##### Table of Contents



SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 Form 10-QSB
 þ
    
    Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 For the quarterly period ended March 31, 2006 or
 o
    
    Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 For
the transition period from ___ to ___
 Commission File Number: 0-27166
 XATA Corporation
 
  Minnesota
    
    41-1641815(State or Other Jurisdiction of Incorporation or Organization)
    
    (I.R.S. Employer Identification Number)
  
  (952) 707-5600
 
  þ o
 o þ
 o o þ
   o þ




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##### 



Index
 Page No.PART I.
    
    FINANCIAL INFORMATIONItem 1.
    
    Financial Statements:Balance Sheets as of March 31, 2006 and September 30, 2005
    
    
    3Statements of Operations for the Three and Six Months Ended March 31, 2006 and 2005
    
    
    4Statements of Changes in ShareholdersEquity as of March 31, 2006 and September 30, 2005
    
    
    5Statements of Cash Flows for the Six Months Ended March 31, 2006 and 2005
    
    
    6Notes to Financial Statements
    
    
    7Item 2.
    
    Management's Discussion and Analysis or Plan of Operation
    
    
    15Item 3.
    
    Controls and Procedures
    
    
    22PART II.
    
    OTHER INFORMATIONItem 1.
    
    Legal Proceedings
    
    
    24Item 2.
    
    Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    24Item 3.
    
    Defaults upon Senior Securities
    
    
    24Item 4.
    
    Submission of Matters to a Vote of Security Holders
    
    
    24Item 5.
    
    Other Information
    
    
    25Item 6.
    
    Exhibit
    
    
    25SIGNATURESEXHIBITSCertification of CEO Pursuant to Section 302Certification of CFO Pursuant to Section 302Certification of CEO Pursuant to Section 906Certification of CFO Pursuant to Section 906
  2




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##### Table of Contents



PART I. FINANCIAL INFORMATION
 
 Item 1. Financial Statements
 XATA CORPORATION
 
 BALANCE SHEETS
 March 31,
    
    
    September 30,2006
    
    
    2005ASSETSCurrent AssetsCash and cash equivalents
    
    $
    5,355,000
    
    
    $
    6,473,000Accounts receivable, less allowances for doubtful accounts
and sales returns of $365,000 and $315,000
    
    
    6,853,000
    
    
    
    7,812,000Inventories
    
    
    2,112,000
    
    
    
    1,257,000Deferred product costs
    
    
    3,654,000
    
    
    
    4,671,000Prepaid expenses
    
    
    337,000
    
    
    
    204,000Total current assets
    
    
    18,311,000
    
    
    
    20,417,000Equipment and leasehold improvements, net
    
    
    2,144,000
    
    
    
    1,085,000Deferred product costs, net of current portion
    
    
    1,429,000
    
    
    
    1,002,000Total assets
    
    $
    21,884,000
    
    
    $
    22,504,000LIABILITIES AND SHAREHOLDERS EQUITYCurrent LiabilitiesBank line of credit
    
    $
    500,000
    
    
    $
    1,800,000Current portion of long-term obligations
    
    
    88,000
    
    
    
    Accounts payable
    
    
    1,509,000
    
    
    
    2,387,000Accrued expenses
    
    
    2,746,000
    
    
    
    2,171,000Deferred revenue
    
    
    7,233,000
    
    
    
    7,774,000Total current liabilities
    
    
    12,076,000
    
    
    
    14,132,000Long-term obligations, net of current portion
    
    
    136,000
    
    
    
    Deferred revenue, net of current portion
    
    
    4,677,000
    
    
    
    3,335,000Total liabilities
    
    
    16,889,000
    
    
    
    17,467,000Shareholders EquityPreferred stock, no par, 5,000,000 shares authorized:Series B, 4% convertible, 2,250,000 shares designated;
1,744,000 and 1,710,000 shares issued and outstanding
    
    
    4,399,000
    
    
    
    4,260,000Series C, convertible, 1,400,000 shares designated;
1,269,000 shares issued and outstanding
    
    
    4,845,000
    
    
    
    4,845,000Common stock, par value $0.01 per share; 25,000,000 shares
authorized; 7,810,000 and 7,549,000 shares issued and outstanding
    
    
    78,000
    
    
    
    76,000Additional paid-in capital
    
    
    22,541,000
    
    
    
    21,458,000Unearned stock based compensation
    
    
    (1,447,000
    )
    
    
    (1,007,000
    )Accumulated deficit
    
    
    (25,421,000
    )
    
    
    (24,595,000
    )Total shareholders equity
    
    
    4,995,000
    
    
    
    5,037,000Total liabilities and shareholders equity
    
    $
    21,884,000
    
    
    $
    22,504,000
  3




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##### Table of Contents



XATA Corporation
 
 STATEMENTS OF OPERATIONS
 Three Months Ended
    
    
    Six Months EndedMarch 31,
    
    
    March 31,2006
    
    
    2005
    
    
    2006
    
    
    2005Net sales
    
    $
    8,418,000
    
    
    $
    4,316,000
    
    
    $
    14,841,000
    
    
    $
    8,854,000Costs and expensesCost of goods sold
    
    
    4,530,000
    
    
    
    2,429,000
    
    
    
    8,302,000
    
    
    
    4,888,000Selling, general and administrative
    
    
    3,011,000
    
    
    
    2,339,000
    
    
    
    5,692,000
    
    
    
    4,433,000Research and development
    
    
    840,000
    
    
    
    1,137,000
    
    
    
    1,567,000
    
    
    
    2,133,0008,381,000
    
    
    
    5,905,000
    
    
    
    15,561,000
    
    
    
    11,454,000Operating income (loss)
    
    
    37,000
    
    
    
    (1,589,000
    )
    
    
    (720,000
    )
    
    
    (2,600,000
    )Non-operating incomeInterest income
    
    
    19,000
    
    
    
    28,000
    
    
    
    27,000
    
    
    
    42,000Other
    
    
    7,000
    
    
    
    11,000
    
    
    
    7,000
    
    
    
    14,00026,000
    
    
    
    39,000
    
    
    
    34,000
    
    
    
    56,000Net income (loss) before income taxes
    
    
    63,000
    
    
    
    (1,550,000
    )
    
    
    (686,000
    )
    
    
    (2,544,000
    )Income tax expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Net income (loss)
    
    
    63,000
    
    
    
    (1,550,000
    )
    
    
    (686,000
    )
    
    
    (2,544,000
    )Preferred stock dividends
    
    
    (44,000
    )
    
    
    (42,000
    )
    
    
    (88,000
    )
    
    
    (82,000
    )Preferred stock deemed dividend
    
    
    
    
    
    
    
    
    
    
    (52,000
    )
    
    
    (110,000
    )Income
(loss) to common shareholders
    
    $
    19,000
    
    
    $
    (1,592,000
    )
    
    $
    (826,000
    )
    
    $
    (2,736,000
    )Income (loss) per common share  basic and diluted:Income (loss) to common shareholders
    
    $
    0.00
    
    
    $
    (0.22
    )
    
    $
    (0.11
    )
    
    $
    (0.38
    )Weighted average common and
common share equivalentsBasic
    
    
    7,406,000
    
    
    
    7,172,000
    
    
    
    7,354,000
    
    
    
    7,151,000Diluted
    
    
    11,071,000
    
    
    
    9,464.000
    
    
    
    10,881,000
    
    
    
    9,428,000
  4




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##### Table of Contents



XATA CORPORATION
 
 STATEMENTS OF CHANGES IN SHAREHOLDERS EQUITY
 PERIODS ENDED MARCH 31, 2006 AND SEPTEMBER 30, 2005
 Series B
    
    Series C
    
    Additional
    
    DeferedCommon Stock
    
    Preferred Stock
    
    Preferred Stock
    
    Paid-In
    
    Stock-Based
    
    AccumulatedShares
    
    Amount
    
    Shares
    
    Amount
    
    Shares
    
    Amount
    
    Capital
    
    Compensation
    
    Deficit
    
    TotalBalance, September 30, 2004
    
    
    7,254,000
    
    
    $
    73,000
    
    
    
    1,643,000
    
    
    $
    3,923,000
    
    
    
    
    
    
    $
    
    
    
    $
    19,499,000
    
    
    $
    (499,000
    )
    
    $
    (17,860,000
    )
    
    $
    5,136,000Common stock issued on exercise of options
    
    
    118,000
    
    
    
    1,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    404,000
    
    
    
    
    
    
    
    
    
    
    
    405,000Issuance of restricted shares of common stock
    
    
    197,000
    
    
    
    2,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,016,000
    
    
    
    (1,018,000
    )
    
    
    
    
    
    
    Amortization of deferred stock based compensation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    435,000
    
    
    
    
    
    
    
    435,000Elimination of deferred compensation related to
terminated employees
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (75,000
    )
    
    
    75,000
    
    
    
    
    
    
    
    Forfeiture of restricted shares of common stock
    
    
    (20,000
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Issuance of common stock warrants
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    25,000
    
    
    
    
    
    
    
    
    
    
    
    25,000Issuance of preferred stock and warrants
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,269,000
    
    
    
    4,426,000
    
    
    
    589,000
    
    
    
    
    
    
    
    
    
    
    
    5,015,000Preferred stock dividends
    
    
    
    
    
    
    
    
    
    
    67,000
    
    
    
    170,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (169,000
    )
    
    
    1,000Preferred stock deemed dividends
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    167,000
    
    
    
    
    
    
    
    419,000
    
    
    
    
    
    
    
    
    
    
    
    (586,000
    )
    
    
    Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (5,980,000
    )
    
    
    (5,980,000
    )Balance, September 30, 2005
    
    
    7,549,000
    
    
    $
    76,000
    
    
    
    1,710,000
    
    
    $
    4,260,000
    
    
    
    1,269,000
    
    
    $
    4,845,000
    
    
    $
    21,458,000
    
    
    $
    (1,007,000
    )
    
    $
    (24,595,000
    )
    
    $
    5,037,000Common stock issued on exercise of options
    
    
    105,000
    
    
    
    1,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    299,000
    
    
    
    
    
    
    
    
    
    
    
    300,000Issuance of restricted shares of common stock
    
    
    173,000
    
    
    
    1,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    835,000
    
    
    
    (836,000
    )
    
    
    
    
    
    
    Amortization of deferred stock based compensation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    320,000
    
    
    
    
    
    
    
    320,000Elimination of deferred compensation related to
terminated employees
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (76,000
    )
    
    
    76,000
    
    
    
    
    
    
    
    Forfeiture of restricted shares of common stock
    
    
    (17,000
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Issuance of common stock warrants
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    25,000
    
    
    
    
    
    
    
    
    
    
    
    25,000Preferred stock dividends
    
    
    
    
    
    
    
    
    
    
    34,000
    
    
    
    87,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (88,000
    )
    
    
    (1,000
    )Preferred stock deemed dividends
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    52,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (52,000
    )
    
    
    Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (686,000
    )
    
    
    (686,000
    )Balance, March 31, 2006
    
    
    7,810,000
    
    
    $
    78,000
    
    
    
    1,744,000
    
    
    $
    4,399,000
    
    
    
    1,269,000
    
    
    $
    4,845,000
    
    
    $
    22,541,000
    
    
    $
    (1,447,000
    )
    
    $
    (25,421,000
    )
    
    $
    4,995,000
  5




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##### Table of Contents



XATA Corporation
 
 STATEMENTS OF CASH FLOWS
  Six Months EndedMarch 31,2006
    
    
    2005Cash provided by (used in) operating activitiesNet loss
    
    $
    (686,000
    )
    
    $
    (2,544,000
    )Adjustments to reconcile net loss to net cash provided by
(used in) operating activities:Depreciation and amortization of equipment and leasehold improvements
    
    
    176,000
    
    
    
    121,000Issuance of warrants for services rendered
    
    
    25,000
    
    
    
    25,000Deferred compensation recognized
    
    
    320,000
    
    
    
    195,000Changes in assets and liabilities:
    
    
    Accounts receivable
    
    
    959,000
    
    
    
    2,140,000Inventories
    
    
    (855,000
    )
    
    
    (763,000
    )Deferred product costs
    
    
    590,000
    
    
    
    (1,408,000
    )Prepaid expenses
    
    
    (133,000
    )
    
    
    23,000Accounts payable
    
    
    (878,000
    )
    
    
    (256,000
    )Accrued expenses
    
    
    574,000
    
    
    
    (230,000
    )Deferred revenue
    
    
    801,000
    
    
    
    2,910,000Net cash provided by operating activities
    
    
    893,000
    
    
    
    213,000Cash used in investing activitiesPurchase of equipment and leasehold improvements
    
    
    (548,000
    )
    
    
    (367,000
    )Additions to software development costs
    
    
    (475,000
    )
    
    
    Net cash used in investing activities
    
    
    (1,023,000
    )
    
    
    (367,000
    )Cash (used in) provided by financing activitiesNet borrowings on bank line of credit
    
    
    200,000
    
    
    
    Net payments on bank line of credit
    
    
    (1,500,000
    )
    
    
    (518,000
    )Payments on long-term debt
    
    
    
    
    
    
    (251,000
    )Net borrowings on long-term obligations
    
    
    49,000
    
    
    
    Net payments on long-term obligations
    
    
    (37,000
    )Proceeds from options and warrants exercised
    
    
    300,000
    
    
    
    215,000Net cash used in financing activities
    
    
    (988,000
    )
    
    
    (554,000
    )Decrease in cash and cash equivalents
    
    
    (1,118,000
    )
    
    
    (708,000
    )Cash and cash equivalentsBeginning
    
    
    6,473,000
    
    
    
    5,322,000Ending
    
    $
    5,355,000
    
    
    $
    4,614,000Supplemental disclosures of cash flow informationCash payments for interest
    
    $
    64,000
    
    
    $
    10,000Supplemental schedule of noncash investing and financing activitiesIssuance of restricted stock
    
    $
    836,000
    
    
    $
    443,000Preferred stock deemed dividends
    
    
    52,000
    
    
    
    110,000Deferred compensation for terminated employees
    
    
    76,000
    
    
    
    9,000Preferred stock dividends payable
    
    
    59,000
    
    
    
    56,000Preferred stock dividends paid
    
    
    87,000
    
    
    
    85,000Equipment purchased under capital lease
    
    
    212,000
    
    
    
    
  6




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##### Table of Contents



NOTES TO FINANCIAL STATEMENTS
 Note 1. Significant Accounting Policies
 Presentation
   Revenue Recognition
 Software Revenue Recognition Software Revenue Recognition with Respect to Certain Transactions Revenue Recognition in Financial
Statements
    7




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##### Table of Contents



Use of Estimates
  Cash Equivalents
  Concentration of Credit Risk
  Fair Value of Financial Instruments
  Inventories
  8




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##### Table of Contents



March 31,
    
    
    September 30,2006
    
    
    2005Raw materials and subassemblies
    
    $
    1,470,000
    
    
    $
    686,000Finished goods
    
    
    642,000
    
    
    
    571,000Total inventories
    
    $
    2,112,000
    
    
    $
    1,257,000
 Equipment and Leasehold Improvements
   March 31,
    
    
    September 30,2006
    
    
    2005Office furniture and equipment
    
    $
    2,355,000
    
    
    $
    1,661,000Engineering and manufacturing equipment
    
    
    546,000
    
    
    
    454,000Capitalized software development costs
    
    
    759,000
    
    
    
    285,000Leasehold improvements
    
    
    34,000
    
    
    
    59,0003,694,000
    
    
    
    2,459,000Less: accumulated depreciation and amortization
    
    
    (1,550,000
    )
    
    
    (1,374,000
    )Equipment and leasehold improvements, net
    
    $
    2,144,000
    
    
    $
    1,085,000
   Long-Lived Assets
  Product Warranties
   9




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##### Table of Contents



Shipping Costs
  Advertising Costs
  Research and Development Costs
 Accounting
for the Costs of Computer Software Developed or Obtained for Internal Use Accounting for the Costs of Computer Software to Be Sold, Leased, or Otherwise
Marketed
 Income taxes
 Accounting for
Income Taxes
 Stock-Based Compensation
 Accounting for Stock Issued to
Employees Accounting for Stock-Based Compensation
 10




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##### Table of Contents



Three Months Ended
    
    
    Six Months EndedMarch 31,
    
    
    March 31,2006
    
    
    2005
    
    
    2006
    
    
    2005Net income (loss) to common
shareholders, as reported
    
    $
    19,000
    
    
    $
    (1,592,000
    )
    
    $
    (826,000
    )
    
    $
    (2,736,000
    )Deduct: Total stock-based
employee compensation expense
determined under fair value
based
methods for all awards, net
of
related tax effects
    
    
    (59,000
    )
    
    
    (74,000
    )
    
    
    (60,000
    )
    
    
    (114,000
    )Pro forma net income (loss)
    
    $
    (40,000
    )
    
    $
    (1,666,000
    )
    
    $
    (886,000
    )
    
    $
    (2,850,000
    )Basic and diluted net income (loss)
to common shareholders
per common shareAs reported
    
    $
    0.00
    
    
    $
    (0.22
    )
    
    $
    (0.11
    )
    
    $
    (0.38
    )Pro forma
    
    
    (0.01
    )
    
    
    (0.23
    )
    
    
    (0.12
    )
    
    
    (0.40
    )
 Reclassifications
  Recently Issued Accounting Standards
 Share-Based Payment (Statement 123)
 Shared-Based Payment, Accounting
for Stock-Based Compensation . Accounting for Stock Issued to Employees, Statement of Cash Flows.
 Note 2. Commitments
 Leases
   11




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##### Table of Contents



Reseller Commitment
  401(k) Plan
  Note 3. Bank Line of Credit
  Note 4. Income (Loss) Per Share
  12




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##### Table of Contents



Note 5. Shareholders Equity
 Common Stock
  Preferred Stock
  Series B
    13




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##### Table of Contents



Series C
  14




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##### Table of Contents



Restricted Stock Awards
   Common Stock Warrants
   Weighed-Average
    
    Weighted AverageDate
    
    Warrants Outstanding
    
    Exercise Price
    
    Remaining LifeMarch 31, 2006
    
    
    1,028,000
    
    
    $
    3.44
    
    
    3.39 yearsSeptember 30, 2005
    
    
    1,019,000
    
    
    $
    3.43
    
    
    3.83 years
 
 Item 2. Managements Discussion and Analysis or Plan of Operation
  Overview
    
    
    Mobile two-way messaging and real-time vehicle location.
    
    Automation of DOT driver log requirements and state fuel tax reporting.
    
    Comprehensive vehicle and driver performance reporting.
 15




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##### Table of Contents




    
    Efficient routing, trip optimization and stop activity scheduling.
    
    Diagnostic and accident data capture.
  XATANET Fleet Management System
      Onboard Hardware
  
 Driver Displays
  Wireless Communications
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Application Service Packages
  OpCenter Fleet Management System
     Critical Accounting Policies
  Revenue Recognition. Software Revenue Recognition Software Revenue Recognition with Respect to Certain Transactions Revenue Recognition in
Financial Statements
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##### Table of Contents



Allowance for doubtful accounts and sales returns.
 Capitalized software development costs.
 Research and development costs. Accounting for the Costs of Computer Software Developed or Obtained for
Internal Use
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##### Table of Contents



Income taxes
 Results of Operations for the three and six months ended March 31, 2006 and 2005
  Three Months Ended
    
    Six Months EndedMarch 31,
    
    March 31,2006
    
    2005
    
    2006
    
    2005Net sales
    
    
    100
    %
    
    
    100
    %
    
    
    100
    %
    
    
    100
    %Gross profit
    
    
    46
    %
    
    
    44
    %
    
    
    44
    %
    
    
    45
    %Selling, general and administrative
    
    
    36
    %
    
    
    55
    %
    
    
    38
    %
    
    
    50
    %Research and development
    
    
    10
    %
    
    
    26
    %
    
    
    11
    %
    
    
    24
    %Operating loss
    
    
    0
    %
    
    
    -37
    %
    
    
    -5
    %
    
    
    -29
    %Net income (loss)
    
    
    1
    %
    
    
    -36
    %
    
    
    -5
    %
    
    
    -29
    %
 Net Sales
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Cost of Goods Sold
   Selling, General and Administrative Expenses
   Research & Development Expenses
 .
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##### Table of Contents



Non-operating Income (Expense)
  Income Taxes
  Net Income (Loss) to Common Shareholders
  Liquidity and Capital Resources
      21




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##### Table of Contents



Related Party Transactions
  
 Item 3. Controls and Procedures
 Evaluation of Disclosure Controls and Procedures and Internal Control over Financial Reporting
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##### Table of Contents



Forward-looking Statements
 This document includes forward-looking statements based on current expectations. Actual results
may differ materially. These forward-looking statements involve a number of risks and
uncertainties about us, our business, our customers, the economy and the business environment in
general. Risks and uncertainties about us include, but are not limited to, the following:
 
    
    although we expect to incur operating losses in the current fiscal year, these losses
may continue beyond the expected timeframe or in excess of the expected magnitude, and we
may be dependent upon external investment to support our operations during periods in which
we incur operating losses;
    
    we may be unable to adapt to technological change quickly enough to grow or to retain
our customer base;
    
    we will continue to be dependent upon positioning systems and communication networks
owned and controlled by others, and accordingly, their problems may adversely impact us;
    
    for the foreseeable future, we are dependent upon the continued receipt and fulfillment
of new orders for our current products;
    
    our growth and profitability depend on our timely introduction and market acceptance of
new products, our ability to continue to fund research and development activities, and our
ability to establish and maintain strategic partner relationships.
 You are encouraged to read more about the specific risks and uncertainties of our business. We
have described those that we currently consider most important in our report on Form 10-KSB for our
fiscal year ended September 30, 2005. We undertake no obligation to update our disclosures in this
regard.
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##### Table of Contents



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 and Small Business Issuer Purchases of Equity
Securities
  
 Item 4. Submission of Matters to a Vote of Security Holders
   1.
    
    The number of directors was set at six (6), and six (6) directors (including
Christopher P. Marshall, who was elected by the holders of the Series B Preferred Stock,
voting separately by ballot as a class) were elected to serve for a one-year term
expiring when their successors are elected and qualified at the annual meeting in 2007.
 For
    
    WithheldStephen A. Lawrence
    
    
    8,827,009
    
    
    
    710,307Craig S. Fawcett
    
    
    8,772,208
    
    
    
    765,108Carl M. Fredericks
    
    
    8,833,398
    
    
    
    703,918Roger W. Kleppe
    
    
    8,836,298
    
    
    
    701,018Charles R. Stamp, Jr.
    
    
    8,769,708
    
    
    
    767,608Christopher P. Marshall
    
    
    1,744,355
    
    
    
    -0
 2.
    
    Approval of Amendment to 2002 Long-Term Incentive and Stock Option Plan to
increase the number of shares reserved for issuance under the Plan from 750,000 to
1,250,000.For 6,388,416 Against 972,097 Abstain 21,293 Broker Non-Vote
2,155,5103.
    
    Approval of Amendment to 2002 Long-Term Incentive and Stock Option Plan to
require all options and awards to be granted with a price of not less than 100% of the
fair market value of the underlying common stock as of the date of grant.For 7,302,499 Against 58,139 Abstain 21,268 Broker Non-Vote
2,155,510
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##### Table of Contents



Item 5. Other Information
  
 Item 6. Exhibits
  31.1
    
    Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 200231.2
    
    Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 200232.1
    
    Certification pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section
906 of the Sarbanes-Oxley Act of 200232.2
    
    Certification pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section
906 of the Sarbanes-Oxley Act of 2002
 
 SIGNATURES
  Dated: May 12, 2006
    
    XATA Corporation(Registrant)by:
    
    /s/ Mark E. TiesMark E. TiesChief Financial Officer(Signing as Principal Financial and AccountingOfficer, and as Authorized Signatory of Registrant)
 
 25