SCHEDULE
14C
(Rule
14c-101)
INFORMATION
REQUIRED IN INFORMATION STATEMENT
Information
Statement Pursuant to Section 14(c) of the
Securities
Exchange Act of 1934
Check
the
appropriate box:
[
x ]
Preliminary Information Statement
[
] Confidential, for use of the Commission only
[
] Definitive Information Statement
Ultradata Systems,
Incorporated
(Name
of
Registrant as Specified In Its Charter)
Payment
of Filing Fee (Check the appropriate box):
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[
]
|
Fee
computed on table below per Exchange Act Rules 14c-5(g) and
0-11.
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1)
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Title
of each class of securities to which transaction
applies:
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____________________________________
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2)
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Aggregate
number of securities to which transaction
applies:
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____________________________________
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3) |
Price
per unit or other underlying value of transaction pursuant to Exchange
Act
Rule 0-11. (Set forth the amount on which the filing fee is calculated
and
state how it was determined.)
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____________________________________
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4)
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Proposed
maximum aggregate value of
transaction:
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____________________________________
____________________________________
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[
]
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Fee
paid previously with preliminary
materials.
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[
]
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Check
box if any part of the fee is offset as provided by Exchange Act
Rule
0-11(a)(2) and identify the filing for which the offsetting fee
was paid
previously. Identify the previous filing by registration statement
number,
or the Form or Schedule and the date of its
filing.
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1)
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Amount
Previously Paid:
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____________________________________
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2)
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Form,
Schedule or Registration Statement
No.:
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____________________________________
____________________________________
____________________________________
Ultradata
Systems, Incorporated
1240
Dielman Industrial Court
INFORMATION
STATEMENT
To
the
Holders of the Voting Stock:
The
purpose of this Information Statement is to notify you that the holders of
shares representing a majority of the voting power of Ultradata Systems,
Inc.
have given their written consent to a resolution adopted by the Board of
Directors of Ultradata to amend the certificate of incorporation so as to
(1)
change the name of the company to “China Huaren Organic Products, Inc.”; (2)
effect a reverse split of the corporation’s common stock in a ratio of 1:39; and
(3) increase the number of shares of common stock that the corporation is
authorized to issue from 50,000,000 shares, par value $.01, to 100,000,000
shares, $.01 par value. We anticipate that this Information Statement will
be
mailed on December 12, 2006 to shareholders of record. On or after January
2,
2007, the amendment of the certificate of incorporation will be filed with
the
Delaware Secretary of State and become effective.
The
Delaware General Corporation Law permits holders of a majority of the voting
power to take shareholder action by written consent. Accordingly, Ultradata
will
not hold a meeting of its shareholders to consider or vote upon the amendment
of
Ultradata’s certificate of incorporation.
WE
ARE NOT ASKING YOU FOR A PROXY.
YOU
ARE REQUESTED NOT TO SEND US A PROXY.
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Fang
Jinzhong
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Chairman
and Chief Executive Officer
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VOTING
SECURITIES OUTSTANDING
Stockholders
of record entitled to vote will be determined as of the close of business
on
November 30, 2006. At that date, there were outstanding and entitled to vote
45,034,840 shares of Ultradata common stock and shares of three series of
Ultradata preferred stock convertible into 539,959,296 common shares, yielding
a
total outstanding on a fully diluted basis of 584,994,136 shares. Each share
of
common stock entitles the holder thereof to one vote. The holders of the
convertible preferred stock have the voting power of the common shares into
which their preferred shares could be converted.
The
following table sets forth the number of shares of voting stock beneficially
owned by each person who, as of the Record Date, owned beneficially more
than 5%
of any class of Ultradata’s voting stock, as well as the ownership of such
shares by each member of Ultradata’s Board of Directors and the shares
beneficially owned by its officers and directors as a group.
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Name
and Address of
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Amount
and Nature
of
Beneficial Ownership
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Aggregate
Percent
of Class
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Percent
of
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Beneficial
Owner
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Common
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Preferred
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Common
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Preferred
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Voting
Power
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Fang
Jinzhong(1)
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5,117,926
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43,734
Series D
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11.4%
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18.6%
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15.8%
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Zhang
Changcai(1)
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3,122,430
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26,682
Series D
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6.9%
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11.4%
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9.7%
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Zhou
Huakang(2)
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3,155,413
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25,015
Series D
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7.0%
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10.7%
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210,000
Series B
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100%
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19.1%
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Current
executive officers and directors
as a group (3 persons)
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11,395,769
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95,431
Series D
210,000
Series B
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25.3%
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40.6%
100%
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44.5%
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American
Union Securities(3)
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1,770,110
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15,126
Series D
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3.9%
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6.4%
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5.5%
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_______________________________
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(1)
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The
address of Messrs. Fang and Zhang
is
648
Weihai Road, Changchun, Jilin Province, P.R. China.
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(2)
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Mr.
Zhou’s address
is
18
Kimberly Court, East Hanover, NJ 07936. The shares listed are shares
held
of record by Warner Technology & Investment Corp., of which Mr. Zhou
is the President and controlling
shareholder.
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(3)
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The
address of American Union Securities is 100 Wall Street, 15th
Floor, New York, NY 10005
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TO
CHANGE THE NAME OF THE CORPORATION
The
Board
of Directors of Ultradata has adopted a resolution to change the name of
the
corporation from Ultradata Systems, Incorporated to “China Huaren Organic
Products, Inc.” The holders of shares representing a majority of the voting
power of Ultradata’s outstanding voting stock have given their written consent
to the resolution. Under Delaware corporation law, the consent of the holders
of
a majority of the voting power is effective as shareholders’ approval. We will
file the Amendment with the Secretary of State of Delaware on or after January
2, 2007, and it will become effective on the date of such filing (the “Effective
Date”).
Reasons
for Approving the Name Change
The
primary purpose of the name change is to better represent the corporation’s
business. The corporation recently acquired indirect ownership of Jilin Huaren
Organic Health Products, Co., Ltd., a corporation organized under the laws
of
The People’s Republic of China (the “Subsidiary”). The Subsidiary is engaged in
the business of research, development, production and sale of organic foods
and
healthcare products in the People’s Republic of China. Because
of this new overall direction in the corporation’s business, the Board of
Directors and majority shareholders have determined to change the corporation’s
name.
Certificates
for the corporation’s common stock that recite the name “Ultradata Systems
Incorporated” will continue to represent shares in the corporation after the
Effective Date. If, however, a shareholder wishes to exchange his certificate
for a certificate reciting the name “China Huaren Organic Products, Inc.” after
the Effective Date, he may do so by surrendering his certificate to the
corporation’s Transfer Agent with a request for a replacement certificate and
the appropriate stock transfer fee. Ultradata’s Transfer Agent is:
American
Stock Transfer & Trust Company
59
Maiden
Lane - Plaza Level
TO
INCREASE THE AUTHORIZED CAPITAL STOCK
The
Board
of Directors of Ultradata has adopted a resolution to increase from 50,000,000
to 100,000,000 the number of shares of Common Stock authorized by the
Certificate of Incorporation. The holders of shares representing a majority
of
Ultradata’s outstanding voting stock have given their written consent to the
resolution. We will file the Amendment with the Secretary of State of Delaware,
and it will become effective on the Effective Date.
Reasons
for Approving the Increase in Authorized Shares
At
the
present time, 45,034,840 of the corporation’s 50,000,000 authorized common
shares have been issued and are outstanding, leaving very few shares available
for issuance. In addition, the shares of convertible preferred stock currently
issued and outstanding are convertible, in the aggregate, into 539,959,296
shares of common stock. The Board of Directors and the majority shareholders
have approved the increase in authorized common stock in order to make a
sufficient number of shares available upon conversion of the convertible
preferred shares and to provide the corporation with flexibility in pursuing
its
long-term business objectives. In order to pursue these business objectives,
Management’s intentions are as follows:
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Management
expects that in the future it will pursue opportunities to obtain
the
capital Ultradata needs in order to fully implement its business
plan. A
reserve of common shares available for issuance from time-to-time
will
enable Ultradata to entertain a broad variety of financing proposals.
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Management
may utilize the additional shares in connection with corporate
acquisitions, joint venture arrangements, or for other corporate
purposes,
including the solicitation and compensation of key personnel. Ultradata
is
not, at this time, engaged in negotiating or effecting any acquisitions
or
similar transactions.
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TO
EFFECT A REVERSE SPLIT OF THE COMMON STOCK
The
Board
of Directors of Ultradata has unanimously adopted a resolution to amend the
Certificate of Incorporation to effect a reverse split of Ultradata’s
outstanding common stock in a ratio of 1:39 (the “Reverse Split”). The holders
of shares representing a majority of the voting power of Ultradata’s outstanding
voting stock have given their written consent to the resolution. Under Delaware
corporation law, the consent of the holders of a majority of the voting power
is
effective as shareholders’ approval. We will file the Amendment with the
Secretary of State of Delaware, and it will become effective on the Effective
Date.
The
Amendment to the Certificate of Incorporation provides that each 39 shares
of
common stock outstanding on the Effective Date will be exchanged for one
post-Reverse Split share of Ultradata common stock (“New Common Stock”). No
fractional shares or scrip will be issued; rather, shareholders who would
otherwise be entitled to a fractional share as a result of the Reverse Split
will be issued one whole share of New Common Stock in lieu of the
fraction.
Reasons
for Approving the Reverse Stock Split
There
are
two primary reasons why the Board of Directors is recommending the Reverse
Split. The first reason is that, after the Effective Date, as a result in
the
increase in the number of common shares described above, our Board of Directors
will be authorized to issue 100,000,000 common shares, which adds approximately
55,000,000 to the number of common shares available for issuance. However,
as
stated above, the currently outstanding shares of preferred stock are
convertible into nearly 540,000,000 common shares. So the number of shares
available for issuance by the Board is still inadequate to achieve the
corporation’s business objectives, as described above, and to meet its
obligation to have common shares available for issuance upon conversion of
the
preferred shares. The dearth of authorized shares prevents the Board from
pursuing its objectives of effecting acquisitions, obtaining financing, and
recruiting management personnel.
The
Board
of Directors expects the holders of Ultradata’s Series B, Series C and Series D
Preferred Stock to convert their shares into common stock within the next
six
months. Other than that conversion, the Board of Directors has not made any
specific plan, commitment, arrangement, understanding or agreement with respect
to the shares that will be available for issuance after the Reverse Split.
The
second reason for the Reverse Split relates to the current low market price
of
the corporation’s common stock. Ultradata will require financing to fund the
pursuit of its business objectives. The Board of Directors has come to the
conclusion that an increase in the market price of the common stock may enhance
the marketability of the common stock and so improve Ultradata’s prospects for
obtaining financing. It is hoped that the Reverse Split will increase the
per
share market price of the common stock. There is, however, no assurance that
the
market price will increase, or that it will not return to its current levels
after the Reverse Split.
Recently,
the market price for Ultradata common stock has been only pennies per share.
Many brokerage firms are reluctant to recommend lower-priced stocks to their
clients. The policies and practices of some brokerage houses tend to discourage
individual brokers within those firms from dealing in lower priced stocks.
Additionally, the brokerage commission on the purchase or sale of stock with
a
relatively low per share price generally tends to represent a higher percentage
of the sales price than the brokerage commission charged on a stock with
a
relatively high per share price. The Board of Directors believes that these
issues are best addressed by an increase in the inherent value per share
of
common stock that will occur as a result of the Reverse Split. The Board
believes that, absent the Reverse Split, Ultradata is not likely to obtain
any
additional financing. Accordingly, the Board believes that the proposed Reverse
Split is essential to Ultradata’s prospects for raising financing through the
sale of its common stock or derivative securities.
General
Effects of the Increase in Authorized
Capital
Stock and Reverse Stock Split on Capital Stock
The
New
Common Stock will provide the same rights and privileges to Ultradata’s
stockholders as they enjoyed prior to the Reverse Split. The stockholders
will
have the same relative rights following the Effective Date as they had prior
to
the Effective Date, except to the extent the proportion of shares that they
own
is affected by the rounding up of fractional shares.
The
table
below shows the cumulative effect on Ultradata’s voting stock of the
“recapitalization” that will occur on the Effective Date, namely: (a) the
increase in authorized common stock and (b) the reverse split of the outstanding
common stock. The column labeled “After Recapitalization” does not reflect any
adjustments that may result from the rounding-up of fractional shares because
we
cannot calculate at this time the number of fractional shares that will result
from the Reverse Split.
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Prior
to
Recapitalization
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After
Upon
Recapitalization
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Conversion
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Common
Stock
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Authorized
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50,000,000
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100,000,000
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Issued
and outstanding
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45,034,840
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1,154,739
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1,154,739
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(7.7%)
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Series
B Preferred Stock
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Authorized
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210,000
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210,000
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Issued
and outstanding
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210,000
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210,000
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1,499,985
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(10.0%) |
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Series
C Preferred Stock
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Authorized
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150,000
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150,000
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Issued
and outstanding
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100,000
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100,000
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299,997
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(2.0%) |
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Series
D Preferred Stock
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Authorized
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234,880
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234,880
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Issued
and outstanding
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234,880
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234,880
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12,045,128
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(80.3%) |
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14,999,850
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(100%) |
The
Reverse Split, together with the increase in authorized common shares will
increase the number of common shares available for issuance by the Board
of
Directors to 85,000,150. The Board of Directors will be authorized to issue
the
additional common shares without having to obtain the approval of the Ultradata
shareholders. Delaware law requires that the Board use its reasonable business
judgment to assure that Ultradata obtains "fair value" when it issues shares.
Nevertheless, the issuance of the additional shares would dilute the
proportionate interest of current shareholders in Ultradata. The issuance
of the
additional shares could also result in the dilution of the value of shares
now
outstanding, if the terms on which the shares were issued were less favorable
than the contemporaneous market value of Ultradata common stock.
The
increase in authorized shares and the Reverse Split, with the resulting increase
in the number of shares available for issuance, is not being done for the
purpose of impeding any takeover attempt. Nevertheless, the power of the
Board
of Directors to provide for the issuance of shares of common stock without
shareholder approval has potential utility as a device to discourage or impede
a
takeover of Ultradata. In the event that a non-negotiated takeover were
attempted, the private placement of stock into "friendly" hands, for example,
could make Ultradata unattractive to the party seeking control of the company.
This would have a detrimental effect on the interests of any stockholder
who
wanted to tender his or her shares to the party seeking control or who would
favor a change in control.
Exchange
of Stock Certificate and Liquidation of Fractional Shares
On
the
Effective Date, the outstanding certificates representing shares of Ultradata’s
common stock will be automatically converted into certificates representing
shares of New Common Stock. It is not necessary for a shareholder to obtain
a
replacement certificate in order to be registered in the record books of
the
corporation as the owner of the appropriate number of shares of New Common
Stock. Every shareholder who wishes to receive a replacement certificate,
however, may do so by surrendering to the Transfer Agent his certificate
representing shares of pre-Reverse Split common stock and paying the Transfer
Agent’s standard fee. In exchange, he will receive a replacement certificate
representing the appropriate number of share of New Common Stock. The name
and
address of the Transfer Agent are stated above.
No
Dissenters Rights
Under
Delaware law, shareholders are not entitled to dissenters’ rights with respect
to any of the transactions described in this Information Statement.
