Ulticom to Delay 10-K Filing; Restatement Related to Stock-Based Compensation Expected

Ulticom, Inc. (NASDAQ: ULCM) today announced that, as a result of its ongoing review relating to the Company's stock option awards, it is filing a Form 12b-25 report with the Securities and Exchange Commission indicating that its Annual Report on Form 10-K for the fiscal year ended January 31, 2006 will not be filed today, its due date. The Company did not seek in the filing a 15-day extension for filing its Annual Report because it does not expect that it will be able to file the report by the end of the extension period, primarily due to uncertainty relating to the accounting treatment of certain options awarded by Comverse Technology, Inc., the Company's majority shareholder, to the Company's management and employees prior to the Company's initial public offering.

Restatement Related to Stock-Based Compensation Expected

As previously announced on March 14, 2006, the Audit Committee of the Company's Board of Directors has been reviewing matters relating to the Company's stock option awards, including but not limited to the accuracy of the stated dates of option awards and whether all proper corporate procedures were followed. The Audit Committee is being assisted in its review by independent legal counsel and accounting experts.

At this time, the Audit Committee has not completed its work or reached any final conclusions. The Audit Committee is in the final stages of its review and has reached a preliminary conclusion that the stated dates of certain of the Company's stock option awards, which were used in preparation of the Company's financial statements, differed from the measurement dates required to be used for accounting purposes to determine the value of such awards. As a result, the Company expects to record additional non-cash charges for stock-based compensation expense for prior periods.

In addition, on March 14, 2006, Comverse announced that a special committee of its Board of Directors has been reviewing matters relating to stock option awards by Comverse. The special committee is being assisted in its review by independent legal counsel and accounting experts, who are the same as those assisting the Company's Audit Committee. While the Company does not participate in and is not privy to the special committee's review, Comverse today announced that the special committee had reached a preliminary conclusion that the stated dates of the awards that were used in the preparation of its financial statements differed from the measurement dates required to be used for accounting purposes to determine the value of certain of its stock option awards. Consequently, the Company may also be required to record non-cash charges for stock-based compensation expense on account of certain stock options issued by Comverse to employees of the Company when the Company was a wholly owned subsidiary of Comverse before the Company's April 2000 initial public offering. The Company believes that it will be able to release its Form 10-K Annual Report for the year ended January 31, 2006 and restated financial statements for prior periods promptly after Comverse has determined the appropriate measurement dates and accounting treatment for the options granted by Comverse which affect Ulticom's financial statements.

Based on the Audit Committee's preliminary conclusion and Comverse's announcement, the Company expects that (i) such non-cash charges will be material and (ii) the Company will need to restate its historical financial statements for each of the fiscal years ended January 31, 2005, 2004, 2003 and 2002. Such charges could also affect prior periods. On April 16, 2006, the Company concluded that such financial statements and any related reports of its independent registered public accounting firm should no longer be relied upon.

Any such stock-based compensation charges would have the effect of decreasing the income from operations, net income and retained earnings figures contained in the Company's historical financial statements. The Company does not expect that the anticipated restatements would have an impact on its historical revenues, cash position or non-stock option related operating expenses. Nor would any such charges impact the Company's revenues, cash position or non-stock option related operating expenses for the year ended January 31, 2006.

The Company is today notifying The NASDAQ Stock Market that it will not be in compliance with NASDAQ's requirements for continued listing, for failure to make on a timely basis all required filings with the SEC. The Company expects that it will receive a Staff Determination letter from NASDAQ indicating that, due to its noncompliance with such requirement, its common stock will be delisted unless the Company requests a hearing in accordance with NASDAQ rules. If the Company receives such a Staff Determination Letter, the Company intends to request a hearing before the NASDAQ Listing Qualifications Panel to review the Staff Determination. Under NASDAQ rules, a request for a hearing stays the delisting action pending the issuance of a written determination by the Listing Qualification Panel.