SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
____________
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended JUNE 30, 1999, 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
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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)
Issuer's Telephone Number, Including Area Code (416) 593-2604
---------------------
Check whether the issuer: (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act during the past 12 months (or
for such shorter period that the issuer was required to file such reports), and
(2) has been subject to such filing requirements for the past 90 days. Yes [X]
No [ ]
State 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 June 30, 1999
-------------------------- -----------------------------
Common Stock $0.001 par value 50,388,579
Class B Common Stock $0.00000007 0
Transitional Small Business Disclosure Format (check one): Yes [X] No [ ]
<PAGE>
<TABLE>
<CAPTION>
THE TRACKER CORPORATION OF AMERICA, INC.
INDEX
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Page
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<S> <C>
Part I. Financial Information. . . .. . . . . . . . . . . . . . . 1
Item 1. Financial Statements
Consolidated Balance Sheet as of June 30, 1999. . . . . . 2
Consolidated Statement of Operations for the three
months ended June 30, 1999 and 1998 . . . . . . . . . . . 3
Consolidated Statement of Cash Flows for the three months
ended June 30, 1999 and 1998. . . . . . . . . . . . . . . 4
Notes to Financial Statements . . . . . . . . . . . . . . 5
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations . . . . . . . . . . . 6
Part II. Other Information. . . . . . . . . . . . . . . . . . . . 10
Item 1. Legal Proceedings . . . . . . . . . . . . . . . . . . . . 10
Item 6. Exhibits and Reports on Form 8-K. . . . . . . . . . . . . 10
</TABLE>
ii
<PAGE>
PART I FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)
1
<PAGE>
<TABLE>
<CAPTION>
THE TRACKER CORPORATION OF AMERICA
(A DEVELOPMENT STAGE COMPANY)
-------------------------------------
CONSOLIDATED BALANCE SHEET
-------------------------------------
ASSETS
JUNE 30, MARCH 31,
1999 1999
------------- -------------
(UNAUDITED) (AUDITED)
<S> <C> <C>
CURRENT ASSETS
ACCOUNTS RECEIVABLE . . . . . . . . . . . . . . . . . . . . . . . . . . $ - $ 97,843
PREPAID EXPENSES AND DEPOSITS . . . . . . . . . . . . . . . . . . . . . 120,000 120,000
DEFERRED CHARGES. . . . . . . . . . . . . . . . . . . . . . . . . . . . 114,276 114,405
------------- -------------
TOTAL CURRENT ASSETS . . . . . . . . . . . . . . . . . . . . . . . 234,276 332,248
DUE FROM STOCKHOLDERS . . . . . . . . . . . . . . . . . . . . . . . . . . 14,072 14,072
DEFERRED CHARGES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111,616 141,600
PROPERTY AND EQUIPMENT (NET). . . . . . . . . . . . . . . . . . . . . . . - -
------------- -------------
TOTAL ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 359,964 $ 487,920
============= =============
LIABILITIES & SHAREHOLDERS' DEFICIT
CURRENT LIABILITIES
ACCOUNTS PAYABLE. . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 458,352 $ 458,352
ACCRUED LIABILITIES . . . . . . . . . . . . . . . . . . . . . . . . . . 602,665 584,823
DEFERRED REVENUE. . . . . . . . . . . . . . . . . . . . . . . . . . . . 197,479 197,602
AMOUNT DUE TO STOCKHOLDERS. . . . . . . . . . . . . . . . . . . . . . . 30,997 -
DEBENTURE PAYABLE . . . . . . . . . . . . . . . . . . . . . . . . . . . 31,809 31,809
CONVERTIBLE DEBENTURES. . . . . . . . . . . . . . . . . . . . . . . . . 475,790 475,790
------------- -------------
TOTAL CURRENT LIABILITIES. . . . . . . . . . . . . . . . . . . . . 1,797,093 1,748,376
DEFERRED REVENUE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 165,902 215,244
COMMITMENTS (NOTE 10) . . . . . . . . . . . . . . . . . . . . . . . . . . - -
STOCKHOLDERS' DEFICIENCY
COMMON STOCK, $.001PAR VALUE, 50,000,000 SHARES AUTHORIZED,
50,388,579 SHARES ISSUED AND OUTSTANDING. . . . . . . . . . . . . . . 50,389 50,389
CONVERTIBLE SENIOR PREFERRED STOCK, $.001 PAR VALUE, 6,500,000 SHARES
AUTHORIZED, NIL ISSUED AND OUTSTANDING. . . . . . . . . . . . . . . . - -
CLASS B VOTING COMMON STOCK, $0.00000007 PAR VALUE, 100,000,000
SHARES AUTHORIZED, NIL ISSUED
AND OUTSTANDING . . . . . . . . . . . . . . . . . . . . . . . . . . . - -
PAID-IN CAPITAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16,777,482 16,777,482
OTHER CAPITAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (424,267) (424,267)
DEFICIT ACCUMULATED DURING THE DEVELOPMENT STAGE. . . . . . . . . . . . (17,880,368) (17,753,037)
CUMULATIVE TRANSLATION ADJUSTMENT . . . . . . . . . . . . . . . . . . . (126,262) (126,263)
------------- -------------
TOTAL SHAREHOLDERS' DEFICIT . . . . . . . . . . . . . . . . . . . . . (1,603,030) (1,475,700)
------------- -------------
TOTAL LIABILITIES AND SHAREHOLDERS' DEFICIT . . . . . . . . . . . . . $ 359,964 $ 487,920
============= =============
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL
STATEMENTS.
2
<PAGE>
<TABLE>
<CAPTION>
THE TRACKER CORPORATION OF AMERICA
(A DEVELOPMENT STAGE COMPANY)
----------------------------------------
CONSOLIDATED STATEMENT OF CASH FLOWS
----------------------------------------
(UNAUDITED)
FROM INCEPTION
(MAY 6, 1993) FOR 3 MONTHS FOR 3 MONTHS
THROUGH MARCH 31 ENDING ENDING
1998 JUNE 30, 1999 JUNE 30, 1998
------------------ --------------- ---------------
UNAUDITED UNAUDITED
<S> <C> <C> <C>
CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES:
NET LOSS. . . . . . . . . . . . . . . . . . . . . . . . . . . . $ (17,128,614) $ (127,331) $ 447,797
ADJUSTMENTS TO RECONCILE NET LOSS TO NET CASH FROM
OPERATING ACTIVITIES:
DEPRECIATION. . . . . . . . . . . . . . . . . . . . . . . . . 380,019 - -
LOSS ON SALE OF LONG-TERM INVESTMENT. . . . . . . . . . . . . 13,414 - -
RENT, CONSULTING AND MARKETING SERVICES, EMPLOYEE . . . . . . 0 -
COMPENSATION SETTLED VIA THE ISSUANCE OF COMPANY
SHARES . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,284,144 - -
CHANGES IN ASSETS AND LIABILITIES:
PREPAID EXPENSES AND DEPOSITS . . . . . . . . . . . . . . (17,273) - -
ACCOUNTS RECEIVABLE . . . . . . . . . . . . . . . . . . . 97,843 97,843 (72,082)
SHORT-TERM INVESTMENT . . . . . . . . . . . . . . . . . . - - -
INVENTORY . . . . . . . . . . . . . . . . . . . . . . . . - - -
DEFERRED CHARGES. . . . . . . . . . . . . . . . . . . . . (1,432,629) 30,113 882,716
DEFERRED REVENUE. . . . . . . . . . . . . . . . . . . . . 2,162,108 (49,465) (1,446,658)
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES. . . . . . . . . 1,032,720 48,841 237,691
------------------ --------------- ---------------
NET CASH USED IN OPERATING ACTIVITIES . . . . . . . . . . . . . (9,608,269) 0 49,464
------------------ --------------- ---------------
CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES:
ACQUISITION OF FIXED ASSETS . . . . . . . . . . . . . . . . . . 6,028 - -
LOAN TO SHAREHOLDERS. . . . . . . . . . . . . . . . . . . . . . (370,484) - -
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. . . . . . . . . . . . . . . . . 2,287,958 - -
------------------ --------------- ---------------
NET CASH FROM (USED IN) INVESTING ACTIVITIES. . . . . . . . . . (21,458) - -
------------------ --------------- ---------------
CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES:
ISSUANCE OF COMMON SHARES . . . . . . . . . . . . . . . . . . . 8,952,530 - 45,281
ISSUANCE OF PREFERRED SHARES. . . . . . . . . . . . . . . . . . 1,050,000 - -
ISSUANCE OF CONVERTIBLE SUBORDINATED DEBENTURES . . . . . . . . 2,189,529 - -
REPAYMENT OF DEBENTURES AND CONVERTIBLE SUBORDINATED DEBENTURES (297,401) - -
SHARE ISSUE COSTS . . . . . . . . . . . . . . . . . . . . . . . (1,684,735) - -
------------------ --------------- ---------------
NET CASH FROM (USED IN) FINANCING ACTIVITIES. . . . . . . . . . 10,209,923 - 45,281
------------------ --------------- ---------------
EFFECT OF EXCHANGE RATE CHANGES . . . . . . . . . . . . . . . . . (580,196) - (94,745)
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS DURING . . . . . 0 0 -
THE PERIOD
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD. . . . . . . . . . - - -
------------------ --------------- ---------------
CASH AND CASH EQUIVALENTS, END OF PERIOD. . . . . . . . . . . . . $ 0 $ 0 $ 0
================== =============== ===============
<FN>
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)
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL
STATEMENTS.
3
<PAGE>
<TABLE>
<CAPTION>
THE TRACKER CORPORATION OF AMERICA
(A DEVELOPMENT STAGE COMPANY)
-------------------------------------
CONSOLIDATED STATEMENT OF OPERATIONS
(UNAUDITED)
FROM INCEPTION
(MAY 6, 1993) FOR 3 MONTHS ENDING
THROUGH JUNE 30, JUNE 30,
1999 1999 1998
------------- ------------ ------------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C>
REVENUE. . . . . . . . . . . . . . . . . . $ 340,504 $ 33,783 $ 72,082
COST OF SALES. . . . . . . . . . . . . . . 102,592 2,298 42,383
------------- ------------ ------------
GROSS PROFIT . . . . . . . . . . . . . . . 237,912 31,485 29,700
------------- ------------ ------------
DEVELOPMENT COSTS
OPERATIONAL. . . . . . . . . . . . . . . 1,608,386 86,526 79,895
INFORMATION SYSTEMS. . . . . . . . . . . 943,436 13,404 7,151
SALES AND MARKETING. . . . . . . . . . . 3,467,256 30,212 33,376
GENERAL AND ADMINISTRATIVE . . . . . . . 7,866,413 30,183 49,693
------------- ------------ ------------
TOTAL DEVELOPMENT COSTS. . . . . . . . . . $ 13,885,492 $ 160,325 $ 170,115
LOSS FROM CONTINUING OPERATIONS. . . . . . (13,647,579) (128,841) (140,416)
GAIN (LOSS) FROM DISCONTINUED OPERATION. . (3,481,035) 1,510 588,212
------------- ------------ ------------
NET LOSS APPLICABLE TO COMMON STOCK. . . . $(17,128,614) $ (127,331) $ 447,797
============= ============ ============
EARNINGS (LOSS) PER SHARE OF COMMON STOCK
LOSS FROM CONTINUING OPERATIONS. . . . . . $ (0.9312) $ (0.0032) $ (0.0062)
GAIN (LOSS) FROM DISCONTINUED OPERATION. . (0.2375) 0.0000 0.0259
------------- ------------ ------------
NET LOSS . . . . . . . . . . . . . . . . . $ (1.1687) $ (0.0032) $ 0.0197
============= ============ ============
WEIGHTED AVERAGE NUMBER OF SHARES
OUTSTANDING . . . . . . . . . . . . . . 14,656,572 38,712,584 22,682,017
============= ============ ============
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL
STATEMENTS.
4
<PAGE>
NOTE 3 - SIGNIFICANT ACCOUNTING POLICIES:
- ----------------------------------------------
PRINCIPLES OF CONSOLIDATION
The accompanying financial statements include the accounts of the Company and
its former wholly owned subsidiary, Tracker Canada. All significant
intercompany accounts and transactions have been eliminated.
DEVELOPMENT COSTS
Development costs are expensed as incurred.
DEFERRED CHARGES
Deferred charges relate primarily to unamortized commissions, net of a 30%
cancellation reserve, and other costs of sales which are amortized on a
straight-line basis over the term of the related agreement.
REVENUE RECOGNITION AND DEFERRED REVENUE
Revenue for Company services is recognized on a straight-line basis over the
term of the services offered and is shown net of sales discounts and allowances.
Amounts received for which service has not yet been provided, are recorded as
deferred revenue. The average length of the services agreement varies from
monthly to a five-year period.
FOREIGN CURRENCY TRANSLATION
The assets and liabilities of Tracker Canada are translated at the fiscal year
or period end exchange rate while revenues, expenses and cash flows are
translated at average rates in effect for the period.
EARNINGS PER SHARE
Primary earnings per share are calculated based on net profit (loss) divided by
the weighted average number of shares of common stock and Class B voting common
stock outstanding.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
revenues and expenses during the period reported. Actual results could differ
from those estimates. Estimates are used when accounting for inventory
obsolescence, depreciation and amortization, taxes, and contingencies.
5
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NEW ACCOUNTING PRONOUNCEMENTS
Other pronouncements issued by the Financial Accounting Standards Board adopted
during the year are not material to the consolidated financial statements of the
Company. Further, pronouncements with future effective dates are either not
applicable or not material to the consolidated financial statements of the
Company.
NOTE 4 - PREPAID EXPENSES AND DEPOSITS:
- ---------------------------------------------
Prepaid expenses and deposits comprise the following:
<TABLE>
<CAPTION>
June 30, March 31,
1999 1999
---------- ----------
<S> <C> <C>
Other $ 120,000 $ 120,000
---------- ----------
$ 120,000 $ 120,000
========== ==========
</TABLE>
NOTE 6 - DEFERRED CHARGES:
- -----------------------------
Deferred charges consist of the following:
<TABLE>
<CAPTION>
June 30, March 31,
1999 1999
--------- ----------
<S> <C> <C>
Current:
Deferred sales commission (net of cancellation reserve). $ 80,309 $ 80,309
Other. . . . . . . . . . . . . . . . . . . . . . . . . . 33,967 34,096
--------- ----------
Long term . . . . . . . . . . . . . . . . . . . . . . . $ 114,276 $ 114,405
--------- ----------
Deferred sales' commission (net of cancellation reserve) $ 69,331 $ 52,192
Other. . . . . . . . . . . . . . . . . . . . . . . . . . 42,285 89,408
--------- ----------
$ 111,616 $ 141,600
--------- ----------
</TABLE>
NOTE 8 - ACCRUED LIABILITIES:
- ---------------------------------
Accrued liabilities comprise the following:
<TABLE>
<CAPTION>
June 30, March 31,
1999 1999
--------- ----------
<S> <C> <C>
Directors fees. . . . . . . . . . . . . . . $ 24,432 $ 24,432
Interest expense for convertible debentures 219,825 115,209
Others. . . . . . . . . . . . . . . . . . . 358,408 445,182
--------- ----------
$ 602,665 $ 584,823
========= ==========
</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. The
term, "forward-looking statements," is defined in Section 27A of the Securities
Act of 1933 and Section 21E of the Securities Exchange Act of 1934. When used
in this Form 10-Q and other filings with the Securities and Exchange Commission,
in our press releases, and in our oral statements, words or phrases such as
"believes," "anticipates," "expects," "intends," "will likely result,"
"estimates," "projects" or similar expressions are intended to denote
forward-looking statements. The possible results that may be suggested by
forward-looking statements are subject to risks and uncertainties that may cause
actual results to differ materially. Some of the factors that might cause such
differences include risks associated with the development of a new technology;
technological obsolescence; dependence on the Tracker System and the
uncertainty of its market acceptance; history of operating losses and
expectation of future losses; limited sales and marketing experience; heightened
competition; lack of manufacturing capability and dependence on contract
manufacturers and suppliers; dependence on proprietary technology, including the
adequacy of patent and trade secret protection; retention of key personnel and
recruitment of additional qualified skilled personnel; and the failure to raise
additional funds.
Do not place undue reliance on forward-looking statements. The forward-looking
statements speak only as of the date made and may not reflect events or
circumstances which occur thereafter. Carefully review and consider the various
disclosures we make in this report and in our other public filings to advise
interested parties of the risks factors and other uncertainties that may affect
our business.
DEVELOPMENT STAGE ACTIVITIES
The Tracker Corporation of America has been in the development stage since its
formation. It primarily markets, sells and operates the Tracker System , a
personal property marking and monitoring system developed by the Company. The
Tracker System utilizes advanced bar code and laser scanning technology to
create an identification device which interfaces with a computer database and
scanning network.
RESULTS OF OPERATIONS
COMPARISON OF THREE AND NINE MONTHS ENDED JUNE 30, 1999 AND 1998
Revenue: Our revenue for the three months ended June 30, 1999 decreased 53% as
compared to the comparable period a year ago. This decrease results from the
Company's decision to focus its limited resources on the development of new
product lines rather than the marketing and sale of existing products.
Loss: Our net loss, including the net loss from discontinued operations,
totaled $127,331 during the three months ended June 30, 1999 (as compared to a
gain of $447,797 during the same period in 1998). Our net loss from continuing
operations totaled $128,841 during the three months ended June 30, 1999, as
compared to a net loss of $140,416 during the same period in 1998. The decrease
in our net loss results primarily from cost-cutting measures taken by the
Company.
7
<PAGE>
Cost of Sales: Cost of sales decreased 95% for the three-month period ended
June 30, 1999, as compared to the comparable 1998 period. This decrease
results from an increase in software sales and a decrease in label product
sales.
Gross Profits: Gross profits increased by 256%, as compared to the comparable
1997 period. Gross profits primarily increased as a result of payments derived
from a contract entered into with a subsidiary of Sony Corporation.
Development costs decreased by approximately 6% for the three months ended June
30, 1999 to $160,325, compared to the comparable 1997 period. Development
costs decreased primarily because of a 40% reduction in general and
administrative costs.
LIQUIDITY AND CAPITAL RESOURCES
Our operations since inception have been funded by net proceeds from the sale of
Common and Preferred Stock, notes and debentures totaling approximately
$10,255,205, net of discontinued operations. During the three months ended June
30, 1999, our net cash used in operations was ($127,331) as compared to $447,797
for the comparable 1998 period. Cash used in operations was devoted primarily
to funding the development of identification and recovery systems and software,
labels, packaging, marketing and advertising.
At June 30, 1999, we had total current assets of $234,276, consisting of prepaid
expenses and deposits of $120,000 and current deferred charges of $114,276;
amount due from stockholders of $14,072, and long-term deferred charges totaling
$111,616. The amount due from stockholders primarily reflects expenses
advanced to our Chief Executive Officer who, to enable Tracker to conserve cash,
has not drawn a salary since Fall 1997. The long-term deferred charges reflects
the reduced deferred commission expense resulting from discontinuance of the
discontinued operations.
At June 30, 1999, we had liabilities of $1,797,093, consisting of accounts
payable of $458,352; accrued liabilities of $602,665; deferred revenues of
$197,479; amount due to stockholders of $30,997; debentures of $31,809; and
convertible subordinated debentures of $475,790. We had long-term deferred
revenues of $165,902.
The significant reduction in the Company's assets results from the write-off of
deferred expenditures arising from discontinued operations. A corresponding
reduction in liabilities results from the write-off of deferred revenues from
discontinued operations. The further reduction in stockholders' equity
(deficit) results from obligations the Company has continued to incur as it
develops and rolls out its new product lines.
As of June 30, 1999, our accumulated deficit totaled $17,880,368. To date, we
have financed our research and development activities and operations primarily
through sales generated by discontinued operations, private placements of debt
and equity securities, the sale of equity securities pursuant to Regulation S,
loans from third parties, and loans made by management funded in the over the
counter market through the sale of Company Shares owned by management.
8
<PAGE>
CAPITAL REQUIREMENTS
Our current cash projections indicate that its short-term annual funding
requirements will be approximately $2 million for the next twelve months. We
anticipate that future cash sales and equity or debt financing will cover
long-term cash needs, but this might not occur. We are currently seeking
additional equity/debt financing to finance our immediate working capital needs
and supplement future cash flows. No assurance can be given that the necessary
funding will be available to us 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 would affect our ability
to continue as a going concern.
PART II
OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
We, along with Symbol Technologies, Inc. ("Symbol"), were defendants in a
lawsuit filed by Datastrip (IOM) Limited ("Datastrip") in the United States
District Court for the District of Delaware. Datastrip alleged that Tracker
infringed on Datastrip's U.S. Patent No. 4,782,221. The lawsuit has since been
dismissed upon the finding that neither Symbol nor Tracker infringed Datastrip's
patent.
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
our business, operating results or financial condition.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
As of June 30, 1999, we are in default to our subordinated convertible
debenture holders in the principal amount of $475,790, plus accrued interest.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(A) EXHIBITS
None
(B) REPORTS ON FORM 8-K
No reports were filed on Form 8-K during the three months ended June 30,
1999.
9
<PAGE>
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.
Date: August 17, 1999.
THE TRACKER CORPORATION
OF AMERICA, a Delaware corporation
By: /s/ Bruce I. Lewis
---------------------
Bruce I. Lewis
Chairman of the Board,
Chief Executive Officer,
(Principal Executive Officer)
10
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAR-31-1999
<PERIOD-START> APR-01-1999
<PERIOD-END> JUN-30-1999
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 234276
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 234276
<PP&E> 125688
<DEPRECIATION> 0
<TOTAL-ASSETS> 359964
<CURRENT-LIABILITIES> 1797093
<BONDS> 0
<COMMON> 50389
0
0
<OTHER-SE> (1653415)
<TOTAL-LIABILITY-AND-EQUITY> 359964
<SALES> 33783
<TOTAL-REVENUES> 33783
<CGS> 2298
<TOTAL-COSTS> 2298
<OTHER-EXPENSES> 160325
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (127331)
<INCOME-TAX> 0
<INCOME-CONTINUING> (128841)
<DISCONTINUED> (1510)
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (127331)
<EPS-BASIC> 0
<EPS-DILUTED> 0
</TABLE>
