8-K/A 1 v012900_8k-a.txt UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington D.C. 20549 FORM 8-K/A CURRENT REPORT Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934 Date of Report (Date of earliest event reported) February 14, 2005 TECHALT, INC. (Exact name of registrant as specified in its charter) Nevada (State or other jurisdiction of incorporation) 000-27867 (Commission File Number) 87-0533626 (IRS Employer Identification No.) 3311 N. Kennicott Ave., Suite A Arlington Heights, IL 60004 (Address of principal executive offices)(Zip Code) (847) 870-2601 Company's telephone number, including area code Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below): [___] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [___] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [___] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) [___] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) EXPLANATORY NOTE On December 15, 2004, pursuant to an Agreement and Plan of Merger by and among TechAlt, Inc., a Nevada corporation (the "Company"), TechAlt Acquisitions, Inc., a Nevada corporation (the "Merger Sub"), Technology Alternatives, Inc., an Illinois corporation ("TAI"), James E. Solomon ("Solomon") and Paul Masanek ("Masanek"), the Merger Sub was merged with and into TAI, with TAI becoming a wholly-owned subsidiary of the Company (the "Merger"). This amendment to Current Report on Form 8-K dated December 21, 2004, is being filed to provide the financial statements and pro forma financial information of TAI. Section 9 - Financial Statements and Exhibits Item 9.01 Financial Statements and Exhibits (a) Financial statements of businesses acquired. Report of Independent Registered Public Accounting Firm Balance Sheets September 30, 2004 (unaudited) and December 31, 2003 Statements of Operations for the Year ended December 31, 2003 and from January 29, 2002 (inception) to December 31, 2002, and the nine months ended September 30, 2003 (unaudited) and September 30, 2004 (unaudited) Statement of Cash Flows for the Year ended December 31, 2003 and from January 29, 2002 (inception) to December 31, 2002, and the nine months ended September 30, 2003 (unaudited) and September 30, 2004 (unaudited) Statement of Changes in Stockholders' Deficit from January 29, 2002 (inception) to December 31, 2002, year ended December 31, 2003 and nine months ended September 30, 2004 (unaudited). Notes to Financial Statements (b) Pro Forma Financial Information Unaudited Pro Forma condensed consolidated financial information 2 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 hereunto duly authorized. TECHALT, INC. (Company) /s/ David M. Otto ----------------------------------------- By: David M. Otto Its: Secretary Date: February 14, 2005 3 (a) Financial statements of businesses acquired. TECHNOLOGY ALTERNATIVES, INC. REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM Board of Directors and Shareholders' Technology Alternatives, Inc. We have audited the accompanying balance sheet at December 31, 2003, and the related statements of operations, changes in stockholders' deficit, and cash flows for the year ended December 31, 2003 and the period January 29, 2002 (inception) through December 31, 2002. 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 the standards of the Public Company Accounting Oversight Board (United States). 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, the financial statements audited by us present fairly, in all material respects, the financial position of Technology Alternatives, Inc. as of December 31, 2003, and the results of its operations and its cash flows for the year ended December 31, 2003 and the period January 29, 2002 (inception) through December 31, 2002, in conformity with accounting principles generally accepted in the United States of America. The accompanying financial statements have been prepared assuming the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company has recurring losses including a loss in 2003 of $686,258, cash used in operations of $608,648, has current liabilities in excess of current assets and a stockholders' deficit of $1,201,314 at December 31, 2003. These factors raise substantial doubt about its ability to continue as a going concern. Management's plans in regards to these matters are also described in Note 1. The financial statements do not include any adjustments that might result from the outcome of these uncertainties. SALBERG & COMPANY, P.A. Boca Raton, Florida January 17, 2005 TECHNOLOGY ALTERNATIVES, INC. BALANCE SHEETS

See accompanying notes to financial statements. TECHNOLOGY ALTERNATIVES, INC. STATEMENTS OF OPERATIONS

See accompanying notes to financial statements. TECHNOLOGY ALTERNATIVES, INC. STATEMENTS OF CASH FLOWS

See accompanying notes to financial statements. TECHNOLOGY ALTERNATIVES, INC. STATEMENT OF CHANGES IN STOCKHOLDERS' DEFICIT FROM JANUARY 29, 2002 (INCEPTION) TO DECEMBER 31, 2002, YEAR ENDED DECEMBER 31, 2003 AND NINE MONTHS ENDED SEPTEMBER 30, 2004 (UNAUDITED)

See accompanying notes to financial statements. TECHNOLOGY ALTERNATIVES, INC. NOTES TO FINANCIAL STATEMENTS December 31, 2003 and 2002 and September 30, 2004 (unaudited) NOTE 1 - DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES ORGANIZATION - Technology Alternatives, Inc. (the "TAI" or the "Company") was organized under the laws of the State of Illinois on January 29, 2002, and is owned 55% and 45% by the Company's two founders. The Company has not paid any dividends and any dividends that may be paid in the future will depend upon the financial requirements of the Company and other relevant factors. BASIS OF PRESENTATION AND GOING CONCERN - The accompanying financial statements have been prepared in conformity with generally accepted accounting principles in the United States of America, which contemplate continuation of the Company as a going concern. The Company has incurred losses since its inception, and has current liabilities in excess of current assets. These factors, among others, raise substantial doubt about the ability of the Company to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of these uncertainties. Management's plans are discussed in See Note 9 - Subsequent events regarding, among other things, the December 15, 2004 merger of TAI with TechAlt, Inc. ("TechAlt"), fund-raising activities of TechAlt prior to and subsequent to the merger, and other transactions and related agreements. Management believes the items discussed in Note 9 provide the Company the ability to continue as a going concern. DESCRIPTION OF BUSINESS - The Company is engaged in the sale of portable wireless communications solutions to be used by emergency first responders for interagency interoperability, communication and collaboration used in Homeland security, emergency medical and disaster response. Sales of these products are generally made to an independent contractor hired by local, state or federal agencies. CASH AND CASH EQUIVALENTS - The Company considers all highly liquid debt investments purchased with a maturity of three months or less to be cash equivalents. ACCOUNTS RECEIVABLE - Accounts receivable result from the sale of the Company's products and services and is reported at anticipated realizable value. The Company estimates its allowance for doubtful accounts based on a specific identification basis and additional allowances as needed based upon historical collections experience. Accounts receivable is considered past due if payment has not been received from the customer within thirty days and management reviews the customer accounts on a routine basis to determine if an account should be written off. PROPERTY AND EQUIPMENT - Property and equipment is stated at cost. Depreciation is computed on a straight-line basis over estimated useful lives of assets, ranging from 3 to 5 years. Costs for repair and maintenance are expensed as incurred. REVENUE RECOGNITION - The Company recognizes revenue when there is persuasive evidence of an arrangement, the product has been delivered under the delivery terms or the services have been provided to the customer, the sales price is fixed or determinable, and collectibility is reasonably assured. Delivery terms are generally FOB shipping point, typically the Company's facility. The Company does not have transactions in which the amount of revenue is variable based on activities or events which occur after shipment. The Company reduces revenue for estimated customer returns and other allowances when reasonably known. Amounts billed in advance of revenue recognition are included in deferred revenue. Revenue from hardware sales is recognized when the product is shipped to the customer and when there are no unfulfilled obligations that affect the customer's final acceptance. Revenue from sales of software licenses and software maintenance subscriptions are recognized on a straight-line basis over the subscription term. SHIPPING AND HANDLING - Amounts billed to customers relating to shipping handling costs are included as an offset to related freight costs, which are included in costs of goods sold in the accompanying statements of operations. RESEARCH AND DEVELOPMENT--Research and development costs, which are comprised primarily of compensation, consulting costs, supplies, materials and related costs, are expensed as incurred. The value of acquired in-process Research and Development is charged to expense on the date of acquisition if the acquired intellectual property has not attained "technological feasibility as of that date. CONCENTRATION OF RISK - Two customers accounted for 74% and 26%, respectively, of the Company's sales in 2002 and another two customers accounted for 57% and 27%, respectively, of the Company's sales in 2003. One supplier, an affiliate, accounted for 100% and 93% of the Company's cost of goods sold in 2002 and 2003, respectively. (See Note 2). The Company's products are reliant upon the technology underlying the patent (see Note 2). INCOME TAXES - The Company accounts for income taxes in accordance with Statement of Financial Accounting Standards No. 109 "Accounting for Income Taxes". SFAS 109 requires the Company to provide a net deferred tax asset/liability equal to the expected future tax benefit/expense of temporary reporting differences between book and tax and any available operating loss or tax credits. LOSS PER SHARE - The computation of basic loss per share excludes dilution and is computed by dividing net loss by the weighted average number of common shares outstanding during the period presented. Diluted net loss per share reflects the potential dilution that could occur if stock options or other contracts to issue common stock were exercised or converted into common stock. At December 31, 2003, there were no common stock equivalents outstanding. USE OF ESTIMATES--The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates include valuation of accounts receivable, valuation of intangible and income taxes. Actual results could differ from those estimates. PRODUCT WARRANTIES - The Company has a limited warranty on certain products for a period of one year from the date of receipt of the product by the customer. The Company will, at its option, either repair or replace with new or used parts any of the products sold which prove to be defective. TECHNOGY ALTERNATIVES, INC. NOTES TO FINANCIAL STATEMENTS (CONTINUED) December 31, 2003 and 2002 and September 30, 2004 (unaudited) NOTE 1 - DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) FAIR VALUE OF FINANCIAL INSTRUMENTS--The Company's financial instruments consist of cash, accounts receivable, accounts payable, accounts and advances payable to related parties, and accrued liabilities and their carrying amounts approximate fair value due to their short maturities and recent occurrences. UNAUDITED INTERIM FINANCIAL STATEMENTS - The accompanying balance sheet as of September 30, 2004, the statements of operations and the statements of cash flows for the nine months ended September 30, 2003 and 2004, and the statement of changes in stockholders' deficit for the nine months ended September 30, 2004, are unaudited. The unaudited interim financial statements have been prepared on the same basis as the annual financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary to present fairly the Company's financial position, results of operations and cash flows for the nine months ended September 30, 2003 and 2004. The financial data and other information disclosed in these notes to financial statements related to the nine months ended September 30, 2003 and 2004 are unaudited. The results for the nine months ended September 30, 2004 are not necessarily indicative of the results to be expected for the year ending December 31, 2004 or for any other interim period or for any future year. RECENT ACCOUNTING PRONOUNCEMENTS - Statement of Financial Accounting Standards ("SFAS") No. 146, "Accounting for Costs Associated with Exit or Disposal Activities", SFAS No. 147, "Acquisitions of Certain Financial Institutions - an Amendment of FASB Statements No. 72 and 144 and FASB Interpretation No. 9", SFAS No. 148, "Accounting for Stock-Based Compensation - Transition and Disclosure - an Amendment of FASB Statement No. 123", SFAS No. 149, "Amendment of Statement 133 on Derivative Instruments and Hedging Activities", and SFAS No. 150, "Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity", were recently issued. SFAS No. 146,147,148,149 and 150 had no applicability to the Company or their effect on the financial statements would not have been significant. NOTE 2 - RELATED PARTY TRANSACTIONS During the fiscal years ended December 31, 2002 and 2003, the Company received approximately $361,000 and $193,518, respectively, primarily for working capital purposes from Services By Designwise, Ltd. ("SBD"), a Company owned by the Company's 45% shareholder. Borrowings are due on demand, are unsecured and non-interest bearing. The balance at December 31, 2003 was $554,518. Advances payable to the Company's President and 55% founding shareholder was $103,749 at December 31, 2003. These advances are due on demand, unsecured and non-interest bearing. Purchases of equipment from SBD included in cost of goods sold in 2002 and 2003 totaled $18,400 and $119,086, respectively. At December 31, 2003 the Company had accounts payable to its affiliate, SBD, of $448,359 primarily for equipment purchases and consulting fees (see below). During 2002 and 2003 the Company incurred $123,400 and $294,400 of consulting fees to its affiliate, SBD. The amounts are included in general and administrative expenses on the accompanying financial statements. In April 2003, the Company's 55% shareholder contributed to the Company certain intellectual property, including a patent covering the method and apparatus for transporting data over a managed wireless network using unique communication protocol. The Company recorded the contributed property at the shareholder's basis in such assets, which amount was zero. NOTE 3 - INCOME TAXES There was no income tax during 2003 and 2002 due to the Company's net loss. The Company's tax expense differs from the "expected" tax expense for the period ended December 31, (computed by applying the Federal Corporate tax rate of 34% to loss before taxes), as follows: 2002 2003 ----------- ----------- Computed "expected" tax expense (benefit) $ (180,620) $ (941,844) Non deductible expenses 3,628 916,761 State income taxes (25,803) (34,313) Change in valuation allowance 202,794 270,720 ----------- ----------- $ -- $ -- =========== =========== The tax effects of temporary differences that gave rise to significant portions of deferred tax assets and liabilities at December 31, 2003 are as follows: Deferred Tax Assets: Non-deductible cost & expenses $ 216,243 Net operating loss carryforwards 260,731 --------- 476,974 Deferred tax liabilities-fixed assets (3,460) --------- 473,514 Deferred tax asset valuation allowance (473,514) --------- Net deferred tax asset $ -- In assessing the recoverability of deferred tax assets, management considers whether it is more likely than not that, some portion or all of the deferred tax assets will be realized. The valuation allowance has been increased by $202,794 for the period February 20, 2003 (Inception of development stage) through December 31, 2002 and $270,732 for the year ended December 31, 2003 as a result of increased net operating losses. Net operating loss carry-forwards aggregate approximately $651,827 and expire in years through 2022. TECHNOGY ALTERNATIVES, INC. NOTES TO FINANCIAL STATEMENTS (CONTINUED) December 31, 2003 and 2002 and September 30, 2004 (unaudited) NOTE 4 - EQUIPMENT Equipment is comprised of the following: December 31, 2003 September 30, 2004 (unaudited) Computer equipment and software $ 13,748 $ 17,719 Demonstration equipment 7,972 7,972 Office furniture and equipment -- 18,820 Vehicle 6,400 6,400 ----------- ----------- 28,120 50,911 Accumulated depreciation (11,133) (22,771) ----------- ----------- Equipment, net $ 16,987 $ 28,140 =========== =========== Substantially all of the Company's equipment is pledged as collateral for borrowing and other obligation agreements. Depreciation expense was $6,081 for the year ended December 31, 2003 and $5,052 for the period January 29, 2002(inception) to December 31, 2002. NOTE 5 - OPERATING LEASE The Company leases its office and manufacturing facilities pursuant to terms of a lease agreement. Prior to May 2003, the Company leased the facilities pursuant to a series of short-term lease agreements. Rent expense for the fiscal year ended December 31, 2002 approximated $28,000 and is included in selling, general and administrative expense. Commencing in May 2003, the Company entered into a three year lease, requiring monthly rents of approximately $6,700 at the beginning of the lease and increasing to approximately $7,100 during the last year of the lease. Rent expense for the fiscal year ended December 31, 2003 approximated $69,000 and is included in selling, general and administrative expense. Future minimum lease obligations pursuant to the lease approximate $82,000, $84,000 and $28,000 during 2004, 2005 and 2006, respectively. In September 2004, the Company assigned it's rights and obligations relating to the lease to TechAlt, Inc. See Note 9 - Subsequent events regarding, among other things, the Company's merger with TechAlt, Inc. NOTE 6 - ROYALTY AGREEMENT The Company is party to a royalty agreement that requires royalty payment to a patent holder of the technology related to mounting certain of the Company's products in the trunk of a motor vehicle. The agreement provides for a royalty of 5% of the net sales price, as defined, of every mobile video recording system covered by the patent and minimum payment on every system in the amount of $150. Amounts paid pursuant to this Royalty Agreement were approximately $1,000 and $5,000 for the fiscal years ended December 31, 2002 and 2003, respectively and an acquisition cost of approximately $18,000 in 2002 to allow an assignment for the prior licensee. The acquisition cost was expensed in 2002. See Note 9 for subsequent consulting and purchase commitments. NOTE 7 - LICENSE AGREEMENT On August 20, 2004, the TechAlt and its then majority (55%) shareholder and sole member of its board of directors (the "Warranting Shareholder") entered into an Intellectual Property License Agreement with TAI, which agreement (the "License Agreement") was consummated on August 24, 2004 ("Closing"). Pursuant to the License Agreement, in exchange for the issuance of 10,044,000 shares of TechAlt common stock, TechAlt licensed certain intellectual property owned by TAI. The initial term of the License was 6 months, which 6 month term was automatically extended for additional 6 month terms until terminated by mutual agreement of TechAlt and TAI. Pursuant to terms of the License Agreement, TechAlt is to receive $100,000 from TAI to satisfy certain liabilities and 27,219,000 shares of TechAlt common stock were cancelled. The $100,000 amount due by TAI to TechAlt has been recorded as selling, general and administrative expense during the nine month period ended September 30, 2004. Subsequent to August 20, 2004 through September 30, 2004, TechAlt paid certain TAI liabilities of approximately $124,000. These payments have been recorded as contributed capital in the additional paid-in capital account in the financial statements for the nine months ended September 30, 2004. As further described in Note 9 - Subsequent events, in December 2004, the License Agreement was rescinded, which rescission included rescinding the 10,044,000 shares of TechAlt common stock issued pursuant to the License Agreement. NOTE 8 - STOCKHOLDERS' DEFICIT At inception, the Company issued 9,544,000 common shares to its two founders for $1,000 cash. As a result of the recapitalization discussed in Note 9, all share and per share data in the accompanying financial statements has been retroactively restated for all periods presented. TECHNOGY ALTERNATIVES, INC. NOTES TO FINANCIAL STATEMENTS (CONTINUED) December 31, 2003 and 2002 and September 30, 2004 (unaudited) NOTE 9 - SUBSEQUENT EVENTS On December 15, 2004, TechAlt paid $650,000 to the former 45% owner of TAI ("Masanek"), which such payment then provided that certain documents and agreements became effective pursuant to terms of an Escrow Agreement entered into on November 20, 2004 between TechAlt, TAI, Masanek and the former 55% owner of TAI ("Solomon"), and their respective attorneys. Material terms of the agreements and transactions occurring subsequent to these payments are as follows: AGREEMENT AND PLAN OF MERGER- Pursuant to the Merger Agreement, all of the shares of common stock of TAI (all of which were owned by Solomon and Masanek) were exchanged for 9,544,000 shares of common stock of TechAlt. TechAlt Acquisitions, Inc., a wholly-owned subsidiary of TechAlt, was merged with and into TAI, with TAI becoming a wholly-owned subsidiary of TechAlt (the "Merger"). Additionally, pursuant to terms of the Merger Agreement, TechAlt issued 400,000 shares of its common stock to an investment advisor as consideration for business development services provided and 100,000 shares of its common stock as consideration for $50,000 cash. Upon consummation of the Merger, Solomon and Masanek together own approximately 83% of the common stock of the merged entity and the shareholders of TechAlt prior to the License Agreement and name change from Dendo Global Corp. own approximately 17%. The transaction, in which TechAlt Acquisitions, Inc. was merged with and into TAI, is accounted for as a recapitalization of TAI and combination of entities under common control and the Company is deemed to have issued approximately 1,956,000 common shares to the shareholders of TechAlt, Inc.. Inasmuch as the former TAI shareholders own a majority of TechAlt common stock after the merger, TAI is considered to be the acquiring corporation for accounting purposes, and the predecessor entity to TechAlt for purposes of financial reporting. The financial statements after the transaction consist of the balance sheet of TAI and TechAlt, the operations of TechAlt from the license date and the historical operations of TAI. SETTLEMENT AGREEMENT - Pursuant to terms of the Settlement Agreement between the TechAlt and Masanek, among other things, (i) the License Agreement entered into between TechAlt and TAI in August 2004 was rescinded, which rescission included rescinding the 10,044,000 shares of TechAlt common stock issued pursuant to the License agreement, (ii) TechAlt paid Masanek $650,000 cash, (iii) TechAlt and Masanek entered into Sales, Consulting, Registration Rights, Right of First Refusal and Escrow Agreements, (iv) the TechAlt issued a Convertible Promissory Note for $1,150,000 to Services by Designwise, Ltd. ("SBD"), a company owned by Masanek, payable $650,000 one year from issuance and the remainder two years from issuance subject to acceleration, as defined, based on capital raises, with interest at 5%, and convertible into shares of TechAlt common stock on the basis of $1.00 per share, and secured by substantially all assets of TechAlt. There is no beneficial conversion since the conversion price exceeds the stock trading price, (v) TechAlt issued warrants to Masanek for the right to purchase for a period of five years 750,000 shares of TechAlt common stock for $1.00 per share with a cashless exercise provision. The Company recorded a debt discount of $293,700 for the valuation of the 750,000 warrants (computed using a Black-Scholes model with an interest rate of 3.48%, volatility of 123%, zero dividends and expected term of 5 years)., (vi) TechAlt received from SBD the assignment of all right, title and interests in certain intellectual property and inventory of SBD relating to In-Car Based Communications, Data Capture and Video Systems, (vii) TechAlt paid $140,000 for the attorneys fees of Masanek, and (viii) settlement of certain claims made by Masanek against TechAlt and others in a lawsuit filed in the Circuit Court of Cook County, Illinois, (ix) beginning December 15, 2004, a 3 year sales agreement with a commitment for the Company to purchase from SBD $1,250,000 of equipment inventory per year plus pay 6.25% to 6.75% royalties on certain third party supplied goods, (x) a consulting agreement for which the Company will pay $25,000 for the first four months and $6,250 per month for the next 32 months plus other benefits. RAISING ADDITIONAL FINANCING - Among other conditions satisfied with respect to consummation of the Merger, was that TechAlt received cash of not less than $1,500,000 from issuances of securities through the exercise of Additional Investment Rights issued to certain investors in August 2004 pursuant to the terms of its recent Series A Preferred stock and Warrant financing. Subsequent to September 30, 2004 and through January 17, 2005, TechAlt received cash of approximately $2,750,000 net of offering costs of $50,000 paid from the sale of 2,800,000 shares of Series A Preferred stock and warrants to purchase 5,600,000 shares of TechAlt common stock for $1.00 per share. Additional offering costs of approximately $250,000 are expected to be paid from these proceeds. TECHNOLOGY ALTERNATIVES, INC. NOTES TO FINANCIAL STATEMENTS (CONTINUED) December 31, 2003 and 2002 and September 30, 2004 (unaudited) NOTE 8 - SUBSEQUENT EVENTS (continued) CONTRACT TO SUPPLY EQUIPMENT TO COOK COUNTY - In July 2004, the Company was awarded a contract to supply certain equipment, software and services to a contractor doing business with Cook County Commissioners Office. The Commission approved a plan to implement a county-wide wireless communications system. A grant of approximately $13 million from the Urban Area Security Initiative of the Department of Homeland Security has been accepted to fund the project. An additional grant of approximately $17 million has also been approved for the second phase of the project. The contract is anticipated to result in future Company revenues of approximately $9 million. AGREEMENT WITH IBM - In October 2004, the Company entered into a Statement of Work ("SOW") with International Business Machines Corporation ("IBM") for the Phase 1 Implementation of the Company's wireless communications product line in connection with Cook County's mobile wireless video and data network project. The SOW serves as the Company's official notice and authorization to begin implementation of and billing for the project. Pursuant to terms of the SOW, the Company will be providing hardware and software, and maintenance services through 2009, under Phase 1 for which it is to receive payments of approximately $2.9 million. In Phase 1 of the project, 15 radio towers and 32 municipal and county buildings will be configured as wireless hotspots. The Company's multi-network capable communications modules will be used to transmit video and data to police, fire, and emergency services vehicles. This live streaming video will help first responders orchestrate a coordinated response to emergencies. The wireless network will provide first responders in remote locations with information already shared on the county's wired network. Police, fire and emergency services personnel will have real-time access to law enforcement databases, GIS information, hazmat information and other data on the Cook County network. REGISTRATION STATEMENT ON FORM SB-2 - TechAlt is in the process of filing a Registration Statement on Form SB-2 with the Securities and Exchange Commission regarding the registration of approximately 34 million shares of the Company's common stock to be sold by certain TechAlt stockholders. The selling stockholders will offer the common stock in amounts, at prices and on terms to be determined at the time of the offering. TechAlt will not receive any proceeds from the sales of the common stock by the selling stockholders. Shares of the TechAlt common stock are not currently quoted on any exchange or the over-the-counter bulletin board market. TechAlt has applied for trading of its common stock on the over-the-counter bulletin board. CONVERTIBLE DEBENTURE AND CONVERSION On June 25, 2004 the Company entered into a 10% Secured Cumulative Convertible Debenture in the amount of $100,000. The Company is not required to make any payments prior to either the maturity date which is June 25, 2005 or a merger/acquisition transaction involving the Company. The debenture is secured by US Patent No. 6,587,441 which the Company holds. On December 30, 2004 a conversion agreement was executed converting the principal amount into 100,000 shares of TechAlt's Series A Convertible Preferred Stock and Warrants to purchase 200,000 shares of common stock on the terms and conditions of the offering. RELATED PARTY TRANSACTIONS - At September 30, 2004 advances payable to the Company's President and 55% founding shareholder was $253,295 (unaudited). At September 30, 2004 the Company had accounts payable to its affiliate, SBD, of $651,711 (unaudited) and $226,650 (unaudited) to TechAlt, Inc. (b) Pro Forma Financial Information TechAlt, Inc. Pro Forma Financial Information (Unaudited) The accompanying unaudited pro forma consolidated financial information has been prepared to give effect to the merger of Technology Alternatives, Inc. ("TAI") with TechAlt, Inc. ("TechAlt" or the "Company"), which occurred December 15, 2004, pursuant to terms of an Agreement and Plan of Merger ("Merger Agreement") and related agreements and transactions, as described below. The pro forma information included herein has been prepared in accordance with guidelines established by regulations promulgated by the Securities and Exchange Commission and should be read in conjunction with the financial statements of the Company and TAI and managements' discussion and analysis of operations and financial condition included elsewhere in this Registration Statement. Pro forma information is presented based upon historical information and, accordingly, is not necessarily indicative of future financial positions or results of operations. The Merger and related agreements and transactions On December 15, 2004, TechAlt paid $650,000 to the former 45% owner of TAI ("Masanek"), which such payment then provided that certain documents and agreements became effective pursuant to terms of an Escrow Agreement entered into on November 20, 2004 between TechAlt, TAI, Masanek, Services By Designwise, Ltd., an Illinois corporation controlled by Masanek ("SBD") and the former 55% owner of TAI ("Solomon"), and their respective attorneys. Material terms of the agreements and transactions occurring subsequent to these payments are as follows: AGREEMENT AND PLAN OF MERGER- Pursuant to the Merger Agreement, all of the shares of common stock of TAI (all of which were owned by Solomon and Masanek) were exchanged for 9,544,000 shares of common stock of TechAlt. TechAlt Acquisitions, Inc., a wholly-owned subsidiary of TechAlt, was merged with and into TAI, with TAI becoming a wholly-owned subsidiary of TechAlt (the "Merger"). Additionally, pursuant to terms of the Merger Agreement, TechAlt issued 400,000 shares of its common stock to an investment advisor company as consideration for business development services provided and 100,000 shares of its common stock as consideration for a $50,000 cash investment. Upon consummation of the Merger, Solomon and Masanek together own approximately 83% of the issued and outstanding common stock of TechAlt and the shareholders of TechAlt prior to the License Agreement and name change from Dendo Global Corp. own approximately 17%. The transaction, in which TechAlt Acquisitions, Inc. was merged with and into TAI, is accounted for as a recapitalization of TAI and combination of entities under common control and the Company is deemed to have issued approximately 1,956,000 common shares to the shareholders of TechAlt, Inc. Inasmuch as the former TAI shareholders own a majority of TechAlt common stock after the merger, TAI is considered to be the acquiring corporation for accounting purposes, and the predecessor entity to TechAlt for purposes of financial reporting. The financial statements after the transaction consist of the balance sheet of TAI and TechAlt, the operations of TechAlt from the license date and the historical operations of TAI. SETTLEMENT AGREEMENT - Pursuant to terms of the Settlement Agreement between TechAlt and Masanek, among other things, (i) TAI and TechAlt agreed to rescind their License Agreement, which rescission included rescinding, ab initio, the 10,044,000 shares of TechAlt common stock issued pursuant to the License agreement, (ii) TechAlt paid Masanek $650,000 cash, (iii) TechAlt and Masanek entered into Sales, Consulting, Registration Rights, Right of First Refusal and Escrow Agreements, (iv) the TechAlt issued a Convertible Promissory Note for $1,150,000 to SBD, a company owned by Masanek, payable $650,000 one year from issuance and the remainder two years from issuance subject to acceleration, as defined, based on capital raises, with interest at 5%, and convertible into shares of TechAlt common stock on the basis of $1.00 per share, and secured by substantially all assets of TechAlt. There is no beneficial conversion since the conversion price exceeds the stock trading price, (v) TechAlt issued warrants to Masanek for the right to purchase for a period of five years 750,000 shares of TechAlt common stock for $1.00 per share with a cashless exercise provision. The Company recorded a debt discount of $293,700 for the valuation of the 750,000 warrants (computed using a Black-Scholes model with an interest rate of 3.48%, volatility of 123%, zero dividends and expected term of 5 years), (vi) TechAlt received from SBD the assignment of all rights, title and interests in certain intellectual property and inventory of SBD relating to In-Car Based Communications, Data Capture and Video Systems, (vii) TechAlt paid $140,000 for the attorneys fees of Masanek, and (viii) settlement of certain claims made by Masanek against TechAlt and others in a lawsuit filed in the Circuit Court of Cook County, Illinois, (ix) beginning December 15, 2004, a 3 year sales agreement with a commitment for the Company to purchase from SBD $1,250,000 of equipment inventory per year plus pay 6.25% to 6.75% royalties on certain third party supplied goods, (x) a consulting agreement for which the Company will pay $25,000 for the first four months and $6,250 per month for the next 32 months plus other benefits. RAISING ADDITIONAL FINANCING - Among other conditions satisfied with respect to consummation of the Merger, was that TechAlt received cash of not less than $1,500,000 from issuances of securities through the exercise of Additional Investment Rights issued to certain investors in August 2004 pursuant to the terms of its recent Series A Preferred stock and Warrant financing. Subsequent to September 30, 2004 and through January 17, 2005, TechAlt received cash of approximately $2,750,000 from the sale of 2,800,000 shares of Series A Preferred stock and warrants to purchase 5,600,000 shares of TechAlt common stock for $1.00 per share. Pro forma financial statements The accompanying pro forma condensed consolidated balance sheet is presented as of September 30, 2004, the date of TechAlt and TAI's third fiscal quarter, and gives pro forma effect to the Merger and related agreements and transactions, and raising additional financing proceeds of $790,000, as if they had occurred on that date. The accompanying pro forma condensed consolidated statements of operations are presented for the year ended December 31, 2003 and nine-months ended September 30, 2004. The pro forma statements of operations include the results of TechAlt and TAI for the respective periods presented and give effect to the Merger and related agreements and transactions as it they had occurred at the beginning of the respective periods. TechAlt, Inc. and subsidiary Unaudited Pro Forma Condensed Consolidated Balance Sheet September 30, 2004 (dollars in thousands)

Notes regarding amounts presented in pro forma condensed consolidated balance sheet: (a) - Amounts represent balances in the Techalt September 30, 2004 unaudited balance sheet as presented in this Registration Statement. (b) - Amounts represent balances in the Technology Alternatives, Inc. September 30, 2004 unaudited balance sheet as presented in this Registration Statement. (c) - Amounts represent the receipt of cash of $790,000 from the sales of 790,000 shares of Series A Preferred Stock and warrants to purchase 1,580,000 shares of common stock at an exercise price of $1.00 per share. The entire purchase price has been allocated to the Series A Preferred Stock, inasmuch as the estimated fair value of warrants has been determined to be negligible. (d) - Amounts represent the amount of cash payments made to Masanek of $650,000 and attorneys of $140,000. The $650,000 is recorded as repayment for TAI amounts due SBD at September 30, 2004 of $656,000. and the $140,000 recorded as legal expense. (e) - The issuance of 400,000 shares of Company common stock to an investment advisor company as consideration for services provided has been recorded as an increase in accumulated deficit relating to recording business development expense and as an increase in common stock and additional paid-in capital in the amount of $200,000, estimated utilizing a per share price of $0.50 , the Series A Preferred Stock conversion price equivalent. (f) - Amounts represent the face amount of the convertible promissory notes. The settlement payment of $1,150,000 has been recorded (i) as inventories in the amount of $210, 000, the estimated fair value determined as sales price of inventories acquired, reduced by estimated costs of disposal, (ii) as settlement expense of $554,000, determined as the amount of amounts contributed to TAI by Masanek, and (iii) $386,000 as intangibile assets, the estimated fair value of Intellectual Properties acquired by TAI from SBD. (g) - Warrants issued to purchase 750,000 shares of common stock at an exercise price of $1.00 per share were determined by Company management to have an estimated fair value of approximately $293,700, utiltilizing. the Black-Scholes valuation model with assumptions of an option life of 5 years, a market price of $0.50 per share, 123% volatility and 3.48% risk-free interest rate. The value of options issued has been determined by Company management to represent settlement expense. (h) - The merger is accounted for utilizing the purchase method and inasmuch as the former TAI shareholders own a majority of the Techalt common stock after the merger, TAI is considered to be the acquiring corporation for purposes of purchase accounting. Inasmuch as both Techalt and TAI were both owned more than 50% at December 15, 2004, the merger date, the business combination has been accounted for as a combination of entities under common control, and accordingly, the recorded value of assets and liabilities are not adjusted. The $100,000 payable by TAI to Techalt is in effect cancelled upon merger. TechAlt, Inc. Unaudited Pro Forma Condensed Consolidated Statement of Operations Year ended December 31, 2003 (in thousands, except per share data)

Notes regarding amounts presented in pro forma condensed consolidated statement of operations: (a) - Amounts represent balances in the Techalt December 31, 2003 statement of operations as presented in this Registration Statement. (b) - Amounts represent balances in the Technology Alternatives, Inc. December 31, 2003 statement of operating results as presented in this Registration Statement. (c) - Amounts represent the 5% dividends payable on the additional 790,000 shares of Series A Preferred Stock issued in connection with the Merger and related agreements. (d) - Amounts represent the 5% interest payable on the $1,150,000 convertible promissory note issued in connection with the Merger and related agreements. (e) - Amount represents amortization of acquired intangible assets. TechAlt, Inc. Unaudited Pro Forma Condensed Consolidated Statement of Operations Nine months ended September 30, 2004 (in thousands, except per share data)

Notes regarding amounts presented in pro forma condensed consolidated statement of operations: (a) - Amounts represent balances in the Techalt September 30, 2004 unaudited statement of operations as presented in this Registration Statement. (b) - Amounts represent balances in the Technology Alternatives, Inc. September 30, 2004 unaudited statement of operating results as presented in this Registration Statement. (c) - Amounts represent the 5% dividends payable on the additional 790,000 shares of Series A Preferred Stock issued in connection with the Merger and related agreements. (d) - Amounts represent the 5% interest payable on the $1,150,000 convertible promissory note issued in connection with the Merger and related agreements. (e) - Amount represents amortization of acquired intangible assets.

TechAlt, Inc. 8-K/A