<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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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 JUNE 30, 1998, or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
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Commission file number 0-24944
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THE TRACKER CORPORATION OF AMERICA, INC.
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(Exact Name of Registrant as Specified in its Charter)
DELAWARE 86-0767918
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(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 [CHECKMARK 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 July 3, 1998
- ----------------------- ---------------------------
$0.001 par value 22,340,638
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THE TRACKER CORPORATION OF AMERICA, INC.
INDEX
<TABLE>
<CAPTION>
Page
----
<S> <C>
Part I. Financial Information 1
Item 1. Financial Statements
Consolidated Balance Sheet as of June 30, 1998
and March 31, 1998 2
Consolidated Statement of Operations for the three and six Months
ended June 30, 1998 and 1997 and for the Period from May 6, 1993
(inception) through June 30, 1998 3
Consolidated Statement of Cash Flows for the three months Ended
June 30, 1998 and 1997 and for the period from May 6, 1993 (inception)
through June 30, 1998 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
</TABLE>
ii
<PAGE> 3
PART I
FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
<PAGE> 4
THE TRACKER CORPORATION OF AMERICA, INC.
( A Development Stage Company)
CONSOLIDATED BALANCE SHEET
Assets
<TABLE>
<CAPTION>
June 30 March 31,
1998 1998
------------ ------------
(Unaudited) (Audited)
<S> <C> <C>
Current assets
Cash and cash equivalents $ -- $ --
Short-term investment -- --
Accounts receivable 72,082 --
Prepaid expenses and deposits -- --
Inventory -- --
Deferred charges 348,627 1,187,699
------------ ------------
Total current assets 420,709 1,187,699
Due from stockholders 14,072 14,072
Deferred charges 231,399 275,043
Property and equipment (net) -- --
Long-term investment -- --
------------ ------------
Total assets $ 666,179 $ 1,476,814
============ ============
Liabilities & Stockholders' equity (deficit)
Current liabilities
Accounts payable $ 653,333 $ 440,835
Accrued liabilities 553,592 528,399
Deferred revenue 352,069 1,798,727
Debenture payable 31,809 31,809
Convertible debentures 475,790 475,790
------------ ------------
Total current liabilities 2,066,594 3,275,560
Deferred revenue 363,381 412,846
Commitments (Note 10) -- --
Stockholders' equity (deficit)
$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,
23,782,128 (20,788,042 - March 31, 1997) shares issued and outstanding 21,160 19,718
Paid-in capital 15,415,481 15,371,641
Other capital (356,002) (356,002)
Accumulated deficit (16,553,486) (17,001,283)
Cumulative translation adjustment (290,948) (245,666)
------------ ------------
Total stockholders' deficit (1,763,795) (2,211,592)
------------ ------------
Total liabilities and stockholders' deficit $ 666,179 $ 1,476,814
============ ============
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
2
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THE TRACKER CORPORATION OF AMERICA, INC.
(A Development Stage Company)
Consolidated Statement of Operations
(Unaudited)
<TABLE>
<CAPTION>
For 3 months ending From Inception (May 6,
June 30 1993) through June 30,
---------------------------------- ----------------------
1998 1997 1998
------------ ------------ ------------
<S> <C> <C> <C>
Revenue $ 72,082 $ 33,369 $ 378,804
Cost of sales 42,383 7,812 142,676
------------ ------------ ------------
Gross profit 29,700 25,557 236,127
------------ ------------ ------------
Development costs
Operational 79,895 4,751 1,601,754
Information systems 7,151 2,005 937,182
Sales and marketing 33,376 2,186 3,470,420
General and administrative 49,693 9,050 7,885,924
------------ ------------ ------------
Total development costs $ 170,115 $ 17,992 $ 13,895,281
Gain (Loss) from continuing operations (140,416) 7,565 (13,659,154)
Gain (Loss) from discontinued operation 588,212 (353,537) (2,894,333)
------------ ------------ ------------
Net profit (loss) applicable to common stock $ 447,797 $ (345,972) $(16,553,487)
============ ============ ============
Profit (Loss) per share of common stock
Loss from continuing operations (0.0062) $ 0.0004 $ (1.087)
Gain (Loss) from discontinued operation 0.0259 (0.0169) (0.2304)
------------ ------------ ------------
Net Gain (Loss) 0.0197 (0.0166) (1.3178)
============ ============ ============
Weighted average number of shares
outstanding 22,682,017 20,874,564 12,561,576
============ ============ ============
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
3
<PAGE> 6
THE TRACKER CORPORATION OF AMERICA, INC.
(A Development Stage Company)
- --------------------------------------------------------------------------------
CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
From inception
(May 6, 1993) For 3 months ended For 3 months ended
through June 30 June 30, June 30,
1998 1998 1997
------------ ------------ ------------
<S> <C> <C> <C>
Cash flows from (used in) operating activities:
Net loss ($16,553,486) $ 447,797 ($ 345,972)
Adjustments to reconcile net loss to net cash from
operating activities:
Depreciation $ 380,019 -- 51,077
Loss on sale of long-term investment $ 13,414 -- --
Rent, consulting and marketing services, employee
compensation settled via the issuance of company
shares $ 5,284,144 -- 42,828
Changes in assets and liabilities:
Prepaid expenses and deposits ($ 17,273) -- (153,757)
Accounts receivable ($ 72,082) (72,082) 79,447
Short-term investment $ 0 -- --
Inventory $ 0 -- 15,226
Deferred charges ($ 580,026) 882,716 (842,223)
Deferred revenue $ 764,915 (1,446,658) 1,140,549
Accounts payable and accrued liabilities $ 1,221,570 237,691 161,778
------------ ------------ ------------
Net cash used in operating activities (9,558,805) 49,464 148,953
------------ ------------ ------------
Cash flows from (used in) investing activities:
Acquisition of fixed assets $ 6,028 -- (65,883)
Loan to stockholders ($ 370,484) -- --
Repayment of loans to stockholders $ 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) -- (65,883)
------------ ------------ ------------
Cash flows from (used in) financing activities:
Issuance of common shares $ 8,997,811 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) -- (99,653)
Due to stockholder $ 0 -- --
Repayment to stockholder $ 0 -- --
Share issue costs ($ 1,684,735) -- --
------------ ------------ ------------
Net cash from (used in) financing activities 10,255,204 45,281 (99,653)
------------ ------------ ------------
Effect of exchange rate changes ($ 674,941) (94,745) 24,612
Increase (decrease) in cash and cash equivalents during 0 -- 8,029
the period
Cash and cash equivalents, beginning of period -- -- 105,213
------------ ------------ ------------
Cash and cash equivalents, end of period 0 -- $ 113,242
============ ============ ============
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 Stockholders' Equity (Deficit)
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
4
<PAGE> 7
THE TRACKER CORPORATION OF AMERICA, INC.
(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 March 31, 1998. 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, 1998 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 former
independent accountant as of and for each of the years ended March 31, 1997 and
1996, and its current independent accountant as of and for the year ended March
31, 1998, 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>
June 30, March 31,
1998 1998
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<S> <C> <C>
Current:
Deferred sales commission (net of cancellation reserve) $ 202,118 $ 776,055
Other 146,509 411,644
---------- ----------
$ 348,627 $1,187,699
---------- ----------
</TABLE>
5
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THE TRACKER CORPORATION OF AMERICA, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
Long term:
Deferred sales' commission (net of cancellation reserve) $149,640 $183,041
Other 81,759 92,002
-------- --------
$231,399 $275,043
-------- --------
</TABLE>
NOTE 5 - ACCRUED LIABILITIES:
Accrued liabilities comprise the following:
<TABLE>
<CAPTION>
June 30, March 31,
1998 1998
-------- --------
<S> <C> <C>
Directors fees $ 24,431 $ 24,432
Interest expense for convertible debentures 83,978 58,785
Others 445,182 445,182
-------- --------
$553,592 $528,399
======== ========
</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 June 30, 1998, the Company has incurred losses totaling
approximately $16.5 million, including approximately $1.6 million in operational
costs, $937,000 in research and development expenses, $3.5 million for sales and
marketing expenses and $7.9 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 will have 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
During the prior fiscal year, we derived substantial revenue from our credit
card registration service. The period-to-period comparisons that appear below
adjust retroactively the results of operations for the three months ended June
30, 1997, to account for the discontinuance of our credit card registration
service business.
Our cash sales for the three months ended June 30, 1998 increased 216% to
$72,082 as compared to $33,369 a year ago. This increase resulted primarily from
the recognition of prior sales made during earlier periods, and not from
material increases in sales volume.
Our revenue from sales of the Tracker(TM) System increased 216% to $72,082 for
the three months ended June 30, 1998, as compared to $33,369 for the three
months ended June 30, 1997. However, cost of sales increased 542% or $42,383 as
compared to $7,812 for the comparable 1997 period. The increase in cost of sales
resulted from an increase in production costs. Due to the substantial increase
in cost of sales, our gross profit for the three months ended June 30, 1998
increased by 16.2%, to $29,700, compared to a gross profit of $25,557 for the
three months ended June 30, 1998.
Development costs increased by 945% for the three months ended June 30, 1998 to
$170,115, as compared to $17,992 for the comparable 1997 period. The substantial
increase in development costs resulted from our efforts to develop new products
and services as a result of the discontinuance of our credit card registration
service. As a result of our substantial increase in development costs, we
experienced a loss of $140,416 for the three months ended June 30, 1998,
compared to a gain of $17,992 for the comparable 1997 period.
Our loss for the three months ended June 30, 1998 does not reflect a $588,212
gain derived from our discontinued credit card registration service, compared to
a $353,537 loss from the credit card service for the comparable 1997 period.
When this is included, we experienced a net profit of $447,797 for the tree
months ended June 30, 1998, compared to a $345,972 net loss for the
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<PAGE> 11
comparable 1997 period. This represents a net gain of $.0197 per share for the
first quarter of 1998, as compared to a net loss of $.0166 per share in the
first quarter of 1997.
LIQUIDITY AND CAPITAL RESOURCES
From inception at May 6, 1993 through June 30, 1998, we have received
approximately $10,255,204 in net cash from financing activities, net of
discontinued operations, some of which are noted below.
During the three months ended June 30, 1998, our net cash used in operations was
$49,464 as compared to $433,470 for the year ended March 31, 1998. 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 June 30, 1998, we had total current assets of $666,179 as compared to
$1,187,699 at March 31, 1998. Current assets consisted of accounts receivable in
the amount of $72,082 as compared to $Nil at March 31, 1998, and current
deferred charges in the amount of $348,627 as compared to $1,187,699 at March
31, 1998.
At June 30, 1998, we had amount due from stockholders in the amount of $14,072,
the same as at March 31, 1998, and long-term deferred charges totaling $231,399
as compared to $275,043 at March 31, 1998.
At June 30, 1998, we had liabilities net of discontinued operations of
$2,066,594 as compared to $3,275,560 at March 31, 1998. Such liabilities consist
of: accounts payable in the amount of $653,333 at June 30, 1998 as compared to
$440,835 at March 31, 1998; accrued liabilities in the amount of $553,592 as
compared to $528,399 at March 31, 1998; deferred revenues in the amount of
$352,069 as compared to $1,798,727 at March 31, 1998; debentures in the amount
of $31,809 as compared to the same as at March 31, 1998; and convertible
subordinated debentures in the amount of $475,790 as compared to the same at
March 31, 1998. We had long-term deferred revenues in the amount of $363,381 at
June 30, 1998 as compared to $412,846 at March 31, 1998.
As of June 30, 1998 and March 31, 1998, respectively, our accumulated deficits
totaled $16,553,486 and $17,001,283. To date, we have financed our research and
development activities and operations primarily through the sales of its
now-discontinued 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
With the cessation of our credit card registration program, we are currently
focusing on selling our personal property identification and recovery system
through various channels. Unfortunately, the revenue stream of the personal
property identification and recovery system has a much longer selling cycle and
thus 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
9
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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 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.
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<PAGE> 13
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 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
<TABLE>
<CAPTION>
Number Description
- ------ -----------
<S> <C>
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
</TABLE>
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<PAGE> 14
<TABLE>
<S> <C>
10.1++++ 1994 Stock Incentive Plan of the Registrant, as amended by
Amendment No. 1 to the 1994 Stock Incentive Plan
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.
</TABLE>
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<TABLE>
<S> <C>
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
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
</TABLE>
13
<PAGE> 16
<TABLE>
<S> <C>
10.27+++++ Letter agreement dated January 26, 1996 between The Tracker
Corporation and Consumers Distributing Inc.
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,
Inc.
10.40+++++++ Employment Agreement dated September 24, 1996 between I. Bruce
Lewis and The Tracker Corporation of America, Inc.
</TABLE>
14
<PAGE> 17
<TABLE>
<S> <C>
21.1++++ List of subsidiaries of the Registrant
23+++++++ Consent of Independent Accountants
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
99.1++++++++ Cautionary Statement
</TABLE>
<TABLE>
<S> <C>
+ 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 Current Report on
Form 10-K dated March 31, 1996 (filed July 15, 1996)
++++++ Incorporated by reference from the Registrant's Current Report on
Form 10-K dated March 31, 1997 (filed July 3, 1997)
+++++++ Incorporated by reference from the Registrant's Annual Report on
Form 10-K dated March 31, 1998 (filed November 4, 1998)
++++++++ Incorporated by reference from the Registrant's Quarterly Report
on Form 10-Q dated November 23, 1998.
</TABLE>
(b) REPORTS ON FORM 8-K
During the three months ended June 30, 1998, the Company filed no
reports on Form 8-K with the Securities and Exchange Commission.
15
<PAGE> 18
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: November 23, 1998 THE TRACKER CORPORATION
OF AMERICA, INC., 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
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAR-31-1999
<PERIOD-START> APR-01-1998
<PERIOD-END> JUN-30-1998
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 72,082
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 420,709
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 666,179
<CURRENT-LIABILITIES> 2,066,594
<BONDS> 0
0
0
<COMMON> 19,718
<OTHER-SE> (1,783,513)
<TOTAL-LIABILITY-AND-EQUITY> 666,179
<SALES> 72,082
<TOTAL-REVENUES> 72,082
<CGS> 42,383
<TOTAL-COSTS> 42,383
<OTHER-EXPENSES> 170,115
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 83,978
<INCOME-PRETAX> 447,797
<INCOME-TAX> 0
<INCOME-CONTINUING> (140,416)
<DISCONTINUED> 588,212
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 447,797
<EPS-PRIMARY> 0.02
<EPS-DILUTED> 0
</TABLE>
