**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


**WASHINGTON,
      DC 20549**


**_______**





**FORM
      10-QSB**





(Mark
      One)





[X]
            QUARTERLY
                REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
                ACT OF
                1934For
                the quarterly period ended
            **September
                30, 2006**OR[ 
                ]
            TRANSACTION
                REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
                ACT OF
                1934For
                the transition period from
            
            toCommission
                file number:
            **000-51819****ULTITEK,
                LTD.**(Exact
                Name of Registrant as Specified in Its Charter)**Nevada**
            
            **20-2556241**(State
                of Other Jurisdiction of Incorporation or
              Organization)
            
            (I.R.S.
                Employer Identification Number)**560
                Sylvan Avenue**
              **Englewood
                Cliffs, NJ**
            
            **07632**(Address
                of Principal Executive Offices)
            
            (Zip
                Code)**(201)
                541-1700**(Registrant’s
                Telephone Number, Including Area Code)(Former
                Name, Former Address and Former Fiscal Year, If Changed Since Last
                Report)





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


[X]
      Yes [
 ] No





Indicate
      by check mark whether the registrant is a shell company (as defined in Rule
      12b-2 of the Exchange Act).


[ 
]
      Yes [X] No





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





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





[ 
]
      Yes [  ] No





**APPLICABLE
      ONLY TO CORPORATE ISSUERS:**




State
        the
        number of shares outstanding of each of the issuer’s classes of common equity,
        as of the latest practicable date. 72,043,756 shares
        of common stock, par value $0.0001 per share, issued and outstanding as of
        November 14, 2006 .
  Transitional
          Small Business Disclosure Format (check one):    [
          ] Yes
          [X] No








**TABLE
      OF CONTENTS**





**Page****PART
                I - FINANCIAL INFORMATION**Item
                1.
            Financial
                Statements
            3Item
                2.
            Management’s
                Discussion and Analysis or Plan of Operation
            7Item
                3.
            Controls
                and Procedures
            11**PART
                II - OTHER INFORMATION**Item
                1.
            Legal
                Proceedings
            12Item
                2.
            Unregistered
                Sale of Equity Securities and Use of Proceeds
            12Item
                3.
            Defaults
                Upon Senior Securities
            12Item
                4.
            Submission
                of Matters to a Vote of Security Holders
            12Item
                5.
            Other
                Information
            12Item
                6.
            Exhibits
            13**SIGNATURES**
            14





2





**PART
      I**


**FINANCIAL
      INFORMATION**





**Item
      1. Financial Statements.**




ULTITEK,
        LTD. AND SUBSIDIARIES




CONSOLIDATED
        BALANCE SHEETS
  September
                  30,
              
              December
                  31,2006
              
              2005(Unaudited)
              
              (Restated)ASSETSCURRENT
                  ASSETSCash
              
              $
              69,043
              
              $
              60,324Accounts
                  receivable
              
              
              503,514
              
              
              237,576Work
                  in progress
              
              
              391,444
              
              
              146,792Prepaid
                  expenses
              
              
              220,381
              
              
              121,909Total
                  Current Assets
              
              
              1,184,382
              
              
              566,601OFFICE
                  EQUIPMENT, net of accumulated depreciationof
                  $49,419 (unaudited) and $37,604, respectively
              
              
              52,018
              
              
              45,045Total
                  Assets
              
              $
              1,236,400
              
              $
              611,646LIABILITIES
                  AND STOCKHOLDERS' EQUITY (DEFICIT)CURRENT
                  LIABILITIESNote
                  payable to individual
              
              
              
              
              $
              50,000Accounts
                  payable
              
              $
              884,464
              
              
              433,375Accrued
                  salaries and related taxes
              
              
              51,967
              
              
              19,133Accrued
                  income taxes
              
              
              
              
              
              30,305Accrued
                  expenses-other
              
              
              26,782
              
              
              2,846Total
                  Current Liabilities
              
              
              963,213
              
              
              535,6597%
                  CONVERTIBLE DEBENTURE
              
              
              365,388STOCKHOLDERS'
                  EQUITY (DEFICIT)Preferred
                  stock, par value $0.001, authorized100,000,000
                  shares, none issued and outstandingCommon
                  stock, par value $0.0001, authorized1,000,000,000
                  shares, issued and outstanding72,043,756
                  and 56,190,333 at September 30, 2006(unaudited)
                  and December 31, 2005, respectively
              
              
              7,204
              
              
              5,619Additional
                  paid in capital
              
              
              2,483,406
              
              
              1,078,931Retained
                  earnings (deficit)
              
              
              (2,601,777
              )
              
              (1,026,639
              )Accumulated
                  and comprehensive income
              
              
              18,966
              
              
              18,526Stock
                  subscription receivable
              
              
              
              
              
              (450
              )Total
                  Stockholders' Equity (Deficit)
              
              
              (92,201
              )
              
              75,987$
              1,236,400
              
              $
              611,646See
                  accompanying notes to financial statements.






3




ULTITEK,
        LTD. AND SUBSIDIARIES




CONSOLIDATED
        STATEMENTS OF OPERATIONS
  Three
                  Months Ended
              
              Nine
                  Months EndedSeptember
                  30,
              
              September
                  30,2006
              
              2005
              
              2006
              
              2005(Unaudited)
              
              (Unaudited)
              
              (Unaudited)
              
              (Unaudited)Revenues
              
              $
              284,697
              
              $
              495,121
              
              $
              1,109,950
              
              $
              1,089,152Costs
                  and expenses:Cost
                  of revenues
              
              
              231,812
              
              
              196,728
              
              
              940,411
              
              
              682,350Selling,
                  general and administrativeexpenses
              
              
              204,285
              
              
              87,277
              
              
              1,617,522
              
              
              756,720Research
                  and development expenses
              
              
              37,600
              
              
              15,500
              
              
              88,850
              
              
              18,500Interest
                  Expense
              
              
              8,834
              
              
              
              
              
              19,039Depreciation
              
              
              4,414
              
              
              5,135
              
              
              11,815
              
              
              10,729Total
                  Costs and Expenses
              
              
              486,945
              
              
              304,640
              
              
              2,677,637
              
              
              1,468,299NET
                  INCOME (LOSS) BEFORETAXES
              
              
              (202,248
              )
              
              190,481
              
              
              (1,567,687
              )
              
              (379,147
              )PROVISION
                  FOR INCOME TAXES
              
              
              1,845
              
              
              63,007
              
              
              7,450
              
              
              67,327NET
                  INCOME (LOSS)
              
              
              ($204,093
              )
              $
              127,474
              
              
              ($1,575,137
              )
              
              ($446,474
              )NET
                  LOSS PER COMMONSHARE
                  (Basic and Diluted)
              
              $
              0.00
              
              $
              0.01
              
              
              ($0.15
              )
              
              ($0.01
              )WEIGHTED
                  AVERAGE SHARES
              
              
              
              
              
              
              
              
              104,224,926
              
              
              34,731,492OUTSTANDINGSee
                  accompanying notes to financial statements.








4




ULTITEK,
        LTD. AND SUBSIDIARIES




CONSOLIDATED
        STATEMENTS OF CASH FLOWS


Nine
                  Months EndedSeptember
                  30,2006
              
              2005(Unaudited)
              
              (Unaudited)CASH
                  FLOWS FROM OPERATING ACTIVITIESNet
                  income (loss)
              
              
              ($1,575,137
              )
              
              ($446,474
              )Adjustments
                  to reconcile net income (loss) to netCash
                  provided by operating activitiesDepreciation
              
              
              11,815
              
              
              10,729Stock
                  based compensation
              
              
              1,198,300
              
              
              562,100Amortization
                  of discount
              
              
              3,148Changes
                  in assets and liabilities:(Increase)
                  decrease in accounts receivable
              
              
              (265,938
              )
              
              (301,598
              )(Increase)
                  decrease in work in progress
              
              
              (244,652
              )
              
              (90,918
              )(Increase)
                  decrease in prepaid expenses
              
              
              (98,471
              )
              
              9,281Increase
                  (decrease) in accounts payable
              
              
              451,089
              
              
              (92,631
              )Increase
                  (decrease) in accrued salariesand
                  related taxes
              
              
              32,834
              
              
              41,315Increase
                  in customer deposits
              
              
              
              
              
              290,000Increase
                  (decrease) in accrued income taxes
              
              
              (30,305
              )
              
              67,327Increase
                  in accrued expenses-other
              
              
              23,934
              
              
              1,815Net
                  cash provided by (used in) operatingactivities
              
              
              (493,383
              )
              
              50,946CASH
                  FLOWS FROM INVESTING ACTIVITIESPurchase
                  of office equipment
              
              
              (18,788
              )
              
              (11,316
              )Net
                  cash used in investing activities
              
              
              (18,788
              )
              
              (11,316
              )CASH
                  FLOWS FROM FINANCING ACTIVITIESProceeds
                  of 7% convertible debenture
              
              
              570,000Note
                  payable to individual
              
              
              (50,000
              )
              
              50,000Sale
                  of common stock
              
              
              
              
              
              75,250Stock
                  subscription receivable
              
              
              450
              
              
              (450
              )Net
                  cash provided by financing activities
              
              
              520,450
              
              
              124,800EFFECT
                  OF EXCHANGE RATE ON CASH
              
              
              440
              
              
              (160
              )INCREASE
                  (DECREASE) IN CASH
              
              
              8,719
              
              
              164,270CASH
                  AT BEGINNING OF PERIOD
              
              
              60,324
              
              
              14,801CASH
                  AT END OF PERIOD
              
              $
              69,043
              
              $
              179,071SUPPLEMENTAL
                  CASH FLOW DISCLOSURESNon-cash
                  transactions:Issuance
                  of 25,000,000 shares of commonstock
                  as stock based compensation
              
              
              
              
              $
              425,000Issuance
                  of 500,000 shares of common stock
              
              
              
              
              
              75,000for
                  legal servicesIssuance
                  of 266,667 shares of common stock
              
              
              
              
              
              200,000as
                  stock based compensationIssuance
                  of 1,853,423 shares of common stockas
                  stock based compensation
              
              $
              300,000Issuance
                  of 2,000,000 shares of common stockfor
                  legal services
              
              
              20,000Issuance
                  of 12,000,000 shares of common stockas
                  stock based compensation
              
              
              192,000Fair
                  value of warrants associated with 7%convertible
                  debentures
              
              
              207,760Fair
                  value of options and warrants issued
              
              
              686,300See
                  accompanying notes to financial statements.


5




**ULTITEK,
        LTD. AND SUBSIDIARIES**
 
 **NOTES
        TO UNAUDITED CONDENSED FINANCIAL STATEMENTS**
 
 NOTE
        A -
        BASIS OF PRESENTATION
 
 The
        accompanying condensed consolidated financial statements have been prepared
        in
        accordance with generally accepted accounting principles for interim financial
        information. Accordingly, they do not include all of the information and
        footnotes required by generally accepted accounting principles for complete
        financial statements. In the opinion of management, all adjustments (consisting
        of normal recurring accruals) considered necessary in order to make the
        financial statements not misleading have been included. Results for the three
        and nine months ended September 30, 2006 are not necessarily indicative of
        the
        results that may be expected for the year ending December 31, 2006. For
        further information, refer to the financial statements and footnotes thereto
        included in the Ultitek, LTD. and Subsidiaries annual report on Form SB for
        the
        year ended December 31, 2005 filed on October 26, 2006.
 
 NOTE
        B -
        STOCKHOLDERS’ EQUITY (DEFICIT)
 
 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.
 
 During
        the three months ended September 30, 2006, the Company recorded $100,000
        in
        consulting fees and has included in shares outstanding an additional 1,453,423
        shares of common stock. To date, the shares have not been issued.
 
 6
  **Item
        2. Management’s Discussion and Analysis or Plan of
        Operation**
 
 **Forward-Looking
        Statements**
 
 *This
        Report contains statements that we believe are, or may be considered to be,
        “forward-looking statements” within the meaning of the Private Securities
        Litigation Reform Act of 1995. All statements other than statements of
        historical fact included in this Report regarding the prospects of our industry
        or our prospects, plans, financial position or business strategy, may constitute
        forward-looking statements. In addition, forward-looking statements generally
        can be identified by the use of forward-looking words such as “may,” “will,”
“expect,” “intend,” “estimate,” “foresee,” “project,” “anticipate,” “believe,”
“plans,” “forecasts,” “continue” or “could” or the negatives of these terms or
        variations of them or similar terms. Furthermore, such forward-looking
        statements may be included in various filings that we make with the SEC or
        press
        releases or oral statements made by or with the approval of one of our
        authorized executive officers. Although we believe that the expectations
        reflected in these forward-looking statements are reasonable, we cannot assure
        you that these expectations will prove to be correct. These forward-looking
        statements are subject to certain known and unknown risks and uncertainties,
        as
        well as assumptions that could cause actual results to differ materially
        from
        those reflected in these forward-looking statements. Readers are cautioned
        not
        to place undue reliance on any forward-looking statements contained herein,
        which reflect management’s opinions only as of the date hereof. Except as
        required by law, we undertake no obligation to revise or publicly release
        the
        results of any revision to any forward-looking statements. You are advised,
        however, to consult any additional disclosures we make in our reports to
        the
        SEC. All subsequent written and oral forward-looking statements attributable
        to
        us or persons acting on our behalf are expressly qualified in their entirety
        by
        the cautionary statements contained in this Report.*
 
 ***Business
        Overview***
 
 Ultitek
        was originally incorporated in the State of Delaware on January 11, 2005.
        On
        March 11, 2005, the Company was reincorporated in the State of Nevada. Also
        on
        March 11, 2005, the Company entered into a share exchange agreement with
        Transport Automation Information Systems (TAIS) pursuant to which the Company
        exchanged 15,000,000 shares of the Company’s common stock for all of the issued
        and outstanding shares of TAIS. In connection with the merger, TAIS became
        a
        wholly owned subsidiary of the Company. Through TAIS, the Company owns and
        operates the ULTITEK System consisting of a Computerized Reservation System,
        a
        Global Distribution System, and operation systems for the airlines, to be
        marketed worldwide.
 
 Prior
        to
        the merger, the Company was a non-operating “shell” corporation. For financial
        statement purposes, the merger has been reflected in the financial statements
        and below as though it occurred on January 1, 2004. The historical statements
        prior to the date of merger are those of TAIS. Since the merger is a
        recapitalization and not a business combination, pro-forma information is
        not
        presented.
 
 ***Our
        Principal Products and Services***
 
 We
        operate a completely independent reservation, global distribution, and airline
        operation system. Essentially, computer reservation systems and global travel
        distribution systems were partly or completely owned and hosted by a few
        large
        airlines. The remaining airlines are guests using these systems to have their information
        stored on the system hosted by a competitor who charges significant
        user  fees
        while accumulating proprietary and confidential information of the guest
        airline.  There
        are
        approximately ten large airlines with their own system, which host the
        other 990
        regional, mid-size and small airlines. We have a product that will provide these
        airlines a state-of-the-art system that is efficient, less costly and allows
        them to maintain
        their proprietary information.
 
 The
        Company’s software, known as the ULTITEK System (“ULTITEK System”), consists of
        the following systems:
 
 ●  Computerized
        Reservation System (“CRS”) .
        The
        Computer Reservations System is the module primarily designed to maintain
        seats
        inventory for airlines and to assist travel agencies book seats and other
        travel. Computerized Reservation System has a wide range of travel agency
        solutions, with an easy graphical interface including tools to run a travel
        agency productively.
  7
  ●  Global
        Distribution System (“GDS”) .
        The
        Global Distribution System is designed to disseminate flight schedules, seating
        availability, and pricing information electronically to customers. Modules
        provide solutions that meet the booking needs of travel agencies or in-house
        corporate travel departments.
 
 ●  Airline
        Operations System (“AOS”) .
        The
        Airline Operations System allows a subscriber airline to manage every aspect
        of
        the airline’s operations, which makes ULTITEK a complete solution.
 
 ●  Departure
        Control System (“DCS”) .
        The
        Departure Control System controls passenger registration and identification,
        boarding passes and seating assignments.
 
 
 The
        ULTITEK System will also include (a) a complete accounting system, including
        revenue management, yield management, accounts payable, accounts receivable,
        general ledger and cost accounting; (b) inventory control for the number
        of seats
        available on a flight; (c) inventory control for spare parts and other
        miscellaneous components; (d) maintenance; (e) fixed assets; (f) purchasing;
        (g)
        airport departure control (including control of boarding passes); (h)
        inter-airline clearing facility with electronic funds transfer; (i) aircraft
        dispatching; (j) crew management/scheduling; (k) airplane equipment inventory;
        (l) miscellaneous supplies and logistics; (m) inter-city long haul bus
        station/scheduling/reservation system; (n) reservations via Internet; (o)
        theater tickets sales; (p) multilingual features; (q) access to hotel
        reservations; (r) access to car rental reservations; (s) access to other
        tour
        operators; (t) frequent flyer programs; and (u) charter airline management
        modules.
 
 The
        ULTITEK System is currently accredited by International Air Transport
        Association (“IATA”) defined as a Computerized Reservation System  and
        has
        an IATA designated code. ULTITEK system communicates with most distribution
        systems worldwide.
 
 The
        ULTITEK System initially will be available in English and Russian. Subsequently,
        language modules will include French, German, Spanish, and other languages,
        as
        necessary, for ease of use and to support international marketing efforts
        at an
        anticipated cost ranging from $300,000 to $500,000 per additional language
        module.
 
 The
        ULTITEK System also offers (i) compatibility with standard technologies to
        facilitate integration into any agency environment; (ii) travel documents,
        ranging from a single ticket for multi airline bookings to boarding passes,
        car
        vouchers, itinerary information, invoices and tickets; and (iii) a
        state-of-the-art, real time approach to distributed data-bases.
 
 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
        allow ULTITEK’s Systems 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.
 
 8
  Hardware
        sales will be offered as a service, if requested by the subscriber.
 
 
 ***Liquidity
        and Capital Resources***
 
 As
        of
        September 30, 2006, we had $69,043 cash on hand and had a net loss of
        $1,575,137. We have financed our operations to date from loans, the sale
        of
        equity securities and through revenues.
 
 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***
 
 *Nine
        Months Ended September 30, 2006 Compared to Nine Months Ended September 30,
        2005*
 
 Our
        total
        revenue increased by $20,798, or approximately 1.9%, from $1,089,152 for
        the
        nine months ended September 30, 2005 to $1,109,950 for the nine months ended
        September 30, 2006. This increase was due to an increase in software licenses
        and maintenance fees.
 
 Our
        costs
        of revenue increased by $258,061, or approximately 37.8%, from $682,350 for
        the
        nine months ended September 30, 2005 to $940,411 for the nine months ended
        September 30, 2006. This increase was primarily due to an increase in the
        number
        of software licenses and maintenance activity which necessitated our increased
        utilization of programmers and consultants.
 
 
 *Three
        Months Ended September 30, 2006 Compared to Three Months Ended September
        30,
        2005*
 
 Our
        total
        revenue decreased by $210,424, or by 42.5%, from $495,121 for the three months
        ended September 30, 2005 to $284,697 for the three months ended September
        30,
        2006. This decrease was due to a decrease in software licenses and maintenance
        fees.
 
 Our
        costs
        of revenue increased by $35,084, or approximately 17.8% from $196,728 for
        the
        three months ended September 30, 2006 to $231,812 for the three months ended
        September 30, 2006. This increase was primarily due to our increased need
        for
        programmers and consultants.
 
 
 ***Research
        and Development***
 
 For
        the
        three and nine months ended September 30, 2006, we spent approximately $37,600
        and $88,850, respectively, in research and development, an increase from
        $15,500
        and $18,500 for the three and nine month ended September 30, 2005. These
        increases were due to the development and integration of reservation and
        financial systems. We
        do not
        expect to incur significant research and development expenses with respect
        to
        our software nor do 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.
 
 9
  ***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***
 
 The
        following 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.
 
 10
  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.
 
 Stock-Based
        Compensation
 
 The
        Company accounts for stock based compensation using the fair value method.
 
 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.
 
 
 **Item
        3. Controls and Procedures.**
 
 
 (a) *Evaluation
        of Disclosure Controls and Procedures.* Based on
        their evaluation as of the end of the period covered by this Quarterly Report
        on
        Form 10-QSB, our principal executive officer and principal financial officer
        have concluded that our disclosure controls and procedures (as defined in
        Rules
        13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the “Exchange
        Act”)) were effective to ensure that information required to be disclosed by
        us
        in reports that we file or submit under the Exchange Act is recorded, processed,
        summarized and reported within the time periods specified in SEC rules and
        forms.
 
 11
  (b) *Changes
          in Internal Controls Over Financial Reporting.* There
          were no changes in our internal controls over financial reporting during
          the
          fiscal quarter covered by this Form 10-QSB that have materially affected,
          or are
          reasonably likely to materially affect, our internal control over financial
          reporting.
 **PART
        II**
 **OTHER
        INFORMATION**
 
 **Item
        1. 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
        2. Unregistered Sale of Equity Securities and Use of
        Proceeds.**
 
 As
        disclosed in Note B to the Company’s financial statements filed with this
        Quarterly Report on Form 10-QSB, 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 three months ended September 30, 2006, the Company
        has
        included in shares outstanding an additional 1,453,423 shares of common stock
        although the shares have not yet been issued. When issuing the shares, the
        Company intends to rely upon the exemption from registration afforded the
        Company under Section 4(2) of the Securities Act of 1933, as amended, as
        the
        issuance will not involve a public offering. There will be no proceeds to
        the
        Company upon such issuance.
 
 **Item
        3. Defaults Upon Senior Securities.**
 
 None.
 
 **Item
        4. Submission of Matters to a Vote of Security Holders.**
 
 None.
 
 **Item
        5. Other Information.**
 
 None.
 
 12
  **Item
        6. Exhibits.**
 
 **EXHIBIT
        INDEX**
  **Exhibit No.**
              
              **Exhibit**31.1
              
              Certification
                  by Roman Price, the Principal Executive Officer of Ultitek, Ltd.,
                  pursuant
                  to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934,
                  as
                  amended31.2
              
              Certification
                by Paul Freed, CPA, the Principal Accounting Officer of Ultitek,
                Ltd.,
                pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act
                of
                1934, as amended32.1
              
              Certification
                  of Roman Price, the Principal Executive Officer of Ultitek, Ltd.,
                  pursuant
                  to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of
                  the
                  Sarbanes-Oxley Act of 200232.2
              
              Certification
                  of Paul Free, the Principal Accounting Officer of Ultitek, Ltd.,
                  pursuant
                  to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of
                  the
                  Sarbanes-Oxley Act of 2002
  13
  **SIGNATURES**
 
 In
        accordance with the requirements of the Exchange Act, the registrant caused
        this
        report to be signed on its behalf by the undersigned, thereunto duly
        authorized.
 
 
 **ULTITEK,
                  LTD.**By:
              */s/
                  Paul Freed***PAUL
                  FREED**
                Chief
                  Financial Officer
                (Principal
                  Accounting Officer) of Ultitek, Ltd.


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