U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(MARK ONE)
(X) QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 - FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2003
( ) TRANSITION REPORT UNDER SECTION 13 OR 15 (d) OF THE EXCHANGE ACT OF
1934 FOR THE TRANSITION PERIOD FROM ______________TO_______________
COMMISSION FILE NUMBER 0-25380
ULTRADATA SYSTEMS, INCORPORATED
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(Exact name of small business issuer as specified in its charter)
Delaware 43-1401158
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(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
1240 Dielman Industrial Court, St. Louis, MO 63132
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(Address of principal executive offices) (Zip Code)
Issuer's telephone number, including area code: (314) 997-2250
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15 (d) of the Securities Exchange Act during the past 12
months (or for such shorter period that the registrant was required to file
such reports) and (2) has been subject to such filing requirements for the
past 90 days. Yes [X] No [ ]
State the number of shares outstanding of each of the issuer's classes of
common equity as of the latest practicable date.
Class Outstanding as of May 9, 2003
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Common, $.01 par value 4,627,693
Transitional Small Business Disclosure Format Yes [ ] No [X]
File Number
0-25380
ULTRADATA SYSTEMS, INCORPORATED
FORM 10-QSB
March 31, 2003
INDEX
PART I - FINANCIAL INFORMATION PAGE
Item 1. Condensed Unaudited Financial Statements
Condensed Balance Sheets at
March 31, 2003 and December 31, 2002 3.
Condensed Statements of Operations
for the three months ended March 31,
2003 and 2002 4.
Condensed Statements of Cash Flows
for the three months ended March 31,
2003 and 2002 5.
Notes to Condensed Financial Statements 6.
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 7.
PART II - OTHER INFORMATION 11.
Signatures 11.
-2-
ULTRADATA SYSTEMS, INCORPORATED
Condensed Balance Sheets
As of March 31, 2003 and December 31, 2002
March 31, December 31,
2003 2002
Assets ---------- --------------
(Unaudited)
Current assets:
Cash $ 33,244 $ 37,842
Trade accounts receivable, net of
allowance for doubtful accounts of
$16,103 136,691 141,599
Inventories, net 104,177 102,486
Prepaid expenses 18,005 4,562
--------- ---------
Total current assets 292,117 286,489
--------- ---------
Property and equipment, net 46,667 45,432
--------- ---------
Total property and equipment 46,667 45,432
--------- ---------
Notes receivable and accrued interest -
long term 254,132 247,933
Other assets 5,444 5,444
--------- ---------
Total assets $ 598,360 $ 585,298
========= =========
Liabilities and Stockholders' Deficiency
Current liabilities:
Accounts payable $ 212,746 $ 277,828
Accrued liabilities 226,245 188,825
Notes payable - current 252,657 126,064
--------- ---------
Total current liabilities 691,648 592,717
--------- ---------
Long term liabilities:
Notes payable - long term 340,504 434,202
--------- ---------
Total liabilities 1,032,152 1,026,919
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Stockholders' deficiency
Preferred Stock, $0.01 par value,
4,996,680 shares authorized, none outstanding - -
Series A convertible preferred stock,
3,320 shares authorized, 16 shares outstanding
with a stated value of $1,000 16,000 16,000
Common stock, $.01 par value; 10,000,000
shares authorized; 4,627,693 shares issued
and outstanding March 31, 2003; 4,224,456
shares issued and outstanding December 31, 2002 46,277 42,244
Additional paid-in capital 8,826,707 9,631,750
Accumulated deficit (9,249,743) (9,086,935)
Treasury stock (326,171 shares at cost) - (942,311)
Notes receivable issued for purchase of
common stock (73,033) (102,369)
--------- ---------
Total stockholders' deficiency (433,792) (441,621)
--------- ---------
Total liabilities and stockholders' deficiency $ 598,360 $ 585,298
========= =========
See accompanying summary of accounting policies and notes to financial
statements.
-3-
ULTRADATA SYSTEMS, INCORPORATED
Condensed Statements of Operations
Three months ended March 31, 2003 and 2002
2003 2002
---------------------
(Unaudited)
Net sales $ 351,956 $ 995,719
Cost of sales 196,545 714,722
--------- ---------
Gross profit 155,411 280,997
Selling expense 25,036 38,885
General and administrative expenses 244,035 296,964
Research and development expense 22,428 58,357
--------- ---------
Operating loss (136,088) (113,209)
--------- ---------
Other income (expense):
Interest and dividend income 6,236 4,906
Interest expense (50,809) (19,815)
Other, net 17,853 90
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Total other income (expense) (26,720) (14,819)
--------- ---------
Loss before income tax expense (162,808) (128,028)
Income tax expense - -
--------- ---------
Net loss $ (162,808) $ (128,028)
========= =========
Loss per share:
Basic and diluted $ (0.04) $ (0.04)
========= =========
Weighted Average Shares Outstanding:
Basic and diluted 4,487,025 3,380,772
========= =========
See accompanying summary of accounting policies and notes to financial
statements.
-4-
ULTRADATA SYSTEMS, INCORPORATED
Condensed Statements of Cash Flows
Three months ended March 31, 2003 and 2002
2003 2002
-----------------------
(Unaudited)
Cash flows from operating activities:
Net loss $ (162,808) $ (128,028)
Adjustments to reconcile net loss to net
cash provided by (used in) operating
activities:
Depreciation and amortization 8,915 48,429
Inventory writedown 7,586 31,130
Stock issued for services 4,500 -
Non-cash interest expense 31,457 -
Non-cash accrued interest receivable (6,198) -
Increase (decrease) in cash due to changes in
operating assets and liabilities:
Trade accounts receivable, net 4,908 (214,990)
Inventories (9,278) 371,895
Prepaid expenses and other current assets (13,442) 4,874)
Accounts payable (65,082) 130,915
Accrued expenses and other liabilities 37,420 (106,522)
-------- ---------
Net cash (used in) provided by operating
activities (162,022) 127,955
-------- ---------
Cash flows from investing activities:
Capital expenditures (10,150) (1,920)
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Net cash used in investing activities (10,150) (1,920)
-------- ---------
Cash flows from financing activities:
Subscription payments 29,336 14,127
Payments on note payable (30,062) (29,970)
Note Payable - offering 91,600 -
Common stock 76,700 -
-------- ---------
Net cash provided by (used in) financing
activities 167,574 (15,843)
-------- ---------
Net (decrease) increase in cash (4,598) 110,192
Cash at beginning of period 37,842 164,682
-------- ---------
Cash at end of period $ 33,244 $ 274,874
======== =========
Supplemental disclosure of non-cash investing and financing activities:
(1) The Company retired its 326,171 shares of treasury stock at a cost of
$942,311.
(2) The Company converted $60,100 of notes payable to 398,408 shares of
common stock.
See accompanying summary of accounting policies and notes to financial
statements.
-5-
ULTRADATA SYSTEMS, INCORPORATED
Notes to Condensed Financial Statements
March 31, 2003
(Unauditd)
Summary of Significant Accounting Policies
Basis of Presentation
The accompanying interim condensed financial statements included herein have
been prepared by Ultradata Systems, Incorporated (the "Company"), without audit
in accordance with generally accepted accounting principles and pursuant to
the rules and regulations of the Securities and Exchange Commission for
interim financial information. Certain information and footnote disclosures
normally included in financial statements prepared in accordance with
generally accepted accounting principles have been condensed or omitted
pursuant to such rules and regulations, although the Company believes that
the disclosures made are adequate to make the information presented not
misleading.
In the opinion of management, the information furnished for the three-month
periods ended March 31, 2003 and 2002, respectively, includes all adjustments,
consisting solely of normal recurring accruals necessary for a fair
presentation of the financial results for the respective interim periods and
is not necessarily indicative of the results of operations to be expected for
the entire fiscal year ending December 31, 2003. It is suggested that the
interim financial statements be read in conjunction with the audited
financial statements for the year ended December 31, 2002, as filed with the
Securities and Exchange Commission on Form 10-KSB (Commission File Number
0-25380), from which the interim statements were derived.
Use of Estimates
The financial statements have been prepared in conformity with generally
accepted accounting principles and, as such, include amounts based on
informed estimates and adjustments by management, with consideration given
to materiality. Actual results could vary from those estimates.
Note 1. Nature of Operations
The principal business activity of Ultradata Systems, Incorporated (the
Company), located in St. Louis, Missouri, is the design, manufacture, and
sale of hand-held electronic information products.
Note 2. Inventories
Inventories consist of the following:
March 31, December 31,
2003 2002
------------ -------------
Raw Materials, net of obs. $ 63,811 $ 46,015
Finished Goods, net of obs. 40,366 56,471
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Total $ 104,177 $ 102,486
======== ========
Obsolete inventory on hand $1,118,271 $1,110,684
Note 3. Prepaid Expenses
Prepaid expenses consist of the following:
March 31, December 31,
2003 2002
------------ -------------
Prepaid insurance $ 11,433 $ -
Prepaid advertising 6,571 4,562
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$ 18,005 $ 4,562
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-6-
Note 4. Debt Conversion
During the quarter ending March 31, 2003, convertible debt holders converted
$60,100 of convertible debt into 369,408 shares of common stock.
Note 5. Notes Payable
During 2003, the Company issued a private debt offering of secured 12%
Promissory Notes of $165,000. For each dollar loaned to the Company, the
lender was also entitled to purchase two shares of the Company's common
stock for $.01 per share. As part of the offering, the Company also received
an aggregate of $3,300 from the sale of 330,000 common shares. The shares
were treated as a discount to the private offering, and the shares were
valued at $76,700 based on the market price on the dates the funds were
received. The amount of the proceeds allocated to common stock shall be
amortized over the life of the notes payable as additional interest expense.
During the three months ended March 31, 2003, the Company expensed
$31,457. (See Note 6(A). The funds received from the debt offering are for
a limited purpose described below. The notes-payable balance at March 31,
2003 is $123,057.
All of the proceeds raised under the offering are to be maintained in an
escrow account maintained by the Company's attorney. Once the Company
receives a purchase order from either of two specified customers, the Company
can "draw down" 70% of the purchase order amount from the escrow account in
order to purchase the product from a vendor. Once the revenue from the sale
is received, the "draw down" funds are to be returned to the escrow account and
the Company retains the balance of the sales proceeds.
Note 6. Common Stock
A) Stock issued for cash
During 2003, the Company issued 330,000 shares of common stock for $76,700.
(See Note 5)
B) Stock issued for services
During 2003, the Company issued 30,000 shares of common stock for services
with a fair value of $4,500.
ITEM 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
YOU SHOULD NOT RELY ON FORWARD LOOKING STATEMENTS
This quarterly report contains a number of forward-looking statements
regarding our future prospects. Among the forward-looking statements are
descriptions of our plans to introduce new products to the market, to expand
our customer base, to develop products based on a GPS/Internet technology,
and to return our company to profitability. These forward-looking statements
are a true statement of our present intentions, but are neither predictions
of the future nor assurances that any of our intentions will be fulfilled.
Many factors beyond our control could act against Ultradata in its efforts
to develop and market its products. Among these factors are:
* The fact that our financial resources are minimal and will not sustain us
past this year unless our new products are successful;
* The fact that our lack of capital severely limits our ability to market our
products. As a result, the loss of a significant customer could imperil
the marketing of an entire product line;
* The difficulty of attracting mass-market retailers to seasonal products
like the Road Whiz(tm) product line; and
* The breadth and depth of competition in the GPS market, which will make
introduction of our product with a limited marketing budget difficult.
There may also be factors that we have not foreseen which could interfere
with our plans. In addition, changing circumstances may cause us to
determine that a change in plans will be in the best interests of Ultradata.
For this reason, you should not place undue reliance on any of the forward-
looking statements in this report, as there is a significant risk that we
will not be able to fulfill our expectations for Ultradata.
-7-
OVERVIEW
Since 1987 we have been engaged in the business of manufacturing and
marketing handheld computers that provide travel information. The products
are based upon a data compression technology that we developed, portions of
which we have patented. Recent developments in communications technology
have opened up new opportunities for us to use our technology. The following
paragraphs outline the scope of our operations:
* The Company has sold over 3 million of its low-cost handheld travel
computers, demonstrating that there is a market for travel information
products. To re-awaken that market with an improved product that speaks,
the Company has developed a Talking Road Whiz. Deliveries of this product
began in March of 2003, and the Company expects to receive significant
revenue in 2003 from sales of this new addition to its product line. It
has a contract with a major distributor providing exclusivity in certain
channels if 300,000 units are purchased and delivered in calendar 2003.
Fulfillment of this agreement with delivery of 300,000 units would ensure
good profitability for the Company in 2003 and sufficient cash and earnings
to solve our liquidity issues.
* In 2002 we shipped the reprogrammed beta-test units of our Travel*Star
24(tm), which combines our travel information with a GPS antenna to enable
a driver to obtain his location and directions to his destination while he
drives. Improved performance was obtained, but the tests revealed several
software problems that have to date prevented marketing of the product.
The software issue is still being addressed, and the Company plans to test
the market in the second half of 2003.
* The Company continues to sell its line of both branded and private-labelled,
low-cost travel computers.
Each of our consumer products is designed to allow the consumer to access
useful information stored in a convenient manner. Our handheld computers
generally sell at retail prices between $19.95 and $49.95 per unit. The
products have been in retail mass-market chains plus many other locations.
The new TRAVEL*STAR 24 is expected to be offered at retail for under $400,
which should make it very competitive in the auto aftermarket. Its
portability and the fact that it requires no elaborate installation offer
advantages over the more expensive in-car systems.
RESULTS OF OPERATIONS
Three Months Ended March 31, 2003 Compared to Three Months Ended March 31,
2002
Operating results for the first quarter of 2003 were less than that of the
first quarter of 2002 due to a large order received in 2002.
Sales. During the first three months of 2003, net sales totaled $351,956, as
compared with $995,719 in sales recorded in the first quarter of 2002,
representing a 64.7% decrease. Replenishment of customer inventory, which
finally sold through during the slow year of 2001, represented the bulk of
sales in the first quarter of 2002, which is generally a period of minimal
sales after the holiday season. The first quarter of 2003 followed this
more normal trend, but nonetheless, booked a significant sales volume for
the period. In addition, the Company's backlog at March 31, 2003 was
$304,521 as compared with $422,622 as of March 31, 2002.
Gross Profit. Gross profit margin for the current quarter was $155,411, or
4.1% of sales compared to $280,997, or 28.2% of sales for the first quarter
of 2002. Gross profit in early 2002 still suffered from higher cost of
microchips remaining in inventory from the chip shortage in 2000. Sales in
2002 exhausted the higher-priced chips in inventory, and margins have
improved accordingly.
S,G&A Expense. Selling expenses amounted to $25,036, or 7.1% of sales, for
the first quarter of 2003 as compared with $38,885, or 3.9% of sales for the
first quarter of 2002. Although within expected limits, selling expense
increased as a percent of sales due to the fixed portion being spread over a
much smaller sales base in the first quarter of 2003 as compared with 2002.
General and administrative expenses were $244,035 for the first quarter of
2003 as compared with $296,964 for the same quarter in 2002, representing a
decrease of 17.8% and reflecting continuing efforts to reduce operating
expenses. A major contributor was the rent reduction due to vacating 2,000
square feet of office and warehouse space and storing material in a less-
expensive off-site facility.
-8-
R&D Expense. Research and development expense in the first quarter of 2003
was $22,428 as compared to $58,357 for the same quarter of 2002, representing
a decrease of 61.6% due primarily to the write-off of the TRAVEL*STAR 24(tm)
software and further reduction in R&D personnel.
The Company posted a net loss from operations of ($136,088) for the quarter
ended March 31, 2003 compared to a net loss from operations of ($113,209)
for the quarter ended March 31, 2002. The loss occurred in spite of improved
margins and lower costs as sales were insufficient to fully pay for operating
costs.
Other Expense. Other expense for the first quarter of 2003 amounted to
($26,720) compared with ($14,815) for the same period in 2002. The current
quarter, as compared to 2002, had the burden of $31,457 in non-cash interest
expense, primarily for the offering described in Note 5. Also the current
experienced the addition of $17,852 in income from consulting activity by
Company personnel in the area of previous government work by the Company.
The full extent of future work of this nature is unknown at this time but
may be of significant help in meeting operating costs.
As a result of the foregoing, the Company posted a net loss of ($162,808),
or ($0.04) per basic and diluted common share, for the three-month period
ended March 31, 2003, compared to a net loss of ($128,028), or ($0.04) per
basic and diluted common share, for the three-month period ended March 31,
2002.
FINANCIAL CONDITION AND LIQUIDITY
The Company's condensed financial statements as of March 31, 2003 and for
the three months then ended have been prepared on a going-concern basis, which
contemplates the realization of assets and the settlement of liabilities in
the normal course of business. The Company had a net loss of $162,808 and a
negative cash flow from operations of $162,022 for the three months ended
March 31, 2003 and a working capital deficiency of $399,531 and an
accumulated deficit of $9,249,743 at March 31, 2003, respectively. These
conditions raise substantial doubt about the Company's ability to continue as
a going concern.
The Company has continued its product design and development efforts to
introduce new products in 2003 and introduced its Talking Road Whiz in March
2003. The Company also continues its efforts to expand into new markets. In
addition, the Company has obtained short-term loans from investors secured by
purchase orders from major customers to fund the production of this new
product. Management believes that actions presently taken to obtain
additional funding provide the opportunity for the Company to continue as a
going concern.
At March 31, 2003, the Company had $33,244 in cash, compared to $37,842 at
December 31, 2002. The Company's operating activities used cash totaling
$162,022 due to the losses of the quarter and paying down year-end accounts
receivable by $65,082.
Net cash used in investing activities for the quarter ended March 31, 2003
totaled ($10,150) as compared to ($1,920) in the first quarter of 2002,
reflecting cash outlays for capitalized tooling for the Talking Road Whiz(tm).
Net cash provided by financing activities for the quarter ended March 31,
2003 was $167,574 compared with cash used of (15,843) in the same quarter of
2002. The offering set-up in December 2002 was almost fully subscribed in
the first quarter of 2003 and has provided needed working capital to service
the orders received for the first half of the year.
Our operating losses over the past four years have eliminated our working
capital. In January and February we completed a private offering of debt
and equity, and obtained $165,000 in proceeds. These funds are held in
escrow pending receipt of purchase orders from certain of the Company's
customers. Up to 70% of the value of these purchase orders is available for
use by the Company, and funds must be placed back in escrow upon receipt by
the Company in payment for the orders. Management expects these funds to be
sufficient to support operations until sales of the Talking Road Whiz begin
producing significant cash flow in the latter half of the year. The notes
are due and payable July 31, 2003.
Because the Company has reduced its costs of doing business and has excellent
prospects for increased sales in 2003, Management expects the financial
picture to improve greatly over the course of 2003. However, if the
anticipated sales fail to materialize, we will not have sufficient financial
resources to carry the Company into 2004.
ITEM 3. Controls and Procedures
Monte Ross, our Chief Executive Officer, and Ernest Clarke, our Chief
Financial Officer, performed an evaluation of the Company's disclosure
controls and procedures within 90 days prior to the filing date of this
report. Based on their evaluation, they concluded that the controls and
procedures in place are sufficient to assure that material information
concerning the Company which could affect the disclosures in the Company's
quarterly and annual reports is made known to them by the other officers and
employees of the Company, and that the communications occur with promptness
sufficient to assure the inclusion of the information in the then-current
report.
There have been no significant changes in the Company's internal controls or
in other factors that could significantly affect those controls subsequent
to the date on which Messrs. Ross and Clarke performed their evaluation.
-9-
ULTRADATA SYSTEMS, INCORPORATED
10QSB
PART II - OTHER INFORMATION
Item 1. Legal Proceedings:
None
Item 2. Changes in Securities:
During the first quarter of 2003 the Company sold, in a private
offering, 12% promissory notes in the principal amount of $165,000
and 320,000 shares of common stock. The securities were sold in
units, each consisting of two shares of common stock and a $1.00
note. The aggregate purchase price received by the Company was
$168,200. The securities were sold to 12 individuals who are
accredited investors. There was no underwriter. The offering was
made pursuant to the exemption from registration afforded by
Section 4(6) of the Securities Act of 1933 and SEC Rule 506.
Item 3. Defaults upon Senior Securities:
None
Item 4. Submission of Matters to a Vote of Security Holders:
None
Item 5. Other Information:
None
Item 6. Exhibits and Reports on Form 8-K:
Exhibits:
99 Section 906 Certification.
-10-
SIGNATURES
Pursuant to the requirements 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.
May 15, 2003 /s/ Monte Ross
----------------------
Monte Ross, CEO
(Chief executive officer)
/s/ Ernest S. Clarke
-----------------------
Ernest S. Clarke, President
(Principal financial and accounting
officer)
-11-
CERTIFICATIONS
I, Monte Ross, certify that:
1. I have reviewed this quarterly report on Form 10-QSB of Ultradata
Systems, Incorporated;
2. Based on my knowledge, this quarterly report does not contain any
untrue statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this quarterly report;
3. Based on my knowledge, the financial statements and other
financial information included in this quarterly report fairly present in
all material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this
quarterly report;
4. The registrant's other certifying officers and I are responsible
for establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:
a) Designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within
those entities, particularly during the period in which this quarterly
report is being prepared;
b) Evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of
this quarterly report (the "Evaluation Date"); and
c) Presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed,
based on our most recent evaluation, to the registrant's auditors and the
audit committee of the registrant's board of directors (or persons performing
the equivalent functions):
a) All significant deficiencies in the design or operation of
internal controls which could adversely affect the registrant's
ability to record, process, summarize and report financial data and
have identified for the registrant's auditors any material weaknesses
in internal controls; and
b) Any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's
internal controls; and
6. The registrant's other certifying officers and I have indicated
in this quarterly report whether or not there were significant changes in
internal controls or in other factors that could significantly affect
internal controls subsequent to the date of our most recent evaluation,
including any corrective actions with regard to significant deficiencies and
material weaknesses.
Date: May 15, 2003 /s/ Monte Ross
-----------------------------------
Monte Ross, Chief Executive Officer
I, Ernest Clarke, certify that:
1. I have reviewed this quarterly report on Form 10-QSB of Ultradata
Systems, Incorporated;
2. Based on my knowledge, this quarterly report does not contain any
untrue statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this quarterly report;
3. Based on my knowledge, the financial statements and other
financial information included in this quarterly report fairly present in
all material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this
quarterly report;
4. The registrant's other certifying officers and I are responsible
for establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:
a) Designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within
those entities, particularly during the period in which this quarterly
report is being prepared;
b) Evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of
this quarterly report (the "Evaluation Date"); and
c) Presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed,
based on our most recent evaluation, to the registrant's auditors and the
audit committee of the registrant's board of directors (or persons performing
the equivalent functions):
a) All significant deficiencies in the design or operation of
internal controls which could adversely affect the registrant's
ability to record, process, summarize and report financial data and
have identified for the registrant's auditors any material weaknesses
in internal controls; and
b) Any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's
internal controls; and
6. The registrant's other certifying officers and I have indicated
in this quarterly report whether or not there were significant changes in
internal controls or in other factors that could significantly affect
internal controls subsequent to the date of our most recent evaluation,
including any corrective actions with regard to significant deficiencies and
material weaknesses.
Date: May 15, 2003 /s/ Ernest S. Clarke
--------------------------------------
Ernest Clarke, Chief Financial Officer
* * * * *
EXHIBIT 99: SECTION 906 CERTIFICATION
The undersigned officers certify that this report fully complies with the
requirements of Section 13(a) of the Securities Exchange Act of 1934, and
that the information contained in the report fairly presents, in all material
respects, the financial condition and results of operations of Ultradata
Systems Incorporated.
A signed original of this written statement required by Section 906 has been
provided Ultradata Systems, Incorporated and will be retained by Ultradata
Systems, Incorporated and furnished to the Securities and Exchange Commission
or its staff upon request.
May 15, 2003 /s/ Monte Ross
-------------------------------
Monte Ross
(Chief executive officer)
/s/ Ernest S. Clarke
-------------------------------
Ernest S. Clarke
(Chief financial officer)