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 JUNE 30, 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 [   ]

The number of shares of the Company's common stock outstanding on June 30, 2005:
13,365,972

<PAGE>

                                  TECHALT, INC.
                                   FORM 10-QSB

TABLE OF CONTENTS

PART  I     FINANCIAL  INFORMATION

Item 1      Financial  Statements

Item 2      Management's  Discussion  and Analysis or Plan of Operation

Item 3      Controls and Procedures

PART II     OTHER INFORMATION

Item 1      Legal Proceedings

Item 2      Unregistered Sales of Equity Securities and Use of Proceeds

Item 3      Defaults Upon Senior Securities

Item 4      Submission of Matters to a Vote of Security Holders

Item 5      Other Information

Item 6      Exhibits

SIGNATURES


                                       2
<PAGE>

                         PART I - FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

                          TECHALT, INC. AND SUBSIDIARY
                      CONDENSED CONSOLIDATED BALANCE SHEET
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                                            June 30,
                                                                                              2005
                                                                                        ---------------
<S>                                                                                      <C>
Current assets
  Cash and cash equivalents                                                             $            --
  Accounts receivable                                                                           580,248
  Inventory                                                                                     395,183
  Prepaid expenses and other current assets                                                      62,167
                                                                                        ---------------
          Total current assets                                                                1,037,598
Property and equipment, net                                                                     245,647
Other assets                                                                                     35,928
                                                                                        ---------------

           Total assets                                                                 $     1,319,173
                                                                                        ===============

Current liabilities
  Excess of checks issued over bank balance                                             $        18,777
  Notes payable to bank collateralized by accounts receivable                                   628,094
  Accounts payable                                                                            1,059,805
  Accounts payable - related parties                                                            346,670
  Accrued liabilities                                                                           434,039
  Deferred revenue                                                                              287,623
  Current portion of notes payable to bank                                                       26,672
  Advances due to officer                                                                       126,399
  Current portion of note payable due to affiliate of shareholder                               650,000
  Accrued preferred stock dividends                                                             124,600
                                                                                        ---------------
          Total current liabilities                                                           3,702,679
Notes payable to bank, net of current portion                                                    16,921
Note payable to affiliate of shareholder, net of current portion                                500,000
                                                                                        ---------------
          Total liabilities                                                                   4,219,600
                                                                                        ---------------

Commitments and contingencies (Note 3)

Series A Preferred stock subject to potential recission (Note 4)                              4,816,260
                                                                                        ---------------

Stockholders' Deficit
  Preferred 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 shares issued and outstanding, liquidation preference of $9,632,520                    --
  Common stock and additional paid-in capital, $0.001 par value,
    500,000,000 shares authorized, 13,307,719 shares issued and outstanding                      13,306
  Common stock issuable (169,577 shares)                                                            170
  Additional paid-in capital                                                                    397,980
  Deferred stock-based consulting                                                              (125,619)
  Accumulated deficit                                                                        (8,002,524)
                                                                                        ---------------
     Total stockholders' deficit                                                             (7,716,687)
                                                                                        ---------------

           Total liabilities and stockholders' deficit                                  $     1,319,173
                                                                                        ===============
</TABLE>

     See accompanying notes to condensed consolidated financial statements.


                                       3
<PAGE>

                          TECHALT, INC. AND SUBSIDIARY
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                    Three months ended June 30,     Six months ended June 30,
                                                   ----------------------------    ----------------------------
                                                       2005            2004            2005            2004
                                                   ------------    ------------    ------------    ------------
<S>                                                <C>             <C>             <C>             <C>
Revenue                                            $  1,318,938    $     64,760    $  2,315,320    $    123,849
Cost of goods sold                                      411,517          59,850         901,040          84,710
                                                   ------------    ------------    ------------    ------------
Gross profit                                            907,421           4,910       1,414,280          39,139
                                                   ------------    ------------    ------------    ------------
Operating expenses
  General and administrative                            856,056         205,145       1,611,428         365,080
  Research and development                              568,725          26,153       1,038,653          35,583
  Business development                                  639,688          33,456       1,096,685          67,558
                                                   ------------    ------------    ------------    ------------
     Total operating expenses                         2,064,469         264,754       3,746,766         468,221
                                                   ------------    ------------    ------------    ------------

Loss  from operations before interest                (1,157,048)       (259,844)     (2,332,486)       (429,082)
Interest expense, net                                   (15,855)             --         (29,127)             --
                                                   ------------    ------------    ------------    ------------

Net loss                                             (1,172,903)       (259,844)     (2,361,613)       (429,082)

Preferred stock dividends                               (59,251)             --        (112,075)             --
                                                   ------------    ------------    ------------    ------------

Net loss attributable to holders of common stock   $ (1,232,154)   $   (259,844)   $ (2,473,688)   $   (429,082)
                                                   ============    ============    ============    ============

Basic and diluted net loss per share
  attributable to holders of common stock          $      (0.09)   $      (0.03)   $      (0.18)   $      (0.04)
                                                   ============    ============    ============    ============


Weighted average shares used
  in computing loss per share                        13,477,296       9,544,000      13,418,033       9,544,000
                                                   ============    ============    ============    ============
</TABLE>

     See accompanying notes to condensed consolidated financial statements.


                                       4
<PAGE>

                          TECHALT, INC. AND SUBSIDIARY
                CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                  (UNAUDITED)

<TABLE>
<CAPTION>
                                                                              Six months ended June 30,
                                                                             --------------------------
                                                                                2005            2004
                                                                             -----------    -----------
<S>                                                                          <C>            <C>
Cash flows from operating activities:
 Net loss                                                                    $(2,361,613)   $  (429,082)
    Adjustments to reconcile net loss to net cash
      used  by operating activities:
        Depreciation expense                                                      56,425          7,759
        Amortization of deferred stock-based compensation                        177,573             --
        Decrease in provision for allowance for doubtful accounts                (28,000)            --
        Changes in operating assets and liabilities:
           Inventory                                                            (186,383)            --
           Accounts receivable                                                  (455,929)       (16,439)
          Prepaid expenses and other current assets                               32,310             --
          Accounts payable and accounts payable - related party                  815,688        345,010
          Accrued liabilities                                                    187,540         (4,308)
          Deferred revenue                                                      (763,657)            --
                                                                             -----------    -----------
               Net cash used in operating activities                          (2,526,046)       (97,060)
                                                                             -----------    -----------
Cash flows from investing activities:
     Purchase of property, plant & equipment                                    (181,844)        (2,759)
                                                                             -----------    -----------
          Net cash used in investing activities                                 (181,844)        (2,759)
                                                                             -----------    -----------
Cash flows from financing activities:
    Increase (decrease) in excess of checks issued over bank balance              18,777        (13,137)
    Proceeds from notes payable collateralized by accounts receivable, net       628,094             --
     Principal payments on notes payable to bank                                 (10,608)            --
     Proceeds from sale of preferred stock                                       881,260             --
     Increase (decrease) in advances due to officer                              (12,381)       127,994
                                                                             -----------    -----------
          Net cash provided  by financing activities                           1,505,142        114,857
                                                                             -----------    -----------

Net increase (decrease) in cash and cash equivalents                          (1,202,748)        15,038

Cash and cash equivalents, beginning of period                                 1,202,748             --
                                                                             -----------    -----------

Cash and cash equivalents, end of period                                     $        --    $    15,038
                                                                             ===========    ===========

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
  Cash paid for interest                                                     $    35,846    $        --
                                                                             ===========    ===========
  Cash paid for income taxes                                                 $        --    $        --
                                                                             ===========    ===========

  Non-cash investing and financing activities
     Common stock issued for preferred stock dividends                       $    13,860    $        --
                                                                             ===========    ===========
</TABLE>

See accompanying notes to condensed consolidated financial statements.


                                       5
<PAGE>

                          TECHALT, INC. AND SUBSIDIARY
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  JUNE 30, 2005
                                   (UNAUDITED)


NOTE 1 - DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

RESTATEMENT - As described in Note 4, in July 2005,  Company  management  became
aware of the possibility  that holders of the Company's Series A Preferred Stock
may be entitled to certain recission rights. As a result, the Company's December
31, 2004  consolidated  balance sheet will be restated to  reclassify  the gross
proceeds received from the sale of these securities out of stockholders' equity,
where  originally  recorded,  to the  balance  sheet  classification  "Series  A
Preferred  Stock Subject to Recission" in accordance  with Emerging  Issues Task
Force Topic D-98,  Classification and Measurement of Redeemable Securities.  The
consolidated  statement of stockholders'  equity for the year ended December 31,
2004 will similarly be restated for this  reclassification.  There was no effect
on the Company's  consolidated  statements  of operations or of cash flows.  The
Company is in the process of filing  amendments  to its December 31, 2004 Annual
Report on Form 10-KSB and March 31, 2005 Quarterly  Report on Form 10-QSB (for a
similar adjustment) relating to this restatement.

Additionally,  the Company is restating its December 31, 2004 and March 31, 2005
consolidated financial statements included in the aforementioned Form 10-KSB and
Form 10-QSB amendments to be filed for the revaluation of warrants issued, which
had been initially recorded using values determined  utilizing the Black-Scholes
valuation model with a volatility  factor of 0%, and have been revised utilizing
a volatility  factor of 71%,  determined based on average  volatilities of other
similar  entities.  The effect of the change in volatility factor resulted in an
increase  in  settlement  expense  of  $172,500,  an  increase  in  general  and
administrative  expense  of  $32,025  (relating  to  amortization  of  increased
deferred stock-based consulting), an increase in deferred stock-based consulting
of $181,475, and an increase in additional paid-in capital of $395,000 as of and
for the year ended December 31, 2004.  The net effect on the Company's  December
31, 2004 financial statements increased net loss by $213,525.  The effect of the
restatement  also increased  general and  administrative  expense by $51,000 and
decreased  deferred  stock-based  consulting  by $51,000 as of and for the three
months ended March 31, 2005. There was no effect on total stockholders'  deficit
or cash flows.

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 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,  During the six months ended June 30, 2005, the Company
incurred a net loss of  $2,361,613,  and its operating  activities  used cash of
$2,526,046,  and has a working capital deficit of $2,665,081 and a stockholders'
deficit of $7,716,687  at June 30, 2005. In addition,  as discussed in Note 3, a
creditor, an affiliate of a greater than 10% shareholder, has provided notice of
default to the Company and demanded  possession of  collateral,  which  includes
substantially all Company assets,  and as discussed in Note 4, certain investors
may have recission  rights.  These factors and the company cash position,  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,  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.  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.  These  interim  condensed  consolidated
financial statements should be read in conjunction with the audited consolidated
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") and Note 1 "RESTATEMENT" above.


                                       6
<PAGE>

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.

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.  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,  which to date have been insignificant,  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.  If the
Company recorded  stock-based  compensation  expense in accordance with SFAS No.
123, the net loss for the three and six month  periods ended June 30, 2005 would
have increased by  approximately  $1,186,000 from $1,172,903 and $2,361,613 to a
pro forma net loss of $2,358,903 and $3,547,613, respectively. Basic and diluted
net loss per share  attributable to holders of common stock would have increased
from  $0.09 and $0.18 to $0.18 and $0.26 on a pro forma  basis for the three and
six months ended June 30, 2005, respectively.

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  six  months  ended  June  30,  2004,   would  be
anti-dilutive for all periods presented.  Computations of net loss per share for
the three and six months ended June 30, 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.  Such  common  stock  equivalents  may dilute  future
earnings per share.

RECENT  ACCOUNTING  PRONOUNCEMENTS - In December 2004, the Financial  Accounting
Standards Board ("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.

In May 2005,  the FASB issued  Statement of Financial  Accounting  Standards No.
154, "Accounting Changes and Error Corrections",  (SFAS 154"). SFAS 154 replaces
APB Opinion No. 20, "Accounting  Changes," and SFAS No. 3, "Reporting Accounting
Changes in Interim  Financial  Statements," and changes the requirements for the
accounting for and reporting of a change in accounting principle. The Company is
required to adopt SFAS 154 in 2007.  The  Company's  results of  operations  and
financial  condition will only be impacted by SFAS 154 if the Company implements
changes in accounting  principles  that are addressed by the standard or correct
accounting errors in future periods.

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:


                                       7
<PAGE>

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

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. Also see Note 3 regarding communications
received from SBD in June and July 2005.

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

Bridge Loans - During the six months ended June 30,  2005,  the Company  entered
into two  short-term  loans,  one for $376,094 and the other for  $252,000.  The
first loan is due July 6, 2005,  which was paid on that date.  The other loan is
due August 6, 2005, which was paid on that date. Both loans were  collateralized
by all business assets,  and in particular  accounts  receivable from one of the
Company's customers.

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.  In April  2005,  the Company
granted  Solomon fully vested  options with a 10 year term to purchase 1 million
shares of Company common stock with an exercise price of $0.50 per share.

Investment  Banking  Agreement  -  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 a value of $0.50 per share and  $54,866  value of the common  stock  warrants
(based on a  Black-Scholes  valuation  using zero dividends and 71%  volatility,
interest  rate of 4.15% and term of 4 years)  was  recorded  as  offering  costs
deducted from Series A funds raised as a charge to  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 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,  which were recorded at December 31, 2004. The total  estimated  value of
$251,000 was initially  deferred as a component of  stockholders'  equity and is
being  amortized  over the one-year  term.  During the six months ended June 30,
2005, amortization expense was $62,750.


                                       8
<PAGE>

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 was recorded as deferred  revenue at December 31, 2004.
During the six months  ended June 30,  2005,  the  Company  received  additional
payments of $817,585, and recognized $1,610,656 of revenue.

Operating  Lease  Agreement - 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 filed a Registration Statement
on Form SB-2 with the Securities and Exchange Commission regarding  registration
of approximately 40 million shares of Company common stock to be sold by certain
stockholders. In July 2005, the Company withdrew this Registration Statement and
is in the process of filing a new  registration  statement.  It is expected that
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.

Communications  received  from SBD - On June 30,  2005,  the Company  received a
letter  from  SBD  claiming  that  the  Company  had  defaulted  on its  payment
obligations  under  the Note and that SBD has the right to  accelerate  the full
payment of the $1,150,000  promissory  note. The Company  engaged in discussions
with SBD to resolve its claim of default and acceleration,  however, on July 22,
2005,  the  Company  received  a  letter  from  SBD's  legal  counsel  demanding
possession of "all accounts,  accounts receivable,  good, equipment,  inventory,
machinery,  fixtures,  cash, securities,  all intellectual  property,  including
trademarks,   services  marks,  trade  names,  copyrights,   patents,  licenses,
including  patent   licenses,   contracts  and  other  tangible  and  intangible
property." Company management  believes SBD's demand to be legally defective and
without  force or effect and  intends to defend  itself  vigorously  against any
attempts by Masanek and/or SBD to secure  possession of the Company's assets, in
addition  to  pursuing in a court of law,  if  necessary,  SBD,  Masanek and his
associates  in connection  with certain  actions taken by them prior to the July
22, 2005 letter.  The Company  continues to be engaged in discussions to resolve
this matter.

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"),  all of such  rights  have been  exercised.  An  additional
820,000  Series A Preferred  were  authorized  in December  2004.  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. Included in general and administrative expenses for the three and six
months ended June 30, 2005 is $300,000 relating to accrued damages.

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.


                                       9
<PAGE>

Series A Preferred Stock Subject to Potential  Recission - In July 2005, Company
management became aware that holders of 4,816,260 shares of the Company's Series
A Preferred Stock (all outstanding shares) may be entitled to certain rescission
rights. The resale  registration  statement of shares of common stock underlying
these  securities was originally  filed by the Company in November 2004, and has
subsequently  been  withdrawn.  Pursuant to the  Securities  Act of 1933 and the
related rules and  regulations,  as  interpreted  by the Securities and Exchange
Commission, as a result of a portion of the additional investment rights granted
with the initial sale of 500,000 shares of Series A Preferred Stock,  which were
the basis of the sale of additional  shares of Series A Preferred  Stock,  being
unexercised at the time the resale registration  statement was originally filed,
the private  offerings have not been completed and  accordingly,  the public and
private  offerings would be integrated and result in a violation of Section 5 of
the  Securities  Act.  Accordingly,  the  investors  who  purchased  the private
placement  securities may have a number of remedies available to them, including
the  potential  right  to  rescind  the  purchase  of  those   securities  plus,
potentially, any amount representing damage to such investors.


The Company is unable to predict if the investors would attempt to exercise such
potential rescission rights. Each investor's decision would be based upon, among
other things,  the price of the Company's common stock and other factors.  These
potential  rescission  rights  could  require the Company to refund at least the
gross proceeds of these private offerings to the investors.  In order to satisfy
such  potential  obligations,  the  Company  would be  required  to utilize  its
available  capital  resources and obtain  alternate  sources of capital for such
purposes.  The Company  presently does not have the capital available to satisfy
all potential claims for rescission. The inability to obtain alternative sources
of capital would have a material effect on the Company's financial condition and
results of operations.


For purposes of accounting for this  contingency in accordance with Statement of
Financial Accounting Standards 5, "Accounting for Contingencies",  the Company's
management has evaluated the above factors and has determined  that the ultimate
liability to the Company from the potential assertion by investors of rescission
rights is not probable.  This conclusion is based on management's  determination
that the factors  and/or  conditions  that would  encourage an attempt to assert
such rights are  significantly  outweighed by the factors and/or conditions that
would  discourage  an attempt  to assert  such  rights.  Since the  Company  has
determined  that a rescission is not probable,  although it may be possible,  no
accrual  is  required  under  SFAS  5.  As  of  June  30,  2005,  the  Company's
consolidated  balance sheet reflects  $4,816,260,  as "Series A Preferred  Stock
Subject to Potential Rescission",  in accordance with Emerging Issues Task Force
Topic D-98, Classification and Measurement of Redeemable Securities.

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  value of  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.

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 were valued at $107,388  based on the $.50
per share common stock value of  contemporaneous  issuances and conversion terms
of the Series A  Preferred,  and  charged to  additional  paid-in-capital  as an
offering cost.

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.  In
April 2005, the Company granted to certain of its employees, officers and member
of the Board of Directors  fully-vested,  ten-year options to purchase 2,845,000
shares of Company  common stock at $0.50 per share,  a price  considered  by the
Company's Board of Directors to represent the fair value of such common stock at
grant date.  Additionally,  in April 2005, the Company granted to certain of its
employees  and  officers  ten-year  options,  which fully vest 1 year from grant
date, to purchase  693,664 shares of Company common stock at $0.50 per share. At
June 30, 2005, there were 3,538,664 options outstanding.

NOTE 5 - RELATED PARTY TRANSACTIONS

Purchases  of  equipment  from SBD included in cost of goods sold during the six
months  ended  June  30,  2005  and  2004  approximated  $212,000  and  $84,000,
respectively.  Additionally,  during the six months ended June 30, 2005 and 2004
the Company incurred  consulting fees payable to SBD of  approximately  $102,000
and $184,000. The amounts are included in general and administrative expenses on
the accompanying condensed  consolidated financial statements.  At June 30, 2005
the Company  had  accounts  payable to SBD of  approximately  $167,000  which is
included in accounts payable-related party.

Advances payable to the Company's  Chairman and Chief Executive  Officer and 55%
founding  shareholder  was $126,399 at June 30, 2005.  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
$294,000  and  $52,000  during  the six  months  ended  June 30,  2005 and 2004,
respectively.  Accounts  payable of  approximately  $160,000 was due to this law
firm at June 30, 2005, which is included in accounts payable-related party.


                                       10
<PAGE>


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 and  RESTATEMENT  in Note 1 to the
financial  statements  included in this Form 10-QSB.  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.

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)


                                       11
<PAGE>

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 June 30,
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").  The Series A  Preferred  contain  registration  rights and damages
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.

SERIES A PREFERRED STOCK SUBJECT TO RECISSION - In July 2005, Company management
became  aware  that  holders  of  4,816,260  shares  of the  Company's  Series A
Preferred Stock (all outstanding  shares) may be entitled to certain  rescission
rights. The resale  registration  statement of shares of common stock underlying
these  securities was originally  filed by the Company in November 2004, and has
subsequently  been  withdrawn.  Pursuant to the  Securities  Act of 1933 and the
related rules and  regulations,  as  interpreted  by the Securities and Exchange
Commission, as a result of a portion of the additional investment rights granted
with the initial sale of 500,000 shares of Series A Preferred Stock,  which were
the basis of the sale of additional  shares of Series A Preferred  Stock,  being
unexercised at the time the resale registration  statement was originally filed,
the private  offerings have not been completed and  accordingly,  the public and
private  offerings would be integrated and result in a violation of Section 5 of
the  Securities  Act.  Accordingly,  the  investors  who  purchased  the private
placement  securities may have a number of remedies available to them, including
the  potential  right  to  rescind  the  purchase  of  those   securities  plus,
potentially, any amount representing damage to such investors.


The Company is unable to predict if the investors would attempt to exercise such
potential rescission rights. Each investor's decision would be based upon, among
other things,  the price of the Company's common stock and other factors.  These
potential  rescission  rights  could  require the Company to refund at least the
gross proceeds of these private offerings to the investors.  In order to satisfy
such  potential  obligations,  the  Company  would be  required  to utilize  its
available  capital  resources and obtain  alternate  sources of capital for such
purposes.  The Company  presently does not have the capital available to satisfy
all potential claims for rescission. The inability to obtain alternative sources
of capital would have a material effect on the Company's financial condition and
results of operations.


For purposes of accounting for this  contingency in accordance with Statement of
Financial Accounting Standards 5, "Accounting for Contingencies",  the Company's
management has evaluated the above factors and has determined  that the ultimate
liability to the company from the potential assertion by investors of rescission
rights is not probable.  This conclusion is based on management's  determination
that the factors  and/or  conditions  that would  encourage an attempt to assert
such rights are  significantly  outweighed by the factors and/or conditions that
would  discourage  an attempt  to assert  such  rights.  Since the  Company  has
determined  that a rescission is not probable,  although it may be possible,  no
accrual  is  required  under  SFAS  5.  As  of  June  30,  2005,  the  Company's
consolidated  balance sheet  reflects  $4,816,260  as "Series A Preferred  Stock
Subject to Potential Rescission",  in accordance with Emerging Issues Task Force
Topic D-98, Classification and Measurement of Redeemable Securities.

Registration Statement on Form SB-2 - The Company filed a Registration Statement
on Form SB-2 with the Securities and Exchange Commission regarding  registration
of approximately 40 million shares of Company common stock to be sold by certain
stockholders. In July 2005, the Company withdrew this Registration Statement and
is in the process of filing a new  registration  statement.  It is expected that
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.


                                       12
<PAGE>

Communications  received  from SBD - On June 30,  2005,  the Company  received a
letter  from  SBD  claiming  that  the  Company  had  defaulted  on its  payment
obligations  under  the Note and that SBD has the right to  accelerate  the full
payment of the $1,150,000  promissory  note. The Company  engaged in discussions
with SBD to resolve its claim of default and acceleration,  however, on July 22,
2005,  the  Company  received  a  letter  from  SBD's  legal  counsel  demanding
possession of "all accounts,  accounts receivable,  good, equipment,  inventory,
machinery,  fixtures,  cash, securities,  all intellectual  property,  including
trademarks,   services  marks,  trade  names,  copyrights,   patents,  licenses,
including  patent   licenses,   contracts  and  other  tangible  and  intangible
property." Company management  believes SBD's demand to be legally defective and
without  force or effect and  intends to defend  itself  vigorously  against any
attempts by Masanek and/or SBD to secure  possession of the Company's assets, in
addition  to  pursuing in a court of law,  if  necessary,  SBD,  Masanek and his
associates  in connection  with certain  actions taken by them prior to the July
22, 2005 letter.  The Company  continues to be engaged in discussions to resolve
this matter.


QUARTER  ENDED JUNE 30,  2005 AND 2004,  AND SIX MONTHS  ENDED JUNE 30, 2005 AND
2004

The following  discussion and analysis  provides  information  which  management
believes is relevant to an assessment and understanding of the Company's results
of operation  and  financial  condition for the three months ended June 30, 2005
and six months ended June 30, 2005 as compared to the three and six months ended
June 30, 2004. The discussion  should be read in conjunction  with the financial
statements and notes thereto.

Revenue of $1,319,000  for the three months ended June 30, 2005  increased  over
the same period for 2004 due to Phase 1  implementation  and billing  $1,197,000
for the IBM contract and $122,000 in equipment sales to municipalities.  Revenue
of $65,000 for the three months  ended June 30, 2004 is  comprised  primarily of
equipment sales.

General and administrative  expenses of $856,000 for the three months ended June
30, 2005 included  approximately $132,000 of legal and accounting fees, $192,000
for employee  compensation,  and $300,000  for accrued  damages  relating to the
effectiveness  deadlines for holders of preferred stock. The balance of $232,000
included consulting fees, and operations costs such as Building Rent, Insurance,
Telephone and Office Expenses.  General and administrative expenses for the same
period in 2004 were $205,000. The increase is primarily attributed to additional
staff and related expenses to support the IBM contract, and accrued damages.

The  $569,000  for  the  three  months  ended  June  30,  2005 of  research  and
development  expenses are comprised primarily of $242,000 employee  compensation
and related expenses, $291,000 in Applications Development and Project Costs and
the balance of $36,000 for Office and other  operating  expenses.  Research  and
development costs for the same period in 2004 were $26,000.  The increase is due
to  additional  staff and  outside  services  to  support  the IBM  Project  and
continued product development.

Business  Development  expenses of $ 640,000 for the three months ended June 30,
2005 included $276,000 for employee compensation and related expenses,  $308,000
for Public  Relations,  Marketing  materials and Trade Shows, and the balance of
$56,000  for  operating  expenses.  Expenses  for the same  period  in 2004 were
$33,000, with the increase for additional staff and Marketing.

Revenue for the six months  ended June 30,  2005 was  $2,315,000,  comprised  of
$1,983,000  for Phase 1 IBM  contract  billing  and  $332,000  from the State of
Illinois and other municipality equipment purchases.  Revenue for the six months
ended  June 30,  2004 was $  124,000  and is  comprised  of  equipment  sales to
municipalities. The increase in revenue is primarily due to the IBM contract.

General and administrative  expenses of $1,611,000 for the six months ended June
30, 2005 included  approximately $336,000 in legal and accounting fees, $412,000
for employee  compensation and related expenses and $300,000 for accrued damages
relating to the  effectiveness  deadlines  for holders of preferred  stock.  The
balance of $563,000  included  consulting  fees,  and  operations  costs such as
Building Rent, Insurance, Office and Travel expenses. General and administrative
expenses for the same period in 2004 were $365,000.  Increased  expenditures for
General and administrative  were due to additional staff and related expenses to
support the IBM contract, and accrued damages.

Research  and  Development  costs for the six months  ended  June 30,  2005 were
$1,039,000,  comprised  primarily  of $438,000  for  employee  compensation  and
related  expenses,  $494,000 in Application  Development and Project Costs, with
the balance of $107,000 for operating expenses.  For the same period in 2004 the
Research and  Development  costs were $36,000.  Increases in these costs reflect
increased staff and outside services to support  continued  product  development
and the requirements for the IBM contract.


                                       13
<PAGE>

Business  Development  expenses totaled $1,097,000 for the six months ended June
30, 2005. This included $521,000 for employee compensation and related expenses,
$391,000 for Public  Relations,  Marketing  materials and Trade Shows,  with the
balance of $185,000 for operating  expenses.  Expenses were $68,000 for the same
period in 2004.  The increase over 2004  expenses is due to increased  staff and
Marketing activities.


LIQUIDITY AND CAPITAL RESOURCES

During the six-months ended June 30, 2005, cash used by operating activities was
$2,526,046 as compared to cash used of $97,060 during the comparative prior year
period.  The increase in cash used by operating  activities was primarily due to
the  increase  in net loss to  $2,361,613,  a  $1,932,531  increase,  as further
increased by changes in operating  assets and  liabilities,  most significant of
which were increases in accounts receivable and inventories, offset by increases
in accounts payable.

Cash used by investing  activities was $181,844 during the six months ended June
30, 2005 for the  acquisition  of property and  equipment  versus  $2,759 in the
comparative prior year period.

Cash provided by financing activities for the six-months ended June 30, 2005 was
$1,505,142,  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 and the proceeds
from  collateralizing of the accounts  receivable with our bank in the amount of
$628,094.  Cash provided by financing  activities for the six-months  ended June
30, 2004 was  $127,994,  primarily  consisting of an increase in advances due to
officer.

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


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, accounting for income
taxes.

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.  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, which to
date have been  insignificant,  are recognized on a straight-line basis over the
subscription term.


                                       14
<PAGE>

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.

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.


                                       15
<PAGE>

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 June 30, 2005 that have  materially  affected,  or are  reasonably
likely to materially affect, our internal control over financial reporting.


                                       16
<PAGE>

                           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

2.1      Form of Agreement and Plan of Merger

3.1(i)   Articles of Incorporation

3.2(i)   Certificate of Amendment to the Articles of Incorporation

3.3(i)   Certificate of Amendment to the Articles of Incorporation

3.4(ii)  Bylaws

3.5(ii)  Amended Bylaws

4.1      Certificate of Designation

4.2      Amended Certificate of Designation

4.3      Form of Securities Purchase Agreement

4.4      Form of Registration Rights Agreement

4.5      Form of Warrant

4.6      Form of Additional Warrant

4.7      Form of Additional Investment Right

4.8      Form of Lock-Up Agreement

4.9      Form of Warrant issued to Paul Masanek

4.10     Secured Convertible Promissory Note


                                       17
<PAGE>

4.11     Form of Registration Rights Agreement with Paul Masanek and Services By
         Designwise, Ltd.

4.12     Form of Right of First Refusal Agreement

4.13     Form of Non-Qualified Stock Option Agreement

4.14     Form of Incentive Stock Option Agreement

4.15     Form of Excipio Group, S.A. Warrant

10.1     Employment Agreement with James E. Solomon

10.2     Intellectual Property License Agreement

10.3     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 Corporation

10.6     IBM Solutions Engagement Agreement Statement of Work

10.7     Arias Technology Corporation, Inc., Agreement for Consulting Services

10.8     TechAlt/Arias Statement of Work

10.9     Form of Agreement to Rescind Intellectual Property License Agreement

10.10    Form of Sales Agreement

10.11    Form of Security Agreement

10.12    Form of Settlement Agreement

10.13    Form of Technology Assignment and Bill of Sale

10.14    Form of Escrow Agreement

10.15    Form of Consulting Agreement

10.16    Form of Waiver and Amendment Agreement

10.17    2005 Stock Option Plan

10.18    Business Development Agreement with Excipio Group, S.A.

31.1     Certification of CEO pursuant to Section 302 of the Sarbanes-Oxley Act

31.2     Certification of CFO pursuant to Section 302 of the Sarbanes-Oxley Act

32       Certification   of  CEO  and  CFO   pursuant  to  Section  906  of  the
         Sarbanes-Oxley Act


                                       18
<PAGE>

                                   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.

August 15, 2005                       /s/ James E. Solomon
                                      ------------------------------------------
                                      James E. Solomon
                                      Chairman & Chief Executive Officer

August 15, 2005                       /s/ James E. Solomon
                                      ------------------------------------------
                                      James E. Solomon
                                      Chairman & Chief Executive Officer
                                      (Principal Executive Officer)

August 15, 2005                       /s/ James Hurley
                                      ------------------------------------------
                                      James Hurley
                                      Chief Financial Officer
                                      (Principal Financial Officer)


                                       19
<PAGE>

                                  EXHIBIT INDEX

2.1      Form of Agreement and Plan of Merger*

3.1(i)   Articles of Incorporation*

3.2(i)   Certificate of Amendment to the Articles of Incorporation*

3.3(i)   Certificate of Amendment to the Articles of Incorporation*

3.4(ii)  Bylaws*

3.5(ii)  Amended Bylaws*

4.1      Certificate of Designation*

4.2      Amended Certificate of Designation*

4.3      Form of Securities Purchase Agreement*

4.4      Form of Registration Rights Agreement*

4.5      Form of Warrant*

4.6      Form of Additional Warrant*

4.7      Form of Additional Investment Right*

4.8      Form of Lock-Up Agreement*

4.9      Form of Warrant issued to Paul Masanek*

4.10     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 Agreement*

4.13     Form of Non-Qualified Stock Option Agreement*

4.14     Form of Incentive Stock Option Agreement*

4.15     Form of Excipio Group, S.A. Warrant*

10.1     Employment Agreement with James E. Solomon*

10.2     Intellectual Property License Agreement*

10.3     Financial  Advisory  and  Investment  Banking  Agreement  with  Sunrise
         Securities Corp.*

10.4     Public Relations  Retainer Agreement with with Sunrise Financial Group,
         Inc.*


                                       20
<PAGE>

<TABLE>
<S>                                                                                       <C>
10.5     Base Agreement with International Business Machines Corporation*

10.6     IBM Solutions Engagement Agreement Statement of Work*

10.7     Arias Technology Corporation, Inc., Agreement for Consulting Services*

10.8     TechAlt/Arias Statement of Work*

10.9     Form of Agreement to Rescind Intellectual Property License Agreement*

10.10    Form of Sales Agreement*

10.11    Form of Security Agreement*

10.12    Form of Settlement Agreement*

10.13    Form of Technology Assignment and Bill of Sale*

10.14    Form of Escrow Agreement*

10.15    Form of Consulting Agreement*

10.16    Form of Waiver and Amendment Agreement*

10.17    2005 Stock Option Plan*

10.18    Business Development Agreement with Excipio Group, S.A.*

31.1     Certification of CEO pursuant to Section 302 of the Sarbanes-Oxley Act           Attached

31.2     Certification of CFO pursuant to Section 302 of the Sarbanes-Oxley Act           Attached

32       Certification   of  CEO  and  CFO   pursuant  to  Section  906  of  the          Attached
         Sarbanes-Oxley Act
</TABLE>

* Previously filed.


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