**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


**Washington,
      D.C. 20549**





**FORM
      10-KSB**





(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, 2007**





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, Englewood Cliffs, 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: $2,365,643.





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
      $987,567 based on an aggregate amount of 24,087,000 shares of non-affiliate
      Common Stock at a sales price of $0.041 on March 31, 2008.





State
      the
      number shares outstanding of each of the issuer’s classes of common equity, as
      of the latest practicable date: As of April 15, 2008, there were 139,381,933
      shares of common stock issued and outstanding.





**DOCUMENTS
      INCORPORATED BY REFERENCE:**





None





**TABLE
      OF CONTENTS**




**PART
                  I**Item 1.
              
              Description
                  of Business
              1Item 2.
              
              Description
                  of Property
              10Item 3.
              
              Legal
                  Proceedings
              10Item 4.
              
              Submission
                  of Matters to a Vote of Security Holders
              10**PART
                  II**Item 5.
              
              Market
                  for Common Equity and Related Stockholder Matters
              10Item 6.
              
              Management’s
                  Discussion and Analysis or Plan of Operation
              16Item 7.
              
              Financial
                  Statements
              24Item 8.
              
              Changes
                  in and Disagreements with Accountants on Accounting and Financial
                  Disclosure
              24Item 8AT
              
              Controls
                  and Procedures
              24Item 8B
              
              Other
                  Information
              25**PART
                  III**Item 9.
              
              Directors,
                  Executive Officers, Promoters and Control Persons and Corporate
                  Governance; Compliance with Section 16(a) of the Exchange
                  Act
              25Item 10.
              
              Executive
                  Compensation
              27Item 11.
              
              Security
                  Ownership of Certain Beneficial Owners and Management and Related
                  Stockholder Matters
              30Item 12.
              
              Certain
                  Relationships and Related Transactions and Director
                  Independence
              31Item 13.
              
              Exhibits
                  and Reports on Form 8-K
              31Item 14.
              
              Principal
                  Accountant Fees and Services
              32Signatures
              
              
              34





**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*** ******





Since
      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 (now FINRA)
      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.





***Our
      Principal Products and Services***





We
      operate a completely independent reservation, global distribution, and airline
      operation system. Traditionally, computer reservation systems and global travel
      distribution systems are partly or completely owned and hosted by a few large
      airlines. The remaining airlines are guests on these systems and 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. Our product provides these
      airlines with a state-of-the-art system that is efficient, less costly and
      allows them to maintain
      their own proprietary information.


1


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 seat inventory for airlines and to assist travel agencies in booking
      seats and other travel. The CRS provides a wide range of travel agency solutions
      with an easy graphical interface 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 its operations.





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





The
      ULTITEK System also includes the following:





·
            a
                complete accounting system, including revenue management, yield
                management, accounts payable, accountsreceivable,
                general ledger and cost accounting;


·
            inventory
                control for the number ofseats available on a flight;


·
            inventory
                control for spare parts and other miscellaneous components;


·
            maintenance;


·
            fixed
                assets;


·
            purchasing;


·
            airport
                departure control (including control of boarding passes);


·
            inter-airline
                clearing facility with electronic funds transfer;


·
            aircraft
                dispatching;


·
            crew
                management/scheduling;


·
            airplane
                equipment inventory;


·
            miscellaneous
                supplies and logistics;


·
            inter-city
                long haul bus station/scheduling/reservation system;


·
            reservations
                via Internet;


·
            theater
                tickets sales;


·
            multilingual
                features;


·
            access
                to hotel reservations;


·
            access
                to car rental reservations;


·
            access
                to other tour operators;


·
            frequent
                flyer programs; and


·
            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 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.


2


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.





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 System 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.


***Recent
        Events***
 
 On
        November 9, 2007, the Company entered into a non-exclusive licensing agreement
        with the Ukrainian State Scientific Corporation “Kiev Institute of Automation”
(“KIA”), to license to KIA its proprietary technology and to furnish to KIA a
        national Ukrainian reservation system. The term of the licensing agreement
        is
        five years, and is subject to automatic renewal. This agreement is attached
        to
        this annual statement as Exhibit 10.1.


***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 16 reservation
      centers throughout the former Soviet Union servicing 62 airlines and over 5,000
      travel agents. We also have 38 direct licenses of our software with various
      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 anywhere from 1 to 5 years, and
      we
      sell upgrades of our software to the reservation centers, airports, theaters
      and
      our other customers.





As
      of
      December 31, 2007, we had a net loss of $4,113,167 and a stockholders’ deficit
      of $1,176,406, 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, 2007, compared
      to
      December 31, 2006 and (iii) our statement of operations for the audited year
      ended December 31, 2007 compared to December 31, 2006. 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.


3
  **At**
                  **December 31,****2007**
                  **(Audited)**
                
                **2006**
                  **(Audited)*****Balance
                    Sheet:***Cash
                
                $
                1,551
                
                $
                6,900Total
                    Assets
                
                $
                981,658
                
                $
                1,081,935Total
                    Liabilities
                
                $
                2,158,064
                
                $
                1,407,666Total
                    Stockholders’ Deficit
                
                $
                (1,176,406
                )
                $
                (325,731
                )


**For the Fiscal Year Ended**
                **December 31,****2007**
                **(Audited)**
              
              **2006**
                **(Audited)*****Statement
                  of Operations***:Revenue
              
              $
              2,365,643
              
              $
              1,871,988Net
                  Loss
              
              $
              (4,113,167
              )
              $
              (7,411,167
              )Net
                  Loss Per Share of Common Stock
              
              $
              (0.05
              )
              $
              (0.11
              )





***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 dissolved,
      a
      company called TAIS (now our wholly-owned subsidiary) 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 24 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.





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.


4


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 as compared
      to
      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
      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.


5


(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.


6


***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 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;




(ii)
            our
                own secure environment;


7


(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.


8


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 38 licensing agreements with 16 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
      March 31, 2008, 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. Of our full-time employees, 57 are located in Moscow
      and 3
      are located in the United States. 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.


9


***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.





**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 January 16, 2007 and terminates on March 1, 2009, 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. 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 (now FINRA)
      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.


10


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 (now FINRA) 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, 2007, the Company had 87,381,933 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, 2007, there were approximately 72 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 OTCBB 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:


11





**Period**
            
            **Low Bid**
            
            **High Bid****2008**First
                Quarter
            
            $
            0.02
            
            $
            0.28**2007**Fourth
                Quarter
            
            $
            0.07
            
            $
            0.12Third
                Quarter
            
            $
            0.07
            
            $
            0.30Second
                Quarter
            
            $
            0.05
            
            $
            0.18First
                Quarter
            
            $
            0.09
            
            $
            0.19**2006**Fourth
                Quarter
            
            $
            0.07
            
            $
            0.30Third
                Quarter
            
            $
            0.06
            
            $
            0.11Second
                Quarter
            
            $
            0.07
            
            $
            0.20First
                Quarter
            
            $
            0.035
            
            $
            0.51





***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.


12


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 Trust (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.





On
      April
      11, 2007, the Company issued 3,000,000 shares of its common stock to Andrey
      Miller. The Company issued the stock in consideration for professional
      consulting 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 stock did
      not
      involve a public offering of securities.


13


On
      April
      12, 2007, the Company issued an aggregate of 25,000,000 shares of its common
      stock to Roman Price. The Company issued the stock in consideration for 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 stock did not involve a public offering of
      securities.





On
      April
      12, 2007, the Company issued an aggregate of 1,000,000 shares of its common
      stock to Ernest Sabato. The Company issued the stock in consideration for
      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 stock did not involve a
      public offering of securities.





On
      April
      24, 2007, the Company issued 41,600 shares of its common stock to Global
      Consulting Group. The Company issued the stock in consideration for professional
      consulting 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 stock did
      not
      involve a public offering of securities.





On
      May 9,
      2007, the Company issued 600,000 shares of its common stock to Svetlana
      Kilesnikova. The Company issued the stock in consideration for professional
      consulting 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 stock did
      not
      involve a public offering of securities.





On
      May 9,
      2007, the Company issued 400,000 shares of its common stock to Floriya Prom.
      The
      Company issued the stock in consideration for professional consulting 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 stock did not involve a public offering of
      securities.





On
      June
      14, 2007, the Company issued 11,000,000 shares of its common stock to the Roman
      Price Revocable Trust pursuant to the partial exercising of certain existing
      warrants 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 and subsequently such stock underlying the warrant
      to Mr. Price (via the Roman Price Revocable Trust) 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
      July
      6, 2007, the Company issued 300,000 shares of its common stock to Leonard Stahl.
      The Company issued the stock to Mr. Stahl at a purchase price of $0.06 per
      share, and the issuance was conducted 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 stock did
      not
      involve a public offering of securities.





On
      July
      12, 2007, the Company issued 50,000 shares of its common stock to Keith
      Testaverde. The Company issued the stock in consideration for professional
      consulting 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 stock did
      not
      involve a public offering of securities.





On
      July
      16, 2007, the Company issued 3,000,000 shares of its common stock to Atlantic
      Holdings of NJ, LLC. The Company issued the stock in consideration for 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 stock did not involve a public offering of
      securities.





On
      February 27, 2008, the Company issued 5,000,000 shares of its common stock
      to
      Ernest Sabato. The Company issued the stock as an employment bonus in
      consideration for executive officer 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 stock did not involve a public offering of securities.


14


On
      February 27, 2008, the Company issued 2,500,000 shares of its common stock
      to
      Fred Biehl. The Company issued the stock in consideration for 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 stock did not involve a public offering of
      securities.





On
      February 27, 2008, the Company issued 4,000,000 shares of its common stock
      to
      Gennady Gotgelf. The Company issued the stock in consideration for 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 stock did not involve a public offering of
      securities.





On
      February 27, 2008, the Company issued 1,375,000 shares of its common stock
      to
      Svetlana Kilesnikova. The Company issued the stock in consideration for 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 stock did not involve a public offering of
      securities.





On
      February 27, 2008, the Company issued 4,000,000 shares of its common stock
      to
      Mark Levin. The Company issued the stock in consideration for 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 stock did not involve a public offering of
      securities.





On
      February 27, 2008, the Company issued 4,000,000 shares of its common stock
      to
      Vladimir Lovskiy. The Company issued the stock in consideration for 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 stock did not involve a public offering of
      securities.





On
      February 27, 2008, the Company issued an aggregate of 25,000,000 shares of
      its
      common stock to Roman Price. The Company issued the stock in consideration
      for
      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 stock did not involve a
      public offering of securities.





On
      February 27, 2008, the Company issued 1,125,000 shares of its common stock
      to
      Floriya Prom. The Company issued the stock in consideration for 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 stock did not involve a public offering of
      securities.





On
      February 27, 2008, the Company issued 4,000,000 shares of its common stock
      to
      Irina Shoful. The Company issued the stock in consideration for 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 stock did not involve a public offering of
      securities.





On
      February 27, 2008, the Company issued 1,000,000 shares of its common stock
      to
      Leonard Stahl. The Company issued the stock in consideration for 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 stock did not involve a public offering of
      securities.





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





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.


15


**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, 2007 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.




***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 “blank check” 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 managing 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.





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.


16


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.




***Recent
        Events***
 
 On
        November 9, 2007, the Company entered into an exclusive licensing agreement
        with
        the Ukrainian State Scientific Corporation “Kiev Institute of Automation”
(“KIA”), to license to KIA its proprietary technology and to furnish to KIA a
        national Ukrainian airline reservation system
        for use by Ukrainian and non-Ukrainian airlines. The term of the licensing
        agreement is five years, and subject to automatic renewal.




***Liquidity
      and Capital Resources***





As
      of
      December 31, 2007, we had $1,551cash on hand and had a net loss of $4,113,167.
      We have financed our operations to date from loans, the sale of equity
      securities and through revenues. Our auditors have indicated in their 2007
      audit
      report their doubt that our Company will continue as a “going concern.”





As
      of
      December 31, 2007, we had received an aggregate of $166,000 through loans and
      $183,550 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
      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.


17


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, 2008.





On
      December 31, 2007, the Company borrowed in aggregate $166,000 from an individual
      who is directly related to the President of the Company. The note bears interest
      at the rate of 6% per annum, and is unsecured and is due throughout 2008.





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, 2007 Compared to Fiscal Year Ended December 31, 2006*





Our
      total
      revenue increased by $493,655, or approximately 26.37% from $ 1,871,988
      for the
      year
      ended December 31, 2006 to $2,365,643 for the fiscal year ended December 31,
      2007. This increase was due to an increase in software licenses and maintenance
      fees.





Our
      costs
      of revenue increased by $ 608,855,
      or approximately 38.70%, from $1,573,100 for
      the
      year ended December 31, 2006 to
      $2,181,955 for the fiscal year ended December 31, 2007. 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 decreased by $3,135,341 ,
      or
      approximately 45.43%, from $6,901,035 for
      the
      year ended December 31, 2006 to
      $3,765,694 for the fiscal year ended December 31, 2007. This
      decrease was primarily due to streamlined operations and a decrease of stock
      based compensation.





Our
      interest expense decreased by $552,191 ,
      from $630,792 for the
      year ended December 31, 2006 to $78,601 for
      the
      year ended December 31, 2007. This decrease was primarily due beneficial
      conversion features incurred in 2006.





***Research
      and Development***





For
      the
      years ended December 31, 2006 and 2007, we spent approximately $141,462 and
      $402,824, respectively, in research and development, an increase of
      approximately $261,362 (approximately 84.76%). 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.


18


***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.


19


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.


20


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. Uncollectible accounts are charged against the
      allowance account.


21





**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, 2007, we had $1,551 in cash
      on hand, a net loss of $ 4,113,167 and a
      stockholders’ deficit of $1,176,406 ,
      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.





**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;


22


●
            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;





●
            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;


23


●
            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, 2007 and
      2006 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





**Item
      8A(T). 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.


24


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, 2007, that materially affected, or were reasonably likely
      to
      materially affect, our internal controls over financial reporting.





REPORT
      OF
      MANAGEMENT ON INTERNAL CONTROL OVER FINANCIAL REPORTING




Our
      management is responsible for establishing and maintaining adequate internal
      control over financial reporting for the company. Internal control over
      financial reporting is a process to provide reasonable assurance regarding
      the
      reliability of our financial reporting for external purposes in accordance
      with
      accounting principles generally accepted in the United States of America.
      Internal control over financial reporting includes maintaining records that
      in
      reasonable detail accurately and fairly reflect our transactions; providing
      reasonable assurance that transactions are recorded as necessary for preparation
      of our financial statements; providing reasonable assurance that receipts and
      expenditures of company assets are made in accordance with management
      authorization; and providing reasonable assurance that unauthorized acquisition,
      use or disposition of company assets that could have a material effect on our
      financial statements would be prevented or detected on a timely basis. Because
      of its inherent limitations, internal control over financial reporting is not
      intended to provide absolute assurance that a misstatement of our financial
      statements would be prevented or detected.





Although
      management did not conduct an evaluation of the effectiveness of our internal
      control over financial reporting based on the framework in Internal Control
      -
      Integrated Framework issued by the Committee of Sponsoring Organizations of
      the
      Treadway Commission, it has concluded that notwithstanding the foregoing, the
      Company’s internal controls over financial reporting are effective, and no
      material weaknesses in financial reporting have been discovered upon our
      year-end evaluation. As noted in this Annual Report, we have limited resources
      available. As we obtain additional funding and employ additional personnel,
      we
      will implement programs to ensure the proper segregation of duties and reporting
      channels.





This
      Form
      10-KSB does not include an attestation report of the Company’s registered public
      accounting firm regarding internal control over financial reporting.
      Management’s report was not subject to attestation by the Company’s registered
      public accounting firm pursuant to temporary rules of the SEC that permit the
      Company to provide only management’s report in this annual report.




**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.


25




Name
            
            Age
            
            PositionRoman
                Price
            
            53
            
            President,
                CEO, Chairman and sole DirectorErnest
                J. Sabato
            
            71
            
            Secretary,
                VP, Chief Operating OfficerPaul
                Freed, C.P.A.
            
            60
            
            Chief
                Financial Officer





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





**Roman
      Price** is
      the
      founder of Ultitek, Ltd. and has been serving as our 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.





**Other
      Key Employees**





**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.


26


***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.





Item
      405
      of Regulation S-B requires every small business issuer that has a class of
      equity securities registered pursuant to Section 12 of the Exchange Act to
      identify each person who, at any time during the fiscal year, was a director,
      officer or beneficial owner of more than 10 percent of any class of equity
      securities registered pursuant to Section 12 of the Exchange Act that failed
      to
      file on a timely basis, as disclosed in the above forms as well as other
      information. From the effective date our Registration Statement on Form
      10-SB ,
      as
      amended (File No.: 000-51819), on March
      8, 2007 through December 31, 2007, our executive officers and director: Roman
      Price (President, CEO and Sole Director), Ernest J. Sabato (Secretary, VP,
      Chief
      Operating Officer), and Paul Freed (Chief Financial Officer), and the
      stockholders listed in Item 11 who own beneficially own more than 10% of our
      common stock have not filed Forms 3, 4 or 5 with the Securities and Exchange
      Commission. Such persons are anticipated to file such forms in the future.





Other
      than the foregoing, the Company believes that no other 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
      adopted a Code of Ethic and Code of Business Conduct that applies to our
      principal executive officer, principal financial officer, principal accounting
      officer or controller, and persons performing similar functions in that our
      officers and directors serves in all the above capacities. The Code of Ethics
      and Code of Business Conduct are attached to this annual statement as Exhibits
      14.1 and 14.2 respectively.





**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.




**2007
      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
            
            
            2007
            
            $
            0.00
            
            
            0
            
            
            0
            
            
            0
            
            
            0
            
            
            0
            
            
            0
            
            $
            0.00President, Chairman
                and CEO
            
            
            2006
            
            $
            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.


27


The
      Company currently pays for the lease agreement and insurance premiums of an
      automobile driven by Mr. Roman Price, a 2007 Acura. The lease payments are
      approximately $535 per month, and the insurance is approximately $150 per month.





At
      December 31, 2006, the Company recorded $400,000 in consulting fees and has
      recorded 4,086,750 shares of common stock as issued and outstanding. For the
      year ended December 31, 2007, the Company recorded $400,000 in consulting fees
      and has included in shares outstanding an additional 4,885,919 shares of common
      stock. To date, the shares have not been issued.




**Options/SAR
        Grants in Last Fiscal Year**
 
 No
        options were granted in the fiscal year 2007.


**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.


28


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, 2007, no director
      expenses were reimbursed.





**Employment
      Agreements**





The
      Company is not a party to any employment agreements.


29


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





The
      following table sets forth information as of April 15, 2008 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
              560
                  Sylvan Avenue
                Englewood
                  Cliffs, NJ 07632
            
            
            127,600,000
            (2)
            
            65.44
            %Ernest
                J. Sabato
              560
                Sylvan Avenue
              Englewood
                Cliffs, NJ 07632
            
            
            16,100,000
            (3)
            
            10.92
            %Paul
                Freed
              560
                Sylvan Avenue
              Englewood
                Cliffs, NJ 07632
            
            
            750,000
            (4)
            
            *Atlantic
                Holdings of NJ, LLC
              24
                Tennyson Drive
              Short
                Hills, NJ 07078
            
            
            21,500,000
            (5)
            
            13.93
            %Semyon
                Zlochevsky
              800
                Palisade Avenue
              Fort
                Lee, NJ 07024
            
            
            27,125,000
            (6)
            
            16.30
            %All
                Directors and Executive Officers as a Group (without naming them)
                (3
                persons)
            
            
            144,450,000
            (7)
            
            70.96
            %





*
      Less
      than 1%





(1)
            Based
                on 139,381,933 shares of issued and outstanding common stock, par
                value
                $0.001 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) 72,000,000 shares held by the Roman Price Revocable Trust,
                and (ii)
                55,600,000 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




(3)
            Consists
                of (1) 8,000,000 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.


30


(4)
            Consists
                of 500,000 shares issuable upon the exercise of a warrant issued
                on
                February 14, 2006 to Mr. Freed at a purchase price of $0.02 per share,
                and
                250,000 shares of common stock held by Marilyn Ruth Freed, Mr. Freed’s
                spouse.




(5)
            Consists
                of (i) 4,000,000 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,
                and
                2,500,000 shares held by Fred Biehl personally.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.




(6)
            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. Also includes (v)
                125,000
                shares of common stock held by IreneZlochevsky,
                the spouse of SemyonZlochevsky.
                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.




(7)
            
            Consists
                of the securities listed in footnotes (1) to (3) 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
                Zlochevsky


31





3.5*
            
            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 TAIS10.1**
            
            Licensing
                Agreement with Kiev Institute of Automation dated November 9,
                200714.1
            
            Code
                of Ethics14.2
            
            Code
                of Business Conduct23.1
            
            Consent
                of Independent Auditors31.1
            
            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, 2007.31.2
            
            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, 2007.32.1
            
            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.





*
            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.




**
            To
                be filed by an Amendment. (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 $ 33,907 and
      $33,500 for fiscal year ended December 31, 2007 and 2006, respectively.


32


***Audit-Related
      Fees***





Meyler
      fees billed for assurance and related services related to the audit or review
      of
      the Company’s financial statements were $ 14,500 and
      $2,500 for the fiscal years ended December 31, 2007 and 2006, 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, 2007 and 2006.





***All
      Other Fees***





Meyler
      fees billed for other products and services were $0 for the fiscal years ended
      December 31, 2007 and 2006.


33





**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:
                April 15, 2008
            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:
                April 15, 2008
            /s/ ROMAN
                PRICERoman
                PricePresident,
                Chief Executive Officer and Sole Director
              (Principal
                Executive Officer)Date:
                April 15, 2008
            /s/
                PAUL FREEDPaul
                Freed
              Chief
                Financial Officer
              (Principal
                Financial Officer)


34




ULTITEK,
      LTD. AND SUBSIDIARY





CONSOLIDATED
      FINANCIAL STATEMENTS





DECEMBER
      31, 2007 AND 2006








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’ Deficit
            
            
            F
                6Notes
                to Consolidated Financial Statements
            
            
            F
                8





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, 2007 and 2006, and the related consolidated
      statements of operations, stockholders’ 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, 2007 and 2006, 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 B to the
      consolidated financial statements, the Company has incurred a net loss of
      $4,113,167 in 2007 and $7,411,167 in 2006, an accumulated deficit of $12,550,973
      and a working capital deficiency of $927,842 at December 31, 2007, 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 B. The financial statements
      do not include any adjustments that might result from the outcome of these
      uncertainties.





/s/
      Meyler & Company, LLC





Middletown,
      NJ


April
      11,
      2008


F-1




ULTITEK,
      LTD. AND SUBSIDIARY





CONSOLIDATED
      BALANCE SHEETS





December
                31,2007
            
            2006ASSETSCURRENT
                ASSETSCash
            
            $
            1,551
            
            $
            6,900Accounts
                receivable, net
            
            
            134,167
            
            
            380,698Work
                in progress
            
            
            694,079
            
            
            502,152Prepaid
                expenses
            
            
            34,280
            
            
            43,574Total
                Current Assets
            
            
            864,077
            
            
            933,324PROPERTY,
                PLANT AND EQUIPMENT, net of accumulated depreciation of $100,660
                and
                $62,831, respectively
            
            
            110,581
            
            
            141,611Other
                Assets
            
            
            7,000
            
            
            7,000Total
                Assets
            
            $
            981,658
            
            $
            1,081,935LIABILITIES
                AND STOCKHOLDERS’ DEFICITCURRENT
                LIABILITIESBank
                overdraft
            
            $
            553
            
            
            -Note
                payable to individual
            
            
            166,000
            
            $
            30,000Accounts
                payable
            
            
            633,417
            
            
            353,881Deferred
                revenue
            
            
            554,485
            
            
            564,272Accrued
                salaries and related taxes
            
            
            136,472
            
            
            39,336Accrued
                expenses-other
            
            
            300,992
            
            
            83,458Total
                Current Liabilities
            
            
            1,791,919
            
            
            1,070,9477%
                CONVERTIBLE DEBENTURE
            
            
            366,145
            
            
            336,719STOCKHOLDERS’
                DEFICITPreferred
                stock, par value $0.001, authorized 100,000,000 shares, none issued
                and
                outstanding
            
            
            -
            
            
            -Common
                stock, par value $0.0001, authorized 1,000,000,000 shares, issued
                and
                outstanding 151,004,602 and 74,277,083 at December 31, 2007 and,
                2006,
                respectively
            
            
            15,101
            
            
            7,428Additional
                paid in capital
            
            
            11,350,990
            
            
            8,109,839Accumulated
                deficit
            
            
            (12,550,973
            )
            
            (8,437,806
            )Accumulated
                other comprehensive income (loss)
            
            
            8,476
            
            
            (5,192
            )Total
                Stockholders’ Deficit
            
            
            (1,176,406
            )
            
            (325,731
            )Total
                Liabilities and Stockholders’ Deficit
            
            $
            981,658
            
            $
            1,081,935





See
      accompanying notes to consolidated financial statements.


F-2





ULTITEK,
      LTD. AND SUBSIDIARY





CONSOLIDATED
      STATEMENTS OF OPERATIONS





For the Years Ended
              December 312007
            
            2006REVENUES
            
            $
            2,365,643
            
            $
            1,871,988COSTS
                AND EXPENSES:Cost
                of revenues
            
            
            2,181,955
            
            
            1,573,100Selling,
                general and administrative expenses
            
            
            3,765,694
            
            
            6,901,035Research
                and development expenses
            
            
            402,824
            
            
            141,462Interest
                Expense
            
            
            78,601
            
            
            630,792Depreciation
            
            
            37,829
            
            
            25,227Total
                Costs and Expenses
            
            
            6,466,903
            
            
            9,271,616NET
                LOSS BEFORE TAXES
            
            
            (4,101,260
            )
            
            (7,399,628
            )PROVISION
                FOR INCOME TAXES
            
            
            11,907
            
            
            11,539NET
                LOSS
            
            $
            (4,113,167
            )
            $
            (7,411,167
            )NET
                LOSS PER COMMONSHARE
                (Basic and Diluted)
            
            $
            (0.05
            )
            $
            (0.11
            )WEIGHTED
                AVERAGE SHARES OUTSTANDING
            
            
            90,792,408
            
            
            70,016,654





See
      accompanying notes to consolidated financial statements.


F-3


ULTITEK,
      LTD. AND SUBSIDIARY





CONSOLIDATED
      STATEMENTS OF CASH FLOWS





For the Years Ended
              December 31,2007
            
            2006CASH
                FLOWS FROM OPERATING ACTIVITIESNet
                loss
            
            $
            (4,113,167
            )
            $
            (7,411,167
            )Adjustments
                to reconcile net loss to net cash provided by operating
                activitiesDepreciation
            
            
            37,829
            
            
            25,227Stock
                based compensation
            
            
            3,132,824
            
            
            5,922,651Interest
                Expense
            
            
            -
            
            
            573,783Legal
                and professional expense
            
            
            96,950
            
            
            312,000Amortization
                of discount
            
            
            29,426
            
            
            18,002Changes
                in assets and liabilities:(Increase)
                decrease in accounts receivable
            
            
            246,531
            
            
            (143,122
            )(Increase)
                decrease in work in progress
            
            
            (191,927
            )
            
            (355,360
            )(Increase)
                decrease in prepaid expenses
            
            
            344
            
            
            51,335(Increase)
                decrease in other assets
            
            
            -
            
            
            (7,000
            )Increase
                (decrease) in accounts payable
            
            
            279,536
            
            
            (79,494
            )Increase
                (decrease) in deferred revenue
            
            
            (9,787
            )
            
            564,272Increase
                (decrease) in accrued salaries and related taxes
            
            
            97,136
            
            
            20,203Increase
                (decrease) in accrued income taxes
            
            
            -
            
            
            (30,305
            )Increase
                in accrued expenses-other
            
            
            227,534
            
            
            80,612Net
                cash used in operating activities
            
            
            (166,771
            )
            
            (458,363
            )CASH
                FLOWS FROM INVESTING ACTIVITIESPurchase
                of office equipment
            
            
            (6,799
            )
            
            (121,793
            )Net
                cash used in investing activities
            
            
            (6,799
            )
            
            (121,793
            )CASH
                FLOWS FROM FINANCING ACTIVITIESBank
                overdraft
            
            
            553
            
            
            -Proceeds
                of 7% convertible debenture
            
            
            -
            
            
            570,000Note
                payable to individual- proceeds
            
            
            136,000
            
            
            30,000Note
                payable to individual- repayment
            
            
            -
            
            
            (50,000
            )Sale
                of common stock
            
            
            18,000
            
            
            -Stock
                subscription receivable
            
            
            -
            
            
            450Net
                cash provided by financing activities
            
            
            154,553
            
            
            550,450EFFECT
                OF EXCHANGE RATE ON CASH
            
            
            13,668
            
            
            (23,718
            )DECREASE
                IN CASH
            
            
            (5,349
            )
            
            (53,424
            )CASH
                AT BEGINNING OF YEAR
            
            
            6,900
            
            
            60,324CASH
                AT END OF YEAR
            
            
            1,551
            
            
            6,900





See
      accompanying notes to consolidated financial statements.


F-4





ULTITEK,
      LTD. AND SUBSIDIARY





CONSOLIDATED STATEMENTS OF CASH FLOWS




For the Years Ended
              December 31,2007
            
            2006SUPPLEMENTAL
                CASH FLOW DISCLOSURESCash
                paid during year for interest
            
            
            
            
            $
            2,500Non-cash
                transactions:Issuance
                of 500,000 and 2,000,000 shares of common for legal services,
                respectively
            
            $
            55,000
            
            
            500,000Issuance
                of 4,885,919 and 4,086,750 shares of common stock to TAIS as stock
                based
                compensation, respectively
            
            
            400,000
            
            
            400,000Issuance
                of 60,341,600 and 12,000,000 shares of common stock as stock based
                compensation, respectively
            
            
            2,793,824
            
            
            3,000,000Issuance
                of 11,000,000 shares of common stock to President and CEO in relation
                to
                warrant exercise
            
            
            1,100Issuance
                of shares to settle accrued expenses
            
            
            13,000Fair
                value of warrants associated with 7% convertible
                debentures
            
            
            
            
            
            251,283Fair
                value of options and warrants issued
            
            
            
            
            
            2,022,651Beneficial
                conversion features related to convertible debentures
            
            
            
            
            
            573,783





See
      accompanying notes to consolidated financial statements.


F-5





ULTITEK,
      LTD. AND SUBSIDIARY





CONSOLIDATED
      STATEMENT OF STOCKHOLDERS' DEFICIT


December
      31, 2007 and 2006





AccumulatedAdditional
            
            
            
            Other
            
            StockCommon Stock
            
            Paid
                in
            
            Accumulated
            
            Comprehensive
            
            SubscriptionShares
            
            Amount
            
            Capital
            
            Deficit
            
            Income
                (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 options and warrants issued with convertible
                debentures
            
            
            -
            
            
            -
            
            
            251,283
            
            
            -
            
            
            -
            
            
            -
            
            
            251,283Beneficial
                conversion features related to convertible debentures
            
            
            -
            
            
            -
            
            
            573,783
            
            
            -
            
            
            -
            
            
            -
            
            
            573,783Issuance
                of common stock under consulting agreement with TAIS
            
            
            4,086,750
            
            
            409
            
            
            399,591
            
            
            -
            
            
            -
            
            
            -
            
            
            400,000Receipt
                of subscription receivable
            
            
            -
            
            
            -
            
            
            -
            
            
            
            
            
            
            
            
            450
            
            
            450Net
                loss for the year ended December 31, 2006
            
            
            -
            
            
            -
            
            
            -
            
            
            (7,411,167
            )
            
            -
            
            
            -
            
            
            (7,411,167
            )Other
                comprehensive income (loss)
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            (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 consolidated financial statements.


F-6





ULTITEK,
      LTD. AND SUBSIDIARY





CONSOLIDATED
      STATEMENT OF STOCKHOLDERS' DEFICIT (CONTINUED)


December
      31, 2007 and 2006





AccumulatedAdditional
            
            
            
            Other
            
            StockCommon Stock
            
            Paid
                in
            
            Accumulated
            
            Comprehensive
            
            SubscriptionShares
            
            Amount
            
            Capital
            
            Deficit
            
            Income
                (Loss)
            
            Receivable
            
            TotalBalance,
                December 31, 2006
            
            
            74,277,083
            
            $
            7,428
            
            $
            8,109,839
            
            $
            (8,437,806
            )
            $
            (5,192
            )
            
            -
            
            $
            (325,731
            )Issuance
                of common stock under consulting agreement with TAIS
            
            
            4,885,919
            
            
            489
            
            
            399,511
            
            
            -
            
            
            -
            
            
            -
            
            
            400,000Issuance
                of common stock for legal services at $0.10 per share
            
            
            500,000
            
            
            50
            
            
            54,950
            
            
            -
            
            
            -
            
            
            -
            
            
            55,000Issuance
                of common stock under consulting agreement with TAIS at $0.11 per
                share
            
            
            3,000,000
            
            
            300
            
            
            329,700
            
            
            -
            
            
            -
            
            
            -
            
            
            330,000Issuance
                of common stock for consulting services at $0.14 per share
            
            
            1,000,000
            
            
            100
            
            
            139,900
            
            
            -
            
            
            -
            
            
            -
            
            
            140,000Issuance
                of common stock for professional services at $0.18 per
                share
            
            
            100,000
            
            
            10
            
            
            13,990
            
            
            -
            
            
            -
            
            
            -
            
            
            14,000Issuance
                of common stock for consulting services at $0.07 per share
            
            
            1,600,000
            
            
            160
            
            
            111,840
            
            
            -
            
            
            -
            
            
            -
            
            
            112,000Exercise
                of warrant by officer at $0.02 per share
            
            
            11,000,000
            
            
            1,100
            
            
            (1,100
            )
            
            -
            
            
            -
            
            
            -
            
            
            0Issuance
                of common stock for consulting services at $0.14 per share
            
            
            41,600
            
            
            4
            
            
            5,820
            
            
            -
            
            
            -
            
            
            -
            
            
            5,824Issuance
                of common stock for consulting services at $0.08 per share
            
            
            50,000
            
            
            5
            
            
            3,995
            
            
            -
            
            
            -
            
            
            -
            
            
            4,000Issuance
                of common stock at $0.06 per share
            
            
            300,000
            
            
            30
            
            
            17,970
            
            
            -
            
            
            -
            
            
            -
            
            
            18,000Issuance
                of common stock for consulting services at $0.04 per share
            
            
            50,750,000
            
            
            5,075
            
            
            2,024,925
            
            
            -
            
            
            -
            
            
            -
            
            
            2,030,000Issuance
                of common stock for professional services at $0.04 per
                share
            
            
            3,500,000
            
            
            350
            
            
            139,650
            
            
            -
            
            
            -
            
            
            -
            
            
            140,000Net
                loss for the year ended December 31, 2007
            
            
            
            
            
            
            
            
            
            
            
            (4,113,167
            )
            
            
            
            
            
            
            
            (4,113,167
            )Other
                comprehensive income (loss)
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            13,668
            
            
            
            
            
            13,668Balance,
                December 31, 2007
            
            
            151,004,602
            
            $
            15,101
            
            $
            11,350,990
            
            $
            (12,550,973
            )
            $
            8,476
            
            $
            -
            
            $
            (1,176,406
            )





See
      accompanying notes to consolidated financial statements.


F-7


ULTITEK,
        LTD. AND SUBSIDIARY
 
 NOTES
        TO
        FINANCIAL STATEMENTS
 December
        31, 2007


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.





NOTE
      B-
      GOING CONCERN AND MANAGEMENT PLANS





As
      shown
      in the accompanying financial statements, the Company has incurred a net loss
      of
      $4,113,167 in 2007 and $7,411,167 in 2006, had an accumulated deficit of
      $12,550,973 and a working capital deficiency of $927,842 at December 31, 2007.
      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.





NOTE
      C -
      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, 2007 and December 31, 2006.





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.


F-8


ULTITEK,
        LTD. AND SUBSIDIARY
 
 NOTES
        TO
        FINANCIAL STATEMENTS
 December
        31, 2007


NOTE
      C -
      SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)





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 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.


F-9


ULTITEK,
      LTD. AND SUBSIDIARY





NOTES
      TO
      FINANCIAL STATEMENTS


December
      31, 2007





NOTE
      C -
      SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)





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 licenses, 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, 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. Anticipated
      contract losses are recognized as they become known. For the year ended December
      31, 2007, the Company recognized $38,000 in losses on contracts accounted for
      under the completed contract method.





Foreign
      Currency Translation





The
      Company considers the Russian ruble to be its functional currency. Assets and
      liabilities were translated into U.S. dollars at 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 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.




F-10


ULTITEK,
      LTD. AND SUBSIDIARY





NOTES
      TO
      FINANCIAL STATEMENTS


December
      31, 2007





NOTE
      C -
      SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)




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. Uncollectible accounts are charged against the
      allowance account. The allowance for doubtful accounts was $0 and $44,280 at
      December 31, 2007 and 2006, respectively.





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. The 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 adopted the provisions of FIN 48 on January
      1, 2007. The adoption of FIN 48 did not have a material impact on the financial
      position or results of operations of the Company.






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 SFAS No. 157
      and
      is currently evaluating the potential impact, if any, that the adoption of
      SFAS
      No. 157 will have on its 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, 2007


NOTE
      C -
      SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)





Recent
      Accounting Pronouncements (Continued)





In
      December 2007, the FASB issued SFAS No. 141R, *Business
      Combinations* .
      This
      standard establishes principles and requirements for how an acquirer recognizes
      and measures in its financial statements the identifiable assets acquired,
      the
      liabilities assumed, any non-controlling interest in the acquiree and the
      goodwill acquired. This statement also establishes disclosure requirements
      which
      will enable users to evaluate the nature and financial effects of the business
      combination. SFAS No.141R is effective for us for acquisitions made after
      November 30, 2009. The Company is currently evaluating the potential
      impact, if any, that the adoption of SFAS No. 141R will have on its consolidated
      financial statements.





In
      December 2007, the FASB issued SFAS No. 160, *Noncontrolling
      Interests in Consolidated Financial Statements* .
      This
      standard outlines the accounting and reporting for ownership interest in a
      subsidiary held by parties other than the parent. SFAS No. 160 is effective
      for the first quarter of 2010. The Company is currently evaluating the potential
      impact, if any, that the adoption of SFAS No. 160 will have on its consolidated
      financial statements.




NOTE
      D – PROPERTY, PLANT AND EQUIPMENT




Property,
      Plant and Equipment is comprised of the following:






December
                31,2007
            
            2006Office
                equipment, primarily computers
            
            $
            107,643
            
            $
            100,844Leasehold
                Improvements
            
            
            103,598
            
            
            103,598211,241
            
            
            204,442Less
                accumulated depreciation
            
            
            (100,660
            )
            
            (62,831
            )$
            110,581
            
            $
            141,611





NOTE
      E -
      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.


F-12


ULTITEK,
      LTD. AND SUBSIDIARY





NOTES
      TO
      FINANCIAL STATEMENTS


December
      31, 2007





NOTE
      E -
      7% CONVERTIBLE DEBENTURES (Continued)





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.





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
      F -
      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 and during 2007 borrowed an
      additional $ 136,000. The note bears interest at the rate of 6% per annum,
      is
      unsecured and was due December 26, 2007. The note was extended to December
      26,
      2008. The
      weighted average amounts borrowed for the year ended December 31, 2007 was
      $140,676.





NOTE
      G -
      STOCKHOLDERS’ 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.


F-13


ULTITEK,
      LTD. AND SUBSIDIARY





NOTES
      TO
      FINANCIAL STATEMENTS


December
      31, 2007





NOTE
      G -
      STOCKHOLDERS’ DEFICIT (Continued)





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.





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, 2007 and 2006, $360,000 and
      $312,000 of the prepaid legal fees has been amortized, respectively.





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.





On
      March
      23, 2007, the Company filed with the SEC a Registration Statement on Form S-8
      therein registering 7,000,000 shares of common stock underlying awards granted
      or available for grant under the Company’s 2007 Incentive Compensation Plan with
      a maximum offering price of $0.10.





On
      April
      5, 2007, the Company approved and issued 3,000,000 restricted shares of common
      stock to a consultant of the Company at $0.11 per share and 500,000 shares
      of
      S-8 stock for legal services at $0.11 per share




On
      April
      24, 2007, the Company approved and issued an aggregate of 1,041,600 restricted
      shares of common stock to three consultants at $0.14 per share and 100,000
      shares of S-8 stock at $0.14 per share to a fourth consultant of the
      Company.





On
      June
      1, 2007, the President of the Company exercised warrants to purchase 15,000,000
      shares of the Company’s common stock at $0.02. The exercise was treated as a
      cashless exercise with 3,750,000 shares returned to the Company and cancelled.
      The 3,750,000 shares represent the fair value of the shares needed to repay
      the
      $300,000 exercise price. The original warrant agreement did not allow for a
      cashless exercise. As such, the Company agreed to amend the warrant agreement
      retroactive to June 1, 2007, the date of exercise. The amendment was executed
      and approved by the Board of Directors of the Company on August 7, 2007. As
      a
      result of the cashless exercise amendment and calculation, the President of
      the
      Company is due an additional 250,000 shares.


F-14


ULTITEK,
      LTD. AND SUBSIDIARY





NOTES
      TO
      FINANCIAL STATEMENTS


December
      31, 2007





NOTE
      G -
      STOCKHOLDERS’ DEFICIT (Continued)





On
      June
      5, 2007, the Company approved and issued 1,600,000 S-8 shares of common stock
      at
      $0.07 per share to an individual related to the President of the Company for
      payment of professional fees.





On
      July
      6, 2007, the Company approved and issued 300,000 restricted shares of common
      stock for $18,000 in a private placement.





On
      July
      12, 2007, the Company approved and issued 50,000 restricted shares of common
      stock to a consultant at $0.08 per share for services rendered.





On
      December 5, 2007, the Company approved and issued 48,250,000 restricted shares
      of common stock as stock based compensation, 3,500,000 restricted shares for
      professional services and 2,500,000 restricted shares for consulting, all at
      $0.04 per share for a total of $2,170,000.





For
      the
      years ended December 31, 2007 and 2006, the Company recorded $400,000 in
      consulting fees each year and has included in shares outstanding an additional
      4,885,919 and 4,086,750 shares of common stock, respectively. To date, the
      shares have not been issued.





NOTE
      H -
      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 $716,000 and $408,000,
      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 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 $2,862,000
      and $168,000 at December 31, 2007 and 2006 respectively, which will expire
      through 2022.





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
      I -
      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-15


ULTITEK,
      LTD. AND SUBSIDIARY





NOTES
      TO
      FINANCIAL STATEMENTS


December
      31, 2007





NOTE
      I -
      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, 2007
      and
      2006 was $106,160 and $134,390, respectively.





The
      lease
      on the Russian facility expires on August 31, 2007. The minimum lease commitment
      is approximately $66,000 on this facility. The lease on the U.S. facility
      expired on February 28, 2008. The minimum lease commitment is approximately
      $2,100. On January 16, 2008, the Company renewed its lease on the U.S. facility
      until January 28, 2009 at the same rate of $12,650 per year.





NOTE
      J-
      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:





Options
              Outstanding
            
            Weighted
              Average
              Exercise price
            
            Warrants
              Outstanding
            
            Weighted
              Average
              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
            
            $
            0.02GrantedExercised
            
            
            (15,000,000
            )
            $
            0.02CancelledBalance,
                December 31, 2007
            
            
            1,000,000
            
            $
            0.10
            
            
            82,023,333
            
            $
            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
            %


F-16


ULTITEK,
      LTD. AND SUBSIDIARY





NOTES
      TO
      FINANCIAL STATEMENTS


December
      31, 2007





NOTE
      I-
      STOCK OPTION AND WARRANT AGREEMENTS (Continued)





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
            
            
            
            
            
            
            
            
            
            
            
            81,853,333
            
            
            4.18
            
            $
            0.02$0.10
            
            
            1,000,000
            
            
            4.06
            
            $
            0.10$0.15
            
            
            
            
            
            
            
            
            
            
            
            170,000
            
            
            4.06
            
            $
            0.15





The
      intrinsic value of warrants exercised during 2007 was $1,800,000. The intrinsic
      value of options and warrants outstanding at December 31, 2007 was
      $4,901,382.





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 EVENT





On
      January 14, 2008, the Company entered into a consulting agreement with State
      Street & Company ("State Street") for State Street to become a strategic and
      financial consultant to the Company.  The term of the consulting agreement
      is 6 months. Ultitek has received $145,000 investment from State Street. No
      stock has been issued to date.


F-17


**EXHIBIT
      INDEX**





14.1
            
            Code
                of Ethics14.2
            
            Code
                of Business Conduct23.1
            
            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, 2007.31.2
            
            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, 2007.32.1
            
            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.


35