      hour. Basic training will be included in the price of the system. Additional
      or
      special training needs will be priced on a case-by-case basis.





We
      currently have approximately 24 licensing agreements with reservation centers
      throughout the former Soviet Union. Our agreements range from three to five
      years and provide for a one time lump sum licensing fee ranging between $10,000
      and $100,000 depending on the number of locations, volume of passengers, number
      of servers, number of computers and the like. In addition, we offer a separate
      maintenance agreement based on time and material, which agreements are renewable
      automatically and we sell upgrades of our software to the reservation centers,
      airports, theaters and our other customers. We directly license our software
      to
      three airlines in the former Soviet Union which includes us providing support
      services to them on a time and material basis.





***Promotion
      Strategy***





Our
      pre-
      and post-product-launch promotional campaign will include:


·
              Trade
                  show exhibits;





·
            Promotional
                literature;





·
            Advertising
                in industry publications, and selected public
                media;





·
            Direct
                marketing;





·
            Website
                advertising;





·
            Seminars;
                and





·
            Distribution
                of promotional items.





A
      24
      hours sales desk will be available to answer marketing calls generated by
      promotional literature and other marketing efforts. We will utilize services
      of
      a major advertising agency to develop and oversee our promotional
      campaign.





***Employees***





As
      of
      April 12, 2007, the Company had 60 full-time employees, 50 of whom are
      programmers, system analysts and designers and 10 of whom is support and
      administration staff. All of our 60 full-time employees are located in Moscow.
      We also retain four consulting firms in Moscow from time to time who utilize
      an
      aggregate of approximately 225 consultants to provide programming services
      on
      per project basis. We pay our consulting firms a range of $2,000 to $200,000
      per
      project, depending on the complexity and length of the engagement and number
      of
      consultants utilized on a particular project. In 2006, we paid an aggregate
      of
      $1,057,000 in consulting fees.





***Available
      Information***





We
      are
      subject to the information reporting requirements of the Exchange Act, and,
      accordingly, are required to file periodic reports, including quarterly and
      annual reports and other information with the Securities and Exchange
      Commission. Such reports and other information may be inspected and copied
      at
      the public reference facilities maintained by the Commission at 100 F Street,
      N.E., Washington, D.C. 20549. The public may obtain information on the operation
      of the Public Reference Room by calling the SEC at 1-800-SEC-0330. In addition,
      the SEC maintains an Internet website that contains reports, proxy and
      information statements and other information regarding registrants that file
      electronically. The address of the website is http://www.sec.gov .




12





**Item
      2. Description of Property.**





We
      currently lease the property and facilities located at 560 Sylvan Avenue, Part
      1 st Floor,
      Englewood Cliffs, New Jersey 07632. The owner and landlord to such property
      is
      Goodrich Executive L.L.C. The total office space occupied at this location
      is
      550 rentable square feet. The leasehold duration consists of a commencement
      date
      of March 1, 2005, and terminates on February 28, 2006, subject to renewal.
      Under
      the terms of the lease, the issuer is to pay approximately $1,054.17 per month,
      or $12,650.00 per annum. Under the terms of the lease, the issuer may only
      use
      the property for executive and general offices, where all other uses such as
      medical, retail, residential, manufacturing and industrial uses are strictly
      prohibited. On
      January 16, 2007, the Company renewed its lease on the U.S. facility. The
      minimum lease commitment for the period March 1, 2007 to February 28, 2008
      is
      $13,475.





Ultitek’s
      subsidiary TAIS, holds lease to the property and facilities located at Number
      39
      Building 3, Leningradsky Avenue, Moscow 125167, Russia, and occupies
      approximately 6,635 square feet. The owner of the building is Ministry of State
      Property and Central Army Sports Club. Under the term of the lease TAIS pays
      approximately US$ 8,373.00 per month, according to the current exchange rate.
      The current lease expires August 31, 2007.




**Item
      3. Legal Proceedings.**





The
      Company is not a party to or the subject of any pending legal proceeding or
      any
      contemplated proceeding of a governmental authority.





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





None





**PART
      II**





**Item
      5. Market for Common Equity, Related Stockholder Matters and Issuer Purchases
      of
      Equity Securities.** ****





***Our
      Common Stock***





As
      of
      March 12, 2007, our common stock has been listed for trading on the OTC Bulletin
      Board under the ticker symbol, “UITK.OB.” Prior to such listing, our common
      stock had been trading on the Pink Sheets maintained by the NASD under the
      symbol “UITK.PK.” Stocks traded on the OTCBB and Pink Sheets are usually thinly
      traded, highly volatile, and not followed by analysts. Investors in our common
      stock may experience a loss or liquidity problem with their share
      holdings.





The
      holders of the Company's common stock are entitled to one vote per share. The
      common stock holders do not have preemptive rights to purchase, subscribe for,
      or otherwise acquire any shares of common stock.




13





Prior
      to
      our listing on the OTCBB, there was no active trading in the Company’s common
      stock. Upon the effectiveness of our Registration Statement on Form 10-SB ,
      as
      amended (File No.: 000-51819) on March
      8, 2007, the Company requested that a broker-dealer / market maker submit an
      application to the NASD in order to make a market for the Company's shares
      and
      for the shares to be quoted on the OTC Bulletin Board. The Company’s application
      consisted of current corporate information, financial statements and other
      documents as required by Rule 15c2-11 of the Securities Exchange Act. Inclusion
      on the OTC Bulletin Board permits price quotations for the Company's shares
      to
      be published by such service. Secondary trading of the Company's shares may,
      however, be subject to certain state imposed restrictions. Except for being
      quoted on the OTC Bulletin Board, there are no plans, proposals, arrangements
      or
      understandings with any person concerning the development of a trading market
      in
      any of the Company's securities.





The
      ability of individual stockholders to trade their shares in a particular state
      may be subject to various rules and regulations of that state. A number of
      states require that an issuer's securities be registered in their state or
      appropriately exempted from registration before the securities are permitted
      to
      trade in that state. Presently, the Company has no plans to register its
      securities in any particular state. Further, the Company's shares are be subject
      to the provisions of Section 15(g) and Rule 15g- 9 of the Exchange Act, commonly
      referred to as the "penny stock" rule. Section 15(g) sets forth certain
      requirements for transactions in penny stocks and Rule 15g-9(d)(1) incorporates
      the definition of penny stock as that used in Rule 3a51-1 of the Exchange
      Act.





The
      SEC
      generally defines penny stock to be any equity security that has a market price
      less than $5.00 per share, subject to certain exceptions. Rule 3a51-1 provides
      that any equity security is considered to be a penny stock unless that security
      is: registered and traded on a national securities exchange meeting specified
      criteria set by the SEC; authorized for quotation on The NASDAQ Stock Market;
      issued by a registered investment company; excluded from the definition on
      the
      basis of price (at least $5.00 per share) or the issuer's net tangible assets;
      or exempted from the definition by the SEC. Broker- dealers who sell penny
      stocks to persons other than established customers and accredited investors
      (generally persons with assets in excess of $1,000,000 or annual income
      exceeding $200,000, or $300,000 together with their spouse), are subject to
      additional sales practice requirements.





For
      transactions covered by these rules, broker-dealers must make a special
      suitability determination for the purchase of such securities and must have
      received the purchaser's written consent to the transaction prior to the
      purchase. Additionally, for any transaction involving a penny stock, unless
      exempt, the rules require the delivery, prior to the first transaction, of
      a
      risk disclosure document relating to the penny stock market. A broker-dealer
      also must disclose the commissions payable to both the broker-dealer and the
      registered representative, and current quotations for the securities. Finally,
      monthly statements must be sent to clients disclosing recent price information
      for the penny stocks held in the account and information on the limited market
      in penny stocks. Consequently, these rules may restrict the ability of
      broker-dealers to trade and/or maintain a market in the Company's common stock
      and may affect the ability of stockholders to sell their shares.





At
      December 31, 2006, the Company had 69,790,333 shares of common stock issued
      and
      outstanding. None of the Company’s common stock is being or has proposed to be,
      sold by the Company in a registered public offering.





At
      December 31, 2006, there were approximately 100 holders of record of our common
      stock. The record holders include some brokerage firms and nominees who may
      be
      holding shares in “street name” for the benefit of other holders. The Company
      believes that the number of beneficial owners of its common stock is slightly
      higher than the number of record holders.





The
      range
      of high and low bid information for our common stock on the Pink Sheets for
      each
      quarterly period within the two most recent fiscal years is set forth below.
      Such quotations reflect inter-dealer prices, without retail mark-up, mark-down
      or commission and may not necessarily represent actual transactions. There
      was
      no active trading market for our common stock during the period reflected
      blow:





**Period**
            
            **Low
                Bid**
            
            **High
                Bid****2007**First
                Quarter
            
            $
            0.10
            
            $
            0.19**2006**Fourth
                Quarter
            
            $
            0.07
            
            $
            0.30Third
                Quarter
            
            $
            0.06
            
            $
            0.11Second
                Quarter
            
            $
            0.07
            
            $
            0.20First
                Quarter
            
            $
            0.035
            
            $
            0.51**2005**Fourth
                Quarter
            
            $
            0.42
            
            $
            1.25Third
                Quarter
            
            $
            1.10
            
            $
            1.50Second
                Quarter
            
            $
            0.75
            
            $
            1.19First
                Quarter
            
            
            —
            
            
            —





14




***Dividend
      Policy***





We
      have
      never declared or paid dividends on our common stock. We currently intend to
      retain all future earnings for use in the operation and expansion of our
      business and do not anticipate paying any cash dividends on common stock in
      the
      foreseeable future. Any future dividends will be at the discretion of the board
      of directors, after taking into account various factors, including among others,
      operations, current and anticipated cash needs and expansion plans, the income
      tax laws then in effect, the requirements of Nevada law, and any restrictions
      that may be imposed by our future credit arrangements.





***Transfer
      Agent***





Our
      transfer agent is Holladay Stock Transfer, Inc., 2939
      North 67 th Place,
      Scottsdale, AZ 85251.





***Recent
      Sales of Unregistered Securities***





On
      January 2, 2006, the Company granted stock options to each of Mr. Levin, Lovsky
      and Gotgelf and Ms. Shoful. Each stock option agreement is exercisable for
      250,000 shares of the Company’s common stock for a purchase price of $0.10 per
      share until the earlier of the fifth anniversary date of the date of grant
      or
      date of termination of employment. The stock options have anti-dilution
      protections in the event that a stock dividend, stock split, share combination
      or similar change in the capitalization of Ultitek has been effectuated. The
      stock options were granted to such individuals in consideration for professional
      services rendered by them, and the Company relied upon the exemption from
      registration requirements of the Securities Act of 1933, as amended, provided
      under Section 4(2) promulgated thereunder as the grant of such options did
      not
      involve a public offering of securities.





On
      January 2, 2006, the Company issued warrants to (i) Mr. Leonard Stahl (50,000
      shares), (ii) Mr. Michael London (100,000 shares) and (iii) Mr. Lowell Nerenberg
      (20,000 shares) to purchase shares of common stock of the Company at a purchase
      price of $0.15 per share until the fifth anniversary date of the date of grant.
      The Company issued the warrants in consideration for professional services
      rendered and upon reliance on the exemption from registration requirements
      of
      the Securities Act of 1933, as amended, provided under Section 4(2) promulgated
      thereunder as the issuance of the warrants did not involve a public offering
      of
      securities.





On
      January 31, 2006, the Company issued 12,000,000 shares of its common stock
      to
      its executive officers at $0.25 per share for compensation for services
      rendered. The
      stock
      was issued to such individuals in consideration for professional services
      rendered by them, and the Company relied upon the exemption from registration
      requirements of the Securities Act of 1933, as amended, provided under Section
      4(2) promulgated thereunder as the issuance of the stock did not involve a
      public offering of securities.




15





In
      connection with legal services rendered, the Company issued 2,000,000 shares
      of
      its common stock on January 31, 2006 at $0.25 per share for services
      performed . The
      stock
      was issued in consideration for professional services rendered and the Company
      relied upon the exemption from registration requirements of the Securities
      Act
      of 1933, as amended, provided under Section 4(2) promulgated thereunder as
      the
      issuance of the stock did not involve a public offering of securities.





On
      February 14, 2006, the Company issued warrants to (i) Mr. Paul Freed (500,000
      shares), (ii) Ms. Polina Price (2,500,000 shares), (iii) SZP Price Holdings,
      LLC
      (53,333 shares), (iv) Samuel L. Gralnick (100,000 shares), (v) Atlantic Holdings
      of NJ, LLC (15,000,000 shares), (vi) the Roman Price Revocable Fund (66,600,000
      shares), (vii) Ernest J. Sabato (8,100,000 shares) and (viii) Yves Kramer
      (500,000) to purchase shares of common stock of the Company at a purchase price
      of $0.02 per share until the fifth anniversary date of the date of grant. The
      Company issued the warrants in consideration for personal services rendered
      and
      upon reliance on the exemption from registration requirements of the Securities
      Act of 1933, as amended, provided under Section 4(2) promulgated thereunder
      as
      the issuance of the options did not involve a public offering of securities.





On
      February 14, 2006, the Company issued to Mr. Semyon Zlochevsky a 7% Convertible
      Debenture for the principal amount of $70,000 bearing interest at the rate
      of 7%
      per annum and maturing on February 14, 2011. The unpaid principal amount, plus
      accrued interest, of the debenture is convertible at any time by Mr. Zlochevsky
      into shares of the Company’s common stock at the conversion price of $0.02 per
      share. In connection with the debenture, the Company issued to Mr. Zlochevsky
      a
      five year warrant to purchase up to 3,500,000 shares of the Company’s common
      stock at an exercise price of $0.02 per share. The conversion price of the
      debenture has anti-dilution protection in the event the Company’s effectuates a
      stock split or dividend and the shares issuable upon the conversion of the
      debenture and/or exercise of the warrants have registration rights. The
      debenture is redeemable by the Company at 100% of the unpaid principal amount
      of
      the debenture with 30 days notice subordinated and junior in right of payment
      to
      all accounts payable by the Company in the ordinary course of business and/or
      bank debt not exceeding $100,000. The convertible debenture and warrants were
      granted in consideration of the amounts loaned the Company, and the Company
      relied upon the exemption from registration requirements of the Securities
      Act
      of 1933, as amended, provided under Section 4(2) promulgated thereunder as
      the
      issuance of the debenture and warrants did not involve a public offering of
      securities.




On
      May 3,
      2006, the Company issued to Mr. Semyon Zlochevsky a 7% Convertible Debenture
      for
      the principal amount of $500,000 bearing interest at the rate of 7% per annum
      and maturing on May 3, 2013. The unpaid principal amount, plus accrued interest,
      of the debenture is convertible at any time by Mr. Zlochevsky into shares of
      the
      Company’s common stock at the conversion price of $0.05 per share. In connection
      with the debenture, the Company issued to Mr. Zlochevsky a five year warrant
      to
      purchase up to 10,000,000 shares of the Company’s common stock at an exercise
      price of $0.05 per share. The conversion price of the debenture has
      anti-dilution protection in the event the Company’s effectuates a stock split or
      dividend and the shares issuable upon the conversion of the debenture and/or
      exercise of the warrants have registration rights. The debenture is redeemable
      by the Company at 100% of the unpaid principal amount of the debenture with
      30
      days notice and is subordinated and junior in right of payment to all accounts
      payable by the Company in the ordinary course of business and/or bank debt
      not
      exceeding $100,000. The convertible debenture and warrants were granted in
      consideration of the amounts loaned the Company, and the Company relied upon
      the
      exemption from registration requirements of the Securities Act of 1933, as
      amended, provided under Section 4(2) promulgated thereunder as the issuance
      of
      the debenture and warrants did not involve a public offering of securities.





***Securities
      Authorized for Issuance under Equity Compensation
      Plans***





The
      Company did not have an Equity Compensation Plan during the fiscal year ended
      December 31, 2006. On March 23, 2007, the Company filed a Registration Statement
      on Form S-8 therein registering seven million (7,000,000) shares of the
      Company’s Common Stock available for issuance pursuant to awards granted under
      the Company’s 2007 Incentive Compensation Plan.




16





**Item
      6. Management’s Discussion and Analysis or Plan of
      Operation.**





***Basis
      of Presentation*** ******





The
      following discussion and analysis is based on the audited financial statements
      for the years ended December 31, 2006 and 2006 of Ultitek, Ltd., a Nevada
      corporation (“Ultitek,” the “Company,” “our,” or “we”), and its wholly-owned
      subsidiary, TAIS. All significant inter-company amounts have been eliminated.
      In
      the opinion of management, the audited financial statements presented herein
      reflect all adjustments (consisting only of normal recurring adjustments)
      necessary for fair presentation. Interim results are not necessary indicative
      of
      results to be expected for the entire year.





We
      prepare our financial statements in accordance with generally accepted
      accounting principles, which require that management make estimates and
      assumptions that affect reported amounts. Actual results could differ from
      these
      estimates.





Certain
      of the statements contained below are forward-looking statements (rather than
      historical facts) that are subject to risks and uncertainties that could cause
      actual results to differ materially from such forward-looking statements.





The
      following Management’s Discussion and Analysis of Financial Condition and
      Results of Operations gives effect to the restatement of the Company’s
      previously filed financial statements as discussed in Note A to the Consolidated
      Financial Statements filed with this Amendment.





***Business
      Overview***





Ultitek
      was originally incorporated in the State of Delaware on January 11, 2005. On
      March 11, 2005, the Company was reincorporated in the State of Nevada. Also
      on
      March 11, 2005, the Company entered into a share exchange agreement with
      Transport Automation Information Systems (TAIS) pursuant to which the Company
      exchanged 15,000,000 shares of the Company’s common stock for all of the issued
      and outstanding shares of TAIS. In connection with the merger, TAIS became
      a
      wholly owned subsidiary of the Company. Through TAIS, the Company owns and
      operates the ULTITEK System consisting of a Computerized Reservation System,
      a
      Global Distribution System, and operation systems for the airlines, to be
      marketed worldwide.





Prior
      to
      the merger, the Company was a non-operating “shell” corporation. For financial
      statement purposes, the merger has been reflected in the financial statements
      and below as though it occurred on January 1, 2004. The historical statements
      prior to the date of merger are those of TAIS. Since the merger is a
      recapitalization and not a business combination, pro-forma information is not
      presented.





***Industry
      Overview***





The
      airline industry has undergone significant changes in recent years with a number
      of trends emerging that have had a significant impact on the marketplace. These
      trends have caused convergence of flight operations management systems as it
      relates to airspace management and the different functions required to
      efficiently manage an airline’s operations. The major trends are:





·
            Significant
                increases in operating costs including labor, insurance and, most
                recently, security and fuel;·
            Rationalization
                of routes by the major network carriers in response to the general
                economic conditions and the increased competition from low fare
                carriers;





·
            Strategic
                investments by airlines in the areas of operational planning, control,
                revenue and network management and customer loyalty;·
            Alliances
                of major airlines and their associated regional carriers creating
                virtual
                buying groups and substantial new competitors in market segments
                in which
                the individual airlines were weak;





·
            Increased
                outsourcing of non-core business activities as a means of reducing
                costs.




17




The
      effects of convergence and the development of hardware technology, operating
      systems and wireless technology should continue the trend toward the creation
      of
      a real-time integrated operations control system wherein the air traffic control
      authorities, airline operations centers and pilots all have the same information
      available to make decisions and can seamlessly communicate and implement those
      decisions throughout their networks.





Airline
      passenger traffic during the last fiscal year continued to recover after the
      tragic events of September 11, 2001 and the viral epidemic Severe Acute
      Respiratory Syndrome (SARS) early in 2003. However, the lingering effects of
      these events continue to depress the industry. Traffic has started to recover
      worldwide, in many regions such as North America and Europe, but ticket prices
      and yields have remained depressed due to the continued penetration of low
      cost
      carriers and the overcapacity of seats.





The
      more
      recent recovery and industry restructuring among airlines and the drive for
      increased operational efficiency within the airlines, has led to a significant
      increase in interest for certain products and services that we offer.





***Market
      Trends***





Trends
      in
      the airline industry have created a market for firms capable of creating a
      fully
      integrated operations management system that performs all of the following
      required functions in an integrated fashion:





·
            Flight
                Planning·
            Aircraft
                Performance





·
            Aeronautical
                Charts





·
            Airline
                Schedule and Commercial Planning·
            Crew
                Scheduling





·
            Aircraft
                Maintenance·
            Ground
                Operations





·
            Reservations





The
      flight support business is facing a technical paradigm shift, gradually moving
      from paper products to electronic solutions. Changes in customer requirements
      regarding functionality and interactivity are resulting in the combination
      of
      aeronautical data and software, in “paperless” operational use.





This
      will
      change the business model for providers of flight operations solutions and
      we
      think will result in further industry consolidation.




***Liquidity
      and Capital Resources***





As
      of
      December 31, 2006, we had $6,900 cash on hand and had a net loss of $7,411,167.
      We have financed our operations to date from loans, the sale of equity
      securities and through revenues.





As
      of
      March 31, 2006, we had received an aggregate of $120,000 through loans and
      $166,300 from investors through the private sale of common stock in offerings
      exempt from the registration requirements of the Securities Act of 1933, as
      amended, under Rule 504 of Regulation D promulgated thereunder.





On
      July
      15, 2005, the Company borrowed $50,000 from an individual who is directly
      related to the President of the Company. The note evidencing this debt bore
      interest at the rate of 5% per annum, was unsecured and due by July 15, 2006
      and
      was repaid in full prior to its stated maturity date.





On
      February 14, 2006, the Company borrowed $70,000 under a 7% Convertible Debenture
      due 60 months from the date of execution. The debenture is convertible at the
      holder’s option at $0.02 per share. Additionally, we issued a five year warrant
      to the holder to purchase 3,500,000 shares at $0.02 per share. The warrant
      is
      protected by anti-dilution provisions.




18





On
      May 3,
      2006, the Company issued a 7% $500,000 Convertible Debenture due 2013. The
      Debenture is unsecured, bears interest at the 7% per annum and is payable at
      the
      holder’s option in either cash and or stock, at a rate of $0.05 per share.
      Additionally, the Company issued the holder a seven-year warrant for 10,000,000
      shares which are immediately exercisable. The conversion privileges are
      protected by anti-dilution provisions.





On
      December 26, 2006, the Company borrowed $30,000 from an individual who is
      directly related to the President of the Company. The note bears interest at
      the
      rate of .6% per annum, is unsecured and is due December 26, 2007.





We
      do not
      expect to incur significant marketing or expansion expenses with respect to
      the
      sale of ULTITEK Systems. Consequently, any significant increases in sales
      requirements will be predicated entirely upon the particular circumstances
      of
      each new agreement, and capital requirements will follow the same particular
      circumstance.





The
      level
      of cash flows we derive from operations will depend to a significant degree
      on
      our ability to license the ULTITEK Systems. If we are unable to generate
      sufficient cash flows from operations, we will attempt to raise additional
      funds
      to cover the costs of operations through additional private or public offerings
      of debt or equity securities. There is no assurance that we will be able to
      raise additional funds. If we cannot, we will be forced to curtail our
      operations or possibly be forced to evaluate a sale or liquidation of our
      assets. Even if we are successful in raising additional funds, there is no
      assurance regarding the terms of any additional investment. Any future financing
      may involve substantial dilution to existing investors.





***Results
      of Operations*** ******





*Fiscal
      Year Ended December 31, 2006 Compared to Fiscal Year Ended December 31, 2005*





Our
      total
      revenue increased by $700,191, or approximately 59.8% from $ 1,171,797
      for the
      year
      ended December 31, 2005 to $1,871,988 for the fiscal year ended December 31,
      2006. This increase was due to an increase in software licenses and maintenance
      fees.





Our
      costs
      of revenue increased by $416,460, or approximately 36%, from $1,156,640 for
      the
      year ended December 31, 2005 to
      $1,573,100 for the fiscal year ended December 31, 2006. This
      increase was primarily due to an increase in the number of software licenses
      and
      maintenance activity which necessitated our increased utilization of programmers
      and consultants.





Our
      selling, general and administrative (SG&A) expenses increased by $5,921,443,
      or approximately 603%., from $979,592 for the year ended December 31, 2005 to
      $6,901,035 for the fiscal year ended December 31, 2006. This
      increase was primarily due to an increase in stock based compensation
      representing the fair value of stock, options, and warrants issued to officers,
      directors, consultants and employees.





Our
      interest expense increased by $630,792, from $0 for the year ended December
      31,
      2005 to $630,792 for the year ended December 31, 2006. This increase was
      primarily due to the recognition of beneficial conversion features on the
      debentures issued in 2006.





***Research
      and Development***





For
      the
      years ended December 31, 2005 and 2006, we spent approximately $36,500 and
      $141,462, respectively, in research and development, an increase of
      approximately $104,962 (approximately 287%). In order to grow our business
      and
      operations, we
      anticipate incurring additional research and development expenses and changing
      with respect to our software. Any significant increases in research and
      development will be predicated entirely upon the particular circumstances of any
      acquisitions that we make, including the state of development of the technology,
      the complexity and the requirement for modification or integration with other
      solutions.





19




***Revenue
      Recognition***





The
      Company derives revenue from the following sources: (i) software, which includes
      the sale of the Company’s software licenses and (ii) services, which includes
      consulting and maintenance.





The
      Company’s records revenue pursuant to the Statement of position No. 97-2,
      Software Revenue recognition, issued by the American Institute of Certified
      Public Accountants.





For
      software license arrangements that do not require significant modification
      or
      customization, we recognize new software license revenue when (i) we enter
      into
      a legally binding arrangement with a customer for the license of software;
      (ii)
      we deliver the products; (iii) customer payment is deemed fixed and determinable
      and free of contingencies or significant uncertainties; and (iv) collection
      is
      probably. Substantially all of our new software license revenues are recognized
      in this manner.





Revenues
      from consulting services are generally recognized as the services are performed.





In
      certain consulting contracts, modifications to software may be accounted for
      based upon contract accounting using the completed contract method. Contract
      accounting is applied to any arrangement: (i) that includes milestones or
      customer specific acceptance criteria that maybe effect collection of software
      license fees; (ii) where services include significant modification or
      customization of software; or (iii) where software license payment is tied
      to
      the performance of consulting services.





***Off-Balance
      Sheet Arrangements***





We
      did
      not have any off-balance
      sheet arrangements that have or are reasonably likely to have a current or
      future effect on our financial condition, changes in financial condition,
      revenues or expenses, results of operations, liquidity, capital expenditures
      or
      capital resources that is material to investors.




***Critical
      Accounting Policies & Estimates***




Our
      significant accounting policies are summarized in Note B to our financial
      statements. The follow describes critical accounting policies and
      estimates:




Use
      of
      Estimates





It
      is
      important to note that when preparing the financial statements in conformity
      with U.S. generally accepted accounting principles, management is required
      to
      make certain estimates and assumptions that affect the amounts reported and
      disclosed in the financial statements and related notes. Actual results could
      differ if those estimates and assumptions approve to be incorrect.





On
      an
      ongoing basis, we evaluate our estimates, including those related to estimated
      customer life, used to determine the appropriate amortization period for
      deferred revenue and deferred costs associated with licensing fees, the useful
      lives of property and equipment as well as in U.S. dollar exchange rates with
      the Russian ruble, among others, as well as our estimates of the value of common
      stock for the purpose of determining stock-based compensation. We base our
      estimates on historical experience and on various other assumptions that we
      believe to be reasonable, the results of which form the basis for making
      judgments about the carrying values of assets and liabilities.





Work
      in Progress





Work
      in
      progress represents consulting projects billable in accordance with the terms
      of
      a contract at specified stages of completion and consists of accumulated costs
      of materials and time charges not yet billed. To the extent that the terms
      are
      altered or our performance under these contracts is delayed, our estimates
      will
      be wrong and may impact when revenue is recognized.




20





Stock-Based
      Compensation





The
      Company accounts for stock based compensation using the fair value method.





The
      Company accounts for employee stock based compensation and stock issued for
      services using the fair value method. In accordance with Emerging Issues Task
      Force (“EITF”) 96-18, the measurement date of shares issued for services is the
      date at which the counterparty’s performance is complete.





For
      services in which the Company issues its common stock, the Company utilizes
      the
      fair value of its common stock at month-end and accrues the value of shares
      to
      be issued in Stockholders’ Equity, even if the shares have not been issued.
      Accordingly, earnings per share computations are adjusted.





Software
      Costs





Software
      development costs are accounted for in accordance with SFAS No. 86 “Accounting
      for the Costs of Computers, Software to be Sold, Leased, or Otherwise Marketed”
and SOP No. 98-1 “Accounting for the Costs of Computer Software Developed or
      Obtained for Internal Use.”




Revenue
      Recognition





The
      Company derives revenue from the following sources: (1) software, which includes
      the sale of software license’s, and (2) services, which includes consulting and
      maintenance.





The
      Company records revenue pursuant to SOP No. 97-2, “Software Revenue
      Recognition”, issued by the AICPA.





For
      software license arrangements that do not require significant modification
      or
      customization, we recognized new software license revenue when: (1) we enter
      into a legally binding arrangement with a customer for the license of software;
      (2) we deliver the products; (3) customer payment is deemed fixed and
      determinable and free of contingencies or significant uncertainties; and (4)
      collection is probable. Substantially all of our new software license revenues
      are recognized in this manner.





Revenues
      from consulting services are generally recognized as the services are
      performed.





In
      certain consulting contracts, modifications to software may be accounted for
      based upon contract accounting using the completed contract method. Contract
      accounting is applied to any arrangement: (1) that includes milestones or
      customer specific acceptance criteria that may effect collection of software
      license fees; (2) where services include significant modification or
      customization of software; or (3) where software license payment is tied to
      the
      performance of consulting services.




Foreign
      Currency Translation





The
      Company considers the Russian ruble to be its functional currency. Assets and
      liabilities were translated into U.S. dollars at the period end exchange rates.
      Statement of Operations amounts were translated using the average rate during
      the year. Gains and losses resulting from translating foreign currency financial
      statements were accumulated in other comprehensive income (loss), a separate
      component of stockholder’s equity (deficit). Drastic fluctuations in the
      exchange rate of the U.S. dollar and the Russian ruble will affect our financial
      statements.





Convertible
      Debentures





The
      Company accounts for its convertible debentures with detachable warrants in
      accordance with Accounting Principles Board (“APB”) Opinion 14, “Accounting for
      Convertible Debt and Debt Issued with Stock Purchase Warrants (as amended)”,
      which requires the portion of the proceeds of debt securities issued with
      detachable warrants which is allocable to the warrants to be accounted for
      as
      Paid-in capital. The allocation is based upon the relative fair value
      method.




21





Beneficial
      Conversion Features





The
      Company follows EITF 00-27, “Application of Issue No. 98-5 to Certain
      Convertible Instruments”, and EITF 98-5, “Accounting for Convertible Securities
      with Beneficial Conversion Features or Contingently Adjustable Conversion
      Ratios” in accounting for beneficial conversion features associated with its
      convertible debentures. A beneficial conversion feature is computed as the
      difference between the effective conversion price and the fair value of the
      stock at the commitment date multiplied by the number of shares which the
      security is convertible. The effective conversion price is determined by first
      allocating the portion of the proceeds to the detachable warrants using the
      relative fair value method.





**RISKS
      ASSOCIATED WITH OUR BUSINESS** ****





In
      addition to the other information in this report, the following risks should
      be
      considered carefully in evaluating our business and prospects:





**WE
      WILL NEED ADDITIONAL CAPITAL FINANCING IN THE FUTURE.**





As
      of
      December 31, 2006, we had $6,900 in cash on hand, a net loss of $7,411,167
      and a
      stockholders’ deficit of $325,731, causing our auditors to express their doubt
      as to our ability to continue as a going concern. We will be required to seek
      additional financing in the future to respond to increased expenses or
      shortfalls in anticipated revenues, accelerate product development and
      deployment, respond to competitive pressures, develop new or enhanced products,
      or take advantage of unanticipated acquisition opportunities. We cannot be
      certain we will be able to find such additional financing on reasonable terms,
      or at all. If we are unable to obtain additional financing when needed, we
      could
      be required to modify our business plan in accordance with the extent of
      available financing.





**IF
      WE ENGAGE IN ACQUISITIONS, WE MAY EXPERIENCE SIGNIFICANT COSTS AND DIFFICULTY
      ASSIMILATING THE OPERATIONS OR PERSONNEL OF THE ACQUIRED COMPANIES, WHICH COULD
      THREATEN OUR FUTURE GROWTH.**





If
      we
      make any acquisitions, we could have difficulty assimilating the operations,
      technologies and products acquired or integrating or retaining personnel of
      acquired companies. In addition, acquisitions may involve entering markets
      in
      which we have no or limited direct prior experience. The occurrence of any
      one
      or more of these factors could disrupt our ongoing business, distract our
      management and employees and increase our expenses. In addition, pursuing
      acquisition opportunities could divert our management’s attention from our
      ongoing business operations and result in decreased operating performance.
      Moreover, our profitability may suffer because of acquisition-related costs
      or
      amortization of acquired goodwill and other intangible assets. Furthermore,
      we
      may have to incur debt or issue equity securities in future acquisitions. The
      issuance of equity securities would dilute our existing stockholders.





**IF
      WE CANNOT ATTRACT, RETAIN, MOTIVATE AND INTEGRATE ADDITIONAL SKILLED PERSONNEL,
      OUR ABILITY TO COMPETE WILL BE IMPAIRED.**





Many
      of
      our current and potential competitors have more employees than we do. Our
      success depends in large part on our ability to attract, retain and motivate
      highly qualified management and technical personnel. We face intense competition
      for qualified personnel. The industry in which we compete has a high level
      of
      employee mobility and aggressive recruiting of skilled personnel. If we are
      unable to continue to employ our key personnel or to attract and retain
      qualified personnel in the future, our ability to successfully execute our
      business plan will be jeopardized and our growth will be inhibited.





22





**WE
      MAY BE UNABLE TO ADEQUATELY PROTECT OUR PROPRIETARY RIGHTS OR MAY BE SUED BY
      THIRD PARTIES FOR INFRINGEMENT OF THEIR PROPRIETARY RIGHTS.**





The
      telecommunications industry is characterized by the existence of a large number
      of patents and frequent litigation based on allegations of trade secret,
      copyright or patent infringement. We may inadvertently infringe a patent of
      which we are unaware. In addition, because patent applications can take many
      years to issue, there may be a patent application now pending of which we are
      unaware that will cause us to be infringing when it is issued in the future.
      If
      we make any acquisitions, we could have similar problems in those industries.
      Although we are not currently involved in any intellectual property litigation,
      we may be a party to litigation in the future to protect our intellectual
      property or as a result of our alleged infringement of another’s intellectual
      property, forcing us to do one or more of the following:


· Cease
        selling, incorporating or using products or services that incorporate the
        challenged intellectual property;





· Obtain
        from the holder of the infringed intellectual property right a license to
        sell
        or use the relevant technology, which license may not be available on reasonable
        terms; or





· Redesign
        those products or services that incorporate such technology.





A
      successful claim of infringement against us, and our failure to license the
      same
      or similar technology, could adversely affect our business, asset value or
      stock
      value. Infringement claims, with or without merit, would be expensive to
      litigate or settle, and would divert management resources.





**BECAUSE
      OUR OFFICERS AND DIRECTORS ARE INDEMNIFIED AGAINST CERTAIN LOSSES, WE MAY BE
      EXPOSED TO COSTS ASSOCIATED WITH LITIGATION.**





If
      our
      directors or officers become exposed to liabilities invoking the indemnification
      provisions, we could be exposed to additional non-reimbursable costs, including
      legal fees. Our articles of incorporation and bylaws provide that our directors
      and officers will not be liable to us or to any shareholder and will be
      indemnified and held harmless for any consequences of any act or omission by
      the
      directors and officers unless the act or omission constitutes gross negligence
      or willful misconduct. Extended or protracted litigation could have a material
      adverse effect on our cash flow.





**WE
      WILL DEPEND ON OUTSIDE MANUFACTURING SOURCES AND SUPPLIERS.**





We
      may
      contract with third party manufacturers to produce our products and we will
      depend on third party suppliers to obtain the raw materials necessary for the
      production of our products. We do not know what type of contracts we will have
      with such third party manufacturers and suppliers. In the event we outsource
      the
      manufacture of our products, we will have limited control over the actual
      production process. Moreover, difficulties encountered by any one of our third
      party manufacturers, which result in product defects, delayed or reduced product
      shipments, cost overruns or our inability to fill orders on a timely basis,
      could have an adverse impact on our business. Even a short-term disruption
      in
      our relationship with third party manufacturers or suppliers could have a
      material adverse effect on our operations. We do not intend to maintain an
      inventory of sufficient size to protect ourselves for any significant period
      of
      time against supply interruptions, particularly if we are required to obtain
      alternative sources of supply.








**OUR
      STOCK PRICE MAY BE VOLATILE.**





The
      market price of our common stock will likely fluctuate significantly in response
      to the following factors, some of which are beyond our control:





· Variations
        in our quarterly operating results;
  23




· Changes
        in financial estimates of our revenues and operating results by securities
        analysts;


· Changes
        in market valuations of telecommunications equipment companies;




· Announcements
        by us of significant contracts, acquisitions, strategic partnerships, joint
        ventures or capital commitments;




· Additions
        or departures of key personnel;


· Future
        sales of our common stock;


· Stock
        market price and volume fluctuations attributable to inconsistent trading
        volume
        levels of our stock;


· Commencement
        of or involvement in litigation.





In
      addition, the equity markets have experienced volatility that has particularly
      affected the market prices of equity securities issued by technology companies
      and that often has been unrelated or disproportionate to the operating results
      of those companies. These broad market fluctuations may adversely affect the
      market price of our common stock.




**WE
      DO NOT ANTICIPATE PAYING ANY DIVIDENDS ON OUR COMMON STOCK.**





We
      have
      not paid any dividends on our Common Stock since inception and do not anticipate
      paying any dividends on our Common Stock in the foreseeable future. Instead,
      we
      intend to retain any future earnings for use in the operation and expansion
      of
      our business.





as
      a
      "reporting issuer," any future quotation of its common stock on the OTC Bulletin
      Board may be jeopardized.





**WE
      ARE SUBJECT TO SEC REGULATIONS RELATING TO LOW-PRICED PENNY-STOCKS.**





The
      Securities and Exchange Commission has adopted regulations concerning low-priced
      (or “penny”) stocks. The regulations generally define “penny stock” to be any
      equity security that has a market price less than $5.00 per share, subject
      to
      certain exceptions. Our stock is currently classified as a penny stock.





The
      penny
      stock regulations require that broker-dealers, who recommend penny stocks to
      persons other than institutional accredited investors make a special suitability
      determination for the purchaser, receive the purchaser’s written agreement to
      the transaction prior to the sale and provide the purchaser with risk disclosure
      documents that identify risks associated with investing in penny stocks.
      Furthermore, the broker-dealer must obtain a signed and dated acknowledgment
      from the purchaser demonstrating that the purchaser has actually received the
      required risk disclosure document before effecting a transaction in penny stock.
      These requirements have historically resulted in reducing the level of trading
      activity in securities that become subject to the penny stock rules.





The
      additional burdens imposed upon broker-dealers by these penny stock requirements
      may discourage broker-dealers from effecting transactions in our common stock,
      which could severely limit the market liquidity of our common stock and our
      shareholders’ ability to sell our common stock in the secondary market.





**Item
      7. Financial Statements.**





The
      Company’s audited financial statements for the years ended December 31, 2006 and
      2005 and the notes thereto follow the signature page of this Annual Report
      on
      Form 10-KSB.





**Item
      8. Changes in and Disagreements with Accountants on Accounting and Financial
      Disclosure.**





None




24





**Item
      8A. Controls and Procedures**





The
      Company’s management is responsible for establishing and maintaining a system of
      disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e)
      under the Exchange Act) that is designed to ensure that information required
      to
      be disclosed by the Company in the reports that the Company files or submits
      under the Exchange Act is recorded, processed, summarized and reported, within
      the time periods specified in the Commission’s rules and forms. Disclosure
      controls and procedures include, without limitation, controls and procedures
      designed to ensure that information required to be disclosed by an issuer in
      the
      reports that it files or submits under the Exchange Act is accumulated and
      communicated to the issuer’s management, including its principal executive
      officer or officers and principal financial officer or officers, or persons
      performing similar functions, as appropriate to allow timely decisions regarding
      required disclosure.





In
      accordance with Exchange Act Rules 13a-15 and 15d-15, an evaluation was
      completed under the supervision and with the participation of the Company’s
      management, including the Company’s principal executive officer and principal
      financial officer, of the effectiveness of the design and operation of the
      Company’s disclosure controls and procedures as of the end of the period covered
      by this Annual Report. Based on that evaluation, the Company’s Principal
      Executive Officer and Principal Financial Officer concluded that the Company’s
      disclosure controls and procedures are effective, to provide reasonable
      assurance that information required to be disclosed in the Company’s reports
      filed or submitted under the Exchange Act is recorded, processed, summarized,
      and reported within the time periods specified in the Commission’s rules and
      forms. There have been no changes to the Company’s internal controls over
      financial reporting that occurred during our last fiscal quarter of the year
      ended December 31, 2006, that materially affected, or were reasonably likely
      to
      materially affect, our internal controls over financial reporting.




**Item
      8B. Other Information.**




None





**PART
      III**





**Item
      9. Directors, Executive Officers, Promoters, Control Persons and Corporate
      Governance; Compliance with Section 16(a) of the Exchange
      Act.**





The
      following table sets forth the names and ages of our current directors,
      executive officers and key consultants as well as the principal offices and
      positions held by each person. We are managed by our Board of Directors.
      Currently, the Board has one member. Our executive officers serve at the
      discretion of the Board of Directors. There are no family relationships between
      any of the directors and executive officers.  In addition, there was no
      arrangement or understanding between any executive officer and any other person
      pursuant to which any person was selected an executive officer.


Name
              
              Age
              
              PositionRoman
                  Price
              
              52
              
              President,
                  CEO, Chairman and sole DirectorErnest
                  J. Sabato
              
              69
              
              Secretary,
                  VP, Chief Operating OfficerPaul
                  Freed, C.P.A.
              
              58
              
              Chief
                  Financial OfficerMark
                  Levin, PhD
              
              68
              
              VP,
                  General Manager, Russian OperationsIrina
                  Shoful
              
              63
              
              TAIS;
                  technical servicesVladimir
                  Lovsky
              
              54
              
              TAIS;
                  sales marketing and customer relationsGennady
                  Gotgelf
              
              50
              
              TAIS;
                  administrative manager





25


The
      following biographies describe the business experience of our directors,
      executive officers, managers and key consultants.





**Roman
      Price** is
      the
      founder of Ultitek, Ltd., Chairman and President since 2004. He has a degree
      in
      Technology. He studied Mathematics and Mechanics at the University of Odessa,
      and Computer Science at the City University of New York. Mr. Price worked as
      a
      programmer and project leader at Diversified Computer Technologies from 1976
      through 1978 until McDonnell Douglas bought the company. From 1979 to 1980
      Mr.
      Price was an independent computer consultant. In 1980, he started the
      minicomputer division for a large New York consulting company APMI@ and built
      that division into a multimillion-dollar business with a staff of more than
      30
      people. In 1982 Mr. Price started his own software company, which was sold
      in
      1994. From 1988 through 1998 he was a fifty percent owner of a travel agency
      in
      New Jersey. Until December 2004, Mr. Price was in charge of marketing and
      operations for International Business Solutions, Inc.





**Paul
      Freed** is
      the
      Chief Financial Officer since 2005. Mr. Freed is a Certified Public Accountant
      and since 1997, has operated his own CPA firm. Mr. Freed is a graduate of Pace
      College with a BA in accounting and business administration and allied member
      of
      the NYSE. Mr. Freed was a major stockholder, member of the Board of Directors
      and the Chief Financial Officer of Direct Brokerage, Inc., a member firm of
      NYSE. From 1968 thru 1982 Mr. Freed was a partner at Harry Goodkin & Co.,
      CPA. From 1982 to 1997 he was Comptroller of Harvey Young Yurman and JRP
      Securities from 1989 to 1997. From 1990 to 1994 he was the Treasurer of Goin
      & Co., Inc., an AMEX specialist firm. Mr. Freed specializes in security
      taxation and tax planning.





**Ernest
      J. Sabato** is
      the
      Chief Operating Officer since 2005. Mr. Sabato is a graduate of the Temple
      University. He was a Founder, Director and Executive Vice President of The
      Ultimate Corporation, East Hanover, NJ, a manufacturer and distributor of
      hardware and software. He was instrumental in the company’s rapid growth, which
      led to a successful IPO in 1981. The company traded on the NYSE in the mid
      80's.
      He had responsibility for sales, marketing and support worldwide. Prior to
      Mr.
      Sabato’s leaving the company, it had gross revenues in excess of $220 million
      and employed over 600 people worldwide. Mr. Sabato has extensive experience
      in
      international marketing and has been a member of the Board of Directors of
      several companies. Mr. Sabato was retired from 1996 to 2005.





**Mark
      Levin,** is
      the
      President of TAIS since 1989 and was one of the four original developers of
      the
      software. He will be the General Manager of the Moscow office and assist in
      development of the product. He has a PhD. in mathematics and extensive
      experience in technical sciences.





**Irina
      Shoful,** is
      one of
      the four original developers of the software since 1989 and currently works
      at
      TAIS as a technical services person. She will continue working at the Moscow
      office in that capacity.





**Vladimir
      Lovsky,** is
      one of
      the four original developers since 1989 and has a Ph.D. in computer science.
      He
      currently works at TAIS in sales marketing and customer relations and will
      continue in that role for the Company.





**Gennady
      Gotgelf,** is
      one of
      the four original developers of the software since 1989 and currently works
      at
      TAIS as administrative manager. He will continue as administrative officer
      of
      the Moscow office and assist in development. He formerly was head programmer
      at
      the Moscow office.





***Compliance
      with Section 16(a) of the Securities Exchange Act of
      1934*** **





Section  16(a)
      of
      the Exchange Act requires the Company’s directors and officers, and persons who
      beneficially own more than 10% of a registered class of the Company’s equity
      securities, to file reports of beneficial ownership and changes in beneficial
      ownership of the Company’s securities with the SEC of forms 3, 4 and 5.
      Officers, directors and greater than 10% stockholders are required by SEC
      regulation to furnish the Company with copies of all Section 16(a) forms they
      file.




26





Based
      solely on the Company’s review of the copies of the forms received by it during
      the period from June 27, 2006 (inception) to December 31, 2006 and written
      representations that no other reports were required, the Company believes that
      no person who, at any time during such fiscal year, was a director, officer
      or
      beneficial owner of more than 10% of the Company’s common stock failed to comply
      with all Section 16(a) filing requirements during such fiscal
      year.





***Code
      of Ethics***





We
      have
      not adopted a Code of Business Conduct and Ethics that applies to our principal
      executive officer, principal financial officer, principal accounting officer
      or
      controller, or persons performing similar functions in that our officers and
      directors serves in all the above capacities.





**Audit,
      Nominating and Compensation Committees**


Our
      Board
      of Directors does not have standing audit, nominating or compensation
      committees, and our Board of Directors performs the functions that would
      otherwise be delegated to such committees. Currently, our Board of Directors
      believes that the cost of establishing such committees, including the costs
      necessary to recruit and retain qualified independent directors to serve on
      our
      Board of Directors and such committees and the legal costs to properly form
      and
      document the authority, policies and procedures of such committees are not
      justified under our current circumstances. However, we anticipate that our
      Board
      of Directors will seek qualified independent directors to serve on the Board
      and
      ultimately form standing audit, nominating and compensation committees.





**Item
      10. Executive Compensation.**





The
      following table sets forth information regarding the compensation paid to our
      “named executive officers” as defined in Rule 402(a)(2) under Regulation S-B.
      Compensation accrued during one year and paid in another is recorded under
      the
      year of accrual.




**2006
      Summary Compensation Table**


**Name
                  and Principal Position**
              
              **Year**
              
              **Salary ($)**
              
              **Bonus ($)**
              
              **Stock**
                **Awards**
                **($)**
              
              **Option**
                **Awards**
                **($)**
              
              **Non-Equity**
                **Incentive
                  Plan**
                **Compensation**
                **($)**
              
              **Change
                  in**
                **Pension**
                **Value
                  and**
                **Nonqualified**
                **Deferred**
                **Compensation**
                **Earnings**
                **($)**
              
              **All
                  Other**
                **Compensation**
                **($)**
              
              **Total**
                **($)**Roman
                  Price
              
              
              2006
              
              $
              25,000
              
              
              0
              
              
              0
              
              
              0
              
              
              0
              
              
              0
              
              
              0
              
              $
              25,000President,
                  Chairman and CEO
              
              
              2005
              
              $
              25,000
              
              
              0
              
              
              0
              
              
              0
              
              
              0
              
              
              0
              
              
              0
              
              $
              25,000





In
      accordance with the terms of our March 2005 merger agreement with TAIS, we
      agreed to pay each of the four former officers of TAIS a salary of $100,000
      per
      year each in stock for five years commencing March 11, 2005. The Company accrues
      the amounts payable to the former officers quarterly. No shares have been issued
      to these four individuals.





At
      December 31, 2005, the Company recorded $300,000 in consulting fees and has
      recorded 400,000 shares of common stock as issued and outstanding. For the
      year
      ended December 31, 2006, the Company recorded $400,000 in consulting fees and
      has included in shares outstanding an additional 4,086,750 shares of common
      stock. To date, the shares have not been issued.





27




**Options/SAR
      Grants in Last Fiscal Year**





**OPTION/SAR
                GRANTS IN LAST FISCAL YEAR**
              [Individual
                Grants]**Name**
            
            **Number
                of securities underlying options/SARs granted (#)**
            
            **Percent
                of total options/SARs granted to employees in fiscal
                year**
            
            **Exercise
                or base price ($/Sh)**
            
            **Expiration
                date**Mark
                Levin, PhD
            
            250,000(1)
            
            25%
            
            $0.10/share
            
            1/1/2011Irina
                Shoful
            
            250,000(2)
            
            25%
            
            $0.10/share
            
            1/1/2011Vladimir
                Lovsky
            
            250,000(3)
            
            25%
            
            $0.10/share
            
            1/1/2011Gennady
                Gotgelf
            
            250,000(4)
            
            25%
            
            $0.10/share
            
            1/1/2011





(1)
            Stock
                option agreement, dated January 2, 2006, between the Company and
                Mr. Levin
                for a purchase price of $0.10 per
                share.




(2)
            Stock
                option agreement, dated January 2, 2006, between the Company and
                Ms.
                Shoful for a purchase price of $0.10 per
                share.




(3)
              Stock
                  option agreement, dated January 2, 2006, between the Company and
                  Mr.
                  Lovsky for a purchase price of $0.10 per
                  share.




(4)
            Stock
                option agreement, dated January 2, 2006, between the Company and
                Mr.
                Gotgelf or a purchase price of $0.10 per
                share.





**Indemnity**





The
      Articles of Incorporation provide for indemnification to the full extent
      permitted by the laws of the State of Nevada for each person who becomes a
      party
      to any civil or criminal action or proceeding by reason of the fact that he,
      or
      his testator, or intestate, is or was a director or officer of the corporation
      or served any other corporation of any type or kind, domestic or foreign in
      any
      capacity at the request of the corporation.





Insofar
      as indemnification for liabilities arising under the Securities Act of 1933
      (the
“Act 1993”), as amended, may be permitted to directors or officers pursuant to
      the foregoing provisions, we are informed that, in the opinion of the Securities
      and Exchange Commission, such indemnification is against public policy, as
      expressed in the Act 1933 and is, therefore, unenforceable.





**Director
      Compensation**





We
      do not
      currently pay any cash fees to our directors, but we pay directors’ expenses in
      attending board meetings. During the year ended December 31, 2006 no director
      expenses were reimbursed.





**Employment
      Agreements**





The
      Company is not a party to any employment agreements.




28





**Item
      11. Security Ownership of Certain Beneficial Owners and Management and Related
      Stockholder Matters.**





The
        following table sets forth information as of May 14, 2007 with respect to
        the
        beneficial ownership of the issuer’s common stock by (i) each person known by
        the issuer to be the beneficial owner of more than 5% of the outstanding
        common
        stock which is the only class of stock of the issuer, (ii) each
        director of the Company’s board of directors, (iii) each “named executive
        officer” as defined in Item 402(a)(2) of Regulation S-B promulgated under the
        Securities Act and (iv) the directors and executive officers of the issuer,
        as a
        group, without naming them.





**Name
                  and Address**
              
              **Shares
                  Held**
              
              **Percentage
                  (1)**Roman
                  Price
                200
                  Old Palisades Road
                Fort
                  Lee, NJ 07024
              
              
              105,100,000(2
              )
              
              73.22
              %Ernest
                  J. Sabato
                560
                  Sylvan Avenue
                Englewood
                  Cliffs, NJ 07632
              
              
              11,100,000(3
              )
              
              13.45
              %Paul
                  Freed
                560
                  Sylvan Avenue
                Englewood
                  Cliffs, NJ 07632
              
              
              500,000(4
              )
              
              *Mark
                  Levin
                112
                  Leningradskoe Shosse
                Moscow,
                  Russia 125445
              
              
              4,000,000(5
              )
              
              5.36
              %Vladimir
                  Lovsky
                15
                  Smolensky Blvd.Moscow,
                  Russia 119121
              
              
              4,000,000(6
              )
              
              5.36
              %Gennady
                  Gotgelf
                4
                  Isakovsky Street
                Moscow,
                  Russia 123181
              
              
              4,000,000(7
              )
              
              5.36
              %Irina
                  Shoful
                15-22
                  Volokolomskoe Shosse
                Moscow,
                  Russia 125080
              
              
              4,000,000(8
              )
              
              5.36
              %Atlantic
                  Holdings of NJ, LLC
                24
                  Tennyson Drive
                Short
                  Hills, NJ 07078
              
              
              21,000,000(9
              )
              
              23.48
              %Semyon
                  Zlochevsky
                800
                  Palisade Avenue
                Fort
                  Lee, NJ 07024
              
              
              27,000,000(10
              )
              
              26.62
              %(10)All
                  Directors and Executive Officers as a Group (without naming them)
                  (7
                  persons)
              
              
              132,700,000
                  (11
              )
              
              81.57
              %





*
      Less
      than 1%





29


(1)
              Based
                  on 74,431,933 shares of issued and outstanding common stock, par
                  value
                  $0.0001 per share, of Ultitek.Pursuant
                  to Rule 13d-3 promulgated under the Exchange Act, any securities
                  not
                  outstanding which are subject to warrants, rights or conversion
                  privileges
                  exercisable within 60 days are deemed to be outstanding for purposes
                  of
                  computing the percentage of outstanding securities of the class
                  owned by
                  such person but are not deemed to be outstanding for the purposes
                  of
                  computing the percentage of any other person.




(2)
            Consists
                of (i) 11,000,000 shares held by the Roman Price Revocable Fund,
                (ii)
                25,000,000 shares held by the Roman Price Revocable Trust, (iii)
                66,600,000 shares issuable upon the exercise of a warrant issued
                on
                February 14, 2006 to the Roman Price Revocable Fund at a purchase
                price of
                $0.02 per share and (iv) 2,500,000 shares issuable upon the exercise
                of a
                warrant issued on February 14, 2006 to Polina Price at a purchase
                price of
                $0.02 per share.




(3)
            Consists
                of (1) 3,000,000 shares of common stock and (ii) 8,100,000 shares
                issuable
                upon the exercise of a warrant issued on February 14, 2006 to the
                Mr.
                Sabato at a purchase price of $0.02 per share.




(4)
            Consists
                of 500,000 shares issuable upon the exercise of a warrant issued
                on
                February 14, 2006 to the Mr. Freed at a purchase price of $0.02 per
                share.




(5)
            Consists
                of (i) 3,750,000 shares held by Mr. Levin and (ii)250,000 shares issuable upon the exercise of a stock option agreement,
                dated January 2, 2006, between the Company and Mr. Levin for a purchase
                price of $0.10 per share.




(6)
            Consists
                of(i)
                3,750,000 shares held by Mr. Lovsky and (ii)250,000
                shares issuable upon the exercise of a stock option agreement, dated
                January 2, 2006, between the Company and Mr. Lovsky for a purchase
                price
                of $0.10 per share.




(7)
            Consists
                of (i) 3,750,000 shares held by Mr. Gotgelf and (ii) 250,000 shares
                issuable upon the exercise of a stock option agreement, dated January
                2,
                2006, between the Company and Mr. Gotgelf for a purchase price of
                $0.10
                per share.





(8)
            Consists
                of (i) 3,750,000 shares held by Ms. Shoful and (ii) 250,000 shares
                issuable upon the exercise of a stock option agreement, dated January
                2,
                2006, between the Company and Ms. Shoful for a purchase price of
                $0.10 per
                share.




(9)
            Consists
                of (i) 6,000,000 shares held by Atlantic Holdings of NJ, LLC and
                (ii)
                15,000,000shares
                issuable upon the exercise of a warrant issued on February 14, 2006
                to
                Atlantic Holdings of NJ, LLC at a purchase price of $0.02 per share.Fred
                Biehl is the sole owner and registered agent of Atlantic Holdings
                of NJ,
                LLC. Mr. Biehl’s address is 24 Tennyson Drive, Short Hills, NJ
                07078.




(10)
            Consists
                of (i) up to 3,500,000 shares issuable upon the conversion of that
                certain
                7% Convertible Debenture, dated February 14, 2006, for the principal
                amount of $70,000 convertible into shares of common stock of Ultitek
                at a
                conversion price of $0.02 per share (the “$70,000 Convertible Debenture”),
                (ii) up to 3,500,000 shares issuable upon the exercise of a warrant
                issued
                in connection with the $70,000 Convertible Debenture at purchase
                price of
                $0.02 per share, (iii) up to 10,000,000 shares issuable upon the
                conversion of that certain 7% Convertible Debenture, dated May 3,
                2006,
                for the principal amount of $500,000 convertible into shares of common
                stock of Ultitek at a conversion price of $0.05 per share (the “$500,000
                Convertible Debenture”), (iv) up to 10,000,000 shares issuable upon the
                exercise of a warrant issued in connection with the $500,000 Convertible
                Debenture at purchase price of $0.05 per share. Each of the debentures
                and
                warrants referenced in (i) to (iv) in this footnote (8) contain provisions
                prohibiting the holder from converting or exercising, as the case
                may be,
                such securities into or for any amount which would, after giving
                effect to
                such conversion or exercise, as the case may be, result in the holder
                beneficially owning (as determined in accordance with Rule 13d-3
                promulgated under the Securities Act of 1934, as amended) in excess
                of
                9.99% of the issued and outstanding voting securities of the Company.




30




(11)
            Consists
                of the securities listed in footnotes (1) to (8) above.




**Item
      12. Certain Relationships and Related Transactions, and Director
      Independence**





No
        transactions have occurred since the beginning of the Company’s last fiscal year
        or are proposed with respect to which a director, executive officer, security
        holder owning of record or beneficially more than 5 % of any class of the
        Company’s securities or any member of the immediate families of the foregoing
        persons had or will have a direct or indirect material interest:




**Item
      13. Exhibits and Reports on Form 8-K**





(a)  The
      following exhibits required by Item 601 of Regulation S-B are filed with this
      Registration Statement.


**Exhibit
                  Number**
              
              **Description**2.1*
              
              Certificate
                  of Incorporation and Amendments2.1.1*
              
              Amendment,
                  dated February 15, 2006, of Certificate of Incorporation of
                  Ultitek.2.2*
              
              By-Laws3.1*
              
              Form
                  of Warrant, dated January 2, 2006, to purchase shares of common
                  stock of
                  Ultitek, Ltd. for $0.15 per share.3.2*
              
              Form
                  of Stock Option Agreement, dated January 2, 2006, to purchase shares
                  of
                  common stock of Ultitek, Ltd. for $0.10 per share3.3*
              
              Form
                  of Warrant, dated February 14, 2006, to purchase shares of common
                  stock of
                  Ultitek, Ltd. for $0.02 per share3.4*
              
              7%
                  Convertible Debenture, dated February 14, 2006, for the principal
                  amount
                  of $70,000 issued to Semyon Zlochevsky3.5*
              
              Registration
                  Rights Agreement, dated February 14, 2006, between Ultitek, Ltd.
                  and
                  Semyon Zlochevsky3.6*
              
              7%
                  Convertible Debenture, dated May 3, 2006, for the principal amount
                  of
                  $500,000 issued to Semyon Zlochevsky3.7*
              
              Registration
                  Rights Agreement, dated May 3, 2006, between Ultitek, Ltd. and
                  Semyon
                  Zlochevsky3.8*
              
              Warrant
                  Agreement, dated February 14, 2006, between Ultitek, Ltd. and Semyon
                  Zlochevsky3.9*
              
              Warrant
                  Agreement, dated May 3, 2006, between Ultitek, Ltd. and Semyon
                  Zlochevsky7.1*
              
              Material
                  Foreign Patents7.2*
              
              Patents
                  Translation Certification8.1*
              
              Share
                  Exchange Agreement - Ultitek and
                  TAIS
  23.1
                
                Consent
                    of Meyler & Company, LLC, independent registered public accounting
                    firm.
  31.1
              
              Certification
                  of the Company’s Principal Executive Officer pursuant to Section 302 of
                  Sarbanes Oxley Act of 2002, with respect to the registrant’s Annual Report
                  on Form 10-KSB for the year ended December 31, 2006.31.2
              
              Certification
                  of the Company’s Principal Financial Officer pursuant to Section 302 of
                  Sarbanes Oxley Act of 2002, with respect to the registrant’s Annual Report
                  on Form 10-KSB for the year ended December 31, 2006.32.1
              
              Certification
                  of the Company’s Principal Executive Officer pursuant to 18 U.S.C. Section
                  1350, as adopted pursuant to Section 906 of the Sarbanes Oxley
                  Act of
                  2002.32.2
              
              Certification
                  of the Company’s Principal Financial Officer pursuant to 18 U.S.C. Section
                  1350, as adopted pursuant to Section 906 of the Sarbanes Oxley
                  Act of
                  2002.
  31




*
            Previously
                filed as an exhibit to the Registrant’s Registration Statement on Form
                10-SB, as amended (File No.: 000-51819), filed with the Securities
                and
                Exchange Commission and incorporated by reference herein.





(b)  Reports
      on Form 8-K.  None





**Item
      14. Principal Accountant Fees and Services**





Meyler
      & Company, LLC (“Meyler”) is the Company’s independent registered public
      accounting firm. The Company does not have a separately standing audit
      committee. The Company’s Board of Directors, which consists of one member, Roman
      Price, the Company’s Chief Executive Officer and President, performs the duties
      and responsibilities of the audit committee, including the appointment and
      oversight of the Company’s independent registered public accounting
      firm





***Audit
      Fees***





The
      aggregate fees billed by Meyler for professional services rendered for the
      audit
      of our annual financial statements and review of financial statements included
      in our Form 10-KSB or services that are normally provided in connection with
      statutory and regulatory filings were $33,500 and $30,000 for fiscal year ended
      December 31, 2006 and 2005, respectively.





***Audit-Related
      Fees***





Meyler
      fees billed for assurance and related services related to the audit or review
      of
      the Company’s financial statements were $2,500 and $0 for the fiscal years ended
      December 31, 2006 and 2005, respectively.





***Tax
      Fees***





Meyler
      fees billed for professional services for tax compliance, tax advice, and tax
      planning were $0 for the fiscal years ended December 31, 2006 and 2005.





***All
      Other Fees***





Meyler
      fees billed for other products and services were $0 for the fiscal years ended
      December 31, 2006 and 2005.





32





**SIGNATURES**





Pursuant
      to the requirements of Section 13 or 15(d) 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.




**ULTITEK,
                  LTD.**Date:
                  May 14, 2007
              By:
              /s/ ROMAN
                  PRICERoman
                  PricePresident,
                  Chief Executive Officer and Sole Director




In
      accordance with the Exchange Act, this report has been signed below by the
      following persons on behalf of the registrant and in the capacities and on
      the
      dates indicated.




Date:
                  May 14, 2007
              
              /s/ ROMAN
                  PRICERoman
                  PricePresident,
                  Chief Executive Officer and Sole Director
                (Principal
                  Executive Officer)


Date:
                  May 14, 2007
              
              /s/
                    PAUL FREEDPaul
                    FreedChief
                    Financial Officer
                  (Principal
                    Financial Officer)




33






ULTITEK,
      LTD. AND SUBSIDIARY





CONSOLIDATED
      FINANCIAL STATEMENTS





DECEMBER
      31, 2006 AND 2005




35




Table
      of
      Contents


Report
                  of Independent Registered Public Accounting Firm
              F
                  1Consolidated
                  Balance Sheets
              F
                  2Consolidated
                  Statements of Operations
              F
                  3Consolidated
                  Statements of Cash Flows
              F
                  4Consolidated
                  Statement of Stockholders’ Equity (Deficit)
              F
                  6Notes
                  to Consolidated Financial Statements
              F
                  8
 36


MEYLER
      & COMPANY, LLC


CERTIFIED
      PUBLIC ACCOUNTANTS


ONE
      ARIN
      PARK


1715
      HIGHWAY 35


MIDDLETOWN,
      NJ 07748




Report
      of
      Independent Registered Public Accounting Firm




To
      the
      Board of Directors and


Stockholders
      of Ultitek, Ltd.


Englewood
      Cliffs, NJ




We
      have
      audited the accompanying consolidated balance sheets of Ultitek, Ltd. and
      subsidiary as of December 31, 2006 and 2005, and the related consolidated
      statements of operations, stockholder’s equity (deficit) and cash flows for each
      of the two years in the period then ended. These consolidated financial
      statements are the responsibility of the Company’s management. Our
      responsibility is to express an opinion on these consolidated financial
      statements based on our audits.





We
      conducted our audits in accordance with the standards of the Public Company
      Accounting Oversight Board (United States). Those standards require that we
      plan
      and perform the audit to obtain reasonable assurance about whether the financial
      statements are free of material misstatement. The Company is not required to
      have, nor were we engaged to perform, an audit of its internal control over
      financial reporting. Our audits included consideration of internal control
      over
      financial reporting as a basis for designing audit procedures that are
      appropriate in the circumstance, but not for the purpose of expressing an
      opinion on the effectiveness of the Company’s internal control over financial
      reporting. Accordingly, we express no such opinion. An audit includes examining,
      on a test basis, evidence supporting the amounts and disclosures in the
      financial statements, assessing the accounting principles used and significant
      estimates made by management, as well as evaluating the overall financial
      statement presentation. We believe that our audits provide a reasonable basis
      for our opinion.





In
      our
      opinion, the consolidated financial statements referred to above present fairly,
      in all material respects, the financial position of Ultitek, Ltd. as of December
      31, 2006 and 2005, and the results of its operations and its cash flows for
      each
      of the two years then ended in conformity with accounting principles generally
      accepted in the United States of America.





The
      accompanying consolidated financial statements have been prepared assuming
      that
      the Company will continue as a going concern. As discussed in Note A to the
      consolidated financial statements, the Company has incurred a net loss of
      $7,411,167 in 2006 and had a stockholders’ deficit of $325,731
      at December 31, 2006, and there are existing uncertain conditions the Company
      faces relative to its ability to obtain capital and operate successfully. These
      conditions raise substantial doubt about its ability to continue as a going
      concern. Management’s plans regarding those matters are also described in Note
      A. The financial statements do not include any adjustments that might result
      from the outcome of these uncertainties.






/s/
      Meyler & Company, LLC




Middletown,
      NJ


April
        9,
        2007 (except for Note J as to which the date is May 14, 2007)




F-1





ULTITEK,
      LTD. AND SUBSIDIARY





CONSOLIDATED
      BALANCE SHEETS




December
                31,
            
            December
                31,2006
            
            2005ASSETSCURRENT
                ASSETSCash
            
            $
            6,900
            
            $
            60,324Accounts
                receivable, net of allowance for doubtfulaccounts
                of $44,280 at December 31, 2006
            
            
            380,698
            
            
            237,576Work
                in progress
            
            
            502,152
            
            
            146,792Prepaid
                expenses
            
            
            43,574
            
            
            406,909Total
                Current Assets
            
            
            933,324
            
            
            851,601PROPERTY,
                PLANT AND EQUIPMENT, net ofaccumulated
                depreciation of $62,831 and$37,604,
                respectively
            
            
            141,611
            
            
            45,045OTHER
                ASSETS
            
            
            7,000Total
                Assets
            
            $
            1,081,935
            
            $
            896,646LIABILITIES
                AND STOCKHOLDERS' EQUITY (DEFICIT)CURRENT
                LIABILITIESNote
                payable to individual
            
            $
            30,000
            
            $
            50,000Accounts
                payable
            
            
            353,881
            
            
            433,375Deferred
                revenue
            
            
            564,272Accrued
                salaries and related taxes
            
            
            39,336
            
            
            19,133Accrued
                income taxes
            
            
            
            
            
            30,305Accrued
                expenses-other
            
            
            83,458
            
            
            2,846Total
                Current Liabilities
            
            
            1,070,947
            
            
            535,6597%
                CONVERTIBLE DEBENTURE
            
            
            336,719STOCKHOLDERS'
                EQUITY (DEFICIT)Preferred
                stock, par value $0.001, authorized100,000,000
                shares, none issued and outstandingCommon
                stock, par value $0.0001, authorized1,000,000,000
                shares, issued and outstanding74,277,083
                and 56,190,333, respectively
            
            
            7,428
            
            
            5,619Additional
                paid- in capital
            
            
            8,109,839
            
            
            1,363,931Accumulated
                Deficit
            
            
            (8,437,806
            )
            
            (1,026,639
            )Accumulated
                other comprehensive income (loss)
            
            
            (5,192
            )
            
            18,526Stock
                subscription receivable
            
            
            
            
            
            (450
            )Total
                Stockholders' Equity (Deficit)
            
            
            (325,731
            )
            
            360,987$
            1,081,935
            
            $
            896,646




See
      accompanying notes to financial statements.




F-2


ULTITEK,
      LTD. AND SUBSIDIARY





CONSOLIDATED
      STATEMENTS OF OPERATIONS




For
                the Years EndedDecember
                31,2006
            
            2005Revenues
            
            $
            1,871,988
            
            $
            1,171,797Costs
                and expenses:Cost
                of revenues
            
            
            1,573,100
            
            
            1,156,640Selling,
                general and administrative expenses
            
            
            6,901,035
            
            
            979,592Research
                and development expenses
            
            
            141,462
            
            
            36,500Interest
                Expense
            
            
            630,792
            
            
            -Depreciation
            
            
            25,227
            
            
            15,065Total
                Costs and Expenses
            
            
            9,271,616
            
            
            2,187,797NET
                LOSS BEFORE TAXES
            
            
            (7,399,628
            )
            
            (1,016,000
            )PROVISION
                FOR INCOME TAXES
            
            
            11,539
            
            
            13,012NET
                LOSS
            
            $
            (7,411,167
            )
            $
            (1,029,012
            )NET
                LOSS PER COMMONSHARE
                (Basic and Diluted)
            
            $
            (0.11
            )
            $
            (0.03
            )WEIGHTED
                AVERAGE SHARESOUTSTANDING
            
            
            70,016,658
            
            
            40,102,364




See
      accompanying notes to financial statements.




F-3


ULTITEK,
                LTD. AND SUBSIDIARYCONSOLIDATED
                STATEMENTS OF CASH FLOWSFor
                the Years EndedDecember
                31,2006
            
            2005CASH
                FLOWS FROM OPERATING ACTIVITIESNet
                loss
            
            $
            (7,411,167
            )
            $
            (1,029,012
            )Adjustments
                to reconcile net loss to netCash
                used in operating activitiesDepreciation
            
            
            25,227
            
            
            15,065Stock
                based compensation
            
            
            5,922,651
            
            
            852,050Interest
                expense
            
            
            573,783Amortization
                of discount
            
            
            18,002Amortization
                of prepaid legal fees
            
            
            312,000Changes
                in assets and liabilities:(Increase)
                decrease in accounts receivable
            
            
            (143,122
            )
            
            (172,468
            )(Increase)
                decrease in work in progress
            
            
            (355,360
            )
            
            (146,792
            )(Increase)
                decrease in prepaid expenses
            
            
            51,335
            
            
            (29,372
            )(Increase)
                decrease in other assets
            
            
            (7,000
            )Increase
                (decrease) in accounts payable
            
            
            (79,494
            )
            
            324,946Increase
                (decrease) in deferred revenue
            
            
            564,272Increase
                (decrease) in accrued salariesand
                related taxes
            
            
            20,203
            
            
            16,827Increase
                (decrease) in accrued income taxes
            
            
            (30,305
            )
            
            30,305Increase
                (decrease) in accrued expenses-other
            
            
            80,612
            
            
            2,846Net
                cash used in operating activities
            
            
            (458,363
            )
            
            (135,605
            )CASH
                FLOWS FROM INVESTING ACTIVITIESPurchase
                of office equipment
            
            
            (121,793
            )
            
            (25,107
            )Net
                cash used in investing activities
            
            
            (121,793
            )
            
            (25,107
            )CASH
                FLOWS FROM FINANCING ACTIVITIESProceeds
                of 7% convertible debenture
            
            
            570,000Proceeds
                from note payable to individual
            
            
            30,000
            
            
            50,000Payment
                of note payable to individual
            
            
            (50,000
            )Sale
                of common stock
            
            
            
            
            
            165,850Legal
                costs in connection with private placement
            
            
            
            
            
            (10,000
            )Stock
                subscription receivable
            
            
            450Net
                cash provided by financing activities
            
            
            550,450
            
            
            205,850EFFECT
                OF EXCHANGE RATE ON CASH
            
            
            (23,718
            )
            
            (30,337
            )INCREASE
                (DECREASE) IN CASH
            
            
            (53,424
            )
            
            14,801CASH
                AT BEGINNING OF YEAR
            
            
            60,324
            
            
            45,523CASH
                AT END OF YEAR
            
            $
            6,900
            
            $
            60,324




See
      accompanying notes to financial statements.




F-4


ULTITEK,
      LTD. AND SUBSIDIARY





CONSOLIDATED STATEMENTS OF CASH FLOWS




For
                the Years EndedDecember
                31,2006
            
            2005SUPPLEMENTAL
                CASH FLOW DISCLOSURESCash
                paid during year for interest
            
            $
            3,000Non-cash
                transactions:Issuance
                of 25,000,000 shares of commonstock
                as stock based compensation
            
            
            
            
            $
            425,000Issuance
                of 500,000 shares of commonfor
                legal services
            
            
            
            
            
            360,000Issuance
                of 4,086,750 shares of common stockas
                stock based compensation
            
            
            400,000Issuance
                of 2,000,000 shares of common stockfor
                legal services
            
            
            500,000Issuance
                of 12,000,000 shares of common stockas
                stock based compensation
            
            
            3,000,000Fair
                value of warrants associated with 7%convertible
                debentures
            
            
            251,283Fair
                value of options and warrants issued
            
            
            2,022,651Beneficial
                conversion features related toconvertible
                debentures
            
            
            573,783




See
      accompanying notes to financial statements.




F-5




ULTITEK,
      LTD. AND SUBSIDIARY





CONSOLIDATED
      STATEMENT OF STOCKHOLDERS’ EQUITY (DEFICIT)


December
      31, 2006 and 2005


Additional
              
              Retained
              
              Comprehensive
              
              StockCommon
                    Stock
              
              Paid
                  in
              
              Earnings
              
              Income
              
              SubscriptionShares
              
              Amount
              
              Capital
              
              (Deficit)
              
              (Loss)
              
              Receivable
              
              TotalBalance,
                  December 31, 2004
              
              
              15,000,000
              
              
              1,500
              
              
              
              
              
              2,373
              
              
              17,841
              
              
              
              
              
              21,714Sale
                  of common stock underprivate
                  placement at $0.005per
                  share
              
              
              7,000,000
              
              
              700
              
              
              34,300
              
              
              
              
              
              
              
              
              
              
              
              35,000Sale
                  of common stock underprivate
                  placement at $0.15per
                  share
              
              
              737,000
              
              
              74
              
              
              110,476
              
              
              
              
              
              
              
              
              
              
              
              110,550Sale
                  of common stock underprivate
                  placement at $0.375per
                  share
              
              
              53,333
              
              
              5
              
              
              19,995
              
              
              
              
              
              
              
              
              
              
              
              20,000Issuance
                  of shares to officers andDirectors
                  at $0.017 - founders
              
              
              25,000,000
              
              
              2,500
              
              
              422,500
              
              
              
              
              
              
              
              
              
              
              
              425,000Issuance
                  of shares at $0.017 to founders
              
              
              7,500,000
              
              
              750
              
              
              126,750
              
              
              
              
              
              
              
              
              (450
              )
              
              127,050Issuance
                  of shares for legal servicesat
                  $0.72 per share
              
              
              500,000
              
              
              50
              
              
              359,950
              
              
              
              
              
              
              
              
              
              
              
              360,000Legal
                  fees incurred in connectionwith
                  private placements
              
              
              
              
              
              
              
              
              (10,000
              )
              
              
              
              
              
              
              
              
              
              
              (10,000
              )Issuance
                  of common stock underconsulting
                  agreement to formerofficer
                  of TAIS
              
              
              400,000
              
              
              40
              
              
              299,960
              
              
              
              
              
              
              
              
              
              
              
              300,000Net
                  loss for the year endedDecember
                  31, 2005
              
              
              
              
              
              
              
              
              
              
              
              (1,029,012
              )
              
              
              
              
              
              
              
              (1,029,012
              )Change
                  in comprehensive income(loss)
                  for the year ended December 31, 2005
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              685
              
              
              
              
              
              685Balance,
                  December 31, 2005
              
              
              56,190,333
              
              
              5,619
              
              
              1,363,931
              
              
              (1,026,639
              )
              
              18,526
              
              
              (450
              )
              
              360,987




See
      accompanying notes to financial statements.




F-6


ULTITEK,
      LTD. AND SUBSIDIARY





CONSOLIDATED
      STATEMENT OF STOCKHOLDERS’ EQUITY (DEFICIT) (Continued)


December
      31, 2006 and 2005




Additional
              
              Retained
              
              Comprehensive
              
              StockCommon
                  Stock
              
              Paid
                  in
              
              Earnings
              
              Income
              
              SubscriptionShares
              
              Amount
              
              Capital
              
              (Deficit)
              
              (Loss)
              
              Receivable
              
              TotalBalance,
                  December 31, 2005
              
              
              56,190,333
              
              
              5,619
              
              
              1,363,931
              
              
              (1,026,639
              )
              
              18,526
              
              
              (450
              )
              
              360,987Issuance
                  of common stock to Officers at $0.25 per share
              
              
              12,000,000
              
              
              1,200
              
              
              2,998,800
              
              
              
              
              
              
              
              
              
              
              
              3,000,000Issuance
                  of common stock for legal services at $0.25 per share
              
              
              2,000,000
              
              
              200
              
              
              499,800
              
              
              
              
              
              
              
              
              
              
              
              500,000Issuance
                  of options and warrants
              
              
              
              
              
              
              
              
              2,022,651
              
              
              
              
              
              
              
              
              
              
              
              2,022,651Fair
                  value of warrants issued with convertible debenture
              
              
              
              
              
              
              
              
              251,283
              
              
              
              
              
              
              
              
              
              
              
              251,283Beneficial
                  conversion feature associated with convertible debentures
              
              
              
              
              
              
              
              
              573,783
              
              
              
              
              
              
              
              
              
              
              
              573,783Issuance
                  of common stock under consulting agreement to former officer of
                  TAIS
              
              
              4,086,750
              
              
              409
              
              
              399,591
              
              
              
              
              
              
              
              
              
              
              
              400,000Subscription
                  receivable receipt
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              450
              
              
              450Net
                  loss for year ended December 31, 2006
              
              
              
              
              
              
              
              
              
              
              
              (7,411,167
              )
              
              
              
              
              
              
              
              (7,411,167
              )Change
                  in comprehensive income (loss)for the year ended December 31,
                  2006
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              (23,718
              )
              
              
              
              
              (23,718
              )Balance,
                  December 31, 2006
              
              
              74,277,083
              
              $
              7,428
              
              $
              8,109,839
              
              $
              (8,437,806
              )
              $
              (5,192
              )
              
              -
              
              $
              (325,731
              )




See
      accompanying notes to financial statements.




F-7


ULTITEK,
        LTD. AND SUBSIDIARY
 
 NOTES
        TO
        FINANCIAL STATEMENTS
 December
        31, 2006


NOTE
      A -
      NATURE OF BUSINESS





Ultitek,
      Ltd. (the “Company”) incorporated on March 11, 2006, is a Nevada corporation
      working through its wholly owned Russian subsidiary which owns and operates
      a
      computerized reservation system (“CRS”), a global distribution system (“GDS”)
      and operation systems for the airlines, to be marketed worldwide.





Reverse
      Merger





On
      March
      11, 2005, the Company entered into a share exchange agreement with Transport
      Automation Information Systems (TAIS) to exchange 15,000,000 shares of the
      Company’s common stock for all of the issued and outstanding shares of TAIS. In
      connection with the merger, TAIS became a wholly owned subsidiary of the
      Company. Prior to the merger, the Company was a non-operating “shell”
corporation. For financial statement purposes, the merger has been reflected
      in
      the financial statements as though it occurred on January 1, 2004. The
      historical statements prior to the date of merger are those of TAIS. Since
      the
      merger is a recapitalization and not a business combination, pro-forma
      information is not presented.





NOTE
      B -
      SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES





Use
      of
      Estimates





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





Cash
      and Cash Equivalents





The
      Company considers all highly-liquid investments with an original maturity of
      three months or less to be cash equivalents. There are no cash equivalents
      at
      December 31, 2006 and December 31, 2005.





Property,
      Plant and Equipment and Related Depreciation





Property,
      plant and equipment consists of office equipment and leasehold improvements.
      Property, plant and equipment is stated at cost, and is depreciated using the
      straight line method over the estimated useful lives of the respective assets
      (five years). Routine maintenance, repairs and replacement costs are expensed
      as
      incurred and improvements that extend the useful life of the assets are
      capitalized. When office equipment is sold or otherwise disposed of, the cost
      and related accumulated depreciation are eliminated from the accounts and any
      resulting gain or loss is recognized in operations.





Fair
      Values of Financial Instruments





The
      Company uses financial instruments in the normal course of business. The
      carrying values of accounts receivable, accounts payable, accrued expenses
      and
      other current liabilities approximate their fair value due to the short-term
      maturities of these assets and liabilities.





Income
      Taxes





The
      Company accounts for income taxes in accordance with Statement of Financial
      Accounting Standards No. 109, “Accounting for Income Taxes” (“SFAS 109”). SFAS
      109 requires the determination of deferred tax assets and liabilities based
      on
      the differences between the financial statement and income tax bases of assets
      and liabilities, using estimated tax rates in effect for the year in which
      the
      differences are expected to reverse. The measurement of a deferred tax asset
      is
      adjusted by a valuation allowance, if necessary, to recognize tax benefits
      only
      to the extent that, based on available evidence, it is more likely than not
      that
      they will be realized. In determining the valuation allowance, the Company
      considers factors such as the reversal of deferred income tax liabilities,
      projected taxable





F-8


ULTITEK,
        LTD. AND SUBSIDIARY
 
 NOTES
        TO
        FINANCIAL STATEMENTS
 December
        31, 2006


NOTE
      B -
      SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)





Income
      Taxes (Continued)





income
      and the character of income tax assets and tax planning strategies. A change
      to
      these factors could impact the estimated valuation allowance and income tax
      expense.





Net
      Income (Loss) Per Common Share





The
      Company computes per share amounts in accordance with Statement of Financial
      Accounting Standards (“SFAS”) No. 128, “Earnings per Share”. SFAS No. 128
      requires presentation of basic and diluted EPS. Basic EPS is computed by
      dividing the income (loss) available to common stockholders by the
      weighted-average number of common shares outstanding for the period. Diluted
      EPS
      is based on the weighted-average number of shares of common stock and common
      stock equivalents outstanding during the period. A fully diluted calculation
      was
      not presented since the results would be anti-dilutive.





Consolidated
      Financial Statements





The
      consolidated financial statements include the Company and its wholly owned
      subsidiary. All significant intercompany transactions and balances have been
      eliminated in consolidation.





Work
      in Progress





Work
      in
      progress represents consulting projects billable in accordance with the terms
      of
      a contract at specified stages of completion and consists of accumulated costs
      of materials and time charges not yet billed.





Stock-Based
      Compensation





The
      Company accounts for stock based compensation using the fair value
      method.





The
      Company accounts for employee stock based compensation and stock issued for
      services using the fair value method. In accordance with Emerging Issues Task
      Force (“EITF”) 96-18, the measurement date of shares issued for services is the
      date at which the counterparty’s performance is complete.





For
      services in which the Company issues its common stock, the Company utilizes
      the
      fair value of its common stock at month-end and accrues the value of shares
      to
      be issued in Stockholders’ Equity, even if the shares have not yet been issued.
      Accordingly, earnings per share computations are adjusted.





Software
      Costs





Software
      development costs are accounted for in accordance with SFAS No. 86 “Accounting
      for the Costs of Computers, Software to be Sold, Leased, or Otherwise Marketed”
and Statement of Position (“SOP”) No. 98-1 “Accounting for the Costs of Computer
      Software Developed or Obtained for Internal Use”, issued by the American
      Institute of Certified Public Accountants (“AICPA”.)





Revenue
      Recognition





The
      Company derives revenue from the following sources: (1) software, which includes
      the sale of software license’s, and (2) services, which includes consulting and
      maintenance.





The
      Company records revenue pursuant to SOP No. 97-2, “Software Revenue
      Recognition”, issued by the AICPA.





F-9


ULTITEK,
        LTD. AND SUBSIDIARY
 
 NOTES
        TO
        FINANCIAL STATEMENTS
 December
        31, 2006





NOTE
      B -
      SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)





Revenue
      Recognition (Continued)





For
      software license arrangements that do not require significant modification
      or
      customization, the Company recognizes new software license revenue when: (1)
      we
      enter into a legally binding arrangement with a customer for the license of
      software; (2) we deliver the products; (3) customer payment is deemed fixed
      and
      determinable and free of contingencies or significant uncertainties; and (4)
      collection is probable. Substantially all of our new software license revenues
      are recognized in this manner.





Revenues
      from consulting services are generally recognized as the services are
      performed.





In
      certain consulting contracts, modifications to software may be accounted for
      based upon contract accounting using the completed contract method. Contract
      accounting is applied to any arrangement: (1) that includes milestones or
      customer specific acceptance criteria that may effect collection of software
      license fees; (2) where services include significant modification or
      customization of software; or (3) where software license payment is tied to
      the
      performance of consulting services.





Foreign
      Currency Translation





The
      Company considers the Russian ruble to be its functional currency. Assets and
      liabilities were translated into U.S. dollars at the year end exchange rates.
      Statement of Operations amounts were translated using the average rate during
      the year. Gains and losses resulting from translating foreign currency financial
      statements were accumulated in other comprehensive income (loss), a separate
      component of stockholder’s equity (deficit).





Convertible
      Debentures





The
      Company accounts for its convertible debentures with detachable warrants in
      accordance with Accounting Principles Board (“APB”) Opinion 14, “Accounting for
      Convertible Debt and Debt Issued with Stock Purchase Warrants (as amended)”,
      which requires the portion of the proceeds of debt securities issued with
      detachable warrants which is allocable to the warrants to be accounted for
      as
      Paid-in capital. The allocation is based upon the relative fair value
      method.





Beneficial
      Conversion Features





The
      Company follows EITF 00-27, “Application of Issue No. 98-5 to Certain
      Convertible Instruments”, and EITF 98-5, “Accounting for Convertible Securities
      with Beneficial Conversion Features or Contingently Adjustable Conversion
      Ratios” in accounting for beneficial conversion features associated with its
      convertible debentures. A beneficial conversion feature is computed as the
      difference between the effective conversion price and the fair value of the
      stock at the commitment date multiplied
      by the number of shares which the security is convertible. The effective
      conversion price is determined by first allocating the portion of the proceeds
      to the detachable warrants using the relative fair value method.





Research
      and Development





Research
      and development expenses are expensed as incurred.





Allowance
      for Doubtful Accounts





The
      allowance for doubtful accounts represents management’s estimate of the amount
      of probable credit losses in accounts receivable, based upon experience and
      a
      review of past due balances.





F-10


ULTITEK,
        LTD. AND SUBSIDIARY
 
 NOTES
        TO
        FINANCIAL STATEMENTS
 December
        31, 2006





NOTE
      B -
      SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)





Going
      Concern





As
      shown
      in the accompanying financial statements, the Company has incurred a net loss
      of
      $7,411,167 in 2006 and had a stockholders’ deficit of $325,731 at December 31,
      2006. Management’s plans include the raising of capital through the equity
      markets to fund future operations, seeking additional acquisitions, and
      generating of revenue through its business. Additionally, even if the Company
      does raise sufficient capital to support its operating expenses and generate
      adequate revenues, there can be no assurances that the revenue will be
      sufficient to enable it to develop business to a level where it will generate
      profits and cash flows from operations. These matters raise substantial doubt
      about the Company’s ability to continue as a going concern. However, the
      accompanying financial statements have been prepared on a going concern basis,
      which contemplates the realization of assets and satisfaction of liabilities
      in
      the normal course of business. These financial statements do not include any
      adjustments relating to the recovery of the recorded assets or the
      classification of the liabilities that might be necessary should the Company
      be
      unable to continue as a going concern.





Recent
      Accounting Pronouncements




In
      June 2006, the Financial Accounting Standards Board (“FASB”) issued
      Interpretation 48, “Accounting for Income Tax Uncertainties” (“FIN 48”). FIN 48
      defines the threshold for recognizing the benefits of tax return positions
      in
      the financial statements as “more-likely-than-not” to be sustained by the taxing
      authority. Recently issued literature also provides guidance on the
      derecognition, measurement and classification of income tax uncertainties,
      along
      with any related interest and penalties. FIN 48 also includes guidance
      concerning accounting for income tax uncertainties in interim periods and
      increases the level of disclosures associated with any recorded income tax
      uncertainties. FIN 48 is effective for fiscal years beginning after
      December 15, 2006. The Company expects to adopt the provisions of FIN 48
      beginning in the first quarter of 2007. The Company is currently in the process
      of determining the impact, if any, of adopting the provisions of FIN 48 on
      its
      financial position, results of operations and liquidity.




In
      September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements,” which
      defines fair value, establishes a framework for measuring fair value under
      other
      accounting pronouncements that permit or require fair value measurements,
      changes the methods used to measure fair value and expands disclosures about
      fair value measurements. In particular, disclosures are required to provide
      information on the extent to which fair value is used to measure assets and
      liabilities; the inputs used to develop measurements; and the effect of certain
      of the measurements on earnings (or changes in net assets). SFAS No. 157 is
      effective for fiscal years beginning after November 15, 2007 and interim periods
      within those fiscal years. Early adoption, as of the beginning of an entity’s
      fiscal year, is also permitted, provided interim financial statements have
      not
      yet been issued. The Company expects to adopt the provisions of FIN 48 beginning
      in the first quarter of 2008. The Company is currently evaluating the potential
      impact, if any, that the adoption of SFAS No. 157 will have on its consolidated
      financial statements.




In
      September 2006, the Securities and Exchange Commission issued Staff Accounting
      Bulletin No. 108, “Considering the Effects of Prior Year Misstatements when
      Quantifying Misstatements in Current Year Financial Statements” (“SAB No. 108”).
      SAB No. 108 provides guidance on how prior year misstatements should be
      considered when quantifying misstatements in the current year financial
      statements. SAB No. 108 requires registrants to quantify misstatements using
      both a balance sheet and an income statement approach and evaluate whether
      either approach results in quantifying a misstatement that, when all relevant
      quantitative and qualitative factors are considered, is material. SAB No. 108
      does not change the guidance in SAB No. 99, “Materiality,” when evaluating the
      materiality of misstatements. SAB No. 108 is effective for fiscal years ending
      after November 15, 2006. Upon initial application, SAB No. 108 permits a
      one-time cumulative effect adjustment to beginning retained earnings. The
      Company adopted SAB No. 108 for the fiscal year ended December 31, 2006.
      Adoption of SAB No. 108 did not have a material impact on the consolidated
      financial statements.





In
      February 2007, the FASB issued SFAS No. 159, *The
      Fair Value Option for Financial Assets and Financial Liabilities* (“SFAS 159”).
      SFAS 159 allows entities to measure at fair value many financial
      instruments and certain other
      assets and liabilities that are not otherwise required to be measured at fair
      value. SFAS 159 is effective for fiscal years beginning after
      November 15, 2007. We have not determined what impact, if any, that
      adoption will have on our results of operations, cash flows or financial
      position.





F-11


ULTITEK,
        LTD. AND SUBSIDIARY
 
 NOTES
        TO
        FINANCIAL STATEMENTS
 December
        31, 2006


NOTE
      C -
      PROPERTY, PLANT AND EQUIPMENT




Property,
      Plant and Equipment is comprised of the following:




December
                31,2006
            
            2005Office
                equipment, primarily computers
            
            $
            100,844
            
            $
            82,649Leasehold
                Improvements
            
            
            103,598204,442
            
            
            82,649Less
                accumulated depreciation
            
            
            (62,831
            )
            
            (37,604
            )$
            141,611
            
            $
            45,045





NOTE
      D -
      7% CONVERTIBLE DEBENTURES





On
      February 14, 2006, the Company borrowed $70,000 under a 7% Convertible Debenture
      due 60 months from the date of execution. The Debenture is convertible at the
      holder’s option at $0.02 per share. Additionally, the Company issued a five year
      warrant to the holder to purchase 3,500,000 shares at $0.02 per share. The
      warrant is protected by anti-dilution provisions. The Company has separated
      the
      warrant from the Convertible Debenture and recorded the relative fair value
      of
      the warrant as a reduction of the Convertible Debenture and an increase in
      Stockholders’ Equity in accordance with the provisions of APB 14. The
      unamortized discount of $29,367 is being amortized over 7 years at an implied
      compounded annual interest rate of 18.389%. The relative fair value of the
      warrant associated with the convertible debenture was calculated utilizing
      the
      Black-Scholes option pricing model.





The
      relative fair value of warrants granted was determined to be $0.0398. The
      relative fair value was estimated using the Black-Scholes option pricing model
      based on the weighted average assumptions of:


Risk-free
                  rate
              4.69%Volatility
              89%Expected
                  life
              2.5
                  yearsDividend
                  yield
              0%


The
      Company also computed a beneficial conversion feature of $151,867. This feature
      was determined by subtracting the effective conversion price of $0.012 from
      $0.055, which was the fair value of the Company’s stock at February 14, 2006,
      multiplied by the 3,500,000 shares which the debenture is convertible. The
      entire beneficial conversion is included in Interest Expense as the debenture
      is
      immediately convertible into common stock.





On
      May 3,
      2006, the Company issued a 7% $500,000 Convertible Debenture due 2013. The
      Debenture bears interest at the rate of 7% and is payable at the holder’s option
      in cash and or stock. The Debenture is convertible into the Company’s stock at
      $0.05 per share. Additionally, the Company issued a 7 year warrant for
      10,000,000 shares which is immediately exercisable. The conversion privileges
      are protected by anti-dilution provisions. The Debenture is
      unsecured.





The
      Company has separated the warrant from the Convertible Debenture and recorded
      the relative fair value of the warrant as a reduction of the Convertible
      Debenture and an increase in Stockholders’ Equity in accordance with the
      Provisions of APB 14. The unamortized discount of $221,916 is being amortized
      over 7 years at an implied compounded
      annual interest rate of 8.467%. The relative fair value of the warrant
      associated with the convertible debenture was calculated utilizing the
      Black-Scholes option pricing model.




F-12


ULTITEK,
        LTD. AND SUBSIDIARY
 
 NOTES
        TO
        FINANCIAL STATEMENTS
 December
        31, 2006


NOTE
      D -
      7% CONVERTIBLE DEBENTURES (Continued)








The
      relative fair value of warrant was determined to be $0.0559. The relative fair
      value was estimated using the Black-Scholes option pricing model based on the
      weighted average assumptions of:


Risk-free
                  rate
              5.01%Volatility
              139%Expected
                  life
              5
                  yearsDividend
                  yield
              0%




The
      Company computed a beneficial conversion feature of $421,916. This feature
      was
      determined by subtracting the effective conversion price of $0.028 from $0.070,
      which was the fair value of the Company’s stock at May 3, 2006, multiplied by
      the 10,000,000 shares which the debenture is convertible. The entire beneficial
      conversion is included in Interest Expense as the debenture is immediately
      convertible into common stock.





NOTE
      E -
      NOTE PAYABLE TO INDIVIDUAL





On
      July
      15, 2005, the Company borrowed $50,000 from an individual who is directly
      related to the President of the Company. The note bears interest at the rate
      of
      6% per annum, is unsecured and was repaid in July 2006.





On
      December 26, 2006, the Company borrowed $30,000 from an individual who is
      directly related to the President of the Company. The note bears interest at
      the
      rate of 6% per annum, is unsecured and is due December 26, 2007





NOTE
      F -
      STOCKHOLDERS’ EQUITY (DEFICIT)





In
      connection with the share exchange agreement dated March 11, 2005, the Company
      issued 15,000,000 shares at par to acquire Transport Automation Information
      Systems (TAIS).





On
      May
      19, 2005, the Company, under a private placement agreement, issued 7,000,000
      shares of its common stock at $0.005 per share.





On
      June
      2, 2005, the Company issued a total of 32,500,000 shares of stock of officers
      and directors of the Company at $0.017. These shares represent founder’s shares
      of stock which were authorized by the Board of Directors on March 11, 2005
      upon
      formation of the Company. Accordingly, Stock Based Compensation was recorded
      aggregating $425,000.





Between
      August 1, 2005 and November 30, 2005, the Company, under a private placement
      agreement, issued 737,000 shares of its common stock at $0.15 per
      share.





On
      March
      17, 2005, the Company, under a private placement agreement, issued 53,333 of
      its
      common stock at $0.375 per share.





In
      connection with legal services, the Company issued 500,000 shares of its common
      stock on November 15, 2005 at $0.72 in exchange for future legal services. The
      fair
      value of the common stock issued was utilized in measuring stock based
      compensation and
      $360,000 was recorded in prepaid expenses since the service had not yet been
      performed.





The
      prepaid legal fees are being amortized over the period that the services are
      being performed. For the year ended December 31, 2006, $312,000 of the prepaid
      legal fees has been amortized.





F-13


ULTITEK,
        LTD. AND SUBSIDIARY
 
 NOTES
        TO
        FINANCIAL STATEMENTS
 December
        31, 2006


NOTE
      F -
      STOCKHOLDERS’ EQUITY (DEFICIT) (Continued)





On
      January 31, 2006, the Company issued 12,000,000 shares of its common stock
      to
      officers at $0.25 per share for compensation services performed. Accordingly,
      Stock Based Compensation was recorded aggregating $3,000,000.





In
      connection with legal services, the company issued 2,000,000 shares of its
      common stock on January 31, 2006 at $0.25 per share for services performed. The
      fair
      value of the common stock issued was utilized in measuring stock based
      compensation as this amount was deemed more reliably measurable than the fair
      value of the consideration received.





On
      January 2, 2006, the Company signed a management consulting agreement with
      the
      four former owners of TAIS for $100,000 a year each. During the period March
      15,
      2005 to March 15, 2006, each employee will receive 133,333 shares of the
      Company’s common stock. During the period March 15, 2006 to March 15, 2010, the
      annual consulting fee remains at $100,000 and is payable monthly in common
      stock
      of the Company or cash when the Company has sufficient cash to meet the
      commitments. Should the Company not be trading on the Over the Counter Bulletin
      Board, a discount of 25% is applicable to the trading price of the
      stock.





At
      December 31, 2005, the Company recorded $300,000 in consulting fees and has
      recorded 400,000 shares of common stock as issued and outstanding. For the
      year
      ended December 31, 2006, the Company recorded $400,000 in consulting fees and
      has included in shares outstanding an additional 4,086,750 shares of common
      stock. To date, the shares have not been issued.





NOTE
      G -
      PROVISION FOR INCOME TAXES





The
      principal types of differences, which are measured at current tax rates, are
      net
      operating loss carry forwards. At December 31, 2006 and 2005, these differences
      resulted in a deferred tax asset of approximately $408,000 and $42,000,
      respectively. SFAS No. 109 requires the establishment of a valuation allowance
      to reflect the likelihood of realization of deferred tax assets. Since
      realization is not assured, the Company has recorded a valuation allowance
      for
      the entire deferred tax asset, and the accompanying consolidated financial
      statements do not reflect any net asset for deferred taxes at December 31,
      2006
      and, 2005.





The
      Company’s net operating loss carry forwards amounted to approximately $1,634,000
      and $168,000 at December 31, 2006 and 2005 respectively, which will expire
      through 2026.





The
      Company’s Russian subsidiary has an annual tax provision. The Russian tax rate
      is 24%. The difference between the effective tax rate per the statements of
      operations and the 24% Russian tax rate is due to (A) the disallowance of
      certain expenditures in Russia which are paid from surplus and (B) the U.S.
      losses of the parent company.





NOTE
      H -
      COMMITMENTS





Consulting
      Fees





On
      January 2, 2006, the Company signed a management consulting agreement with
      the
      four former owners of TAIS for $100,000 a year each. During the period March
      15,
      2005 to March 15, 2006, each employee will receive 133,333 shares of the
      Company’s common stock. During the period March 15, 2006 to March 15, 2010, the
      annual consulting fee remains at $100,000 and is payable monthly in common
      stock
      of the Company or cash when the Company has sufficient cash to meet the
      commitments. Should the Company not be trading on the Over the Counter Bulletin
      Board, a discount of 25% is applicable to the trading price of the
      stock.





F-14




ULTITEK,
        LTD. AND SUBSIDIARY
 
 NOTES
        TO
        FINANCIAL STATEMENTS
 December
        31, 2006





NOTE
      H -
      COMMITMENTS (Continued)





Leased
      Facilities





Both
      the
      Company’s office facility in the U.S. and its facility in Russia are leased on
      an annual renewal basis. Rent expense for the years ended December 31, 2006
      and
      2005 was $134,390 and $108,000, respectively.





The
      lease
      on the Russian facility expires on August 31, 2007. The minimum lease commitment
      is approximately $66,000 on this facility. On January 16, 2007, the Company
      renewed its lease on the U.S. facility. The minimum lease commitment for the
      period March 1, 2007 to February 28, 2008 is $13,475.





NOTE
      I-
      STOCK OPTION AND WARRANT AGREEMENTS





Between
      January 2, 2006 and February 14, 2006, the Company issued 1,000,000 options
      and
      97,023,333 warrants. All 1,000,000 options and 77,753,333 warrants were issued
      to employees and 19,270,000 warrants were issued to consultants. These options
      and warrants are exercisable immediately and expire 5 years from the date of
      issuance and requires physical settlement by the Company. The following is
      a
      summary of the Company’s options and warrants:




Weighted
              
              WeightedOptions
              
              Average
              
              Warrants
              
              AverageOutstanding
              
              Exercise
                  price
              
              Outstanding
              
              Exercise
                  PriceBalance,
                  December 31, 2005Granted
              
              
              1,000,000
              
              $
              0.10
              
              
              97,023,333
              
              $
              0.02ExercisedCancelledBalance,
                  December 31, 2006
              
              
              1,000,000
              
              $
              0.10
              
              
              97,023,333
              
              $
              0.02


The
      average fair value of options granted was $0.18 and the average fair value
      of
      warrants granted was $0.02. The fair value was estimated using the Black-Scholes
      option pricing model based on the weighted average assumptions of:




Options
            
            WarrantsRisk-free
                rate
            
            4.32%
            
            4.32%
                - 4.65%Volatility
            
            75%
            
            75%
                - 86%Expected
                life
            
            2.5
                years
            
            2.5
                - 4 yearsDividend
                yield
            
            0%
            
            0%





The
      following summarizes stock options and warrants outstanding and exercisable
      at
      December 31, 2006:


Average
              
              
              
              
              
              AverageExercise
              
              
              
              Average
              
              Exercise
              
              
              
              Average
              
              ExercisePrice
              
              Options
              
              Life
              
              Price
              
              Warrants
              
              Life
              
              Price$
              0.02
              
              
              
              
              
              
              
              
              
              
              
              96,853,333
              
              
              4.18
              
              $
              0.02$
              0.10
              
              
              1,000,000
              
              
              4.06
              
              $
              0.10$
              0.15
              
              
              
              
              
              
              
              
              
              
              
              170,000
              
              
              4.06
              
              $
              0.15





During
      the year ended December 31, 2006, the Company recognized $2,022,651 in expense
      related to the issuance of these options and warrants which is classified as
      Additional paid-in Capital.





NOTE
      J -
      SUBSEQUENT EVENTS





On
      March
      23, 2007, the Company filed an S-8 for 7,000,000 shares of common stock with
      the
      SEC with a maximum offering price of $0.10.





F-15
 ULTITEK,
            LTD. AND SUBSIDIARY
 
 NOTES
            TO
            FINANCIAL STATEMENTS
 December
            31, 2006


NOTE
      J -
      SUBSEQUENT EVENTS (Continued)





On
        April
        5, 2007, the Company approved the issuance of 3,000,000 restricted shares
        of
        stock to consultants of the Company at $0.11 per share and 500,000 shares
        of S-8
        stock at $0.10.





On
        April
        24, 2007, the Company approved the issuance of 1,041,600 restricted shares
        of
        stock at $0.14 and 100,000 shares of S-8 stock at $0.10 to consultants of
        the
        Company.





F-16


**EXHIBIT
      INDEX**





23.1
              Consent
                  of Meyler & Company, LLC, independent registered public accountingfirm.




31.1
              Certification
                  of the Company’s Principal Executive Officer pursuant to Section 302 of
                  Sarbanes Oxley Act of 2002, with respect to the registrant’s Annual Report
                  on Form 10-KSB for the year ended December 31,
                  2006.




31.2
              Certification
                  of the Company’s Principal Financial Officer pursuant to Section 302 of
                  Sarbanes Oxley Act of 2002, with respect to the registrant’s Annual Report
                  on Form 10-KSB for the year ended December 31,
                  2006.




32.1
              Certification
                  of the Company’s Principal Executive Officer pursuant to 18 U.S.C. Section
                  1350, as adopted pursuant to Section 906 of the Sarbanes Oxley
                  Act of
                  2002.




32.2
              Certification
                  of the Company’s Principal Financial Officer pursuant to 18 U.S.C. Section
                  1350, as adopted pursuant to Section 906 of the Sarbanes Oxley
                  Act of
                  2002.