Date Filed:  July 16, 2001



                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549
                                  ------------

                                   FORM 10-KSB


(Mark One)

[X]  Annual report  pursuant to Section 13 or 15(d) of the  Securities  Exchange
     Act of 1934

     For the fiscal year ended March 31, 2001, or
                               --------------

[ ]  Transition  report  pursuant  to Section  13 or 15(d) of the  Securities
     Exchange Act of 1934

     For the transition period from _________

     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.)


1120 Finch Avenue West, Suite 303, North York, Ontario, Canada        M5G 1Z8
--------------------------------------------------------------       ---------
   (Address and Zip Code of Principal Executive Offices)             (Zip Code)


                                 (800) 822-8757
               --------------------------------------------------
              (Registrant's Telephone Number, Including Area Code)

Securities  registered  pursuant to Section 12(b) of the Securities Exchange Act
of 1934: None
         ----

Securities  registered  pursuant to Section 12(g) of the Securities Exchange Act
of 1934: None
         ----

     Check  whether  the issuer:  (1) 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  [X]  No [ ]

     Check if there is no disclosure  of  delinquent  filers in response to Item
405 of Regulation S-B is not contained in this form,  and no disclosure  will be
contained,  to the  best of  registrant's  knowledge,  in  definitive  proxy  or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. [ ]

     Our revenues for fiscal year 2001: $17,591

<PAGE>


     As of June 30, 2001, there were issued and outstanding 91,914,859 shares of
our capital stock,  consisting of 91,914,859  shares of common stock,  par value
$0.001 per share. Non-affiliates hold 88,123,259 shares of our common stock. The
aggregate market value of the shares of our common stock held by  non-affiliates
at such date was  $1,762,465  (calculated  on the basis of $0.20 per share which
was the average of the high bid and low asked quotations for our common stock on
the OTC Bulletin Board on June 30, 2001).

     Transitional Small Business Disclosure Format: Yes [ ] No [ x]



                       DOCUMENTS INCORPORATED BY REFERENCE

     The following documents are incorporated by reference. We identify the part
of this Form 10-KSB into which the document is incorporated.

     Exhibits 2.1, 2.2, 3.1, 3.2, 4.1, 9.1, 9.2, 10.2, 10.3, 10.10, 10.11, 10.19
and  21.1  to  our  Registration   Statement  on  Form  S-1  (No.  33-99686)  is
incorporated by reference in Part III.

     Exhibit 10.37 to our Annual Report on Form 10-K dated March 31, 1997 (filed
July 3, 1997) is incorporated by reference in Part III.

     Exhibit 10.39 to our Annual Report on Form 10-K dated March 31, 1998 (filed
November 4, 1998) is incorporated by reference in Part III.

     Exhibits  10.41,  10.42 and 10.43 to our  Annual  Report on Form 10-K dated
March 31, 1999 (filed August 17, 1999) is incorporated by reference in Part III.

     Exhibits  10.44 and 10.45 to our  Amended  Quarterly  Report on Form 10-QSB
dated  September 30, 1999 (filed January 11, 2000) is  incorporated by reference
in Part III.

     Exhibits 10.47,  10.48,  10.49,  10.50, 10.51 and 10.52 to our Registrant's
Registration  Statement  on Form S-8  concerning  the 1994  Amended and Restated
Stock Option Plan (filed March 28,  2000) is  incorporated  by reference in Part
III.

     Exhibit  10.53  to our  Registrant's  Registration  Statement  on Form  S-8
concerning  the 2000 Stock Wage and Fee Payment  Plan (filed  March 28, 2000) is
incorporated by reference in Part III.

     Exhibit 10.46 to our Registration  Statement on Form SB-2/A (filed July 10,
2000) is incorporated by reference in Part III.


                                       ii

<PAGE>


                                TABLE OF CONTENTS



PART I
------

1.       Description of Business                                              1
2.       Description of Property                                              7
3.       Legal Proceedings                                                    7
4.       Submission of Matters to a Vote of Security Holders                  7

PART II
-------

5.       Market for Common Equity and Related Stockholder Matters             7
6.       Management's Discussion and Analysis                                12
7.       Financial Statements                                                17
8.       Changes in and Disagreements With Accountants on Accounting
         And Financial Disclosure                                            17

PART III
--------

9.       Directors, Executive Officers, Promoters and Control Persons;
            Compliance with Section 16(a) of the Exchange Act                18
10.      Executive Compensation                                              20
11.      Security Ownership of Certain Beneficial Owners and Management      22
12.      Certain Relationships and Related Transactions                      23
13.      Exhibits, List and Reports on Form 8-K                              24


SIGNATURES                                                                   28
----------

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA                                 F-1
-------------------------------------------




                                      iii
<PAGE>



                                     PART I

Item 1. Description of Business.

Corporate History

     We  develop,  market,  sell and  operate a personal  property  marking  and
monitoring system. Our technology  utilizes advanced bar code and laser scanning
technology  that  interfaces  with a computer  database and scanning  network to
create an identification system. Our website is located at www.tracker.com.

     Our current business began in July 1994 through a  reorganization  in which
we acquired all of the issued and outstanding voting shares of Tracker Canada in
exchange for  approximately  90% of our total voting shares as of that date. Our
predecessor  was  incorporated  as a Utah  corporation  in 1986, and changed its
state of  incorporation to Nevada in 1992 and Delaware in 1994 through change in
domicile mergers.  Concurrent with the effective date of the reorganization,  we
changed our fiscal year-end from December 31 to March 31.

Background

     Tracker   Canada,   which   originated   our  line  of  personal   property
identification  systems,  was incorporated in May 1993 and, until February 1998,
was  our  operating  subsidiary.   Tracker  Canada  supported  the  development,
marketing  and sale of our products and services.  Its  functions  also included
personnel  recruitment  and  management,  advanced  bar code and laser  scanning
technology  research and  development,  proprietary  software  development,  key
supplier relationships, and business and marketing planning.

     Until 1995, the  operations of Tracker Canada  generated our only source of
revenue.  During the fiscal year ended March 31,  1996,  we  introduced a credit
card  registration   service  marketed  by  independent   telemarketing   firms.
Subsequently,  cash sales increased from $382,632 for the 1995-96 fiscal year to
$7,977,881  for the fiscal year ended March 31, 1997. The increase in cash sales
and the corresponding  increase in recorded revenues for the 1996-97 fiscal year
was due primarily to the increase in sales from our now discontinued credit card
registration service.

     FTC Lawsuit; Board of Directors and Officer Resignations

     In September 1997, the Federal Trade  Commission filed a lawsuit against us
in Georgia alleging our credit card registration  service had violated Section 5
of the Federal Trade  Commission Act and the FTC Trade  Regulator  Telemarketing
Sales Rule. The FTC obtained a temporary  restraining  order halting the further
sale of credit card registration services and an injunction freezing our assets.
Upon completing an internal investigation, we elected to discontinue credit card
registration service operations.

     Following  commencement  of the lawsuit,  four  members of our  five-member
board of directors,  including all  non-employee,  outside  directors,  tendered
their  resignations.


<PAGE>

Subsequently,  our Chief  Financial  Officer  resigned as an executive  officer,
leaving Bruce I. Lewis,  the Chief Executive  Officer,  as our sole director and
executive officer.

     We settled the FTC lawsuit on July 28, 1998.  The  settlement,  among other
things,   permanently  barred  Mr.  Lewis  and  us  from  engaging  directly  or
indirectly, in the business of credit card registration or promotion.

     Tracker Canada Bankruptcy; Cessation of Operations

     The FTC lawsuit and the cessation of the credit card  registration  service
had a negative effect on our financial  condition and that of Tracker Canada. On
January 27, 1998,  Tracker  Canada  declared  itself  insolvent and a trustee in
bankruptcy was appointed to liquidate its assets. The trustee sold the assets of
Tracker Canada in February 1998.

     Global Tracker

     On February 10, 1998, Global Tracker acquired  substantially all of Tracker
Canada's assets in an arm's length transaction from the bankruptcy  trustee.  On
July 30, 1998, we entered into a license  agreement with Global  Tracker.  Under
the agreement,  we have an exclusive  worldwide license to commercially  exploit
the technology  formerly owned by Tracker Canada. The license is for a renewable
seven-year  term and  provides  for payment of a 12%  royalty on gross  revenues
commencing in the second year of the license.

The Product

     Our  technology  consists  of an  identification  device  and a  relational
database that,  depending on how it is applied,  works in tandem with a scanning
network and recovery system.

     Identification Device
     ---------------------

     The  identification  device consists of a label  displaying a serial number
that is  resistant  to  partial  destruction  or  defacement.  The  label may be
attached  to an article by  adhesive,  thermal  transfer or laser  etching  onto
metal,  plastic or nylon textile.  It contains a specially  encoded  insignia in
advanced  two-dimensional  redundant bar code form,  otherwise  known as PDF 417
symbology.   The  PDF  417  symbology   permits  multiple   repetitions  of  the
alphanumeric  number  within  the  advanced  bar code.  Partial  destruction  or
defacement of the insignia does not impair the ability of our laser  scanners to
read the label and communicate the information to our database.

     Relational Database
     -------------------

     The  relational  database is a depository we maintain to index  correlating
identification  information and other data entries to codes  identified with the
corresponding  identification  device.  Although we make substantial  efforts to
protect  data,  avoid  human  error and  ensure  system  security,  privacy  and
integrity, no system is foolproof.  Any material loss of information



                                       2
<PAGE>

or security breach could damage our credibility and could  materially  adversely
affect our business, operating results and financial condition.

     Scanning Network
     ----------------

     We have  developed  a network  consisting  of a series  of PDF  417-capable
scanners.   The  laser  scanner  reads  the  serial  number   displayed  on  the
identification device and transmits that information to our relational database.
Scanners  are also  utilized  with our  inventory  control and asset  management
systems.

     Recovery System
     ---------------

     After the scanner reads the  identification  device,  it transfers the data
via  modem  to our  central  database.  We can then  notify a user of an  item's
location and arrange for its retrieval. As of March 31, 2001, utilization of our
technology  has  resulted  in  over  1300  successful  recoveries.  While  these
recoveries  demonstrate the  effectiveness of the system, to date the system has
not generated sufficient sales volume.

Strategic Focus

     Prior  to  Tracker  Canada's  bankruptcy,  our  marketing  efforts  focused
primarily  on the  consumer  market for  personal  property  identification  and
recovery.  Although we believe the system has significant  commercial potential,
the marketing efforts  undertaken to date have been met with only limited market
acceptance.  We presently do not have any current sources of income.  Initially,
we  developed a personal  property  security  kit that  included  24  possession
labels,  eight clothing labels and 10 assorted shoe, key, luggage, and pet tags.
We packaged the initial  purchase as a membership  service term and marketed the
system indirectly as a value-added service offered by third parties.

     Present Operations

     While management conceived other potential applications for our technology,
past  experience  and present  financial  circumstances  dictate a more narrowly
focused strategy.  Consequently, we recently altered our business plan to divide
our operations into two sectors:  personal  property  registration  and business
asset management.

     Personal Property Registration
     ------------------------------

     We still  believe  that our  technology  provides an  efficient  method for
tracking inventory and accessing related  information.  Presently,  this type of
central   registration/identification   system  is  mainly  done  through  local
initiatives and no national or regional  industry  leader exists to date.  Given
our failure to effectively  market our products and services to date, there is a
risk that a competitor  could enter the market and capture a substantial  market
share to our detriment.

     In February  2001,  we entered into an agreement  with  Warrantech  Inc., a
United States  wholesaler of after market extended warranty products to purchase
and resell  Tracker's  service

                                       3
<PAGE>

to  their  customer  base  which  includes  a  large  retail  electronics  store
component.  In June 2001,  Warrantech  purchased $29,500 of Tracker  promotional
kits for resale to Brandsmart Inc.

     Business Asset Management
     -------------------------

     We also believe our  products and services can provide an efficient  method
for tracking and managing fixed assets.  Manufacturers can use our technology by
laser etching or otherwise  applying a serial number containing  specially coded
insignia  directly  onto or into  products  during  the  manufacturing  process.
Possible applications for this service include computer chips,  bicycles,  power
tools,  electronic equipment,  cameras and auto parts. We believe that the coded
insignia adds value to a product by increasing the likelihood of recovery in the
event of loss or theft

     We  believe  our  products  and  services  can  assist  consumer   products
manufacturers  combat  long-term  warranty  fraud.  This  can  be  done  through
identifying  the proper  owner of the product  warranty and then refuse to honor
claims to which no obligation exists. The business asset management  industry is
relatively new and contains hundreds of competitors. Because there is a low cost
of entry and  basically no market  barriers,  software  providers  could achieve
significant market share through a predatory pricing strategy.

     We recently installed a customized asset tracking management application at
Plan Group, a large Canadian electrical  contracting company. We plan to present
the system to public and private sector clients as a portable solution for asset
movement and individual accountability. The asset management system comprises of
three components:

     (1)  a desktop multiple document interface application;
     (2)  a portable data collection and audit application; and
     (3)  a  communication  utility that allows for the exchange of data between
          the desktop and portable device

     We  incurred  approximately  $250,000  in costs to date.  These  costs  are
associated with the writing of functional  specifications  for the applications,
the development of desktop  applications by third party software  developers and
the installation and subsequent  updates at our alpha and beta site. We estimate
the release of the system for sale to the public can provide significant revenue
over the next three years.

     Marketing and Distribution

     Our long-term  strategy is to introduce  applications  of our technology in
select  market  niches  and  establish  the  system as a  dominant  brand  name.
Currently, we have a key return service and a bike registration program.

     We hope to establish  credibility and confidence in the marketplace through
affiliations,  alliances,  sponsorships,  and  promotional  programs  with  well
recognized,  stable  and  reputable  organizations.  We are also  marketing  our
products and  services to police  departments  who have a need to inventory  and
warehouse  lost and  stolen  bicycles.  On March 22,  2001,  we  entered  into a

                                       4
<PAGE>

five-year  license  agreement  with the  Florida  Police  Chiefs  Foundation  to
collaborate  on a  statewide  Operation  Bicycle  Identification  Program.  This
agreement  will  link our  products  and  services  to local  and  regional  law
enforcement  agencies and is fundamental to the distribution of our products and
services.

     We presently have no material backlog of orders.  We have granted,  and may
grant in the  future,  commissions  and other  payments in  connection  with the
distribution of our products.

International Operations

     We  presently  maintain   operations  in  Canada  and  the  United  States.
International  operations are subject to inherent  risks,  including  unexpected
changes in regulatory  requirements,  currency exchange rates, tariffs and other
barriers,   difficulties  in  staffing  and  managing  foreign  operations,  and
potentially  adverse tax consequences.  These factors may have a material impact
on our ability to market products and services on an international  basis. We do
not engage in any  hedging  contracts  because we receive a majority of our cash
flow in United States dollars.

Key Suppliers

     Our ability to market and sell our products and services depends in part on
our  ability  to procure  necessary  equipment,  supplies  and  services.  These
agreements or understandings  tend to be informal,  may be difficult to enforce,
and may be subject to termination. Accordingly, we cannot assure that equipment,
supplies or services will be available when needed or on terms  favorable to us.
Any such  unavailability  of  equipment,  supplies or services  could prevent or
delay the  development,  marketing,  sale,  operation and  effectiveness  of our
products.

     We procure scanning equipment from Symbol Technologies. Symbol's PDF 417 is
an advanced  two-dimensional,  stacked symbology. In 1992, Symbol introduced the
PDF 1000 laser scanner.  This is the first laser scanner to read two-dimensional
bar code.  The PDF 1000  laser  scanner  is 30 times  faster  than  conventional
scanners.  It also decodes in a specialized  pattern across and down the PDF 417
symbol and reads both  two-dimensional and one-dimensional bar codes. It is able
to read poorly printed or damaged codes that have been defaced up to 60%.

Competition

     We have a large number of competitors with substantially greater financial,
technical,  marketing, and management resources. The alternative methods used by
our competitors  presently include:  (1) tracking by serial number; (2) tracking
by the  owner's  imprinted  name  and  address;  and (3)  conventional  forms of
insurance  that  reimburse  consumers  for lost items.  As a result,  demand and
market  acceptance  for our products and services are subject to a high level of
uncertainty. We currently have limited financial,  personnel and other resources
to  undertake  the  extensive  activities  necessary  to produce  and market our
products and  services.  We cannot  assure that we will be able to  successfully
compete with existing or new competitors.


                                       5
<PAGE>

Intellectual Property Protection and Infringement

     We rely on a  combination  of  applicable  patent laws,  trade secret laws,
nondisclosure  and other  contractual  agreements,  and  technical  measures  to
protect the confidential  information,  know-how and proprietary rights relating
to our personal property  identification  and recovery system. In addition,  our
international  patent application  pursuant to the Patent Cooperation Treaty for
our personal property  identification and recovery system was recently approved.
However,  these  protections  may not  preclude  competitors  from  developing a
personal  property  identification  and recovery system that is competitive with
our system.  We do not believe  that our  products  and other  confidential  and
proprietary  rights  infringe  upon the  proprietary  rights  of third  parties.
However, we cannot assure that third parties will not assert infringement claims
against  us in the  future.  The  successful  assertion  of  such  claims  could
materially  adversely  affect our  business,  operating  results  and  financial
condition.

     We have no registered trademarks or service marks.  Furthermore,  we do not
have any active  trademark  or service mark  applications  pending with the U.S.
Patent and Trademark Office or with other regulatory authorities.

Employees

     As of March 31, 2001 through contractual  arrangements with Global Tracker,
we  employ  a  total  of 15  persons,  including  two in  management,  three  in
administration  and  accounting,  five in  operations,  including two part-time,
three in sales and marketing  and two in  information  systems,  one of which is
part-time.  Our  future  success  will  depend in large  part on our  ability to
attract, train and retain highly skilled and qualified personnel.

     None of our employees are represented by a labor union. We have experienced
no work stoppages,  and we believe that the  relationship  with our employees is
excellent.

Governmental Regulations

     We are  not  subject  to any  governmental  regulations  other  than  those
applicable  to  businesses  generally.  Although we believe we are in compliance
with all  currently  applicable  regulations,  additional  regulations  could be
enacted  in the future  that could  materially  adversely  affect our  business,
operating results and financial condition. We are not currently affected or bear
any costs associated with federal, state or local environmental laws.

Reports to Security Holders

     We have filed with the SEC a  registration  statement  under the Securities
Exchange  Act of 1933  with  respect  to the  securities  offered  herein.  This
prospectus does not contain all of the information set forth in the registration
statement,  certain parts of which are omitted in accordance  with the rules and
regulations  of the SEC. We will provide at no charge to any person upon written
or oral request a copy of any such  information.  Requests should be directed to
Bruce I. Lewis,  1120 Finch Avenue West,  Suite 303, North York,  Ontario Canada
M3J 3H7.

                                       6
<PAGE>

     We are required to file reports with the SEC. These reports include: (1) an
annual  report  on Form  10-K  containing  financial  information  examined  and
reported upon by our certified public accountants; (2) quarterly reports on Form
10-Q  containing  unaudited  financial  statements  for each of the first  three
quarters  of the  fiscal  year;  and (3)  additional  information  on  Form  8-K
concerning  our  business  and  operations  deemed  appropriate  by our board of
directors

     You may read and copy any  materials  we file with the SEC by visiting  the
public reference room located at 450 Fifth Street, N.W., Washington,  D.C. 20549
or by calling  the  Commission  at  1-800-SEC-0330.  Since we are an  electronic
filer,  you may also  receive  information  about us through the SEC's  internet
website that  contains  reports,  proxy and  information  statements,  and other
information at http://www.sec.gov.

Item 2. Description of Property.

     We currently  occupy  approximately  3,700  square feet of office  premises
leased by Global  Tracker for us on a  month-to-month  basis at a rate of $3,800
per month.  Under the sublease,  we may withhold rent payments to Global Tracker
for the  lesser  of up to six  consecutive  months or such  earlier  date as the
parties may terminate the sublease.  Lease payments due and unpaid accrue at the
rate of 10% per annum. We do not anticipate any difficulty in securing  adequate
new space in the event Global Tracker  terminates the sublease.  We believe that
suitable  additional  space will be available  as needed if future  expansion is
required.

Item 3. Legal Proceedings.

     As of March 31, 2001, we are not a party to any material litigation and are
not  aware  of any  pending  or  threatened  litigation  that  could  materially
adversely affect our business, operating results or financial condition.

Item 4. Submission of Matters to a Vote of Security Holders.

     During the fourth  quarter of the fiscal year ended March 31, 2000,  we did
not submit any matter to a vote of the security holders.

                                     PART II

Item 5. Market For Common Equity and Related Stockholder Matters.

     Our  common  stock is  traded  in the  over-the-counter  market  on the OTC
Bulletin  Board under the symbol  "TRKR."  Quotations  for our common stock were
first  listed  on May  5,  1993.  The  market  for  our  common  stock  must  be
characterized  as extremely  limited due to the low trading volume and the small
number of brokerage firms acting as market makers.  Additionally,  stocks traded
on the OTC Bulletin Board  generally  have limited  brokerage and news coverage.
Thus, the market price of the common stock may not reflect our true value.  As a
result,  you may  find  it  difficult  to  dispose  of,  or to  obtain  accurate
quotations  as to the value of,  the common  stock.  We cannot  assure  that the
over-the-counter  market for our securities  will  continue,  that a

                                       7
<PAGE>

more active market will  develop,  or that the prices in any such market will be
maintained at their current levels or otherwise.

     The following table sets forth, for the periods indicated, the high and low
bid quotations for our common stock as reported by the National Quotation Bureau
or Bloomberg.  These quotations reflect inter-dealer prices, without adjustments
for retail  markups,  markdowns  or  commissions,  and do not  represent  actual
transactions.

Quarter Ended                             High                        Low
-------------                             ----                        ---
March 31, 1999                           $0.1775                     $0.0725
June 30, 1999                            $0.350                      $0.100
September 30, 1999                       $0.400                      $0.180
December 31, 1999                        $0.210                      $0.1025
March 31, 2000                           $0.725                      $0.1025
June 30, 2000                            $0.430                      $0.150
September 30, 2000                       $0.197                      $0.080
December 31, 2000                        $0.180                      $0.031
March 31, 2001                           $0.125                      $0.040

     On March 31, 2001,  the high and low bid quotations for our common stock on
the OTC  Bulletin  Board were  $0.050 and $0.043,  respectively.  As of June 30,
2001,  there  were  91,914,859  shares  of  common  stock  outstanding  held  by
approximately  379  holders of record,  including  broker-dealers  and  clearing
corporations holding common shares on behalf of their customers.

     We have never paid any cash dividends on our common stock and do not intend
to pay any cash dividends in the foreseeable  future.  Future earnings,  if any,
will be retained to fund the development and growth of our business.

     We issued the  following  securities  within the past fiscal  year  without
registering  the  securities  under the  Securities  Act.  All of the  issuances
occurred without the aid of any underwriters:
<TABLE>
<CAPTION>
<S>      <C>
1.       SovCap Equity Partners, Ltd.
         Date issued: 10/26/00
         Title of securities: Common Stock
         Amount: 222,463 shares
         Consideration: conversion of $50,000 of convertible bridge notes
         Securities Act exemption: Rule 144 - the notes were held for over one year

         Date issued: 11/13/00
         Title of securities: Common Stock
         Amount: 889,675 shares
         Consideration: exercise of repricing warrants dated 9/26/00
         Securities Act exemption: Rule 144 - notes underlying the warrants held for over 1 year


                                       8
<PAGE>

         Date issued: 3/2/01
         Title of securities: Common Stock
         Amount: 1,094,418 shares
         Consideration: conversion of $100,000 of convertible bridge notes
         Securities Act exemption: Rule 144 - the notes were held for over one year

2.       Correllus International, Ltd.
         Date issued: 10/27/00
         Title of securities: Common Stock
         Amount: 360,232 shares
         Consideration: conversion of $50,000 of convertible bridge notes
         Securities Act exemption: Rule 144 - the notes were held for over one year

         Date issued: 12/22/00
         Title of securities: Common Stock
         Amount: 973,856 shares
         Consideration: exercise of repricing warrants dated 10/27/00
         Securities Act exemption: Rule 144 - notes underlying the warrants held for over 1 year

         Date issued: 1/19/01
         Title of securities: Common Stock
         Amount: 367,642 shares
         Consideration: conversion of $50,000 of convertible bridge notes
         Securities Act exemption: Rule 144 - the notes were held for over one year

         Date issued: 1/23/99
         Title of securities: Common Stock
         Amount: 1,552,423 shares
         Consideration: exercise of repricing warrants dated 1/19/01
         Securities Act exemption: Rule 144 - notes underlying the warrants held for over 1 year

         Date issued: 3/29/01
         Title of securities: Common Stock
         Amount: 382,380 shares
         Consideration: conversion of $50,000 of convertible bridge notes
         Securities Act exemption: Rule 144 - the notes were held for over one year

         Date issued: 3/29/01
         Title of securities: Common Stock
         Amount: 552,849 shares
         Consideration: conversion of $50,000 of convertible bridge notes
         Securities Act exemption: Rule 144 - the notes were held for over one year



                                       9
<PAGE>

         Date issued: 3/29/01
         Title of securities: Common Stock
         Amount: 551,317 shares
         Consideration: exercise of repricing warrants dated 3/29/01
         Securities Act exemption: Rule 144 - notes underlying the warrants held for over 1 year

3.       Arab Commerce Bank, Ltd.
         Date issued: 2/5/01
         Title of securities: Common Stock
         Amount: 189,398 shares
         Consideration: conversion of $25,000 of convertible bridge notes
         Securities Act exemption: Rule 144 - the notes were held for over one year

         Date issued: 3/2/01
         Title of securities: Common Stock
         Amount: 193,365 shares
         Consideration: conversion of $25,000 of convertible bridge notes
         Securities Act exemption: Rule 144 - the notes were held for over one year

         Date issued: 3/22/01
         Title of securities: Common Stock
         Amount: 499,030 shares
         Consideration: exercise of repricing warrants dated 2/5/01
         Securities Act exemption: Rule 144 - notes underlying the warrants held for over 1 year

4.       Enrico Bonetti
         Date issued: 10/27/00
         Title of securities: Common Stock
         Amount: 359,250 shares
         Consideration: conversion of $50,000 of convertible bridge notes
         Securities Act exemption: Rule 144 - the notes were held for over one year

         Date issued: 3/22/01
         Title of securities: Common Stock
         Amount: 1,010,330 shares
         Consideration: exercise of repricing warrants dated 10/27/00
         Securities Act exemption: Rule 144 - notes underlying the warrants held for over 1 year

5.       Frutose - Marketing & Investors Internacionais LDA
         Date issued: 12/22/00
         Title of securities: Common Stock
         Amount: 518,797 shares
         Consideration: conversion of $50,000 of convertible bridge notes
         Securities Act exemption: Rule 144 - the notes were held for over one year


                                       10
<PAGE>

6.       Bruce Lewis
         Date issued: 10/16/00
         Title of securities: Common Stock
         Amount: 475,000 shares
         Consideration: stock issued in lieu of payment of expenses rendered on behalf of the Company valued at
         $71,250
         Securities Act exemption:ss.4(2) - this was an isolated sale to an individual with a close relationship
         with us and was not part of any public offering or distribution.  The issued stock was restricted from
         being sold for at least one year, pursuant to Rule 144 of the Securities Act of 1933

         Date issued: 11/2/00
         Title of securities: Common Stock
         Amount: 268,000 shares
         Consideration: stock issued in lieu of payment of expenses rendered on behalf of the Company valued at
         $26,800
         Securities Act exemption:ss.4(2) - this was an isolated sale to an individual with a close relationship
         with us and was not part of any public offering or distribution.  The issued stock was restricted from
         being sold for at least one year, pursuant to Rule 144 of the Securities Act of 1933

         Date issued: 11/13/00
         Title of securities: Common Stock
         Amount: 85,000 shares
         Consideration: stock issued in lieu of payment of expenses rendered on behalf of the Company valued at
         $6,715
         Securities Act exemption:ss.4(2) - this was an isolated sale to an individual with a close relationship
         with us and was not part of any public offering or distribution.  The issued stock was restricted from
         being sold for at least one year, pursuant to Rule 144 of the Securities Act of 1933

         Date issued: 11/20/00
         Title of securities: Common Stock
         Amount: 186,000 shares
         Consideration: stock issued in lieu of payment of expenses rendered on behalf of the Company valued at
         $11,160
         Securities Act exemption:ss.4(2) - this was an isolated sale to an individual with a close relationship
         with us and was not part of any public offering or distribution.  The issued stock was restricted from
         being sold for at least one year, pursuant to Rule 144 of the Securities Act of 1933

         Date issued: 12/19/00
         Title of securities: Common Stock
         Amount: 68,740 shares
         Consideration: stock issued in lieu of payment of expenses rendered on behalf of the Company valued at
         $3,437



                                       11
<PAGE>

         Securities Act  exemption:ss.4(2) - this was an isolated sale to an individual  with a close  relationship
         with us and was not part of any public  offering or  distribution.  The issued stock was  restricted  from
         being sold for at least one year, pursuant to Rule 144 of the Securities Act of 1933

         Date issued: 1/10/00
         Title of securities: Common Stock
         Amount: 655,860 shares
         Consideration: stock issued in lieu of payment of expenses rendered on behalf of the Company valued at
         $32,793
         Securities Act  exemption:ss.4(2) - this was an isolated sale to an individual  with a close  relationship
         with us and was not part of any public  offering or  distribution.  The issued stock was  restricted  from
         being sold for at least one year, pursuant to Rule 144 of the Securities Act of 1933

7.       Mark Gertzbein
         Date issued: 7/18/00
         Title of securities: Common Stock
         Amount: 18,800 shares
         Consideration: issued in settlement of employment contract claim for $2,914
         Securities Act  exemption:ss.4(2) - this was an isolated sale to an individual  with a close  relationship
         with us and was not part of any public  offering or  distribution.  The issued stock was  restricted  from
         being sold for at least one year, pursuant to Rule 144 of the Securities Act of 1933



Item 6.           Management's Discussion and Analysis.

General

     We have been in the development stage since formation. We primarily market,
sell and operate a personal property marking and monitoring  system.  Our system
utilizes  advanced  bar  code  and  laser  scanning   technology  to  create  an
identification  device that  interfaces  with a computer  database  and scanning
network.  We also  sell,  install  and  support  corporate  asset  tracking  and
management software.

     We have not generated any significant revenue since we cancelled our credit
card  registration  program in September  1997. Our ability to generate  revenue
from operations and achieve profitability is largely dependent on the successful
commercialization  of our products and services.  This has not happened to date.
In order to achieve success, we will require significant additional financing to
penetrate new markets for our products and services.  For these reasons,  in its
most recent report our independent auditor has expressed  substantial doubt that
we can continue as a going concern.

     We believe the societal  trend  towards  using the internet for  purchasing
goods and services will have a positive effect on our future  financial  results
through  enhanced sales and a reduction in costs. In April 2000, we upgraded our
website  to enable  e-commerce  applications


                                       12
<PAGE>

for the  sale  of our  products  and  services.  The  website  enables  existing
customers  to upgrade  our  applications.  We hope to reduce  costs  through the
introduction  of  web-based  activation  of our tags and labels by end users and
resellers.

     We are presently  focusing our resources on the development of our products
and services rather than sales.  During the past two fiscal years ended we spent
$4,146,152 on development  costs.  The  associated  costs may have a detrimental
effect on our short-term  financial results and cash flow. However,  these costs
are necessary to our becoming commercially viable.

     Given our focus on  development  and test marketing  rather than sales,  we
have no source of current  income.  Although our agreement  with  Warrantech may
prove fruitful in the future,  we are currently  generating  limited income from
it. Similarly,  we are not generating any income from the bicycle identification
program

Overview

Treatment of Discontinued Operations

     Our profit and loss from discontinued  operations  appears as a single line
item in our statement of operations as required by generally accepted accounting
principals.  The balance of deferred  revenue and expenses from our discontinued
operations appearing on our balance sheet in previous years has been written off
in the current year.  Their impact on our overall  financial  performance is not
material to our present and future financial performance.  As such, we limit our
discussion in this section to only continuing operations.

Revenues

     Since the  discontinuation  of the  credit  card  registration  program  in
September  1997 our only source of revenue has been from our  personal  property
registration  program and our nascent business  information  systems program. We
have  generated  minimal  sales to date.  The revenue  reported on our financial
statements is mainly derived from the sale of our personal property registration
kits through a variety of retail outlets and corporate affinity programs.

Cost of Sales

     The  costs  of  sales  primarily  consists  of  costs  associated  with the
construction and packaging of the personal property registration kits.

Operational

     Operational  costs contain  wages paid to staff  employees to maintain call
centers  servicing our current  customer base. This includes  subscribers to our
personal  property  registration  kit as  well  as  residual  clients  from  our
discontinued credit card registration program.


                                       13
<PAGE>


Information Systems

     The costs  associated  with  information  systems  primarily  relate to our
efforts to maintain  and update our  operational  systems as well as upgrade our
business information systems programs.

Sales and Marketing

     We sell our personal property registration kit primarily through our direct
sales forces.  Selling and marketing expenses consist mostly of personnel costs,
travel and promotional events such as trade shows, advertising,  market research
and public relations programs.

General and Administrative

     General and administrative expenses include executive  compensation,  legal
and accounting fees and administrative costs associated with our facilities such
as rent, office supplies, telephone expenses and corporate travel.

Results of Operations

Fiscal Year Ended March 31, 2000 Compared To Fiscal Year Ended March 31, 1999

     Revenues.  Revenues from our personal property  registration kits decreased
by 61% to $17,591 for the year ended March 31, 2001  compared to $44,732 for the
year ended March 31, 2000.  The decrease in revenues  was  primarily  due to our
lack of success in setting up our intended distribution channels for the bicycle
registration  and pet  identification  kits.. We expect revenues for fiscal year
end March 31, 2002 to increase due to our Warrantech agreement and our new focus
on corporate sales of our business information system software.

     Costs of Sales.  Costs of sales  increased  by 72% to $12,331  for the year
ended March 31, 2001 compared to $7,156 for the year ended March 31, 2000.  This
increase is due to the higher unit costs for  production  and  packaging  of the
bicycle  registration and pet  identification  kits compared to the old personal
property  registration  kit. We expect costs of sales to increase in  accordance
with the expected improvement in revenue for fiscal year end March 31, 2002.

     Operational.  Operational  costs  decreased by 16% to $222,107 for the year
ended March 31, 2001 compared to $264,615 for the year ended March 31, 2000 This
decrease reflects further infrastructure  reductions associated with a reduction
in support costs required for the  discontinued  CPS division.  We do not expect
this trend to continue for fiscal year end March 31, 2002.

     Information  Systems.  Informational  systems  costs  increased  by 120% to
$345,298  for the year ended  March 31, 2001  compared to $156,633  for the year
ended March 31, 2000.  This  increase  primarily  resulted from the necessity to
hire a chief information  officer and enhance our business  information  systems
software  offering.  We expect these costs to increase for fiscal year

                                       14
<PAGE>

end  March  31,  2002  due  to  our  need  to  explore  and  develop  e-commerce
applications for our products and services.

     Sales and  Marketing.  Sales and  marketing  expenses  increased  by 77% to
$693,891  for the year ended  March 31, 2001  compared to $392,239  for the year
ended March 31, 2000. This increase in sales and marketing expenses reflects the
increase in costs associated with the attempted, but unsuccessful rollout of the
bicycle registration and pet identification kits in the State of Florida.  Until
we find a  significant  market niche for our products  and  services,  we expect
these  expenses  to grow for  fiscal  year end March  31,  2002 if our cash flow
allows it.

     General and Administrative.  General and administrative  expenses decreased
by 14% to $958,161 for the year ended March 31, 2001 compared to $1,113,207  for
the year ended  March 31,  2000.  The  decrease  in general  and  administrative
expenses  primarily resulted from the necessity to hold costs down until our new
products and services start selling in the marketplace. These costs are expected
to slightly  increase  for fiscal year end March 31, 2002 as we are  required to
build infrastructure to support new sales initiatives.

Liquidity and Capital Resources

     From our inception, we have primarily financed our operations through funds
generated from the sale of capital stock, notes and debentures. Our losses since
inception total approximately  $21,775,778 as of March 31, 2001. Since September
2000, we have received  approximately  $570,000 in venture  capital funding from
off shore investors  through the issuance of convertible  bridge financing notes
and  associated  warrants.  We have  used  these  funds  primarily  to fund  the
development  of our new products and services.  We plan to  immediately  convert
these notes into common stock upon the  registration  of the  underlying  common
stock to the notes and  warrants.  Thereafter,  we may  call,  and the  security
holders may  exercise,  the  outstanding  warrants.  We  estimate  that we could
receive up to an additional $1,000,000 through the exercise of the warrants over
the next twelve months.

     As of March 31, 2001, we are in default under the terms of our  convertible
debentures in the principal  amount of $475,790 plus accrued interest at 15% per
annum.  Under the  default,  the  debenture  holders have the same rights as any
unsecured creditor. Based on preliminary  negotiations,  we believe that some of
the debenture  holders are still inclined to convert the  outstanding  debt into
common stock. We estimate the balance will be retired over the next  twenty-four
months  through  either  conversion  or future  income  streams.  Our  financial
statements  presently  account for the fact that the debenture  holders will not
convert the outstanding debt.  Consequently,  if they do decide to convert their
debt into common stock, our liquidity will improve.

     We are in default under a three-year  real property lease that commenced on
May 15, 1997. The lease  requires an annual payment of $41,772.  We negotiated a
final settlement in the amount of $10,000, which currently remains unpaid.

     Our  operating  activities  have used  cash in each of the last two  fiscal
years. Cash used in operating  activities  totaled $1,230,565 and $1,545,055 for
the years ended March 31, 2001 and



                                       15
<PAGE>

2000,  respectively.  This resulted from net losses of $2,210,800 and $1,811,943
for the years ended March 31, 2001 and 2000, respectively.

     Cash from investing  activities was $15,241 and $12,637 for the years ended
March 31, 2001 and 2000,  respectively.  The cash from investing  activities for
this period realized through the partial repayment of a loan to shareholders.

     Cash provided by financing activities amounted to $591,308 and $2,030,167
for the year ended March 31, 2001 and 2000, respectively.  During the year ended
March  31,  2001,  we  received  $1,045,527  from the sale of  common  stock and
$570,000 from the issuance of convertible  bridge  financing  notes.  During the
year ended March 31, 2000,  we received  $694,902  from the sale of common stock
and $1,700,000 from the issuance of convertible  bridge financing notes. We also
repaid $10,000 of debentures and convertible subordinated debentures

     Our current cash  projections  indicate that our short-term  annual funding
requirements  will be approximately  $1.5 million for the next twelve months. We
anticipate  that future cash sales and equity or debt  financing  will cover our
long-term cash needs,  but this might not occur.  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 could affect our ability to continue as a going concern.

Inflation; Seasonablity

     While inflation has not had a material  impact on operating  results and we
do not expect  inflation  to have a material  impact on  operating  results,  we
cannot assure that our business will not be affected by inflation in the future.
While our  business to date has not been  seasonal and we do not expect that our
business will be seasonal in the future, we cannot assure that our business,  on
a consolidated basis, will not be seasonal in the future.

New Accounting Pronouncements

     In March 2000, the Emerging  Issues Task Force (EITF) of the FASB reached a
consensus on EITF Issue 00-2,  "Accounting for Web Site Development Costs." This
consensus provides guidance on what types of costs incurred to develop Web sites
should be capitalized or expensed. The Company adopted this consensus.

     In March  2000,  the FASB  issued  Financial  Interpretation  (FIN) No. 44,
"Accounting  for Certain  Transactions  Involving  Stock  Compensation."  FIN 44
clarifies the  application of Accounting  Principles  Board (APB) Opinion No. 25
for  certain  issues,  such as the  definition  of an employee  for  purposes of
applying  APB  Opinion  No.  25, the  criteria  for  determining  whether a plan
qualifies as a  non-compensatory  plan,  the  accounting  consequence of various
modifications  to the terms of a previously  fixed stock option or award and the
accounting  for  an  exchange  of  stock  compensation   awards  in  a  business
combination. Adoption of FIN 44 did not change the Company's existing accounting
policies or disclosures.



                                       16
<PAGE>

     In July 2000, the EITF reached a consensus on EITF Issue 99-19,  "Reporting
Revenue Gross as a Principal  versus Net as an Agent." This  consensus  provides
guidance  concerning  under what  circumstances  a company should report revenue
based on (a) the gross amount billed to a customer because it has earned revenue
from the sale of the goods or services or (b) the net amount  retained (that is,
the amount billed to the customer less the amount paid to a supplier) because it
has earned a commission  or fee.  Adoption of this  consensus did not change the
Company's existing accounting policies.

     In September  2000, the EITF reached a final consensus on EITF Issue 00-10,
"Accounting  for Shipping and Handling Fees and Costs." This consensus  requires
that all amounts billed to a customer in a sale transaction  related to shipping
and handling, if any, represent revenue and should be classified as revenue. The
Company  historically  has classified  shipping charges to customers as revenue.
With  respect to the  classification  of costs  related to shipping and handling
incurred by the seller,  the EITF  determined  that the  classification  of such
costs is an accounting  policy  decision  that should be disclosed.  Adoption of
this  consensus did not change the  Company's  existing  accounting  policies or
disclosures.

Item 7. Financial Statements.

     Our  consolidated  financial  statements for the years ended March 31, 2001
and March 31, 2000 are included beginning at page F-1.

Item  8.  Changes  in and  Disagreements  With  Accountants  on  Accounting  and
          Financial Disclosure.

     On August 18, 1998, we retained Hirsch Silberstein & Subelsky,  P.C. as our
independent  accountants  to audit our  financial  statements as of, and for the
years ended, March 31, 1998 and March 31, 1999.

     On August 27, 1999, our Board of Directors  decided to retain the certified
public accounting firm of J. L. Stephan Co., P.C. to replace Hirsch  Silberstein
& Subelsky, P.C. as our independent accountants.  Hirsch Silberstein & Subelsky,
P.C.  has  discontinued  its  audit  practice  concerning  compliance  with  the
regulations  of the SEC.  We had no  disagreements  with  Hirsch  Silberstein  &
Subelsky,  P.C. on any matter of accounting  principles or practices,  financial
statement disclosure, or auditing scope or procedure.


                                       17
<PAGE>


                                    PART III

Item 9. Directors, Executive Officers, Promoters and Control Persons; Compliance
        With Section 16(a) of the Exchange Act.

     The  following  table sets forth  certain  information  with respect to our
executive officers and directors as of March 31, 2001:

NAME                          AGE        POSITION
---------------------------- ----- ---------------------------------------------

Bruce I. Lewis                60   Chief  Executive  Officer and  Chairman of
                                   the Board of Directors

Jay S. Stulberg               51   President,  Chief  Operating  Officer,
                                   Chief Financial Officer and Director

Dr. H. Joseph Greenberg       78   Director

Carl J. Corcoran              63   Director

David G.R. Butler             64   Director
------------------------

     Bruce I. Lewis has been our  Chairman of the Board of  Directors  and Chief
Executive Officer since June 30, 1994, and our President from August 12, 1995 to
December 22, 1998. His term on our Board of Directors expires at the 2003 annual
meeting of  stockholders.  From May 1993 until its dissolution in February 1998,
Mr.  Lewis  served as the Chief  Executive  Officer and Chairman of the Board of
Directors of Tracker Canada.  From November 1997 to December 22, 1998, Mr. Lewis
served as interim Chief Financial Officer.

     Jay S. Stulberg has been our President,  Chief Operating  Officer and Chief
Financial Officer, and a director, since December 22, 1998 for the term expiring
at the 2001 annual meeting of  stockholders.  Since February 1998, Mr.  Stulberg
has been the sole  shareholder,  director  and officer of Global  Tracker  Corp.
Since  approximately  1984, Mr. Stulberg has served on the board of directors of
two privately held family holding companies. From 1994 to mid-1996, Mr. Stulberg
served as the Group Controller of Algorithmics, Inc.

     H. Joseph  Greenberg has been a Director since December 22, 1998 for a term
expiring at the 2002 annual meeting of  stockholders.  Dr. Greenberg has engaged
in the practice of medicine since his graduation from medical school in 1952. He
has been a director of Genevest, Inc. since 1993.

     Carl J.  Corcoran  has been a director  since  December 22, 1998 for a term
expiring at the 2003 annual meeting of  stockholders.  Mr. Corcoran is currently
an officer and director of several  family-held  businesses,  including  Corcair
Farms,  Ltd.,  CorProperties,  Inc.,  Cor Source Water  Corporation,  Corcorvest
Corporation  and CJC  Bottling,  Ltd.  He is also a director  of the  Accessible

                                       18
<PAGE>

Software  Corporation,  a  publicly  traded  corporation,  and  A.A.B.  Building
Systems, Inc., a private company.

     David G. R. Butler has been a director  since  December 22, 1998 for a term
expiring at the 2001 annual  meeting of  stockholders.  Mr.  Butler is the chief
executive  officer and sole shareholder of Holiday Breaks  International,  Inc.,
which offers stay-free hotel  accommodations to companies as sales and marketing
incentives; MF Incentives, Inc., which offers travel coupons as sales incentives
for manufacturers'  products;  and Newfound  Communications,  Inc., which offers
premium incentive promotions.

Classification of Board of Directors

     Our  certificate  of  incorporation  and bylaws  provide  that the board of
directors be divided into three classes of directors,  with the classes to be as
nearly equal in number as possible.  Currently,  those  provisions  mandate that
approximately  one-third of the directors  will continue to serve until the 2001
annual meeting of stockholders,  one-third will continue to serve until the 2002
annual  meeting  and  one-third  will  continue  to serve  until the 2003 annual
meeting.  This  classification of the board of directors makes it more difficult
for  stockholders  to change the composition of the board of directors and could
discourage a third party from attempting to obtain control.

Committees of the Board of Directors

     The board of directors currently has four committees:

The  Executive  Committee  comprises  of  Messrs.  Lewis  and  Stulberg  and  is
responsible for:

     o    supervising our day-to-day operations
     o    strategic planning
     o    recruiting outside directors.

The Audit Committee comprises of Messrs.  Butler and Stulberg and is responsible
for:

     o    reviewing and recommending the engagement of our independent auditors
     o    consulting with the  independent  auditors on the adequacy of internal
          controls
     o    reviewing the auditors' reports on our financial statements

The  Ethics  Committee  comprises  of Mr.  Corcoran  and  Dr.  Greenberg  and is
responsible for:

     o    reviewing corporate policies and procedures
     o    insuring the dissemination of material information to all key managers

The  Compensation  Committee  comprises  of Messrs.  Butler and  Corcoran and is
responsible for:

     o    determining the compensation of our senior officers
     o    reviewing  recommendations  by  management as to the  compensation  of
          other officers and key personnel
     o    reviewing management's succession program
     o    administer the stock incentive plan



                                       19
<PAGE>

Section 16(a) Beneficial Ownership Reporting Compliance

     The following  persons failed to file reports  pursuant to Section 16(a) of
the Exchange Act during the past fiscal year:  Bruce I. Lewis,  Jay S. Stulberg,
H. Joseph Greenberg,  Carl J. Corcoran,  and David G. R. Butler.  Each filed one
Form 5 on May 17, 2001 to correct  their  respective  delinquencies.  Mr. Lewis'
Form 5 covered 18 transactions over the past three fiscal years that should have
been filed under Form 4. Mr.  Stulberg's Form 5 covered 74 transactions over the
past  three  fiscal  years that  should  have been  filed  under Form 4.  Mssrs.
Greenberg,  Corcoran and Butler each filed a Form 5 that  covered 1  transaction
that should have been filed under Form 3 and 1 transaction that should have been
filed under Form 3.

Item 10. Executive Compensation.

Compensation of Named Executive Officers

         The  following  table  provides  certain  information   concerning  the
compensation  earned by our Chief  Executive  Officer  and other  then-executive
officers who received  compensation in excess of $100,000 for services  rendered
in all capacities to us for the most recent three fiscal years.



                                                     SUMMARY COMPENSATION TABLE

------------------------------------------------------------------------------------------------------------------------------------
                                                                                Long-Term Compensation
--------------------- --------- ------------------------------ ----------------------------------------------------- --------------
                                     Annual Compensation                      Awards                     Payouts
--------------------- --------- ------------------------------ ------------------------------------ ---------------- --------------
                                                                  Restricted        Securities                         All Other
Name and then-         Fiscal     Salary    Bonus     Other     Stock Award(s)     Under-Lying       LTIP Payouts     Compensation
Principal Position      Year       ($)       ($)     ($)(1)           ($)         Options/SARs (#)       ($)              ($)
--------------------- --------- ----------- ------- ---------- ----------------- ------------------ ---------------- --------------
Bruce I. Lewis, CEO      2001     45,000              10,000          130,000
--------------------- --------- ----------- ------- ---------- ----------------- ------------------ ---------------- --------------
                         2000     30,000              10,000          145,000           600,000
--------------------- --------- ----------- ------- ---------- ----------------- ------------------ ---------------- --------------
                         1999          0              10,000          175,000         2,488,578
--------------------- --------- ----------- ------- ---------- ----------------- ------------------ ---------------- --------------
Jay S. Stulberg,
President, COO & CFO     2001     36,950              10,000          138,050
--------------------- --------- ----------- ------- ---------- ----------------- ------------------ ---------------- --------------

                         2000     36,250              10,000           88,750           600,000
--------------------- --------- ----------- ------- ---------- ----------------- ------------------ ---------------- --------------
                         1999     40,000              10,000           85,000         2,488,578
--------------------- --------- ----------- ------- ---------- ----------------- ------------------ ---------------- --------------
(1) Automobile Allowance



------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>



                                      AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND
                                                     FY-END OPTION/SAR VALUES

---------------------------------------------------------------------------------------------------------------------------------
                                                            Number of Securities Underlying    Value of Unexercised In-The-Money
                   Shares Acquired On                      Unexercised Options/SARs At FY-End      Options/SARs At FY-End ($)
     Name             Exercise (#)         Value Realized    (#) Exercisable/ Unexercisable        Exercisable/ Unexercisable
     (a)                   (b)                   (c)                       (d)                                 (e)
----------------- ---------------------- ----------------- ---------------------------------- -----------------------------------
<S>               <C>                    <C>               <C>                                <C>
Bruce I. Lewis            1,444,289              NIL              1,244,289/1,600,000                         NIL
----------------- ---------------------- ----------------- ---------------------------------- -----------------------------------
Jay S. Stulberg           1,244,289              NIL                1,444,289/400,000                         NIL
----------------- ---------------------- ----------------- ---------------------------------- -----------------------------------




</TABLE>


                                       20
<PAGE>

Employment Contracts, Termination of Employment and Change of Control

     On December 18, 1998, we entered into employment  agreements with Mr. Lewis
and Mr.  Stulberg,  pursuant to which Mr.  Lewis  serves as our Chief  Executive
Officer and Mr. Stulberg serves as our President, Chief Operating Officer, Chief
Financial  Officer  and  Secretary.  The  agreements  provide for an annual base
salary of $175,000 for Mr. Lewis and $125,000 for Mr. Stulberg.  Both agreements
provide  for base  salary  increases  of $37,500  each year  based upon  certain
performance  criteria beginning April 1, 2000, a maximum automobile allowance of
$10,000 and the possibility of discretionary bonuses.

     The initial term for each  agreement is three years with  one-year  renewal
terms thereafter,  and provides for the payment of a relocation  allowance equal
to the lesser of the actual relocation  expenses or $25,000 per each occurrence.
The  agreements   provide  that  Mssrs.  Lewis  and  Stulberg  are  entitled  to
participate in any stock option, stock purchase,  annual bonus, pension,  profit
sharing, life insurance and medical benefit plans and such other fringe benefits
that may be applicable to our senior executive employees.

     If the  employment of either Mr. Lewis or Mr.  Stulberg is  terminated  for
cause or if they terminate for any reason, they will be entitled to compensation
through the date of termination. If, prior to a change of control, employment is
terminated  due to their death or  disability,  by us other than for cause or by
them for good reason, they are entitled to receive all compensation  through the
date of termination.  They also receive the  continuation of base salary for the
greater of one year or the remainder of the term of the agreement.  In addition,
we will  maintain  for 12  months,  or through  the date he obtains  alternative
employment,  whichever is earlier,  their  participation in our employee benefit
plans in which they are eligible to participate  immediately  before termination
to the extent  permissible  under such  plans.  They will also have the right to
exercise  all  vested  stock  options  outstanding  at the  termination  date in
accordance with the plans governing those options.  We will use our best efforts
to  remove  the  restrictions   from  any  restricted  stock  held  by  them  at
termination.  If employment is terminated after a change of control, by them for
good reason or by us without  cause,  they will  receive all the  benefits  they
would have  received for such a  termination  prior to a change of control.  All
unvested stock options held shall become fully vested immediately. Payments made
in  conjunction  with a change of control are limited to an amount that will not
result in a loss of our income tax deduction under Internal Revenue Code.

Compensation of Directors

     Non-employee  directors are paid $500 for attendance at each meeting of the
board of directors or a committee meeting.  Non-employee  directors also receive
an annual retainer of $10,000. In addition,  non-employee directors are eligible
to receive options to purchase shares of our common stock.

     Under  our  1999  Director  Option  Plan,  each  non-employee  director  is
automatically  granted an option to purchase  5,000  shares of common stock upon
election.  If the  non-employee  director is elected  Chairman of the Board, the
director  is granted an option to purchase  10,000  shares of common  stock.  On
every anniversary of initial election or appointment,  each eligible


                                       21
<PAGE>


director  is  automatically   granted  a  nonqualified  option  to  purchase  an
additional  5,000  shares of common  stock  (10,000  shares if  Chairman  of the
Board). The plan provides that options granted to non-employee  directors have a
maximum  term of ten years and are  exercisable  ratably in annual  installments
over three years. All options granted to non-employee directors vest immediately
upon a change of control. The exercise price of options granted pursuant to such
automatic  grants is reduced to a price 25% below the average  trading  price of
our  common  stock  for the 30 days  immediately  prior to the  grant  date.  On
December 22,  1999,  we granted  options to purchase  5,000 shares of our common
stock at an exercise price of $0.098 per share to each Joseph  Greenberg,  David
Butler and Carl Corcoran.

Item 11. Security Ownership of Certain Beneficial Owners and Management.



     The following table sets forth certain information regarding the beneficial
ownership of the common stock as of June 30, 2000 by:

     o    Each person known to us to own beneficially  more than 5% of our total
          voting stock;
     o    The  CEO  and  the  other  executive  officers  named  in the  summary
          compensation table;
     o    Each of our directors; and
     o    All of our directors and officers as a group.

     Except as otherwise  indicated  below,  to our knowledge all persons listed
below have sole  voting and  investment  power with  respect to their  shares of
common  stock,  except to the extent that  authority is shared by spouses  under
applicable  law.  The  common  stock is our  only  outstanding  class of  equity
securities.  As of June 30, 2001, there were approximately 379 record holders of
common  stock.  Percentage  of  ownership  is based upon  91,914,859  issued and
outstanding  shares  of  common  stock  beneficially  owned  on June  31,  2000,
including currently  exercisable warrants to purchase 1,250,000 shares of common
stock,  currently exercisable options to purchase 40,000 shares of common stock,
currently  exercisable  options to purchase  2,688,578  shares of common  stock,
currently  exercisable  options to purchase  200,000  shares  reserved  under an
option issued to Toda Corporation Limited for financial consulting services, and
22,044,855  shares of common stock to be issued upon conversion of the remaining
bridge  financing  notes and  exercise  of the  repricing  warrants at $0.20 per
share.

                                               Total Shares Owned
Beneficial Owner and Address                   As of June 30, 2001    Percentage
--------------------------------------------------------------------------------
Bruce I. Lewis, Chief Executive Officer            4,371,8291            3.70%
1120 Finch Avenue West, Suite 303
North York, Ontario, Canada M3J 3H7

Jay S. Stulberg, Chief Financial Officer           2,977,2892            2.52%
1120 Finch Avenue West, Suite 303
North York, Ontario, Canada M3J 3H7

H. Joseph Greenberg, M.D., Director                    6,6673           <0.01%
1120 Finch Avenue West, Suite 303
North York, Ontario, Canada M3J 3H7


                                       22
<PAGE>

David G. R. Butler, Director                           6,6673           <0.01%
1120 Finch Avenue West, Suite 303
North York, Ontario, Canada M3J 3H7

Carl J. Corcoran, Director                             6,6673           <0.01%
1120 Finch Avenue West, Suite 303
North York, Ontario, Canada M3J 3H7

Executive Officers and Directors as a group,       7,369,1193            6.24%
Including those named above (five persons)

(1)  Number of shares includes the option to purchase 1,244,289 shares of common
     stock.  Furthermore,  Mr. Lewis has pledged  600,000 shares of common stock
     and the option to purchase an additional  1,244,289  shares of common stock
     as security to the bridge financing notes.
(2)  Number of shares includes the option to purchase 1,444,289 shares of common
     stock
(3)  Number of shares  includes  the  currently  exercisable  option to purchase
     6,667 shares of common stock.

     Upon  conversion  of the  bridge  financing  notes and  attached  repricing
warrants into common stock,  SovCap Equity  Partners,  Ltd. will likely become a
greater than 5% shareholder in our company.  As of June 30, 2001,  SovCap Equity
Partners,  Ltd.  holds  971,705  shares  of  common  stock  and its  address  is
Cumberland  House,  #27  Cumberland  Street,  P.O.  Box  CB-13016,  Nassau,  New
Providence,  Bahamas and is directed by Barry Herman, its President. Assuming we
convert the remaining notes into common stock at a conversion price of $0.20 per
share,  after  conversion of the notes and exercise of the  repricing  warrants,
SovCap Equity Partners,  Ltd. would own  approximately  an additional  9,549,854
shares of our common stock. At that point, SovCap Equity Partners, Ltd. would be
an  8.91%  shareholder.  Under  this  scenario,  our  current  management  would
beneficially  own less than 5.00% of the issued and  outstanding  common  stock.
Should this occur, SovCap Equity Partners, Ltd. may be in a position to effect a
material  change  in our  management.  Furthermore,  if we  decide  to call  the
remaining  warrants,  SovCap  Equity  Partners,  Ltd.  could be an even  greater
security owner if it decides to exercise them.

Item 12. Certain Relationships and Related Transactions.

Transactions with Management

     We  have   entered  into   employment   agreements   containing   severance
arrangements  with certain  executive  officers.  These  agreements  provide for
compensation  payments under certain  circumstances  to each officer through the
remainder of the term of the agreements.  Our certificate of  incorporation  and
bylaws provide for  indemnification of all directors and officers.  In addition,
each director nominee,  when elected,  will enter into separate  indemnification
agreements with us.

     We have agreed with certain state  regulatory  authorities  that so long as
our  securities  are  registered  in such states,  we will not make loans to our
officers, directors, employees, or principal stockholders. This does not include
loans made in the ordinary course of business, such as travel advances,  expense
account advances, relocation advances, or reasonable salary advances.


                                       23
<PAGE>

     Furthermore,   all  future   transactions  with  our  executive   officers,
directors,  employees,  5%  stockholders  and affiliates  will be subject to the
approval of a majority of the independent, disinterested members of the board of
directors.  Such future  transactions must be for bona fide business purposes on
terms that are no less favorable to us than those that could be negotiated  with
unaffiliated parties.

Global Tracker

     In February 1998,  Global Tracker acquired  substantially all of the assets
of  Tracker  Canada  in a  bankruptcy  proceeding.  Jay S.  Stulberg,  our Chief
Financial Officer and Director, is the sole shareholder, officer and Director of
Global  Tracker.  Following the bankruptcy  proceeding,  Global Tracker made the
assets formerly owned by Tracker Canada available to us in order to permit us to
carry on Tracker  Canada's  business.  . Under a license  agreement  with Global
Tracker, we will pay Global Tracker a 12% gross royalty on our sales.


Item 13. Exhibits, List 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 of America, 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



                                   24
<PAGE>

10.2+           Discretionary Cash Bonus Arrangement of The Tracker Corporation of America

10.3+           Form of Indemnification Agreement entered into between the Registrant and each of its
                Directors

10.10+          Right of First Refusal, Co-Sale and Voting Agreement dated March 14, 1994 between The Tracker
                Corporation of America, 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 of America and
                Stalia Holdings B.V., as confirmed by letter dated June 22, 1994

10.19+          Assignment World-Wide dated May 12, 1994 from I. Bruce Lewis to the Tracker Corporation of
                America

10.37++         Modification Agreement dated May 27, 1997 between The Tracker Corporation of America, Saturn
                Investments, Inc., I. Bruce Lewis, Mark J. Gertzbein, and Jonathan B. Lewis

10.39+++        License Agreement dated as of July 30, 1998 between The Global Tracker Corporation and the
                Tracker Corporation of America

10.41++++       Employment Agreement dated December 18, 1998 between Bruce I. Lewis and The Tracker
                Corporation of America

10.42++++       Employment Agreement dated December 18, 1998 between Jay S. Stulberg and The Tracker
                Corporation of America

10.43++++       Letter Agreement dated May 18, 1999 between Symbol Technologies, Inc. and The Tracker
                Corporation of America

10.44+++++      Purchase and Security Agreement dated August 18, 1999

10.45+++++      1994 Amended and Restated Stock Option Plan

10.46+(8)       Placement Agreement dated August 18, 1999 with Sovereign Capital Advisors, LLC.

10.47+(6)       Stock Option Award Agreement dated December 22, 1998 between Bruce
                Lewis and The Tracker Corporation of America

10.48+(6)       Stock Option Award Agreement dated December 22, 1998 between Jay
                Stulberg and The Tracker Corporation of America

10.49+(6)       Non-Qualified Stock Option Award Agreement dated December 31, 1999
                between Bruce Lewis and The Tracker Corporation of America

10.50+(6)       Non-Qualified Stock Option Award Agreement dated December 31, 1999
                between Jay Stulberg and The Tracker Corporation of America



                                   25
<PAGE>

10.51+(6)       Incentive Stock Option Award Agreement dated December 31, 1999 between
                Christopher Creed and The Tracker Corporation of America

10.52+(6)       Incentive Stock Option Award Agreement dated December 31, 1999 between
                Tizio Panara and The Tracker Corporation of America

10.53+(7)       2000 Stock Wage and Fee Payment Plan

21.1+           List of subsidiaries of the Registrant

23.1            Consent of J. L. Stephan Co., P. C.

23.2            Consent of Hirsch Silberstein & Subelsky, P.C.

24.1            Power of Attorney
--------------------

+               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  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  Annual Report on Form 10-K dated
                March 31,  1999 (filed  August 17, 1999).

+++++           Incorporated  by reference  from the  Registrant's  Amended  Quarterly  Report on
                Form 10-QSB dated  September  30, 1999 (filed January 11, 2000)

+(6)            Incorporated by reference from the Registrant's Registration  Statement  on Form  S-8
                concerning  the  1994  Amended  and Restated Stock Option Plan (filed March 28, 2000)

+(7)            Incorporated by reference from the Registrant's Registration  Statement on Form S-8
                concerning the 2000 Stock Wage and Fee Payment Plan (filed March 28, 2000)

+(8)            Incorporated by reference from the Registrant's Registration Statement on
                Form SB-2/A (filed July 10, 2000)
</TABLE>


                                       26
<PAGE>


     (b) Reports on Form 8-K

     During the fourth  quarter of the fiscal year ended March 31, 2001,  we did
not submit any reports on Form 8-K.




                                       27


<PAGE>

                                   SIGNATURES

     In accordance  with Section 13 or 15(d) of the  Securities  Exchange Act of
1934, as amended,  the registrant  caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.


THE TRACKER CORPORATION OF AMERICA,
a Delaware corporation



By:  /s/ Bruce I. Lewis
    -------------------------------------------------
     Bruce I. Lewis
     Chairman of the Board and Chief Executive Officer

Dated: July 14, 2001

     In  accordance  with the Exchange Act, this report has been signed below by
the following  persons on behalf of the  registrant and in the capacities and on
the dates indicated.


By:  /s/ Bruce I. Lewis
    -------------------------------------------------
     Bruce I. Lewis
     Chairman of the Board and Chief Executive Officer


Dated: July 14, 2001


                                       28
<PAGE>
<TABLE>
<CAPTION>




                       THE TRACKER CORPORATION OF AMERICA

                          INDEX TO FINANCIAL STATEMENTS


<S>                                                                                 <C>
Independent Auditor's Report dated July 17, 2001.......................................F-2

Audited Balance Sheet as of March 31, 2001.............................................F-3

Audited Statement of Income for the Years Ended March 31, 2001 and March 31, 2000......F-4

Audited Statement of Cash Flows for the Years Ended March 31, 2001 and
        March 31, 2000.................................................................F-5

Audited Statement of Changes in Stockholders' Equity for the Years Ended
        March 31, 2001 and March 31, 2000..............................................F-6

Notes to Audited Financial Statements.................................................F-11

</TABLE>

<PAGE>

                          INDEPENDENT AUDITOR'S REPORT
                          ----------------------------



To the Board of Directors and Stockholders of
The Tracker Corporation of America

We have audited the  accompanying  balance sheets of The Tracker  Corporation of
America,  as of March 31, 2001 and March 31, 2000, and the related statements of
operations,  shareholders' deficit, and cash flows for the years ended March 31,
2001 and March 31, 2000. These financial  statements are the  responsibility  of
the Company's  management.  Our responsibility is to express an opinion on these
financial statements based on our audits. The consolidated  financial statements
of The Tracker  Corporation  of America and  Subsidiary as of March 31, 1999 and
from  inception  at May 6, 1993  through  March 31,  1998 were  audited by other
auditors  whose reports dated July 9, 1999,  except for Note 15 as to which date
is July 3, 2000,  September 16, 1998,  and June 24, 1997 included an explanatory
paragraph that described going concern uncertainties discussed in Notes 1 & 2 to
the consolidated financial statements.

We  conducted  our  audits  in  accordance  with  generally   accepted  auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We believe our audits provide a reasonable basis for our opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all material  respects,  the financial  position of The Tracker  Corporation  of
America as of March 31, 2001 and 2000, and the results of its operations and its
cash  flows for the years  then  ended in  conformity  with  generally  accepted
accounting principles.

The accompanying  consolidated  financial statements have been prepared assuming
that the Company will continue as a going  concern.  As discussed in Notes 1 & 2
to  the  consolidated   financial  statements,   the  Company  discontinued  its
telemarketing program for its credit card registration  business. The Company is
relying upon affiliated and outside  parties to fund its cash flow  deficiencies
through debt and equity  infusions.  Those  conditions raise  substantial  doubt
about the Company's ability to continue as a going concern.  Management's  plans
in regard to these  matters are also  described in Notes 1 and 2. The  financial
statements do not include any adjustments  that might result from the outcome of
this uncertainty.


J L Stephan Co, PC

J L Stephan Co, PC

Traverse City, Michigan
June 15, 2001




                                      F-2

<PAGE>

<TABLE>
<CAPTION>


                                 THE TRACKER CORPORATION OF AMERICA
                                   ( A Development Stage Company)
----------------------------------------------------------------------------------------------------------

                                     CONSOLIDATED BALANCE SHEET
                                     --------------------------


                                               Assets
                                                                               March 31,       March 31,
                                                                                 2001            2000
                                                                             ------------    ------------
<S>                                                                          <C>             <C>
Current assets
  Cash and cash equivalents                                                  $       --      $    497,749
  Due from related parties                                                        149,716            --
  Prepaid expenses and deposits                                                    12,000            --
  Deferred charges                                                                   --           114,065
                                                                             ------------    ------------
       Total current assets                                                       161,716         611,814

Due from shareholders                                                                --             1,434
Deferred charges                                                                     --            21,514
Property and equipment (net)                                                                           --
                                                                             ------------    ------------
       Total assets                                                          $    161,716    $    634,763
                                                                             ============    ============

                                 Liabilities & Shareholders' Deficit

Current liabilities
  Accounts payable                                                           $    458,972    $    434,223
  Accrued liabilities                                                             673,086         487,114
  Due to shareholders                                                              13,806            --
  Due to related parties                                                             --            13,324
  Deferred revenue                                                                   --           192,135
  Convertible bridge notes                                                      1,720,000       1,700,000
  Debenture payable                                                                31,809          31,809
  Convertible debentures                                                          465,790         465,790
                                                                             ------------    ------------
       Total current liabilities                                                3,363,463       3,324,394


Deferred revenue                                                                     --            23,109

Commitments (Note 12)                                                                --

Shareholders' deficiency
   Common stock, $.001par value, 90,000,000 shares authorized,

    86,406,347 (56,627,509 - March 31, 2000) shares issued and outstanding         86,406          56,628

   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, 20,000,000
    shares authorized, 606,730  (793,594 - March 31, 2000) issued
    and outstanding                                                                                    --

  Paid-in capital                                                              18,735,962      16,981,878
  Other capital                                                                  (248,336)        (60,000)
  Deficit accumulated during the development stage                            (21,775,779)    (19,564,979)
  Comprehensive income (Note 3)                                                      --          (126,267)
                                                                             ------------    ------------
    Total shareholders' deficit                                                (3,201,747)     (2,712,741)
                                                                             ------------    ------------

    Total liabilities and shareholders' deficit                              $    161,716    $    634,763
                                                                             ============    ============



The accompanying notes are an integral part of these consolidated financial statements.



                                                 F-3
</TABLE>

<PAGE>

<TABLE>
<CAPTION>

                                       THE TRACKER CORPORATION OF AMERICA
                                         ( A Development Stage Company)
---------------------------------------------------------------------------------------------------------------

                                      CONSOLIDATED STATEMENT OF OPERATIONS
                                      ------------------------------------

                                                    From Inception (May 6, 1993)             For the
                                                          through March 31,            Year ended March 31,

                                                               2001                  2001            2000
                                                      ------------------------  ---------------  --------------
<S>                                                   <C>                       <C>              <C>
Revenue                                               $               495,919   $       17,591   $      44,732

Cost of sales                                                         191,410           12,331           7,156
                                                      ------------------------  ---------------  --------------

Gross profit                                                          304,509            5,260          37,577
                                                      ------------------------  ---------------  --------------

Development costs
  Operational                                                       3,597,158          222,107         264,615
  Information systems                                               2,036,521          345,298         156,633
  Sales and marketing                                               6,069,500          693,891         392,239
  General and administrative                                       14,964,856          958,161       1,113,207
                                                      ------------------------  ---------------  --------------

Total development costs                                            26,668,035        2,219,457       1,926,695

Loss from continuing operations                                   (26,363,526)      (2,214,198)     (1,889,118)

Discontinued operations:
  Gain from operation                                               4,744,836            3,398          77,175
  Gain (loss) on disposal of CPS segment                             (157,088)               -               -
                                                      ------------------------  ---------------  --------------
                                                                    4,587,748            3,398          77,175
                                                      ------------------------  ---------------  --------------

Net loss applicable to common stock                   $           (21,775,778)  $   (2,210,800)  $  (1,811,943)
                                                      ========================  ===============  ==============



Basic and Diluted Earnings (loss) per share of common stock

Loss from continuing operations                       $                 (1.05)  $        (0.04)  $       (0.03)

Gain (loss) from discontinued operation               $                  0.19   $         0.00   $        0.00
                                                      ------------------------  ---------------  --------------

Net loss                                              $                 (0.86)  $        (0.04)  $       (0.03)
                                                      ========================  ===============  ==============

Weighted average number of shares
   outstanding                                                     25,144,399       62,266,106      54,082,601
                                                      ========================  ===============  ==============




The accompanying notes are an integral part of these consolidated financial statements.






                                                      F-4
</TABLE>

<PAGE>
<TABLE>
<CAPTION>


                                                THE TRACKER CORPORATION OF AMERICA
                                                   (A Development Stage Company)
----------------------------------------------------------------------------------------------------------------------------------

                                               CONSOLIDATED STATEMENT OF CASH FLOWS
                                               ------------------------------------



                                                                       From inception
                                                                        (May 6, 1993)              Year Ended          Year Ended
                                                                       through March 31             March 31            March 31
                                                                             2001                     2001                2000
                                                                          -----------              ----------          -----------
<S>                                                                     <C>                      <C>                  <C>
Cash flows from (used in) operating activities:
  Net loss                                                              $ (21,775,779)           $ (2,210,800)        $ (1,811,943)
  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                         571,900                       -                    -
    Compensation settled via the issuance of company shares                 6,308,363               1,024,219              354,735
    Changes in assets and liabilities:
        Prepaid expenses and deposits                                         (29,273)                (12,000)                   -
        Accounts receivable                                                         0                       -               97,843
        Deferred charges                                                            0                 135,579              120,426
        Deferred revenue                                                            0                (215,244)            (197,602)
        Due to related parties                                                      0                 (13,324)              13,324
        Due from related parties                                             (149,716)               (149,716)                   -
        Accounts payable and accrued liabilities                            1,146,702                 210,721             (121,839)
                                                                          -----------              ----------          -----------
  Net cash used in operating activities                                   (13,534,369)             (1,230,565)         ($1,545,055)
                                                                          -----------              ----------          -----------

Cash flows from (used in) investing activities:
  Acquisition of fixed assets                                                   6,028                       -                    -
  Loan to shareholders                                                       (356,412)                  1,434               12,637
  Repayment of loans to shareholders                                          370,218                  13,806                    -
  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                                  6,420                  15,241               12,637
                                                                          -----------              ----------          -----------
Cash flows from (used in) financing activities:
  Issuance of common shares                                                11,014,485                 571,308              340,167
  Issuance of preferred shares                                              1,050,000                       -                    -
  Issuance of convertible subordinated debentures                           2,189,529                                            -
  Repayment of debentures and convertible subordinated debentures            (307,401)                      -              (10,000)
  Issuance of convertible bridge notes                                      1,720,000                  20,000            1,700,000
  Share issue costs                                                        (1,684,735)                      -                    -
                                                                          -----------              ----------          -----------
  Net cash from (used in) financing activities                             13,981,878                 591,308            2,030,167
                                                                          -----------              ----------          -----------
Effect of exchange rate changes                                              (453,929)                126,268                    -
                                                                          -----------              ----------          -----------
Increase (decrease) in cash and cash equivalents during                             0                (497,749)            $497,749
  the period

Cash and cash equivalents, beginning of period                                      -                 497,749                    -
                                                                          -----------              ----------          -----------
Cash and cash equivalents, end of period                                  $         0              $        0          $   497,749
                                                                          ===========              ==========          ===========
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.











                                                                F-5
</TABLE>
<PAGE>
<TABLE>
<CAPTION>



                                                THE TRACKER CORPORATION OF AMERICA
                                                   (A Development Stage Company)
------------------------------------------------------------------------------------------------------------------------------------

                                          CONSOLIDATED STATEMENT OF SHAREHOLDERS' DEFICIT
                                          -----------------------------------------------




                                                                                         SHARES
                                                                     ---------------------------------------------- -----------

                                                                                                        Class B
                                                                      Preferred         Common          Common       Preferred
                                                                        Stock           Stock           Stock          Stock
                                                                     ---------------------------------------------- -----------
<S>                                                                  <C>              <C>             <C>           <C>
Shares issued to officers at inception (Cash - $Nil)                          --             --         5,089,286   $      --

Shares issued for cash (Cash - $4,714,188)                                    --             --           884,729          --

Shares issued in lieu of rent (Cash - $Nil)                                   --             --            60,871          --

Share issue costs                                                             --             --              --            --

Translation adjustment                                                        --             --              --            --

Net loss                                                                      --             --              --            --
                                                                     ---------------------------------------------- -----------
Balance at March 31, 1994                                                     --             --         6,034,886          --
                                                                     ---------------------------------------------- -----------

Shares issued for cash (Cash - $1,175,797)                                    --             --           234,517          --

Shares issued in lieu of rent (Cash - $Nil)                                   --             --             5,777          --

Reverse merger with The Tracker Corporation
on July 12, 1994 (Cash - $100)                                                --          739,219            --            --

Shares issued  from Regulation S offering (including
79,658 shares
   at $7 per share for consulting services and 3,571 shares at $5.50
   per share for the purchase of fixed assets) (Cash -$1,505,000)             --          860,000            --            --
Share proceeds to be received subsequent to March 31, 1995                    --             --              --            --

Shares issued for consulting and marketing services  (Cash-$Nil)              --          825,000          78,005          --
Less: consulting and marketing services not yet received                      --         (814,583)*          --            --

Shares proceeds received from private placement
  on March 15, 1995 (Cash - $350,000)                                         --          500,000            --            --

Shares issued to employees for employment services (Cash-$Nil)                --             --            25,063          --

Share issue costs                                                             --             --              --            --

Translation adjustment                                                        --             --              --            --

Net loss                                                                      --             --              --            --
                                                                     ---------------------------------------------- -----------
Balance at March 31, 1995                                                     --        2,109,636       6,378,248          --
                                                                     ---------------------------------------------- -----------



                                                                                                 AMOUNTS
                                                                      -------------------------------------------------------------
                                                                                      Paid In
                                                                                     Capital in                          Other
                                                                        Common         Excess          Other        Comprehensive
                                                                        Stock          of Par         Capital           Income
                                                                      -------------------------------------------------------------
Shares issued to officers at inception (Cash - $Nil)                  $      --      $      --       $      --      $      --

Shares issued for cash (Cash - $4,714,188)                                    --        4,714,188           --             --

Shares issued in lieu of rent                                                 --          324,344           --             --

Share issue costs                                                             --         (466,142)          --             --

Translation adjustment                                                        --             --             --         (129,098)

Net loss                                                                      --             --             --             --

                                                                      -------------------------------------------------------------
Balance at March 31, 1994                                                     --        4,572,390           --         (129,098)
                                                                      -------------------------------------------------------------


Shares issued for cash (Cash - $1,175,797)                                    --        1,175,797           --             --

Shares issued in lieu of rent (Cash - $Nil)                                   --           30,121           --             --

Reverse merger with The Tracker Corporation
on July 12, 1994 (Cash - $100)                                                 739           (639)          --             --

Shares issued  from Regulation S offering (including
79,658 shares
   at $7 per share for consulting services and 3,571 shares at $5.50
   per share for the purchase of fixed assets) (Cash -$1,505,000)              860      2,900,840           --             --
Share proceeds to be received subsequent to March 31, 1995                    --         (819,459)          --             --

Shares issued for consulting and marketing services  (Cash-$Nil)               825      2,204,153           --             --
Less: consulting and marketing services not yet received                      (815)          --       (2,086,685)          --

Shares proceeds received from private placement
  on March 15, 1995 (Cash - $350,000)                                          500        349,500           --             --

Shares issued to employees for employment services (Cash-$Nil)                --           74,409           --             --

Share issue costs                                                             --         (779,495)          --             --

Translation adjustment                                                        --             --             --         (159,026)

Net loss                                                                      --             --             --             --


                                                                      -------------------------------------------------------------
Balance at March 31, 1995                                                    2,109      9,707,617     (2,086,685)      (288,124)
                                                                      -------------------------------------------------------------



                                                                           AMOUNTS (Continued)
                                                                      -----------------------------
                                                                         Deficit
                                                                       Accumulated
                                                                         During
                                                                       Development
                                                                          Stage         Total
                                                                      -----------------------------
Shares issued to officers at inception (Cash - $Nil)                  $      --      $      --

Shares issued for cash (Cash - $4,714,188)                                    --        4,714,188

Shares issued in lieu of rent                                                 --          324,344

Share issue costs                                                             --         (466,142)

Translation adjustment                                                        --         (129,098)

Net loss                                                                (2,043,425)    (2,043,425)
                                                                      -----------------------------
Balance at March 31, 1994                                               (2,043,425)     2,399,867
                                                                      -----------------------------

Shares issued for cash (Cash - $1,175,797)                                    --        1,175,797

Shares issued in lieu of rent (Cash - $Nil)                                   --           30,121

Reverse merger with The Tracker Corporation
on July 12, 1994 (Cash - $100)                                                --              100

Shares issued  from Regulation S offering (including 79,658 shares
   at $7 per share for consulting services and 3,571 shares at $5.50
   per share for the purchase of fixed assets) (Cash -$1,505,000)             --        2,901,700
Share proceeds to be received subsequent to March 31, 1995                    --         (819,459)

Shares issued for consulting and marketing services  (Cash-$Nil)              --        2,204,978
Less: consulting and marketing services not yet received                      --       (2,087,500)

Shares proceeds received from private placement
  on March 15, 1995 (Cash - $350,000)                                         --          350,000

Shares issued to employees for employment services (Cash-$Nil)                --           74,409

Share issue costs                                                             --         (779,495)

Translation adjustment                                                        --         (159,026)

Net loss                                                                (5,068,583)    (5,068,583)
                                                                      -----------------------------
Balance at March 31, 1995                                               (7,112,008)       222,909
                                                                      -----------------------------












The accompanying notes are an integral part of these consolidated financial statements.





                                                               F-6

</TABLE>

<PAGE>
<TABLE>
<CAPTION>



                                                THE TRACKER CORPORATION OF AMERICA
                                                   (A Development Stage Company)
------------------------------------------------------------------------------------------------------------------------------------

                                          CONSOLIDATED STATEMENT OF SHAREHOLDERS' DEFICIT
                                          -----------------------------------------------



                                                                                                    SHARES
                                                                     --------------------------------------------------- -----------

                                                                                                           Class B
                                                                      Preferred         Common              Common        Preferred
                                                                        Stock           Stock               Stock           Stock
                                                                     --------------------------------------------------- -----------
<S>                                                                  <C>           <C>                <C>                <C>
Share proceeds received re Regulation S offering                           --             --               --            $  --
   made before March 31, 1995 (Cash - $225,280)

Consulting services received re shares issued                              --           14,582 *           --               --
   before March 31, 1995 (Cash - $ Nil)

Marketing services received re shares issued                               --          266,664 *           --               --
    to LL Knickerbocker Co.  (Cash - $ Nil)

Shares issued to Directors as compensation  (Cash - $Nil)                  --           98,858             --               --

Shares issued to Amerasia for marketing services (Cash - $Nil)             --             --             30,000             --
Less: services not yet received                                            --             --            (12,500)*           --

Shares cancelled (Cash - $Nil)                                             --             (171)            --               --

Shares issued pursuant to S-8 for employees, consultants and               --          770,000             --               --
     a director  (Cash - $Nil)
Less: employment and consulting services not yet received                  --         (340,939)*           --               --

                                                                           --          200,000             --               --
Less: shares proceeds to be received                                       --             --               --               --

Share proceeds received from private placement (Cash - $250,000)           --          250,000             --               --

Shares issued upon exercise of warrants at Canadian $1 per share           --             --            849,803             --
   (Cash - $619,166)

Shares issued to officers (Cash - $Nil)                                    --          630,000             --               --

Shares issued to a consultant (Cash - $Nil)                                --            7,500             --               --

Shares issued for investor relation services (Cash - $Nil)                 --          200,000             --               --
Less: services not yet received                                            --         (200,000)*           --               --

Shares issued to employees for employment services (Cash - $Nil)           --             --             14,176             --


Shares exchanged as per exchange agreement (Cash - $Nil)                   --        1,133,365       (1,133,365)            --

Shares issued for conversion from debenture holders (Cash -$Nil)           --          991,434             --               --

Share issue cost from April 1, 1995 to March 31, 1996                      --             --               --               --

Translation adjustment                                                     --             --               --               --

Net loss from April 1, 1995 to March 31, 1996                              --             --               --               --

                                                                     --------------------------------------------------- -----------
Balance as at March 31, 1996                                               --        6,130,929        6,126,362     $       --
                                                                     --------------------------------------------------- -----------




                                                                                       AMOUNTS
                                                                  ---------------------------------------------
                                                                                      Paid In
                                                                                     Capital in
                                                                       Common          Excess         Other
                                                                       Stock           of Par        Capital
                                                                  ---------------------------------------------
Share proceeds received re Regulation S offering                  $       --      $    819,459    $       --
   made before March 31, 1995 (Cash - $225,280)

Consulting services received re shares issued                                14            --            87,486
   before March 31, 1995 (Cash - $ Nil)

Marketing services received re shares issued                                265            --           666,400
    to LL Knickerbocker Co.  (Cash - $ Nil)

Shares issued to Directors as compensation  (Cash - $Nil)                    99          86,402            --

Shares issued to Amerasia for marketing services (Cash - $Nil)             --            44,496            --
Less: services not yet received                                            --              --           (18,630)

Shares cancelled (Cash - $Nil)                                                1              (1)           --

Shares issued pursuant to S-8 for employees, consultants and                770         769,230            --
     a director  (Cash - $Nil)
Less: employment and consulting services not yet received                  (341)           --          (340,598)


                                                                            200         199,800            --
Less: shares proceeds to be received                                       --          (117,000)           --

Share proceeds received from private placement (Cash - $250,000)            250         249,750            --

Shares issued upon exercise of warrants at Canadian $1 per share           --           619,166            --
   (Cash - $619,166)

Shares issued to officers (Cash - $Nil)                                     630         826,245            --

Shares issued to a consultant (Cash - $Nil)                                   8           9,836            --

Shares issued for investor relation services (Cash - $Nil)                  200         262,300            --
Less: services not yet received                                            (200)           --          (262,300)

Shares issued to employees for employment services (Cash - $Nil)           --            22,716            --


Shares exchanged as per exchange agreement (Cash - $Nil)                  1,134          (1,134)           --

Shares issued for conversion from debenture holders (Cash -$Nil)            992         728,537            --

Share issue cost from April 1, 1995 to March 31, 1996                      --          (214,357)           --

Translation adjustment                                                     --              --              --

Net loss from April 1, 1995 to March 31, 1996                              --              --              --


                                                                  ---------------------------------------------
Balance as at March 31, 1996                                       $      6,131    $ 14,013,062    $ (1,954,327)
                                                                  ---------------------------------------------



                                                                              AMOUNTS (Continued)
                                                                  ---------------------------------------------
                                                                                   Deficit
                                                                                 Accumulated
                                                                      Other        During
                                                                  Comprehensive  Development
                                                                      Income        Stage            Total
                                                                  ---------------------------------------------
Share proceeds received re Regulation S offering                  $       --      $       --      $    819,459
   made before March 31, 1995 (Cash - $225,280)

Consulting services received re shares issued                              --              --            87,500
   before March 31, 1995 (Cash - $ Nil)

Marketing services received re shares issued                               --              --           666,665
    to LL Knickerbocker Co.  (Cash - $ Nil)

Shares issued to Directors as compensation  (Cash - $Nil)                  --              --            86,501

Shares issued to Amerasia for marketing services (Cash - $Nil)             --              --            44,496
Less: services not yet received                                            --              --           (18,630)

Shares cancelled (Cash - $Nil)                                             --              --              --

Shares issued pursuant to S-8 for employees, consultants and               --              --           770,000
     a director  (Cash - $Nil)
Less: employment and consulting services not yet received                  --              --          (340,939)


                                                                           --              --           200,000
Less: shares proceeds to be received                                       --              --          (117,000)

Share proceeds received from private placement (Cash - $250,000)           --              --           250,000

Shares issued upon exercise of warrants at Canadian $1 per share           --              --           619,166
   (Cash - $619,166)

Shares issued to officers (Cash - $Nil)                                    --              --           826,875

Shares issued to a consultant (Cash - $Nil)                                --              --             9,844

Shares issued for investor relation services (Cash - $Nil)                 --              --           262,500
Less: services not yet received                                            --              --          (262,500)

Shares issued to employees for employment services (Cash - $Nil)           --              --            22,716


Shares exchanged as per exchange agreement (Cash - $Nil)                   --              --              --

Shares issued for conversion from debenture holders (Cash -$Nil)           --              --           729,529

Share issue cost from April 1, 1995 to March 31, 1996                      --              --          (214,357)

Translation adjustment                                                   47,224            --            47,224

Net loss from April 1, 1995 to March 31, 1996                              --        (6,090,730)     (6,090,730)
                                                                  ---------------------------------------------

Balance as at March 31, 1996                                       $   (240,900)   $(13,202,738)   $ (1,378,772)
                                                                  ---------------------------------------------





The accompanying notes are an integral part of these consolidated financial statements.

                                                               F-7

</TABLE>

<PAGE>
<TABLE>
<CAPTION>



                                                THE TRACKER CORPORATION OF AMERICA
                                                   (A Development Stage Company)
------------------------------------------------------------------------------------------------------------------------------------

                                          CONSOLIDATED STATEMENT OF SHAREHOLDERS' DEFICIT
                                          -----------------------------------------------

                                                                                                    SHARES
                                                                            --------------------------------------------------------

                                                                                                                      Class B
                                                                                 Preferred        Common              Common
                                                                                   Stock           Stock               Stock
                                                                            --------------------------------------------------------
<S>                                                                         <C>               <C>                   <C>
Marketing services received re shares issued
    to LL Knickerbocker Co.  (Cash - $ Nil)                                            --           133,336 *           --

Shares issued to Directors as compensation (Cash - $Nil)                               --            34,445             --

Marketing services received from Amerasia  (Cash - $Nil)                               --              --              5,000

Employment and consulting services and Directors' fees received re S-8
 (Cash - $Nil)                                                                         --         1,740,938 *           --

Shares issued for conversion from debenture holders  (Cash -$Nil)                      --         1,433,443             --

Preferred shares issued from private placement  (Cash - $1,050,000)                   1,050            --               --

Common shares issued for conversion from preferred stockholder                       (1,050)      4,365,136             --
  (Cash - $Nil)

Shares exchanged as per exchange agreement (Cash - $Nil)                               --         1,268,825       (1,268,825)

Shares issued to employees for employment services (Cash-$Nil)                         --            26,000             --

Shares issued for consulting services (Cash-$Nil)                                      --           208,250             --

Shares issued in lieu of finder fee for debenture holders (Cash -$Nil)                 --            52,906             --

Shares issued in lieu of finder fee for preferred stockholders  (Cash -$Nil)           --           112,500             --

Shares issued pursuant to W.Marches S-8 stock payment plan                             --           333,272             --

Shares issued for office rental expense  ( Cash $ Nil)                                 --           615,780             --
Less: rental expense not yet amortized                                                 --          (530,255)*           --

Share issue cost from April 1, 1996 to March 31, 1997                                  --              --               --

Translation adjustment                                                                 --              --               --

Net loss from April 1, 1996 to March 31, 1997                                          --              --               --

                                                                            --------------------------------------------------------
Balance as at March 31, 1997                                                           --        15,925,505        4,862,537
                                                                            --------------------------------------------------------





                                                                                                      AMOUNTS
                                                                               ------------------------------------------------
                                                                                                                   Paid In
                                                                                                                  Capital In
                                                                                 Preferred       Common             Excess
                                                                                   Stock          Stock             of Par
                                                                               ------------------------------------------------
Marketing services received re shares issued
    to LL Knickerbocker Co.  (Cash - $ Nil)                                    $       --      $        135    $   (999,600)

Shares issued to Directors as compensation (Cash - $Nil)                               --                34          15,466

Marketing services received from Amerasia  (Cash - $Nil)                               --              --           (11,124)

Employment and consulting services and Directors' fees received re S-8
 (Cash - $Nil)                                                                         --             1,741         316,054

Shares issued for conversion from debenture holders  (Cash -$Nil)                      --             1,434         653,566

Preferred shares issued from private placement  (Cash - $1,050,000)                       1            --         1,049,999

Common shares issued for conversion from preferred stockholder                           (1)          4,364          (4,363)
  (Cash - $Nil)

Shares exchanged as per exchange agreement (Cash - $Nil)                               --             1,269          (1,269)

Shares issued to employees for employment services (Cash-$Nil)                         --                26          12,474

Shares issued for consulting services (Cash-$Nil)                                      --               208          49,634

Shares issued in lieu of finder fee for debenture holders (Cash -$Nil)                 --                53          52,853

Shares issued in lieu of finder fee for preferred stockholders  (Cash -$Nil)           --               113          44,887

Shares issued pursuant to W.Marches S-8 stock payment plan                             --               332          87,668

Shares issued for office rental expense  ( Cash $ Nil)                                 --               616         153,329
Less: rental expense not yet amortized                                                 --              (531)           --

Share issue cost from April 1, 1996 to March 31, 1997                                  --              --          (224,741)

Translation adjustment                                                                 --              --              --

Net loss from April 1, 1996 to March 31, 1997                                          --              --              --

                                                                               ------------------------------------------------
Balance as at March 31, 1997                                                   $       --      $     15,925    $ 15,207,895
                                                                               ------------------------------------------------



                                                                                                AMOUNTS (Continued)
                                                                            --------------------------------------------------------
                                                                                                    Deficit Accumulated
                                                                                            Other          During
                                                                                Other   Comprehensive   Development
                                                                               Capital      Income         Stage           Total
                                                                            --------------------------------------------------------

Marketing services received re shares issued
    to LL Knickerbocker Co.  (Cash - $ Nil)                                 $  1,332,800   $    --     $       --      $    333,335

Shares issued to Directors as compensation (Cash - $Nil)                            --          --             --            15,500

Marketing services received from Amerasia  (Cash - $Nil)                          18,630        --             --             7,506

Employment and consulting services and Directors' fees received re S-8
 (Cash - $Nil)                                                                   340,598        --             --           658,393

Shares issued for conversion from debenture holders  (Cash -$Nil)                   --          --             --           655,000

Preferred shares issued from private placement  (Cash - $1,050,000)                 --          --             --         1,050,000

Common shares issued for conversion from preferred stockholder                      --          --             --              --
  (Cash - $Nil)

Shares exchanged as per exchange agreement (Cash - $Nil)                            --          --             --              --

Shares issued to employees for employment services (Cash-$Nil)                      --          --             --            12,500

Shares issued for consulting services (Cash-$Nil)                                   --          --             --            49,842

Shares issued in lieu of finder fee for debenture holders (Cash -$Nil)              --          --             --            52,906

Shares issued in lieu of finder fee for preferred stockholders  (Cash -$Nil)        --          --             --            45,000

Shares issued pursuant to W.Marches S-8 stock payment plan                          --          --             --            88,000

Shares issued for office rental expense  ( Cash $ Nil)                              --          --             --           153,945
Less: rental expense not yet amortized                                          (132,034)       --             --          (132,565)

Share issue cost from April 1, 1996 to March 31, 1997                               --          --             --          (224,741)

Translation adjustment                                                              --       (79,146)          --           (79,146)

Net loss from April 1, 1996 to March 31, 1997                                       --          --       (3,708,078)     (3,708,078)

                                                                            --------------------------------------------------------
Balance as at March 31, 1997                                                $   (394,333) $ (320,046)  $(16,910,816)   $ (2,401,375)
                                                                            --------------------------------------------------------








The accompanying notes are an integral part of these consolidated financial statements.

                                                               F-8

</TABLE>

<PAGE>
<TABLE>
<CAPTION>



                                                THE TRACKER CORPORATION OF AMERICA
                                                   (A Development Stage Company)
------------------------------------------------------------------------------------------------------------------------------------

                                          CONSOLIDATED STATEMENT OF SHAREHOLDERS' DEFICIT
                                          -----------------------------------------------


                                                                                                   SHARES
                                                                          -------------------------------------------- -------------

                                                                                                        Class B
                                                                           Preferred      Common         Common         Preferred
                                                                             Stock        Stock          Stock            Stock
                                                                          -------------------------------------------- -------------
<S>                                                                       <C>          <C>            <C>              <C>

Shares issued pursuant to W.Marches S-8 stock payment plan                     --          339,755            --              --

Shares issued for office rental expense ( Cash $ Nil)                          --          153,945            --              --

Shares exchanged as per exchange agreement (Cash - $Nil)                       --        2,240,053      (2,240,053)           --

Shares issued to employee for employment services                              --           19,303            --              --

Shares issued for consulting services                                          --          539,583            --              --

Share proceeds received from private placement (Cash - $30,000)                --          500,000            --              --

Translation adjustment                                                         --             --              --              --

Net Profit (loss) from April 1, 1997 to March 31, 1998                         --             --              --              --


                                                                          -------------------------------------------- -------------
Balance as at March 31, 1998                                                   --       19,718,144       2,622,484     $      --
                                                                          -------------------------------------------- -------------




Shares exchanged as per exchange agreement (Cash - $Nil)                       --        1,549,490      (1,549,490)           --

Shares issued for office rental expense ( Cash $ Nil)                          --          672,096            --              --

Shares issued for consulting services                                          --        2,427,478            --              --

Share proceeds received from private placements (Cash - $795,745)              --       14,244,063            --              --

Shares issued pursuant to S-8 for employees                                    --       13,175,996            --              --
     and consultants  (Cash - $Nil)
Less: employment and consulting services not yet received                      --       (2,000,000)           --              --

Shares issued in prior years as prepayment of rent and consulting
   services, written-off in year ended March 31, 1998                          --          601,312            --              --



Translation adjustment                                                         --             --              --              --

Net Profit (loss) from April 1, 1998 to March 31, 1999                         --             --              --              --

                                                                          -------------------------------------------- -------------
Balance as at March 31, 1999                                                   --       50,388,579       1,072,994     $      --
                                                                          ============================================ =============



                                                                                                AMOUNTS
                                                                    ----------------------------------------------------------------
                                                                                      Capital in                           Other
                                                                        Common        Excess             Other        Comprehensive
                                                                         Stock        of Par            Capital           Income
                                                                    ----------------------------------------------------------------
Shares issued pursuant to W.Marches S-8 stock payment plan          $        341    $     69,659            --              --

Shares issued for office rental expense ( Cash $ Nil)                        153            --            38,331            --

Shares exchanged as per exchange agreement (Cash - $Nil)                   2,240          (2,240)           --              --

Shares issued to employee for employment services                             19           2,617            --              --

Shares issued for consulting services                                        540          64,210            --              --

Share proceeds received from private placement (Cash - $30,000)              500          29,500            --              --

Translation adjustment                                                      --              --              --            74,381

Net Profit (loss) from April 1, 1997 to March 31, 1998                      --              --              --              --




                                                                    ----------------------------------------------------------------
Balance as at March 31, 1998                                        $     19,718    $ 15,371,641    $   (356,002)   $   (245,665)
                                                                    ----------------------------------------------------------------





Shares exchanged as per exchange agreement (Cash - $Nil)            $      1,549    $     (1,549)           --              --

Shares issued for office rental expense ( Cash $ Nil)                        672            --           49,735             --

Shares issued for consulting services                                      2,428          72,257            --              --

Share proceeds received from private placements (Cash - $795,745)         14,244         781,501            --              --

Shares issued pursuant to S-8 for employees                               13,176         433,633            --              --
     and consultants  (Cash - $Nil)
Less: employment and consulting services not yet received                 (2,000)           --          (118,000)           --

Shares issued in prior years as prepayment of rent and consulting
   services, written-off in year ended March 31, 1998                        601            --              --              --



Translation adjustment                                                      --              --              --           119,398

Net Profit (loss) from April 1, 1998 to March 31, 1999                      --              --              --              --


                                                                    ----------------------------------------------------------------
Balance as at March 31, 1999                                        $     50,389    $ 16,657,482    $   (424,267)   $   (126,267)
                                                                    ================================================================





                                                                         AMOUNTS (Continued)
                                                                    ----------------------------
                                                                       Deficit
                                                                     Accumulated
                                                                       During
                                                                     Development
                                                                        Stage           Total
                                                                    ----------------------------
Shares issued pursuant to W.Marches S-8 stock payment plan                  --      $     70,000

Shares issued for office rental expense ( Cash $ Nil)                       --            38,484

Shares exchanged as per exchange agreement (Cash - $Nil)                    --                 0

Shares issued to employee for employment services                           --             2,636

Shares issued for consulting services                                       --            64,750

Share proceeds received from private placement (Cash - $30,000)             --            30,000

Translation adjustment                                                      --            74,381

Net Profit (loss) from April 1, 1997 to March 31, 1998                   (90,467)        (90,467)


                                                                    ----------------------------

Balance as at March 31, 1998                                        $(17,001,283)   $ (2,211,591)
                                                                    ----------------------------




Shares exchanged as per exchange agreement (Cash - $Nil)                    --      $       --

Shares issued for office rental expense ( Cash $ Nil)                       --            50,407

Shares issued for consulting services                                       --            74,685

Share proceeds received from private placements (Cash - $795,745)           --           795,745

Shares issued pursuant to S-8 for employees                                 --           446,809
     and consultants  (Cash - $Nil)
Less: employment and consulting services not yet received                   --          (120,000)

Shares issued in prior years as prepayment of rent and consulting
   services, written-off in year ended March 31, 1998                       --               601



Translation adjustment                                                      --           119,398

Net Profit (loss) from April 1, 1998 to March 31, 1999                  (751,753)       (751,753)
                                                                    ----------------------------

Balance as at March 31, 1999                                        $(17,753,036)   $ (1,595,699)
                                                                    ============================











The accompanying notes are an integral part of these consolidated financial statements.

                                                       F-9

</TABLE>

<PAGE>
<TABLE>
<CAPTION>



                                                THE TRACKER CORPORATION OF AMERICA
                                                   (A Development Stage Company)
------------------------------------------------------------------------------------------------------------------------------------

                                          CONSOLIDATED STATEMENT OF SHAREHOLDERS' DEFICIT
                                          -----------------------------------------------


                                                                                           SHARES                    AMOUNTS
                                                                           --------------------------------- -----------------------

                                                                                                    Class B
                                                                            Preferred    Common     Common   Preferred     Common
                                                                              Stock      Stock       Stock     Stock       Stock
                                                                           --------------------------------- -----------------------

<S>                                                                        <C>         <C>        <C>        <C>       <C>
Shares exchanged as per exchange agreement (Cash - $Nil)                       --        279,400   (279,400)      --   $        279

Expense balance of office rental expense                                       --             --         --       --            --

Shares issued for consulting services                                          --        100,000         --       --            100

Share proceeds received from private placements (Cash - $203,583)              --      1,500,000         --       --          1,500

Shares issued pursuant to S-8 for employees                                    --      2,359,530         --       --          2,360
     and consultants  (Cash - $Nil)

Balance of share proceeds received - R. Zuk (Cash - $20,000)                   --             --         --       --            --

Balance of consulting services received                                        --      2,000,000         --       --          2,000

Share issue cost from April 1, 1999 to March 31, 2000                          --             --         --       --            --

Net Profit (loss) from April 1, 1999 to March 31, 2000                         --             --         --       --            --

                                                                           --------------------------------- -----------------------
Balance as at March 31, 2000                                                   --     56,627,509    793,594  $    --   $     56,628
                                                                           --------------------------------- -----------------------


Shares exchanged as per exchange agreement (Cash - $Nil)                       --        186,864   (186,864)      --   $        187

Shares issued pursuant to S-8 for employees
     and consultants  (Cash - $Nil)                                            --     14,975,571         --       --         14,976
Less: services not yet received                                                --             --         --       --            --

shares issued in lieu of reimbursement of employee
   expenses and advances                                                       --      2,210,400         --       --          2,210

Translation adjustment                                                         --             --         --       --            --

Shares issued on conversion of Bridge Notes (Note 9)                           --      9,717,425         --       --          9,717

Shares issued on exercise of stock options (Cash - $209,643)                   --      2,688,578         --       --          2,688



Net Profit (loss) from April 1, 2000 to March 31, 2001                         --             --         --       --            --


                                                                           --------------------------------- -----------------------
Balance as at March 31, 2001                                                   --     86,406,347    606,730  $    --   $     86,407
                                                                           ================================= =======================



                                                                                             AMOUNTS (Continued)
                                                                   -----------------------------------------------------------------
                                                                                                                         Deficit
                                                                       Paid In                                         Accumulated
                                                                      Capital in                         Other            During
                                                                        Excess           Other       Comprehensive     Development
                                                                        of Par          Capital          Income           Stage
                                                                    ----------------------------------------------------------------
Shares exchanged as per exchange agreement (Cash - $Nil)           $       (279)           --               --              --

Expense balance of office rental expense                                    --            43,767            --              --

Shares issued for consulting services                                     17,900            --              --              --

Share proceeds received from private placements (Cash - $203,583)        202,083            --              --              --

Shares issued pursuant to S-8 for employees                              352,375            --              --              --
     and consultants  (Cash - $Nil)

Balance of share proceeds received - R. Zuk (Cash - $20,000)                --           262,500            --              --

Balance of consulting services received                                     --            58,000            --              --

Share issue cost from April 1, 1999 to March 31, 2000                   (247,682)           --              --              --

Net Profit (loss) from April 1, 1999 to March 31, 2000                      --              --              --        (1,811,943)
                                                                   -----------------------------------------------------------------

Balance as at March 31, 2000                                        $ 16,981,878    $    (60,000)   $   (126,267)   $(19,564,979)
                                                                   =================================================================


Shares exchanged as per exchange agreement (Cash - $Nil)            $       (187)           --              --              --

Shares issued pursuant to S-8 for employees
     and consultants  (Cash - $Nil)                                      870,579          60,000            --              --
Less: services not yet received                                             --          (248,336)           --              --

shares issued in lieu of reimbursement of employee
   expenses and advances                                                 136,454            --              --              --

Translation adjustment                                                      --              --           126,267            --

Shares issued on conversion of Bridge Notes (Note 9)                     540,283            --              --              --

Shares issued on exercise of stock options (Cash - $209,643)             206,955            --              --              --



Net Profit (loss) from April 1, 2000 to March 31, 2001                      --              --              --        (2,210,800)
                                                                   -----------------------------------------------------------------
Balance as at March 31, 2001                                        $ 18,735,962    $   (248,336)   $       --      $(21,775,779)
                                                                   =================================================================




                                                                   ---------------
                                                                        Total
                                                                   ---------------
Shares exchanged as per exchange agreement (Cash - $Nil)           $       --

Expense balance of office rental expense                                  43,767

Shares issued for consulting services                                     18,000

Share proceeds received from private placements (Cash - $203,583)        203,583

Shares issued pursuant to S-8 for employees                              354,735
     and consultants  (Cash - $Nil)

Balance of share proceeds received - R. Zuk (Cash - $20,000)             262,500

Balance of consulting services received                                   60,000

Share issue cost from April 1, 1999 to March 31, 2000                   (247,682)

Net Profit (loss) from April 1, 1999 to March 31, 2000                (1,811,943)

                                                                   ------------

Balance as at March 31, 2000                                        $ (2,712,739)

                                                                   ============


Shares exchanged as per exchange agreement (Cash - $Nil)            $       --

Shares issued pursuant to S-8 for employees
     and consultants  (Cash - $Nil)                                      945,555
Less: services not yet received                                         (248,336)

shares issued in lieu of reimbursement of employee
   expenses and advances                                                 138,664

Translation adjustment                                                   126,267

Shares issued on conversion of Bridge Notes (Note 9)                     550,000

Shares issued on exercise of stock options (Cash - $209,643)             209,643



Net Profit (loss) from April 1, 2000 to March 31, 2001                (2,210,800)


                                                                   -------------
Balance as at March 31, 2001                                        $ (3,201,746)
                                                                   =============


The accompanying notes are integral parts of these consolidated financial statements.




                                                              F-10

</TABLE>

<PAGE>
                       THE TRACKER CORPORATION OF AMERICA
                          (A Development Stage Company)
                   Notes to Consolidated Financial Statements
--------------------------------------------------------------------------------



NOTE 1 - DESCRIPTION OF DEVELOPMENT STAGE ACTIVITIES AND CORPORATE HISTORY:
---------------------------------------------------------------------------

     The Tracker  Corporation of America has been in the development stage since
its formation. We primarily market, sell and operate a personal property marking
and  monitoring  system we developed  that utilizes  advanced bar code and laser
scanning  technology to create an  identification  device that interfaces with a
computer  database  and  scanning  network.  We also sell,  install  and support
corporate asset tracking management software.

     Our current business  originated in July 1994 through a  reorganization  in
which we acquired  all of the issued and  outstanding  voting  shares of Tracker
Canada, an Ontario, Canada corporation, in exchange for approximately 90% of our
total voting shares as of that date. Our predecessor was  incorporated as a Utah
corporation  in 1986, and changed its state of  incorporation  to Nevada in 1992
and Delaware in 1994 through  change in domicile  mergers.  Concurrent  with the
effective date of the  reorganization,  we changed our year-end from December 31
to March 31. The reorganization was accounted for as a reverse acquisition.

     On July 28, 1998, pursuant to an agreement with the FTC we discontinued our
credit  card  registration  service  which  had been the  primary  source of our
revenues  through  September  1997.  The FTC  agreement and the cessation of the
credit card  registration  service resulted in the insolvency and dissolution of
Tracker Canada. The liquidation and dissolution occurred in February 1998.

     On February 10,  1998,  Global  Tracker,  a newly  formed  Ontario,  Canada
corporation,  acquired  substantially  all of Tracker  Canada's  assets at arm's
length in a bankruptcy  proceeding.  Shortly thereafter,  Global Tracker entered
into an  agreement  with us which  permitted  the use of  personnel  retained by
Global Tracker and assets formerly owned or leased by Tracker Canada to continue
the  business  formerly  conducted  by  Tracker  Canada.  As a  result  of  this
arrangement, we have continued on a limited basis the business formerly operated
by Tracker Canada.

NOTE 2 - GOING CONCERN:
-----------------------

     We have been in a development stage since its inception on May 6, 1993. The
likelihood that we will attain profitability depends on many factors,  including
our ability to obtain  adequate  financing  and  generate  sufficient  revenues.
Management is currently  working to secure adequate  capital through the private
placement of securities for the purpose of executing its revised  business plan.
The accompanying  consolidated  financial statements have been prepared assuming
that we will  continue  as a going  concern,  although  the report of our former
independent  accountant  as of and for the year ended  March 31,  1999,  and our
independent  accountant  as of and for the years  ended March 31, 2000 and 2001,
express substantial doubt as to our 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.



                                      F-11
<PAGE>

                       THE TRACKER CORPORATION OF AMERICA
                          (A Development Stage Company)
                   Notes to Consolidated Financial Statements
--------------------------------------------------------------------------------



NOTE 3 - SIGNIFICANT ACCOUNTING POLICIES:
-----------------------------------------

Principles of consolidation

     The accompanying financial statements include our accounts and those of our
former wholly owned subsidiary,  Tracker Canada, through its date of dissolution
on January 27, 1998. 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  including  cost of goods sold;
sales   commissions;   and   telemarketing   costs  which  are  amortized  on  a
straight-line basis over the term of the related agreement.

Revenue recognition and deferred revenue

     Revenue for our 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. Typical services provided include assistance with the recovery
of lost and stolen  property,  cancellation  of lost and expired credit cards as
well as continued maintenance of database of all customers' registered property.
The average length of the services  agreement varies from monthly to a five-year
period.

Stock-Bases Compensation

     We have  elected to follow  Accounting  Principles  Board  Opinion  No. 25,
Accounting   for  Stock  Issued  to  Employees   ("APB  No.  25"),  and  related
interpretations,  in accounting  for its employee  stock options rather than the
alternative  fair value  accounting  allowed  by SFAS No.  123,  Accounting  for
Stock-Based  Compensation.  APB No. 25 provides  that the  compensation  expense
relative to our employee stock options is measured based on the intrinsic  value
of the stock option. SFAS No. 123 requires companies that continue to follow APB
No. 25 to  provide a pro forma  disclosure  of the impact of  applying  the fair
value method of SFAS No. 123.

Foreign currency translation

     The assets and liabilities of our Canadian operations 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

     Basic  earnings  per  share  excludes  any  dilutive  effects  of  options,
warrants, and convertible securities.  We compute basic earnings per share using
the  weighted-average  number of common shares


                                      F-12
<PAGE>


                       THE TRACKER CORPORATION OF AMERICA
                          (A Development Stage Company)
                   Notes to Consolidated Financial Statements
--------------------------------------------------------------------------------


outstanding  during the period.  We compute diluted earnings per share using the
weighted-average number of common and common stock equivalent shares outstanding
during the period.  We exclude common  equivalent shares from the computation if
their affect is anti-dilutive.

Comprehensive Income (Loss)

     As of April  1,  1998 we  adopted  SFAS No.  130,  Reporting  Comprehensive
Income,   which   establishes   standards  for  the  reporting  and  display  of
comprehensive  income  and  its  components  in the  financial  statements.  The
Statement of Shareholder  Equity has been restated for all previous  years.  The
only item of comprehensive  income (loss) that we currently report is unrealized
gain on foreign currency translation adjustments.

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.

New accounting pronouncements

     In March 2000, the Emerging  Issues Task Force (EITF) of the FASB reached a
consensus on EITF Issue 00-2,  "Accounting for Web Site Development Costs." This
consensus provides guidance on what types of costs incurred to develop Web sites
should be capitalized or expensed. The Company adopted this consensus.

     In March  2000,  the FASB  issued  Financial  Interpretation  (FIN) No. 44,
"Accounting  for Certain  Transactions  Involving  Stock  Compensation."  FIN 44
clarifies the  application of Accounting  Principles  Board (APB) Opinion No. 25
for  certain  issues,  such as the  definition  of an employee  for  purposes of
applying  APB  Opinion  No.  25, the  criteria  for  determining  whether a plan
qualifies as a  non-compensatory  plan,  the  accounting  consequence of various
modifications  to the terms of a previously  fixed stock option or award and the
accounting  for  an  exchange  of  stock  compensation   awards  in  a  business
combination. Adoption of FIN 44 did not change the Company's existing accounting
policies or disclosures.

     In July 2000, the EITF reached a consensus on EITF Issue 99-19,  "Reporting
Revenue Gross as a Principal  versus Net as an Agent." This  consensus  provides
guidance  concerning  under what  circumstances  a company should report revenue
based on (a) the gross amount billed to a customer because it has earned revenue
from the sale of the goods or services or (b) the net amount  retained (that is,
the amount billed to the customer less the amount paid to a supplier) because it
has earned a commission  or fee.  Adoption of this  consensus did not change the
Company's existing accounting policies.

     In September  2000, the EITF reached a final consensus on EITF Issue 00-10,
"Accounting  for Shipping and Handling Fees and Costs." This consensus  requires
that all amounts billed to a customer in a


                                      F-13
<PAGE>


                       THE TRACKER CORPORATION OF AMERICA
                          (A Development Stage Company)
                   Notes to Consolidated Financial Statements
--------------------------------------------------------------------------------


sale transaction related to shipping and handling, if any, represent revenue and
should be  classified  as  revenue.  The  Company  historically  has  classified
shipping charges to customers as revenue.  With respect to the classification of
costs  related  to  shipping  and  handling  incurred  by the  seller,  the EITF
determined  that  the  classification  of such  costs  is an  accounting  policy
decision that should be disclosed. Adoption of this consensus did not change the
Company's existing accounting policies or disclosures.

NOTE 4 - DUE FROM SHAREHOLDERS:
-------------------------------

     Promissory notes held on loans made to shareholders bear interest at 5% per
annum and are due on demand.

NOTE 5 - DUE TO RELATED PARTIES:
--------------------------------

     Global Tracker  Corporation has incurred expenses on behalf of the Company.
The balance represents un-reimbursed portion of these expenses.

NOTE 6 - DEFERRED CHARGES:
--------------------------

            Deferred charges consist of the following:

                                                         March 31,     March 31,
                                                           2001          2000
                                                           ----          ----
Current:
Deferred sales commission (net of cancellation reserve)   $ NIL        $ 80,309

Other                                                       NIL          33,756
                                                          -----        --------
                                                          $ NIL        $114,065
                                                          -----        --------
Long term:
Deferred sales' commission (net of cancellation reserve)  $ NIL        $  9,099

Other                                                       NIL          12,415
                                                          -----        --------
                                                          $ NIL        $ 21,514
                                                          -----        --------

NOTE 7 - PROPERTY AND EQUIPMENT:
--------------------------------

     We  currently  lease  all  of  our  equipment  from  Global  Tracker  under
short-term  agreements  classified  as  operating  leases.  Lease  payments  are
expensed as incurred. The lease expense for the period was $7,534. See Note 1.

NOTE 8 - ACCRUED LIABILITIES:
-----------------------------

Accrued liabilities comprise the following:
                                                       March 31,       March 31,
                                                          2001            2000
                                                    --------------    ----------

Interest expense for convertible debentures         $      503,086    $ 267,114
Others                                                     170,000      220,000
                                                    --------------    ----------
                                                    $      673,086    $  487,114
                                                    ==============    ==========

                                      F-14
<PAGE>


                       THE TRACKER CORPORATION OF AMERICA
                          (A Development Stage Company)
                   Notes to Consolidated Financial Statements
--------------------------------------------------------------------------------


     Other accrued  liabilities  include:  professional  fees, sales refunds and
commissions, rent, and various trade payables.

NOTE  9 - BRIDGE NOTES:
-----------------------

     We have outstanding at March 31, 2001 $1,720,000 in venture capital funding
from off shore investors  through the issuance of convertible  bridge  financing
notes and associated  warrants.  We plan to immediately convert these notes into
common stock upon the  registration of the underlying  common stock to the notes
and warrants.  Thereafter,  we may call, and the security  holders may exercise,
the outstanding  warrants. We estimate that we could receive up to an additional
$1,000,000 through the exercise of the warrants.

     Total interest incurred and included in general and administrative expenses
is $ 222,612 and $70,795 for years ended March 31, 2001 and 2000 respectively.

     In  addition  to the  convertible  bridge  notes,  we issued  four types of
warrants.  The repricing  warrants are attached to the notes and are exercisable
only if the stock price on the date of conversion  falls below 125% of the stock
price on the date of each closing. Given the closing stock price on the dates of
the three closings,  if the conversion occurs on a date when our stock is traded
at greater than $0.37 per share, no repricing warrants will become  exercisable.
Each purchaser also received a callable warrant at the rate of $100,000 worth of
shares of common stock for each $100,000 in principal  amount of notes purchased
and issued.  Further,  each investor  received a purchase warrant at the rate of
20,000  warrants for each  $100,000 in principal  amount of notes  purchased and
issued.

     In  accordance  with APB 14.15,  we did not assign a separate  value to the
stock purchase warrants from the debt because the stock purchase warrants have a
negative value at the time of issue.

NOTE 10 - CONVERTIBLE SUBORDINATED DEBENTURES:
----------------------------------------------

     We have outstanding at March 31, 2000 subordinated debentures in the amount
of $465,790 ($ 475,790 as at March 31, 1999)  bearing  interest at 15% annually.
Total interest incurred and included in general and administrative expenses is $
70,764 and $ 68,785  for year ended  March 31,  2001 and 2000  respectively.  At
March 31, 2001, we were in default under the terms of these agreements.

NOTE 11 - CAPITAL STOCK:
------------------------

(i)  The Class B voting common stock was held in trust  pursuant to the terms of
     an exchange  agency and voting trust agreement with holders of exchangeable
     preference shares in the Canadian subsidiary.

(ii) On March 15, 1995, we entered into an agreement and sold,  for net proceeds
     of $350,000,  500,000 units comprised of 500,000  restricted  common shares
     and 500,000 warrants to purchase 500,000 restricted common shares to Kuplen
     Group Investment ("KGI"). The warrants were exercisable during the one-year
     period  commencing  July 12,  1995 to July 12, 1996 at a price of $5.00 per
     share.  Since  the  common  stock  underlying  the  warrants  could  not be
     purchased  legally on margin at a marginable price, the exercise period has
     been extended until the first day that the common stock becomes marginable.
     To secure  registration  rights of the restricted shares, KGI must exercise
     the warrants on a 1:1 basis with the common shares.

                                      F-15


<PAGE>

                       THE TRACKER CORPORATION OF AMERICA
                          (A Development Stage Company)
                   Notes to Consolidated Financial Statements
--------------------------------------------------------------------------------


(iii)During the year ended  March 31,  1995,  we adopted a plan that  allows for
     the granting of options,  appreciation rights, restricted stock and certain
     other stock-based  performance incentives to certain officers as determined
     at the discretion of the compensation committee of the board of directors.

(iv) During the years ended March 31, 1999 and 2000, we amended and restated the
     Plan and increased the number of shares reserved for issuance thereunder.

(v)  During the year ended March 31,  1999,  we adopted a plan  allowing for the
     issuance of options to outside directors.

(vi) We have issued the following options and warrants:
<TABLE>
<CAPTION>


                                                For year   Weighted-  Grant   From           Weighted-  Grant
                                              ended March  Average    Date    inception      Average    Date
                                                31, 2001   Exercise   Fair    May 6, 1993    Exercise   Fair
                                                           Price      Value   through March  Price      Value
                                                                              31, 2000
                                             ------------ ----------- ------ --------------- --------- -------
   <S>                                       <C>          <C>         <C>    <C>             <C>       <C>
   Options:
     Opening (*)                               9,272,839
      Granted during the period (*)                                               40,000       $7.95     $7.95
      Granted during the period (*)                                               50,000       $0.13     $0.13
      Granted during the period (**)                                             300,000       $0.50     $0.50
      Granted during the period (**)                                           2,400,000       $0.75     $0.75

      Granted during the period (***)                                          5,286,968       $0.07     $0.07

      Granted during the period (****)                                           400,000       $0.10     $0.10
      Granted during the period (*****)                                        2,200,000      $0.115    $0.115
      Granted during the period (******)                                         260,871      $0.098    $0.115
      Granted during the period (*******)        857,142    $0.047   $0.035
      Exercised during the period              2,688,578    $0.078
      Expired/cancelled during period            500,000    $0.115             1,665,000       $0.75
                                             ------------                    ------------
      Closing                                  6,941,403    $0.220             9,272,839      $0.182
                                             ============                    ============

(*)       40,000  options were issued in July 1994 and 50,000  options were issued in July 1997 to  non-employee
          directors and vest proportionately over a period of three years. Cancelled in December 1999

(**)      2,700,000 options were issued in August 1997 to management at various terms from 4 to 7 years

(***)     5,286,968  options were issued in December 1998 to management and non-employee  directors vesting over
          two and three years respectively. Exercise rights vary from 5 to 10 years

(****)    400,000 options were issued in January 1999, vesting proportionately over four years, to management.
          Exercise  rights extend for ten years from date of vesting.  These options were  cancelled in December
          1999.

(*****)   2,200,000  options  were issued in December  1999 vesting  proportionately  over three  years,  to
          management. Exercise rights extend for ten years from date of vesting.


                                      F-16
<PAGE>

                       THE TRACKER CORPORATION OF AMERICA
                          (A Development Stage Company)
                   Notes to Consolidated Financial Statements
--------------------------------------------------------------------------------



(******)  260,871  options were issued in December  1999 vesting  proportionately  over three years,  to non
          employee directors. Exercise rights extend for ten years from date of vesting.

(*******) 857,142  options were issued in December 2000 vesting  proportionately  over three years,  to non
          employee directors. Exercise rights extend for ten years from date of vesting.
</TABLE>

Grant date fair  value is based on the  average  market  price for the five days
preceding the grant date.

The  following  table  summarizes  information  about  options  outstanding  and
exercisable at March 31, 2001
<TABLE>
<CAPTION>

----------------- ------------ --------------------- --------------------- --------------------- ----------------------
Range of           Options      Weighted              Weighted-average      Options Exercisable    Weighted-average
Exercise Price     Outstanding  -average Remaining      Exercise Price                             Exercise Price of
                                Contractual Life                                                  Options Exercisable
----------------- ------------ --------------------- --------------------- --------------------- ----------------------
<S>               <C>          <C>                   <C>                   <C>                   <C>
$0.07 -- $0.13      5,416,404        7.49                   $0.084                3,148,144              $0.082
----------------- ------------ --------------------- --------------------- --------------------- ----------------------
$0.50 -- $0.75      1,525,000        6.0                    $0.701                    0                    N/a
----------------- ------------ --------------------- --------------------- --------------------- ----------------------

----------------- ------------ --------------------- --------------------- --------------------- ----------------------
$0.07 -- $0.75      6,941,404        7.16                   $0.22                 3,148,744              $0.082
----------------- ------------ --------------------- --------------------- --------------------- ----------------------
</TABLE>

Pro Forma Disclosure

     We follow the intrinsic  value method in accounting  for our stock options.
Had  compensation  costs been recognized  based on the fair value at the date of
grant for options  granted in 2001,  the pro forma  amounts of the Company's net
loss per share for the years ended March 31,  2000,  and 1999 would have been as
follows:

                                                      YEARS ENDED MARCH 31,
                                                 -------------------------------
                                                       2001             2000

Net loss as reported                             $  (2,210,800)   $  (1,811,943)
Net loss pro forma                               $  (2,210,800)   $  (1,811,943)
Basic and diluted loss per share - as reported   $       (0.04)   $       (0.03)
Basic and diluted loss per share - pro forma     $       (0.04)   $       (0.03)

The fair value for each option  granted was estimated at the date of grant using
a  Black-Scholes  option  pricing model,  assuming the following  waited-average
assumptions:



                                                      YEARS ENDED MARCH 31,
                                                 -------------------------------
                                                       2001             2000

Average risk-free interest rates                       6.2%              6.7%
Average expected life in years                         3.0               3.5
Volatility                                             200%              200%

The  weighted-average  fair value of options  granted  during the years 2001 and
2000 was $0.047 and $0.11 , respectively.

The pro forma  effect of  compensation  expense on net income and  earnings  per
share  for the  2001 and  2000  grants  for  stock-based  compensation  plans in
accordance with provisions of SFAS 123 is immaterial.


                                      F-17
<PAGE>


                       THE TRACKER CORPORATION OF AMERICA
                          (A Development Stage Company)
                   Notes to Consolidated Financial Statements
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>

                                           For year ended    Exercise    For year ended     Exercise
                                           March 31, 2001    Price       March 31, 2000     Price
                                          ----------------- ---------- ----------------- -----------------
          <S>                             <C>               <C>        <C>               <C>
          Warrants (Common Stock ):
            Opening                              1,750,000    N/A               950,000               N/A
              Issued during the period                   0                      800,000     $.011 - $0.40
              Exercised during the period                0                            0
              Expired during the period                  0                            0
                                          -----------------            -----------------
            Closing                              1,750,000                    1,750,000
                                          =================            =================
</TABLE>

(vii)       On May 1,  1995,  we entered  into an  agreement  and sold,  for net
            proceeds of $250,000,  250,000 units comprised of 250,000 restricted
            common shares and 250,000  warrants to purchase  250,000  restricted
            common shares to Reynold Kern. The warrants were exercisable  during
            the one-year  period  commencing July 12, 1995 to July 12, 1996 at a
            price of $5.00 per share.  Since the  common  stock  underlying  the
            warrants  could not be  purchased  legally on margin at a marginable
            price,  the exercise  period has been  extended  until the first day
            that the common stock becomes marginable.

(viii)      In June 1995, we issued 200,000  shares of common stock,  restricted
            as to  transferability  for a  period  of two  years  from  date  of
            issuance,  to Robert Zuk for certain investor relations services for
            us. A  settlement  was reached in June 1999 whereby Mr. Zuk returned
            $20,000  to the  Company  and the  balance  of future  services  was
            expensed.

(ix)        In October 1995, we issued  770,000  shares of common stock pursuant
            to the  registration  statement on S-8 to six key  employees and one
            director as payment in lieu of prior  accrued  salaries and fees and
            as an advance of their  salaries and fees up to September  30, 1996.
            The shares issued were all valued at $1.00 per share.

(x)         In November 1995, at its annual general  meeting,  the  shareholders
            approved the increase of the authorized number of common shares from
            20,000,000 to 30,000,000 shares.

(xi)        In December 1998, at our annual general  meeting,  the  shareholders
            approved the increase of the authorized number of common shares from
            30,000,000 to 50,000,000  shares and the  authorization of 6,500,000
            shares of blank check Preferred Stock.

(xii)       In 1998, 200,000 warrants were issued to Toda Corporation for future
            investment  relations  services.   These  warrants  are  exercisable
            through May 8, 2006 and were issued at $0.40.

(xiii)      During the year ended March 31, 1999, we issued 13,175,996 shares of
            common stock  amounting to $1,600,883  pursuant to the  registration
            statement on S-8 to eight  employees and two  consultants as payment
            in lieu of salaries and consulting fees

(xiv)       In September 1999, at our annual general  meeting,  the shareholders
            approved the increase of the authorized number of common shares from
            50,000,000 to 93,400,000 shares

(xv)        During the year ended March 31, 2000, the Company  issued  2,359,540
            shares  of  common  stock  amounting  to  $278,896  pursuant  to the
            registration   statement  on  S-8  to  four   employees   and  three
            consultants as payment in lieu of salaries and consulting fees.


                                      F-18
<PAGE>



                       THE TRACKER CORPORATION OF AMERICA
                          (A Development Stage Company)
                   Notes to Consolidated Financial Statements
--------------------------------------------------------------------------------


(xvi)       In 1999,  800,000  warrants were issued at an exercise  price equal
            to the market price at that time.  The price ranged from $0.11 to
            $0.14 and were for investor relations and legal services.

(xv)        We have, from inception to present, issued shares in exchange for:
            (a) employment services,  (b) consulting and marketing services, and
            (c) consideration in lieu of rental payments.

(xvi)       During the year ended  March 31,  1997,  we issued  1,050  shares of
            $1,000 6% Cumulative  Convertible  Preferred Stock (the "Convertible
            Preferred  Stock").  As at March 31, 1997,  4,365,136  common shares
            were issued due to the  conversion  of 1,050  shares of  convertible
            preferred  stock  totaling  $1,050,000.  As at March  31,  1997,  no
            convertible preferred stock remains outstanding.

(xvii)      During the year ended March 31, 1997, we issued  1,740,000 shares of
            common  stock  amounting  to $658,393  pursuant to the  registration
            statement on S-8 to five  employees and five outside  (non-employee)
            directors as payment in lieu of salaries and consulting fees.

(xviii)     In October 1996, we entered into a one-year consulting  agreement to
            obtain  advice  concerning  our growth  strategy,  financial  public
            relations obligations and future capital structure.  Under the terms
            of the agreement,  we agreed to pay the consultant 100,000 shares of
            our common stock

(xix)       During the year ended March 31, 2001, the Company issued  14,475,571
            shares  of  common  stock  amounting  to  $873,091  pursuant  to the
            registration  statement  on S-8 to thirteen  employees  and eighteen
            consultants as payment in lieu of salaries and consulting fees.

(xx)        During the  year  ended  March 31,  2001,  SovCap  Equity  Partners
            exchanged  $550,000 of their Bridge Notes for 9,717,425  shares  of
            common stock

NOTE 12 - COMMITMENTS:
----------------------

Leases

     Office space is leased  through  Global  Tracker  Corporation.  The current
lease  requires  a monthly  payment of  $3,968.  The lease  term is five  years,
expiring  November  30, 2004.  Rental  expense for the year ended March 31, 2001
amounted to $ 47,872 and $110,339 for the year ended March 31, 2000. Included in
the expenses for the year ended March 31, 2000 is un-amortized  portions of rent
of previously leased office space.

Marketing agreement

     On March 22, 2000, we entered into a five-year  license  agreement with the
Florida Police Chiefs Foundation (FPCF) to collaborate on a statewide  Operation
Bicycle Identification  Program. Under the agreement, we agreed to pay the FPCF,
on a monthly basis in arrears, the greater of $36,000 per year or a fee based on
the total number of our subscribers residing in the State of Florida.

NOTE 13 - RELATED PARTY TRANSACTIONS:
-------------------------------------

     Prior to the date of incorporation (May 6, 1993), the founder and other key
members of  management  received  5,089,286  exchangeable  preference  shares in
consideration  for the assignment of



                                      F-19
<PAGE>



                       THE TRACKER CORPORATION OF AMERICA
                          (A Development Stage Company)
                   Notes to Consolidated Financial Statements
--------------------------------------------------------------------------------


international  patents  covering the Tracker Canada system and as inducements to
join us, respectively. No value has been assigned to these shares.

     We retain  certain key management  personnel  under  contract.  Included in
expenses  are  consulting  and  management  fees paid  under the  aforementioned
contracts totaling, in the aggregate, $375,000 for the year ended March 31, 2001
and $325,000 for the year ended March 31, 2000.

     Our President,  Chief Operating  Officer and Chief Financial  Officer,  Jay
Stulberg, is the sole shareholder of Global Tracker Corporation.  Global Tracker
acquired  Tracker  Canada's  assets at arms length in an insolvency  proceeding.
Global Tracker leases all of such assets to us.

NOTE 14 - INCOME TAXES:
-----------------------

     The estimated deferred tax asset of $5,454,000 and $4,648,000, representing
benefit for the income tax effects of the accumulated losses for the period from
inception (May 6, 1993) to March 31, 2001 and March 31, 2000  respectively,  has
not  been  recognized  due to the  uncertainty  of  future  realization  of such
benefits. Estimated net operating losses aggregating $14,567,000 ($12,357,000 as
at March 31,2000)  expire  starting in 2001; the benefit of these losses has not
been reflected in these consolidated financial statements.

                                         March 31,               March 31,
                                           2001                     2000
                                     ------------------     ------------------
Deferred tax liabilities             $               0      $               0
Deferred tax assets
            Net operating losses             5,454,000              4,648,000
                                     ------------------     ------------------
                                             5,454,000              4,648,000
            Valuation allowance             (5,454,000)            (4,648,000)
                                     ------------------     ------------------
                                     $               0      $               0
                                     ==================     ==================

The valuation allowance did increase by $806,504 during the year.

NOTE 15 - DISCONTINUED OPERATIONS
---------------------------------

     We discontinued our CPS Program in September 1997. All telemarketing  rooms
were closed and the Corporate  Telemarketing  Centers in Toronto,  Canada and in
Smyrna, Georgia were abandoned.

There are no remaining assets and liabilities of the Discontinued Operation:

                                                            2001          2000
Assets:
-------
            Deferred charge - current portion            $     --       $114,405
            Deferred charges - long term                 $     --       $ 21,514
                                                         ----------     --------
            Total deferred charges                       $     --       $135,579



                                      F-20
<PAGE>


                       THE TRACKER CORPORATION OF AMERICA
                          (A Development Stage Company)
                   Notes to Consolidated Financial Statements
--------------------------------------------------------------------------------


Liabilities:
------------
            Deferred revenues - current portion          $     --       $192,135
            Deferred revenues - long term                $     --       $ 23,109
                                                         ----------     --------
            Total revenues charges                       $     --       $215,244

<TABLE>
<CAPTION>

Summary Statement of Operations from discontinued operations
------------------------------------------------------------

                                       From Inception (May 6, 1993)            For the
                                             Through March 31,            Year ended March 31,

                                                  2001                  2001            2000
<S>                                            <C>                   <C>           <C>
Revenue                                        $11,989,167           $   215,244   $   197,602

Cost of sales                                    9,089,000               211,846       120,426

Gross profit                                     2,900,167                 3,398        77,176

Gain (loss) from discontinued operations       $ 2,900,167           $     3,398   $    77,176
                                               ===========           ===========   ===========


</TABLE>







                                      F-21