UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-K

                  Annual Report Pursuant to Section 13 or 15(d)
                     of the Securities Exchange Act of 1934
                       for the year-ended January 31, 2001


                         Commission File Number: 0-30121


                                  ULTICOM, INC.
             (Exact name of registrant as specified in its charter)

               New Jersey                                    22-2050748
    (State or other jurisdiction of                       (I.R.S. Employer
     incorporation or organization)                       Identification No.)

    1020 Briggs Rd. Mt. Laurel, NJ                             08054
(Address of principal executive offices)                     (Zip Code)

                                 (856) 787-2700
              (Registrant's telephone number, including area code)

                                 Not Applicable
              (Former name, former address and former fiscal year,
                          if changed since last report)

          Securities registered pursuant to Section 12 (b) of the Act:

Title of each class                                      Name of each exchange
-------------------                                      ---------------------
                                                            on which registered
                                                            -------------------

  Not applicable                                                 Not applicable

           Securities registered pursuant to Section 12(g) of the Act:

                      Common Stock, no par value per share
                                (Title of Class)


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.

                                [ X ] Yes [ ] No

78436.0001
<PAGE>


        Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K.



                                       [X]


        The aggregate market value of the voting stock held by non-affiliates of
the registrant on April 24, 2001 was approximately $203,000,000. The closing
price of the registrant's common stock on the NASDAQ National Market System on
April 24, 2001 was $21.63 per share.

        There were 40,732,323 shares of the registrant's common stock
outstanding on April 24, 2001.


                       DOCUMENTS INCORPORATED BY REFERENCE

        The registrant hereby incorporates by reference in this report the
information required by Part III appearing in the registrant's proxy statement
or information statement distributed in connection with the 2001 Annual Meeting
of Stockholders of the registrant or in an amendment to this report on Form
10K/A.


                            -------------------------


        Signalware(R), Ultimate Call Control(R), are registered trademarks, and
Ulticom, Inc.TM, NexworxTM, Ultimate Service ControlTM, Programmable NetworkTM,
Service Enabling SoftwareTM, Instant ConferencingTM, JTCAPTM, JISUPTM, JOAMTM,
SoftserviceTM and NexworldTM are trademarks of the Company.


<PAGE>

                                     PART I

ITEM 1. BUSINESS.

THE COMPANY

         Ulticom, Inc. ("Ulticom" and together with its subsidiary, the
"Company") is a provider of service enabling network software for wireline,
wireless and Internet communications. The Company's Signalware call control
products interconnect the complex circuit switching, database and messaging
systems, and manage vital number, routing and billing information that form the
backbone of today's global public networks.1 The Company's products are used by
equipment manufacturers, application developers and communication service
providers to develop and deploy revenue generating services such as voice and
text messaging, voice-activated dialing, prepaid calling, caller ID and global
roaming. Signalware products also are embedded in a range of packet
softswitching products to interoperate or converge voice and data networks and
facilitate value-added services such as voice over the Internet and Internet
call waiting. Ulticom's Nexworx product initiative is designed to move service
control into the hands of subscribers, so that businesses and consumers can
access public network resources to create and customize their communication
services utilizing enterprise systems, private databases and browser enabled
appliances. In addition, as a founding member of The Parlay Group and the Java
API Integrated Networks initiative, two industry consortia, the Company is
involved in defining industry standards that foster continued growth for the
communication industry and the Company.

         The Company was incorporated in New Jersey on December 18, 1974 as
"Dale, Gesek, McWilliams & Sheridan, Inc.," and was formerly known as "DGM&S
Telecom, Inc." In May 1999, the Company changed its name to "Ulticom, Inc." The
Company completed an initial public offering of its common stock in April 2000
and its common stock is listed on the NASDAQ National Market System under the
symbol "ULCM". The Company is a subsidiary of Comverse Technology, Inc.
("Comverse"), which holds approximately 75% of its outstanding shares. The
Company's principal executive offices are located at 1020 Briggs Road, Mount
Laurel, New Jersey 08054, and its telephone number is (856) 787-2700.

THE COMPANY'S PRODUCTS

Industry Update

         Demand for enhanced voice and data communication services has grown
rapidly in recent years due to the following developments:

         o        the growth of the Internet as a global communications medium
                  enabling millions of people to share information and conduct
                  business electronically;

--------
1 References made in this document to technologies, features, capabilities and
specifications in conjunction with the Company's products and technological
resources do not necessarily apply to all products, models and system
configurations.

<PAGE>

         o        the growth in wireless communications as cellular and other
                  wireless services have become more widely available and
                  affordable; and

         o        the introduction of new, packet softswitching services that
                  converge voice and data communications over wireless, wireline
                  and Internet networks.

         In response to these trends, service providers are building
increasingly complex communication networks. Traditionally, voice networks were
based on a technology called "circuit switching." In circuit switched networks,
a dedicated line or circuit is established for each telephone call and
maintained for the duration of the call. At the conclusion of a circuit switched
call, the dedicated line or circuit is disconnected.

         The circuit switched network provides high voice quality and
reliability by separating the voice and signaling portions of a call. The
signaling infrastructure processes in real time the information needed to
set-up, connect, route, terminate and bill a call, and also provides a
foundation to develop and offer value-added network services. The signaling
portion of a telephone network that controls each call is based on a globally
accepted set of standards and protocols called signaling system #7 ("SS7"). SS7
provides the speed and reliability required for processing complex call control
information.

         While circuit switching has offered reliable and high quality voice
communication, a technology called "packet switching" has emerged that is
inherently more efficient and cost effective than circuit switching. In packet
switched networks, the voice or data information transmitted is formatted into a
series of shorter digital messages called "packets." These packets of voice or
data information travel over a shared line or circuit. The cost and performance
superiority of packet switching has led many traditional and new service
providers to build packet networks to handle data traffic.

         Because SS7 is the globally accepted signaling standard protocol, it
has become the critical element needed to connect and interoperate packet
networks with the existing circuit network infrastructure. Service providers
worldwide have implemented SS7, including traditional, emerging, Internet and
wireless service providers, as the standard protocol for converging voice and
data communications.

Signalware

         Signalware provides the SS7 connectivity required to offer value-added
services. Signalware call control products work within wireless, wireline and
Internet networks to interconnect and interoperate voice and data communication
systems. In addition, Signalware plays a key role in the convergence of
disparate networks by providing a means to bridge circuit and packet technology.
Signalware offers many of the features that are crucial to the connectivity of
communication networks and the rapid delivery of revenue generating services,
including:

         o        open standards--running applications on multiple software
                  platforms;

         o        service reliability--building systems with no single point of
                  failure;




                                       2
<PAGE>

         o        high performance--processing calls at very high rates;

         o        scalability--increasing computing capacity to run various
                  applications; and

         o        global interoperability--creating applications that can run on
                  various communications networks around the world.

         Signalware enables the delivery of revenue generating services beyond
the call or data transmission itself. Signalware is used to build a wide range
of intelligent network and converged network services, including, but not
limited to the following:


             Intelligent Network Services:     Converged Network Services:

             Prepaid Calling Service           Internet Redirect Services
             Wireless Authentication           Voice over the Internet Services
             Wireless Roaming Service          Wireless Internet Services
             Caller ID                         Internet Call Waiting
             Number Portability                Internet Call Forwarding
             Wireless 911 Service              Wireless Email Service
             Wireless Text Messaging           Internet Fax Delivery
             800 Number Service                Unified Messaging
             Voice Messaging Service
             Personal Number Service
             411/Operator Assistance
             Voice Activated Dialing
             Virtual Private Networks
             Taxi Dispatch Service
             Enhanced 611 Service
             Electronic Banking Service
             Televoting
             Airport Information Service

         Signalware works with multiple SS7 networks, supports a wide variety of
SS7 protocol elements and enables analog or digital wireline and wireless
transmissions. It provides the functionality needed for call set-up/call
termination and call routing/call billing. Signalware product packages run on a
range of hardware platforms and operating systems, including Sun Solaris and IBM
AIX. The packages can be used in single or multiple computing configurations for
fault resiliency and reliability. Signalware also provides a means to separate
the signaling function from the application development environment, which
provides greater flexibility in service configurations.

         Signalware includes interface boards to provide the physical connection
to a signaling network. Signalware boards are configured to support a wide range
of hardware platforms and network links. The bundling of Signalware interface
boards and software allows the Company to control product performance, capacity
and compliance with standards.



                                       3
<PAGE>

         New customers begin development of applications and services by
purchasing the appropriate Signalware development kit, which includes a
development site license. Each kit includes software, an interface board, cables
and documentation, and registration for two training classes. A development
maintenance plan for one year is also included with each development kit. The
maintenance plan provides access to customer support services along with service
packs and scheduled release upgrades of the software. After the initial year,
the maintenance plan must be renewed for a fee in order to continue to receive
support and upgrades.

         When the application is ready for installation, the customer purchases
one or more deployment licenses per installation, in addition to continuing the
development site license and maintenance. In addition, in order to deploy
systems incorporating the Company's deployment licenses, a customer generally
purchases one or more interface boards and a deployment system maintenance and
support plan.

Nexworx

         The Nexworx service control product initiative combines the key
attributes of Signalware, including global interoperability, service reliability
and open standards, with technology designed to create a platform to enable
service creation both inside and outside of the traditional telephone networks.
Nexworx is designed to move service control into the hands of subscribers, so
that businesses and consumers can access public network resources to create and
customize their communication services utilizing enterprise systems, private
databases and browser enabled appliances. The Nexworx product initiative will
place the subscriber in control, creating a new Programmable Network. Examples
of services that Nexworx is designed to enable include web-based call
forwarding, call screening, instant conferencing, messaging, reminder,
click-to-dial, location, and personal 800 number services.

Support Services

         The Company believes that customer support, training and custom
development services are key to building and maintaining strong customer
relationships. Customer support is offered as part of the maintenance
agreements.

         Customer Support. The Company provides comprehensive technical support
to help customers develop and deploy new services. The support organization
provides continuous support and interfaces with customers' technical staff
through a 24-hour-a-day, 7-day-a-week help desk to answer questions, resolve
problems and provide assistance. The support organization is managed through
corporate headquarters in Mount Laurel, New Jersey with remote service locations
in Texas and France to provide extended geographic and same-time-zone coverage.

         Training Services. The Company offers customers a comprehensive
training program with courses in application development and operations and
troubleshooting. Courses are scheduled throughout the year. Customized and/or
on-site training programs also are provided for an additional fee to meet the
specific needs of customers.



                                       4
<PAGE>

         Custom Development Services. The Company offers fee-based custom
development services to create customer-specific enhancements to our products.
An experienced engineering staff provides such services. This service assists
customers by accelerating their time-to-market, and also hastens the point in
the development cycle when the Company begins to receive recurring deployment
license revenues.

MARKETS, SALES AND MARKETING

         The Company's sales organization operates from the U.S. and Europe.
Account teams comprised of account managers and sales engineers work closely
with product management and development organizations to provide customers with
a consultative sales approach. The consultative approach facilitates the sale of
development kits to enable customers to immediately begin to build prototypes of
their products.

         The Company actively works to further enhance market awareness and
acceptance of the Company and its products. To this end, efforts are focused on
identifying market opportunities in cooperation with customers and developing
and enhancing products to seize these opportunities in a timely fashion. Based
on market considerations, the Company may port software products to additional
operating systems, develop new features and functionality and engage in new
strategic alliances and partnerships.

         The Company's market strategy includes enhancing brand awareness for
our Signalware and Nexworx product lines with a web site, promotional
literature, direct marketing to current and prospective customers, advertising,
continued participation in industry relevant trade shows and conferences, and a
public relations program that includes public demonstrations of products and
prototypes. Representatives of the Company also are called upon to address
industry symposia and conferences, are frequently quoted in industry
publications and may from time to time author articles about developments in
communications technology.

         Products are sold primarily to equipment manufacturers and application
developers, who include the Company's products within their products and sell
them as an integrated solution to service providers. Service providers will
install the solution in their communication networks and offer the service
enabled by such solution to their subscribers. Since the Company and its
customers have a mutual interest in developing solutions that are widely
accepted by subscribers and profitable to service providers, the Company works
closely with customers to support their development efforts and produce
solutions that are unique, reliable, scalable and cost effective. For example,
the Company engages in joint promotion, sales efforts, training, testing,
design, integration and installation with Sun Microsystems and other computer
integrators who use Sun Microsystems' components.

         The Company's products are currently used by over 50 customers and are
deployed by more than 250 carriers in more than 90 countries. We market our
products and services primarily through a direct sales organization and through
key relationships with customers. Customers include: equipment manufacturers,
such as Alcatel, Ericsson and Siemens; application developers, such as Comverse
Network Systems, Logica and Sonus; and service providers, such as Level (3) and
MCI Worldcom. For fiscal 1998, Siemens and Comverse Network Systems and its
affiliates accounted for 13% and 20%, respectively, of the Company's revenues.
For fiscal 1999, Ericsson, Siemens and Comverse Network Systems and its


                                       5
<PAGE>

affiliates accounted for 20%, 12% and 18%, respectively, of the Company's
revenues. For fiscal 2000, Ericsson, Comverse Network Systems and its affiliates
and Siemens accounted for 18%, 16% and 10%, respectively, of the Company's
revenues. Substantially all of the Company's revenues during the last three
years have been generated by the Company's Signalware product line.

         The Company actively participates in industry activities to define the
technology to facilitate the convergence of telephony networks with the
Internet. It is a founding member, along with British Telecom, Microsoft, Nortel
and Siemens, of the Parlay Group, an industry consortium to specify an open
interface to enable secure public access to core capabilities of voice data
networks. The Company also is a founding member of JAIN, the Java API Integrated
Networks industry initiative, to define common interfaces between Intelligent
Network and SS7 environments so that services and protocols can run anywhere in
the network. In addition, Ulticom has worked with the Internet Engineering Task
Force to develop a set of signaling transport standards called SIGTRAN to enable
communication service providers to more easily implement services that span
existing circuit switched networks and packet networks using Internet Protocol.

RESEARCH AND DEVELOPMENT

         The Company continues to enhance the features and performance of
existing products and introduce new products. The Company believes that its
future success depends on a number of factors, which includes the Company's
ability to:

         o        identify and respond to emerging technological trends in
                  target markets;

         o        develop and maintain competitive solutions that meet
                  customers' changing needs; and

         o        enhance existing products by adding features and functionality
                  that differentiate the Company's products from those of its
                  competitors.

         As a result, the Company has made and intends to continue to make
significant investments in research and development. Research and development
resources are allocated in response to market research and customer demands for
additional features and products. The development strategy involves rolling out
initial releases of products and adding features over time. The Company
continuously incorporates product feedback we receive from customers into the
product development process. While it is expected that new products will
continue to be developed internally, the Company may, based on timing and cost
considerations, acquire or license technologies, products or applications from
third parties.

         The Company's research and development expenses were approximately $4.7
million, $6.0 million and $10.3 million for the years ended January 31, 1999,
2000 and 2001, respectively. Research and development activities are located in
Mount Laurel, New Jersey, Dallas, Texas and in France. As of January 31, 2001,
there were 117 employees engaged in research and development activities. The


                                       6
<PAGE>

Company believes that recruiting and retaining highly skilled engineering
personnel is essential to its success.

INTELLECTUAL PROPERTY RIGHTS

         The Company has accumulated a significant amount of proprietary
know-how and expertise over the years in developing network signaling software
and signaling system #7 protocol technology for communication services. Its
continued success is dependent, in part, upon its ability to protect proprietary
rights to the technologies used in its products. If the Company is not
adequately protected, competitors could use the intellectual property that it
has developed to enhance competing products and services, which could harm the
Company's business. To safeguard its proprietary technology, the Company relies
on a combination of technical innovation, trade secret, copyright and trademark
laws, restricted licensing arrangements and non-disclosure agreements, each of
which affords only limited protection, and in the future the Company may rely on
patents. As of January 31, 2001, the Company had no registered patents and one
patent application pending. The Company conducts periodic reviews of new areas
of technology with its patent attorneys to determine whether they are
patentable. However, there can be no assurance that the Company will receive any
patents.

         The Company licenses software from third parties that is incorporated
into some versions of Signalware. The Nexworx product also includes licensed
software from third parties.

         Due to the value of intellectual property rights, the Company generally
does not make its proprietary software code available to customers. Exceptions
to this principle were made in the past, in limited circumstances, for large
customers where adequate control mechanisms were in place to protect our
intellectual property rights.

         The Company has granted Comverse Network Systems, an affiliate, a
perpetual, royalty-free, non-exclusive license to use and operate software
products for incorporation into any of Comverse Network Systems' products.

         In January 2000, Comverse and Lucent Technologies, Inc. ("Lucent")
entered into a non-exclusive cross-licensing arrangement covering current and
certain future patents issued to Comverse and its affiliates, including the
Company, and a portfolio of current and certain future patents in the area of
telecommunications technology issued to Lucent and its affiliates. The Company
is entitled to utilize the licensed patent rights, and is obligated to provide
licenses under any patents it may hold, pursuant to a royalty-free license
agreement with Comverse.

COMPETITION

         The market for network signaling software is intensely competitive,
both in the U.S. and internationally. The Company expects competition to
persist, intensify and increase in the future, especially with the convergence
of voice and data networks.

         The Company's primary competition comes from in-house development
organizations within our customers who seek, in a build versus buy decision, to
develop substitutes for the Company's products. The Company also competes with a
number of U.S. and international suppliers that vary in size and in the scope


                                       7
<PAGE>

and breadth of the products and services offered. Competitors for present and
planned future products include a number of companies ranging from signaling
system #7 software solution providers, such as ADC NewNet and Trillium Digital
Systems, an Intel company, and vendors of communication and network
infrastructure equipment, such as Hewlett Packard's Agilent Group and Compaq.
The Company believes it competes principally on the basis of:

         o        product performance and functionality;

         o        product quality and reliability;

         o        customer service and support; and

         o        price.

         The Company believes its success will depend primarily on its ability
to provide technologically advanced and cost effective signaling solutions.
Additionally, the Company must provide its customers with prompt and responsive
customer support. Furthermore, should competition intensify, the Company may
have to reduce the prices of its products.

MANUFACTURING

         The Company's Signalware products have two components: software and
interface boards. Software is duplicated in house and provided to customers on
several media, primarily CD-ROM, and digital audio tape. Each software shipment
is configured to provide the specific operating system version and features
requested by the customer. Each order is tracked by purchase order number and
documented according to internal quality standards.

         Subcontractors who are certified by the International Standards
Organization perform assembly of our printed circuit interface boards. Periodic
audits are performed to ensure adherence to quality standards. Subcontractors
are responsible for purchasing, inspecting, installing and assembling components
of interface boards. Completed assemblies are burned-in, inspected, tested and
packaged in the Company's facility according to International Standards
Organization standards. All inspection, test, repair, revision and shipping
information is tracked by product type and serial number and maintained in our
tracking database.

         The Company works closely with interface board component suppliers to
monitor component changes and availability. However, there are no long term
supply agreements with these suppliers to ensure uninterrupted supply of
components. Under certain circumstances, the Company may place blanket orders to
ensure availability of discontinued components. In the event of a reduction or
an interruption in the supply of components, a significant amount of time could
be required to qualify alternate suppliers and to receive an adequate supply of
replacement components.

         The Company does not have any long term agreements with any of its
manufacturers, some of whom are small, privately held companies. In the event
that these manufacturers experience financial, operational or quality assurance
difficulties, business could be adversely affected until an alternate


                                       8
<PAGE>

manufacturer could be found. There is no assurance that an alternate
manufacturer will be able to meet our requirements or that existing or alternate
sources for interface boards will continue to be available at favorable prices.

EMPLOYEES

         As of January 31, 2001, the Company had approximately 300 employees.
The Company considers its relationship with its employees to be good. Our
employees are not covered by any collective bargaining agreement.


ITEM 2. PROPERTIES.

         The Company has headquarters and development facilities in Mount
Laurel, New Jersey where it leases approximately 54,000 square feet of office
space. We also lease approximately 13,000 square feet of office space in Dallas,
Texas and approximately 7,200 square feet of office space in France.

         The Company believes that its facilities currently under lease are
adequate for current operations and that additional facilities can be acquired
to provide for future expansion of the Company's operations as may be warranted.


ITEM 3. LEGAL PROCEEDINGS.

         None.


ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

         No matters were submitted to a vote of the security holders during the
fourth quarter of the last fiscal year.



                                       9
<PAGE>

                                     PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.

The Company's common stock trades on the NASDAQ National Market System under the
symbol "ULCM". The following table sets forth the range of closing prices of the
Company's common stock as reported on NASDAQ for the period from April 5, 2000
through January 31, 2001.

FISCAL YEAR         FISCAL QUARTER                 LOW                 HIGH
-----------         --------------                 ---                 ----

2000               04/5/00* -    04/30/00         $14.81               $33.00
                   05/1/00  -    07/31/00         $22.06               $53.44
                   08/1/00  -    10/31/00         $29.19               $60.98
                   11/1/00  -    01/31/01         $25.50               $53.63

*Stock began trading on April 5, 2000, the date of the Company's initial public
offering.

         There were 159 holders of record of the Company's common stock on April
24, 2001. Such record holders include a number who are nominees for an
undetermined number of beneficial owners. The Company believes that the number
of beneficial owners of the shares of common stock outstanding at such date was
approximately 8,000.

         The Company does not expect to pay any cash dividends on its equity
securities in the foreseeable future, but rather intends to retain its earnings
to finance the development and growth of its business. Any future determination
as to the declaration and payment of dividends will be made by the Board of
Directors in its discretion, and will depend upon the Company's earnings,
financial condition, capital requirements and other relevant factors. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations - Liquidity and Capital Resources."

         On April 10, 2000, the Company completed its initial public offering of
4,887,500 shares of common stock at a price of $13.00 per share, pursuant to a
Registration Statement on Form S-1 under the Securities Act of 1933,
(Registration No. 333-94873) which was declared effective by the Securities and
Exchange Commission on April 4, 2000. The managing underwriters for the offering
were Lehman Brothers, Chase H&Q, U.S. Bancorp Piper Jaffray and Fidelity Capital
Markets, a division of National Financial Services Corporation. The offering
generated net proceeds of approximately $58.1 million, after deducting the
underwriting discount and commissions of approximately $4.4 million and offering
expenses of approximately $1.0 million.

         On October 20, 2000, the Company completed its secondary offering of
4,250,000 shares of common stock at a price of $50.00 per share, including
1,406,625 shares from selling shareholders, pursuant to a Registration Statement
on Form S-1 under the Securities Act of 1933, (Registration No. 333-45366) which
was declared effective by the Securities and Exchange Commission on October 17,
2000. The managing underwriters for this offering were Lehman Brothers, Chase
H&Q, Bear, Stearns & Co. Inc. and U.S. Bancorp Piper Jaffray. The offering


                                       10
<PAGE>

generated net proceeds to the Company of approximately $137.2 million after
deducting the underwriting discount and commissions of approximately $4.3
million and offering expenses of approximately $0.7 million. In addition, the
offering generated net proceeds to the selling shareholders of approximately
$68.2 million after deducting the underwriting discount and commissions of
approximately $2.1 million.

ITEM 6. SELECTED FINANCIAL DATA.

         The following tables present selected consolidated financial data for
the Company for each of the years in the two years ended December 31, 1997, the
one month period ended January 31, 1998, and each of the years in the three
years ended January 31, 2001. Such information has been derived from the
Company's audited consolidated financial statements and should be read in
conjunction with the Company's consolidated financial statements and the notes
to the consolidated financial statements included elsewhere in this report.
<TABLE>
<CAPTION>
                                                                    One Month
                                               Year Ended             Ended
                                              December 31,         January 31,           Year Ended January 31,
                                             ------------                               ----------------------
                                           1996          1997           1998        1999           2000        2001
                                           ----          ----           ----        ----           ----        ----
                                                             (in thousands, expect per share data)
<S>                                      <C>          <C>            <C>         <C>         <C>            <C>
Statement of Operations Data:
Sales                                    $ 6,450      $ 14,559       $  212      $ 18,629    $ 25,831       $ 47,441
Cost of sales                              2,853         4,495          294         6,131       8,883         15,489
                                        --------       -------       ------       -------     -------        -------
Gross profit                               3,597        10,064          (82)       12,498      16,948         31,952
Research and development                   1,905         2,398          205         4,706       6,015         10,325
Selling, general and administrative        3,875         3,891          348         4,948       8,124         13,271
                                        --------       -------       ------       -------     -------        -------
Income (loss) from operations             (2,183)        3,775         (635)        2,844       2,809          8,356
Interest income (expense), net              (342)         (507)         (45)         (350)       (271)         6,282
                                        --------       -------       ------       -------     -------        -------
Income (loss) before income taxes         (2,525)        3,268         (680)        2,494       2,538         14,638
Income tax provision (benefit)              (948)        1,213         (249)          927         964          5,561
                                        --------       -------       ------       -------     -------        -------
Net income (loss)                       $ (1,577)      $ 2,055       $ (431)      $ 1,567     $ 1,574        $ 9,077
                                        ========       =======       ======       =======     =======        =======
Earnings (loss) per share--
diluted                                   ($0.05)      $  0.06       ($0.01)      $  0.05     $  0.05        $  0.22

Weighted average number of common
and common equivalent shares
outstanding - diluted                     32,727        32,727       32,727        33,087      33,759         40,715
</TABLE>

<TABLE>
<CAPTION>
                                          As of December 31,                         As of January 31,
                                          ------------------          ----------------------------------------------
                                         1996          1997           1998          1999          2000          2001
                                         ----          ----           ----          ----          ----          ----
<S>                                 <C>            <C>            <C>            <C>            <C>           <C>
Balance Sheet Data:
Cash and cash equivalents           $    315       $  1,030       $    584       $  2,544       $  6,299      $183,303
Working capital (deficit)             (4,699)        (2,999)        (3,513)        (2,236)           742       195,369
Total assets                           4,858          7,319          6,878          8,883         17,364       232,187
Long-term debt                            --             --             --             --          3,800            --
Stockholders' equity (deficit)        (3,389)        (1,333)        (2,021)          (454)         1,120       207,049
Dividend to parent                       953             --            256             --             --            --

</TABLE>


                                       11
<PAGE>

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

RESULTS OF OPERATIONS

INTRODUCTION

         Substantially all of our product revenues have been generated by our
Signalware product line. Signalware product sales consist of software licenses,
printed circuit interface boards, training, and support revenues. In certain
limited circumstances, we sell Signalware development services typically under
fixed-fee arrangements with our customers. New customers begin development of
applications and services by purchasing the appropriate Signalware development
kit, which includes a development site license, an interface board, and a
one-year maintenance plan. At deployment, the customer generally purchases one
or more deployment licenses, additional interface boards and a deployment
maintenance and support plan.

         In accordance with Statement of Position 97-2, "Software Revenue
Recognition," product revenues are generally recognized in the period in which
the products are delivered and accepted by the customer, the fee is fixed and
determinable and collection is considered probable. When we have significant
obligations subsequent to shipment, revenues are not recognized until the
obligations are fulfilled. Revenues from arrangements that include significant
acceptance terms are not recognized until acceptance has occurred. Revenues from
product support services, including those included in initial licensing fees,
are recognized ratably over the contract period. Post-contract support services
included in the initial licensing fee are allocated from the total contract
amount based on the relative fair value determined using vendor-specific
objective evidence.

         During the last four years, a growing proportion of our total revenues
were derived from customers located outside the U.S. To date international sales
have been denominated in U.S. dollars. Accordingly, we have not been exposed to
fluctuations in foreign currency exchange rates. However, we expect that in
future periods, a portion of international sales may be denominated in
currencies other than U.S. dollars, which could expose us to gains and losses on
foreign currency transactions. We may choose to limit our exposure by utilizing
hedging strategies. There can be no assurance that any such hedging strategies
that we undertake would be successful in avoiding exchange rate losses.

         Our cost of sales include material costs, subcontractor costs, salary
and related benefits for the operations and service departments, depreciation
and amortization of equipment used in the operations and service departments,
amortization of capitalized software costs and an overhead allocation. Our
research and development costs include salaries and related benefits as well as
travel, depreciation and amortization of research and development equipment, an
overhead allocation, as well as other costs associated with our research and
development activities. Our selling, general and administrative costs include
salary and related benefits, travel, depreciation and amortization, marketing
and promotional materials, recruiting expenses, professional fees, corporate
services provided by Comverse, facility costs, as well as other costs associated
with our sales, marketing, finance and administrative departments.



                                       12
<PAGE>
Year-ended January 31, 2001 Compared to Year-ended January 31, 2000

         Sales. Sales for the fiscal year ended January 31, 2001, or fiscal
2000, increased by approximately $21.6 million, or 84%, compared to the fiscal
year ended January 31, 2000, or fiscal 1999. The increase is attributable to a
higher volume of sales and deployments of our Signalware products worldwide,
especially to customers who provide wireless communication services or who sell
products enabling the convergence of voice and data networks. Sales to
international customers represented 62% of our sales in fiscal 2000 compared to
63% in fiscal 1999.

         Cost of Sales. Cost of sales increased by approximately $6.6 million,
or 74%, for fiscal 2000 compared to fiscal 1999. The increase is primarily
attributable to an increase of approximately $2.6 million in personnel-related
costs due to the hiring of additional personnel. Depreciation and amortization
increased by $0.9 million for fiscal 2000 compared to fiscal 1999. Material and
production costs increased approximately $2.6 million due to increased sales.
Gross margins increased from approximately 66% in fiscal 1999 to approximately
67% in fiscal 2000.

         Research and Development Expenses. Research and development expenses
increased in fiscal 2000 by approximately $4.3 million, or 72%, compared to
fiscal 1999 due to the overall growth of research and development operations and
the increase in new research and development projects. The increase is primarily
attributable to an increase in personnel-related costs of approximately $3.0
million due to the hiring of additional personnel and increased compensation and
benefits for existing personnel. Material costs related to research and
development activities increased by approximately $1.3 million.

         Selling, General & Administrative Expenses. Selling, general and
administrative expenses increased by approximately $5.1 million, or 63%, in
fiscal 2000 compared to fiscal 1999 and as a percentage of sales decreased to
28% in fiscal 2000 from approximately 31% in fiscal 1999. The increase is
primarily attributable to an increase in personnel-related costs of
approximately $2.5 million due to the hiring of additional personnel. In
addition, expenses related to overall administrative costs increased by
approximately $1.6 million due to the overall growth and expansion of our
operations.

         Interest Income (Expense), Net. Interest income (expense), net for
fiscal 2000 increased by approximately $6.6 million as compared to fiscal 1999.
The principal reason for the increase was the interest income earned from the
investment of proceeds from the Company's public offerings.

         Income Tax Provision. Provision for income taxes increased by
approximately $4.6 million, or 477%, due to the increased pre-tax income. Our
overall effective tax rate was approximately 38% for both fiscal 2000 and fiscal
1999.

         Net Income. Net income increased by approximately $7.5 million in
fiscal 2000 compared to fiscal 1999, while net income as a percentage of sales
increased to 19% in fiscal 2000 from approximately 6% in fiscal 1999. The
changes resulted primarily from the factors described above.



                                       13
<PAGE>
Year-ended January 31, 2000 Compared to Year-ended January 31, 1999

         Sales. Sales for fiscal 1999 increased by approximately $7.2 million,
or 39%, compared to the fiscal year ended January 31, 1999, or fiscal 1998. This
increase is primarily attributable to higher volume of sales of our Signalware
products to international customers. Sales to international customers
represented 63% of our total sales in fiscal 1999, compared to 51% of our total
sales in fiscal 1998.

         Cost of Sales. Cost of sales for fiscal 1999 increased by approximately
$2.8 million, or 45%, compared to fiscal 1998. The increase in cost of sales is
attributable to an increase in personnel-related costs of approximately $1.7
million, due to hiring of additional personnel and increased compensation and
benefits for existing personnel. In addition, materials and production costs
increased by approximately $1.5 million due to the increase in sales. Gross
margins decreased from approximately 67% in fiscal 1998 to approximately 66% in
fiscal 1999.

         Research and Development Expenses. Research and development expenses
for fiscal 1999 increased by approximately $1.3 million, or 28%, compared to
fiscal 1998 due to overall growth of research and development operations and the
initiation of significant new research and development projects. The increase
primarily resulted from an increase in personnel-related costs of approximately
$0.9 million, due to hiring of additional personnel and increased compensation
and benefits for existing personnel.

         Selling, General and Administrative Expenses. Selling, general and
administrative expenses for fiscal 1999 increased by approximately $3.2 million,
or 64%, compared to fiscal 1998, and as a percentage of sales increased from
approximately 27% for fiscal 1998 to approximately 31% for fiscal 1999. The
increase was primarily a result of an increase in personnel-related costs of
approximately $1.7 million, due to hiring of additional personnel and increased
compensation and benefits for existing personnel. In addition, expenses related
to marketing and promotional materials increased by approximately $200,000 and
rent expense increased by approximately $150,000.

         Income Tax Provision. Provision for income taxes increased by
approximately $37,000, or 4%, due to increased pre-tax income. Our overall
effective tax rate increased from approximately 37% for fiscal 1998 to
approximately 38% for fiscal 1999.

         Net Income. Net income increased by approximately $7,000 in fiscal 1999
compared to fiscal 1998, while net income as a percentage of sales decreased
from approximately 8% for fiscal 1998 to approximately 6% for fiscal 1999. The
changes resulted primarily from the factors described above.

         Liquidity and Capital Resources.

         The Company had working capital at January 31, 2001 and 2000 of
approximately $195.4 million and $0.7 million, respectively. At January 31, 2001
and 2000, the Company had cash and cash equivalents of approximately $183.3
million and $6.3 million, respectively.



                                       14
<PAGE>

         Operations for fiscal 2000, fiscal 1999 and fiscal 1998, after adding
back non-cash items, provided cash of approximately $11.8 million, $3.0 million
and $3.3 million, respectively. During such years, other changes in operating
assets and liabilities provided cash of approximately $9.2 million, $4.1 million
and $0.7 million, respectively.

         Investing activities for fiscal 2000, fiscal 1999 and fiscal 1998 used
cash of approximately $35.4 million, $3.5 million and $1.8 million,
respectively. These amounts include additions of property and equipment in
fiscal 2000, fiscal 1999 and fiscal 1998 of approximately $4.3 million, $2.9
million and $1.3 million, respectively, capitalization of software development
costs in fiscal 1999 and fiscal 1998 of approximately $0.6 million and $0.5
million, respectively, and purchases of investments in the amount of $31.1
million in fiscal 2000. In fiscal 2000 the Company increased its investments to
better utilize the proceeds from the public offerings in the period.

         Financing activities for fiscal 2000, fiscal 1999 and fiscal 1998
provided (used) cash of approximately $191.4 million, $0.1 million, and ($0.2)
million, respectively. These amounts include (i) $195.2 million of net proceeds
from the issuance of common stock in connection with the Company's public
offerings in fiscal 2000; (ii) proceeds from the exercise of stock options in
the amount of $0.5 million, in fiscal 2000; (iii) repayments to related parties
of $0.6 million, $3.7 million and $0.2 million in fiscal 2000, fiscal 1999 and
fiscal 1998, respectively, and (iv) the borrowing of bank debt of $3.8 million
in fiscal 1999 and the repayment of such debt in fiscal 2000.

         The Company may pursue acquisitions of businesses, products or
technologies in the future to expand its business and the products it offers.
Any material acquisition could result in a decrease in working capital depending
upon the amount, timing and nature of the consideration paid.

         The Company believes that the proceeds from its public offerings during
fiscal 2000, together with the potential cash flow from operations, will be
sufficient to meet anticipated cash needs for working capital, capital
expenditures and other activities for the foreseeable future. Thereafter, if
current sources are not sufficient to meet our needs, we may seek additional
debt or equity financing.

          Although there are no present understandings, commitments or
agreements with respect to acquisitions of other businesses, products or
technologies, the Company may in the future consider such transactions, which
may require additional debt or equity financing. The issuance of debt or equity
securities could be expected to have a dilutive impact on the Company's
stockholders, and there can be no assurance as to whether or when any acquired
business would contribute positive operating results commensurate with the
associated investment.

         Certain Trends and Uncertainties.

         The telecommunications industry has been affected by worldwide
conditions of economic weakness. Telecommunications service providers have
announced reductions in capital expenditures, delays in the deployment of
services and a large number of service providers, equipment manufacturers and
applications developers have announced reductions in anticipated revenues and


                                       15
<PAGE>

deterioration in operating results. While the Company's revenues and net income
have grown in recent periods, the continuation of economic weakness in the
telecommunications industry may adversely affect the Company's future operating
results. The Company's sales to equipment manufacturers and application
developers who supply the telecommunications industry may be adversely affected
by the slowdown of infrastructure purchases by telecommunications service
providers and by declines in technology expenditures in general. In addition,
weakness in the telecommunications industry may affect the Company's business by
increasing the risk of credit or business failures of suppliers or customers, by
delaying customers' payments and by price reductions by competitors to retain
market share.

         The telecommunications industry is subject to rapid technological
change. The introduction of new technologies in the telecommunications market
and new alternatives for the delivery of services are having, and can be
expected to continue to have, a profound effect on competitive conditions in the
market and the success of market participants, including the Company. The
Company's revenue stream will depend on its ability to correctly anticipate
technological trends, to react quickly and effectively to such trends and to
enhance its existing products and to introduce new products on a timely and
cost-effective basis.

         The Company intends to continue to make significant investments in the
expansion of its business, and to examine opportunities for additional growth
through acquisitions, the development of new products and strategic investments.
Future acquisitions could result in potentially dilutive issuances of equity
securities, the incurrence of debt and other acquisition-related expenses. The
impact of these decisions on future profitability cannot be predicted with
assurance, and the Company's commitment to growth may increase its vulnerability
to unforeseen downturns in its markets, technology changes and shifts in
competitive conditions. Further, these types of activities involve expenditures
and obligations that may not be readily curtailed or reduced if anticipated
demand for the associated products does not materialize or is delayed.

         The Company holds a large portion of its net assets in cash equivalents
and short-term investments. Such investments subject the Company to the risks
inherent in the capital markets in general. Given the relatively high proportion
of the Company's liquid assets relative to its overall size, the results of its
operations in the future will reflect, to a greater extent than in the past, the
results of the Company's capital management and investment activities and the
risks associated with those activities. In addition, the reduction in prevailing
interest rates due to economic conditions or government policies can be expected
to have an adverse impact on the Company's results of operations.

         The Company's products are dependent upon their ability to operate on
new hardware and operating systems of other companies. Any modifications to our
software needed to adapt to these hardware and operating system changes may
prove to be costly, time-consuming and may not be successful. Undetected defects
could result in lost sales, adverse publicity and other claims against the
Company. In addition, the Company's ability to grow and enhance its products may
be limited due to the intense competition for new hires in the technology
fields. The Company has increased its expenditures in the areas of sales and
marketing and research and development during recent periods. The Company
believes that these expenditures are necessary to enhance its products in order


                                       16
<PAGE>

to remain competitive and enhance its future growth and presence in the market.

         The Company is dependent on the sale of its Signalware product line.
All of the Company's products are designed to support signaling system #7. If
future networks do not utilize this system and the Company is unable to adapt
its products to work with the appropriate system protocols, its products will
become less competitive or obsolete. A reduction in the demand for these
products could affect adversely its business and operating results. The Company
is expanding its product line with the development of the Nexworx service
control product initiative. The success of this product line is dependent
primarily upon the development of a market for these types of products and their
acceptance by existing and new customers. If a market for Nexworx does not
develop or the Company is not successful in marketing it, the Company's
continued growth could be adversely affected and its investment in Nexworx may
be lost.

         Historically, a limited number of customers have contributed a
significant percentage of the Company's revenues. The Company anticipates that
its operating results in any given period will continue to depend significantly
upon revenues from a small number of customers. The loss of any of these
customers could have a materially adverse effect on the Company's business. In
order to increase the Company's revenues, it will need to attract additional
customers on an ongoing basis. In addition, since the Company's products have
long sales cycles that typically range from six to twelve months, its ability to
forecast the timing and amount for specific sales is limited. The loss or
deferral of one or more significant sales could have a material adverse effect
on the Company's operating results in any fiscal quarter, especially if there
are significant sales and marketing expenses associated with the deferred or
lost sales.

          The Company's software products are primarily sold to equipment
manufacturers and application developers, who integrate its products with their
products and sell them to service providers. The success of the Company's
business and operating results is dependent upon its channel and marketing
relationships with these manufacturers and developers and the successful
development and deployment of their products. If the Company cannot successfully
establish channel and marketing relationships with leading equipment
manufacturers and application developers or maintain these relationships on
favorable terms, or the Company's sales channels are affected by economic
weakness, its business and operating results may suffer.

         Because the Company relies on a limited number of independent
manufacturers to produce boards for its products, if these manufacturers
experience financial, operational or other difficulties, the Company may
experience disruptions to its product supply. The Company may not be able to
find alternate manufacturers that meet its requirements and existing or
alternative sources for boards may not continue to be available at favorable
prices. The Company also relies on a limited number of suppliers for its board
components and it does not have any long term supply agreements. Thus, if there
is a shortage of supply for these components, the Company may experience an
interruption in its product supply.

         The Company operates in an industry characterized by the existence of a
large number of patents and frequent allegations of patent infringement. As the
number of communications network products increases and the functionality of
these products overlap, the Company believes that it may become increasingly


                                       17
<PAGE>
subject to allegations of infringement. Defending and resolving infringement
allegations against the Company could be time consuming and expensive, result in
a substantial diversion of management resources, cause product delays or force
the Company to enter into unfavorable license agreements. The Company has agreed
to indemnify some of its customers should it be determined that its product
infringes on the proprietary rights of third parties. Litigation resulting on
behalf of the Company's customers may be costly and may require the Company to
obtain licenses, which, if not obtained, could result in customers being
prohibited from using the Company's products.

         The Company's success depends in part upon its proprietary technology.
It is possible that the Company's proprietary software code has in the past been
and will be in the future copied or used inappropriately. Policing the
unauthorized use of the Company's products is difficult and litigation may be
required in the future to enforce the Company's intellectual property rights. In
addition, the laws of some foreign countries do not protect the Company's
proprietary rights in its products to the same extent, as do the laws in the
United States. The Company cannot be sure that it will be successful in
protecting its proprietary software and litigation may be time consuming,
expensive and cause a diversion of management resources.

         The trading price of the Company's shares may be affected by the
factors noted above as well as prevailing economic and financial trends and
conditions in the public securities markets. Share prices of companies in
technology businesses, and particularly smaller sized publicly traded companies
such as the Company, tend to exhibit a high degree of volatility. The
announcement of financial results that fall short of the results anticipated by
the public markets could have an immediate and significant effect on the trading
price of the Company's shares in any given period. Such shortfalls may result
from events that are beyond the Company's immediate control and can be
unpredictable. These factors may contribute to the volatility of the trading
value of the Company's shares regardless of the Company's long-term prospects.
The trading price of the Company's shares also may be affected by developments,
including reported financial results and fluctuations in trading prices of the
shares of other publicly-held companies in the telecommunications industry in
general, and the Company's industry in particular, which may not have any direct
relationship with the Company's business or prospects.

         The recent decline in the price of the Company's shares and the overall
decline in equity prices generally and in the shares of technology companies in
particular, can be expected to make it more difficult for the Company to rely on
equity incentive programs as a means to recruit and retain talented employees,
which may result in increased employment costs, and may limit the Company's
ability to raise capital on advantageous terms.


         Effect of New Accounting Pronouncements.

         In 1998, the Financial Accounting Standards Board issued SFAS No. 133
"Accounting for Derivative Instruments and Hedging Activities" which was
subsequently amended by SFAS Nos. 137 and 138 (collectively "SFAS 133"). SFAS
133 establishes accounting and reporting standards for derivative instruments,
including certain derivatives embedded in other contracts, and hedging
activities and requires that an entity recognize all derivatives as either
assets or liabilities and measure those instruments at fair value. Under SFAS
133, certain contracts that were not formerly considered derivatives may now


                                       18
<PAGE>

meet the definition of a derivative. SFAS 133 is effective for all fiscal
quarters of fiscal years beginning after June 15, 2000. The Company will adopt
SFAS 133 effective February 1, 2001. The adoption of SFAS 133 will not have a
material effect on the Company's operations or financial position.

         Forward-Looking Statements.

         From time to time, the Company makes forward-looking statements.
Forward-looking statements include financial projections, statements of plans
and objectives for future operations, statements of future economic performance,
and statements of assumptions relating thereto.

         The Company may include forward-looking statements in its periodic
reports to the Securities and Exchange Commission on Forms 10-K, 10-Q, and 8-K,
in its annual report to stockholders, in its proxy statements, in its press
releases, in other written materials, and in statements made by employees to
analysts, investors, representatives of the media, and others.

         By their very nature, forward-looking statements are subject to
uncertainties, both general and specific, and risks exist that predictions,
forecasts, projections and other forward-looking statements will not be
achieved. Actual results may differ materially due to a variety of factors
including, without limitation, those discussed under "Certain Trends and
Uncertainties" and elsewhere in this report. Investors and others should
carefully consider these factors and other uncertainties and events, whether or
not the statements are described as forward-looking.

         Forward-looking statements made by the Company are intended to apply
only at the time they are made, unless explicitly stated to the contrary.
Moreover, whether or not stated in connection with a forward-looking statement,
the Company undertakes no obligation to correct or update a forward-looking
statement should the Company later become aware that it is not likely to be
achieved. If the Company were in any particular instance to update or correct a
forward-looking statement, investors and others should not conclude that the
Company will make additional updates or corrections thereafter with respect to
that or any other forward-looking statement.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

         The Company is exposed to market risk from changes in interest rates.
Various financial instruments held by the Company are sensitive to changes in
interest rates. Interest rate changes would result in gains or losses in the
market value of the Company's investments in debt securities due to differences
between the market interest rates and rates at the inception of these financial
instruments. Neither a 100 basis point increase nor decrease from current
interest rates would have a material effect on the Company's financial position,
results of operations or cash flows.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

         The financial information required by Item 8 is in the "Financial
Statements" included in Item 14 of this report on Form 10-K.



                                       19
<PAGE>

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
        FINANCIAL DISCLOSURE.

         Not applicable

                                    PART III

The information required by Part III is omitted pursuant to instruction G(3)











                                       20
<PAGE>
                                     PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENTS SCHEDULES AND REPORTS ON FORM 8-K.

                                                                       Page(s)
(a)      Documents filed as part of this report.
         ---------------------------------------

(1)      Financial Statements.
         ---------------------

         Index to Consolidated Financial Statements                      F-1

         Independent Auditors' Report                                    F-2

         Consolidated Balance Sheets as of
             January 31, 2000 and 2001                                   F-3

         Consolidated Statements of Income
             For the Years Ended January 31, 1999, 2000
             and 2001                                                    F-4

         Consolidated Statements of Stockholders'
             Equity (Deficit) For the Years Ended
             January 31, 1999, 2000 and 2001                             F-5

         Consolidated Statements of Cash Flows for the
             Years Ended January 31, 1999, 2000
             and 2001                                                    F-6

         Notes to Consolidated Financial Statements                      F-7

(2)      Financial Statement Schedules.
         ------------------------------

         None

(3)      Exhibits.
         ---------

         The Index of Exhibits commences on the following page.



                                       21
<PAGE>

                                INDEX TO EXHIBITS


No.      Description

3        Articles of Incorporation and By-Laws:

3.1      Amended and Restated Certificate of Incorporation of Ulticom, Inc.
         (Incorporated by reference from the Registrant's Registration Statement
         on Form S-1 under the Securities Act of 1933, Registration No.
         333-94873)

3.2      Amended and Restated Bylaws of Ulticom, Inc. (Incorporated by reference
         from the Registrant's Registration Statement on Form S-1 under the
         Securities Act of 1933, Registration No. 333-94873)

4        Instruments defining the rights of security holders including
         indentures:

4.1      Specimen Common Stock certificate. (Incorporated by reference from the
         Registrant's Registration Statement on Form S-1 under the Securities
         Act of 1933, Registration No. 333-94873)

4.2      See Exhibit 3.1 for provisions defining the rights of holders of common
         stock of the Registrant.

10       Material Contracts:

10.1     Services Agreement, dated as of February 1, 1998, between Comverse
         Technology, Inc. and Ulticom, Inc. (Incorporated by reference from the
         Registrant's Registration Statement on Form S-1 under the Securities
         Act of 1933, Registration No. 333-94873)

10.2     Federal Income Tax Sharing Agreement, dated as of December 21, 1999,
         between Comverse Technology, Inc. and Ulticom, Inc. (Incorporated by
         reference from the Registrant's Registration Statement on Form S-1
         under the Securities Act of 1933, Registration No. 333-94873)

10.3     Patent License Agreement, dated January 12, 2000, between Comverse
         Patent Holding Company, Inc. and Ulticom, Inc. (Incorporated by
         reference from the Registrant's Registration Statement on Form S-1
         under the Securities Act of 1933, Registration No. 333-94873)

10.4     License Agreement, dated as of February 1, 2000, between Comverse
         Technology, Inc. and Ulticom, Inc. (Incorporated by reference from the
         Registrant's Registration Statement on Form S-1 under the Securities
         Act of 1933, Registration No. 333-94873)



                                       22
<PAGE>

10.5     Registration Rights Agreement, dated as of January 1, 2000, between
         Comverse Technology, Inc. and Ulticom, Inc. (Incorporated by reference
         from the Registrant's Registration Statement on Form S-1 under the
         Securities Act of 1933, Registration No. 333-94873)

10.6     Business Opportunities Agreement, dated as of January 1, 1999, between
         Comverse Technology, Inc. and Ulticom, Inc. (Incorporated by reference
         from the Registrant's Registration Statement on Form S-1 under the
         Securities Act of 1933, Registration No. 333-94873)

10.7     Form of Indemnification Agreement. (Incorporated by reference from the
         Registrant's Registration Statement on Form S-1 under the Securities
         Act of 1933, Registration No. 333-94873)

10.8     1998 Stock Incentive Compensation Plan (Incorporated by reference from
         the Registrant's Registration Statement on Form S-1 under the
         Securities Act of 1933, Registration No. 333-94873)

10.9     Employment Agreement, dated as of February 1, 2000 between Shawn
         Osborne and Ulticom, Inc. (Incorporated by reference from the
         Registrant's Registration Statement on Form S-1 under the Securities
         Act of 1933, Registration No. 333-94873)

10.10    2000 Employee Stock Purchase Plan (Incorporated by reference from the
         Registrant's Registration Statement on Form S-8 under the Securities
         Act of 1933, Registration No. 333-56522)

11.1*    Statement re: Computation of Basic and Diluted Earnings Per Share.

23.1*    Consent of Deloitte and Touche LLP.

-------------------------
* Filed with this report on Form 10-K



                                       23
<PAGE>

                          ULTICOM, INC. AND SUBSIDIARY
                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS


<TABLE>

                                                                                             Page
<S>                                                                                          <C>
Independent Auditors' Report.................................................................F-2

Consolidated Balance Sheets as of January 31, 2000 and 2001..................................F-3

Consolidated Statements of Income for the years ended January 31, 1999, 2000 and
2001.........................................................................................F-4

Consolidated Statements of Stockholders' Equity (Deficit) for the years ended January 31,
1999, 2000, and 2001.........................................................................F-5

Consolidated Statements of Cash Flows for the years ended January 31, 1999, 2000, and
2001 ........................................................................................F-6

Notes to the Consolidated Financial Statements...............................................F-7


</TABLE>


<PAGE>

INDEPENDENT AUDITORS' REPORT



To the Stockholders of
Ulticom, Inc.
Mt. Laurel, New Jersey



We have audited the accompanying consolidated balance sheets of Ulticom, Inc.
and subsidiary (the "Company") as of January 31, 2000 and 2001, and the related
consolidated statements of income, stockholders' equity (deficit), and cash
flows for each of the three years in the period ended January 31, 2001. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, such consolidated financial statements present fairly, in all
material respects, the financial position of the Company as of January 31, 2000
and 2001, and the results of its operations and its cash flows for each of the
three years in the period ended January 31, 2001 in conformity with accounting
principles generally accepted in the United States of America.

/s/ Deloitte & Touche LLP

New York, New York
March 5, 2001




                                      F-2
<PAGE>

                          ULTICOM, INC. AND SUBSIDIARY

                           CONSOLIDATED BALANCE SHEETS
                        (In thousands, except share data)
<TABLE>
<CAPTION>
                                                                             January 31,  January 31,
                                                                                2000         2001
                                                                                ----         ----
<S>                                                                           <C>          <C>
                                      ASSETS

Current Assets:
     Cash and cash equivalents                                               $  6,299      $183,303
     Short-term investments                                                        --        25,577
     Accounts receivable, net of allowance for doubtful accounts of
        $250 and $425                                                           3,162         7,756
     Due from related parties                                                   1,009         1,012
     Inventories                                                                1,812         1,625
     Prepaid expenses and other current assets                                    408           435
     Deferred tax asset                                                           332           332
                                                                             --------      --------
          Total current assets                                                 13,022       220,040
     Property and equipment, net                                                3,190         5,728
     Investments                                                                   --         5,500
     Deferred tax asset                                                            --           422
     Other assets                                                               1,152           497
                                                                             --------      --------
          Total Assets                                                       $ 17,364      $232,187
                                                                             ========      ========

                      LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:
     Accounts payable and accrued expenses                                   $  4,225      $ 14,023
     Deferred revenue                                                           7,438        10,648
     Due to related parties                                                       617            --
                                                                             --------      --------
          Total current liabilities                                            12,280        24,671
                                                                             --------      --------
Long-Term Liabilities:
     Note payable, bank                                                         3,800            --
     Deferred tax liability                                                       164           467
                                                                             --------      --------
          Total long-term liabilities                                           3,964           467
                                                                             --------      --------
Commitments and Contingencies
Stockholders' Equity:
     Undesignated stock, no par value, 10,000,000 shares authorized, no
        shares issued and outstanding                                              --            --
     Common stock, no par value, 200,000,000 authorized,
        32,727,000 and 40,510,965 issued and outstanding                           --            --
     Additional paid-in capital                                                    10       196,862
     Retained earnings                                                          1,110        10,187
                                                                             --------      --------
          Total stockholders' equity                                            1,120       207,049
                                                                             --------      --------
          Total liabilities and stockholders' equity                         $ 17,364      $232,187
                                                                             ========      ========

</TABLE>


                 See notes to consolidated financial statements


                                      F-3
<PAGE>

                          ULTICOM, INC. AND SUBSIDIARY

                        CONSOLIDATED STATEMENTS OF INCOME
                      (In thousands, except per share data)




                                                 Year Ended January 31,
                                           1999           2000            2001
                                         --------       --------       --------

Sales                                    $ 18,629       $ 25,831       $ 47,441
Cost of sales                               6,131          8,883         15,489
                                         --------       --------       --------
Gross profit                               12,498         16,948         31,952

Operating expenses:
Research and development                    4,706          6,015         10,325
Selling, general and administrative         4,948          8,124         13,271
                                         --------       --------       --------
Income from operations                      2,844          2,809          8,356

Interest income (expense), net               (350)          (271)         6,282
                                         --------       --------       --------
Income before income taxes                  2,494          2,538         14,638

Income tax provision                          927            964          5,561
                                         --------       --------       --------

Net income                               $  1,567       $  1,574       $  9,077
                                         ========       ========       ========


Earnings per share:
Basic                                    $   0.05       $   0.05       $   0.24
                                         ========       ========       ========
Diluted                                  $   0.05       $   0.05       $   0.22
                                         ========       ========       ========



                 See notes to consolidated financial statements




                                      F-4
<PAGE>

                          ULTICOM, INC. AND SUBSIDIARY

            CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
                                 (In thousands)
<TABLE>
<CAPTION>
                                                         Common Stock        Additional     Retained
                                                   Number of                  Paid-In       Earnings
                                                    Shares      Par Value     Capital      (Deficit)       Total
                                                    ------      ---------     -------      ---------       -----
<S>                                                   <C>        <C>         <C>          <C>           <C>
Balance, February 1, 1998                             32,727     $     --    $      10    $  (2,031)    $  (2,021)
   Net income                                                                                 1,567         1,567
                                                   ---------    ---------    ---------    ---------     ---------

Balance, January 31, 1999                             32,727           --           10         (464)         (454)
   Net income                                                                                 1,574         1,574
                                                   ---------    ---------    ---------    ---------     ---------

Balance, January 31, 2000                             32,727           --           10        1,110         1,120
   Net income                                                                                 9,077         9,077
   Exercise of stock options                              53           --          546                        546
   Tax benefit of dispositions of stock options                                  1,075           --         1,075
   Proceeds from sale of stock                         7,731           --      195,231           --       195,231
                                                   ---------    ---------    ---------    ---------     ---------


Balance, January 31, 2001                             40,511    $      --    $ 196,862    $  10,187     $ 207,049
                                                   =========    =========    =========    =========     =========

</TABLE>

                 See notes to consolidated financial statements


                                      F-5
<PAGE>

                          ULTICOM, INC. AND SUBSIDIARY

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (In thousands)
<TABLE>
<CAPTION>
                                                                              January 31,

                                                                    1999         2000          2001
                                                                 ---------     ---------     ---------
<S>                                                              <C>           <C>           <C>
Cash flows from operating activities:
Net income                                                       $   1,567     $   1,574     $   9,077
Adjustments to reconcile net income to net cash provided by
operating activities:
   Depreciation and amortization                                     1,408         1,689         2,448
   Deferred income taxes                                               276          (258)         (119)

  Changes in assets and liabilities:
   Accounts receivable                                                (140)       (1,637)       (4,594)
   Due from related parties                                            118           653            (3)
   Inventories                                                          91          (939)          187
   Prepaid expenses and other current assets                            56          (335)          (27)
   Accounts payable and accrued expenses                               335         2,071        10,873
   Deferred revenue                                                    263         4,819         3,210
   Other                                                               (14)         (507)          (35)
                                                                 ---------     ---------     ---------
        Net cash provided by operating activities                    3,960         7,130        21,017
                                                                 ---------     ---------     ---------
Cash flows from investing activities:
   Purchases of property and equipment                              (1,254)       (2,853)       (4,296)
   Purchases of investments, net                                        --            --       (31,077)
   Capitalization of software development costs                       (508)         (632)           --
                                                                 ---------     ---------     ---------
        Net cash used in investing activities                       (1,762)       (3,485)      (35,373)
                                                                 ---------     ---------     ---------

Cash flows from financing activities:
   Proceeds from exercise of  stock options                             --            --           546
   Proceeds from the issuance of common stock in connection
      with public offerings                                             --            --       195,231
   Note payable, bank                                                   --         3,800        (3,800)
   Repayments to related parties                                      (238)       (3,690)         (617)
                                                                 ---------     ---------     ---------
          Net cash provided by (used in) financing activities         (238)          110       191,360
                                                                 ---------     ---------     ---------
Net increase in cash and cash equivalents                            1,960         3,755       177,004
Cash and cash equivalents, beginning of period                         584         2,544         6,299
                                                                 ---------     ---------     ---------
Cash and cash equivalents, end of period                         $   2,544     $   6,299     $ 183,303
                                                                 =========     =========     =========

Supplemental disclosures of cash flow  information:
Cash paid for interest                                               $  --         $  --     $     114
                                                                 =========     =========     =========
Cash paid for taxes                                                  $  --     $      48     $   2,954
                                                                 =========     =========     =========

</TABLE>

                 See notes to consolidated financial statements


                                      F-6
<PAGE>

                          ULTICOM, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                   YEARS ENDED JANUARY 31, 1999, 2000 AND 2001

1.       BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

         Company Business and Background - Ulticom, Inc., ("the Company"),
formerly DGM&S Telecom, Inc., a New Jersey corporation and subsidiary of
Comverse Technology, Inc. ("Comverse"), is engaged in the design, development,
manufacture, marketing and support of software and hardware for use in the
communications industry. In May 1999, the Company amended its certificate of
incorporation to change its name from DGM&S Telecom, Inc. to Ulticom, Inc.

         Recapitalization - In December 1998, the Company amended its
certificate of incorporation to increase its authorized capital stock to
110,000,000 shares without par, of which 100,000,000 shares were designated as
common stock and 10,000,000 shares were authorized without designation and
available for issuance with such designations and relative rights, preferences
and limitations as may be specified from time to time by the Board of Directors.
On March 10, 2000, the Company amended its certificate of incorporation in
connection with its initial public offering to increase its authorized capital
stock to 210,000,000 shares without par, of which 200,000,000 have been
designated as common stock and 10,000,000 shares have been authorized without
designation and available for issuance with such designations and relative
rights, preferences and limitations as may be specified from time to time by the
Board of Directors.

         Effective as of December 31, 1998, the Board of Directors declared a
stock dividend on the Company's outstanding common stock at the rate of 100,000
shares of common stock for each outstanding share of common stock. On March 13,
2000, the Board of Directors declared a stock dividend on the Company's
outstanding common stock at the rate of 2.2727 shares of common stock for each
outstanding share of common stock. All references to per share amounts and the
number of shares in these financial statements have been adjusted to reflect the
increase in authorized capital stock and the stock dividends referred to above.

         Public Offerings - On April 5, 2000, the Company issued 4,250,000
shares of common stock to the public at a price of $13.00 per share. The
underwriters exercised their option to purchase 637,500 additional shares to
cover over-allotments. The net proceeds of the offering were approximately
$58,062,000. On October 17, 2000 the Company issued an additional 2,843,375
shares of common stock in an offering to the public at a price of $50.00 per
share. The net proceeds of this offering were approximately $137,169,000.

         Principles of Consolidation - The consolidated financial statements
include the accounts of the Company and its wholly owned subsidiary. All
material intercompany balances and transactions have been eliminated.

         Cash and Cash Equivalents - The Company considers all highly liquid
investments purchased with original maturities of three months or less to be
cash equivalents.



                                      F-7
<PAGE>

         Short-Term Investments - The Company classifies all of its short-term
investments as held-to-maturity and are stated at cost, adjusted for
amortization of premiums and discounts to maturity. Interest and amortization of
premiums and discounts is included in interest income. As of January 31, 2001,
all of the Company's short-term investments consisted of U.S. corporate debt
securities with a market value of approximately $25,037,000. All of these
short-term investments have a contractual maturity of one year or less.

         Fair Value of Financial Instruments - The estimated fair value amounts
have been determined by the Company, using available market information and
appropriate valuation methodologies. However, considerable judgment is
necessarily required in interpreting market data to develop the estimates of
fair value. Accordingly, the estimates presented herein are not necessarily
indicative of the amounts that the Company could realize in a current market
exchange. The use of different market assumptions and/or estimation
methodologies may have a material effect on the estimated fair value amounts.

         Concentration of Credit Risk - Financial instruments which potentially
expose the Company to a concentration of credit risk consist of cash and cash
equivalents, short-term investments and accounts receivables. The Company places
its cash investments with high quality financial institutions. The Company
believes no significant concentration of credit risk exists with respect to
these cash investments. The Company sells its products to customers who are
dispersed across many geographic regions and who are principally in the
communications industry. The Company had one customer that represented 14% of
gross accounts receivable as of January 31, 2001. The carrying amount of the
financial instruments are reasonable estimates of their fair value.

         Inventories - Inventories are stated at the lower of cost or market.
Cost is determined by the first in, first out (FIFO) method.

         Property and Equipment - Property and equipment are recorded at cost
less accumulated depreciation and amortization. The Company depreciates its
transportation equipment, furniture and equipment using straight-line
depreciation over periods ranging from three to seven years. Leasehold
improvements are amortized over the lesser of the term of the respective lease
or the estimated useful lives of the improvements (7 years). The cost of
maintenance and repairs are charged to operations as incurred. Significant
renewals and betterments are capitalized.

         Income Taxes - The Company accounts for income taxes under the asset
and liability method. Under this method, deferred tax assets and liabilities are
determined based on differences between the financial reporting and the tax
bases of assets and liabilities, and are measured using the enacted tax rates
and laws that are expected to be in effect when the differences are expected to
reverse. For federal income tax purposes, the Company's results were included in
the Comverse consolidated tax return for the period that Comverse retained
beneficial ownership of at least 80% of the total voting power and value of the
outstanding common stock of the Company. Income taxes were determined as if the
Company was a separate taxpayer. Income tax currently payable was charged to the
Due to Related Parties account in the period that the liability arose and the
Company was included in the Comverse consolidated return. Under the tax sharing


                                      F-8
<PAGE>
agreement between the Company and Comverse, the Company does not receive any
benefit for losses that it incurs. Upon completion of the Company's public
offering on October 17, 2000, Comverse's ownership was reduced below 80% of the
total voting power and value of the outstanding Company common stock, and the
Company is preparing its return on a stand-alone basis for the period from
October 17, 2000 through January 31, 2001.

         Revenue and Expense Recognition - Revenues from product sales are
generally recognized upon shipment. The Company provides its customers with
post-contract support services, which generally consist of bug-fixing and
telephone access to the Company's technical personnel, but may also include the
right to receive product updates, upgrades and enhancements. Revenue from these
services is recognized ratably over the contract period. Post-contract support
services included in the initial licensing fee are allocated from the total
contract amount based on the relative fair value of vendor specific objective
evidence ("VSOE"). For multi-element arrangements, VSOE of fair value is
determined based on the price charged when the same element is sold separately
or, for elements not yet being sold separately, the price established by
management having the relevant authority. If VSOE of fair value does not exist
for one or more delivered elements of a multi-element arrangement and VSOE of
fair value exists for all undelivered elements, then revenue is recognized using
the "residual method."

         Deferred revenue consists primarily of amounts billed to customers
pursuant to terms specified in contracts but for which revenue has not been
recognized.

         Included in sales are license revenues amounting to approximately
$7,946,000, $5,270,000, and $11,642,000 for the years ended January 31, 1999,
2000 and 2001. The related costs of revenues associated with these license
revenues were not material in each of the periods presented.

         Expenses incurred in connection with research and development
activities, other than certain software development costs that are capitalized,
and selling, general and administrative expenses are charged to operations as
incurred.

         Software Development Costs - Software development costs are capitalized
upon the establishment of technological feasibility and are amortized over the
estimated useful life of the software, which has been four years or less.
Amortization begins in the period when the product is available for general
release to customers. Amortization expenses amounted to $134,000, $287,000, and
$323,000 for the years ended January 31, 1999, 2000 and 2001, respectively. In
the year ended January 31, 1999, the Company recorded an impairment loss of
$619,000 to reduce the carrying value of the software development costs to their
net realizable value.

         Comprehensive Income - In 1997, the Financial Accounting Standards
Board ("FASB") issued Statement No. 130, Reporting Comprehensive Income. The
statement establishes standards for the reporting and display of comprehensive
income and its components in a full set of general-purpose financial statements.
The statement became effective for the Company beginning January 1, 1998. For
all periods presented, the Company had no components of comprehensive income
other than net income.

         Long-Lived Assets - The Company reviews for the impairment of
long-lived assets and certain identifiable intangibles whenever events change,
or changes in circumstances indicate that the carrying amount of an asset may
not be recoverable. An impairment loss would be recognized when estimated future
cash flows expected to result from the use of an asset and its eventual
disposition is less than its carrying amount. The Company has identified no such
impairment losses.



                                      F-9
<PAGE>

         Pervasiveness of Estimates - The preparation of the financial
statements in conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosures of contingent assets and liabilities at
the date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from those
estimates.

         Recent Accounting Pronouncements - In 1998, the Financial Accounting
Standards Board issued SFAS No. 133 "Accounting for Derivative Instruments and
Hedging Activities" which was subsequently amended by SFAS Nos. 137 and 138
(collectively "SFAS 133"). SFAS 133 establishes accounting and reporting
standards for derivative instruments, including certain derivatives embedded in
other contracts, and hedging activities and requires that an entity recognize
all derivatives as either assets or liabilities and measure those instruments at
fair value. Under SFAS 133, certain contracts that were not formerly considered
derivatives may now meet the definition of a derivative. SFAS 133 is effective
for all fiscal quarters of fiscal years beginning after June 15, 2000. The
Company will adopt SFAS 133 effective February 1, 2001. The adoption of SFAS 133
will not have a material effect on the Company's operations or financial
position.

         Reclassifications - Certain prior year balances have been reclassified
to conform with the current year classification.

2.       INVENTORIES

     Inventories consist of the following:

                                                 January 31,
                                                 -----------
                                         2000                  2001
                                         ----                  ----
                                               (In thousands)

     Work in process                      $  709               $  847
     Finished goods                        1,103                  778
                                         -------              -------
                                         $ 1,812              $ 1,625
                                         =======              =======




                                      F-10
<PAGE>

3.       PROPERTY AND EQUIPMENT
<TABLE>
<CAPTION>
         Property and equipment consists of the following:
                                                                                           January 31,
                                                                                           -----------
                                                                                  2000                   2001
                                                                                  -----                  ----
                                                                                          (In thousands)
<S>                                                                               <C>                  <C>
     Furniture and equipment                                                      $ 4,407              $ 8,087
     Transportation equipment                                                         --                    17
     Leasehold improvements                                                           158                  523
                                                                                  -------              -------
                                                                                    4,565                8,627
     Less: accumulated depreciation                                                (1,375)              (2,899)
                                                                                  -------              -------
                                                                                  $ 3,190              $ 5,728
                                                                                  =======              =======


4.       OTHER ASSETS

         Other assets consist of the following:
                                                                                         January 31,
                                                                                         -----------
                                                                                   2000                  2001
                                                                                   ----                  ----
                                                                                         (In thousands)

     Software development costs, net of accumulated
        amortization of $2,431 and $2,754                                          $   658              $ 335
     Other assets                                                                      494                162
                                                                                 ---------              -----
                                                                                 $   1,152              $ 497
                                                                                 =========              =====


5.        ACCOUNTS PAYABLE AND ACCRUED EXPENSES

         Accounts payable and accrued expenses consist of the following:

                                                                                         January 31,
                                                                                         -----------
                                                                                   2000                  2001
                                                                                   ----                  ----
                                                                                        (In thousands)

     Accounts payable                                                               $ 716              $ 2,415
     Accrued salaries and benefits                                                  2,039                3,943
     Income taxes payable                                                              --                2,283
     Other                                                                          1,470                5,382
                                                                                  -------             --------
                                                                                  $ 4,225             $ 14,023
                                                                                  =======             ========

</TABLE>


                                      F-11
<PAGE>

6.        RELATED PARTY TRANSACTIONS

         The Company sells products and provides services to other subsidiaries
of Comverse. Sales to related parties were approximately $3,789,000, $4,679,000,
and $7,600,000 for the years ended January 31, 1999, 2000 and 2001,
respectively. The amounts charged to related parties for administrative services
were approximately $644,000, $42,000 and $0 for the years ended January 31,
1999, 2000 and 2001, respectively. These charges are included in their entirety
in selling, general and administrative expenses. The Company was charged
interest on balances owed to Comverse amounting to approximately $419,000,
$362,000, and $0 for the years ended January 31, 1999, 2000 and 2001,
respectively.

         The Company has a services agreement with Comverse. Under this
agreement, Comverse provides the Company with various administrative and
consulting services. The Company has agreed to pay to Comverse a quarterly fee
of $150,000, payable in arrears at the end of each fiscal quarter, in
consideration for all services provided by Comverse during such fiscal quarter.
The Company was charged $600,000 in each of the years ended January 31, 1999,
2000 and 2001 for consulting and other corporate services provided by Comverse.
In addition, the Company has agreed to reimburse Comverse for any out-of-pocket
expenses incurred by Comverse in providing the services. The term of the
agreement extends to January 31, 2003 and is automatically extended for
additional twelve-month periods unless terminated by either party.

         In January 2000, the Company secured a bank loan in the amount of $3.8
million in order to repay debt owed to Comverse. A portion of the proceeds from
the Company's initial public offering were used to repay the bank loan in July
2000.

7.       STOCK OPTIONS

         Employee Stock Options-At January 31, 2001, 3,802,471 shares of common
stock were reserved for issuance upon exercise of options then outstanding and
2,644,439 options were available for future grant under the Company's stock
option plan. Options under the plan may be granted to key employees, directors,
and other persons rendering services to the Company. Options which are
designated as "incentive stock options" under the option plan may be granted
with an exercise price not less than the fair market value of the underlying
shares at the date of grant and are subject to certain quantity and other
limitations specified in Section 422 of the Internal Revenue Code. Options which
are not intended to qualify as incentive stock options may be granted at any
price, but not less than the par value of the underlying shares, and without
restriction as to amount. The options and the underlying shares are subject to
adjustment in accordance with the terms of the plan in the event of stock
dividends, recapitalizations and similar transactions.




                                      F-12
<PAGE>
         The changes in the number of options were as follows:
<TABLE>
<CAPTION>
                                                                        Years ended January 31,
                                                                        -----------------------
                                                             1999                 2000                   2001
                                                             ----                 ----                   ----
<S>                                                       <C>                  <C>                     <C>
     Outstanding at beginning of period                          --            2,899,612               3,272,700
     Granted during the period                            3,655,606              877,084                 843,723
     Exercised during the period                                 --                   --                 (53,090)
     Canceled, terminated and expired                      (755,994)            (503,996)               (260,862)
                                                          ---------           ----------               ---------
     Outstanding at end of period                         2,899,612            3,272,700               3,802,471
                                                          =========           ==========               =========
</TABLE>


         Substantially all of the options outstanding as of January 31, 2001
vest in four equal annual increments from the date on which the Company
completed the initial public offering of its common stock, or for options issued
after the initial public offering, in four year increments from the date of
grant. Weighted average option exercise price information was as follows:

<TABLE>
<CAPTION>
                                                                         Years ended January 31,
                                                                         -----------------------
                                                             1999                 2000                 2001
                                                             ----                 ----                 ----
<S>                                                            <C>                <C>                  <C>
     Outstanding at beginning of period                        $  --              $  2.21              $  2.57
     Granted during the period                                  2.17                 3.71                16.84
     Exercised during the period                                  --                   --                10.28
     Canceled, terminated and expired                           1.99                 2.51                 4.62
     Outstanding at end of period                               2.21                 2.57                 5.49
</TABLE>

           Significant option groups outstanding at January 31, 2001, and
related weighted average price and life information were as follows:
<TABLE>
<CAPTION>
                                                                 Weighted                           Weighted
                                              Weighted Average    Average                            Average
         Range of               Number           Remaining        Exercise       Number              Exercise
      Exercise Price          Outstanding     Contractual Life     Price       Exercisable            Price
      --------------          -----------     ----------------     -----       -----------            -----
<S>                            <C>                  <C>           <C>             <C>               <C>
    $ 1.99   -   $ 1.99        1,698,531            7.01          $ 1.99              --            $    --
    $ 2.75   -   $ 3.97        1,335,262            8.09            3.25              --                 --
    $13.00   -   $13.00          522,178            8.36           13.00          55,000              13.00
    $22.56   -   $27.47          246,500            8.85           25.81              --                 --
                               ---------         -------         -------        --------           ---------
                               3,802,471            7.69          $ 5.49          55,000            $ 13.00
                               =========         =======         =======        ========           =========
</TABLE>


                                      F-13
<PAGE>

         The Company applies Accounting Principles Board Opinion No. 25,
"Accounting for Stock Issued to Employees," and related interpretations in
accounting for its option plans. Accordingly, as all options have been granted
at exercise prices equal to fair market value on the date of grant, no
compensation expense has been recognized by the Company in connection with its
stock-based compensation plans. Had compensation cost for the Company's stock
plans been determined based upon the fair value at the date of grant for awards
under these plans consistent with the methodology prescribed under SFAS No. 123,
"Accounting for Stock-Based Compensation", the Company's net income and earnings
per share would be reduced by approximately $196,763, $297,447 and $2,107,109 or
$0.01, $0.01 and $0.05 per diluted share for the years ended January 31, 1999,
2000, and 2001, respectively. The weighted average fair value of the options
granted during the years ended January 31, 1999, 2000 and 2001 is estimated at
$0.66, $1.21, and $12.29, respectively, on the date of grant (using the
Black-Scholes option pricing model) assuming an expected life of seven years for
the years ended January 31, 1999 and 2000 and five years for the year ended
January 31, 2001 and assuming the following weighted average assumptions: (i)
volatility of 0% and risk free interest rate of 5.4% for the year ended January
31, 1999; (ii) volatility of 0% and risk free interest rate of 5.8% for the year
ended January 31, 2000 and (iii) volatility of 90% and risk free interest rate
of 5.6% for the year ended January 31, 2001.


8.       EMPLOYEE STOCK PURCHASE PLAN

        Upon completion of the Company's initial public offering, the Company
adopted the 2000 Employee Stock Purchase Plan. Under the terms of this plan, an
employee, who has been employed for at least three months, may apply up to 10%
of his or her base salary to purchase shares of the Company's common stock. The
price of the stock is 85% of the last sale price on NASDAQ on the first or last
day of the offering period. The first plan offering period began in September
2000. There are 600,000 shares available under this plan and no shares have been
issued as of January 31, 2001.


9.       EARNINGS PER SHARE ("EPS")

         Basic earnings per share is determined by using the weighted average
number of shares of common stock outstanding during each period. Diluted
earnings per share further assumes the issuance of common shares for all
dilutive potential shares outstanding. The calculation for earnings per share
for the years ended January 31, 1999, 2000, and 2001 was as follows:

<TABLE>
<CAPTION>
                               January 31, 1999                January 31, 2000                January 31, 2001
                               -----------------               -----------------               ----------------
                                              Per Share                      Per Share                       Per Share
                          Income    Shares     Amount     Income    Shares     Amount    Income     Shares    Amount
                          ------    ------     ------     ------    ------     ------    ------     ------    ------
                                                     (In thousands, except per share data)
<S>                       <C>        <C>        <C>       <C>        <C>     <C>         <C>         <C>       <C>
Basic EPS
Net income                $ 1,567    32,727     $ 0.05    $ 1,574    32,727  $ 0.05      $ 9,077     37,602    $0.24
                                                ======                       ======                            =====
Effect of dilutive
securities-options             --       360                    --     1,032                   --      3,113
                          -------    ------                ------    ------              -------     ------
Diluted EPS               $ 1,567    33,087     $ 0.05    $ 1,574    33,759  $ 0.05      $ 9,077     40,715    $0.22
                          =======    ======     ======    =======    ======  ======      =======     ======    =====
</TABLE>

                                      F-14
<PAGE>

10.      INTEREST INCOME (EXPENSE), NET

                  Interest income (expense), net consists of the following:
<TABLE>
<CAPTION>
                                                                          Years Ended January 31,
                                                                          -----------------------
                                                               1999                 2000                2001
                                                               ----                 ----                ----
                                                                              (In thousands)
<S>                                                            <C>                 <C>                 <C>
     Interest income                                           $   69              $  103              $ 6,396
     Interest expense                                            (419)               (374)                (114)
                                                               ------              ------              -------
     Net                                                       $ (350)             $ (271)             $ 6,282
                                                               ======              ======              =======


11.      INCOME TAXES

         The provision for income taxes consists of the following:

                                                                         Years Ended January 31,
                                                                         -----------------------
                                                                1999                 2000              2001
                                                                ----                 ----              ----
     Current:                                                                 (In thousands)

          Federal                                                $ 578            $ 1,075             $ 4,916
          State                                                     73                147                 764
                                                                ------            -------             -------
               Total current                                       651              1,222               5,680
                                                                ------            -------             -------
     Deferred (benefit):
          Federal                                                  249               (246)                (37)
          State                                                     27                (12)                (82)
                                                                ------            -------             -------
               Total deferred                                      276               (258)               (119)
                                                                ------            -------             -------
                                                                $  927            $   964             $ 5,561
                                                                ======            =======             =======


         The reconciliation of the U.S. Federal statutory tax rate to the
Company's effective rate is as follows:

                                                                         Years Ended January 31,
                                                                         -----------------------
                                                                1999                 2000               2001
                                                                ----                 ----               ----
     U.S. Federal statutory rate                                  34%                  34%                 34%
     State taxes, net                                              3%                                       3%
                                                                                        4%
     Other                                                        --                    --                  1%
                                                         -----------            ----------            --------
     Company's effective tax rate                                 37%                  38%                 38%
                                                         ============           ==========            ========

</TABLE>


                                      F-15
<PAGE>

         Deferred income taxes reflect the net tax effects of temporary
differences between the carrying amounts of assets and liabilities for financial
reporting purposes and the amounts used for income tax purposes. The tax effects
of significant items comprising the Company's deferred tax asset and liability
at January 31, 2000 and 2001 are as follows:

                                                           January 31,
                                                           -----------
                                                        2000       2001
                                                        -----     -----
                                                         (In thousands)
       Deferred tax asset:
            Accrued liabilities and other               $ 239     $ 608
            Allowance for doubtful accounts                93       146
                                                        -----     -----
                 Total deferred tax asset                 332       754
                                                        -----     -----
       Deferred tax liability:
            Depreciation                                 (164)     (467)
                                                        -----     -----
                 Total deferred tax liability            (164)     (467)
                                                        -----     -----
                  Net deferred tax asset (liability)    $ 168     $ 287
                                                        =====     =====


12.      BUSINESS SEGMENT INFORMATION

           The Company is engaged in one business segment: the design,
development, manufacture, marketing and support of special software and hardware
for the communications industry.

           Sales by country, as a percentage of total sales, is as follows:

                                     Years Ended January 31,
                                     -----------------------
                                      1999    2000    2001
                                      ----    ----    ----

                     United States     49%     37%     38%
                     Germany           13%     12%     10%
                     Israel            20%     18%     16%
                     Sweden             3%     16%     15%
                     Other             15%     17%     21%
                                      ---     ---     ---
                          Total       100%    100%    100%
                                      ===     ===     ===


         For the year ended January 31, 1999, subsidiaries of Comverse and
Siemens accounted for approximately 20% and 13%, respectively, of the Company's
sales. For the year ended January 31, 2000, Ericsson, subsidiaries of Comverse,
and Siemens accounted for approximately 20%, 18% and 12%, respectively, of the
Company's sales. For the year ended January 31, 2001, Ericsson, subsidiaries of
Comverse and Siemens accounted for approximately 18%, 16% and 10%, respectively,
of the Company's sales.

         The Company had long-lived assets of $10,669,000 in the United States
and $1,056,000 in France at January 31, 2001.


                                      F-16
<PAGE>

13.      COMMITMENTS AND CONTINGENCIES

         Leases - The Company leases office space under non-cancelable operating
leases. Rent expense for all leased premises approximated $541,000, $593,000,
and $847,000 for the years ended January 31, 1999, 2000 and 2001. For the year
ended January 31, 1999, the Company received rental income from other
subsidiaries of Comverse of $138,000 for their proportionate share of the leased
space. For the years ended January 31, 2000 and 2001, the Company did not share
office space with any subsidiaries of Comverse.

As of January 31, 2001, the minimum rent obligations of the Company were
approximately as follows:



Years Ending January 31,                               Amount
------------------------                               ------
                                                  (In thousands)

          2002                                           $  881
          2003                                              904
          2004                                              929
          2005                                              954
          2006 and thereafter                             1,704
                                                  -------------
                                                       $  5,372
                                                  =============





                                      F-17
<PAGE>

14.     QUARTERLY INFORMATION (UNAUDITED)

The following table shows selected results of operations of each of the fiscal
quarters during the years ended January 31, 2000 and 2001:

<TABLE>
<CAPTION>
                                                                    Fiscal Quarter Ended
                                   -------------------------------------------------------------------------------------
                                   Apr. 30,  July 31,   Oct. 31,   Jan. 31,    Apr. 30,   July 31,   Oct. 31,   Jan. 31,
                                     1999      1999       1999       2000        2000       2000       2000       2001
                                     ----      ----       ----       ----        ----       ----       ----       ----
                                                         (In thousands, except per share amounts)
<S>                                 <C>       <C>        <C>        <C>          <C>       <C>       <C>         <C>
Sales                               $ 5,363   $ 6,069    $ 6,792    $ 7,607      $ 8,826   $10,591   $ 12,823    $ 15,201
Gross Profit                          3,475     3,993      4,445      5,035        5,879     7,095      8,658      10,320
Net income                              251       361        410        552          961     1,716      2,306       4,094

Diluted earnings per share
                                 $    0.01     $ 0.01     $ 0.01     $ 0.02       $ 0.03    $ 0.04     $ 0.06      $ 0.09
                                 =========     ======     ======     ======       ======    ======     ======      ======

</TABLE>




                                      F-18
<PAGE>

                                   SIGNATURES

         Pursuant to the requirements of section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

                                     Ulticom, Inc.

                             By:     /s/ Shawn K. Osborne
                             Name:   Shawn K. Osborne
                             Date:   April 24, 2001
                             Title:  President and Chief Executive Officer

         Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed by the following persons on behalf of the Registrant
and in the capacities on the dates indicated:
<TABLE>
Signature                                 Title                                                  Date
<S>                                      <C>                                                     <C>
/s/ Kobi Alexander                       Chairman of the Board and Director                      April 24, 2001
------------------
Kobi Alexander

/s/ Shawn K. Osborne                     President and Chief Executive Officer                   April 24, 2001
--------------------
Shawn K. Osborne

/s/ David Kreinberg                      Chief Financial Officer and Director                    April 24, 2001
-------------------
David Kreinberg

/s/ William F. Sorin                     Director                                                April 24, 2001
--------------------
William F. Sorin

/s/ Paul D. Baker                        Director                                                April 24, 2001
-----------------
Paul D. Baker

/s/ Yaacov Koren                         Director                                                April 24, 2001
----------------
Yaacov Koren

/s/ Ron Hiram                            Director                                                April 29, 2001
-------------
Ron Hiram

/s/ Rex A. Mc Williams                   Director                                                April 24, 2001
----------------------
Rex A. McWilliams


/s/ Zvi Bar-on                           Director                                                April 24, 2001
--------------
Zvi Bar-on

</TABLE>

<PAGE>