Forward-Looking Statements

This Report contains statements that we believe are, or may be considered to be, "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact included in this Report regarding the prospects of our industry or our prospects, plans, financial position or business strategy, may constitute forward-looking statements. In addition, forward-looking statements generally can be identified by the use of forward-looking words such as "may," "will," "expect," "intend," "estimate," "foresee," "project," "anticipate," "believe," "plans," "forecasts," "continue" or "could" or the negatives of these terms or variations of them or similar terms. Furthermore, such forward-looking statements may be included in various filings that we make with the SEC or press releases or oral statements made by or with the approval of one of our authorized executive officers. Although we believe that the expectations reflected in these forward-looking statements are reasonable, we cannot assure you that these expectations will prove to be correct. These forward-looking statements are subject to certain known and unknown risks and uncertainties, as well as assumptions that could cause actual results to differ materially from those reflected in these forward-looking statements. Readers are cautioned not to place undue reliance on any forward-looking statements contained herein, which reflect management's opinions only as of the date hereof. Except as required by law, we undertake no obligation to revise or publicly release the results of any revision to any forward-looking statements. You are advised, however, to consult any additional disclosures we make in our reports to the SEC. All subsequent written and oral forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the cautionary statements contained in this Report.

Business Overview

We are engaged in the licensing and management of our multi-purpose software system, known as the Ultitek System, to airlines located in Russia and its provinces. Our software is used by airlines to manage their reservation, global distribution and operating systems. We conduct our operations through our wholly-owned subsidiary, Transport Automation Information Systems, or TAIS. We currently operate our business in Russia.

We were originally incorporated in Delaware on January 11, 2005. On March 11, 2005, we changed our state of incorporation to Nevada. Also on March 11, 2005, we entered into a share exchange agreement with Transport Automation Information Systems (TAIS) pursuant to which we exchanged 15 million (15,000,000) shares of our common stock for all of the issued and outstanding TAIS shares, making TAIS our wholly-owned subsidiary.

Through TAIS, we own and operate the Ultitek System consisting of a Computerized Reservation System, a Global Distribution System, and operation systems for the airlines, to be marketed worldwide. Prior to our merger with TAIS, we were a non-operating "shell" corporation.

Subsequent Events

V.I.P. SERVICE

On October 15, 2008, "V.I.P. Service," one of the largest travel agencies in Russia, initiated a new website, http://new.vip-plane.ru, for their authorized agents.

This website was based on TravelShop, developed by Ultitek's wholly owned subsidiary TAIS. TravelShop is a software module that provides various services for travel agencies. In the very near future, V.I.P. Service plans to provide a direct access to the reservation system for authorized agents.

The new website will ease the load for the main office operators and more importantly, will allow authorized agents greater access to the reservation system.

Authorized agents now will be able to access the system directly for both domestic and foreign airlines, thereby minimizing the need for phone communication, which was a significant cause for delay in the past. This new service provides a much more convenient tool for booking.

This is the fourth website created by TAIS utilizing its software module, TravelShop, for direct air transportation sales.

ISAIR AIRLINES

On October 1, 2008, the Company announced that, TAIS has agreed to install the Serena-2.3 reservation system for Isair Airlines. The Company is currently I the process of installing such system. The airline flies between Moscow and Tel Aviv. The software is compatible with all aspects of Transportation Clearing House (TCH) software, including authorized standard ticket forms and Electronic Ticketing (ET). Website development is in progress when completed, will enable consumers to buy tickets directly from Isair Airline's website.

Our Principal Products and Services

We license and manage the Ultitek System which is a completely independent reservation, global distribution, and airline operation system. Historically, airline computer reservation systems and global travel distribution systems have been partly or completely owned and hosted by a few large airlines. The remaining smaller airlines are guests using these systems and have their information stored on the system hosted by a competitor who charges significant user fees while accumulating proprietary and confidential information of the guest airline. Currently, there are approximately ten large airlines with their own systems which host approximately 990 regional, mid-size and smaller airlines. Our system provides these airlines a state-of-the-art system which we believe is efficient, less costly and which allows such airlines to retain their respective proprietary information databases.

The Ultitek System consists of the following systems:

· Computerized Reservation System ("CRS"). The Computer Reservations System is the module primarily designed to maintain an airline's seat inventory and to assist travel agencies in booking seats and other travel. Our Computerized Reservation System has a wide range of travel agency solutions with an easy graphical interface including tools to run a travel agency productively.

· Global Distribution System ("GDS"). The Global Distribution System is designed to disseminate flight schedules, seating availability, and pricing information electronically to customers. Modules provide solutions that meet the booking needs of travel agencies or in-house corporate travel departments.

· Airline Operations System ("AOS"). The Airline Operations System allows a subscriber airline to manage every aspect of the airline's operations, which makes the Ultitek System a complete solution.

· Departure Control System ("DCS"). The Departure Control System controls passenger registration and identification, boarding passes and seating assignments.

The Ultitek System also includes:

(a) a complete accounting system, including revenue management, yield management, accounts payable, accounts receivable, general ledger and cost accounting;

(b) inventory control for the number of seats available on a flight;

(c) inventory control for spare parts and other miscellaneous components;

(d) maintenance;

(e) fixed assets;

(f) purchasing;

(g) airport departure control (including control of boarding passes);

(h) inter-airline clearing facility with electronic funds transfer;

(i) aircraft dispatching;

(j) crew management/scheduling;

(k) airplane equipment inventory;

(l) miscellaneous supplies and logistics;

(m) inter-city long haul bus station/scheduling/reservation system;

(n) reservations via Internet;

(o) theater tickets sales;

(p) multilingual features;

(q) access to hotel reservations;

(r) access to car rental reservations;

(s) access to other tour operators;

(t) frequent flyer programs; and

(u) charter airline management modules.

The Ultitek System is currently accredited by International Air Transport Association ("IATA") defined as a Computerized Reservation System and has an IATA designated code. The Ultitek System communicates with most distribution systems worldwide. The Ultitek System is currently available in English and Russian.

The Ultitek System also offers (i) compatibility with standard technologies to facilitate integration into any agency environment; (ii) travel documents, ranging from a single ticket for multi airline bookings to boarding passes, car vouchers, itinerary information, invoices and tickets; and (iii) a state-of-the-art, real time approach to distributed data-bases.

Travel agents and the general public have multiple communication paths with the Ultitek System, including internet access to each of the appropriate system modules all of which have security features allowing only authorized personnel to perform functions and access information based upon their security level. Seamless connectivity is a key to the Ultitek System. Currently, travel agents usually access a database that holds comprehensive information which is submitted and updated on a set schedule by travel providers. The Ultitek System enables agents to connect directly and seamlessly into a real-time system that has the most up-to-date information about availability, rates, conditions, etc.

Our Company provides a virtual private network based on the Internet. This feature allows Ultitek's Systems the ability to issue tickets for trips involving the subscriber airline or multiple airlines and act as a clearinghouse. Tickets may be issued as e-tickets, smart-card tickets, or via hard copy at a travel agency. This feature allows corporations to make their own reservations and issue tickets at the travel agency of their choice.

Communication capabilities are an important part of our product. There is a state-of-the-art virtual private network communications infrastructure for a global network. This design approach generates significant communications savings to the subscriber airline. All that is required is dual high-speed Internet connection. The Ultitek global network connections link providers and users. It is designed to support the massive, high-speed transmission of data, voice and video, with numerous back-up and security mechanisms to route data around the world. There is also a diverse array of promotional opportunities for airlines and tour operators, ranging from weather forecasts to destination city information.

Hardware sales are available and offered as a service, as requested by the subscriber.

On November 9, 2007, the Company entered into a non-exclusive licensing agreement with the Ukrainian State Scientific Corporation "Kiev Institute of Automation" ("KIA"), to license to KIA its proprietary technology and to furnish to KIA a national Ukrainian reservation system. The term of the licensing agreement is five years, and is subject to automatic renewal.

GOING CONCERN

The financial statements included in this Quarterly Report have been prepared assuming that the Company will continue as a going concern, which contemplates the recoverability of assets and the satisfaction of liabilities in the normal course of business.

As shown in the accompanying financial statements, the Company incurred a net loss of $1,841,939 for the nine months ended September 30, 2008 and had an accumulated deficit of $14,392,912 at September 30, 2008. Management's plans include the raising of capital through the equity markets to fund future operations, seeking additional acquisitions, and generating of revenue through its business. However, even if the Company does raise sufficient capital to support its operating expenses and generate adequate revenues, there can be no assurances that the revenue will be sufficient to enable it to develop business to a level where it will generate profits and cash flows from operations. These matters raise substantial doubt about the Company's ability to continue as a going concern.

Liquidity and Capital Resources

As of September 30, 2008, we had $30,575 cash on hand. The Company incurred a net loss of $1,841,939 for the nine months ended September 30, 2008 and had an accumulated deficit of $14,392,912 at September 30, 2008. There is substantial doubt about our ability to continue as a going concern. We have financed our operations to date from loans, the sale of equity securities and revenues. Our total current assets at September 30, 2008 were $1,311,362, compared to $864,077 at December 31, 2007. Total current assets consist of cash on hand, accounts receivable; work in progress and prepaid expenses. At September 30, 3008, our cash on hand were $30,575, compared to $1,551 at December 31, 2007. At September 30, 2008, our accounts receivable were $334,571, compared to $134,167 at December 31, 2007. At September 30, 2008, our work in progress was $895,671, compared to $694,079 at December 31, 2007. At September 30, 3008, our prepaid expenses were $50,545, compared to $34,280 at December 31, 2007. Out total assets increased primarily due to increased revenues and accounts receivable resulting from increased business from existing and new customers. We have financed our operations to date from loans, the sale of equity securities and through revenues and will continue to depend on such to fund our operations for the next 12 months. .

On March 23, 2007, the Company filed a Registration Statement on Form S-8 therein registering 7,000,000 shares of the Company's Common Stock available for issuance pursuant to awards granted under the Company's 2007 Incentive Compensation Plan. In the event that options are exercised under this Plan, we will receive the proceeds of such exercise.

On August 4, 2008, the Company filed a Registration Statement on Form S-8 relating to common stock to be issued pursuant to the 2008 Incentive Compensation Plan. This plan was effective August 4, 2008 and continues, unless terminated, until August 4, 2018. Under the Plan, the Company may issue or grant up to 19,607,493 Performance Shares, shares of common stock or options. To date, no awards have been issued under this Plan. In the event that options are issued and exercised under this Plan, we will receive the proceeds of such exercises.

We do not expect to incur significant marketing or expansion expenses with respect to the sale of Ultitek Systems. Consequently, any significant increases in sales requirements will be predicated entirely upon the particular circumstances of each new agreement, and capital requirements will follow the same particular circumstance.

The level of cash flows we derive from operations will depend to a significant degree on our ability to license the Ultitek Systems. If we are unable to generate sufficient cash flows from operations, we will attempt to raise additional funds to cover the costs of operations through additional private or public offerings of debt or equity securities. There is no assurance that we will be able to raise additional funds. If we cannot, we will be forced to curtail our operations or possibly be forced to evaluate a sale or liquidation of our assets. Even if we are successful in raising additional funds, there is no assurance regarding the terms of any additional investment. Any future financing may involve substantial dilution to existing investors.

The following is a summary of the Company's cash flows from operating, investing, and financing activities:

                                                    For the Nine Months Ended
                                                September 30,      September 30,
                                                     2008              2007
    Net Cash Used in Operating Activities       $     (220,462 )  $      (179,886 )

    Net Cash Provided by Investing Activities   $       27,350    $         2,583

    Net Cash Provided by Financing Activities   $      212,858    $       154,000

    Effect of Exchange Rate on Cash             $        9,278    $        28,091

    Net Effect on Cash                          $       29,024    $         4,788

    Cash at Beginning of Period                 $        1,551    $         6,900

    Cash End of Period                          $       30,575    $        11,688

The following
table sets forth
the Company's
contractual
obligations:
Contractual
Obligation                                                Payment by Period
                                             Less than 1                                   More than 5
                                Total           year          1-3 years     3-5 years         years
Long-Term Obligations         $  570,000                 -   $    70,000   $   500,000                 -
Capital Obligations                    -                 -             -             -                 -
Operating Lease Obligations            -                 -             -             -                 -
Other Long-Term Liabilities
Reflected on the
Registrant's Balance Sheet
under GAAP                             -                 -             -             -                 -
Total                         $  570,000                 -   $    70,000   $   500,000                 -

Results of Operations

At September 30, 2008, our cash on hand was $30,575, compared to $1,551 at December 31, 2007. This increase was due to increased borrowed funds and revenues.

At September 30, 2008, our accounts receivable were $334,571, compared to $134,167 at December 31, 2007. This increase was due to increased revenues resulting from increased business from existing and new customers.

At September 30, 2008, our work in progress was $895,671,compared to $694,079. This increase was due to increased business.

At September 30, 2008, our total assets were $1,368,229, compared to $981,658 at December 31, 2007. This increase was primarily due to increased accounts receivables and works in progress resulting due increased business from existing and new customers.

At September 30, 2008, our total current liabilities were $2,558,959, compared to $1,791,919 at December 31, 2007. This increase was due to notes payable of $379,000 at September 30, 2008, compared to $166,000 at December 31, 2007; accounts payable of $944,050 at September 30, 2008, compared to $633,417 at December 31, 2007; deferred revenue of $591,969 at September 30, 2008, compared to $554,485 at December 31, 2007; and accrued salaries and related taxes of $242,099 at September 30, 2008, compared to $136,472 at December 31, 2007.

Three Months Ended September 30, 2008 Compared to Three Months Ended September 30, 2007

Our total revenues increase from $525,128 for the three months ended September 30, 2007 to $567,272 the three months ended September 30, 2008. This increase was due to an increase in business from existing and new customers.

Our costs of revenue increased from $418,363 for the three months ended September 30, 2007 to $506,454 for the three months ended September 30, 2008. This increase was primarily due to our increased use of outside consultants relating to our increase in business from existing and new customers.

Our selling, general and administrative expenses (SG&A) increased from $202,134 for the three months ended September 30, 2007 to $225,441 for the three months ended September 30, 2008. This increase was primarily due to stock based compensation, which increased from $110,824 for the three months ended September 30, 2007 to $125,500 for the three months ended September 30, 2008.

Our interest expense increased from $19,944 for the three months ended September 30, 2007 to $24,769 for the three months ended September 30, 2008. This increase was primarily due to an increase in borrowed funds.

Nine Months Ended September 30, 2008 Compared to Nine Months Ended September 30, 2007

Our total revenue increase from $1,802,172 for the nine months ended September 30, 2007 to $2,067,102 for the nine months ended September 30, 2008. This increase was due to an increase in business from existing and new customers.

Our costs of revenue increased from $1,620,648 for the nine months ended September 30, 2007 to $1,883,900 for the nine months ended September 30, 2008. This increase was primarily due our increased use of outside consultants relating to our increase in business from existing and new customers.

Our selling, general and administrative expenses (SG&A) increased from $1,236,252 for the nine months ended September 30, 2007 to $1,638,474 for the nine months ended September 30, 2008. This increase was primarily due to stock based compensation, which increased from $892,824 for the nine months ended September 30, 2007 to $1,327,533 for the nine months ended September 30, 2008.

Our interest expense increased from $58,373 for the nine months ended September 30, 2007 to $102,656 for the nine months ended September 30, 2008. This increase was primarily due to an increase in borrowed funds.

Research and Development

For the three months ended September 30, 2008 and September 30, 2007, we had no our research development expense.

For the nine months ended September 30, 2008, we spent $250,011 in research and development, compared to $340,000. This decrease is attributable to our increased business from existing and new customers and our decision to utilize our consultants to provide service such additional business.
As we implement our business strategy and grow our business, we expect to incur significant research and development expenses with respect to our software and anticipate significant changes in research and development for our software. Any significant increases in research and development will be predicated entirely upon the particular circumstances of any acquisitions that we make, including the state of development of the technology, the complexity and the requirement for modification or integration with other solutions.

Revenue Recognition

The Company derives revenue from the following sources: (i) software, which includes the sale of the Company's software licenses and (ii) services, which includes consulting and maintenance.

The Company's records revenue pursuant to the Statement of position No. 97-2, Software Revenue recognition, issued by the American Institute of Certified Public Accountants.

For software license arrangements that do not require significant modification or customization, we recognize new software license revenue when (i) we enter into a legally binding arrangement with a customer for the license of software;
(ii) we deliver the products; (iii) customer payment is deemed fixed and determinable and free of contingencies or significant uncertainties; and (iv) collection is probably. Substantially all of our new software license revenues are recognized in this manner.

Revenues from consulting services are generally recognized as the services are performed.

In certain consulting contracts, modifications to software may be accounted for based upon contract accounting using the completed contract method. Contract accounting is applied to any arrangement: (i) that includes milestones or customer specific acceptance criteria that maybe effect collection of software license fees; (ii) where services include significant modification or customization of software; or (iii) where software license payment is tied to the performance of consulting services.

Off-Balance Sheet Arrangements

We did not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.

Critical Accounting Policies & Estimates

The following describes critical accounting policies and estimates:

Use of Estimates

It is important to note that when preparing the financial statements in conformity with U.S. generally accepted accounting principles, management is required to make certain estimates and assumptions that affect the amounts reported and disclosed in the financial statements and related notes. Actual results could differ if those estimates and assumptions approve to be incorrect.

On an ongoing basis, we evaluate our estimates, including those related to estimated customer life, used to determine the appropriate amortization period for deferred revenue and deferred costs associated with licensing fees, the useful lives of property and equipment as well as in U.S. dollar exchange rates with the Russian ruble, among others, as well as our estimates of the value of common stock for the purpose of determining stock-based compensation. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities.

Work in Progress

Work in progress represents consulting projects billable in accordance with the terms of a contract at specified stages of completion and consists of accumulated costs of materials and time charges not yet billed. To the extent that the terms are altered or our performance under these contracts is delayed, our estimates will be wrong and may impact when revenue is recognized.

Stock-Based Compensation

The Company accounts for stock based compensation using the fair value method.

Software Costs

Software development costs are accounted for in accordance with SFAS No. 86 "Accounting for the Costs of Computers, Software to be Sold, Leased, or Otherwise Marketed" and SOP No. 98-1 "Accounting for the Costs of Computer Software Developed or Obtained for Internal Use."

Revenue Recognition

The Company derives revenue from the following sources: (1) software, which includes the sale of software licenses, and (2) services, which includes consulting and maintenance.

The Company records revenue pursuant to SOP No. 97-2, "Software Revenue Recognition", issued by the AICPA.

For software license arrangements that do not require significant modification or customization, we recognized new software license revenue when: (1) we enter into a legally binding arrangement with a customer for the license of software;
(2) we deliver the products; (3) customer payment is deemed fixed and determinable and free of contingencies or significant uncertainties; and (4) collection is probable. Substantially all of our new software license revenues are recognized in this manner.

Revenues from consulting services are generally recognized as the services are performed.

In certain consulting contracts, modifications to software may be accounted for based upon contract accounting using the completed contract method. Contract accounting is applied to any arrangement: (1) that includes milestones or customer specific acceptance criteria that may affect collection of software license fees; (2) where services include significant modification or . . .