Option /SAR Grants in Last Fiscal Year

(1)    2000 Option Plan

In May 2000, the Board of Directors of the Company adopted the Stock Option Plan of 2000 (the "2000 Option Plan"). In October 2000, the shareholders of the Company approved the 2000 Option Plan and ratified options previously granted. The Company registered under the Securities Act of 1933, as amended (the "Securities Act"), the shares issuable upon the exercise of options granted or to be granted pursuant to the 2000 Option Plan in a Registration Statement on Form S-8, File No. 333-51744, filed on December 13, 2000. As a result of this registration under the Securities Act, an optionee who is not an affiliate of the Company may resell the shares of the Common Stock received upon exercise immediately and an optionee who is an affiliate (i.e., a director or an executive officer) may resell pursuant to the exemption of Rule 144 under the Securities Act without compliance with any holding period under paragraph (d) of Rule 144. The 2000 Option Plan provides for the grant of options to purchase shares of the Common Stock to directors, officers, employees and consultants of the Company. Non-qualified stock options may be granted to directors, officers, employees and consultants. Incentive stock options, as such form is defined in Section 422 of the Code, may be granted only to employees. The term of the 2000 Option Plan is for ten years and it provides for the grants of options to purchase an aggregate of 1,925,000 shares of Common Stock. The 2000 Option Plan initially provided for the grants of options to purchase an aggregate of 2,000,000 shares of Common Stock; however, three options to purchase an aggregate of 75,000 shares have been exercised. The 2000 Option Plan was administered by the Board (and not the Compensation Committee) during Fiscal 2005 and prior years.

The 2000 Option Plan, consistent with the provisions of the Code, provides that the exercise price of an incentive stock option shall not be less than the fair market value of Common Stock on the date of grant, except that, if the employee owns stock possessing more than 10% of the total combined voting power of all classes of stock, the exercise price of the option must be at least 110% of the fair market value of Common Stock on the date of grant and the incentive stock option cannot be exercised after five years from the date of grant. No stock option granted has, and no option to be granted under the 2000 Option Plan may have, a term in excess of ten years. The exercise price of a non-statutory or nonqualified option may be less than the fair market value on the date of grant.

The number of shares subject to an outstanding option and the exercise price thereof are subject to adjustment in the event of a stock dividend, stock split, reorganization, recapitalization, combination of shares, change in corporate structure or similar events. No fractional shares will be issued upon exercise and the Company has no obligation to pay for such fractional share.

Options granted to date were not exercisable during the first year after the date of grant and thereafter became exercisable in annual installments of 25% each. Although the 2000 Option Plan permits some options to be granted to employees to have performance goals as the condition precedent to becoming exercisable, no option granted to date has such provision.

Options granted under the 2000 Option Plan are non-transferable and not immediately exercisable. However, as a result of the consummation of the Merger, all outstanding options became immediately exercisable, even if not already exercisable, and their expiration date became April 19, 2008.

The provisions described in this paragraph are applicable to future options: If the optionee's employment will terminate for any reason other than his or her death or disability, he or she may, for a period of up to three months, exercise the option to the extent exercisable upon the date of termination. If the optionee's employment terminates because of his or her total and permanent disability (as defined in the Code), the optionee will have 12 months within which he or she can exercise the stock option to the extent it was exercisable on the date of termination. In the event of other disability causing termination, the optionee may have six months (three months in the event the optionee wants continuous treatment of the stock option as an incentive stock option) to exercise the stock option to the extent exercisable upon the date of termination. If the optionee dies, his estate may exercise the stock option to the extent exercisable upon the date of death of the optionee, whether it occurred during the initial term or during the three, six or 12-month periods described in the three preceding sentences. In no event may a stock option be exercised beyond its original expiration date. Similar provisions are applicable to optionees who are not employees.

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For a consultant to be eligible to receive a grant of a stock option under the 2000 Option Plan, the optionee must be a natural person and the services rendered for the Company must be of a bona fide nature and not in connection with the offer or sale of securities of the Company in a capital raising transaction and do not directly or indirectly promote or maintain a market for the Company's securities.

At March 31, 2005, options covering a total of 314,000 shares of the Common Stock were outstanding under the 2000 Option Plan at a weighted average exercise price of $0.92 per share. As indicated above, options to purchase 75,000 shares were subsequently exercised.

(2)    Activity in Fiscal 2005

During Fiscal 2005, each of the five directors, including Harris A. Shapiro, the Chief Executive Officer of the Company was granted a stock option for 25,000 shares of Common Stock.

During Fiscal 2005, an option for 10,000 shares of Common Stock was granted to an executive officer of the Company.

During Fiscal 2005, options covering an aggregate of 4,500 shares of Common Stock expired.

The Company has never granted any stock appreciation rights (SARs).

Option, Grants, Exercises and Values

The following table provides certain summary information concerning the granting of options during Fiscal 2005 to the Chief Executive Officer who is the sole executive officer named in the Summary Compensation Table:

OPTION GRANTS IN LAST FISCAL YEAR

Name

Number of Options Granted (#)

% of Total Options Granted to Employees in Fiscal Year

Exercise Price per Share ($)

Expiration Date

Harris A. Shapiro

25,000

71

%

0.52

6/09/14

The following table provides certain summary information concerning the exercise of options during Fiscal 2005 and unexercisable options held as of the end of Fiscal 2005 by the Chief Executive Officer who is the sole executive officer named in the Summary Compensation Table:

AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR END OPTION VALUES

Name				Shares Acquired On Exercise (#)				Value Realized ($)				Number of Unexercised Options Held at Fiscal Year End (#)				Value of Unexercised In-the- Money Options at FY-End (2) ($)
																Exercisable				Unexercisable
Harris A. Shapiro					—				—				60,000	(1)			6,666				25,334

(1)	As of March 31, 2005, options were exercisable to purchase 23,332 shares.

(2)	Such value is based upon the market value of the Common Stock as of March 31, 2005, less the exercise price payable per share under such options. An option for 10,000 shares has been excluded because the market value was less than the exercise price.

Directors' Compensation

During Fiscal 2005, each of the five directors of the Company was granted a stock option under the 2000 Option Plan for 25,000 shares of the Common Stock. In addition, each director was eligible to receive $500.00 for each meeting attended in person, plus reimbursement for out-of-pocket expenses, and $250.00 for each meeting attended telephonically.

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Item 11.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

Security Ownership

The following table sets forth, as of April 19, 2005, certain information with respect to all stockholders known by the Company to be beneficial owners of more than 5% of its outstanding shares of the Common Stock, the Chief Executive Officer of the Company (being the sole executive officer named in the Summary Compensation Table in Item 10 to this Report), all directors and all officers and directors of the Company as a group. The ownership information was furnished to the Company by the person or entity and reflects the ownership by PerfectData stockholders prior to giving effect to the changes in officers and directors and the issuance of shares of the Series A Preferred Stock to the former Sona shareholders as a result of the Merger.

Name and Address of Beneficial Owner				Number of Shares of Common Stock Beneficially Owned				Percentage of Common Stock Beneficially Owned (1)
Joseph Mazin c/o Flamemaster Corporation 11120 Sherman Way Sun Valley, CA 91252				788,997(2)				11.98%
StarBiz Corporation 11120 Sherman Way Sun Valley, CA 91252				537,997(2)				8.17%
William B. Wachtel, c/o Wachtel & Masyr, LLP 110 East 59th Street New York, NY 10022				727,873(3)				11.05%
Harris A. Shapiro (4) c/o PerfectData Corporation 1445 East Los Angeles Avenue Simi Valley, CA 93065				344,500(5)				5.18%
Bryan Maizlish (6) 9705 Conestoga Way Potomac, MD 20854				64,256(7)				less than 1%
Timothy D. Morgan (8) 11734 Gladstone Circle Fountain Valley, CA 92708				65,456(7)				less than 1%
Tracie Savage (8) 6212 Banner Avenue Los Angeles, CA 90038				74,556(9)				1.12%
Corey P. Schlossmann (8) 19654-A Roscoe Blvd. Northridge, CA 91324				264,759 (10)				4.01%
All directors and officers as a group (6 in number)				829,343(11)				12.14%

(1)

The percentages computed in the table are based upon 6,584,530 shares of Common Stock which were outstanding as of April 19, 2005 prior to the issuance of shares of the Series A Preferred Stock to the former Sona shareholders as a result of the Merger. Effect is given, pursuant to Rule 13-d(1)(i) under the Exchange Act, to shares issuable upon the exercise of options currently exercisable as a result of giving effect to the Merger. Effect is also given to 150,000 shares issued subsequent to April 19, 2005 to Wachtel & Masyr, LLP in lieu of certain legal fees. See Note (3) to this table.

(2)

The shares of Common Stock reported in the table include (a) 537,997 shares owned by StarBiz Corporation, or "StarBiz", for which Mr. Mazin has voting power as the President, Chairman and Chief Executive Officer of StarBiz; (b) 36,000 shares owned by the Flamemaster Corporation Employees' Profit Sharing Plan for which Mr. Mazin is the fiduciary; and (c) 23,000 shares owned by Altius Investment Corporation ("Altius") for which Mr. Mazin has shared voting power as Chairman of the Board

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	of Altius. Certain of the shares reported in the table are owned by Donna Mazin, his wife, or as to which shares she shares dispositive and voting powers with Mr. Mazin.

(3)

The Shares reported in the table reflect (1) 427,873 shares (the "Trust Shares") held by William B. Wachtel as the Trustee of Digital Trust, (2) 150,000 shares (the "Firm Shares") held by Wachtel & Masyr, LLP, counsel to the Company in which law firm Mr. Wachtel is a managing partner. Such law firm received the Firm Shares in lieu of certain legal fees due or to become due from the Company, and (3) 150,000 shares (the "JDK Shares") held by EuroAmerican Corporation, a Delaware corporation ("EuroAmerican"), in which stockholder Mr. Wachtel is the sole director, officer and stockholder. EuroAmerican received the JDK Shares as the designee of JDK in extinguishment of indebtedness owed to it by JDK and its principal shareholder. JDK received the JDK Shares from the Company in February 2005 as consideration for its agreeing to cancellation of the Consulting Agreement dated January 20, 2000. Mr. Wachtel as the Trustee of the Digital Trust has, under the trust agreement, sole voting and investment power with respect to the Trust Shares reported in the table. Harris A. Shapiro, the Chairman of the Board, Chief Executive Officer and a director of the Company pre-Merger, was the settler of the Digital Trust and made an irrevocable grant to it of the assets which the Digital Trust used to effect the purchase of the Trust Shares. The beneficiaries of the Digital Trust are Mr. Shapiro's children and grandchildren who survive him, although the Trustee, in his absolute discretion, may pay or apply yearly income or the principal of the Trust to any beneficiary. Because he made an irrevocable grant and has no voting or investment power with respect to the Trust Shares, Mr. Shapiro is not the beneficial owner of the Trust Shares reported in the table as being owned of record by the Digital Trust and beneficially by the Trustee. Mr. Wachtel is deemed the beneficial owner of the Firm Shares because he has sole voting power with respect thereto. The table does not give effect to 5,263 shares of the Company's Series A Preferred Stock (convertible into 253,216 shares of the Common Stock) issuable to EuroAmerican as a former Sona shareholder upon the Merger.

(4)	Mr. Shapiro was the Chairman of the Board, the Chief Executive Officer and a director of the Company on April 19, 2005 prior to the Merger.

(5)

The shares of the Common Stock reported in the table reflect (a) 284,500 shares owned by Millennium Capital Corporation ("Millennium"), for which Mr. Shapiro has voting power as its President; (b) 10,000 shares issuable upon the exercise of an option expiring June 19, 2012 under the 2000 Option Plan (c) 25,000 shares issuable upon the exercise of an option expiring September 25, 2012 under the 2000 Option Plan; and (d) 25,000 shares issuable upon the exercise of a an option expiring June 9, 2014 under the 2000 Option Plan. As a result of the Merger, the expiration date of all three options became April 19, 2008.

(6)	A director of the Company both before and after the Merger.

(7)

The shares of Common Stock reported in the table include (a) 10,000 shares issuable upon the exercise of an option expiring June 19, 2012 under the 2000 Option Plan; (b) 25,000 shares issuable upon the exercise of an option expiring September 25, 2012 under the 2000 Option Plan; and (c) 25,000 shares issuable upon the exercise of an option expiring June 9, 2014 under the 2000 Option Plan. As a result of the Merger, the expiration date of all three options became April 19, 2008.

(8)	A director of the Company who resigned as a result of the Merger.

(9)

The shares of Common Stock reported in the table include (a) 10,000 shares issuable upon the exercise of an option expiring July 20, 2005 under the Company's 1985 Stock Option Plan; (b) 10,000 shares issuable upon the exercise of an option expiring June 19, 2012 under the 2000 Option Plan; and (c) 25,000 shares issuable upon the exercise of an option expiring September 25, 2012 under the 2000 Option Plan. As a result of the Merger, the expiration date of all three options became April 19, 2008.

(10)	The shares of the Common Stock reported in the table include 10,000 shares issuable upon the exercise of an option expiring June 19, 2012 under the 2000 Option Plan. As a result of the Merger, the expiration date of this option became April 19, 2008.

(11)

The shares of the Common Stock reported in the table include (a) those shares indicated in the text to Notes 5, 7, 9 and 10; (b) 2,500 shares issuable to an executive officer upon the exercise of an option expiring October 30, 2011 under the 2000 Option Plan; and (c) 10,000 shares issuable to the same executive officer upon the exercise of an option expiring June 9, 2014 under the 2000 Option Plan. As a result of the Merger, the expiration date of these two options became April 19, 2008.

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Securities Authorized for Issuance Under Equity Compensation Plans

The following table sets forth, as of March 31, 2005, certain summary information with respect to compensation plans under which shares of the Common Stock are authorized for issuance:

EQUITY COMPENSATION PLAN INFORMATION

				Number of securities to be issued upon exercise of outstanding options, warrants and rights				Weighted-average price of outstanding options, warrants and rights				Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a) )
				(a)				(b)				(c)
Equity compensation plans approved by security holders					324,000			$	.93				1,686,000
Equity compensation plans not approved by security holders (1)					—				—				76,000
Total					324,000			$	.93				1,762,000

(1)

The only plan not approved by the Company's stockholders as to which shares may be issued as of March 31, 2005 was: In April 1999, the Board of Directors authorized a reserve of 100,000 shares of the Common Stock for granting of warrants and options. Said warrants and options were to be sold for a price of five cents per share and would have an exercise price of $1.56 per share. The term was to be three years from date of issuance. This plan was cancelled by the Board of Directors effective April 18, 2005.

Item 12.    Certain Relationships and Related Transactions.

None.

Item 13.    Exhibits.

Exhibit No.				Description of Exhibit
2.1				Agreement and Plan of Merger dated as of March 7, 2005 by and among PerfectData Corporation, PerfectData Acquisition Corporation and Sona Mobile, Inc. (without disclosure schedules or exhibits) (1)
2.2				Agreement and Plan of Merger dated as of November 29, 2004 by and between PerfectData Corporation, a California corporation, and PerfectData (Delaware) Inc. (2)
3.1(i)				Articles of Incorporation as amended to date (3)
3.2(ii)				Bylaws as amended to date (3)
4.1				Certificate of Designations of Series A Convertible Preferred Stock (4)
4.2				Excerpts from Certificate of Incorporation (Exhibit 3.1(i)) defining rights of holders of equity securities (4)
10.1				Asset Purchase Agreement entered into as of October 3, 2003 by and between PerfectData Corporation and Spray Products Corporation (5)
10.2				First Amendment, dated as of February 26, 2004 to the Asset Purchase Agreement, dated as of October 3, 2003, filed as Exhibit 10.1 (6)
10.3				Second Amendment, dated as of August 12, 2004, to the Asset Purchase Agreement, dated as of October 3, 2003, filed as Exhibit 10.1 (7)

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Exhibit No.				Description of Exhibit
10.4				Addendum to Lease Agreement and Standard Commercial Lease dated September 24, 2003 between Albert and Helen LaMonte, as landlords, and the Company, as tenant (6)
10.5				Stock Option Plan of 2000 of the Company (8)
10.6				Forms of Stock Option Agreements (9)
10.7				1985 Employee Stock Option Plan (10)
10.8				Form of Non-Qualified Stock Option Agreement (10)
10.9				Stock Purchase Agreement dated January 20, 2000 by and among PerfectData Corporation, Millennium Capital Corporation ("Millennium"), JDK Associates, Inc. ("JDK") and other Buyers (11)
10.10				Letter Agreement dated January 20, 2000 by and among PerfectData Corporation, Millennium and JDK (12)
10.11				Amendment dated as of February 14, 2005 to the Letter Agreement dated January 20, 2000 filed as Exhibit 10.10 by and among PerfectData Corporation, Millennium, Harris A. Shapiro, JDK and Joseph D. Kowal. (4)
10.12				Employment Agreement dated September 1, 2000 by and between PerfectData Corporation and Harris Shapiro (13)
10.13				Form of Representative Agreement between the PerfectData Corporation and its Representatives (14)
10.14				Form and Standard Exclusive Distributor Agreement between PerfectData Corporation and its Distributors (14)
10.15				Standard Industrial Lease dated August 26, 1991, between Wayne Mertes, Mamie Mertes, Mike Butler and Sarah Butler, as lessor, and PerfectData Corporation, as lessee (15)
10.16				Agreement and Plan of Merger and Reorganization, dated as of July 2, 2003 by and among PerfectData Corporation, SuperCom Ltd. And SuperCom Merger Sub. Ltd. (without disclosure schedules or exhibits) (16)
21				Subsidiaries (4)
23				Consent of Independent Registered Public Accounting Firm (4)
31.1				Certification of Chief Executive Officer Pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934 (4)
31.2				Certification of Chief Financial Officer Pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934 (4)
32				Certification Pursuant to Rule 13a-14(b) under the Securities Exchange Act of 1934 and Section 1350 of Chapter 63 of Title 18 of United States Code (4)

(1)	Incorporated by reference to the Company's Current Report on Form 8-K filed on March 11, 2005.

(2)	Incorporated by reference to the Company's Current Report on Form 8-K filed on December 3, 2004.

(3)	Incorporated by reference to the Company's definitive Consent Solicitation Statement dated October 26, 2004 as filed on November 1, 2004.

(4)	Filed or, in the case of Exhibit 32, furnished herewith.

(5)	Incorporated by reference to the Company's Current Report on Form 8-K filed on October 8, 2003.

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(6)	Incorporated by reference to the Company's Annual Report on Form 10-KSB for the fiscal year ended March 31, 2004.

(7)	Incorporated by reference to the Company's Quarterly Report on Form 10-QSB for the quarter ended June 30, 2004.

(8)	Incorporated by reference to the Company's Annual Report on Form 10-K for its fiscal year ended March 31, 2000.

(9)	The four forms of stock option agreements used under the Stock Option Plan of 2000 are filed as Exhibits 4(d)(1) to 4(d)(4), both inclusive, to the Company's Registration Statement on Form S-8, File No. 333-51774, and are incorporated herein by this reference.

(10)	Incorporated by reference to the Company's Annual Report on Form 10-K for its fiscal year ended March 31, 1985.

(11)	Incorporated by reference to the Company's definitive Proxy Statement dated March 10, 2000 filed on March 14, 2000.

(12)	Incorporated by reference to the Company's Form 8-K dated March 31, 2000 filed April 14, 2000.

(13)	Incorporated by reference to the Company's Annual Report on Form 10-K for its fiscal year ended March 31, 2001.

(14)	Incorporated by reference to the Company's Annual Report on Form 10-K for its fiscal year ended March 31, 1987.

(15)	Incorporated by reference to the Company's Annual Report on Form 10-K for its fiscal year ended March 31, 1992.

(16)	Incorporated by reference to the Company's Current Report on Form 8-K filed on July 9, 2003.

Item 14.    Principal Accountant Fees and Services.

Audit Fees

Singer Lewak Greenbaum & Goldstein, LLP (the "Singer Firm"), the Company's Independent Registered Public Accounting Firm, billed the Company $39,957 for professional services rendered in connection with its audit of the Company's annual financial statements for Fiscal 2004. KPMG, LLP ("KPMG") the Company's former Independent Registered Public Accounting Firm, billed the Company $10,000 for its review of the Company's financial statements included in the Company's Forms 10-QSB filed for Fiscal 2004.

The Singer Firm estimated that it will bill the Company $26,000 for professional services rendered in connection with its audit of the Company's annual financial statements for Fiscal 2005 of which $10,000 has already been paid. The Singer Firm billed the Company $20,780 for its review of the Company's financial statements included in the Company's Forms 10-QSB filed for Fiscal 2005.

Audit-Related Fees

KPMG billed the Company (1) $30,000 for its professional services in Fiscal 2004 in connection with the Company's Registration Statement on Form S-4, File No. 333-109933, filed in connection with the then proposed merger transaction with SuperCom, which Registration Statement was withdrawn when the proposed transaction terminated, (2) $15,000 for its professional services in connection with the Company's then pending preliminary consent solicitation statement relating to shareholder approval of the proposed sale to Spray and reincorporation of the Company in the State of Delaware, and (3) $25,000 for its professional services in connection with the Company's Annual Report on Form 10-KSB for Fiscal 2004.

The Singer Firm billed the Company $1,061 for its professional services in Fiscal 2005 in connection with the Company's consent solicitation statement relating to shareholder approval of the sale to Spray and reincorporation of the Company in the State of Delaware.

Tax Fees

The Singer Firm billed the Company $4,182 for its professional services in connection with preparing the Company's federal and state tax returns for Fiscal 2004.

The Singer Firm estimates that it will bill the Company $5,000 for its professional services in connection with preparing and filing the Company's federal and state tax returns for Fiscal 2005.

All Other Fees

During Fiscal 2004 KPMG billed the Company $25,000 for its professional services in connection with a limited due diligence review of SuperCom's financial statements.

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During Fiscal 2005 the Singer Firm billed the Company $6,378 for its professional services in connection with the Sona merger.

Audit Committee Approval

Pursuant to the Audit Committee Charter, only the Audit Committee may select annually the Independent Registered Public Accounting Firm for the Company, subject to stockholder ratification. Only the Audit Committee may replace the Independent Registered Public Accounting Firm. The Charter also requires the Audit Committee to approve the retention of the independent auditors for any non-audit service and the fee for such service. The Audit Committee also approves the scope of the annual audit and the intended fee for such service and the fees for the quarterly reviews of the financial statements in the Forms 10-QSB. The Charter does not permit any delegation of the Audit Committee's authority to management and sets forth procedures for annual reviews by the Audit Committee of the Independent Registered Public Accounting Firm to determine their qualifications and independence.

With respect to all of the services described under the captions "Audit-Related Fees," "Tax Fees" and "All Other Fees," the Audit Committee reviewed in advance the scope of the services to be rendered and determined that the services were compatible with maintaining the independence of KPMG or the Singer Firm, whichever was applicable. The Audit Committee also approved in advance all of the fees for such services and for the fees described under the caption "Audit Fees."

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SIGNATURES

Pursuant to the requirements of Section 13 or 15 (d) of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.

PERFECTDATA CORPORATION

				By:  /s/				Irene J. Marino
								Irene J. Marino, Authorized Officer and Principal Financial and Accounting Officer

Date: May 24, 2005

Pursuant to the requirements of the Securities Exchange Act of 1934, this Report has been signed below by the following persons on behalf of the Registrant and in the capacities indicated on May 24, 2005.

Signature		Title
/s/ John Bush		President, Chief Executive Officer, and Director (Principal Executive Officer)
John Bush
/s/ Irene J. Marino		V.P. Finance, and Chief Financial Officer (Principal Financial and Accounting Officer)
Irene J. Marino
/s/ Bryan Maizlish		Director
Bryan Maizlish
/s/ Shawn Kreloff		Director
Shawn Kreloff
/s/ Nicholas H. Glinsman		Director
Nicholas H. Glinsman

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PERFECTDATA CORPORATION

SEC Form 10-KSB

Index to Financial Statements

Financial Statements				Page
Report of Independent Registered Public Accounting Firm - March 31, 2005					F-1
Balance Sheet – March 31, 2005					F-2
Statements of Operations – Years Ended March 31, 2005 and 2004					F-3
Statements of Shareholders' Equity Years Ended March 31, 2005 and 2004					F-4
Statements of Cash Flows – Years Ended March 31, 2005 and 2004					F-5
Notes to Financial Statements					F-6

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

PerfectData Corporation
Simi Valley, California

We have audited the accompanying balance sheet of PerfectData Corporation (the "Company") as of March 31, 2005, and the related statements of operations, shareholders' equity and cash flows for the years ended March 31, 2005 and 2004. 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 audit.

We conducted our audit 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 provided a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of PerfectData Corporation as of March 31, 2005, and the results of its operations and its cash flows for the years ended March 31, 2005 and 2004 in conformity with accounting principles generally accepted in the United States of America.

/s/ SINGER LEWAK GREENBAUM & GOLDSTEIN LLP

Los Angeles, California
May 3, 2005

F-1

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PERFECTDATA CORPORATION

Balance Sheet
March 31, 2005
(Amounts in thousands except share amounts)

Assets
Current assets:
Cash and cash equivalents								$	1,267
Prepaid expenses and other current assets									15
Total current assets									1,282
Total assets								$	1,282
Liabilities
Current liabilities:
Accounts payable								$	151
Accrued compensation									69
Other accrued expenses									74
Current liabilities of discontinued operations									41
Total current liabilities									335
Commitments and contingencies (note 7)
Shareholders' equity:
Preferred Stock, par value, $.01 per share.
Authorized 2,000,000 shares; none issued									—
Common Stock, par value, $.01 per share.
Authorized 10,000,000 shares; issued and outstanding 6,359,530 shares									63
Additional paid - in Capital									11,375
Accumulated deficit									(10,491	)
Total shareholders' equity									947
Total liabilities and shareholders' equity								$	1,282

	See accompanying notes to financial statements

F-2

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PERFECTDATA CORPORATION

Statements of Operations
Years ended March 31, 2005 and 2004
(Amounts in thousands, except per share information)

				2005				2004
Selling, general, and administrative expenses				$	970			$	933
Loss from operations					(970	)			(933	)
Other income:
Other, net					21				17
Loss from continuing operations					(949	)			(916	)
Income from discontinued operations					56				359
Net loss				$	(893	)		$	(557	)
Net loss per common share:
Basic and diluted:
Loss from continuing operations				$	(0.15	)		$	(0.15	)
Income from discontinued operations					0.01				0.06
				$	(0.14	)		$	(0.09	)
Weighted average share outstanding:
Basic and diluted					6,222				6,193

	See accompanying notes to financial statements

F-3

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PERFECTDATA CORPORATION

Statements of Shareholders' Equity
(notes 5 and 6)
Years ended March 31, 2005 and 2004
(Amounts in thousands)

				Common Stock								Additional Paid - in Capital				Accumulated deficit				Total shareholders' equity
				Shares				Amounts
Balance at March 31, 2003					6,159			$	61			$	11,145			$	(9,041	)		$	2,165
Stock Compensation					50				1				51				—				52
Net loss					—				—				—				(557	)			(557	)
Balance at March 31, 2004					6,209				62				11,196				(9,598	)			1,660
Stock Compensation					150				1				179				—				180
Net loss					—				—				—				(893	)			(893	)
Balance at March 31, 2005					6,359			$	63			$	11,375			$	(10,491	)		$	947

	See accompanying notes to financial statements

F-4

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PERFECTDATA CORPORATION

Statements of Cash Flows
Years ended March 31, 2005 and 2004
(Amounts in thousands)

				2005				2004
Cash flows from continuing operating activities:
Net loss				$	(949	)		$	(916	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization					—				6
Stock issued for services					180				52
Decrease in prepaid expenses and other assets					15				32
Increase in acccounts payable					25				54
Increase in accrued expenses					31				29
Net cash used in continuing operating activities					(698	)			(743	)
Net cash provided by discontinued operating activities					62				473
Net decrease in cash and cash equivalents					(636	)			(270	)
Cash and cash equivalents at beginning of year					1,903				2,173
Cash and cash equivalents at end of year				$	1,267			$	1,903

	See accompanying notes to financial statements

F-5

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PERFECTDATA CORPORATION

Notes to Financial Statements

March 31, 2005 and 2004

(1)	Summary of Significant Accounting Policies

(a)	Description of Business

Prior to June 1, 2004, when Spray Products Corporation ("Spray") assumed full responsibility for all of the Company's customers, PerfectData Corporation (the "Company") had sold computer and office equipment care and maintenance products. After the Company completed the sale of its operating assets to Spray on November 30, 2004, it had no operations. On April 19, 2005, the Company consummated a merger transaction with Sona Mobile, Inc. ("Sona"). See the section captioned "Reverse Merger Transaction" preceding Item 1 to this Annual Report.

(b)	Cash and Cash Equivalents

The Company considers all highly liquid money market instruments with an original maturity of three months or less to be cash equivalents. At March 31, 2005, the Company had cash and cash equivalents of $1,267,000.

(c)	Inventories

Prior to the APA (see note 2 below) entered into with Spray, inventories were stated at the lower of cost or market and consisted of finished goods. Cost was determined using the first-in, first-out method.

On November 30, 2004, the Company sold its operating assets to Spray, which included the inventory previously transferred to Spray on October 31, 2003, pursuant to the APA.

(d)	Financial Instruments

The carrying amounts related to cash and cash equivalents, accounts receivable, and accounts payable approximate fair value due to their relatively short maturity.

(e)	Plant and Equipment

Prior to the sale of the operating assets to Spray on November 30, 2004, plant and equipment were stated at cost.

Depreciation on plant and equipment was calculated using the straight-line method over the estimated useful lives of the assets. Leasehold improvements were amortized straight line over the shorter of the lease term or estimated useful life of the asset. The estimated useful lives were as follows:

Machinery and equipment				3 to 5 years
Furniture and fixtures				3 to 5 years
Leasehold improvements				Life of lease

(f)	Revenue Recognition

Until June 1, 2004 the Company had recognized revenue on a gross basis when products were shipped and the customers took ownership and assumed risk of loss, collection of relevant receivables was probable, pervasive evidence of an arrangement existed and the sales price was fixed or determinable. As a result of the provisions to the APA with Spray, the Company no longer met the criteria necessary to recognize revenue as a principal and instead recognized revenue net as an agent. Effective with the sale of the operating assets to Spray on November 30, 2004, the Company had no operations.

F-6

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PERFECTDATA CORPORATION

Notes to Financial Statements

March 31, 2005 and 2004

(g)	Loss per Common Share

Basic and diluted loss per common share is based on the weighted average number of shares outstanding during each of the respective periods. Diluted earnings per share includes the dilutive impact of stock options, warrants, or other equity instruments. During the years presented herein, because net losses were incurred, the impact from such common stock equivalents was antidilutive; accordingly, the common stock equivalents were excluded from the calculation.

The following were excluded from the calculation:

Options				March 31, 2005				March 31, 2004
1985 Plan					10,000				10,000
2000 Plan					314,000				183,500

(h)	Income Taxes

Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. The realizability of deferred tax assets is assessed throughout the year and a valuation allowance is established accordingly.

(i)	Use of Estimates

The preparation of the financial statements requires management of the Company to make a number of estimates and assumptions relating to the reported amount of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the period. Significant items subject to such estimates and assumptions include the allowance for doubtful accounts, inventory valuation (prior to November 1, 2003), deferred income tax asset valuation allowances, and the estimated future operating cash flows from the Company's long-lived assets. Considerable management judgment is necessary to estimate future operating cash flows as future cash flows are impacted by competitive and other factors that are generally out of management's control. Accordingly, actual results could vary significantly from management's estimates.

(j)	Stock-Based Compensation

The Company applies the intrinsic-value-based method of accounting prescribed by Accounting Principles Board (APB) Opinion No. 25, Accounting for Stock Issued to Employees, and related interpretations including FASB Interpretation No. 44, Accounting for Certain Transactions involving Stock Compensation, and Interpretation of APB Opinion No. 25, issued in March 2000, to account for its fixed-plan stock options. Under this method, compensation expense is recorded on the date of grant only if the current market price of the underlying stock exceeded the exercise price. SFAS No. 123, Accounting for Stock-Based Compensation, established accounting and disclosure requirements using a fair-value-based method of accounting for stock-based employee compensation plans. As allowed by SFAS No. 123, the Company has elected to continue to apply the intrinsic-value-based method of accounting described above and has adopted only the disclosure requirements of SFAS No. 123.

F-7

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PERFECTDATA CORPORATION

Notes to Financial Statements

March 31, 2005 and 2004

SFAS No. 123, as amended by SFAS No. 148, permits companies to recognize, as expense over the vesting period, the fair value of all stock-based awards on the date of grant. The Black-Scholes option valuation model was developed for use in estimating the fair value of traded options, which have no vesting restrictions and are fully transferable. Because the Company's stock-based compensation plan has characteristics significantly different from those of traded options and because changes in the subjective input assumptions can materially affect the fair value estimate, management believes that the existing option valuation models do not necessarily provide a reliable single measure of the fair value of awards from the plan. Therefore, as permitted, the Company applies the existing accounting rules under APB No. 25 and provides pro forma net income (loss) disclosures for stock-based awards made during the year as if the fair value method defined in SFAS No. 123, as amended, had been applied. Due to the reduction of the exercise price of fixed stock options through the cancellation of stock option awards and the granting of replacement awards, per FIN No. 44, Accounting for Certain Transactions involving Stock Compensation, the Company has adopted variable accounting for the replacement awards, per FIN No. 28, Accounting for Stock Appreciation Rights and Other Variable Stock Option or Award Plans.

The following table illustrates the effect on net loss as if the Company had applied the fair value recognition provisions of SFAS No. 123 to stock based employee compensation. The fair value of these options was estimated at the date of grant using a Black-Scholes option-pricing model, assuming a risk-free interest rate of 4.57% - 6.26%, a ten-year term, 50% volatility, and $0 expected dividend rate.

(000's, except per share amounts)

				2005				2004
Net loss, as reported				$	(893	)		$	(557	)
Deduct total stock-based employee compensation expense determined under fair-value-based method for all awards, net of tax					(24	)			(27	)
Pro forma net loss				$	(917	)		$	(584	)
Basic and diluted net loss per common share:
As reported				$	(0.14	)		$	(0.09	)
Pro forma				$	(0.14	)		$	(0.09	)

On December 1, 2004, the Board amended outstanding stock options so that, in the event of a consummation of merger or other "change in control" transaction, each option would become immediately exercisable as to all shares subject thereto and would expire three years from the closing date of the merger or other transaction.

(k)	Recently Issued Accounting Standards

In November 2004, the FASB issued SFAS No. 151, "Inventory Costs". SFAS No. 151 amends the accounting for abnormal amounts of idle facility expense, freight, handling costs, and wasted material (spoilage) under the guidance in ARB No. 43, Chapter 4, "Inventory Pricing". Paragraph 5 of ARB No. 43, Chapter 4, previously stated that ". . . under some circumstances, items such as idle facility expense, excessive spoilage, double freight, and rehandling costs may be so abnormal as to require treatment as current period charges. . . ." This Statement requires that those items be recognized as current-period charges regardless of whether they meet the criterion of "so

F-8

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PERFECTDATA CORPORATION

Notes to Financial Statements

March 31, 2005 and 2004

abnormal." In addition, this Statement requires that allocation of fixed production overheads to the costs of conversion be based on the normal capacity of the production facilities. This statement is effective for inventory costs incurred during fiscal years beginning after June 15, 2005. Management does not expect adoption of SFAS No. 151 to have a material impact on the Company's financial statements.

In December 2004, the FASB issued SFAS No. 152, "Accounting for Real Estate Time-Sharing Transactions". The FASB issued this Statement as a result of the guidance provided in AICPA Statement of Position (SOP) 04-2, "Accounting for Real Estate Time-Sharing Transactions". SOP 04-2 applies to all real estate time-sharing transactions. Among other items, the SOP provides guidance on the recording of credit losses and the treatment of selling costs, but does not change the revenue recognition guidance in SFAS No. 66, "Accounting for Sales of Real Estate", for real estate time-sharing transactions. SFAS No. 152 amends Statement No. 66 to reference the guidance provided in SOP 04-2. SFAS No. 152 also amends SFAS No. 67, "Accounting for Costs and Initial Rental Operations of Real Estate Projects", to state that SOP 04-2 provides the relevant guidance on accounting for incidental operations and costs related to the sale of real estate time-sharing transactions. SFAS No. 152 is effective for years beginning after June 15, 2005, with restatements of previously issued financial statements prohibited. This statement is not applicable to the Company.

In December 2004, the FASB issued SFAS No. 153, "Exchanges of Nonmonetary Assets," an amendment to Opinion No. 29, "Accounting for Nonmonetary Transactions". Statement No. 153 eliminates certain differences in the guidance in Opinion No. 29 as compared to the guidance contained in standards issued by the International Accounting Standards Board. The amendment to Opinion No. 29 eliminates the fair value exception for nonmonetary exchanges of similar productive assets and replaces it with a general exception for exchanges of nonmonetary assets that do not have commercial substance. Such an exchange has commercial substance if the future cash flows of the entity are expected to change significantly as a result of the exchange. SFAS No. 153 is effective for nonmonetary asset exchanges occurring in periods beginning after June 15, 2005.

Earlier application is permitted for nonmonetary asset exchanges occurring in periods beginning after December 16, 2004. Management does not expect adoption of SFAS No. 153 to have a material impact on the Company's financial statements.

In December 2004, the FASB issued SFAS No. 123(R), "Share-Based Payment". SFAS 123(R) amends SFAS No. 123, "Accounting for Stock-Based Compensation", and APB Opinion 25, "Accounting for Stock Issued to Employees." SFAS No. 123(R) requires that the cost of share-based payment transactions (including those with employees and non-employees) be recognized in the financial statements. SFAS No. 123(R) applies to all share-based payment transactions in which an entity acquires goods or services by issuing (or offering to issue) its shares, share options, or other equity instruments (except for those held by an ESOP) or by incurring liabilities (1) in amounts based (even in part) on the price of the entity's shares or other equity instruments, or (2) that require (or may require) settlement by the issuance of an entity's shares or other equity instruments. This statement is effective (1) for public companies qualifying as SEC small business issuers, as of the first interim period or fiscal year beginning after December 15, 2005, or (2) for all other public companies, as of the first interim period or fiscal year beginning after June 15, 2005, or (3) for all nonpublic entities, as of the first fiscal year beginning after December 15, 2005. Management is currently assessing the effect of SFAS No. 123(R) on the Company's financial statements.

F-9

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PERFECTDATA CORPORATION

Notes to Financial Statements

March 31, 2005 and 2004

In March 2005, the FASB issued FASB Interpretation ("FIN") No. 47, "Accounting for Conditional Asset Retirement Obligations". FIN No. 47 clarifies that the term conditional asset retirement obligation as used in FASB Statement No. 143, "Accounting for Asset Retirement Obligations," refers to a legal obligation to perform an asset retirement activity in which the timing and (or) method of settlement are conditional on a future event that may or may not be within the control of the entity. The obligation to perform the asset retirement activity is unconditional even though uncertainty exists about the timing and (or) method of settlement. Uncertainty about the timing and/or method of settlement of a conditional asset retirement obligation should be factored into the measurement of the liability when sufficient information exists. This interpretation also clarifies when an entity would have sufficient information to reasonably estimate the fair value of an asset retirement obligation. FIN No. 47 is effective no later than the end of fiscal years ending after December 15, 2005 (December 31, 2005 for calendar-year companies). Retrospective application of interim financial information is permitted but is not required. Management does not expect adoption of FIN No. 47 to have a material impact on the Company's financial statements.

(l)	Reclassifications

Certain reclassifications of previously reported amounts have been made to conform to current year's presentation.

(2)	Discontinued Operations

On October 3, 2003, the Company entered into an Asset Purchase Agreement (the "APA") with Spray, pursuant to which the Company agreed to sell to Spray (or a Spray affiliate) substantially all of the operating assets of the Company for a price equal to the sum of the value of the inventory, collectible accounts receivable and $100,000, less the amount of trade payables assumed by Spray.

From November 1, 2003 until May 31, 2004, Spray, pursuant to the APA, acted as a manager for the fulfillment of orders from the Company's customers. As compensation for Spray's services, Spray received a fee of 7½% of net sales. As a result of the management arrangement with Spray, the Company moved to a smaller facility and reduced its staff, thereby reducing its ongoing overhead expenses.

Because the Company's largest customer had threatened to seek another supplier because of a supplier's offer of lower prices, and because of the long delay in closing the transaction, thereby causing uncertainty for customers and Spray, the Company and Spray agreed in principle and subsequently finalized the agreement in writing by the Second Amendment dated as of August 12, 2004, to the following revisions to the APA: (1) effective June 1, 2004, Spray assumed full responsibility for all of the Company's customers in order to prevent possible losses of customer business; (2) the aforementioned payment of $100,000 was reduced to $80,000; and (3) the Company was granted the right to put the assets to Spray for the purchase price on the earlier of (a) September 30,2004 or (b) the Company receiving shareholder consent to the sale to Spray.

On November 29, 2004, the Company received shareholders' approval, by consents, to permit the sale of its operating assets to Spray and to the reincorporation of the Company in the State of Delaware. The Company then closed the transaction with Spray. As a result, the Company has no operations and will receive no revenues until an acquisition or merger is effected.

Pursuant to the APA as amended, the purchase price for the assets sold to Spray was (1) the sum of (a) collectible accounts receivable of $217,475, (b) inventory of $39,977 and (c) $80,000 less (2)

F-10

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PERFECTDATA CORPORATION

Notes to Financial Statements

March 31, 2005 and 2004

the trade payables to be assumed by Spray. As previously reported, Spray had assumed full responsibility for all of the customers of the Company effective June 1, 2004. Because Spray had been operating the business for a six-month period between June 1, 2004 and the closing date of November 30, 2004, all of the trade payables to be assumed by Spray had instead become amounts which the Company owed to Spray. In addition, the Company had withheld sums from payments otherwise due Spray and paid $1,494 in commissions on behalf of Spray. The parties, accordingly, at the closing, agreed that, because the amounts due Spray unrelated to the closing more than offset the purchase price due the Company, no cash need be paid to the Company.

The carrying amount of liabilities of the discontinued operations at March 31, 2005 is $41,000 and is unrelated to the APA and the sale to Spray.

Operating results of the discontinued operations are as follows:

(amounts in thousands except per share information)

				March 31, 2005				March 31, 2004
Net revenue				$	326			$	2,680
Income from discontinued operations					56				359
Income per share from discontinued operations				$	0.01			$	0.06

(3)	Concentration of Credit Risk

Financial instruments which potentially subject the Company to a concentration of credit risk principally consist of cash and cash equivalents.

As of March 31, 2005, the Company had approximately $1,267,000 of cash equivalents in two financial institutions, which exposes the Company to concentration of credit risk. The Company had approximately $1,256,000 invested in highly liquid money market instruments, which are not federally insured. The remaining $11,000 was deposited at a bank, which is federally insured up to $100,000.

(4)	Income Taxes

A reconciliation of the federal statutory income tax rate to the effective income tax rate on loss from continuing operations is as follows:

				March 31
				2005				2004
Federal statutory rate					34	%			34	%
Increase (reductions) in taxes due to:
State income taxes (net of federal benefit)					6				3
Change in valuation allowance					(40	)			(18	)
Dividends-received deduction					—				1
Expiration of federal net operating loss					—				(16	)
Expiration of state net operating loss					(1	)			(4	)
Other					1				—
					—	%			—	%

F-11

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PERFECTDATA CORPORATION

Notes to Financial Statements

March 31, 2005 and 2004

The tax effects of temporary differences that give rise to a significant portion of the deferred tax assets at March 31, 2005 are summarized as follows (in thousands):

Deferred tax assets (liabilities):

Net operating losses				$	2,349
Accrued expenses					43
Business tax credit carryforwards					12
Other					(5	)
					2,399
Less valuation allowance					2,399
				$	—

At March 31, 2005, the Company had net operating loss (NOL) carryforwards of approximately $6,373,000 and $2,829,000 for federal income tax purposes and California income tax purposes, respectively, expiring in varying amounts through 2024. The NOL carryforwards, which are available to offset future profits of the Company begin to expire in 2009 if not utilized and are subject to annual limitations should a "change in ownership" as defined in the Internal Revenue Code (the "Code") occur. On April 19, 2005 as discussed in Note 8, the Company entered into a transaction which affected a change in ownership. Section 382 of the Code imposes an annual limitation on the utilization of NOL carryforwards based on a statutory rate of return (the "adjusted Federal long term rate", as defined in the Code) and the value of the corporation at the time of a change in ownership as defined by Section 382 of the Code.

Additionally, the Company has general business tax credit carryforwards of approximately $12,000 which will begin to expire in 2006.

Realization of the future tax benefits of the NOL carryforwards and other deferred tax assets is dependent on the Company's ability to generate future taxable income and the limitations of the Code within the periods in which they benefit. In assessing the likelihood of utilization of existing deferred tax assets, management considered the historical results of continuing operations over the last three years and the current economic environment in which the Company operates. Management has determined that future taxable income of the Company will more likely than not be insufficient to realize the recorded net deferred tax assets of $2,399,000 and has recorded a valuation allowance of $2,399,000. During the year ended March 31, 2005, the Company increased the valuation allowance in deferred tax assets by $355,000.

(5)	Shareholders' Equity

In conjunction with the Company's private placement which closed on March 31, 2000, the Company entered into a consulting agreement dated January 20, 2000 with Millennium Capital Corporation ("MCC") and JDK Associates, Inc. ("JDK"). Under this agreement MCC and JDK would provide financial advisory assistance to the Company in searching for and closing future acquisitions and financings for which they would receive an advisory fee of 5% of the estimated purchase price for a future acquisition which they introduced to the Company or for additional capital raised in support of future acquisitions. The term of this consulting agreement was five years. The consulting agreement with MCC and JDK was amended February 14, 2005 (the "Amendment"). Pursuant to the Amendment, the consulting agreement was terminated whereby JDK's designee received 150,000 shares of the Common Stock, and MCC (of which Harris A. Shapiro, the then Chairman of the Board, Chief Executive Officer and a director of the Company,

F-12

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PERFECTDATA CORPORATION

Notes to Financial Statements

March 31, 2005 and 2004

is the President of MCC) received no compensation. The Company has recorded compensation expense of $180,000 for the shares issued.

The remaining warrants from the private placement in March 2000 to purchase 20,000 shares of the Common Stock at $2.75 per share expired on March 31, 2005.

On July 31, 2003, the Company issued 50,000 shares of the Common Stock to the Chairman of the Audit Committee as compensation for his services over the past three years. The Company has recorded compensation expense of $51,500 for the shares.

On November 29, 2004, the Company received shareholders' approval, by consents, to the reincorporation of the Company, which had been incorporated under the laws of the State of California, as a Delaware corporation.

On November 29, 2004, the reincorporation was effected by the merger (the "Reincorporation Merger") of the Company with and into its wholly-owned subsidiary, PerfectData (Delaware) Inc. ("PerfectData Delaware"), which subsidiary had been incorporated on November 5, 2004 under the laws of the State of Delaware. The name of PerfectData Delaware was, simultaneously with consummation of the Reincorporation Merger, changed to PerfectData Corporation.

As a result of the Reincorporation Merger, each share of the Company Common Stock, no par value, automatically was converted into one share of the Common Stock, $.01 par value, of PerfectData Delaware.

The articles of incorporation authorize a class of preferred stock issuable in classes and series with such designations, voting rights, redemption provisions, dividend rates, liquidation and conversion rights, and other preferences and limitations as may be determined by the board of directors. No preferred stock was outstanding at March 31, 2005.

(6)	Stock Option and Bonus Plans

1985 Stock Option Plan

During November 1985, the Company adopted the 1985 Stock Option Plan (the "1985 Plan") to grant incentive and nonqualified stock options to officers and key employees of the Company for the purchase of up to 500,000 shares of the Common Stock. Under the 1985 Plan, options were granted at prices equal to or greater than fair market value at date of grant. The shares, subject to various limitations, are exercisable over terms not to exceed ten years. No options were granted during the three years ended March 31, 2005. Options to purchase a total of 377,750 shares were exercised through March 31, 2005 with an option to purchase 10,000 shares left outstanding. The 1985 Plan has expired; therefore, no additional options can be issued under its terms.

Activity under the 1985 Plan is summarized as follows:

				Number of shares				Weighted average exercise price
Options outstanding at March 31, 2003					11,500			$	1.3017
Options canceled					(1,500	)			2.0625
Option outstanding at March 31, 2004					10,000				1.1875
Option outstanding at March 31, 2005					10,000			$	1.1875

F-13

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PERFECTDATA CORPORATION

Notes to Financial Statements

March 31, 2005 and 2004

As of March 31, 2005, the option outstanding was exercisable and the weighted average remaining contractual life of the outstanding option was approximately 4 months. As a result of the consummation of the Merger with Sona on April 19, 2005, the expiration date of the option became April 19, 2008.

1999 Options

On April 28, 1999, the board of directors authorized the granting of options or warrants to purchase up to an aggregate of 100,000 shares of the Common Stock to directors, employees, or consultants. The options or warrants were to be sold to the grantee at $0.05 per share, to have an exercise price of $1.56 per share, and to have a three-year term from the respective date of grant. Options to purchase a total of 24,000 shares were exercised through March 31, 2005. Activity for these options and warrants is summarized as follows:

				Weighted Number of Shares				Average exercise price
Options outstanding at March 31, 2003					5,000			$	1.56
Canceled					(5,000	)			1.56
Options outstanding at March 31, 2004					—				—
Options outstanding at March 31, 2005					—			$	—

Effective April 18, 2005, the board of directors rescinded and revoked the remaining 76,000 shares reserved.

2000 Stock Option Plan

On May 22, 2000, the Company's board of directors adopted the Stock Option Plan of 2000 of PerfectData Corporation (the "2000 Plan") which provides for the granting of options to directors, officers, employees, and consultants of the Company. The Company has reserved 2,000,000 shares of the Common Stock to be issued in connection with the 2000 Plan.

Options granted under the 2000 Plan shall be at a price no less than the fair market value of the Common Stock on the date of grant or in the case of nonqualified stock options at a price equal to or greater than 85% of the fair market value on the date of grant. Options granted under the 2000 Plan are exercisable at various times as determined by the board of directors or its designee.

On October 31, 2001, the Company granted options to purchase an aggregate of 10,000 shares of the Common Stock at $3.43 per share to various employees. The option price was equal to the fair market value at the time of grant. All of the options described were to become exercisable in four substantially equal installments, commencing with the first anniversary of the respective date of grant.

On June 15, 2002, the Company granted an option to purchase 10,000 shares of the Common Stock at $1.60 per share to each of the five directors. The option price was equal to 120% of the fair market value at the time of grant. All of the options described were to become exercisable in three substantially equal installments, commencing with the first anniversary of the respective date of grant.

On September 17, 2002, the board of directors canceled the options granted on March 31, 2000 to each director pursuant to the 2000 Plan to purchase 25,000 shares of the Common Stock at $18.50 per share and those granted on September 7, 2000 to purchase 25,000 shares of the Common Stock at $4.63 per share. None of the options to purchase an aggregate of 250,000 shares were exercised.

F-14

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PERFECTDATA CORPORATION

Notes to Financial Statements

March 31, 2005 and 2004

On September 26, 2002, the Company granted an option to purchase 25,000 shares of the Common Stock at $1.00 per share to each of the five directors. The fair market value of the stock on the date shareholder approval was obtained was below the exercise price. All of the options described were to become exercisable in three substantially equal installments, commencing with the first anniversary of the respective date of grant. In accordance with FIN 44, the Company has adopted variable accounting for these replacement awards. No compensation expense has been recognized in the financial results as the fair market value has not exceeded the exercise price.

On June 10, 2004, the Company granted an option to purchase 25,000 shares of the Common Stock at $.52 per share to each of the its five directors and 10,000 shares to an executive officer. The option price was equal to the fair market value at the time of grant. All of the options described were to become exercisable in three substantially equal installments, commencing with the first anniversary of the respective date of grant.

Activity under the 2000 Plan is summarized as follows:

				Number of shares				Weighted average exercise price
Options outstanding at March 31, 2003					185,000			$	1.29
Options canceled					(1,500	)			3.43
Options outstanding at March 31, 2004					183,500				1.28
Options granted					135,000				.52
Options canceled					(4,500	)			3.43
Options outstanding at March 31, 2005					314,000			$	0.92

As of March 31, 2005, options to purchase 119,666 shares of the Common Stock are exercisable at a weighted average exercise price of $1.228. As of March 31, 2005, 1,686,000 shares were available for future grants.

The following table summarizes in more detail information regarding the Company's stock options outstanding under the 2000 Plan at March 31, 2005:

Exercise Price				Outstanding Options				Weighted Average Remaining Contractual Life				Exercisable Options				Weighted Average Price Exercisable Options
$0.52					135,000				9.21				—				—
$1.00					125,000				7.50				83,333			$	1.00
$1.60					50,000				7.21				33,333			$	1.60
$3.43					4,000				6.58				3,000			$	3.43
Total					314,000				8.27				119,666			$	1.23

As a result of the consummation of the merger with Sona on April 19, 2005, all options became fully exercisable and expiration date of the options became April 18, 2008.

(7)	Commitments

The Company leases office space on a month-to-month basis. The Company initially leased the office space for a six-month term effective October 15, 2003 and subsequently for an additional six-month term that expired October 15, 2004. The Company had previously leased a facility under an operating lease which expired June 20, 2003. The Company continued to occupy the

F-15

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PERFECTDATA CORPORATION

Notes to Financial Statements

March 31, 2005 and 2004

facility, along with a subtenant to whom the Company sublet warehouse space, on a month-to-month basis until October 31, 2003.

Rental expense was $12,000 for the year ended March 31, 2005 and rental expense net of sublease income was $50,000 for the year ended March 31, 2004.

(8)	Subsequent Event

On April 19, 2005, pursuant to an Agreement and Plan of Merger dated as of March 7, 2005, Sona Mobile, Inc., a Washington corporation ("Sona"), was merged with and into PerfectData Acquisition Corporation, a Delaware corporation and the wholly-owned subsidiary of PerfectData Corporation, the registrant. Former Sona shareholders will own approximately 80% of PerfectData on a fully diluted basis. In connection with the Merger, PerfectData's Chairman, CEO and four out of its five directors have resigned and were replaced by Sona officers and directors. See the section captioned "Reverse Merger Transaction" preceding Item 1 to this Report.

F-16

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PerfectData Corporation
Index to Exhibits Filed with
Annual Report on Form 10-KSB

Exhibit No.				Description of Exhibit				Page
4.1				Certificate of Designations of Series A2 Convertible Preferred Stock					E-2
4.2				Excerpts from Certificate of Incorporation (Exhibit 3.1(i)) defining rights of holders of equity securities					E-12
10.11				Amendment dated as of February 14, 2005 to the Letter Agreement dated January 20, 2000 filed as Exhibit 10.10 by and among PerfectData Corporation, Millennium, Harris A. Shapiro, JDK and Joseph D. Kowal					E-13
21				Subsidiaries					E-15
23				Consent of Independent Registered Public Accounting firm					E-16
31.1				Certification of Chief Executive Officer Pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934					E-17
31.2				Certification of Chief Financial Officer Pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934					E-18
32				Certification Pursuant to Rule 13a-14(b) under the Securities Exchange Act of 1934 and Section 1350 of Chapter 63 of Title 18 of United States Code					E-19

E-1

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