UNITED
STATES
 SECURITIES
AND EXCHANGE COMMISSION
 Washington,
D.C.   20549
 
 FORM
10-KSB
   [
      X ]
              ANNUAL
      REPORT UNDER SECTION 13 0R 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934
 
 For the
fiscal year ended December
31, 2007
 
 [    ]
              TRANSITION
      REPORT UNDER SECTION 13 0R 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934
 
 For the
transition period from to
  Commission file number
000-33309
 GLOBETRAC
      INC.
                (Name
      of Small Business Issuer in its
charter)
  Delaware
                (State
      or other jurisdiction of
                incorporation
      or organization)
              33-0953557
                (I.R.S.
      Employer
                Identification
      No.)
 1100
Melville Street, Suite 610, Vancouver, British Columbia, Canada,V6E
4A6
 (Address of principal
executive offices) (Zip Code)
 Issuer’s
telephone number:  1-800-648-4287
  Securities
registered pursuant to Section 12(b) of the Act:
  Title
      of each class
              
              Name
      of each exchangeon
      which registeredNone
              
              N/A
  Securities
registered pursuant to Section 12(g) of the Act:
  Common
      Stock - $0.001 par value(Title
      of Class)
 
 Check
whether the issuer (1) filed all reports required to be filed by Section 13 or
15(d) of the Exchange Act during the last 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. [
x ] Yes  [   ]  No
 
 Check if
there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B 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.  [ x ]
 
 Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act). [   ]
Yes  [ x ]  No
 
 State
issuer’s revenues for its most recent fiscal year.  $115,654
 
 State the
aggregate market value of the voting and non-voting common equity held by non-affiliates computed by
reference to the price at which the common equity was sold, or the average bid
and asked price of such common equity, as of a specified date within the past 60
days: $27,350, as of March 26,
2008 ($0.002 average 13,675,000)
 
 State the
number of shares outstanding of each of the issuer’s classes of common equity,
as of the latest practicable date.
 
 Class
              
              Outstanding at March 26,
    2008Common
      Stock - $0.001 par value
              
              22,190,000
 
 Documents
incorporated by reference:  Exhibit 2.1 (Articles of Incorporation) and
Exhibit 2.2 (By-laws)
both filed as exhibits to GlobeTrac’s registration statement on Form SB-2 filed
on August 2, 2001; Exhibit 10.1 (Master Distributorship
Agreement) filed as an exhibit to GlobeTrac’s Form 8-K (Current Report)
filed on September 11, 2002; Exhibit 10.5 (Letter Agreement) filed as an
exhibit to GlobeTrac’s Form 8-K (Current Report) filed on December 22, 2004; and
Exhibit 10.6 (Termination and
Transfer Agreement) filed as an exhibit to GlobeTrac’s Form 8-K (Current
Report) filed on November 14, 2005.
 
 Transitional
Small Business Disclosure Format (Check one): Yes   [   ]     No   [
x ]
  
 
 PART
I
 
 Item
1.  Description of Business.
 
 (a) Business
Development
 
 GlobeTrac
was incorporated under the laws of the State of Delaware on March 2, 2000 under
the original name “411 Place.com Inc”.  On February 28, 2001,
GlobeTrac changed its name to “Artescope, Inc.”
 
 On May 6,
2002 all of the directors and officers of GlobeTrac resigned and a new director
and officer was appointed.
 
 On July
29, 2002, the Company changed its name to “GlobeTrac Inc.”  GlobeTrac
has an authorized capital of 205,000,000 shares with a par value of $0.001,
consisting of 200,000,000 shares of Common Stock and 5,000,000 shares of
Preferred Stock with 22,190,000 shares of Common Stock currently issued and
outstanding.
 
 GlobeTrac,
Inc. provided digital graphics design and production services for commercial and
corporate enterprises until August 27, 2002 when GlobeTrac changed its business
direction and began selling, marketing, distributing, and installing global
wireless tracking and telematics equipment in Europe.
 
 On August
27, 2002 the president of GlobeTrac resigned, but remained on as director and
the chief financial officer, and a new president and chief executive officer was
appointed.
 
 Also, on
August 27, 2002, GlobeTrac acquired all of the outstanding shares of Global
Axxess Corporation Limited for $1 and two of the directors of Global Axxess
resigned and two new directors were appointed.  Global Axxess is a
private Irish company that was incorporated on December 31, 1997, as “Advance
High Tech Development Enterprises Limited”.  On April 26, 2002, the
company changed its name to “Global Axxess Corporation Limited” and obtained the
exclusive rights to distribute global wireless tracking and telematics products
in Europe.  See Exhibit 10.1 – Master Distributorship Agreement for
more information.
 
 Also, on
August 27, 2002, Global Axxess acquired the beneficial ownership of all the
outstanding shares of Globetrac Limited for one British pound and all the
directors of Globetrac Limited resigned and two new directors were
appointed.  Globetrac Limited was incorporated in the United Kingdom
on March 28, 2002 as a private limited company under the name “Global Axxess
Tracking Limited”.  On July 19, 2002 the company changed its name to
Globetrac Limited.  Globetrac Limited was in the business of selling,
marketing, distributing and installing global wireless tracking and telematics
equipment.  On March 20, 2007, Globetrac Limited was formally
dissolved and all of Globetrac Limited’s assets and liabilities have been
assumed by GlobeTrac Inc. Globetrac Limited’s losses from operations for the
years ended December 31, 2006 and 2005 were recorded in loss from discontinued
operations on the Statement of Operations in the attached consolidated financial
statements.
 
 Effective
November 1, 2004, GlobeTrac decided to wind down its operations due to cash flow
limitations.  Additionally, GlobeTrac reached an agreement with
WebTech Wireless to cancel the master distributorship agreement and to
restructure its ongoing business relationship with WebTech
Wireless.  See Exhibit 10.5 – Letter Agreement and Exhibit 10.6 -
Termination and Transfer Agreement for more information.  Pursuant to
the terms of the Letter Agreement and the Termination and Transfer Agreement
WebTech acquired
specific assets and liabilities of GlobeTrac.  WebTech has agreed to
pay a 6% commission/royalty on gross sales from qualified potential customers
and resellers, which will be included for commission purposes if such business
commences within 12 months of the signed agreement.  There is no cap
on the royalty payable to GlobeTrac and royalties are to be paid by WebTech for
11 years beginning November 1, 2004.
 
 Since
November 1, 2004, GlobeTrac’s current principal business activity has been to
seek a viable business opportunity through acquisition, merger or other suitable
business combination method.
 
 Neither
GlobeTrac nor any of its subsidiaries have been involved in any bankruptcy,
receivership or similar proceedings.  There have been no material
reclassifications, mergers, consolidations or purchases or sales of a
significant amount of assets not in the ordinary course of GlobeTrac’s business,
with the exception of Globetrac Limited being formally dissolved on March 20,
2007 and the sale of certain assets to WebTech in accordance with the terms set
out in the Termination and Transfer Agreement.  See Exhibit 10.6 for
more information.
  2
  (b) Business
of GlobeTrac
 
 On
November 26, 2004, GlobeTrac entered into an agreement with WebTech Wireless
whereby GlobeTrac decided to wind down its operations effective November 1, 2004
and WebTech Wireless agreed to acquire all of GlobeTrac’s existing customers and
resellers and portals in exchange for the 6% commission/royalty.  See
Exhibit 10.5 – Letter Agreement and Exhibit 10.6 - Termination and Transfer
Agreement for more information.
 
 Since
November 1, 2004, GlobeTrac’s only source of income is the royalty income they
receive from WebTech.  GlobeTrac’s present business objective is to
locate and consummate a merger or acquisition of a viable business.
 
 GlobeTrac
will attempt to locate and negotiate with a target business for the merger of a
target business into GlobeTrac.  In certain instances, a target
business may want to become a subsidiary of GlobeTrac or may want to contribute
assets to GlobeTrac rather than merge.  It is anticipated that
management will contact broker-dealers and other persons with whom they are
acquainted who are involved with corporate finance matters to advise them of
GlobeTrac’s existence and to determine if any companies or businesses that they
represent have a general interest in considering a merger or acquisition with
GlobeTrac.  No assurance can be given that GlobeTrac will be
successful in finding or acquiring a viable target
business.  Furthermore, no assurance can be given that any business
opportunity, which does occur, will be on terms that are favorable to GlobeTrac
or its current stockholders.
 
 A target
business, if any, which may be interested in a business combination with
GlobeTrac may include (1) a company for which a primary purpose of becoming
public is the use of its securities for the acquisition of assets or businesses;
(2) a company that is unable to find an underwriter of its securities or is
unable to find an underwriter of securities on terms acceptable to it; (3) a
company that wants to become public with less dilution of its common stock than
would occur normally upon an underwriting; (4) a company that believes that it
will be able to obtain investment capital on more favorable terms after it has
become public; (5) a foreign company that wants to gain an initial entry into
the United States securities market; (6) a special situation company, such as a
company seeking a public market to satisfy redemption requirements under a
qualified Employee Stock Option Plan; or (7) a company seeking one or more of
the other perceived benefits of becoming a public company.
 
 Management
believes that there are perceived benefits to being a reporting company with a
class of publicly-registered securities.  These are commonly thought
to include (1) the ability to use registered securities to make acquisition of
assets or businesses; (2) increased visibility in the financial community; (3)
the facilitation of borrowing from financial institutions; (4) improved trading
efficiency; (5) stockholder liquidity; (6) greater ease in subsequently raising
capital; (7) compensation of key employees through stock options; (8) enhanced
corporate image; and (9) a presence in the United States capital
market.
 
 GlobeTrac
anticipates that the target businesses or business opportunities presented to it
will (1) either be in the  process of formation, or be recently
organized with limited operating history or a history of losses attributable to
under-capitalization or other factors; (2) experiencing financial or operating
difficulties; (3) be in need of funds to develop new products or services or to
expand into a new market, or have plans for rapid expansion through acquisition
of competing businesses; (4) or other similar
characteristics.  GlobeTrac intends to concentrate its acquisition
efforts on properties or businesses that management believes to be undervalued
or that management believes may realize a substantial benefit from being
publicly owned.  Given the above factors, investors should expect that
any target business or business opportunity may have little or no operating
history, or a history of losses or low profitability.
 
 GlobeTrac
does not propose to restrict its search for business opportunities to any
particular geographical area or industry, and may, therefore, engage in
essentially any business, to the extent of its limited
resources.  This includes industries such as service, finance, natural
resources, manufacturing, high technology, product development, medical,
communications and others.  GlobeTrac’s discretion in the selection of
business opportunities is unrestricted, subject to the availability of such
opportunities, economic conditions, and other factors.  However,
management believes that any potential business opportunity must provide audited
financial statements for review, for the protection of all parties to the
business combination.  One or more attractive business opportunities
may choose to forego the possibility of a business combination with us, rather
than incur the expenses associated with preparing audited financial
statements.
 
 Management,
which in all likelihood will not be experienced in matters relating to the
business of a target business, will rely upon its own efforts in accomplishing
GlobeTrac’s business purposes.  Outside consultants or advisors may be
utilized by GlobeTrac to assist in the search for qualified target
companies.  If GlobeTrac does retain such an outside consultant or
advisor, any cash fee earned by such person will need to be assumed by the
target business, as GlobeTrac has no cash assets with which to pay such
obligation.
  3
 
 Management
does not have the capacity to conduct as extensive an investigation of a target
business as might be undertaken by a venture capital fund or similar
institution.  The analysis of new business opportunities will be
undertaken by, or under the supervision of GlobeTrac’s officers and directors,
who are not professional business analysts.  In analyzing prospective
business opportunities, management may consider such matters as:
  • the
available technical, financial and managerial resources;
 • working
capital and other financial requirements; history of operations, if
any;
 • prospects
for the future;
 • nature of
present and expected competition;
 • the
quality and experience of management services which may be available and the
depth of that management
 • the
potential for further research, development, or exploration
 • specific
risk factors not now foreseeable but which then may be anticipated to impact our
proposed activities;
 • the
potential for growth or expansion;
 • the
potential for profit; and
 • the
perceived public recognition or acceptance of products, services, or trades;
name identification.
 
 A target
business may have an agreement with a consultant or advisor, providing that
services of the consultant or advisor be continued after any business
combination. Additionally, a target business may be presented to GlobeTrac only
on the condition that the services of a consultant or advisor be continued after
a merger or acquisition. Such preexisting agreements of target businesses for
the continuation of the services of attorneys, accountants, advisors or
consultants could be a factor in the selection of a target
business.
 
 In
implementing a structure for a particular target business acquisition, GlobeTrac
may become a party to a merger, consolidation, reorganization, joint venture, or
licensing agreement with another corporation or entity.  GlobeTrac may
also acquire stock or assets of an existing business.  Depending upon
the nature of the transaction, the current officers and directors of GlobeTrac
may resign their management and board positions with GlobeTrac in connection
with a change of control or acquisition of a business opportunity and be
replaced by one or more new officers and directors.
 
 It is
anticipated that any securities issued in any reorganization would be issued in
reliance upon exemption from registration under applicable federal and state
securities laws.  In some circumstances however, as a negotiated
element of its transaction, GlobeTrac may agree to register all or a part of
such securities immediately after the transaction is consummated or at specified
times thereafter.  If such registration occurs, of which there can be
no assurance, it will be undertaken by the surviving entity after GlobeTrac has
entered into an agreement for a business combination or has consummated a
business combination. The issuance of additional securities and their potential
sale into GlobeTrac’s trading market may depress the market value of GlobeTrac’s
securities in the future.
 
 With
respect to any merger or acquisition negotiations with a target business,
management expects to focus on the percentage of GlobeTrac that the target
business stockholder would acquire in exchange for their shareholdings in the
target business.  Depending upon, among other things, the target
business’s assets and liabilities, GlobeTrac’s shareholders will in all
likelihood hold a substantially lesser percentage ownership interest in
GlobeTrac following any merger or acquisition.  Any merger or
acquisition effected by GlobeTrac can be expected to have a significant dilutive
effect on the percentage of shares held by GlobeTrac’s shareholders at that
time.
 
 At the
present time, management has not identified any target business or business
opportunity that it plans to pursue, nor has GlobeTrac reached any agreement or
definitive understanding with any person concerning an acquisition or a business
combination. When any such agreement is reached or other material fact occurs,
GlobeTrac will file notice of such agreement or fact with the Securities and
Exchange Commission on Form 8-K.  Persons reading this Form 10-KSB are
advised to determine if GlobeTrac has subsequently filed a Form
8-K.
 
 Management
anticipates that the selection of a business opportunity in which to participate
will be complex and without certainty of success.  Management believes
(but has not conducted any research to confirm) that there are numerous firms
seeking the perceived benefits of a publicly registered corporation. Such
perceived benefits may include facilitating or improving the terms on which
additional equity financing may be sought, providing liquidity for incentive
stock options or similar benefits to key employees, increasing the opportunity
to use securities for acquisitions, and providing liquidity for stockholder’s
investments.  Business opportunities may be available in many
different industries and at various stages of development, all of which will
make the task of comparative investigation and analysis of such business
opportunities extremely difficult and complex.
  4
 
 Competition
 
 GlobeTrac
will remain an insignificant participant among the firms that engage in the
acquisition of business opportunities. There are many established venture
capital and financial concerns which have significantly greater financial and
personnel resources and technical expertise than GlobeTrac. In view of
GlobeTrac’s combined extremely limited financial resources and limited
management availability, GlobeTrac will continue to be at a significant
competitive disadvantage compared to its competitors.
 
 GlobeTrac
expects to encounter substantial competition in its efforts to locate attractive
business combination opportunities. The competition may in part come from
business development companies, venture capital partnerships and corporations,
small investment companies, and brokerage firms.  Some of these types
of organizations are likely to be in a better position than GlobeTrac to obtain
access to attractive business acquisition candidates either because they have
greater experience, resources and managerial capabilities than GlobeTrac,
because they are able to offer immediate access to limited amounts of cash, or
for a variety of other reasons.  GlobeTrac also will experience
competition from other public companies with similar business purposes, some of
which may also have funds available for use by an acquisition
candidate.
 
 Patents/Trade
Marks/Licences/Franchises/Concessions/Royalty Agreements or Labour
Contracts
 
 Neither
GlobeTrac nor its subsidiaries currently own any patents or trade marks. Also,
they are not party to any license or franchise agreements, concessions, royalty
agreements or labor contracts arising from any patents or trade marks, with the
exception of the terms set out in the Letter Agreement among Global Axxess,
WebTech Wireless International and WebTech Wireless Inc.  See Exhibit
10.5 – Letter Agreement and Exhibit 10.6 - Termination and Transfer Agreement
for more information.
 
 Expenditures
on Research and Development During the Last Two Fiscal Years
 
 GlobeTrac
has not spent any funds on research and development activities in the last two
fiscal years except for funds spent for the development of its
website.
 
 GlobeTrac
is not currently conducting any research and development
activities.
 
 Number
of Total Employees and Number of Full Time Employees
 
 GlobeTrac
currently has no employees.  Management expects to use consultants,
attorneys and accountants as necessary, and does not anticipate a need to engage
any full-time employees so long as it is seeking and evaluating business
opportunities.  The need for employees and their availability will be
addressed in connection with the decision whether or not to acquire or
participate in specific business opportunities.
 
 RISK
FACTORS
 
 You
should consider each of the following risk factors and the other information in
this Annual Report, including GlobeTrac’s consolidated financial statements and
the related notes, in evaluating GlobeTrac’s business and prospects. The risks
and uncertainties described below are not the only ones that impact on
GlobeTrac’s business. Additional risks and uncertainties not presently known to
GlobeTrac or that GlobeTrac currently considers immaterial may also impair its
business operations. If any of the following risks actually occur, GlobeTrac’s
business and financial results could be harmed. In that case, the trading price
of GlobeTrac’s Common Stock could decline.
  5
  Risks
associated with GlobeTrac’s business:
 
 1.
              GlobeTrac
      lacks an operating history and has losses that it expects will continue
      into the future.  If the losses continue GlobeTrac will have to
      suspend operations or cease
operations.
  GlobeTrac
      has no operating history upon which an evaluation of its future success or
      failure can be made.  GlobeTrac has incurred significant
      operating losses since inception and has limited financial resources to
      support it until such time that it is able to generate positive cash flow
      from operations.  GlobeTrac’s accumulated net losses since
      inception are $4,511,922.  For the 12 months ended December 31,
      2007, operating expenses decreased by $3,870 from $126,054 for the year
      ended December 31, 2006 to $122,184 for the year ended December 31,
      2007.  See “Management Discussion and Analysis” on page
      11formore
details.
 GlobeTrac
      currently has few assets and limited financial resources.  Even
      without a viable business, GlobeTrac will, in all likelihood, continue to
      incur operating expenses, at least until the consummation of a business
      combination.  This will most likely result in GlobeTrac
      incurring net operating losses until GlobeTrac can consummate a business
      combination with a target business.  There is no assurance that
      GlobeTrac can identify such a target business and consummate such a
      business combination.
  2.
              GlobeTrac
      has no agreement for a business combination and there are no minimum
      requirements for a business
combination.
 
 GlobeTrac
      has no current arrangement, agreement or understanding with respect to
      engaging in a business combination with a specific
      entity.  There can be no assurance that GlobeTrac will be
      successful in identifying and evaluating suitable target businesses or
      business opportunities or in concluding a business
      combination.  No particular industry or specific business within
      an industry has been selected for a target business.  GlobeTrac
      has not established a specific length of operating history or a specified
      level of earnings, assets, net worth or other criteria that it will
      require a target business to have achieved, or without which GlobeTrac
      would not consider a business combination with such target
      business.  Accordingly, GlobeTrac may enter into a business
      combination with a target business that has limited or no significant
      operating history, operating losses, limited or no potential for immediate
      earnings, limited assets, negative net worth, or other negative
      characteristics.  There is no assurance that GlobeTrac will be
      able to negotiate a business combination on terms favorable to
      GlobeTrac.
  3.
                GlobeTrac
      does not have sufficient funds to acquire or operate a target
      business.
 GlobeTrac
      has very limited funds, and such funds may not be adequate to take
      advantage of any available business opportunities.  Even if
      GlobeTrac’s currently available funds prove to be sufficient to pay for
      its operations until it is able to acquire an interest in or complete a
      transaction with a target business, such funds may not be sufficient to
      enable it to exploit the business opportunity.  Thus, the
      ultimate success of GlobeTrac will depend, in part, upon its availability
      to raise additional capital.  If GlobeTrac requires modest
      amounts of additional capital to fund its operations until it is able to
      complete a business acquisition or transaction, such funds are expected to
      be provided by private loans or the private placement of the Company’s
      commons stock.  However, GlobeTrac has not investigated the
      availability, source, or terms that might govern the acquisition of the
      additional capital that is expected to be required in order to exploit a
      business opportunity, and will not do so until it has determined the level
      of need for such additional financing.  There is no assurance
      that additional capital will be available from any source or, if
      available, that it can be obtained on terms acceptable to
      GlobeTrac.  If not available, GlobeTrac operations will be
      limited to those that can be financed with its modest
    capital.
 
 Risks
associated with GlobeTrac’s industry:
 
 4.
              GlobeTrac
      faces significant competition for business opportunities and combinations
      and there may be a scarcity of available business
      opportunities.
  GlobeTrac
      is and will continue to be an insignificant participant in the business of
      seeking mergers with and acquisitions of business opportunities. A
      large number of established and well-financed entities, including venture
      capital firms, are active in mergers and acquisitions of target businesses
      that may be merger or acquisition target candidates for GlobeTrac. Nearly
      all such entities have significantly greater financial resources,
      technical expertise and managerial capabilities than GlobeTrac and,
      consequently, GlobeTrac will be at a competitive disadvantage in
      identifying possible business opportunities and successfully completing a
      business combination. Moreover, GlobeTrac will also compete in seeking
      merger or acquisition candidates with other small public companies, some
      of which may also have funds available for use by an acquisition
      candidate. See “Business of GlobeTrac – Competition” for more
      details.
 
 6
 5.
                  GlobeTrac’s
      business and operating results may be harmed by inflation and
      deflation.
  Inflation
      has had and may continue to have adverse effects on the economies and
      securities markets of certain countries and could have adverse effects on
      GlobeTrac’s clients in those countries, including their ability to obtain
      financing and repay debts.  Significant inflation or deflation
      could have a material adverse effect on GlobeTrac’s business, operating
      results, liquidity and financial
position.
 6.
              Reporting
      requirements may delay or preclude any merger or acquisition, which may
      adversely affect GlobeTrac’s
business.
  GlobeTrac
      is required to provide certain information about significant acquisitions
      including audited financial statements of the target
      business.  Obtaining audited financial statements are the
      economic responsibility of the target business.  The additional
      time and costs that may be incurred by some potential target businesses to
      prepare such financial statements may significantly delay or essentially
      preclude consummation of an otherwise desirable acquisition by
      GlobeTrac.  Acquisition prospects that do not have or are unable
      to obtain the required audited statements may not be appropriate for
      acquisition so long as the reporting requirements of the Exchange Act are
      applicable.  Notwithstanding a target business’s agreement to
      obtain audited financial statements within the required time frame, such
      audited financials may not be available to GlobeTrac at the time of
      effecting a business combination.  In cases where audited
      financials are unavailable, GlobeTrac will have to rely upon unaudited
      information that has not been verified by outside auditors in making its
      decision to engage in a transaction with the business
      entity.  This risk increases the prospect that a business
      combination with such a target business might prove to be an unfavorable
      one for GlobeTrac.
 7.
                  Regulation
      under the Investment Act of 1940 may adversely affect GlobeTrac’s
      business.
  If
      GlobeTrac engages in business combinations that would result in GlobeTrac
      holding passive investment interests in a number of entities, GlobeTrac
      could be subject to regulation under the Investment Company Act of
      1940.  In such event, GlobeTrac would be required to register as
      an investment company and could be expected to incur significant
      registration and compliance costs.  GlobeTrac has obtained no
      formal determination from the Securities and Exchange Commission as to the
      status of GlobeTrac under the Investment Company Act of 1940 and,
      consequently, any violation of such Act could subject GlobeTrac to
      material adverse
consequences.
 Risks
associated with GlobeTrac and its subsidiaries:
 8.
                  GlobeTrac’s
      stock price is volatile.
 The
      stock market in general, and the stock prices of GlobeTrac’s Common Stock
      in particular, have experienced extreme volatility that often has been
      unrelated to the operating performance of any specific public
      company.  The market price of GlobeTrac’s Common Stock has
      fluctuated in the past and is likely to fluctuate in the future as well,
      especially if GlobeTrac’s Common Stock continues to be thinly
      traded.  Factors that may have a significant impact on the
      market price of GlobeTrac’s Common Stock
      include:
 a.
                          announcements
      concerning GlobeTrac or its competitors, including the negotiation for or
      acquisition of a target business;
 b.
                          announcements
      regarding financial developments;
 c.
                          government
      regulations, including stock option accounting and tax
      regulations;
 d.
                          acts
      of terrorism and war; or
 e.
                          rumors
      or allegations regarding GlobeTrac’s financial disclosures or
      practices.
 7
  9.
              A
      small number of GlobeTrac’s stockholders own a substantial amount of
      GlobeTrac’s Common Stock, and if such stockholders were to sell those
      shares in the public market within a short period of time, the price of
      GlobeTrac’s Common Stock could drop
  significantly.
  Because
      some stockholders own substantial amounts of shares of GlobeTrac’s Common
      Stock, sales of a large number of shares of GlobeTrac’s Common Stock or
      even the availability of a substantial number of shares for sale could
      have the effect of reducing the price per share of GlobeTrac’s Common
      Stock, especially if the Common Stock continues to be thinly
      traded.
 10.
              GlobeTrac
      may not be able to attract and retain qualified personnel necessary for
      the implementation of its business
strategy.
 GlobeTrac’s
      future success depends largely upon the continued service of its Board
      members, executive officers and other key
      personnel.  GlobeTrac’s success also depends on its ability to
      attract, retain and motivate qualified personnel.  GlobeTrac may
      have particular difficulty attracting and retaining key personnel as a
      Company with no or minimal assets and financial
      sources.  GlobeTrac does not maintain key person life insurance
      on any of its personnel.  The loss of one or more of its key
      employees or its inability to attract, retain and motivate qualified
      personnel could negatively impact GlobeTrac’s ability to locate and
      acquire a target
  business.
 11.
              Current
      management of GlobeTrac may change and there may be a change in control of
      GlobeTrac as a result of the acquisition of a target
    business.
 
 In
      conjunction with completion of a business acquisition, it is anticipated
      that GlobeTrac will issue an amount of GlobeTrac’s authorized but unissued
      Common Stock that represents the greater majority of the voting power and
      equity of GlobeTrac, which will, in all likelihood, result in shareholders
      of a target business obtaining a controlling interest in GlobeTrac. As a
      condition of a potential business combination agreement, the current
      shareholders of GlobeTrac may agree to sell or transfer all or a portion
      of GlobeTrac’s Common Stock they own so to provide the target business
      with all or majority control. The resulting change in control of GlobeTrac
      will likely result in removal of the current officers and directors of
      GlobeTrac and a corresponding reduction in or elimination of their
      participation in the future affairs of the
  Company.
  12.
                  GlobeTrac
      does not expect to pay dividends in the foreseeable
  future.
 GlobeTrac
      has never paid cash dividends on its Common Stock and has no plans to do
      so in the foreseeable future. GlobeTrac intends to retain earnings, if
      any, to develop and expand its
business.
  13.
              Dilution.
 
 A
      business combination normally will involve the issuance of a significant
      number of additional shares.  Depending upon the value of the
      assets acquired in such business combination, the per share value of
      GlobeTrac’s Common Stock may increase or decrease, perhaps
      significantly.
  14.
                  “Penny
      Stock” rules may make buying or selling GlobeTrac’s Common Stock
      difficult, and severely limit their market
      and liquidity.
  Trading
      in GlobeTrac’s securities is subject to certain regulations adopted by the
      SEC commonly known as the “penny stock” rules.  These rules
      govern how broker-dealers can deal with their clients and “penny
      stocks”.  The additional burdens imposed upon broker-dealers by
      the “penny stock” rules may discourage broker-dealers from effecting
      transactions in GlobeTrac’s securities, which could severely limit their
      market price and liquidity of its Common Stock.  See “Penny
      Stock rules” on page 11 for more
details.
  8
  Item
2.  Description of Property.
 
 GlobeTrac
currently does not have a principal executive office.  GlobeTrac’s
mailing address is 1100 Melville Street, Suite 610, Vancouver, British Columbia,
V6E 4A6, Canada.  Other than this mailing address, GlobeTrac does not
currently maintain any other office facilities, and does not anticipate the need
for maintaining office facilities at any time in the foreseeable
future.  GlobeTrac pays no rent or other fees for the use of the
mailing address as these offices are used virtually full-time by other
businesses of GlobeTrac’s CEO.
 
 It is
likely that GlobeTrac will not establish an office until it has completed a
business acquisition transaction, but it is not possible to predict what
arrangements will actually be made with respect to future office
facilities.
 
 Item
3.  Legal Proceedings.
 
 GlobeTrac
is not a party to any pending legal proceedings and, to the best of GlobeTrac’s
knowledge, none of GlobeTrac’s property or assets are the subject of any pending
legal proceedings
 
 Item
4.  Submission of Matters to a Vote of Security Holders.
 
 No matter
was submitted to a vote of security holders, through the solicitation of proxies
or otherwise, during the fourth quarter of the fiscal year covered by this
report.
   PART
II
 
 Item
5. Market
for Common Equity and Related Stockholder Matters and Small Business Issuer
Purchases of Equity Securities.
 
 (a) Market
Information
 
 GlobeTrac’s
Common Stock has been quoted on the NASD OTC Bulletin Board since March 2002
under the symbol “GBTR” (formerly “ARTE”).  However, from March 2002
to June 2002, GlobeTrac’s Common Stock did not trade.  The first trade
occurred on June 28, 2002.  The table below gives the high and low bid
information for each fiscal quarter for the last two fiscal years and for the
interim period ended March 26, 2008.  The bid information was obtained
from Pink Sheets LLC and reflects inter-dealer prices, without retail mark-up,
mark-down or commission, and may not represent actual transactions.
  High
      & Low BidsPeriod
      ended
              High
              Low
              Source26
      March 2008
              $0.007
              $0.0012
              Pink
      Sheets LLC31
      December 2007
              $0.006
              $0.003
              Pink
      Sheets LLC30
      September 2007
              $0.008
              $0.006
              Pink
      Sheets LLC30
      June 2007
              $0.014
              $0.006
              Pink
      Sheets LLC31
      March 2007
              $0.0127
              $0.006
              Pink
      Sheets LLC31
      December 2006
              $0.012
              $0.006
              Pink
      Sheets LLC30
      September 2006
              $0.0155
              $0.011
              Pink
      Sheets LLC30
      June 2006
              $0.0155
              $0.011
              Pink
      Sheets LLC31
      March 2006
              $0.017
              $0.012
              Pink
      Sheets LLC
  9
 
 (b) Holders of
Record
 
 At
December 31, 2007 there are approximately 35 holders of record of GlobeTrac’s
Common Stock.
 
 (c) Dividends
 
 GlobeTrac
has declared no dividends on its Common Stock, with the exception of the
following, and is not subject to any restrictions that limit its ability to pay
dividends on its shares of Common Stock.  Dividends are declared at
the sole discretion of GlobeTrac’s Board of Directors.
 
 On May
17, 2002, the Board of Directors declared a stock dividend of three shares for
every one share of Common Stock issued.  The stock dividend was paid
out on May 28, 2002.
  (d) Recent
Sales of Unregistered Securities
 
 There
have been no sales of unregistered securities within the last three years that
would be required to be disclosed pursuant to Item 701 of Regulation
S-B.
 
 There are
no outstanding options or warrants to purchase, or securities convertible into,
shares of GlobeTrac’s Common Stock, except for the following convertible
debt:
 
 At
December 31, 2007 and 2006, GlobeTrac had a note payable in the amount of
$162,149 plus accrued interest of $51,905 and  $38,934 which is
convertible into GlobeTrac common shares at $0.50 per share, at GlobeTrac’s
option.
 
 At
December 31, 2007 and 2006, GlobeTrac had notes payable totaling $511,660 plus
accrued interest of $161,082 and $122,798 that are convertible into GlobeTrac
common shares at $0.50 per share, at GlobeTrac’s option.
 
 At
December 31, 2007 and 2006, GlobeTrac had notes payable totaling $835,940 plus
accrued interest of $292,840 and $209,246 that are convertible into GlobeTrac
common shares at the option of either the GlobeTrac or the lender at market
price less 20%, with a minimum conversion price of $0.15 per share.
 
 (e) Penny
Stock Rules
 
 Trading
in GlobeTrac’s Common Stock is subject to the “penny stock”
rules.  The SEC has adopted regulations that generally define a penny
stock to be any equity security that has a market price of less than $5.00 per
share, subject to certain exceptions.  These rules require that any
broker-dealer who recommends GlobeTrac’s Common Stock to persons other than
prior customers and accredited investors, must, prior to the sale, make a
special written suitability determination for the purchaser and receive the
purchaser’s written agreement to execute the transaction.  Unless an
exception is available, the regulations require the delivery, prior to any
transaction involving a penny stock, of a disclosure schedule explaining the
penny stock market and the risks associated with trading in the penny stock
market.  In addition, broker-dealers must disclose commissions payable
to both the broker-dealer and the registered representative and current
quotations for the securities they offer.  The additional burdens
imposed upon broker-dealers by such requirements may discourage broker-dealers
from effecting transactions in GlobeTrac’s securities, which could severely
limit their market price and liquidity of GlobeTrac’s securities.
  10
 
 Item
6.  Management’s Discussion and Analysis or Plan of Operation.
  MANAGEMENT’S
DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
  FORWARD-LOOKING
STATEMENTS
  This
management discussion and analysis of financial condition and results of
operations (“MD&A”) on Form 10-KSB includes forward-looking statements
within the meaning of the Private Securities Litigation Reform Act of 1995. All
statements other than statements of historical fact, including statements
regarding guidance, industry prospects or future results of operations or
financial position, made in this MD&A on Form 10-KSB are forward-looking. We
use words such as anticipate, believe, expect, future, intend, plan, aim,
project, estimate, will, should, could and similar expressions to identify
forward-looking statements. Forward-looking statements reflect management’s
current expectations and are inherently uncertain. Factors that could cause our
future results to differ from these expectations include general economic
conditions, particularly as they affect our ability to acquire a target business
and raise sufficient working capital and the impact of foreign exchange
fluctuations, changes in global economic conditions and consumer spending, on
our royalty revenue.  As a result, the identification and
interpretation of data and other information and their use in developing and
selecting assumptions from and among reasonable alternatives requires the
exercise of judgment.  To the extent that the assumed events do not
occur, our outcome may vary substantially from our anticipated or projected
results, and accordingly, we express no opinion on the achievability of those
forward-looking statements and give no assurance that any of the assumptions
relating to the forward-looking statements are accurate.  These risks
and uncertainties, as well as other risks and uncertainties that could cause our
actual results to differ significantly from management’s expectations, are
described in greater detail in Item 1(b) of Part I, “Risk Factors,” which
describes some, but not all, of the factors that could cause actual results to
differ significantly from management’s expectations.
 
 OUR
BUSINESS
 
 We were
incorporated in the state of Delaware on March 2, 2000 and our principal
executive offices are headquartered in Canada.  On August 27, 2002 we
acquired 100% of the shares of Global Axxess Corporation Limited (“Global
Axxess”), a company incorporated in Ireland.  Global Axxess owned 100%
of the issued and outstanding shares of Globetrac Limited (“Limited”), a company
incorporated in the United Kingdom, until March 20, 2007 when Limited was
officially dissolved and all of Limited’s assets and liabilities were assumed by
GlobeTrac. As a result of terminating our operations in Europe, we are seeking
new business opportunities.
 
 At
December 31, 2007, our only source of income is a six percent (6%)
commission/royalty that  we receive from WebTech Wireless Inc.
(“WebTech”), based on all qualified sales of any product or service offered by
WebTech.  A qualified sale means all of WebTech’s invoiced sales of
products or services to a customer that has ordered at least one product or
service before November 26, 2005, whether sold by WebTech or by a licensee,
affiliate or agent of WebTech. A customer is a list of customers that was
provided to WebTech by GlobeTrac. There is no cap on the royalty receivable and
royalties are to be paid by WebTech for 11 years, beginning November 1, 2004 and
ending October 31, 2015.
 
 We have
accumulated a deficit of approximately $4.5 million to date and will require
additional financing to continue operations and to seek out new business
opportunities.  We plan to mitigate our losses in future years by
receiving royalty payments from Webtech, reducing operating expenses and
locating a viable business.
 
 There is
no assurance that we will be able to obtain additional financing, be successful
in seeking new business opportunities, receive any royalties from WebTech or
that we will be able to reduce operating expenses. Our consolidated financial
statements do not include any adjustments that might result from the outcome of
these uncertainties.
  11
  CRITICAL
ACCOUNTING POLICIES AND ESTIMATES
  The
preparation of financial statements in conformity with generally accepted
accounting principles of the United States (“GAAP”) requires estimates and
assumptions that affect the reported amounts of assets and liabilities, revenues
and expenses, and related disclosures of contingent assets and liabilities in
the consolidated financial statements and accompanying notes. The SEC has
defined a company’s critical accounting policies as the ones that are most
important to the portrayal of the company’s financial condition and results of
operations, and which require the company to make its most difficult and
subjective judgments, often as a result of the need to make estimates of matters
that are inherently uncertain. Based on this definition, we have identified the
critical accounting policies and estimates addressed below. We also have other
key accounting policies, which involve the use of estimates, judgments, and
assumptions that are significant to understanding our results. Although we
believe that our estimates, assumptions, and judgments are reasonable, they are
based upon information presently available. Actual results may differ
significantly from these estimates under different assumptions, judgments, or
conditions.
  Revenue
Recognition
 
 We
recognize our royalty revenue when pervasive evidence of an agreement exists,
when it is received and accrue for royalty revenues that we believe to be
reasonably collectable.
 
 Accounts
Receivable
 
 Receivables
represent valid claims against debtors for royalties arising on or before the
balance sheet date and are reduced to their estimated net realizable
value.  An allowance for doubtful accounts is based on an assessment
of the collectibility of all past due accounts.
 
 At
December 31, 2007, accounts receivable consists of estimated royalty revenue for
the months of November and December 2007.  Our estimate was based on
the amounts we received from WebTech in the prior months of 2007.  As
of the date of filing we had not received payment of the accrued royalty revenue
and thus our estimated accrual could vary materially from the amount we accrued
at December 31, 2007.
 
 Financial
Instruments
 
 Foreign
Exchange Risk
 
 We are
subject to foreign exchange risk on our royalty revenue which is denominated in
UK pounds and some purchases which are denominated in Canadian dollars. Foreign
currency risk arises from the fluctuation of foreign exchange rates and the
degree of volatility of these rates relative to the United States
dollar.  Due to the nature of our foreign currency transitions we do
not believe we have any material risk due to foreign currency
exchange.
 
 Concentration
of Credit Risk
 
 Financial
instruments that potentially subject us to significant concentrations of credit
risk consist principally of cash and trade accounts receivable.
 
 At
December 31, 2007 and 2006, we had approximately $17,000 and $44,000,
respectively in cash that was not insured.  This cash is on deposit
with a large chartered Canadian bank.  As part of our cash management
process, we perform periodic evaluations of the relative credit standing of this
financial institution.  We have not experienced any losses in cash
balances and do not believe we are exposed to any significant credit risk on our
cash.
  12
 
 Accounts
receivable consists of royalty income from one source and is not
collateralized.  We continually monitor the financial condition of our
customers to reduce the risk of loss.  We routinely assess the
financial strength of our source of revenue income and as a consequence,
concentration of credit risk is limited. At December 31, 2007 and 2006, we had
$41,955 and $45,676 in royalties’ receivable from this source.
  Income
Taxes
  We
adopted the provisions of FIN 48 on January 1, 2007. FIN 48 provides
detailed guidance for the financial statement recognition, measurement and
disclosure of uncertain tax positions recognized in the financial statements in
accordance with SFAS 109. The first step is to evaluate the tax position for
recognition by determining if the weight of available evidence indicates it is
more likely than not that the position will be sustained on audit, including
resolution of related appeals or litigation processes, if any. The second step
is to measure the tax benefit as the largest amount which is more than 50%
likely of being realized upon ultimate settlement.  Tax positions must
meet a “more-likely-than-not” recognition threshold at the effective date to be
recognized upon the adoption of FIN 48 and in subsequent periods. The adoption
of FIN 48 had an immaterial impact on our consolidated financial position and
did not result in unrecognized tax benefits being recorded. Accordingly, no
corresponding interest and penalties have been accrued. We file income tax
returns in the U.S. federal and applicable state jurisdictions. There are
currently no federal or state income tax examinations underway for these
jurisdictions. Furthermore, we are no longer subject to U.S. federal income tax
examinations by the Internal Revenue service for tax years before 2003 and for
state and local tax authorities for years before 2002. We do, however, have
prior year net operating losses which remain open for examination.
  Recent
Accounting Pronouncements
 
 In
September 2006, the FASB issued SFAS No. 157, Fair Value Measurements(“SFAS No. 157”). SFAS No. 157 defines fair value, establishes
a framework for measuring fair value and enhances disclosures about fair value
measures required under other accounting pronouncements, but does not change
existing guidance as to whether or not an instrument is carried at fair value.
SFAS No. 157 will be effective for us on January 1,
2008.  Adoption of SFAS 157 is not expected to have a significant
impact on our consolidated financial statements.
  In
September 2006, the FASB issued SFAS 158 (“SFAS 158”), “Employers’ Accounting for Defined
Benefit Pension and Other Postretirement Plans, an amendment of FASB Statements
No. 87, 88, 106, and 132(R)”. This statement requires an
employer to recognize the over funded or under funded status of a defined
benefit postretirement plan as an asset or liability in its statement of
financial position and to recognize changes in that funded status in the year in
which the changes occur through comprehensive income of a business entity. This
statement also requires an employer to measure the funded status of a plan as of
the date of its year end statement of financial position, with limited
exceptions. We are required to initially recognize the funded status of a
defined benefit postretirement plan and to provide the required disclosures as
of the end of the fiscal year ending after December 15,
2006.  The requirement to measure plan assets and benefit obligations
as of the date of the employer’s fiscal year end statement of financial position
is effective for fiscal years ending after December 15, 2008, or fiscal
2009 for us. We do not have a defined benefit pension or other post retirement
plan and thus we did not have to comply with the disclosure provisions of SFAS
158 at December 31, 2006 or 2007.  Adoption of SFAS 158 is not
expected to have a material impact on our consolidated financial
statements.
  In
February 2007, the FASB issued SFAS No. 159 (“SFAS 159”), "The Fair Value Option for Financial
Assets and Financial Liabilities—Including an amendment of FASB Statement
No. 115”. SFAS 159 permits entities to choose to measure
many financial instruments and certain other items at fair value. Unrealized
gains and losses on items for which the fair value option has been elected will
be recognized in earnings at each subsequent reporting date. SFAS 159 will be
effective for us on January 1, 2008. Adoption of SFAS 159 is not expected
to have a material impact on our consolidated financial statements.
  13
  In
December 2007, the FASB issued SFAS No. 141(R), Business Combinations(“SFAS
141(R)”), which replaces SFAS 141, Business Combinations,
requires an acquirer to recognize the assets acquired, the liabilities assumed,
and any non-controlling interest in the acquiree at the acquisition date,
measured at their fair values as of that date, with limited exceptions. This
Statement also requires the acquirer in a business combination achieved in
stages to recognize the identifiable assets and liabilities, as well as the
non-controlling interest in the acquiree, at the full amounts of their fair
values. SFAS 141(R) makes various other amendments to authoritative literature
intended to provide additional guidance or to confirm the guidance in that
literature to that provided in this Statement. This Statement applies
prospectively to business combinations for which the acquisition date is on or
after the beginning of the first annual reporting period beginning on or after
December 15, 2008. We do not expect adoption of SFAS 141(R) to have a
significant impact on our consolidated financial statements.
  In
December 2007, the Emerging Issues Task Force (“EITF”) of the FASB reached
a consensus on Issue No. 07-1, Accounting for Collaborative
Arrangements(“EITF 07-1”). The EITF concluded on the definition of a
collaborative arrangement and that revenues and costs incurred with third
parties in connection with collaborative arrangements would be presented gross
or net based on the criteria in EITF 99-19 and other accounting literature.
Based on the nature of the arrangement, payments to or from collaborators would
be evaluated and its terms, the nature of the entity’s business, and whether
those payments are within the scope of other accounting literature would be
presented. Companies are also required to disclose the nature and purpose of
collaborative arrangements along with the accounting policies and the
classification and amounts of significant financial-statement amounts related to
the arrangements. Activities in the arrangement conducted in a separate legal
entity should be accounted for under other accounting literature; however
required disclosure under EITF 07-1 applies to the entire collaborative
agreement. This Issue is effective for financial statements issued for fiscal
years beginning after December 15, 2008, and interim periods within those
fiscal years, and is to be applied retrospectively to all periods presented for
all collaborative arrangements existing as of the effective date. We do not
expect Adoption of EITF 07-1 to have a significant impact on our consolidated
financial statements.
 
 In
December 2007, FASB issued SFAS No. 160, Noncontrolling Interests in
Consolidated Financial Statements(“SFAS 160”), which amends Accounting
Research Bulletin No. 51, Consolidated Financial
Statements, to improve the relevance, comparability, and transparency of
the financial information that a reporting entity provides in its consolidated
financial statements. SFAS 160 establishes accounting and reporting standards
that require the ownership interests in subsidiaries not held by the parent to
be clearly identified, labeled and presented in the consolidated statement of
financial position within equity, but separate from the parent’s equity. This
statement also requires the amount of consolidated net income attributable to
the parent and to the non-controlling interest to be clearly identified and
presented on the face of the consolidated statement of income. Changes in a
parent’s ownership interest while the parent retains its controlling financial
interest must be accounted for consistently, and when a subsidiary is
deconsolidated, any retained non-controlling equity investment in the former
subsidiary must be initially measured at fair value. The gain or loss on the
deconsolidation of the subsidiary is measured using the fair value of any
non-controlling equity investment. The Statement also requires entities to
provide sufficient disclosures that clearly identify and distinguish between the
interests of the parent and the interests of the non-controlling owners. This
Statement applies prospectively to all entities that prepare consolidated
financial statements and applies prospectively for fiscal years, and interim
periods within those fiscal years, beginning on or after December 15, 2008.
We do not expect adoption of SFAS 160 to have a significant impact on our
consolidated financial statements.
  14
 
 In
June 2007, the EITF of the FASB reached a consensus on Issue No. 07-3,
Accounting for Nonrefundable
Advance Payments for Goods or Services Received for Use in Future Research and
Development Activities(“EITF 07-3”). EITF 07-3 requires that
non-refundable advance payments for goods or services that will be used or
rendered for future research and development activities should be deferred and
capitalized. As the related goods are delivered or the services are performed,
or when the goods or services are no longer expected to be provided, the
deferred amounts would be recognized as an expense. This Issue is effective for
financial statements issued for fiscal years beginning after December 15,
2007 and earlier application is not permitted. This consensus is to be applied
prospectively for new contracts entered into on or after the effective date. The
pronouncement is not expected to have a material effect on our consolidated
financial statements.
 
 OPERATIONS
REVIEW
 
 During
the year ended December 31, 2007, we had a net loss of $201,919.  As
of December 31, 2007, we had a cash balance of $16,922, accounts receivable of
$41,955 and prepaids of $5,034.  When these current assets are offset
against our current obligations of $91,442 in accounts payable,$64,885 in
accrued professional fees, $2,015,576 in convertible notes payable, including
accrued interest, $32,346 in advances payable, $669,201 in amounts due to
related parties and a $500,000 note payable to a related party, we are left with
a working capital deficit of $3,309,539.
 
 We
believe that our cash as of the date of this filing is not sufficient to satisfy
our working capital needs for the next year.
 
 Over the
next twelve months we plan to seek new business opportunities and collect
royalty payments from WebTech.
 
 We
anticipate funding our working capital needs for the next twelve months through
the royalty payments from WebTech, the equity capital markets, private advances
and loans. Although the foregoing actions are expected to cover our anticipated
cash needs for working capital and capital expenditures for at least the next
twelve months, no assurance can be given that we will be able to collect any
royalty payments or raise sufficient cash to meet our cash
requirements.
 
 We are
not currently conducting any research and development activities. We do not
anticipate conducting such activities in the near future. If we enter into a new
business opportunity, we may be required to hire additional employees,
independent contractors as well as purchase or lease additional
equipment.
 
 We
anticipate continuing to rely on equity sales of common shares or the issuance
of convertible debt to fund our operations and to seek out or enter into new
business opportunities.  The issuance of any additional shares will
result in dilution to our existing shareholders.
 
 RELATED
PARTY TRANSACTIONS
 
 Included
in the $669,201 that is due to related parties at December 31, 2007, is $400,641
in  consulting and management fees that were accrued during 2005 and
2004, $13,766 in advances and $254,794 in accrued interest on the $500,000 note
payable to a related party.  None of the amounts due to related
parties bear interest, have any fixed terms of repayment or are
secured.  The $500,000 note payable to a related party bear’s interest
at 10%, is unsecured and was payable November 27, 2004.  We do not
anticipate paying this note unless we achieve profitable operations, raise
sufficient working capital, or issue shares for debt to cover this
obligation.
  15
 
 COMPARISON
OF THE YEARS ENDED DECEMBER 31, 2007 AND 2006
 
 Overall
Results of Operations
 
 For the
year ended December 31, 2007, we had a net loss of $201,919 or a $(0.01) net
loss per share, which was an increase of $16,165 in net loss from our net loss
of $185,754 or a $(0.01) net loss per share for the year ended December 31,
2006.  The increase in net loss for the year ended December 31, 2007
as compared to the year ended December 31, 2006 was primarily due to a decrease
in our royalty revenues.  If we are not successful in acquiring a
viable business during 2008, we expect our net loss to remain much the same as
in 2007 or at approximately $200,000.
 
 Revenues
 
 Our
revenue decreased by $19,020 or 14% from $134,674 for the year ended December
31, 2006 to $115,654 for the year ended December 31, 2007. All of the revenue
was the result of a 6% royalty which relates to the Termination and Transfer
Agreement that was signed on October 18, 2005.  Revenue decreased in
2007 due to lower sales to GlobeTrac customers by WebTech.  We expect
our royalty income to remain the same at approximately $115,000 during
2008.  We do not expect revenue to increase, unless we locate a new
revenue generating business opportunity.
 
 Operating
Expenses
 
 Our
operating expenses decreased by $3,870 or 3% from $126,054 for the year ended
December 31, 2006 to $122,184 for the year ended December 31, 2007. The decrease
in operating expenses for the year ended December 31, 2007 as compared to the
year ended December 31, 2006 was primarily due to a decrease in administrative
fees of approximately $6,000, offset by an increase in our professional fees of
approximately $2,000.   Our administrative fees decreased due to
the need for less administrative services due to the wind-up of GlobeTrac
Limited and our professional fees increased due to an increase in audit and
accounting fees. During the next year we expect our operating costs to remain
the same or at approximately $125,000, unless we locate a new viable
business.
 
 Interest
Expense
 
 Our
interest expense increased by $39,755 or 27% from $147,744 at December 31, 2006
to $187,499 at December 31, 2007.  The increase is due to the
assumption of Globetrac Limited’s outstanding loans because at December 31, 2006
interest costs associated with Globetrac Limited’s were recorded in Loss from
discontinued operations.  We expect interest expense to remain the
same during 2008 unless some of the convertible notes are converted into our
common shares.
 
 Loss
from Discontinued Operations
 
 On March
20, 2007, Globetrac Limited was officially dissolved.  At December 31,
2006, in connection with the wind up, we recorded a net loss from discontinued
operations of $45,830.  The net losses in 2006 were primarily due to
interest on the notes payable of approximately $40,000 and office expenses of
$6,000.  As a result of the discontinuance the we assumed all of
Limited’s assets and liabilities.  Limited was inactive at the date of
dissolution.
 
 LIQUIDITY,
CAPITAL RESOURCES AND FINANCIAL POSITION
 
 At
December 31, 2007, we had a cash balance of $16,922 and negative cash flows from
operations of $21,238 for the year then ended.  During the year ended
December 31, 2007, we funded our operations through royalty revenue we received
from WebTech of $115,654.
  16
 
 The notes
to our consolidated financial statements as of December 31, 2007, contain
footnote disclosure regarding our uncertain ability to continue as a going
concern.  We have not generated sufficient revenues to cover our
expenses, and we have an accumulated deficit of $4,511,922.  As of
December 31, 2007, we had $3,373,450 in current liabilities, when this is offset
against our current assets of $63,911 we are left with a working capital deficit
of $3,309,539 and as such we cannot assure that we will succeed in achieving a
profitable level of operations sufficient to meet our ongoing cash needs or in
locating a viable business opportunity.  We have, however,
successfully generated sufficient working capital and liquidity through royalty
revenues and advances of cash until the date of this filing, and believe that we
can continue to do so for the next twelve months.
 
 Below is
a discussion of our sources and uses of funds for the year ended December 31,
2007.
 
 Net
Cash Used In Operating Activities
 
 Net cash
used in operating activities during the year ended December 31, 2007 was
$21,238. This cash was primarily used to prepay $5,034 in legal fees; due to an
increase of $1,279 in accounts receivable over collection; pay down of accounts
payable by $20,361; and a net loss of $201,919.  The net loss was
primarily caused by a net increase in accrued professional fees of $19,655;
increases in accrued interest payable to a related party of $50,000; an increase
in interest payable on convertible debt of $137,499 and an increase in amounts
due to related parties of $201.
 
 Net
Cash Provided By Financing Activities
 
 We did
not have any financing activities during the year ended December 31,
2007.
 
 Net
Cash Used In Investing Activities
 
 We did
not have any investing activities during the year ended December 31,
2007.
 
 OFF
BALANCE-SHEET ARRANGEMENTS
 
 We have
no off-balance sheet arrangements that have or are reasonably likely to have a
current or future effect on our consolidated financial condition, changes in
consolidated financial condition, revenue or expenses, results of operations,
liquidity, capital expenditures or capital resources that is material to
investors.  We do not have any non-consolidated, special-purpose
entities.
 
 INCOME
TAXES
  The
following table sets out our deferred tax assets as of December 31, 2007 and
2006.  We have established a 100% valuation allowance, as we believe
it is more likely than not that the deferred tax assets will not be
realized.
  2007
                
                
                2006Federal
      loss carryforwards
                
                $
                679,924
                
                
                $
                628,272State
      loss carryforwards
                
                
                77,509
                
                
                
                64,292Foreign
      loss carryforwards
                
                
                -
                
                
                
                421,148Less:
      Valuation allowance
                
                
                (757,433
                )
                
                
                (1,113,712
                )$
                -
                
                
                $
                -
  17
 
 We based
the establishment of a 100% valuation allowance against our deferred tax assets
on our current operating results.  If our operating results improve
significantly, we may have to record our deferred taxes in our consolidated
financial statements, which could have a material impact on our financial
results.
 
 CONTINGENCIES
AND COMMITMENTS
 
 We had no
contingencies or long-term commitments at December 31, 2007.
 
 CONTRACTUAL
OBLIGATIONS
 
 The
following table provides a summary of our debt obligation as of December 31,
2007. We have not included repayment of our convertible notes payable because
these notes are repayable on demand and we do not know when or if payment will
be demanded.
  Contractual
      Payment Due
                    by
      Period2008Note
      Payable to Related Party
                  
                  $
                  500,000Accrued
      Interest on Note Payable to Related Party
                  
                  
                  254,795Total
      Contractual Obligations
                  
                  $
                  754,795
  INTERNAL
AND EXTERNAL SOURCES OF LIQUIDITY
 
 We have
funded our operations principally from royalty revenue and advances from related
and other parties.
 
 INFLATION
 
 We do not
believe that inflation will have a material impact on our future
operations.
  18
 Item
7.  Financial Statements
 GLOBETRAC
INC.
 CONSOLIDATED
FINANCIAL STATEMENTS
 AS
OF DECEMBER 31, 2007 and 2006
 AND
FOR THE YEARS ENDED DECEMBER 31, 2007 and 2006
   TABLE
OF CONTENTS
   REPORT
      OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
                  F-1CONSOLIDATED
      BALANCE SHEETS
                  F-2CONSOLIDATED
      STATEMENTS OF OPERATIONS
                  F-3CONSOLIDATED
      STATEMENT OF STOCKHOLDERS’ DEFICIT AND COMPREHENSIVE LOSS
                  F-4CONSOLIDATED
      STATEMENTS OF CASH FLOWS
                  F-5NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS
                  F-6
 19
  REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
 To the
Board of Directors and Stockholders
 GlobeTrac,
Inc.
 
 We have
audited the accompanying consolidated balance sheets of GlobeTrac, Inc., as of
December 31, 2007 and 2006 and the related consolidated statements of
operations, stockholders’ deficit and comprehensive loss, and cash flows for the
years then ended.  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.
 
 We
conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States).  Those standards require
that we plan and perform the audits to obtain reasonable assurance about whether
the financial statements are free of material misstatement.  The
Company is not required to have, nor were we engaged to perform, an audit of its
internal control over financial reporting.  Our audit included
consideration of internal control over financial reporting as a basis for
designing audit procedures that are appropriate in the circumstances, but not
for the purpose of expressing an opinion on the effectiveness of the Company’s
internal control over financial reporting.  Accordingly, we express no
such opinion.  An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial
statements.  An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation.  We believe
that our audits provide a reasonable basis for our opinion.
 
 In our
opinion, the consolidated financial statements referred to above present fairly,
in all material respects, the financial position of GlobeTrac, Inc. as of
December 31, 2007 and 2006 and the results of its operations and its cash flows
for the years then ended in conformity with accounting principles generally
accepted in the United States of America.
 
 The
accompanying consolidated financial statements have been prepared assuming that
the Company will continue as a going concern.  As discussed in Note 3
to the consolidated financial statements, the Company has suffered recurring
losses from operations and a net capital deficiency that raise substantial doubt
about its ability to continue as a going concern.  Management's plans
in regard to these matters are also described in Note 3.  The
consolidated financial statements do not include any adjustments that might
result from the outcome of this uncertainty.
 
 Mendoza
Berger & Company, LLP
 /s/
      Mendoza Berger & Company, LLPIrvine,
      California
                        March
      27, 2008
 F-1
 GLOBETRAC
INC.
 CONSOLIDATED
BALANCE SHEETS DECEMBER
31, 2007 AND 2006
 2007
                  
                  
                  2006ASSETSCurrent
      assetsCash
                  
                  $
                  16,922
                  
                  
                  $
                  44,175Accounts
      receivableNet
      of allowance for doubtful accounts of $7,327 and $7,327
                  
                  
                  41,955
                  
                  
                  
                  45,676Prepaids
                  
                  
                  5,034
                  
                  
                  
                  -Total
      current assets
                  
                  $
                  63,911
                  
                  
                  $
                  89,851LIABILITIES
      AND STOCKHOLDERS' DEFICITCurrent
      liabilitiesAccounts
      payable
                  
                  $
                  91,442
                  
                  
                  $
                  114,153Accrued
      professional fees
                  
                  
                  64,885
                  
                  
                  
                  45,230Convertible
      notes payable, including accrued interest
                  
                  
                  2,015,576
                  
                  
                  
                  1,880,727Advances
      payable
                  
                  
                  32,346
                  
                  
                  
                  16,385Due
      to related parties
                  
                  
                  669,201
                  
                  
                  
                  634,961Note
      payable to related party
                  
                  
                  500,000
                  
                  
                  
                  500,000Total
      current liabilities
                  
                  
                  3,373,450
                  
                  
                  
                  3,191,456Commitments
      and contingenciesStockholders
      deficitPreferred
      stock $0.001 par value, 5,000,000 authorized, none issued
    andoutstanding
      at December 31, 2007 and 2006Common
      stock $0.001 par value, 200,000,000 common shares
    authorized,22,190,000
      issued and outstanding at December 31, 2007 and 2006
                  
                  
                  22,190
                  
                  
                  
                  22,190Additional
      paid in capital
                  
                  
                  1,167,085
                  
                  
                  
                  1,167,085Accumulated
      deficit
                  
                  
                  (4,511,922
                  )
                  
                  
                  (4,310,003
                  )Accumulated
      other comprehensive income
                  
                  
                  13,108
                  
                  
                  
                  19,123Total
      stockholders' deficit
                  
                  
                  (3,309,539
                  )
                  
                  
                  (3,101,605
                  )Total
      liabilities and stockholders' deficit
                  
                  $
                  63,911
                  
                  
                  $
                  89,851
   The
accompanying notes are an integral part of these consolidated financial
statements
  F-2
 GLOBETRAC
INC.
 CONSOLIDATED
STATEMENTS OF OPERATIONS FOR
THE YEARS ENDED DECEMBER 31, 2007 AND 2006
 2007
                  
                  
                  2006Royalty
      income
                  
                  $
                  115,654
                  
                  
                  $
                  134,674Operating
      expenses:General
      and administrative
                  
                  
                  122,184
                  
                  
                  
                  126,054Operating
      (loss) income
                  
                  
                  (6,530
                  )
                  
                  
                  8,620Interest
      expense
                  
                  
                  (187,499
                  )
                  
                  
                  (147,744
                  )Net
      loss before franchise tax and loss from discontinued
      operations
                  
                  
                  (194,029
                  )
                  
                  
                  (139,124
                  )Franchise
      tax
                  
                  
                  (7,890
                  )
                  
                  
                  (800
                  )Net
      loss before loss from discontinued operations
                  
                  
                  (201,919
                  )
                  
                  
                  (139,924
                  )Loss
      from discontinued operations
                  
                  
                  -
                  
                  
                  
                  (45,830
                  )Net
      loss
                  
                  $
                  (201,919
                  )
                  
                  $
                  (185,754
                  )Net
      loss per share - basic and dilutedContinuing
      operations
                  
                  $
                  (0.01
                  )
                  
                  $
                  (0.01
                  )Discontinued
      operations
                  
                  
                  (0.00
                  )
                  
                  
                  (0.00
                  )$
                  (0.01
                  )
                  
                  $
                  (0.01
                  )Weighted
      average number of shares outstanding - basic and diluted
                  
                  
                  22,190,000
                  
                  
                  
                  22,190,000
   The
accompanying notes are an integral part of these consolidated financial
statements
  F-3
 GLOBETRAC
INC.
 CONSOLIDATED
STATEMENT OF STOCKHOLDERS' DEFICIT AND COMPREHENSIVE LOSS FOR
THE YEARS ENDED DECEMBER 31, 2007 AND 2006
 Common
      Stock Issued
                  
                  
                  
                  
                  
                  AccumulatedAdditional
                  
                  
                  
                  
                  
                  OtherNumber
      of
                  
                  
                  
                  
                  
                  Paid-in
                  
                  
                  Accumulated
                  
                  
                  ComprehensiveShares
                  
                  
                  Amount
                  
                  
                  Capital
                  
                  
                  Deficit
                  
                  
                  Income
      (Loss)
                  
                  
                  TotalBalance
      at January 1, 2006
                  
                  
                  22,190,000
                  
                  
                  $
                  22,190
                  
                  
                  $
                  1,167,085
                  
                  
                  $
                  (4,124,249
                  )
                  
                  $
                  27,379
                  
                  
                  $
                  (2,907,595
                  )Net
      loss
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  (185,754
                  )
                  
                  
                  -
                  
                  
                  
                  (185,754
                  )Foreign
      currency exchange loss
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  (8,256
                  )
                  
                  
                  (8,256
                  )Comprehensive
      loss
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  (194,010
                  )Balance
      at December 31, 2006
                  
                  
                  22,190,000
                  
                  
                  
                  22,190
                  
                  
                  
                  1,167,085
                  
                  
                  
                  (4,310,003
                  )
                  
                  
                  19,123
                  
                  
                  
                  (3,101,605
                  )Net
      loss
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  (201,919
                  )
                  
                  
                  -
                  
                  
                  
                  (201,919
                  )Foreign
      currency exchange loss
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  (6,015
                  )
                  
                  
                  (6,015
                  )Comprehensive
      loss
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  (207,934
                  )Balance
      at December 31, 2007
                  
                  
                  22,190,000
                  
                  
                  $
                  22,190
                  
                  
                  $
                  1,167,085
                  
                  
                  $
                  (4,511,922
                  )
                  
                  $
                  13,108
                  
                  
                  $
                  (3,309,539
                  )
   The
accompanying notes are an integral part of these consolidated financial
statements
  F-4
 GLOBETRAC
INC.
 CONSOLIDATED
STATEMENTS OF CASH FLOWS FOR
THE YEARS ENDED DECEMBER 31, 2007 AND 2006
 2007
                  
                  
                  2006Cash
      flows from operating activities:Net
      loss
                  
                  $
                  (201,919
                  )
                  
                  $
                  (185,754
                  )Changes
      in operating assets and liabilities:Accounts
      receivable
                  
                  
                  (1,279
                  )
                  
                  
                  (16,851
                  )Prepaids
                  
                  
                  (5,034
                  )
                  
                  
                  -Accounts
      payable
                  
                  
                  (20,361
                  )
                  
                  
                  (4,346
                  )Accrued
      professional fees
                  
                  
                  19,655
                  
                  
                  
                  28,480Accrued
      interest payable to related party
                  
                  
                  50,000
                  
                  
                  
                  50,000Due
      to related parties
                  
                  
                  201
                  
                  
                  
                  (8,414
                  )Accrued
      interest payable on convertible notes
                  
                  
                  137,499
                  
                  
                  
                  137,560Net
      cash (used in) provided by operating activities
                  
                  
                  (21,238
                  )
                  
                  
                  675Effect
      of foreign currency exchange
                  
                  
                  (6,015
                  )
                  
                  
                  (8,256
                  )Net
      decrease in cash
                  
                  
                  (27,253
                  )
                  
                  
                  (7,581
                  )Cash,
      beginning of year
                  
                  
                  44,175
                  
                  
                  
                  51,756Cash,
      end of year
                  
                  $
                  16,922
                  
                  
                  $
                  44,175Supplemental
      disclosure of cash flow information:Cash
      paid during the year for:Income
      taxes
                  
                  $
                  7,890
                  
                  
                  $
                  800Interest
                  
                  $
                  2,650
                  
                  
                  $
                  -Non-cash
      changes items:Amount
      due to former related party reclassified to accounts
    payable
                  
                  $
                  -
                  
                  
                  $
                  19,633Amount
      due to former related party reclassified to advances
    payable
                  
                  $
                  15,961
                  
                  
                  $
                  -Accounts
      receivable offset against interest payable on convertible
      notes
                  
                  $
                  2,650
                  
                  
                  $
                  -Accounts
      receivable offset against accounts payable
                  
                  $
                  2,350
                  
                  
                  $
                  -
   The
accompanying notes are an integral part of these consolidated financial
statements
  F-5
 GLOBETRAC
INC.
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
 DECEMBER
31, 2007 AND 2006
   NOTE
1 – ORGANIZATION AND NATURE OF OPERATIONS
 Nature
of Operations
 
 GlobeTrac
Inc. (“GlobeTrac” or the “Company”) was incorporated in the state of Delaware on
March 2, 2000 as 411 Place.com Inc.  On February 28, 2001, the Company
changed its name to Artescope, Inc. and on July 29, 2002 changed its name to
GlobeTrac Inc.  The Company’s principal executive offices are
headquartered in Canada.  On August 27, 2002 the Company acquired 100%
of the shares of Global Axxess Corporation Limited (“Global Axxess”), a company
incorporated in Ireland.  Global Axxess owned 100% of the issued and
outstanding shares of Globetrac Limited (“Limited”), a company incorporated in
the United Kingdom, until March 20, 2007 when Limited was officially dissolved
and all of Limited’s assets and liabilities were assumed by GlobeTrac. As a
result of terminating its operations in Europe, the Company is seeking new
business opportunities. (Note 8)
 
 The
Company was in the business of selling, marketing, distributing and installing
global wireless tracking and telematics equipment in Europe until November 1,
2004 when they exchanged certain of their assets and certain liabilities in
Globetrac Limited and their rights to the global wireless tracking and
telematics business in Europe for a six percent royalty on gross sales of all
existing and qualified potential customers that the Company has in
Europe.
 
 NOTE
2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 
 Principles
of Consolidation
 
 The
consolidated financial statements include the accounts of the Company and the
consolidated accounts of its subsidiary.  All significant intercompany
balances and transactions have been eliminated.
 
 Reclassifications
 
 Certain
prior period amounts in the accompanying consolidated financial statements have
been reclassified to conform to the current period’s presentation. These
reclassifications had no effect on the consolidated results of operations or
financial position for any period presented.
 
 Accounting
Estimates
 
 The
preparation of the consolidated financial statements in conformity with
accounting principles generally accepted in the United States of America
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 consolidated financial statements and the
reported amounts of revenues and expenses during the reporting
period.  Actual results could differ from those
estimates.
 
 Cash
Equivalents
 
 For
purposes of the consolidated balance sheets and statements of cash flows, the
Company considers all amounts on deposit with financial institutions and highly
liquid investments with an original maturity of 90 days or less to be cash
equivalents.  At December 31, 2007 and 2006, the Company had no cash
equivalents.
 
 Accounts
Receivable
 
 Receivables
represent valid claims against debtors for royalties arising on or before the
balance sheet date and are reduced to their estimated net realizable
value.  An allowance for doubtful accounts is based on an assessment
of the collectibility of all past due accounts.
  F-6
 GLOBETRAC
INC.
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
 DECEMBER
31, 2007 AND 2006
 NOTE
2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
 
 Revenue
Recognition
 
 Royalty
revenue is recognized when pervasive evidence of an agreement exists, when it is
received or when the royalty income is determinable and collectability is
reasonably assured.
 
 Financial
Instruments
 
 Foreign
Exchange Risk
 
 The
Company is subject to foreign exchange risk for sales and purchases denominated
in foreign currencies.  Foreign currency risk arises from the
fluctuation of foreign exchange rates and the degree of volatility of these
rates relative to the United States dollar.  The Company does not
believe that it has any material risk to its foreign currency
exchange.
 
 Fair
Value of Financial Instruments
 
 The
Company’s financial instruments, include cash, accounts receivable, accounts
payable and accrued professional fees, advances payable and convertible notes
payable and related accrued interest due on demand.  The fair value of
these financial instruments approximate their carrying values due to their short
maturities.
 
 Concentration
of Credit Risk
 
 Financial
instruments that potentially subject the Company to significant concentrations
of credit risk consist principally of cash and trade accounts
receivable.
 
 At
December 31, 2007 and 2006, the Company had approximately $17,000 and $44,000,
respectively in cash that was not insured.  This cash is on deposit
with a large chartered Canadian bank.  As part of its cash management
process, the Company performs periodic evaluations of the relative credit
standing of this financial institution.  The Company has not
experienced any losses in cash balances and does not believe it is exposed to
any significant credit risk on its cash.
 
 Accounts
receivable consists of royalty income from one source and is not
collateralized.  Management continually monitors the financial
condition of its customers to reduce the risk of loss.  The Company
routinely assesses the financial strength of its source of revenue income and as
a consequence, concentration of credit risk is limited. At December 31, 2007 and
2006, the Company had $41,955 and $45,676 in royalties’ receivable from this
source.
 
 Comprehensive
Income (Loss)
 
 Comprehensive
income reflects changes in equity that results from transactions and economic
events from non-owner sources.  The Company had $13,108 and $19,123 in
other accumulated comprehensive income for the years ended December 31, 2007 and
2006, respectively, from its foreign currency translation.  As a
result, total comprehensive loss for the years ended December 31, 2007 and 2006
were ($207,934) and ($194,010), respectively.
  F-7
 GLOBETRAC
INC.
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
 DECEMBER
31, 2007 AND 2006
 NOTE
2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
 
 Income
Taxes
 
 Income
tax expense is based on pre-tax consolidated financial accounting
income.  Deferred tax assets and liabilities are recognized for the
future tax consequences attributable to differences between the consolidated
financial statement carrying amounts of existing assets and liabilities and
their respective tax bases. Deferred tax assets, including tax loss and credit
carryforwards, and liabilities are measured using enacted tax rates expected to
apply to taxable income in the years in which those temporary differences are
expected to be recovered or settled. The effect on deferred tax assets and
liabilities of a change in tax rates is recognized in income in the period that
includes the enactment date.  Deferred income tax expense represents
the change during the period in the deferred tax assets and deferred tax
liabilities. The components of the deferred tax assets and liabilities are
individually classified as current and non-current based on their
characteristics. Deferred tax assets are reduced by a valuation allowance when,
in the opinion of management, it is more likely than not that some portion or
all of the deferred tax assets will not be realized.
 
 Stock-Based
Compensation
 
 In
December 2004, the Financial Accounting Standards Board (“FASB”) issued
Statement of Financial Accounting Standards (“SFAS”) No. 123(R), “Share-Based Payment” (“SFAS
123(R)”), which is a revision of SFAS No. 123, “Accounting for Stock-Based
Compensation”.  SFAS 123(R) is effective for small business
issuers for the first fiscal year beginning after December 15, 2005, supersedes
Accounting Principles Board Opinion No. 25 (“APB 25”), “Accounting for Stock Issued to
Employees”, and amends SFAS 95, “Statement of Cash
Flows”.  SFAS 123(R) eliminates the option to use APB 25’s
intrinsic value method of accounting and requires recording expense for stock
compensation based on a fair value based method.
 
 On July
1, 2005, the Company adopted the “modified prospective method”
which required the Company to recognize compensation costs, for all share-based
payments granted, modified or settled, in consolidated financial statements
issued subsequent to July 1, 2005, as well as for any awards that were granted
prior to the adoption date for which the required service has not yet been
performed.  The adoption of SFAS 123(R) did not have a material effect
on the Company’s consolidated financial condition or results of operations
subsequent to July 1, 2005, because the Company did not have any awards that
were granted prior to the adoption date for which the required service have not
yet been performed and the Company did not enter into any share-based
transactions between July 1, 2005 and December 31, 2005.
 
 Prior to
July 1, 2005, the Company accounted for its stock-based compensation using APB
25 and related interpretations. Under APB 25, compensation expense was
recognized for stock options with an exercise price that was less than the
market price on the grant date of the option. For stock options with exercise
prices at or above the market value of the stock on the grant date, the Company
adopted the disclosure-only provisions of SFAS 123 for the stock options granted
to the employees and directors of the Company. Accordingly, no compensation cost
was recognized for these options prior to June 30, 2005.
 
 Basic
and Diluted Net Loss Per Common Share
 
 Basic
loss per share includes no dilution and is computed by dividing net income
available to common shareholders by the weighted average number of outstanding
common shares during the year.  Diluted earnings per share reflect the
potential dilution of securities that could occur if securities or other
contracts (such as convertible debt, stock options and warrants) to issue common
stock were exercised or converted into common stock.  The Company had
no outstanding options or warrants at December 31, 2007.  The
convertible debt has no specific date for conversion and the Company is not sure
if or when it will be converted.  The Company’s common stock
equivalents had no effect on diluted loss per share because potential common
shares are excluded from the diluted loss per share computation in net loss
periods as their effect would be anti-dilutive.
  F-8
 GLOBETRAC
INC.
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
 DECEMBER
31, 2007 AND 2006
 NOTE
2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
 
 Segment
Reporting
 
 The
Company is centrally managed, has limited operations and operates in one
business segment.
 
 Recent
Accounting Pronouncements
 
 In
February 2006, the FASB issued SFAS No. 155 (“SFAS 155”), “Accounting for Certain Hybrid
Financial Instruments - an amendment of FASB Statements No. 133 and
140”.  This Statement amends FASB Statements No. 133, “Accounting for Derivative
Instruments and Hedging Activities”, and No. 140, “Accounting for Transfers and
Servicing of Financial Assets and Extinguishments of
Liabilities”.  This Statement resolves issues addressed in
Statement 133 Implementation Issue No. D1, “Application of Statement 133 to
Beneficial Interests in Securitized Financial Assets.”  This
statement is effective for all financial instruments acquired or issued after
the beginning of an entities first fiscal year that begins after September 15,
2006.  Adoption of SFAS 155 did not have a material impact on the
Company’s consolidated financial statements.
 
 In March
2006, the FASB issued SFAS No. 156 (“SFAS 156”), “Accounting for Servicing of
Financial Assets – an amendment of FASB Statement No.
140”.  SFAS 156 amends SFAS No. 140, “Accounting for Transfers and
Servicing of Financial Assets and Extinguishment of Liabilities,” with
respect to accounting for separately recognized servicing assets and servicing
liabilities.  SFAS 156 is effective for fiscal years that begin after
September 15, 2006, with early adoption permitted as of the beginning of an
entity’s fiscal year.  The Company does not have any servicing assets
or servicing liabilities and, accordingly, the adoption of SFAS 156 did not have
a material impact on the Company’s consolidated financial
statements.
  In
July 2006, the FASB issued FASB Interpretation No. 48 ("Interpretation
No. 48 or FIN 48"), "Accounting for Uncertainty
in Income Taxes".
Interpretation No. 48 clarifies the accounting for uncertainty in income
taxes recognized in an enterprise's financial statements in accordance with SFAS
No. 109, "Accounting for
Income Taxes”. Interpretation No. 48 prescribes a recognition
threshold and measurement attribute for the financial statement recognition and
measurement of a tax position taken or expected to be taken in a tax return.
Interpretation No. 48 also provides guidance on derecognition,
classification, interest and penalties, accounting in interim periods,
disclosure and transition. Interpretation No. 48 is effective beginning
January 1, 2007.
  The
Company adopted the provisions of FIN 48 on January 1, 2007. FIN 48
provides detailed guidance for the financial statement recognition, measurement
and disclosure of uncertain tax positions recognized in the financial statements
in accordance with SFAS 109. Tax positions must meet a “more-likely-than-not”
recognition threshold at the effective date to be recognized upon the adoption
of FIN 48 and in subsequent periods. The adoption of FIN 48 had an immaterial
impact on the Company’s consolidated financial position and did not result in
unrecognized tax benefits being recorded. Accordingly, no corresponding interest
and penalties have been accrued. The Company files income tax returns in the
U.S. federal and state jurisdictions. There are currently no federal or state
income tax examinations underway for these jurisdictions. Furthermore, the
Company is no longer subject to U.S. federal income tax examinations by the
Internal Revenue service for tax years before 2003 and for state and local tax
authorities for years before 2002. The Company does, however, have prior year
net operating losses which remain open for examination.
  In
September 2006, the FASB issued SFAS No. 157, Fair Value Measurements(“SFAS No. 157”). SFAS No. 157 defines fair value, establishes
a framework for measuring fair value and enhances disclosures about fair value
measures required under other accounting pronouncements, but does not change
existing guidance as to whether or not an instrument is carried at fair value.
SFAS No. 157 will be effective for the Company on January 1,
2008.  Adoption of SFAS 157 is not expected to have a significant
impact on our consolidated financial statements.
  F-9
 GLOBETRAC
INC.
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
 DECEMBER
31, 2007 AND 2006
 NOTE
2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
 
 Recent
Accounting Pronouncements (Continued)
  In
September 2006, the FASB issued SFAS 158 (“SFAS 158”), “Employers’ Accounting for Defined
Benefit Pension and Other Postretirement Plans, an amendment of FASB Statements
No. 87, 88, 106, and 132(R)”. This statement requires an
employer to recognize the over funded or under funded status of a defined
benefit postretirement plan as an asset or liability in its statement of
financial position and to recognize changes in that funded status in the year in
which the changes occur through comprehensive income of a business entity. This
statement also requires an employer to measure the funded status of a plan as of
the date of its year end statement of financial position, with limited
exceptions. The Company is required to initially recognize the funded status of
a defined benefit postretirement plan and to provide the required disclosures as
of the end of the fiscal year ending after December 15,
2006.  The requirement to measure plan assets and benefit obligations
as of the date of the employer’s fiscal year end statement of financial position
is effective for fiscal years ending after December 15, 2008, or fiscal
2009 for the Company. Adoption of SFAS 158 is not expected to have a material
impact on the Company’s consolidated financial statements.
  In
February 2007, the FASB issued SFAS No. 159 (“SFAS 159”), "The Fair Value Option for Financial
Assets and Financial Liabilities—Including an amendment of FASB Statement
No. 115”. SFAS 159 permits entities to choose to measure
many financial instruments and certain other items at fair value. Unrealized
gains and losses on items for which the fair value option has been elected will
be recognized in earnings at each subsequent reporting date. SFAS 159 will be
effective for the Company on January 1, 2008. Adoption of SFAS 159 is not
expected to have a material impact on the Company’s consolidated financial
statements.
  In
December 2007, the FASB issued SFAS No. 141(R), Business Combinations(“SFAS
141(R)”), which replaces SFAS 141, Business Combinations,
requires an acquirer to recognize the assets acquired, the liabilities assumed,
and any non-controlling interest in the acquiree at the acquisition date,
measured at their fair values as of that date, with limited exceptions. This
Statement also requires the acquirer in a business combination achieved in
stages to recognize the identifiable assets and liabilities, as well as the
non-controlling interest in the acquiree, at the full amounts of their fair
values. SFAS 141(R) makes various other amendments to authoritative literature
intended to provide additional guidance or to confirm the guidance in that
literature to that provided in this Statement. This Statement applies
prospectively to business combinations for which the acquisition date is on or
after the beginning of the first annual reporting period beginning on or after
December 15, 2008. We do not expect adoption of SFAS 141(R) to have a
significant impact on our consolidated financial statements.
 
 In
December 2007, the Emerging Issues Task Force (“EITF”) of the FASB reached
a consensus on Issue No. 07-1, Accounting for Collaborative
Arrangements(“EITF 07-1”). The EITF concluded on the definition of a
collaborative arrangement and that revenues and costs incurred with third
parties in connection with collaborative arrangements would be presented gross
or net based on the criteria in EITF 99-19 and other accounting literature.
Based on the nature of the arrangement, payments to or from collaborators would
be evaluated and its terms, the nature of the entity’s business, and whether
those payments are within the scope of other accounting literature would be
presented. Companies are also required to disclose the nature and purpose of
collaborative arrangements along with the accounting policies and the
classification and amounts of significant financial-statement amounts related to
the arrangements. Activities in the arrangement conducted in a separate legal
entity should be accounted for under other accounting literature; however
required disclosure under EITF 07-1 applies to the entire collaborative
agreement. This Issue is effective for financial statements issued for fiscal
years beginning after December 15, 2008, and interim periods within those
fiscal years, and is to be applied retrospectively to all periods presented for
all collaborative arrangements existing as of the effective date. We do not
expect Adoption of EITF 07-1 to have a significant impact on our consolidated
financial statements.
  F-10
 GLOBETRAC
INC.
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
 DECEMBER
31, 2007 AND 2006
 NOTE
2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
 
 Recent
Accounting Pronouncements (Continued)
 
 In
December 2007, FASB issued SFAS No. 160, Noncontrolling Interests in
Consolidated Financial Statements(“SFAS 160”), which amends Accounting
Research Bulletin No. 51, Consolidated Financial
Statements, to improve the relevance, comparability, and transparency of
the financial information that a reporting entity provides in its consolidated
financial statements. SFAS 160 establishes accounting and reporting standards
that require the ownership interests in subsidiaries not held by the parent to
be clearly identified, labeled and presented in the consolidated statement of
financial position within equity, but separate from the parent’s equity. This
statement also requires the amount of consolidated net income attributable to
the parent and to the non-controlling interest to be clearly identified and
presented on the face of the consolidated statement of income. Changes in a
parent’s ownership interest while the parent retains its controlling financial
interest must be accounted for consistently, and when a subsidiary is
deconsolidated, any retained non-controlling equity investment in the former
subsidiary must be initially measured at fair value. The gain or loss on the
deconsolidation of the subsidiary is measured using the fair value of any
non-controlling equity investment. The Statement also requires entities to
provide sufficient disclosures that clearly identify and distinguish between the
interests of the parent and the interests of the non-controlling owners. This
Statement applies prospectively to all entities that prepare consolidated
financial statements and applies prospectively for fiscal years, and interim
periods within those fiscal years, beginning on or after December 15, 2008.
We do not expect adoption of SFAS 160 to have a significant impact on our
consolidated financial statements.
 
 In
June 2007, the EITF of the FASB reached a consensus on Issue No. 07-3,
Accounting for Nonrefundable
Advance Payments for Goods or Services Received for Use in Future Research and
Development Activities(“EITF 07-3”). EITF 07-3 requires that
non-refundable advance payments for goods or services that will be used or
rendered for future research and development activities should be deferred and
capitalized. As the related goods are delivered or the services are performed,
or when the goods or services are no longer expected to be provided, the
deferred amounts would be recognized as an expense. This Issue is effective for
financial statements issued for fiscal years beginning after December 15,
2007 and earlier application is not permitted. This consensus is to be applied
prospectively for new contracts entered into on or after the effective date. The
pronouncement is not expected to have a material effect on our consolidated
financial statements.
  NOTE
3 – GOING CONCERN
 
 The
Company was in the business of selling, marketing, distributing and installing
global wireless tracking and telematics equipment in Europe until November 1,
2004 when they exchanged their rights to sell, market, distribute and install
global wireless tracking and telematics equipment in Europe as well as specific
assets and liabilities, for a royalty of 6% on future gross sales to current
customers and qualified potential customers in Europe. There is no cap on the
royalties and royalties are to be paid for the duration of 11 years, ending
October 31, 2015.  The Company has accumulated a deficit of $4,511,922
since inception and additional financing will be required by the Company to fund
and support its operations.  Management plans to mitigate its losses
in future years by significantly reducing its operating expenses and seeking out
new business opportunities.   However, there is no assurance that
the Company will be able to obtain additional financing, reduce their operating
expenses or be successful in locating or acquiring a viable
business.  The consolidated financial statements do not include any
adjustments that might result from the outcome of those
uncertainties.
  F-11
 GLOBETRAC
INC.
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
 DECEMBER
31, 2007 AND 2006
 NOTE
4 – CONVERTIBLE NOTES PAYABLE AND RELATED ACCRUED INTEREST DUE ON
DEMAND
  December
      31,2007
                
                
                2006Notes
      payable due on demand, unsecured, bearing interest at 8% per annum,
      convertible into common shares of the Company at $0.50 per share at the
      option of the Company
                
                $
                673,809
                
                
                $
                673,809Notes
      payable due on demand, unsecured, bearing interest at 10% per annum,
      convertible into common shares of the Company at the option of the Company
      or the lender at market price less 20%, with a minimum conversion price of
      $0.15 per share
                
                
                835,940
                
                
                
                835,940Accrued
      interest due on demand
                
                
                505,827
                
                
                
                370,978Total
      convertible notes payable and related accrued interest due on
      demand
                
                $
                2,015,576
                
                
                $
                1,880,727
 
 NOTE
5 – ADVANCES PAYABLE
 
 At
December 31, 2007 and 2006, the Company had advances payable of $32,346 and
$16,385, respectively.  These advances are unsecured, are non-interest
bearing and have no fixed terms of repayment.
 
 NOTE
6 – DUE TO RELATED PARTIES
 
 December
      31,2007
                
                
                2006Due
      to companies sharing a common officer or to a company sharing a
      former common officer (a)
                
                $
                161,551
                
                
                $
                177,310Advance
      payable to a director
                
                
                13,766
                
                
                
                13,766Interest
      on note payable to a director (Note 7)
                
                
                254,794
                
                
                
                204,795Accrued
      management fees due to a director
                
                
                239,090
                
                
                
                239,090Due
      to related parties
                
                $
                669,201
                
                
                $
                634,961
 
 The above
amounts due to related parties are unsecured, non-interest bearing and have no
fixed terms of repayment.
 
 (a)
Advances payable to a company sharing a former common officer of $15,961, were
reclassified to advances payable at December 31, 2007.
 
 During
the years ended December 31, 2007 and 2006 $63,600 and $69,250 in administrative
fees were paid to a company that shares a common officer.
  NOTE
7 – NOTE PAYABLE TO RELATED PARTY
 
 December
      31,2007
                
                
                2006Note
      payable, unsecured, bears interest at 10% per annum, due November 27, 2004
      (Note 6)
                
                $
                500,000
                
                
                $
                500,000$
                500,000
                
                
                $
                500,000
  F-12
 GLOBETRAC
INC.
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
 DECEMBER
31, 2007 AND 2006
 NOTE
8 – DISCONTINUED OPERATIONS
 
 On March
20, 2007, Limited was officially discontinued and wound up.  At
December 31, 2007 and 2006, in connection with the wind up, the Company recorded
net losses from discontinued operations of $0 and $45,830.  The net
losses in 2006 were primarily due to interest on the notes payable of $40,000
and office expenses of $6,500.  As a result of the discontinuance the
Company assumed all of Limited’s assets and liabilities.  Limited was
inactive at the date of dissolution.
 
 NOTE
9 – COMMON STOCK AND WARRANTS
 
 During
the years ended December 31, 2007 and 2006, no common stock or warrants were
issued.
 
 NOTE
10 – ROYALTY AGREEMENT
 
 On
November 1, 2004 the Company agreed, pursuant to a termination and transfer
agreement, to discontinue, marketing, distributing and installing global
wireless tracking and telematics equipment in Europe, which was carried on
through its wholly-owned subsidiary, GlobeTrac Limited, in exchange for certain
assets and liabilities and a six percent royalty to be paid to GlobeTrac Inc. on
gross sales of all existing and qualified potential customers that the Company
had in Europe.
  NOTE
11 – INCOME TAXES
  As
of December 31, 2007 and 2006, deferred tax assets consist of the
following:
  2007
                
                
                2006Federal
      loss carryforwards
                
                $
                679,924
                
                
                $
                628,272State
      loss carryforwards
                
                
                77,509
                
                
                
                64,292Foreign
      loss carryforwards
                
                
                -
                
                
                
                421,148Less:
      Valuation allowance
                
                
                (757,433
                )
                
                
                (1,113,712
                )$
                -
                
                
                $
                -
 
 At
December 31, 2007 and 2006, the Company had a net operating loss carryforward
(“NOL”) of approximately      $2.1 million and
$4.0 million for federal, state and foreign tax purposes.
 
 At
December 31, 2007 and 2006 the Company had deferred tax assets of approximately
$760,000 and $1.1 million that primarily relates to net operating
losses.  A 100% valuation allowance has been established, as
management believes it is more likely than not that the deferred tax assets will
not be realized.
 
 The
federal and state NOL’s expire through December 31, 2027 and December 31, 2017,
respectively.
 
 The
Company’s valuation allowance (decreased) increased during 2007 and 2006 by
$(356,279) and $47,383.
 
 NOL’s
incurred prior to May 6, 2002 are subject to an annual limitation due to the
ownership change (as defined under Section 382 of the Internal Revenue Code of
1986) which resulted in a change in business direction.  Unused annual
limitations may be carried over to future years until the net operating losses
expire.  Utilization of net operating losses may also be limited in
any one year by alternative minimum tax rules.
 F-13
  Item
8.  Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.
 
 There are
no changes in and disagreements with GlobeTrac’s accountants on accounting and
financial disclosure.  GlobeTrac’s principal independent registered
public accounting firm since February 21, 2006 to the current date is Mendoza
Berger & Company, L.L.P., 9838 Research Drive, Irvine California,
92618.
 
 Effective
February 21, 2006, GlobeTrac’s board of directors approved a change in
GlobeTrac’s independent auditors.  None of the reports of Hall &
Company, Certified Public Accountants Inc. on the financial statements of
GlobeTrac’s for the fiscal years ended December 31,  2004 and 2003
contained any adverse opinion or disclaimer of opinion, but did contain an
uncertainty as to the Company’s ability to continue as a going
concern.  Although audited statements prepared by Hall & Company,
Certified Public Accountants Inc. contained a going concern qualification, such
financial statements did not contain any adjustments for uncertainties stated
therein, nor have there been at any time, disagreements between GlobeTrac and
Hall & Company, Certified Public Accountants Inc. on any matter of
accounting principles or practices, financial statement disclosure or auditing
scope or procedure.
 
 GlobeTrac
retained the accounting firm of Mendoza Berger & Company, L.L.P., to serve
as its independent registered public accounting firm to audit its financial
statements beginning with the year ended December 31, 2005.  This
engagement became effective February 21, 2006.  Prior to its
engagement as GlobeTrac’s independent auditors, Mendoza Berger & Company,
L.L.P., had not been consulted by GlobeTrac either with respect to the
application of accounting principles to a specific transaction or the type of
audit opinion that might be rendered on GlobeTrac’s financial statements or on
any other matter that was the subject of any prior disagreement between
GlobeTrac and its previous certifying accountants.
 
 GlobeTrac
elected to remain with its current audit engagement partner, who changed
independent registered public accounting firms.  Management is pleased
with the audit engagement partner’s past services and thinks the audit
engagement partner’s familiarity with GlobeTrac’s activities from inception
merited the transition to the new firm.
 
 Item 8A.Controls and
Procedures.
 
 Disclosure
on controls and procedures
 
 John
daCosta, GlobeTrac’s Chief Executive Officer and Chief Financial Officer carried
out an evaluation of the effectiveness of the design and operation of our
"disclosure controls and procedures" as such term is defined under Exchange Act
Rule 15(d) - 15(e) as of the end of the period covered by this
report.  The evaluation was undertaken in consultation with
GlobeTrac’s accounting personnel.  Based on that evaluation, the Chief
Executive Officer and the Chief Financial Officer concluded that, as of the
evaluation date, GlobeTrac’s disclosure controls and procedures were effective
to ensure that information required to be disclosed by GlobeTrac in the reports
that GlobeTrac files or submit under the Exchange Act is recorded, processed,
summarized and reported within the time periods specified in the Securities and
Exchange Commission’s rules and forms.
 
 Report
on internal control over financial reporting
 
 John
daCosta, GlobeTrac’s Chief Executive Officer and Chief Financial Officer is
responsible for establishing and maintaining adequate internal control over
financial reporting to provide reasonable assurance regarding the reliability of
GlobeTrac’s financial reporting and the preparation of financial statements for
external purposes in accordance with generally accepted accounting
principles.  Internal control over financial reporting includes those
policies and procedures that (i) pertain to the maintenance of records that in
reasonable detail accurately and fairly reflect the transactions and
dispositions of GlobeTrac’s assets, (ii) provide reasonable assurance that
transactions are recorded as necessary to permit preparation of financial
statements in accordance with generally accepted accounting principles, and that
GlobeTrac’s receipts and expenditures are being made only in accordance with
authorizations of GlobeTrac’s management and directors, and (iii) provide
reasonable assurance regarding prevention or timely detection of unauthorized
acquisition, use or disposition of GlobeTrac’s assets that could have a material
effect on the financial statements.
  20
 
 John
daCosta, GlobeTrac’s Chief Executive Officer and Chief Financial Officer
assessed GlobeTrac’s internal control over financial reporting as of the end of
GlobeTrac’s fiscal year. John daCosta, GlobeTrac’s Chief Executive Officer and
Chief Financial Officer used the criteria set forth by the Committee of
Sponsoring Organizations of the Treadway Commission.  John daCosta,
GlobeTrac’s Chief Executive Officer and Chief Financial Officer’s assessment
included the evaluation of such elements as the design and operating
effectiveness of key financial reporting controls, process documentation,
accounting policies, and GlobeTrac’s overall control environment.
 
 Based on
GlobeTrac’s assessment, John daCosta, GlobeTrac’s Chief Executive Officer and
Chief Financial Officer has concluded that GlobeTrac’s internal control over
financial reporting was effective as of the end of the fiscal year to provide
reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external reporting purposes in
accordance with generally accepted accounting principles.
  This
annual report does not include an attestation report of the Company’s
independent registered public accounting firm regarding internal control over
financial reporting. Management’s report was not subject to attestation by the
Company’s independent registered public accounting firm pursuant to temporary
rules of the Securities and Exchange Commission that permit the Company to
provide only management’s report in this annual report.
  Changes
in internal control over financial reporting
  GlobeTrac
has made no changes in the internal control over financial reporting during the
fourth quarter of the 2007 fiscal year that have materially affected, or are
reasonably likely to materially affect, GlobeTrac’s internal control over
financial reporting.
 Item
8B.  Other Information
 
 During
the fourth quarter of the fiscal year covered by this Form 10-KSB, GlobeTrac
reported all information that was required to be disclosed in a report on Form
8-K.
   PART
III
 
 Item
9.  Directors, Executive Officers, Promoters, Control Persons and Corporate
Governance; Compliance with Section 16(a) of the Exchange Act.
 
 (a) Identify
Directors and Executive Officers
 
 Each
director of GlobeTrac or its subsidiaries holds office until (i) the next annual
meeting of the stockholders, (ii) his successor has been elected and qualified,
or (iii) the director resigns.
 
 GlobeTrac’s
and its subsidiaries’ management teams are listed below.
 Management
Teams
 CompaniesOfficer’s
      Name
              
              GlobeTrac
      Inc.
              
              Global
      Axxess (1)David
      Patriquin
              
              Director
              
              n/aJohn
      daCosta
              
              Chief
      Executive Officer, President,
                Chief
      Financial Officer,
                Treasurer,
      Corporate Secretary
              
              Director
  (1) The
corporate laws governing this company do not require the appointment of
officers, with the exception of a corporate secretary.  The residency
requirement of the corporate law of  Ireland requires that a resident
of Ireland be appointed the corporate secretary. Since the resignation of Mr.
Duncan in 2005 Global Axxess does not have a resident of Ireland on its board.
Directors perform all management duties of this company.
  21
 
 David
Patriquin ●  Mr. Patriquin (65)has been a director of
GlobeTrac since November 2002.  Mr. Patriquin is a businessman who
operates several private businesses, including a private mortgage business, a
restaurant and lounge for the past 24 years and a real estate investment company
for the past 29 years.
 
 John
daCosta ●  Mr. daCosta (43)has been the CFO and
Corporate Secretary of GlobeTrac since May 2002 and the CEO and President of
GlobeTrac since February 2006.  Mr. daCosta has been a director of
Global Axxess since August 2002.  In the past five years, Mr. daCosta
has worked with numerous public and private companies in providing accounting
and management services.
 
 (b) Identify
Significant Employees
 
 GlobeTrac
does not have any significant employees.
 
 (c) Family
Relationships
 
 There are
no family relationships among the directors, executive officers or persons
nominated or chosen by GlobeTrac to become directors or executive
officers.
 
 (d) Involvement
in Certain Legal Proceedings
 
 (1)
              No
      bankruptcy petition has been filed by or against any business of which any
      director was a general partner or executive officer either at the time of
      the bankruptcy or within two years prior to that
  time.
 
 (2)
              No
      director has been convicted in a criminal proceeding and is not subject to
      a pending criminal proceeding (excluding traffic violations and other
      minor offences).
 
 (3)
              No
      director has been subject to any order, judgement, or decree, not
      subsequently reversed, suspended or vacated, of any court of competent
      jurisdiction, permanently or temporarily enjoining, barring, suspending or
      otherwise limiting his involvement in any type of business, securities or
      banking activities.
 
 (4)
              No
      director has been found by a court of competent jurisdiction (in a civil
      action), the Securities Exchange Commission or the Commodity Futures
      Trading Commission to have violated a federal or state securities or
      commodities law, that has not been reversed, suspended, or
      vacated.
 
 (e)           Compliance
with Section 16(a) of the Exchange Act.
 
 All
reports were filed with the SEC on a timely basis and GlobeTrac is not aware of
any failures to file a required report during the period covered by this annual
report, with the exception of the following. Gregory Pek and Jim Pratt failed to
file Form 5's (Annual Statement of Beneficial Ownership). The other affiliates,
in lieu of filing a Form 5, provided GlobeTrac with a written representation
that a Form 5 was not required.
 
 (f)           Nomination
Procedure for Directors
 
 GlobeTrac
does not have a standing nominating committee; recommendations for candidates to
stand for election as directors are made by the board of
directors.  GlobeTrac has not adopted a policy that permits
shareholders to recommend nominees for election as directors or a process for
shareholders to send communications to the board of
directors.  However, pursuant to Section 3 of Article III of
GlobeTrac’s By-laws, shareholders are able to provide GlobeTrac with information
for nominees for directors subject to the conditions provided in Section 3 of
Article III of GlobeTrac’s By-laws.
  22
 
 (g) Audit
Committee Financial Expert
 
 GlobeTrac
has no financial expert.  Management believes the cost related to
retaining a financial expert at this time is prohibitive.
 
 (h) Identification of
Audit Committee
 
 GlobeTrac
does not have a separately-designated standing audit
committee.  Rather, GlobeTrac’s entire board of directors perform the
required functions of an audit committee. Currently, David Patriquin is the only
member of GlobeTrac’s audit committee.  Mr. Patriquin meets
GlobeTrac’s independent requirements for an audit committee
member.  See Item 12. (c)  Director independence below for
more information on independence.
 
 GlobeTrac’s
audit committee is responsible for: (1) selection and oversight of GlobeTrac’s
independent accountant; (2) establishing procedures for the receipt, retention
and treatment of complaints regarding accounting, internal controls and auditing
matters; (3) establishing procedures for the confidential, anonymous submission
by GlobeTrac’s employees of concerns regarding accounting and auditing matters;
(4) engaging outside advisors; and, (5) funding for the outside auditory and any
outside advisors engagement by the audit committee.
 
 As of
December 31, 2007, GlobeTrac did not have a written audit committee charter or
similar document.
 
 (i) Code of
Ethics
 
 GlobeTrac
has adopted a code of ethics that applies to all its executive officers and
employees, including its CEO and CFO.  A copy of GlobeTrac’s adopted
code of ethics is attached to this annual report.  See Exhibit 14 –
Code of Ethics for more information.  GlobeTrac undertakes to provide
any person with a copy of its code of ethics free of charge.  Please
contact John daCosta at 604-648-0526 to request a copy of GlobeTrac’s code of
ethics.  Management believes GlobeTrac’s code of ethics is reasonably
designed to deter wrongdoing and promote honest and ethical conduct; provide
full, fair, accurate, timely and understandable disclosure in public reports;
comply with applicable laws; ensure prompt internal reporting of code
violations; and provide accountability for adherence to the code.
  Item
10.  Executive Compensation.
 
 GlobeTrac
has paid $63,600 in compensation to its named executive officers during its 2007
fiscal year.
  23
 
 SUMMARY
COMPENSATION TABLE
  Non-qualifiedNon-Equity
              DeferredName
      and
              
              
              
              Stock
              Option
              Incentive
              Compensation
              All otherprincipal
      position
              Year
              Salary
              Bonus
              Awards
              Awards
              Plan
              Earnings
              compensation
              Total($)
              ($)
              ($)
              ($)
              ($)
              ($)
              ($)
              ($)(a)
              (b)
              (c)
              (d)
              (e)
              (f)
              (g)
              (h)
              (i)
              (j)John
      daCosta
                CEO
      (1)
                Feb
      2006 - present
                CFO
                May
      2002–Present
              2005
                2006
                2007
              nil
                nil
                nil
              nil
                nil
                nil
              nil
                nil
                nil
              nil
                nil
                nil
              nil
                nil
                nil
              nil
                nil
                nil
              16,050
      (2)
                69,250
      (2)
                63,600
      (2)
              16,050
                69,250
                63,600Jim
      Pratt
                CEO
                Sept
      ‘02 –Feb ‘06
              2005
                2006
                2007
              nil
      (3)
                nil
                n/a
              nil
                nil
                n/a
              nil
                nil
                n/a
              nil
                nil
                n/a
              nil
                nil
                n/a
              nil
                nil
                n/a
              nil
                nil
                n/a
              nil
                nil
                n/a
  (1) John
daCosta was also the CEO of GlobeTrac from May 2002 to September
2002.
 (2) Paid
or accrued to DaCosta Management Corp., which John daCosta is the sole director
and shareholder, for professional, administrative and accounting
services.
 (3) Jim
Pratt is owed $239,023 in back salary
  Since
GlobeTrac’s inception, no stock options, stock appreciation rights, or long-term
incentive plans have been granted, exercised or repriced.
 
 Currently,
there are no arrangements between GlobeTrac and any of its directors or between
any of the subsidiaries and any of its directors whereby such directors are
compensated for any services provided as directors.
 
 There are
no other employment agreements between GlobeTrac or the Subsidiary and any named
executive officer, and there are no employment agreements or other compensating
plans or arrangements with regard to any named executive officer which provide
for specific compensation in the event of resignation, retirement, other
termination of employment or from a change of control of GlobeTrac or from a
change in a named executive officer’s responsibilities following a change in
control.
  24
 
 Item
11.  Security Ownership of Certain Beneficial Holders and
Management.
 
 (a) Security Ownership of Certain
Beneficial Owners (more than 5%)
 
 (1)
                Title
                of
      Class
              (2)
                Name
      and Address of
                Beneficial
      Owner
              (3)
                Amount
      and Nature of
                Beneficial Owner
      [1]
              (4)
                Percent
                of Class
    [2]Common
      Stock
              Jim
      Pratt
                32
      Greenwich Road, Greenwich
                Sydney,
      NSW  2065  Australia
              3,500,000
              15.8%Common
      Stock
              Gregory
      M. Pek
                19/F,
      80 Gloucester Road
                Wanchai,
      Hong Kong
              4,000,000
              18.1%
  [1] The
listed beneficial owner has no right to acquire any shares within 60 days of the
date of this Form 10-KSB from options, warrants, rights, conversion privileges
or similar obligations excepted as otherwise noted.
 [2] Based
on 22,190,000 shares of Common Stock issued and outstanding as of March 26,
2008.
  (b) Security
Ownership of Management
  (1)
                Title
                of
      Class
              (2)
                Name
      and Address of
                Beneficial
      Owner
              (3)
                Amount
      and Nature of
                Beneficial
      Owner
              (4)
                Percent
                of Class
    [1]Common
      Stock
              David
      Patriquin
                3438
      Shuswap Road
                Kamloops,
      BC   V2H 1T2
              1,015,000
      [2]
              4.6%Common
      Stock
              John
      daCosta
                600
      - 1100 Melville Street
                Vancouver,
      BC  V6E 4A6
              0
              0%Common
      Stock
              Directors
      and Executive Officers
                (as
      a group)
              1,015,000
              4.6%
 [1] Based
on 22,190,000 shares of Common Stock issued and outstanding as of March 26,
2008.
 [2] This
number includes 320,000 shares that are beneficially owned indirectly and
500,000 shares that may be acquired as part of a call option.
 
 25
  (c) Changes in
Control
 
 GlobeTrac
is not aware of any arrangement that may result in a change in control of
GlobeTrac.
 
 Item
12.  Certain Relationships and Related Transactions, and Director
Independence.
 
 (a) Transactions
with Related Persons
 
 Since the
beginning of GlobeTrac’s last fiscal year, no director, executive officer,
security holder, or any immediate family of such director, executive officer, or
security holder has had any direct or indirect material interest in any
transaction or currently proposed transaction, which GlobeTrac was or is to be a
participant, that exceeded the lesser of (1) $120,000 or (2) one percent of the
average of GlobeTrac’s total assets at year-end for the last three completed
fiscal years, except for the following:
 
 -
              DaCosta
      Management Corp. a company controlled by the sole officer of GlobeTrac
      billed $63,600 in professional fees.  At December 31, 2007,
      GlobeTrac owed DaCosta Management Corp.
  $156,796.
 -
              $50,000
      in interest was accrued during the year on the $500,000 note payable to
      David Patriquin.  All of this interest remained payable to David
      Patriquin at December 31, 2007.
 
 (b) Promoters
and control persons
 
 During
the past five fiscal years, John daCosta and Jim Pratt have been promoters of
GlobeTrac’s business, but neither of these promoters have received anything of
value from GlobeTrac or its subsidiaries nor is any person entitled to receive
anything of value from GlobeTrac or its subsidiaries for services provided as a
promoter of the business of GlobeTrac and its subsidiaries.
 
 (c) Director
independence
 
 GlobeTrac’s
sole director currently is David Patriquin.  Pursuant to Item
407(a)(1)(ii) of Regulation S-B of the Securities Act, GlobeTrac’s board of
directors has adopted the definition of “independent director” as set forth in
Rule 4200(a)(15) of the NASDAQ Manual.  In summary, an “independent
director” means a person other than an executive officer or employee of
GlobeTrac or its subsidiaries or any other individual having a relationship
which, in the opinion of GlobeTrac’s board of directors, would interfere with
the exercise of independent judgement in carrying out the responsibilities of a
director, and includes any director who accepted any compensation from GlobeTrac
in excess of $200,000 during any period of 12 consecutive months with the three
past fiscal years.  Also, the ownership of GlobeTrac’s stock will not
preclude a director from being independent.
 
 In
applying this definition, GlobeTrac’s board of directors has determined that Mr.
Patriquin does qualify as an “independent director” pursuant to Rule 4200(a)(15)
of the NASDAQ Manual
 
 As of the
date of the report, GlobeTrac did not maintain a separately designated
compensation or nominating committee. GlobeTrac
has also adopted this definition for the independence of the members of its
audit committee.  David Patriquin serves on GlobeTrac’s audit
committee.  GlobeTrac’s board of directors has determined that Mr.
Patriquin is “independent” for purposes of Rule 4200(a)(15) of the NASDAQ
Manual, applicable to audit, compensation and nominating committee members, and
is “independent” for purposes of Section 10A(m)(3) of the Securities Exchange
Act.
  26
 
 Item
13.  Exhibits.
 
 (a)  Index to
and Description of Exhibits.
 
 Exhibit
              Description
              Status3.1
              Articles
      of Incorporation filed as an exhibit to GlobeTrac’s registration statement
      on Form SB-2 filed on August 2, 2001, and incorporated herein by
      reference.
              Filed3.2
              Bylaws
      filed as an exhibit to GlobeTrac’s registration statement on Form SB-2
      filed on August 2, 2001, and incorporated herein by
    reference.
              Filed3.3
              Certificate
      of Amendment to Articles of Incorporation changing the Issuer’s name to
      GlobeTrac Inc. filed as an exhibit to GlobeTrac’s Form 10-KSB filed on
      April 15, 2003, and incorporated herein by reference.
              Filed3.4
              Notification
      of Dissolution for Globetrac Limited dated March 14, 2007 filed as an
      exhibit to GlobeTrac’s Form 10-KSB filed on April 16, 2007, and
      incorporated herein by reference.
              Filed10.1
              Master
      Distributorship Agreement dated June 19, 2002 among WebTech Wireless
      International, WebTech Wireless Inc. and Global Axxess Corporation Limited
      filed as an attached exhibit to GlobeTrac’s Form 8-K (Current Report)
      filed on September 11, 2002, and incorporated herein by
      reference.
              Filed10.2
              Loan
      Agreement dated November 27, 2002 between GlobeTrac Inc. and David
      Patriquin with attached promissory note dated November 27, 2002, filed as
      an exhibit to GlobeTrac’s Form 10-KSB filed on April 15, 2003, and
      incorporated herein by reference.
              Filed10.3
              Amendment
      Letter Agreement dated June 4, 2003, between WebTech Wireless
      International Inc. and Globetrac Limited for the purpose of amending terms
      of the Master Distributorship Agreement filed as an exhibit to GlobeTrac’s
      Form 10-KSB filed on April 7, 2004, and incorporated herein by
      reference.
              Filed10.4
              Amendment
      Letter Agreement dated March 8, 2004 between WebTech Wireless
      International Inc. and Globetrac Limited for the purpose of amending terms
      of the Master Distributorship Agreement filed as an exhibit to GlobeTrac’s
      Form 10-KSB filed on April 7, 2004, and incorporated herein by
      reference.
              Filed10.5
              Letter
      Agreement dated November 26, 2004, among Global Axxess Corporation
      Limited, WebTech Wireless International and WebTech Wireless Inc. filed as
      an exhibit to GlobeTrac’s Form 8-K filed on December 22, 2004, and
      incorporated herein by reference.
              Filed10.6
              Termination
      and Transfer Agreement dated for reference November 1, 2004, among Global
      Axxess Corporation Limited, WebTech Wireless International and WebTech
      Wireless Inc. filed as an exhibit to GlobeTrac’s Form 8-K filed on
      November 14, 2005, and incorporated herein by reference.
              Filed14
              Code
      of Ethics filed as an exhibit to GlobeTrac’s Form 10-KSB filed on April
      15, 2003, and incorporated herein by reference.
              Filed31
              Certifications
      pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
              Included32
              Certification
      pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of
      the Sarbanes-Oxley Act of 2002.
              Included
  27
  Item
14.   Principal Accounting Fees and Services
  (1) 
Audit Fees
  The
aggregate fees billed for each of the last two fiscal years for professional
services rendered by the principal accountant for GlobeTrac’s audit of
consolidated annual financial statements and for review of financial statements
included in GlobeTrac’s Form 10-QSB’s or services that are normally provided by
the accountant in connection with statutory and regulatory filings or
engagements for those fiscal years was:
 
 2007 -
$31,929 –Mendoza
Berger & Company, L.L.P.
 2006 -
$32,126 – Mendoza Berger & Company, L.L.P.
 
 (2)  Audit-Related
Fees
 
 The
aggregate fees billed in each of the last two fiscal years for assurance and
related services by the principal accountants that are reasonably related to the
performance of the audit or review of GlobeTrac’s consolidated financial
statements and are not reported in the preceding paragraph:
 
 2007 -
$750 –Mendoza
Berger & Company, L.L.P.
 2006 - $0
– Mendoza Berger & Company, L.L.P.
  (3) 
Tax Fees
 
 The
aggregate fees billed in each of the last two fiscal years for professional
services rendered by the principal accountant for tax compliance, tax advice,
and tax planning was:
 
 2007 -
$2,923 –Mendoza
Berger & Company, L.L.P.
 2006 -
$2,300 – Mendoza Berger & Company, L.L.P.
 
 (4) 
All Other Fees
 
 The
aggregate fees billed in each of the last two fiscal years for the products and
services provided by the principal accountant, other than the services reported
in paragraphs (1), (2), and (3) was:
 
 2007 - $0
– Mendoza Berger & Company, L.L.P.
 2006 - $0
– Mendoza Berger & Company, L.L.P.
 
 (5)   The percentage of
hours expended on the principal accountant’s engagement to audit GlobeTrac’s
consolidated financial statements for the most recent fiscal year that were
attributed to work performed by persons other than the principal accountant’s
full time, permanent employees was nil %.
  28
  SIGNATURES
 
 In
accordance with the requirements of the Securities Exchange Act of 1934,
GlobeTrac Inc. has caused this report to be signed on its behalf by the
undersigned duly authorized person.
  GLOBETRAC INC.Dated: March 31,
      2008
                By:
                /s/ John daCostaJohn
      daCosta
                  CEO,
      President, and
                  Principal
      Executive Officer
   Pursuant
to the requirements of the Securities Exchange Act of 1934, the following
persons on behalf of GlobeTrac Inc. and in the capacities and on the dates
indicated have signed this report below.
  Signature
                
                Title
                
                Date/s/
      John daCosta
                
                President,
      Chief Executive Officer,
                
                March
      31, 2008John daCosta
                
                Principal
      Executive Officer,Chief
      Financial Officer,Principal
      Financial Officer,Principal
      AccountingOfficer,Corporate
      Secretary and Treasurer/s/
      David Patriquin
                
                Member
      of the Board of Directors
                
                March
      31, 2008David Patriquin