RULE 14F-1
REPORT OF CHANGE IN MAJORITY OF DIRECTORS
INFORMATION PURSUANT TO SECTION 14(f) OF THE
SECURITIES EXCHANGE ACT OF 1934
ULTRADATA SYSTEMS, INCORPORATED
1240 Dielman Industrial Court
St. Louis, MO 63132
This report is furnished by the Board of Directors of Ultradata Systems,
Incorporated, a Delaware corporation ("Ultradata"), to the holders of its
common stock, $.01 par value. Information in this report regarding Warner
Technology & Investment Corp. ("Warner Technology") and John C. Leo has been
provided to Ultradata by Warner Technology.
On June 1, 2006 Ultradata entered into a Stock Purchase Agreement with Warner
Technology, pursuant to which Warner Technology purchased 210,000 shares of
Ultradata's Series B Preferred Stock for $210,000 in cash paid on that date.
The holder of the Series B shares will be entitled to cast 51% of the votes at
any shareholders meeting. Warner will be entitled to convert the Series B
stock into 10% of the outstanding Ultradata shares, but only if Ultradata has
acquired an operating company during 2006. Otherwise the Series B Preferred
Stock will be cancelled.
Pursuant to the terms of the Stock Purchase Agreement, the present directors
of Ultradata have elected to the Board a designee of Warner, John C. Leo, and
have submitted their resignations from the Board. The election and the
resignations will be effective ten days after Ultradata mails this information
statement to its record shareholders. After that change of control, the new
Board of Directors - i.e. Mr. Leo - will bear responsibility for negotiating
the acquisition by Ultradata of an operating company.
This report is provided for information purposes only. We are not soliciting
proxies in connection with the matters described in this report. You are not
requested to respond to this report in any way.
This report will first be mailed to the shareholders of Ultradata on or about
June 27, 2006.
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
There are two classes of Ultradata voting stock outstanding:
* There are 17,548,665 shares of Ultradata common stock outstanding.
Each share is entitled to one vote.
* There are 210,000 shares of Series B Preferred Stock outstanding.
The holder of the Series B Preferred Stock is entitled to cast votes
equal to 51% of all votes cast by all classes of voting stock.
The following table sets forth the number of Ultradata shares of each class
of voting stock owned by (a) each person who, as of the date of this
Report, owns of record, or is known by Ultradata to own beneficially, more
than 5% of either class of Ultradata common stock, (b) each current director
of Ultradata and all current officers and directors as a group, and (c) John
C. Leo, who will become the sole director of Ultradata ten days after this
Report is mailed.
Amount and Nature Aggregate
Name and Address of of Beneficial Ownership Percent of Class Percent of
Beneficial Owner (1) Common Preferred Common Preferred Voting Power
-------------------------------------------------------------------------------
Monte Ross 160,000 -- 0.9% -- 0.5%
Ernest Clarke 160,852 -- 0.9% -- 0.5%
Mark Peterson 191,382 -- 1.1% -- 0.6%
Donald Rattner 120,382 (2) -- 0.7% -- 0.3%
Matthew Klapman 48,000 (2) -- 0.3% -- 0.1%
All officers and
directors as a
group (5 persons) 680,616 (2) -- 3.8% -- 1.9%
John C. Leo -- -- -- -- 0%
100 Wall Street -
15th Floor
New York, NY 10005
Warner Technology &
Investment Corp. -- 210,000 -- 100% 51.0%
18 Kimberly Court
East Hanover, NJ 07936
______________________________
(1) Unless otherwise indicated, the address of each shareholder is c/o
Ultradata Systems, Incorporated, 1240 Dielmann Industrial Court, St.
Louis, MO 63132.
(2) Includes options to purchase shares (Rattner - 74,000 shares; Klapman -
44,000 shares)
NEW BOARD OF DIRECTORS
Ten days after this Report is mailed to the Ultradata shareholders of record,
the resignation of the current members of Ultradata's Board will become
effective. On the same date, the election to the Board of John C. Leo will
also become effective. Mr. Leo will then be the sole member of Ultradata's
Board of Directors. Information regarding Mr. Leo follows:
JOHN C. LEO. Mr. Leo is the founder of American Union Securities, Inc.,
and has served as its President since 2004. American Union Securities
is a full service investment banking firm registered with the Securities
and Exchange Commission and the National Association of Securities
Dealers. American Union Securities works with both domestic and foreign
issuers, with a specific expertise in identifying private companies in
China that have the potential to be successful public companies in the
United States. From 2001 through 2003, prior to organizing American
Union Securities, Mr. Leo was the founder and managing member of Venture
Capital Partners, LLC, a private merchant banking and consulting firm.
From 1996 through 2001, Mr. Leo was employed as a registered principal
and OTC market maker with AM Capital and MH Meyerson. Mr. Leo became a
registered representative in 1987 and during his career has focused on
raising capital for IPOs and reverse merger transactions. Mr. Leo
maintains the following NASD registrations: Series 7, 63, 55 and 24.
Mr. Leo also serves on the board of the following public companies:
China Industrial Waste Management, China International Enterprises Inc.,
DK Investors, and Central American Equities Corp. Mr. Leo is 41 years
old.
Nominating and Audit Committee
The Board of Directors will not have an audit committee or a nominating
committee immediately after the closing of the merger, due to the small size
of the Board. The Board will also not have an "audit committee financial
expert."
Shareholder Communications
The Board of Directors will not adopt a procedure for shareholders to send
communications to the Board of Directors until it has reviewed the merits of
several alternative procedures.
RETIRING BOARD OF DIRECTORS
The following table lists certain information regarding the individuals who
are currently the officers and directors of the Company:
Name Age Position
---- --- --------
Monte Ross 73 Chief Executive Officer, Director
Ernest Clarke 66 President & Chief Financial Officer,
Director
Mark L. Peterson 49 Vice President-Engineering,
Secretary, Director
Donald Rattner 73 Director
Matthew Klapman 36 Director
Background of Directors and Executive Officers:
Monte Ross founded the Company in 1986 and has served as its Chief Executive
Officer and Chairman since inception. He also served as President until April
2001. For over 20 years prior to founding the Company, Mr. Ross was employed
by McDonnell Douglas Corporation (now Boeing) in a variety of positions. When
he left McDonnell Douglas, Mr. Ross was Director of Laser Systems, responsible
for the group of approximately 400 employees, which developed the first space
laser communication system and first space laser radar. Mr. Ross is a Fellow
of the Institute of Electrical and Electronic Engineers and the past President
of the International Laser Communication Society. Mr. Ross was awarded a
Master of Science degree in Electrical Engineering by Northwestern University
in 1962. He is the father-in-law of Mark L. Peterson, the Company's Vice
President-Engineering.
Ernest Clarke has been a Director of the Company since it was founded in 1986.
From August 1990 to June 1999 he served as Vice President - Government
Programs. He then served as Company's Vice President - Controller from June
of 1999 until April 2001. He was elevated to President in April 2001. For
over 20 years prior to joining Ultradata, Mr. Clarke was employed by McDonnell
Douglas Corporation (now Boeing) in a variety of positions. When he left
McDonnell Douglas, Mr. Clarke was its Laser Product Development Manager with
responsibility to supervise over 40 engineers. Mr. Clarke was awarded a
Master of Science degree in Electrical Engineering by Stanford University in
1966.
Mark L. Peterson has been a Director of the Company since it was founded in
1986. He has served as the Company's Vice President of Engineering since
1988. He is responsible for the design of the Company's hand-held products.
During the four years prior to joining the Company, Mr. Peterson was employed
by McDonnell Douglas Corporation as an electronics engineer for fiber optic
products and satellite laser cross-link programs. Mr. Peterson was awarded a
Master of Science degree in Electrical Engineering by Washington University in
1980. He is the son-in-law of Monte Ross.
Donald Rattner joined the Company in 1999 to serve as a member of the Board of
Directors. Mr. Rattner is a member/partner in BrookWeiner, LLC, a Chicago-
based accounting firm, and a member of the American Institute of Certified
Public Accountants and the Illinois CPA Society. He has served on the boards
of several corporations.
Matthew Klapman joined the Company in 2002 to serve as a member of the Board
of Directors. Mr. Klapman is the CEO of Future Vision Technologies, Inc.,
which he co-founded in 1990. He has maintained a strong career in
technological innovation, business strategy, negotiation, and team management.
He has invented and developed a myriad of products in the video, 3-D
graphics, and communication fields. As a Director at Motorola, he developed
the computer graphics and marketing strategy for its corporate strategy office
and broadband wireless communications sector. In addition, as Director of
Research and Development for Motorola's Personal Communications Sector, he
spearheaded the creation of the new user interface platform that is the basis
for all of Motorola's cellular phones. He has developed products and designs
that have earned several industry awards. He received a B.S. in Computer
Engineering and a J.D. from the University of Illinois at Urbana. He holds 4
issued and 7 pending patents.
Nominating and Audit Committee
The Board of Directors has appointed an Audit Committee of the Board. The
present members of the Audit Committee are Donald Rattner and Matthew Klapman.
The Board of Directors has determined that Donald Rattner is qualified to
serve as an "audit committee financial expert", as defined in the Regulations
of the Securities and Exchange Commission. Mr. Rattner is an "independent
director", as defined in the Regulations of the Securities and Exchange
Commission.
Compliance with Section 16(a) of the Exchange Act
None of the directors, officers, or beneficial owners of more than 10% of
Ultradata's common stock failed to file on a timely basis reports required
during 2005 by Section 16(a) of the Exchange Act.
EXECUTIVE COMPENSATION
The following table sets forth all compensation awarded to, earned by, or
paid by Ultradata to executives for services rendered in all capacities to
Ultradata during each of the last three fiscal years. In 2005, in order to
preserve cash reserves, the three principals below deferred a significant
portion of their salaries, as shown in the notes below. The Company records
this liability in its accrued expenses.
ANNUAL LONG-TERM
COMPENSATION COMPENSATION
Name & Position Year Salary Bonus Other Options
----------------------------------------------------------------------------
Monte Ross, 2005 $ 145,310 (1) $ - $ -
Chief Executive Officer 2004 $ 167,880 $ - $ - (2)
2003 $ 157,367 $ - $ -
Ernest Clarke 2005 $ 101,673 (3) $ - $ -
President 2004 $ 111,040 $ - $ - (4)
2003 $ 103,695 $ - $ -
Mark Peterson 2005 $ 89,824 (5) $ - $ -
Vice President - Engineering 2004 $ 101,152 $ - $ - (6)
2003 $ 93,101 $ - $ -
(1) Includes $92,100 in cash and $53,210 deferred.
(2) During 2004 the Board's Stock Option Committee awarded Mr. Ross options
to purchase 25,000 shares of Common Stock at an exercise price of $.72.
(3) Includes $65,706 paid in cash and $35,967 deferred.
(4) During 2004 the Board's Stock Option Committee awarded Mr. Clarke options
to purchase 25,000 shares of Common Stock at an exercise price of $.72.
(5) Includes $58,899 paid in cash and $30,925 deferred.
(6) During 2004 the Board's Stock Option Committee awarded Mr. Peterson
options to purchase 30,000 shares of Common Stock at an exercise price
of $.72.
STOCK OPTION AWARDS
The following tables set forth certain information regarding the stock
options acquired by the Company's Chief Executive Officer and Chief Financial
Officer during the year ended December 31, 2005 and those options held by each
of them on December 31, 2005.
Option Grants in the Last Fiscal Year
Percent
of total
Number of options
securities granted to
underlying employees Exercise
option in fiscal Price Expiration
Name granted year ($/share) Date
---------------------------------------------------------------------------
M. Ross None - N/A N/A
E. Clarke None - N/A N/A
Aggregated Fiscal Year-End Option Values
Number of securities underlying Value of unexercised in-the-money
unexercised options at fiscal options at fiscal year-end ($)
Name year-end (#) (All exercisable) (All exercisable)
------------------------------------------------------------------------------
M. Ross 146,813 $43,853
E. Clarke 91,423 $23,912
REMUNERATION OF DIRECTORS
Outside Directors receive $500 per meeting and are reimbursed for out-of-
pocket expenses incurred on the Company's behalf. From time to time they are
granted stock and options as recommended and approved by the inside directors.
During 2005, the outside directors each received 2,000 shares of Ultradata
common stock.
June 27, 2006 By Order of the Board of Directors:
Monte Ross, Chairman