<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
------------
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period year ended DECEMBER 31, 1997, or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _______________ to ____________________
Commission file number 0-24944
THE TRACKER CORPORATION OF AMERICA
(Exact Name of Registrant as Specified in its Charter)
DELAWARE 86-0767918
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
180 DUNDAS STREET WEST, SUITE 1505, TORONTO, ONTARIO, CANADA M5G 1Z8
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, Including Area Code (416) 493-2604
Indicate by check [CHECK GRAPHIC] whether the registrant: (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [ ] No [X]
Indicate the number of shares outstanding of each of the registrant's classes of
common stock as of the latest practicable date:
Classes of Common Stock Outstanding at December 31, 1997
$0.001 par value 21,471,148
<PAGE> 2
THE TRACKER CORPORATION OF AMERICA
INDEX
Page
Part I. Financial Information 1
Item 1. Financial Statements
Consolidated Balance Sheet as of December 31, 1997
and March 31, 1997 2
Consolidated Statement of Operations for the three and nine
Months ended December 31, 1997 and 1996 and for the Period
from May 6, 1993 (inception) through December 31, 1997 3
Consolidated Statement of Cash Flows for the nine months
Ended December 31, 1997 and 1996 and for the period from
May 6, 1993 (inception) through December 31, 1997 4
Notes to Financial Statements 5
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 7
Part II. Other Information 10
Item 1. Legal Proceedings 10
Item 3. Defaults Upon Senior Securities 11
Item 6. Exhibits and Reports on Form 8-K 11
ii
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PART I
FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)
<PAGE> 4
THE TRACKER CORPORATION OF AMERICA
( A Development Stage Company)
CONSOLIDATED BALANCE SHEET
<TABLE>
<CAPTION>
ASSETS
DECEMBER 31, MARCH 31,
1997 1997
------------ ------------
<S> <C> <C>
Current assets
Cash and cash equivalents $ 84,993 $ 105,213
Short-term investment -- --
Accounts receivable 83,523 133,613
Prepaid expenses and deposits 200,923 359,526
Inventory 24,348 24,338
Deferred charges 871,393 2,820,064
------------ ------------
Total current assets 1,265,180 3,442,754
Due from shareholders 63,831 61,487
Deferred charges 93,998 315,837
Property and equipment (net) 515,407 418,267
------------ ------------
Total assets $ 1,938,416 $ 4,238,345
============ ============
LIABILITIES & SHAREHOLDERS' DEFICIT
Current liabilities
Accounts payable $ 858,810 $ 468,764
Accrued liabilities 510,062 373,687
Deferred revenue 2,754,053 4,509,401
Loan payable 200,625 --
Debenture payable 31,809 83,991
Convertible debentures 475,790 590,746
------------ ------------
Total current liabilities 4,831,149 6,026,589
Deferred revenue 463,395 613,131
Commitments (Note 10) -- --
Shareholders' deficiency
$1000 6% Convertible preferred stock, $.001 par value, 500,000 shares
authorized, Nil (Nil - March 31, 1997) shares issued and outstanding -- --
Common stock, $.001 par value, 30,000,000 shares authorized,
18,581,823 (15,925,505 - March 31, 1997) shares issued and outstanding 19,688 15,925
Class B voting common stock, $0.00000007 par value, 20,000,000 shares
authorized, 2,622,484 (4,862,537 - March 31, 1997) issued
and outstanding -- --
Paid-in capital 15,361,671 15,207,895
Other capital (356,002) (394,333)
Deficit accumulated during the development stage (17,929,217) (16,910,816)
Cumulative translation adjustment (452,268) (320,046)
------------ ------------
Total shareholders' deficit (3,356,128) (2,401,375)
------------ ------------
Total liabilities and shareholders' deficit $ 1,938,416 $ 4,238,345
============ ============
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
2
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THE TRACKER CORPORATION OF AMERICA
( A Development Stage Company)
CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
FROM INCEPTION
FOR THE PERIOD ENDING ( MAY 6, 1993)
---------------------------------------------------------------
3 MONTHS ENDING DECEMBER 31, 9 MONTHS ENDING DECEMBER 31, THROUGH
1997 1996 1997 1996 DECEMBER 31, 1997
------------ ------------ ------------ ------------ -----------------
<S> <C> <C> <C> <C> <C>
Revenue $ 2,466,727 $ 651,357 $ 7,619,438 $ 895,245 $ 10,084,315
Cost of sales 2,192,730 445,808 5,974,604 560,415 7,650,285
------------ ------------ ------------ ------------ ------------
Gross profit 273,997 205,549 1,644,834 334,830 2,434,030
------------ ------------ ------------ ------------ ------------
Development Costs
Operational 156,240 185,998 641,570 471,828 2,711,253
Information systems 75,249 91,073 265,344 210,143 1,440,742
Sales and marketing 182,566 (59,045) 354,217 723,076 4,635,261
General and administrative 439,665 860,388 1,402,104 2,025,582 11,575,993
------------ ------------ ------------ ------------ ------------
Total development costs 853,719 1,078,414 2,663,235 3,430,629 20,363,248
------------ ------------ ------------ ------------ ------------
Net profit (loss) applicable to common stock $ (579,721) $ (872,865) $ (1,018,401) $ (3,095,799) $(17,929,217)
============ ============ ============ ============ ============
Profit (Loss) per share of common stock $ (0.027) $ (0.05) $ (0.048) $ (0.19) $ (1.566)
============ ============ ============ ============ ============
Weighted average number of shares
outstanding 21,478,470 19,153,898 21,185,780 16,007,825 11,448,123
============ ============ ============ ============ ============
</TABLE>
3
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THE TRACKER CORPORATION OF AMERICA
(A Development Stage Company)
CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
FROM INCEPTION
(MAY 6, 1993)
FOR 9 MONTHS ENDED FOR 9 MONTHS ENDED THROUGH
DECEMBER 31 DECEMBER 31 THROUGH DECEMBER 31,
1997 1996 1997
------------ ------------ ------------
<S> <C> <C> <C>
Cash flows from (used in) operating activities:
Net loss ($ 1,018,401) ($ 3,095,799) ($17,929,217)
Adjustments to reconcile net loss to net cash from
operating activities:
Depreciation 145,698 91,091 512,824
Loss on sale of long-term investment -- 13,414 13,414
Rent, consulting and marketing services, employee
compensation settled via the issuance of company
shares 165,870 1,232,696 5,284,144
Changes in assets and liabilities:
Prepaid expenses and deposits (158,603) (70,197) (535,402)
Accounts receivable 50,090 (69,754) (83,523)
Short-term investment -- 43,422 --
Inventory (10) 35,191 (24,348)
Deferred charges 2,170,511 (2,179,090) (965,390)
Deferred revenue (1,905,083) 3,192,033 3,217,449
Accounts payable and accrued liabilities 526,420 222,003 1,383,516
------------ ------------ ------------
Net cash from (used in) operating activities (23,508) (584,990) (9,126,533)
Cash flows from (used in) investing activities:
Acquisition of fixed assets (251,881) (83,853) (1,036,514)
Loan to shareholders (2,344) (2,499) (420,243)
Repayment of loans to shareholders -- -- 356,412
Note receivable -- -- (200,317)
Repayment of note receivable -- -- 200,317
Long-term investment -- -- (2,301,372)
Unwind of long-term investment -- 37,037 2,287,958
------------ ------------ ------------
Net cash from (used in) investing activities (254,225) (49,315) (1,113,759)
------------ ------------ ------------
Cash flows from (used in) financing activities:
Issuance of common shares 30,000 -- 8,952,530
Issuance of preferred shares -- 1,050,000 1,050,000
Issuance of convertible subordinated debentures -- -- 2,189,529
Repayment of debentures and convertible subordinated debentures (167,138) (32,284) (297,401)
Due to shareholder 200,625 -- 200,625
Repayment to shareholder -- -- --
Share issue costs -- -- --
-- (224,741) (1,684,735)
------------ ------------ ------------
Net cash from (used in) financing activities 63,487 792,975 10,410,548
------------ ------------ ------------
Effect of exchange rate changes 194,026 (74,151) (85,263)
Increase (decrease) in cash and cash equivalents during
the period (20,220) 84,519 84,993
Cash and cash equivalents, beginning of period 105,213 78,844 --
------------ ------------ ------------
Cash and cash equivalents, end of period 84,993 $ 163,363 $ 84,993
============ ============ ============
</TABLE>
Supplemental schedule of noncash financing activities
The Company issued certain shares of its Class B voting common stock for
service and for nominal values.
See Consolidated Statement of Shareholders' Equity (Deficit)
The accompanying notes are an integral part of these consolidated financial
statements.
4
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THE TRACKER CORPORATION OF AMERICA
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
NOTE 1 - BASIS OF PRESENTATION:
The accompanying financial statements are unaudited except for the balance sheet
as of December 31, 1997. They are prepared in accordance with instructions to
Form 10-Q and Rule 10-01 of Regulation S-X and do not include all the
information and notes required by Generally Accepted Accounting Principles for
complete financial statements. Management believes all adjustments (consisting
of normal recurring accruals) considered necessary for fair presentation are
included. You should read these financial statements in conjunction with the
financial statements and accompanying notes from our Annual Report on Form 10-K
for the year ended March 31, 1997 filed with the Securities and Exchange
Commission.
NOTE 2 - NET (GAIN) LOSS PER SHARE:
Net (gain) loss per share is computed using the weighted average number of
shares of common stock outstanding during the periods presented. In 1997, the
Financial Accounting Standards Board issued Statement No. 128, Earnings per
Share. Statement 128 replaced the calculation of primary and fully diluted
earnings per share with basic and diluted earnings per share. Unlike primary
earnings per share, basic earnings per share excludes any dilutive effects of
options, warrants and convertible securities. Diluted earnings per share is
similar to the previously reported fully diluted earnings per share. All
earnings per share amounts for all periods are presented, and where appropriate,
restated to conform to the Statement 128 requirements.
NOTE 3 - GOING CONCERN:
The accompanying consolidated financial statements are prepared assuming that
the Company will continue as a going concern, although the reports of its
independent accountant as of and for each of the years ended March 31, 1997 and
1996, express doubt as to the Company's ability to continue as a going concern.
The consolidated financial statements do not include any adjustments that might
result from the outcome of this uncertainty.
NOTE 4 - DEFERRED CHARGES:
Deferred charges consist of the following:
<TABLE>
<CAPTION>
December 31, March 31,
1997 1997
----------- -----------
<S> <C> <C>
Current:
Deferred sales commission (net of cancellation reserve) $ 1,829,375 $ 2,658,446
Other (957,982) 161,618
----------- -----------
$ 871,393 $ 2,820,064
----------- -----------
Long term:
Deferred sales' commission (net of cancellation reserve) $ 189,795 $ 281,163
Other (95,797) 34,674
----------- -----------
$ 93,998 $ 315,837
----------- -----------
</TABLE>
5
<PAGE> 8
THE TRACKER CORPORATION OF AMERICA, INC.
(A Development Stage Company)
Notes to Consolidated Financial Statements
NOTE 5 - ACCRUED LIABILITIES:
Accrued liabilities comprise the following:
<TABLE>
<CAPTION>
Dec. 31, March 31,
1997 1997
-------- --------
<S> <C> <C>
Directors fees $ 24,431 $ 27,399
Others 485,630 346,288
-------- --------
$510,062 $373,687
======== ========
</TABLE>
6
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
CAUTIONARY STATEMENT
This Quarterly Report on Form 10-Q contains forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended. When used in
this Form 10-Q and in our future filings with the Securities and Exchange
Commission, in our press releases and in oral statements made with the approval
of an authorized executive officer, the words or phrases "believes,"
"anticipates," "expects," "intends," "will likely result," "estimates,"
"projects" or similar expressions are intended to identify such forward-looking
statements, but are not the exclusive means of identifying such statements.
These forward-looking statements involve risks and uncertainties that may cause
our actual results to differ materially from the results discussed in the
forward-looking statements. Factors that might cause such differences include,
but are not limited to, the following: risks associated with the development of
a new technology; dependence on the Tracker(TM) System and the uncertainty of
market acceptance; history of operating losses and expectation of future losses;
limited sales and marketing experience; heightened competition and risk of
technological obsolescence; risks associated with the lack of manufacturing
capability and dependence on contract manufacturers and suppliers; risks
associated with our dependence on proprietary technology, including those
related to adequacy of patent and trade secret protection; risks associated with
retaining key personnel and attracting additional qualified skilled personnel;
and the risks associated with raising additional funds.
We wish to caution readers not to place undue reliance on any such
forward-looking statements, which speak only as of the date made. We may not
revise any forward-looking statements in order to reflect events or
circumstances after the date of such statements. Readers are urged to carefully
review and consider the various disclosures we make in this report and in our
other reports filed with the Securities and Exchange Commission that attempt to
advise interested parties of the risks and factors that may affect our business.
DEVELOPMENT STAGE ACTIVITIES
The Company has been in the development stage since its formation. Our present
line of business originated in 1994 with the development, marketing, sale and
operation of the "Tracker(TM) System." The Tracker(TM) System is a personal
property marking and monitoring system that utilizes advanced bar code and laser
scanning technology to create an identification device that interfaces with a
computer database and scanning network.
From inception through December 31, 1997, the Company has incurred losses
totaling approximately $17.9 million, including approximately $2.7 million in
operational costs, $1.4 million in research and development expenses, $4.6
million for sales and marketing expenses and $11.6 million in general and
administrative expenses. Our activities consist primarily of research and
product development, product design, and the development and implementation of
marketing strategies needed for the introduction of the Tracker(TM) System.
7
<PAGE> 10
Our future success is entirely dependent upon the successful development,
commercialization and market acceptance of the Tracker(TM) System, the
development of which is ongoing and the complete efficacy of which has not yet
been demonstrated. We are currently focused on reassessing and developing new
marketing strategies and lines of business.
The Company has generated limited revenue and sustained significant operating
losses each year since inception. We expect such losses to continue for at least
the next two years.
Although we continue to believe that The Tracker(TM) System has significant
commercial potential, our present financial circumstances and past experience
require a more narrowly focused and less costly marketing strategy. We currently
are examining strategies for applying most advantageously the limited resources
we anticipate having at our disposal if we can obtain additional financing. We
are in the process of identifying markets we believe will prove most responsive
to our initiatives.
RESULTS OF OPERATIONS
Our revenues for the nine months ended December 31, 1997 increased 851% to
approximately $7.6 million, as compared to approximately $895,000 during the
comparable 1996 period. This increase resulted primarily from the launch of our
credit card registration service program.
Cost of sales increased 1,066% to almost $6 million as compared to approximately
$560,000 for the comparable 1996 period. The disproportionate increase in cost
of sales as compared to revenue resulted primarily from the additional expenses
the Company incurred in the introduction of the credit card registration
program. Our gross profit for the nine months ended December 31, 1997
increased 491% to approximately $1.6 million, as compared to approximately
$335,000 for the comparable 1996 period.
Development costs decreased by 22% for the nine months ended December 31, 1997
to approximately $2.7 million, as compared to approximately $3.4 million for the
comparable 1996 period. The decrease in development costs reflects efforts to
de-emphasize unprofitable lines of business and focus primarily upon our credit
card registration program.
As a result of our increase in revenues attributable to the credit card
registration service, and the reduction in development cost expenditures, we
reduced our net loss for the nine month period ended December 31, 1997 by 33.3%
to approximately $1 million as compared to approximately $3 million for the
comparable 1996 period. This represents a net loss of $0.048 per share, as
compared to a net loss of $0.19 per share for the comparable 1996 period.
8
<PAGE> 11
LIQUIDITY AND CAPITAL RESOURCES
From inception at May 6, 1993 through December 31, 1997, we have received
approximately $10.4 million in net cash from financing activities, some of which
are noted below.
During the nine months ended December 31, 1997, our net cash used in operations
was $23,508 as compared to $584,990 for the comparable 1996 period. The cash
used in operations was devoted primarily to funding the development of
identification and recovery systems and software, labels, packaging, marketing
and advertising.
At December 31, 1997, we had total current assets of $1,265,180 as compared to
$3,442,750 at March 31, 1997. Current assets consisted of cash and cash
equivalents of $84,993 as compared to $105,213 at March 31, 1997, accounts
receivable in the amount of $83,523 as compared to $133,613 at March 31, 1997,
prepaid expenses and deposits of $200,923, as compared to $359,526 at March 31,
1997, inventory of $871,393, as compared to $2,820,064 at March 31, 1997, and
current deferred charges in the amount of $871,393 as compared to $2,820,064 at
March 31, 1997.
At December 31, 1997, we had amount due from stockholders in the amount of
$63,831, as compared to $61,487 at March 31, 1997, property and equipment (net)
of $515,407, as compared to $418,267 at March 31, 1997, and long-term deferred
charges totaling $93,998 as compared to $315,837 at March 31, 1997.
At December 31, 1997, we had liabilities of $4,831,149 as compared to $6,026,589
at March 31, 1997. Such liabilities consisted of: accounts payable in the amount
of $858,810, as compared to $468,764 at March 31, 1997; accrued liabilities in
the amount of $10,062 as compared to $373,687 at March 31, 1997; deferred
revenues in the amount of $2,754,053 as compared to $4,509,401 at March 31,
1997; loan payable of $200,625 as compared to $Nil at March 31, 1997;
debentures in the amount of $31,809 as compared to $83,991 at March 31, 1997;
and convertible subordinated debentures in the amount of $475,790 as compared
to $590,746 at March 31, 1997. We had long-term deferred revenues in the amount
of $463,395 at December 31, 1997 as compared to $613,131 at March 31, 1997.
As of December 31, 1997 and March 31, 1997, respectively, our accumulated
deficits totaled $17,929,217 and $16,910,816. To date, we have financed our
research and development activities and operations primarily through the sales
of our card registration program, private placements of the Company's debt and
equity securities, the sale of equity securities pursuant to Regulation S, and
loans.
CAPITAL REQUIREMENTS
We anticipate that it will require additional capital in order to meet the needs
for our strategic Canadian and United States roll-outs and otherwise implement
our business plan in the manner contemplated. The acquisition of equipment,
establishment of distribution channels and the conducting of a comprehensive
marketing campaign are crucial to our success. We require additional debt or
equity funding to conduct and complete such activities. We cannot assure that
9
<PAGE> 12
the necessary funding will be available when needed, in sufficient amounts, on
acceptable terms, or at all. If we do not receive sufficient funding on
acceptable terms, this could prevent or delay the marketing, sale and operation
of our services and will have a material adverse effect on our business,
operating results and financial condition.
Our current cash projections indicate that our short-term annual funding
requirements will be approximately $2 million for the next twelve months. We
anticipate long-term cash needs to be covered by future cash sales and capital
or debt financing. There can be no assurance, however, that our actual short and
long term liquidity requirements will be consistent with management's
projections. During the upcoming twelve months, we plan to seek additional
equity/debt financing to conduct such activities as it is anticipated that
additional capital will be needed to enhance current cash flows.
We are attempting to obtain additional debt or equity funding. No assurance can
be given that the necessary funding will be available to the Company when
needed, in sufficient amounts, on acceptable terms, or at all. Any failure to
receive sufficient funding when needed, in sufficient amounts, and on acceptable
terms could prevent or delay the marketing, sale and operation of our personal
property identification and recovery system and will have a material adverse
effect on our business, operating results and financial condition. Moreover, the
report of independent accountants covering our financial statements expressed
substantial doubt about our ability to continue as a going concern because we
are a development stage company and have not yet been able to attract sufficient
outside financing or generate significant revenues. Failure to obtain sufficient
funding on acceptable terms could affect our ability to continue as a going
concern.
PART II
OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
We, along with Symbol Technologies, Inc. ("Symbol"), have recently been served
with a complaint filed by Datastrip (IOM) Limited ("Datastrip") in the United
States District Court for the District of Delaware. Datastrip alleges that the
Company is infringing on Datastrip's U.S. Patent No. 4,782,221, relating to
certain data-encoding technology allegedly developed by Datastrip and that
Symbol is inducing infringement of the patent. The complaint seeks injunctive
relief and unspecified damages. The Company and Symbol believe, based on advice
of Symbol's counsel, that neither the Company nor Symbol are liable to Datastrip
and that the claim is frivolous and without merit. Symbol, the supplier of
automated card readers to the Company, has agreed to vigorously defend itself
and the Company against Datastrip's claim. Symbol, however, has not agreed to
indemnify us from any losses that may result from this claim. No new
developments have occurred since last reported.
We are not a party to any other material litigation and are not aware of any
pending or threatened litigation that would have a material adverse effect upon
the Company's business, operating results or financial condition. The Securities
and Exchange Commission is investigating trading
10
<PAGE> 13
in the Company's securities. We have no reason to believe that any activity of
the Company will result in any liability of the Company under the federal
securities laws.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
As of October 30, 1998, the Company is in default in the payment of interest to
its subordinated convertible debenture holders in the aggregate amount of
$475,790.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) EXHIBITS
Number Description
- ------ -----------
2.1++++ Reorganization Agreement Among Ultra Capital Corp. (the
predecessor of the Registrant), Jeff W. Holmes, R. Kirk Blosch
and the Tracker Corporation dated May 26, 1994, as amended by
Amendment Number One dated June 16, 1994, Amendment Number Two
dated June 24, 1994, and Amendment Number Three dated June 30,
1994, Extension of Closing dated June 23, 1994, and July 11,
1994 letter agreement.
2.2++++ Agreement and Plan of Merger dated July 1, 1994 between Ultra
Capital Corp. (the predecessor of the Registrant) and the
Registrant.
3.1++++ Certificate of Incorporation, as corrected by Certificate of
Correction of Certificate of Incorporation dated March 27,
1995, and as amended by Certificate of Amendment to the
Certificate of Incorporation dated November 1, 1995, and
Certificate of Designation of Rights, Preferences and
Privileges of $1,000.00 6% Cumulative Convertible Preferred
Stock of the Registrant dated April 19, 1996.
3.2++++ Bylaws
4.1++++ Specimen Common Stock Certificate
9.1++++ Agreement dated December 21, 1993 among 1046523 Ontario
Limited, Gregg C. Johnson and Bruce Lewis
9.2++++ Right of First Refusal, Co-Sale and Voting Agreement dated
March 14, 1994 between The Tracker Corporation, Stalia
Holdings B.V., I. Bruce Lewis, MJG Management Accounting
Services Ltd., Spire Consulting Group, Inc., 1046523 Ontario
Limited, Mark J. Gertzbein, Gregg C. Johnson and Jonathan B.
Lewis, as confirmed by letter dated June 22, 1994 and
Agreement dated July 1994
10.1++++ 1994 Stock Incentive Plan of the Registrant, as amended by
Amendment No. 1 to the 1994 Stock Incentive Plan
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<PAGE> 14
10.2++++ Discretionary Cash Bonus Arrangement of the Registrant
10.3++++ Form of Indemnification Agreement entered into between the
Registrant each of its Directors
10.4++++ Employment Agreement dated June 30, 1994 between the
Registrant and I. Bruce Lewis, as amended by Amendment to
Employment Agreement dated July 12, 1995
10.5++++ Employment Agreement dated June 30, 1994 between the
Registrant and Mark J. Gertzbein, as amended by Amendment to
Employment Agreement dated July 12, 1995
10.6++ Marketing Agreement between the Registrant and The L.L.
Knickerbocker Company, Inc. dated March 15, 1995
10.7++++ Lease dated October 18, 1993 between The Dundas/Edward Centre
Inc. and The Tracker Corporation
10.8++++ Corporate Relations Agreement dated February 24, 1994 between
Corporate Relations Group, Inc. and The Tracker Corporation,
as amended by letter agreement dated January 16, 1995 and by
Amendment to Corporate Relations and Marketing Agreement dated
June 22, 1995
10.9++++ Consulting arrangement with Gregg C. Johnson effective August
12, 1995
10.10++++ Right of First Refusal, Co-Sale and Voting Agreement dated
March 14, 1994 between The Tracker Corporation, Stalia
Holdings B.V., I. Bruce Lewis, MJG Management Accounting
Services Ltd., Spire Consulting Group, Inc., 1046523 Ontario
Limited, Mark J. Gertzbein, Gregg C. Johnson and Jonathan B.
Lewis, as confirmed by letter dated June 22, 1994 and
Agreement dated July 1994 (contained in Exhibit 9.2)
10.11++++ Stock Option Agreement dated March 14, 1994 between The
Tracker Corporation and Stalia Holdings B.V., as confirmed by
letter dated June 22, 1994
10.12++++ Letter from DHL International Express Ltd to The Tracker
Corporation dated March 8, 1994
10.13++++ Agreement dated September 1994 between The Tracker Corporation
and Purolator Courier Ltd.
10.14++++ National Account Agreement dated September 15, 1994 between
Mail Boxes Etc. USA, Inc. and the Registrant, as amended by
Amendment to National Account Agreement dated September 14,
1994
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<PAGE> 15
10.15++++ Letter agreement dated March 15, 1995 between The Tracker
Corporation and Black Photo Corporation, as amended by
facsimile amendment dated March 4, 1995
10.16++++ Letter agreement dated September 14, 1995 between The Tracker
Corporation and Amerasia International Holdings Limited
10.17++++ Letter Agreement dated August 31, 1995 between The Tracker
Corporation and Tokai Boeki Co. Ltd.
10.18++++ Letter agreement dated October 5, 1993 between The Tracker
Corporation and Symbol Technologies, Inc., as amended by
letter from The Tracker Corporation to Symbol Technologies
Canada, Inc. dated November 23, 1995, and letter from Symbol
Technologies Canada, Inc. to The Tracker Corporation dated
November 27, 1995
10.19++++ Assignment World-Wide dated May 12, 1994 from I. Bruce Lewis
to the Tracker Corporation
10.20++++ Exchange Agency and Trust Agreement dated July 12, 1994 among
Ultra Capital Corp. (the predecessor of the Registrant), The
Tracker Corporation and Montreal Trust Company of Canada
10.21++++ Guarantee Agreement dated July 12, 1994 between Ultra Capital
Corp. (the predecessor of the Registrant) and The Tracker
Corporation
10.22++++ 1995 Stock Wage and Fee Payment Agreement
10.23++++ Agreement dated August 10, 1995 between The L.L. Knickerbocker
Company, Inc. and the Registrant
10.24+++ Share Purchase Agreement dated July 29, 1994 among The Tracker
Corporation, Page-Direct Ltd., Marc Bombenon, Marc Bombenon
Enterprises Ltd. and 614593 Alberta Ltd.
10.25++++ General Release dated June 15, 1995 among The Tracker
Corporation, 614593 Alberta Ltd., 1069232 Ontario Inc.,
Gowling, Strathy & Henderson, Page-Direct Ltd., Marc Bombenon
Enterprises Ltd. and Mark Bombenon.
10.26+++++ Agreement Between The International Association of Chiefs of
Police and The Tracker Corporation dated February 13, 1996
10.27+++++ Letter agreement dated January 26, 1996 between The Tracker
Corporation and Consumers Distributing Inc.
13
<PAGE> 16
10.28+++++ The Tracker Corp./Tracker Referral Network, Int'l Marketing
Agreement dated April 8, 1996 between The Tracker Corporation
and Tracker Referral Network, Int'l
10.29+++++ Letter agreement dated March 7, 1996 between The Tracker
Corporation and Samsonite Canada Inc.
10.30+++++ Letter agreement dated March 22, 1996 between The Tracker
Corporation and Sony of Canada Ltd.
10.31+++++ Lead Generation/Corporate Relations Agreement dated November
20, 1995 between The Tracker Corporation and Corporate
Relations Group, Inc., as amended by Amendment to the
Marketing Agreement between the Registrant and Corporate
Relations Group, Inc. dated December 5, 1995
10.32+++++ Independent Contractor Agreement between The Tracker
Corporation and Datatrack Inc. dated January 12, 1996
10.33+++++ Services Agreement and Registration Rights Agreement and
Options Agreement dated July 10, 1996 between the Registrant
and Merchant Partners, L.P.
10.34++++++ Exclusive Agent License Agreement dated April 4, 1997 between
The Tracker Corporation of America and Executive Trading Ltd.
10.35++++++ Agreement dated May 15, 1997 between The Tracker Corporation
and Liberty Health.
10.36++++++ Agreement dated May 22, 1997 between The Tracker Corporation
of America and Schwinn Cycling & Fitness Inc.
10.37++++++ Modification Agreement dated May 27, 1997 between The Tracker
Corporation of America, Saturn Investments, Inc., The Tracker
Corporation, I. Bruce Lewis, Mark J. Gertzbein, and Jonathan
B. Lewis.
10.38+++++++ Agreement dated July 1, 1998 between The Global Tracker
Corporation and Warrantech Additive, Inc.
10.39+++++++ License Agreement dated as of July 30, 1998 between The Global
Tracker Corporation and The Tracker Corporation of America
10.40+++++++ Employment Agreement dated September 24, 1996 between I. Bruce
Lewis and The Tracker Corporation of America
21.1++++ List of subsidiaries of the Registrant
23+++++++ Consent of Independent Accountants
14
<PAGE> 17
27.1+++++++ Financial Data Schedule, Fiscal Year Ended March 31, 1998
27.2+++++++ Financial Data Schedule, Fiscal Year Ended March 31, 1997 -
Restated
27.3++++++++ Financial Data Schedule, Fiscal Quarter Ended September 30,
1998
27.4+++++++++ Financial Data Schedule, Fiscal Quarter Ended June 30, 1998
27.5 Financial Data Schedule, Fiscal Quarter Ended December 31,
1997
99.1++++++++ Cautionary Statement
+ Incorporated by reference from the Registrant's Current Report on Form
8-K dated July 12, 1994.
++ Incorporated by reference from the Registrant's Current Report on Form
8-KA dated February 28, 1995 (filed March 15, 1995).
+++ Incorporated by reference from the Registrant's Current Report on Form
8-K dated July 29, 1994 (filed August 12, 1994).
++++ Incorporated by reference from the Registrant's Registration
Statement on Form S-1 (No. 33-99686).
+++++ Incorporated by reference from the Registrant's Annual Report on Form
10-K for the fiscal year ended dated March 31, 1996 (filed July 15,
1996)
++++++ Incorporated by reference from the Registrant's Annual Report on Form
10-K for the fiscal year ended dated March 31, 1997 (filed July 3,
1997)
+++++++ Incorporated by reference from the Registrant's Annual Report on Form
10-K for the fiscal year ended dated March 31, 1998 (filed November 4,
1998)
++++++++ Incorporated by reference from the Registrant's Quarterly Report on
Form 10-Q for the fiscal period ended September 30, 1998.
+++++++++Incorporated by reference from the Registrant's Quarterly Report on
Form 10-Q for the fiscal period ended June 30, 1998.
(b) REPORTS ON FORM 8-K
During the three months ended December 31, 1997, the Company filed Current
Reports on Form 8-K with the Securities and Exchange Commission on September
29, 1997 and October 30, 1997.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
15
<PAGE> 18
Date: January 14, 1999 THE TRACKER CORPORATION OF AMERICA, a
Delaware corporation
By: /s/ Bruce I. Lewis
------------------------------------
Bruce I. Lewis
Chairman of the Board, President,
Chief Executive Officer, Interim
Chief Financial Officer (Principal
Executive Officer, Interim Principal
Financial Officer and Interim
Principal Accounting Officer)
16
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<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> MAR-31-1999
<PERIOD-START> APR-01-1998
<PERIOD-END> DEC-31-1997
<CASH> 84,993
<SECURITIES> 0
<RECEIVABLES> 83,523
<ALLOWANCES> 0
<INVENTORY> 200,923
<CURRENT-ASSETS> 1,265,180
<PP&E> 515,407
<DEPRECIATION> 0
<TOTAL-ASSETS> 1,938,416
<CURRENT-LIABILITIES> 4,831,149
<BONDS> 0
0
0
<COMMON> 19,688
<OTHER-SE> (3,375,816)
<TOTAL-LIABILITY-AND-EQUITY> 1,938,416
<SALES> 2,466,727
<TOTAL-REVENUES> 2,466,727
<CGS> 2,192,730
<TOTAL-COSTS> 2,192,730
<OTHER-EXPENSES> 853,719
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (579,721)
<INCOME-TAX> 0
<INCOME-CONTINUING> (579,721)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (579,121)
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