**SECURITIES
AND EXCHANGE COMMISSION**
 **WASHINGTON,
D.C. 20549**
 
 **FORM
10-QSB**
 
 **QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE**
 **SECURITIES
EXCHANGE ACT OF 1934**
  **FOR
THE QUARTERLY PERIOD ENDED MARCH 31, 2005**
 
 Commission
File Number: 000-27867
 
 **TECHALT,
INC.**
 (Exact
name of small business issuer as specified in its charter)
 
 Nevada
 (State or
other jurisdiction of incorporation or organization)
 
 87-0533626
 (IRS
Employer Identification Number)
 
 3311 N.
Kennicott Ave., Suite A
 Arlington
Heights, IL 60004
 (Address
of principal executive offices)(Zip Code)
 
 (847)
870-2601
 (Registrant's
telephone no., including area code)
  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 for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days.
 Yes x No o
  The
number of shares of the Company's common stock outstanding on March 31, 2005:
13,365,972
  1
 ****
 **TECHALT,
INC.**
 **FORM
10-QSB**
 TABLE OF
      CONTENTSPART
      IFINANCIAL
      INFORMATIONItem
      1
    Financial
      StatementsItem
      2
    Management's
      Discussion and Analysis of Financial Condition and Results of
      OperationsItem
      3
    Controls
      and ProceduresPART
      IIOTHER
      INFORMATIONItem
      1
    Legal
      ProceedingsItem
      2
    Unregistered
      Sales of Equity Securities and Use of ProceedsItem
      3
    Defaults
      Upon Senior SecuritiesItem
      4
    Submission
      of Matters to a Vote of Security HoldersItem
      5
    Other
      InformationItem
      6
    ExhibitsSIGNATURES
  2
 
 **PART
I - FINANCIAL INFORMATION**
  **Item
1.**  **Financial
Statements**
  **TechAlt,
      Inc. and Subsidiary****CondensedConsolidated
      Balance Sheets**March
      31,
    
    December
      31,2005
    
    2004(Unaudited)Current
      assetsCash
      and cash equivalents
    
    $
    241,320
    
    $
    1,202,748Accounts
      receivable, net of allowance of $28,000 at March 31, 2005 and
      December 31, 2004
    
    
    541,680
    
    
    96,319Inventory
    
    
    407,016
    
    
    208,800Prepaid
      expenses and other current assets
    
    
    67,740
    
    
    130,405Total
      current assets
    
    
    1,257,756
    
    
    1,638,272Property
      and equipment, net
    
    
    196,635
    
    
    120,228Total
      assets
    
    $
    1,454,391
    
    $
    1,758,500Current
      liabilitiesAccounts
      payable
    
    $
    683,461
    
    $
    393,513Accounts
      payable - related parties
    
    
    246,346
    
    
    203,576Accrued
      liabilities
    
    
    109,531
    
    
    246,212Deferred
      revenue
    
    
    795,050
    
    
    1,051,280Current
      portion of notes payable to bank
    
    
    24,090
    
    
    21,508Advances
      due to officer
    
    
    163,159
    
    
    138,780Current
      portion of note payable due to affiliate of shareholder
    
    
    650,000
    
    
    650,000Accrued
      preferred stock dividends
    
    
    65,349
    
    
    12,131Total
      current liabilities
    
    
    2,736,986
    
    
    2,717,000Notes
      payable to bank, net of current portion
    
    
    24,839
    
    
    32,693Note
      payable to affiliate of shareholder, net of current
portion
    
    
    500,000
    
    
    500,000Total
      liabilities
    
    
    3,261,825
    
    
    3,249,693Commitments
      (Note 3)Stockholders'
      DeficitPreferred
      stock, $0.001 par value, 100,000,000 shares authorized, of which,4,820,000 million are authorized and designated as Series A
      Preferred Stock,4,816,260 and 3,935,000 shares issued and
      outstanding, liquidation preference of  $9,632,520 and $7,870,000 at
      March 31, 2005 and December 31, 2004, respectively
    
    
    4,816
    
    
    3,935Common
      stock, $0.001 par value, 500,000,000 shares authorized,13,305,972
      and 13,234,800 shares issued and outstanding at March 31, 2005 and
      December 31, 2004, respectively
    
    
    13,306
    
    
    13,235Common
      stock issuable, $0.001 par value (169,577 shares)
    
    
    170
    
    
    -Additional
      paid-in capital
    
    
    4,832,424
    
    
    3,946,378Deferred
      stock-based consulting
    
    
    (91,667
    )
    
    (129,792
    )Accumulated
      deficit
    
    
    (6,566,483
    )
    
    (5,324,949
    )Total
      stockholders' deficit
    
    
    (1,807,434
    )
    
    (1,491,193
    )Total
      liabilities and stockholders' deficit
    
    $
    1,454,391
    
    $
    1,758,500
  See
accompanying notes to condensed consolidated financial statements.
  3
  **TechAlt,
      Inc. and Subsidiary****Condensed
      Consolidated Statements of Operations****(Unaudited)**Three months ended March
      31,2005
    
    2004Revenue
    
    $
    996,382
    
    $
    59,089Cost
      of goods sold
    
    
    489,523
    
    
    24,860Gross
      profit
    
    
    506,859
    
    
    34,229Operating
      expensesGeneral
      and administrative
    
    
    755,372
    
    
    159,935Research
      and development
    
    
    469,928
    
    
    9,430Business
      development
    
    
    456,997
    
    
    34,102Total
      operating expenses
    
    
    1,682,297
    
    
    203,467Loss
      from operations before interest
    
    
    (1,175,438
    )
    
    (169,238
    )Interest
      expense, net
    
    
    (13,272
    )
    
    -Net
      loss
    
    
    (1,188,710
    )
    
    (169,238
    )Preferred
      stock dividends
    
    
    (52,824
    )
    
    -Net
      loss attributable to holders of common stock
    
    $
    (1,241,534
    )
    $
    (169,238
    )Basic
      and diluted net loss attributable to holdersof common
      stock
    
    $
    (0.09
    )
    $
    (0.02
    )Weighted
      average shares usedin computing loss per
    share
    
    
    13,358,770
    
    
    9,544,000
  See
accompanying notes to condensed consolidated financial statements.
 4
  **TechAlt,
      Inc. and Subsidiary****Condensed
      Consolidated Statements of Cash Flows****(Unaudited)**Three
      months ended March 31,2005
    
    2004Cash
      flows from operating activities:Net
      loss
    
    $
    (1,188,710
    )
    $
    (169,238
    )Adjustments
      to reconcile net loss to net cashused by operating
      activities:Depreciation
      expense
    
    
    20,101
    
    
    3,879Amortization
      of deferred stock-based compensation
    
    
    38,125
    
    
    -Changes
      in operating assets and liabilities:
    
    
    ****Accounts
      receivable
    
    
    (445,361
    )
    
    9,065Inventory
    
    
    (198,216
    )
    
    -Prepaid
      expenses and other current assets
    
    
    62,665
    
    
    (41,361
    )Accounts
      payable and accounts payable - related party
    
    
    339,020
    
    
    67,557Accrued
      liabilities
    
    
    (136,681
    )
    
    (4,887
    )Deferred
      revenue
    
    
    (256,230
    )
    
    -Net
      cash used by operating activities
    
    
    (1,765,287
    )
    
    (134,985
    )Cash
      flows from investing activities:Purchase
      of property, plant & equipment
    
    
    (96,508
    )
    
    -Net
      cash used by investing activities
    
    
    (96,508
    )
    
    -Cash
      flows from financing activities:Excess
      of checks issued over bank balance
    
    
    -
    
    
    (2,342
    )Principal
      payments on notes payable to bank
    
    
    (5,272
    )
    
    -Proceeds
      from sale of preferred stock
    
    
    881,260
    
    
    -Increase
      in advances due to officer
    
    
    24,379
    
    
    3,000Increase
      in amounts payable to affilitate of shareholder
    
    
    -
    
    
    134,327Net
      cash provided by financing activities
    
    
    900,367
    
    
    134,985Net
      increase (decrease) in cash and cash equivalents
    
    
    (961,428
    )
    
    -Cash
      and cash equivalents, beginning of period
    
    
    1,202,748
    
    
    -Cash
      and cash equivalents, end of period
    
    $
    241,320
    
    $
    -**Supplemental
      disclosures of cash flow information:**Cash
      paid for interest
    
    $
    19,649
    
    $
    -Cash
      paid for taxes
    
    $
    -
    
    $
    -Non-cash
      investing and financing activitiesCommon stock issued for preferred stock
      dividends
    
    $
    5,907
    
    $
    -
 See
accompanying notes to condensed consolidated financial statements.
 5
 **TECHALT,
INC. AND SUBSIDIARY**
 **NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**
 **March
31, 2005**
 **(Unaudited)**
 
 
 **NOTE
1 - DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES**
 
 ORGANIZATION
- TechAlt, Inc. (“TechAlt”) was organized under the laws of the State of Nevada
in 1994, and effective October 15, 2004, changed its name from Dendo Global
Corp. (“Dendo”) to TechAlt. As more fully described in Note 2, in December 2004,
Technology Alternatives, Inc. (“TAI”) became a wholly-owned subsidiary of
TechAlt. The transaction, in which a wholly-owned subsidiary of TechAlt, TechAlt
Acquisitions, Inc., was merged with and into TAI, is accounted for as a
recapitalization of TAI and combination of entities under common control.
Inasmuch as the former TAI shareholders own a majority of TechAlt common stock
after the merger and obtained management control, TAI is considered to be the
acquiring corporation for accounting purposes. The consolidated financial
statements after the transaction consist of the historical financial statements
of TAI, together with the operations of TechAlt from August 24, 2004, the date
of the License Agreement, as more fully described in Note 2.
 
 DESCRIPTION
OF BUSINESS - TechAlt and its subsidiary, TAI, (together, the “Company”) is
engaged in the sale of portable wireless communications solutions used by
emergency first responders for interagency interoperability, communication and
collaboration used in Homeland security, emergency medical and disaster
response. Sales of these products are generally made to an independent
contractor hired by local, state or federal agencies.
 
 BASIS OF
PRESENTATION AND GOING CONCERN - The accompanying consolidated financial
statements have been prepared in conformity with generally accepted accounting
principles in the United States of America, which contemplate continuation of
the Company as a going concern. The Company has incurred net losses since
inception, including a net loss for the year ended December 31, 2004 of
$4,104,201, cash used by operations for the year ended December 31, 2004 of
$2,489,809, and has a working capital deficit of $1,078,728 and a stockholders'
deficit of $1,491,193 at December 31, 2004. During the three months ended March
31, 2005, the Company incurred a net loss of $1,188,710, cash used by operations
of $1,765,287, and has a working capital deficit of $1,479,230 and a
stockholders’ deficit of $1,807,434 at March 31, 2005. These factors, among
others, raise substantial doubt about the ability of the Company to continue as
a going concern. The condensed consolidated financial statements do not
include any adjustments that might result from the outcome of these
uncertainties. Management's plans include, among other things, additional equity
or debt financing activities, the expansion of bank and vendor financing and
cash flows generated from sales activities all of which, management believes
will provide the Company the ability to continue as a going concern.
 
 BASIS OF
PRESENTATION OF INTERIM FINANCIAL STATEMENTS ** - The
accompanying unaudited condensed consolidated financial statements reflect,
in the opinion of management, all adjustments (consisting of normal recurring
adjustments) necessary for a fair presentation of financial position, results of
operations and cash flows for each period presented in accordance with
accounting principles generally accepted in the United States of America for
interim financial information and with the instructions to Form 10-QSB and of
Regulation SB. Accordingly, information and certain note disclosures normally
included in annual financial statements prepared in accordance with accounting
principles generally accepted in the United States of America have been
condensed or omitted from the accompanying statements. These interim financial
statements should be read in conjunction with the audited financial statements
and related notes thereto, which are included in the Company’s Annual Report on
Form 10-KSB for the year ended December 31, 2004 (the “2004 Form 10-KSB”). The
accompanying financial information as of December 31, 2004 has been derived from
audited financial statements. Operating results for interim periods in 2005, are
not necessarily indicative of future results that may be expected for the year
ending December 31, 2005.
 
 PRINCIPLES
OF CONSOLIDATION - The condensed consolidated financial statements include the
accounts of TechAlt, Inc. and its wholly-owned subsidiary. All significant
intercompany balances and transactions have been eliminated in
consolidation.
 
 USE OF
ESTIMATES--The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Significant estimates in 2004 and 2005
include valuation of accounts receivable, valuation of inventory, valuation of
acquired intangible assets, valuation of capital stock and warrants issued for
services and income taxes including the valuation of deferred tax assets. Actual
results could differ from those estimates.
 
 6
 REVENUE
RECOGNITION - The Company recognizes revenue when there is persuasive evidence
of an arrangement, products have been delivered or services have been provided
to the customer, the sales price is fixed or determinable, and collectibility is
reasonably assured. Delivery terms are generally FOB shipping point, typically
the Company's facility. The Company reduces revenue for estimated customer
returns and other allowances when reasonably known. Amounts billed in advance of
revenue recognition are included in deferred revenue.
 
 Revenue
from hardware sales is recognized when the product is shipped to the customer
and when there are no unfulfilled obligations that affect the customer's final
acceptance. Revenue from sales of software licenses and software maintenance
subscriptions are recognized on a straight-line basis over the subscription
term.
 
 STOCK
BASED COMPENSATION - The Company accounts for stock options issued to employees
in accordance with the provisions of Accounting Principles Board (“APB”) Opinion
No. 25, “Accounting for Stock Issued to Employees,” and related interpretations.
As such, compensation cost is measured on the date of grant as the excess of the
current market price of the underlying stock over the exercise price. Such
compensation amounts are amortized over the respective vesting periods of the
option grant. The Company adopted the disclosure provisions of SFAS No. 123
“Accounting for Stock-Based Compensation,” and SFAS No. 148 “Accounting for
Stock Based Compensation - Transition and Disclosure,” which permits entities to
provide pro forma net income (loss) and pro forma earnings (loss) per share
disclosures for employee stock option grants as if the fair-valued based method
defined in SFAS No. 123 had been applied .
 
 LOSS PER
SHARE - The computation of net loss per share attributable to holders of common
stock is based on the weighted average number of shares outstanding during the
period presented in accordance with Statement of Financial Accounting Standards
No. 128 "Earnings Per Share". Net loss is increased by preferred stock dividends
(paid or payable) in the computation of net loss per share attributable to
holders of common stock. Dilutive loss per share is not presented as the effects
of including common stock equivalent shares, which there were none during the
three months ended March 31, 2004, would be anti-dilutive for all periods
presented. Computations of net loss per share for the year ended March 31, 2005,
exclude 9,632,520 common shares potentially issuable pursuant to terms of
outstanding Series A Convertible Preferred Stock, 1,150,000 common shares
potentially issuable pursuant to a convertible promissory note and 12,915,772 common
shares issuable upon exercise of outstanding warrants and options. Such common
stock equivalents may dilute future earnings per share.
 
 RECENT
ACCOUNTING PRONOUNCEMENTS - In December 2004, the FASB issued SFAS No. 123(R)
that will require compensation costs related to share-based payment transactions
to be recognized in the financial statements. With limited exceptions, the
amount of compensation cost will be measured based on the grant-date fair value
of the equity or liability instruments issued. In addition, liability awards
will be remeasured each reporting period. Compensation cost will be recognized
over the period that an employee provides service in exchange for the award.
Statement 123(R) replaces FASB Statement No. 123 and supercedes APB Opinion No.
25, and is effective as of the beginning of the first annual reporting period
that begins after June 15, 2005.
  RECLASSIFICATIONS
- Certain amounts in 2004 financial statements have been reclassified to conform
with 2005 classifications.
 
 NOTE 2 -
AGREEMENT AND PLAN OF MERGER AND SETTLEMENT AGREEMENT
 
 On
December 15, 2004, TechAlt paid $650,000 to the former 45% owner of TAI
("Masanek"), which such payment then provided that certain documents and
agreements became effective pursuant to terms of an Escrow Agreement entered
into in November 2004 between TechAlt, TAI, Masanek and the former 55% owner of
TAI ("Solomon"). Material terms of the agreements and transactions occurring
subsequent to these payments are as follows:
 
 Agreement
and Plan of Merger- Pursuant to the Merger Agreement, all of the shares of
common stock of TAI (all of which were owned by Solomon and Masanek) were
exchanged for 9,544,000 shares of common stock of TechAlt. TechAlt Acquisitions,
Inc., a wholly-owned subsidiary of TechAlt, was merged with and into TAI, with
TAI becoming a wholly-owned subsidiary of TechAlt (the "Merger"). Upon
consummation of the Merger, Solomon and Masanek together own approximately 83%
of the voting common stock of the merged entity and obtained management control
and the shareholders of TechAlt prior to the License Agreement own approximately
17%. The transaction, in which TechAlt Acquisitions, Inc. was merged with and
into TAI, is accounted for as a recapitalization of TAI and combination of
entities under common control as of the August 24, 2004 license date and the
Company is deemed to have issued 1,656,000 common shares to the shareholders of
TechAlt. Inasmuch as the former TAI shareholders own a majority of TechAlt
common stock after the merger and obtained management control, TAI is considered
to be the acquiring corporation for accounting purposes
 
 7
 Settlement
Agreement - Pursuant to terms of the Settlement Agreement between TechAlt and
Masanek, among other things, (i) the License Agreement entered into between
TechAlt and TAI in August 2004 was rescinded, which rescission included
rescinding the 10,044,000 shares of TechAlt common stock issued pursuant to the
License agreement, (ii) TechAlt paid Masanek $650,000 cash, (iii) TechAlt and
Masanek entered into Sales, Consulting, Registration Rights, Right of First
Refusal and Escrow Agreements, (iv) TechAlt issued a Convertible Promissory Note
for $1,150,000 to Services by Designwise, Ltd. ("SBD"), a company owned by
Masanek, payable $650,000 one year from issuance and the remainder two years
from issuance subject to acceleration, as defined, based on capital raises, with
interest at 5%, and convertible into shares of TechAlt common stock on the basis
of $1.00 per share, and secured by substantially all assets of TechAlt, (v)
TechAlt issued warrants to Masanek for the right to purchase for a period of
five years 750,000 shares of TechAlt common stock for $1.00 per share with a
cashless exercise provision, (vi) TechAlt received from SBD the assignment of
all right, title and interests in certain intellectual property and inventory of
SBD relating to In-Car Based Communications Data Capture and Video Systems,
(vii) TechAlt paid $140,000 for the attorneys fees of Masanek, (viii) settlement
of certain claims made by Masanek against TechAlt and others in a lawsuit filed
in the Circuit Court of Cook County, Illinois, (ix) the Company entered into a 3
year sales agreement with a commitment for the Company to purchase from SBD
$1,250,000 of equipment inventory per year plus pay 6.25% to 6.75% royalties on
certain third party supplied goods, and (x) a consulting agreement for which the
Company will pay SBD $25,000 for the first four months and $6,250 per month for
the next 32 months plus other benefits.
 
 License
Agreement - On August 20, 2004, Dendo and its then majority (52%) shareholder
and sole member of its board of directors entered into an Intellectual Property
License Agreement with Technology Alternatives, Inc. ("TAI"), which agreement
(the "License Agreement") was consummated on August 24, 2004. Pursuant to the
License Agreement, in exchange for the issuance of 10,044,000 shares of Company
common stock ("Common Stock"), the Company licensed certain intellectual
property owned by TAI. The initial term of the License was 6 months,
automatically extended for additional 6 month terms until terminated by mutual
agreement. In connection with the License Agreement the Company made payments to
former Dendo shareholders of approximately $77,000 for the cancellation of
27,219,000 shares of Dendo common stock. After issuance of shares and
cancellation of shares in connection with the License Agreement, TAI owned 4
million shares of the 12 million total outstanding and Solomon, directly or
beneficially owned an additional approximately 4.5 million shares. In certain
circumstances, Solomon, voting shares directly or beneficially owned, along with
voting shares beneficially owned by TAI, had control to vote approximately 71%
of the Company's outstanding common shares
 
 NOTE 3 -
COMMITMENTS AND CONTINGENCIES
 
 Compensation
Agreement- In August 2004, the Company entered into an Employment Agreement with
Solomon, pursuant to which Solomon is to be employed by the Company as Chief
Executive Officer for an initial period of 3 years, which period shall be
automatically renewed until terminated by the Company. The Employment Agreement
provides for annual compensation of $175,000, an opportunity for Solomon to earn
additional annual bonuses upon the Company attaining certain financial targets,
and for the Company to grant Solomon options to purchase up to 1 million shares
of Company common stock at an exercise price being fair value at date of grant,
subject to vesting (these options have not been granted as of March 31,
2005).
 
 In
connection with an investment banking agreement, at March 31, 2005 the Company
had issued 45,200 common shares and had issuable 169,577 common shares and
warrants to purchase 195,252 common shares at $0.50 exercisable for four years.
The $107,388 value of the common stock based on the valuation of $0.50 per share
and $12,737 value of the common stock warrants (based on a Black-Scholes
valuation using zero dividends and zero volatility, interest rate of 3.48% and
term of 4 years) was treated as offering costs deducted from Series A funds
raised as a charge of additional paid-in-capital. (see Note 4)
 
 Business
Development Agreement - During the three months ended March 31, 2005, the
Company entered into a one-year Business Development Agreement with a financial
advisor, which replaced the Company’s prior agreement with the advisor and one
of its affiliates. Pursuant to terms of the Business Development Agreement, the
Company paid $290,000 and issued a total of 600,000 shares of its common stock
and 570,000 warrants to purchase Company common stock at a price of $1.00 per
share with a four-year term, which were recorded at December 31, 2004. In
addition, the Company has agreed to pay fees for future financing funds received
by the Company during the agreement term of cash equal to 10% of future
financing proceeds received and 10% of the securities issued in the
financing
 
 Public
Relations Agreement -In connection with a one-year Public Relations Agreement
entered into in November 2004, the Company agreed to issue 240,000 common shares
valued at $120,000 and warrants to purchase 500,000 common shares at $0.50 per
share and warrants to purchase 500,000 common shares at $1.00 per share. The
warrants were valued at $32,500, determined utilizing the Black-Scholes
valuation model. The total value of $152,500 was initially deferred as a
component of stockholders’ equity and is being amortized over the one-year term.
During the three months ended March 31, 2005, amortization expense was
$38,125.
 
 8
 Contract
to Supply Equipment to Cook County - In July 2004, the Company was awarded a
contract to supply certain equipment, software and services to a contractor
doing business with Cook County Commissioners Office. The Cook County
Commissioners Office approved a plan to implement a county-wide wireless
communications system. A grant of approximately $13 million from the Urban Area
Security Initiative of the Department of Homeland Security has been accepted to
fund the project. An additional grant of approximately $17 million has also been
approved for the second phase of the project. The contract is anticipated to
result in future Company revenues of approximately $9 million.
 
 Agreement
with IBM - In October 2004, the Company entered into a Statement of Work ("SOW")
with International Business Machines Corporation ("IBM") for the Phase 1
Implementation of the Company's wireless communications product line in
connection with Cook County's mobile wireless video and data network project.
The SOW serves as the Company's official notice and authorization to begin
implementation of and billing for the project. Pursuant to terms of the SOW, the
Company will be providing hardware and software, and maintenance services
through 2009, under Phase 1 for which it is to receive payments of approximately
$2.9 million. During December 2004, the Company received approximately $1
million from IBM, which the Company has recorded as deferred revenue at December
31, 2004. During the three months ended March 31, 2005, the Company received
additional payments of $100,000, and recognized $351,510 of deferred
revenue.
 
 In March
2005, TechAlt entered into an operating lease for equipment to be used in a
multi-city demo network. The total value of the equipment was $670,000. The term
of the lease is twenty-four months with monthly lease payments of
$7,600.
 
 Registration
Statement on Form SB-2 - The Company has filed a Registration Statement, as
amended, on Form SB-2 with the Securities and Exchange Commission, which as of
May 15, 2005 has not been declared effective, regarding registration of
approximately 41.6 million shares of Company common stock to be sold by certain
stockholders. The selling stockholders will offer common stock in amounts, at
prices and on terms to be determined at the time of the offering. The Company
will not receive any proceeds from sales of common stock by selling
stockholders. Shares of Company common stock are not currently quoted on any
exchange or over-the-counter bulletin board market. The Company has applied for
trading of its common stock on the over-the-counter bulletin board.
 
 NOTE 4 -
STOCKHOLDERS’ EQUTIY
 
 Series A
Convertible Preferred Stock, Warrants and Additional Investment Rights - During
the year ended December 31, 2004, pursuant to the private offering exemption
provided in Rule 506 of Regulation D of the Securities Act of 1933, in exchange
for $3,835,000, the Company sold 3,835,000 shares of its Series A Convertible
Preferred Stock (purchase price of $1.00 per share) (the "Series A Preferred"),
warrants to purchase 7,670,000 shares of the Company's common stock at an
exercise price of $1.00 per share with a cashless exercise provision for the
period ending five years from issuance (the "Warrants") and Additional
Investment Rights to purchase 65,000 additional shares of Series A Preferred
with 130,000 warrants at a purchase price of $1.00 per share (the "Series A
Preferred Rights") (the "Offering"). Each share of Series A Preferred is
convertible under certain circumstances into two shares of the Company's common
stock, at a conversion price of $0.50 per common share, the price determined by
Company management to represent the fair value of such stock at the issuance
date. The Series A Preferred holders have voting rights on an as converted
basis. The Series A Preferred shares contain registration rights and damages of
1.5% per month or part of any month based on filing and effectiveness deadlines.
An additional 820,000 Series A Preferred were authorized in December
2004.
 
 During
the three months ended March 31, 2005, pursuant to the private offering
exemption provided in Rule 506 of Regulation D of the Securities Act of 1933, in
exchange for $881,260 the Company sold 881,260 shares of its Series A Preferred
(purchase price of $1.00 per share) and Warrants to purchase 1,762,520 shares of
the Company’s common stock.
 
 Terms of
Series A Preferred provides for, among other things, cumulative dividends to be
paid to holders at a rate of 5% per annum, which accumulate daily from issuance
date and payable quarterly, in certain circumstances payable in the Company's
common stock, each preferred share to be convertible into 2 shares of Company
common stock, subject to anti-dilution conversion rate adjustments, a $2.00 per
share liquidation preference amount, if common stock dividends are declared.
Series A receives the same on an as converted basis, voting rights on an as
converted basis, and limits payment of dividends on common stock until certain
financial targets are met.
 
 Common
Stock - In 2004, as amended in February 2005, 400,000 shares were issued and
100,000 were issuable at December 31, 2004 (and issued in 2005) under an
agreement for capital raising services and 100,000 shares were issued for cash
of $50,000 to a financial consultant. The shares for services were valued at
$250,000 based on the $.50 per share common stock valuation from contemporaneous
issuances and conversion terms of the Series A Preferred. The $250,000 was
charged to additional paid-in capital as a Series A Preferred offering cost.
 
 9
 At
December 31, 2004, the Company has 240,000 common shares issuable valued at
$120,000 based on the valuation of  common
stock at $.50 per share,  issuable
pursuant to a Public Relations Agreement. The $120,000 is deferred as a
component of equity to be amortized over the one-year term of the agreement.
Amortization was $38,125 and $0 during the three months ended March 31, 2005 and
2004, respectively.
  During
the period ending March 31, 2005, 45,200 common shares were issued and 169,577
are issuable pursuant to an Investment Banking Agreement relating to the Series
A Preferred sale. The shares are valued at the $0.50 per share common stock
valuation or an aggregate $107,388 which was charged to additional
paid-in-capital as an offering cost. (see Note 3)
 
 On March
29, 2005, the Board of Directors of TechAlt approved the 2005 Stock Option Plan
(the "Plan") and the forms of Non-Qualified Stock Option Agreement ("NQA") and
Incentive Stock Option Agreement ("ISOA") to provide additional incentives to
key employees, officers, directors and independent contractors of TechAlt and
any Parent or Subsidiary it may at any time have, thereby helping to attract and
retain the best available personnel for positions of responsibility with those
entities and otherwise promoting the success of the business activities of such
entities. It is intended that options issued under the Plan constitute either
incentive stock options or nonqualified stock options. The maximum number of
shares that may be optioned and sold under the Plan is the greater of (i) five
million (5,000,000) shares of Common Stock of the Company, subject to
adjustment, or (ii) twenty percent of the total number of shares of Common Stock
that would be outstanding if each class of the Company's stock (including each
class of preferred stock) were converted into shares of Common Stock. The Plan
is administered by the Board directly, acting as a Committee of the whole, or if
the Board elects, by a separate Committee appointed by the Board for that
purpose and consisting of at least two Board members, all of whom shall be
Non-Employee Director. The adoption of the Plan is subject to ratification by
the affirmative vote of the holders of a majority of the shares of Common Stock
represented in person or by proxy at a duly convened meeting of the shareholders
of the Company, which ratification shall occur within twelve (12) months before
or after the date of adoption of the Plan by the Board.
 
 
 NOTE 5 -
RELATED PARTY TRANSACTIONS
 
 Purchases
of equipment from SBD included in cost of goods sold during the three months
ended March 31, 2005 and 2004 approximated $218,000 and $67,000, respectively.
Additionally, during the three months ended March 31, 2005 and 2004 the Company
incurred consulting fees payable to SBD of approximately $48,000 and $103,000.
The amounts are included in general and administrative expenses on the
accompanying financial statements. At March 31, 2005 and December 31, 2004, the
Company had accounts payable to SBD of approximately $158,000 and $14,000,
respectively, which is included in accounts payable-related party.
 
 Advances
payable to the Company's Chairman & Chief Executive Officer and 55% founding
shareholder was $163,259 and $138,780 at March 31, 2005 and December 31, 2004,
respectively. These advances are due on demand, unsecured and non-interest
bearing.
 
 An
officer of the Company is also a principal owner of a law firm that provides
services to the Company. Expenses incurred to this law firm were approximately
$210,000 and $0 during the three months ended March 31, 2005 and 2004,
respectively. Accounts payable of approximately $89,000 was due to this law firm
at March 31, 2005 and $190,000 at December 31, 2004, and included in accounts
payable-related party.
 
 10
 **ITEM
2.**  ****Management’s
Discussion and Analysis of Financial Condition and Results of
Operations****
  The
following discussion of our financial condition and results of operations should
be read in conjunction with the financial statements and related notes to the
financial statements included elsewhere in this Quarterly Report on Form 10-QSB
and the Company’s financial statements and management’s discussion and analysis
of financial condition and results of operations included in the Company’s 2004
Annual Report on Form 10-KSB. This discussion contains forward-looking
statements that relate to future events or our future financial performance.
These statements involve known and unknown risks, uncertainties and other
factors that may cause actual results, levels of activity, performance or
achievements to be materially different from any future results, levels of
activity, performance or achievements expressed or implied by these
forward-looking statements. These risks and other factors include, among others,
those listed under "Risk Factors" in the Company’s Annual Report on Form 10-KSB,
which investors are encouraged to read and consider.
 
 When used
in this report, the words or phrases "would be", "will allow", "intends to",
"will likely result", "are expected to", "will continue", "is anticipated",
"estimate", "project", or similar expressions are intended to identify
"forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995. The Company cautions readers not to place undue
reliance on any forward-looking statements, which speak only as of the date
made, and advises readers that forward-looking statements involve various risks
and uncertainties. The Company does not undertake, and specifically disclaims
any obligation to update any forward-looking statements to reflect occurrences
or unanticipated events or circumstances after the date of such statement.
 
 OVERVIEW
 
 CONTRACT
TO SUPPLY EQUIPMENT TO COOK COUNTY - In July 2004, the Company was awarded a
contract to supply certain equipment, software and services to a contractor
doing business with Cook County Commissioner's Office. The Commission approved a
plan to implement a county-wide wireless communications system. A grant of
approximately $13 million from the Urban Area Security Initiative of the
Department of Homeland Security has been accepted to fund the project. An
additional grant of approximately $17 million has also been approved for the
second phase of the project. The contract is anticipated to result in future
Company revenues of approximately $9 million.
 
 AGREEMENT
WITH IBM - In October 2004, the Company entered into a Statement of Work ("SOW")
with International Business Machines Corporation ("IBM") for the Phase 1
Implementation of TAI's wireless communications product line in connection with
Cook County's mobile wireless video and data network project. The SOW serves as
the Company's official notice and authorization to begin implementation of and
billing for the project. Pursuant to terms of the SOW, TAI will be providing
hardware and software, and maintenance services through 2009, under Phase 1 for
which it is to receive payments of approximately $2.9 million. In Phase 1 of the
project, 15 radio towers and 32 municipal and county buildings will be
configured as wireless hotspots. The Company's multi-network capable
communications modules will be used to transmit video and data to police, fire,
and emergency services vehicles. This live streaming video will help first
responders orchestrate a coordinated response to emergencies. The wireless
network will provide first responders in remote locations with information
already shared on the county's wired network. Police, fire and emergency
services personnel will have real-time access to law enforcement databases, GIS
information, hazmat information and other data on the Cook County network.
 
 AGREEMENT
AND PLAN OF MERGER- Pursuant to the Merger Agreement, all of the shares of
common stock of TAI (all of which were owned by Solomon and Masanek) were
exchanged for 9,544,000 shares of common stock of TechAlt. TechAlt Acquisitions,
Inc., a wholly-owned subsidiary of TechAlt, was merged with and into TAI, with
TAI becoming a wholly-owned subsidiary of TechAlt (the "Merger"). Upon
consummation of the Merger, Solomon and Masanek together own approximately 83%
of the voting common stock of the merged entity and obtained management control
and the shareholders of TechAlt prior to the License Agreement and name change
from Dendo Global Corp. own approximately 17%. The transaction, in which TechAlt
Acquisitions, Inc. was merged with and into TAI, is accounted for as a
recapitalization of TAI and combination of entities under common control as of
the August 24, 2004 license date and the Company is deemed to have issued
1,656,000 common shares to the shareholders of TechAlt. Inasmuch as the former
TAI shareholders own a majority of TechAlt common stock after the merger and
obtained management control, TAI is considered to be the acquiring corporation
for accounting purposes. The consolidated financial statements after the
transaction consist of the balance sheet of TAI and TechAlt, the operations of
TechAlt from the August 24, 2004 license closing date and the historical
operations of TAI.
 
 11
 SETTLEMENT
AGREEMENT - Pursuant to terms of the Settlement Agreement between the TechAlt
and Masanek, among other things, (i) the License Agreement entered into between
TechAlt and TAI in August 2004 was rescinded, which rescission included
rescinding the 10,044,000 shares of TechAlt common stock issued pursuant to the
License agreement, (ii) TechAlt paid Masanek $650,000 cash, (iii) TechAlt and
Masanek entered into Sales, Consulting, Registration Rights, Right of First
Refusal and Escrow Agreements, (iv) TechAlt issued a Convertible Promissory Note
for $1,150,000 to Services by Designwise, Ltd. ("SBD"), a company owned by
Masanek, payable $650,000 one year from issuance and the remainder two years
from issuance subject to acceleration, as defined, based on capital raises, with
interest at 5%, and convertible into shares of TechAlt common stock on the basis
of $1.00 per share, and secured by substantially all assets of TechAlt, (v)
TechAlt issued warrants to Masanek for the right to purchase for a period of
five years 750,000 shares of TechAlt common stock for $1.00 per share with a
cashless exercise provision, (vi) TechAlt received from SBD the assignment of
all right, title and interests in certain intellectual property and inventory of
SBD relating to In-Car Based Communications Data Capture and Video, (vii)
TechAlt paid $140,000 for the attorneys fees of Masanek, and (viii) settlement
of certain claims made by Masanek against TechAlt and others in a lawsuit filed
in the Circuit Court of Cook County, Illinois, (ix) the Company entered into a 3
year sales agreement with a commitment for the Company to purchase from SBD
$1,250,000 of equipment inventory per year plus pay 6.25% to 6.75% royalties on
certain third party supplied goods, and (x) a consulting agreement for which the
Company will pay SBD $25,000 for the first four months and $6,250 per month for
the next 32 months plus other benefits.
 
 SALE OF
SERIES A CONVERTIBLE PREFERRED STOCK AND WARRANTS - Through March 31, 2005,
pursuant to the private offering exemption provided in Rule 506 of Regulation D
of the Securities Act of 1933, in exchange for $4,816,000, before offering
costs, the Company sold 4,816,260 shares of its Series A Convertible Preferred
Stock (purchase price of $1.00 per share) (the "Series A Preferred") and
warrants to purchase 9,632,520 shares of the Company's common stock at an
exercise price of $1.00 per share with a cashless exercise provision (the
"Warrants"). Each share of Series A Preferred is convertible under certain
circumstances into two shares of the Company's common stock. The Series A
Preferred contain registration rights and damages of up to 3% per month based on
filing and effectiveness deadlines.
 
 Terms of
Series A Preferred provides for, among other things, cumulative dividends to be
paid to holders at a rate of 5% per annum, which accumulate daily from issuance
date and payable quarterly, in certain circumstances payable in the Company's
common stock, each preferred share to be convertible into two shares of Company
common stock, subject to anti-dilution conversion rate adjustments, a $2.00 per
share liquidation preference amount, if common stock dividends are declared,
Series A receives the same on an as converted basis, voting rights on an
as-converted basis and limits payment of dividends on common stock until certain
financial targets are met.
 
 REGISTRATION
STATEMENT ON FORM SB-2 - The Company has filed a Registration Statement, as
amended, on Form SB-2 with the Securities and Exchange Commission, which as of
May 15, 2005 has not been declared effective, regarding the registration of
approximately 41.6 million shares of TAI's common stock to be sold by TechAlt
and certain TechAlt stockholders. The selling stockholders will offer the common
stock in amounts, at prices and on terms to be determined at the time of the
offering. TechAlt will not receive any proceeds from sales of common stock by
selling stockholders. Shares of TechAlt common stock are not currently quoted on
any exchange or the over-the-counter bulletin board market. TechAlt has applied
for trading of its common stock on the over-the-counter bulletin board.
 
 
 RESULTS
OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 2004 AND 2005
 
 The
following discussion and analysis provides information which management believes
is relevant to an assessment and understanding of the Company's consolidated
financial condition as of March 31, 2005, and results of operations for the
three months ended March 31, 2005 and 2004.
 
 Revenue
increased to $996,382 during the three months ended March 31, 2005 as compared
to $59,089 during the comparative prior year period. The increase in revenues
was primarily attributable to revenues recognized from the contract with IBM
during 2005.
 
 Cost of
goods sold increased to $489,523 during the three months ended March 31, 2005 as
compared to $24,860 during the comparative prior year period. As a percent of
sales, cost of goods sold was 49% and 42% during the three months ended March
31, 2005 and 2004, respectively. The increase in cost of goods sold as a percent
of sales (and related decrease in gross profit percentage to 41% from 48%) was
due to higher costs in the initial start up of the product line being sold under
the IBM Contract.
 
 General
and administrative expenses increased to $755,372 during the three months ended
March 31, 2005 as compared to $159,935 during the comparative prior year period.
The increase in general and administrative expenses was primarily due to
increased personnel and related costs and increased legal and accounting
fees.
 
 12
 Research
and development expenses increased to $469,928 during the three months ended
March 31, 2005 as compared to $9,430 during the comparative prior year period.
The increase in research and development expenses was primarily due to
additional personnel and related costs, increased expenditures for application
development costs for the VDS (Video Digital System) unit, and for set-up of
demonstration vehicles.
 
 Business
development expenses increased to $456,997 during the three months ended March
31, 2005 as compared to $34,102 during the comparative prior year period. The
increase in business development expenses, which includes sales and marketing,
was primarily due to additional sales personnel and related costs, and increased
levels of public relations expenditures.
 
 
 LIQUIDITY
AND CAPITAL RESOURCES
 
 During
the three-months ended March 31, 2005, cash used by operating activities was
$1,765,287 as compared to cash used of $134,985 during the comparative prior
year period. The increase in cash used by operating activities was primarily due
to the increase in net loss to $1,188,710, a $1,019,472 increase, as further
increased by changes in operating assets and liabilities, most significant of
which were increases in accounts receivable and inventories.
 
 Cash used
in investing activities was approximately $96,508 during the three months ended
March 31, 2005 for the acquisition of property and equipment versus $0 in the
comparative prior year period.
 
 Cash
provided by financing activities for the three-months ended March 31, 2005 was
$900,367, resulting primarily from $881,260 proceeds received from sale of
881,260 shares of Series A Convertible Preferred Stock and warrants to purchase
1,760,000 shares of TechAlt common stock for $1.00 per share. Cash provided by
financing activities for the three-months ended March 31, 2004 was $134,985,
primarily consisting of an increase in amounts payable to an affiliate of a
shareholder.
 
 Off-Balance
sheet arrangements - The Company does not have any off-balance sheet
arrangements that have or are reasonably likely to have a material current or
future effect on its financial condition, changes in financial condition,
revenues or expenses, results of operations, liquidity, capital expenditures or
capital resources.
 
 
 BASIS OF
PRESENTATION AND GOING CONCERN UNCERTAINTIES - Since inception, the Company has
incurred losses. Operating expenses are expected to increase significantly as
the Company expands its sales and marketing efforts and otherwise supports its
expected growth. Given these planned expenditures, the Company may incur
additional losses in the near future. The Company needs additional financing and
could be required to cut back or stop operations if sufficient funding is not
raised. The Company's ability to continue operations will depend on positive
cash flow, if any, from future operations and its ability to raise additional
funds through equity or debt financing. While, Company management anticipates
that cash to be received in the future resulting from the Agreement with IBM,
and additional cash to be received from private and institutional investors will
be sufficient to fund our current operations and capital requirements for the
next 12 months, there can be no assurance that such amounts will be realized.
 
 As
disclosed in report of Independent Registered Public Accounting Firm on the
Company's financial statements for the years ended December 31, 2004 and 2003
included in the Company’s 2004 Annual Report on Form 10-K, these matters raise
substantial doubt about the Company's ability to continue as a going concern.
The accompanying financial statements have been prepared on the basis that the
Company will continue as a going concern and do not include any adjustments to
reflect the possible future effects on the recoverability of assets and
liquidation of liabilities that may result from these
uncertainties.
 
 CRITICAL
ACCOUNTING POLICIES
 
 The
Company's financial statements are prepared in accordance with accounting
principles generally accepted in the United States of America, which among other
things, requires management to make estimates and assumptions that affect
reported amounts of assets and liabilities and disclosure of contingent assets
and liabilities at the date of financial statements and reported amounts of
revenues and expenses during reporting periods. These estimates and assumptions
are affected by management's application of accounting policies. Critical
accounting policies applied in 2005 and 2004 financial statements include
accounting for revenue recognition, accounting for research and development
costs, accounting for non-cash issuances of capital stock and accounting for
income taxes.
 
 13
 REVENUE
RECOGNITION - The Company recognizes revenue when there is persuasive evidence
of an arrangement, products have been delivered or services have been provided
to the customer, the sales price is fixed or determinable, and collectibility is
reasonably assured. Delivery terms are generally FOB shipping point, typically
the Company's facility. The Company reduces revenue for estimated customer
returns and other allowances when reasonably known. Amounts billed in advance of
revenue recognition are included in deferred revenue. Revenue from hardware
sales is recognized when the product is shipped to the customer and when there
are no unfulfilled obligations that affect the customer's final acceptance.
Revenue from sales of software licenses and software maintenance subscriptions
are recognized on a straight-line basis over the subscription term.
 
 RESEARCH
AND DEVELOPMENT COSTS - Research and development costs, which are comprised
primarily of compensation, consulting costs, supplies, materials and related
costs, are expensed as incurred. The value of acquired In-process Research and
Development is charged to expense on the date of acquisition if the acquired
intellectual property has not attained "technological feasibility" as of that
date.
 
 STOCK
BASED COMPENSATION - The Company accounts for stock options issued to employees
in accordance with the provisions of Accounting Principles Board (“APB”) Opinion
No. 25, “Accounting for Stock Issued to Employees,” and related interpretations.
As such, compensation cost is measured on the date of grant as the excess of the
current market price of the underlying stock over the exercise price. Such
compensation amounts are amortized over the respective vesting periods of the
option grant. The Company adopted the disclosure provisions of SFAS No. 123
“Accounting for Stock-Based Compensation,” and SFAS No. 148 “Accounting for
Stock Based Compensation - Transition and Disclosure,” which permits entities to
provide pro forma net income (loss) and pro forma earnings (loss) per share
disclosures for employee stock option grants as if the fair-valued based method
defined in SFAS No. 123 had been applied .
 
 INCOME
TAXES - The Company continues to record a valuation allowance for the full
amount of deferred income taxes, which would otherwise be recorded for tax
benefits relating to operating loss carryforwards, as realization of such
deferred tax assets cannot be determined to be more likely than
not.
 14
  **Item
3.**  **Controls
and Procedures**
  Under the
supervision and with the participation of our management, including the Chief
Executive Officer and Chief Financial Officer, we have evaluated the
effectiveness of our disclosure controls and procedures pursuant to Exchange Act
Rule 13a-15(b) as of the end of the period covered by this report. Based on that
evaluation, the Chief Executive Officer and Chief Financial Officer have
concluded that these disclosure controls and procedures are effective. There
were no changes in our internal control over financial reporting during the
quarter ended March 31, 2005 that have materially affected, or are reasonably
likely to materially affect, our internal control over financial
reporting.
  15
  **PART
II - OTHER INFORMATION**
 **Item
1.**  **Legal
Proceedings**
 
 None
 
 **Item
2.**  **Unregistered
Sales of Equity Securities and Use of Proceeds**
 
 None
 
 **Item
3.**  **Defaults
Upon Senior Securities**
 
 None
 
 **Item
4.**  **Submission
of matters to a Vote of Securities Holders**
 
 None
 
 **Item
5.**  **Other
Information**
 
 None
 
 **Item
6.**  **Exhibits**
 Exhibit
      No.
    Description2.1
    Form
      of Agreement and Plan of Merger3.1(i)
    Articles
      of Incorporation3.2(i)
    Certificate
      of Amendment to the Articles of Incorporation3.3(i)
    Certificate
      of Amendment to the Articles of Incorporation3.4(ii)
    Bylaws3.5(ii)
    Amended
      Bylaws4.1
    Certificate
      of Designation4.2
    Amended
      Certificate of Designation4.3
    Form
      of Securities Purchase Agreement4.4
    Form
      of Registration Rights Agreement4.5
    Form
      of Warrant4.6
    Form
      of Additional Warrant4.7
    Form
      of Additional Investment Right4.8
    Form
      of Lock-Up Agreement
  16
  4.9
    Form
      of Warrant issued to Paul Masanek4.10
    Secured
      Convertible Promissory Note
 
 4.11
    Form
      of Registration Rights Agreement with
      Paul
      Masanek and Services By Designwise, Ltd.4.12
    Form
      of Right of First Refusal Agreement4.13
    Form
      of Non-Qualified Stock Option Agreement4.14
    Form
      of Incentive Stock Option Agreement4.15
    Form
      of Excipio Group, S.A. Warrant10.1
    Employment
      Agreement with James E. Solomon10.2
    Intellectual
      Property License Agreement10.3
    Financial
      Advisory and Investment Banking Agreement
      with
      Sunrise Securities Corp.10.4
    Public
      Relations Retainer Agreement with
      with
      Sunrise Financial Group, Inc.10.5
    Base
      Agreement with International Business Machines
      Corporation10.6
    IBM
      Solutions Engagement Agreement Statement of Work10.7
    Arias
      Technology Corporation, Inc., Agreement forConsulting Services10.8
    TechAlt/Arias
      Statement of Work10.9
    Form
      of Agreement to Rescind Intellectual Property
      License
      Agreement10.10
    Form
      of Sales Agreement10.11
    Form
      of Security Agreement10.12
    Form
      of Settlement Agreement10.13
    Form
      of Technology Assignment and Bill of Sale10.14
    Form
      of Escrow Agreement10.15
    Form
      of Consulting Agreement10.16
    Form
      of Waiver and Amendment Agreement10.17
    2005
      Stock Option Plan10.18
    Business
      Development Agreement
      with
      Excipio Group, S.A.
  17
  31.1
    Certification
      of CEO pursuant to Section 302 of the Sarbanes-Oxley
Act31.2
    Certification
      of CFO pursuant to Section 302 of the Sarbanes-Oxley
Act32
    Certification
      of CEO and CFO pursuantto
      Section 906 of the Sarbanes-Oxley Act
 
 18
 ****
 **SIGNATURES**
  Pursuant
to the requirements of the Securities Exchange Act of 1934, as amended, this
report has been signed by the following persons on behalf of the Registrant in
the capacities and on the dates indicated.
 
 ****TECHALT,
      INC.****May 13, 2005
    
    /s/ James E.
    SolomonJames E. SolomonChairman & Chief Executive
      Officer
 ********May 13, 2005
    
    /s/ James E.
    SolomonJames E. SolomonChairman & Chief Executive
      Officer(Principal Executive Officer)
 ********May 13, 2005
    
    /s/ James
HurleyJames HurleyChief Financial
      Officer(Principal Financial
Officer)
 19
 EXHIBIT
INDEX
 Exhibit
      No.
    
    Description
    
    Location2.1
    
    Form
      of Agreement and Plan of Merger
    
    Incorporated
      by reference to Exhibit 2.1 of the Company's Form 8-K filed December 21,
      2004.3.1(i)
    
    Articles
      of Incorporation
    
    Incorporated
      by reference to Exhibit 3.1 of the Company's Form 10-SB filed October
      29,19993.2(i)
    
    Certificate
      of Amendment to the Articles of Incorporation
    
    Incorporated
      by reference to Exhibit 3.2 of the Company's Form 10-SB filed October
      29,19993.3(i)
    
    Certificate
      of Amendment to the Articles of Incorporation
    
    Incorporate
      by reference to Exhibit 3.3(i) of the Company’s SB-2 Registration
      Statement filed November 15, 20043.4(ii)
    
    Bylaws
    
    Incorporated by
      reference to Exhibit 3.3 of the Company's Form 10-SB filed October
      29,19993.5(ii)
    
    Amended
      Bylaws
    
    Incorporated
      by reference to Exhibit 3.2 of the Company's Form 8-K filed August 27,
      20044.1
    
    Certificate
      of Designation
    
    Incorporated
      by reference to Exhibit 4.1 of the Company's Form 8-K filed August 27,
      20044.2
    
    Amended
      Certificate of Designation
    
    Incorporated
      by reference to Exhibit 4.2 the Company’s Form SB-2/A filed February 17,
      20054.3
    
    Form
      of Securities Purchase Agreement
    
    Incorporated
      by reference to Exhibit 10.3 of the Company's Form 8-K filed August 27,
      20044.4
    
    Form
      of Registration Rights Agreement
    
    Incorporated
      by reference to Exhibit 10.4 of the Company's Form 8-K filed August 27,
      20044.5
    
    Form
      of Warrant
    
    Incorporated
      by reference to Exhibit 10.5 of the Company's Form 8-K filed August 27,
      20044.6
    
    Form
      of Additional Warrant
    
    Incorporated
      by reference to Exhibit 10.6 of the Company's Form 8-K filed August 27,
      20044.7
    
    Form
      of Additional Investment Right
    
    Incorporated
      by reference to Exhibit 10.8 of the Company's Form 8-K filed August 27,
      2004
  20
  4.8
    
    Form
      of Lock-Up Agreement
    
    Incorporated
      by reference to Exhibit 10.7 of the Company's Form 8-K filed August 27,
      20044.9
    
    Form
      of Warrant issued to Paul Masanek
    
    Incorporated
      by reference to Exhibit 4.1 of the Company's Form 8-K filed December 21,
      2004.4.10
    
    Form
      of Secured Convertible Prom. Note
    
    Incorporated
      by reference to Exhibit 4.2 of the Company's Form 8-K filed December 21,
      2004.4.11
    
    Form
      of Registration Rights Agreement
      with
      Paul Masanek and Services
      By
      Designwise, Ltd.
    
    Incorporated
      by reference to Exhibit 4.3 of the Company's Form 8-K filed December 21,
      2004.4.12
    
    Form
      of Right of First Refusal Agreement
    
    Incorporated
      by reference to Exhibit 4.4 of the Company's Form 8-K filed December 21,
      2004.4.13
    
    Form
      of Non-Qualified Stock Option Agreement
    
    Incorporated
      by reference to Exhibit 4.1 of the Company's Form 8-K filed April 4,
      2005.4.14
    
    Form
      of Incentive Stock Option Agreement
    
    Incorporated
      by reference to Exhibit 4.2 of the Company's Form 8-K filed April 4,
      2005.4.15
    
    Form
      of Excipio Group, S.A. Warrant
    
    Incorporated
      by reference to Exhibit 4.3 of the Company's Form 8-K filed April 4, 2005.10.1
    
    Employment
      Agreement with
      James
      E. Solomon
    
    Incorporated
      by reference to Exhibit 10.2 of the Company's Form 8-K filed August 27,
      200410.2
    
    Intellectual
      Property License Agreement
    
    Incorporated
      by reference to Exhibit 10.1 of the Company's Form 8-K filed August 27,
      200410.3
    
    Financial
      Advisory and Investment
      Banking
      Agreement with
      Sunrise
      Securities Corp.
    
    Incorporated
      by reference to Exhibit 10.3 of the Company's Form SB-2 Registration
      Statement filed November 15, 2004.10.4
    
    Public
      Relations Retainer Agreement with
      with
      Sunrise Financial Group, Inc.
    
    Incorporated
      by reference to Exhibit 10.4 of the Company's Form SB-2 Registration
      Statement filed November 15, 2004.10.5
    
    Base
      Agreement with International
      Business
      Machines Corporation
    
    Incorporated
      by reference to Exhibit 10.5 of the Company's Form SB-2 Registration
      Statement filed November 15, 2004.10.6
    
    IBM
      Solutions Engagement Agreement
      Statement
      of Work
    
    Incorporated
      by reference to Exhibit
      10.6
      of the Company's Form SB-2 Registration Statement filed November 15,
      2004.
  21
  10.7
    
    Arias
      Technology Corporation, Inc.,
      Agreement
      for Consulting Services
    
    Incorporated
      by reference to Exhibit
      10.7
      of the Company's Form SB-2 Registration Statement filed November 15,
      2004.10.8
    
    TechAlt/Arias
      Statement of Work
    
    Incorporated
      by reference to Exhibit 10.8 of the Company's Form SB-2 Registration
      Statement filed November 15, 2004.10.9
    
    Form
      of Agreement to Rescind Intellectual
      Property
      License Agreement
    
    Incorporated
      by reference to Exhibit 10.1 of the Company's Form 8-K filed December 21,
      2004.10.10
    
    Form
      of Sales Agreement
    
    Incorporated
      by reference to Exhibit 10.2 of the Company's Form 8-K filed December 21,
      2004.10.11
    
    Form
      of Security Agreement
    
    Incorporated
      by reference to Exhibit 10.3 of the Company's Form 8-K filed
      December
      21, 2004.10.12
    
    Form
      of Settlement Agreement
    
    Incorporated
      by reference to Exhibit
      10.4
      of the Company's Form 8-K filed December 21, 2004.10.13
    
    Form
      of Technology Assignment
      and
      Bill of Sale
    
    Incorporated
      by reference to Exhibit 10.5 of the Company's Form 8-K filed December 21,
      2004.10.14
    
    Form
      of Escrow Agreement
    
    Incorporated
      by reference to Exhibit 10.6 of the Company's Form 8-K filed
      December
      21, 2004.10.15
    
    Form
      of Consulting Agreement
    
    Incorporated
      by reference to Exhibit 10.7 of the Company's Form 8-K filed December 21,
      2004.10.16
    
    Form
      of Waiver and Amendment
      Agreement
    
    Incorporated
      by reference to Exhibit 10.16 the Company’s Form SB-2/A filed February17,
      200510.17
    
    Form
      of 2005 Stock Option Plan
    
    Incorporated
      by reference to Exhibit 10.1 of the Company's Form 8-K filed April 4,
      2005.10.18
    
    Form
      of Business Development Agreement
    
    Incorporated
      by reference to Exhibit 10.3 of the Company's Form 8-K filed April 4,
      2005.
  22
  31.1
    
    Certification
      of CEO pursuant to Section
      302
      of the Sarbanes-Oxley Act
    
    Attached31.2
    
    Certification
      of CFO pursuant to Section
      302
      of the Sarbanes-Oxley Act
    
    Attached32
    
    Certification
      of CEO and CFO pursuantto
      Section
      906 of the Sarbanes-Oxley Act
    
    Attached
 
 
 23