UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


Washington,
D.C.   20549





FORM
10-K







x
            ANNUAL
      REPORT PURSUANT TO SECTION 13 0R 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934




For the fiscal year ended
December
31, 2008




o
            TRANSITION
      REPORT PURSUANT TO 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.(Exact
      name of registrant as specified in its
charter)




Delaware
            
            33-0953557(State
      or other jurisdiction of incorporation or organization)
            
            (I.R.S.
      Employer Identification No.)1100
      Melville Street, Suite 610Vancouver, British
      Columbia, Canada
            
            V6E
      4A6(Address
      of principal executive offices)
            
            (Zip
      Code)





Registrant’s
telephone number, including area code:  1-800-648-4287




Securities
registered pursuant to Section 12(b) of the Act:


Title
      of each class
            
            Name
      of each exchange on which registeredNone
            
            N/A




Securities
registered pursuant to Section 12(g) of the Act:




common
      stock - $0.001 par value(Title
      of Class)





Indicate by
check mark if the registrant is a well-known seasoned issuer, as defined in Rule
405 of the Securities Act. oYes   xNo




Indicate by
check mark if the registrant is not required to file reports pursuant to Section
13 or Section 15(d)
of the Act. oYes   xNo









Indicate by
check mark whether the registrant (1) has filed all reports required to be filed
by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the 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.  xYes   oNo
 
 Indicate by
check mark if disclosure of delinquent filers in response to Item 405 of
Regulation S-K is not contained herein, and will not 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-K or any amendment to this
Form 10-K. x
 
 Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting
company.  See the definitions of “large accelerated filer”,
“accelerated filer” and “smaller reporting company in Rule 12b-2 of the Exchange
Act.






Larger
      accelerated filer
              o
              
              Accelerated
      filer
              oNon-accelerated
      filer
              o
              (Do not
      check if a smaller reporting company)
              Smaller
      reporting company
              x




Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Act). oYes   xNo




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 the last business day
of the registrant’s most recently completed second fiscal quarter: $126,157.20
as of June 30, 2008




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 31,
      2009common
      stock - $0.0001 par value
            
            89,883,198





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.





2




Forward
Looking Statements





The
information in this annual report contains forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934.  These forward-looking statements
involve risks and uncertainties, including statements regarding GlobeTrac’s
capital needs, business strategy and expectations.  Any statements
contained herein that are not statements of historical facts may be deemed to be
forward-looking statements.  In some cases, you can identify
forward-looking statements by terminology such as “may”, “will”, “should”,
“expect”, “plan”, “intend”, “anticipate”, “believe”, “estimate”, “predict”,
“potential” or “continue”, the negative of such terms or other comparable
terminology. Actual events or results may differ materially.  In
evaluating these statements, you should consider various factors, including the
risks outlined from time to time, in other reports GlobeTrac’s files with the
Securities and Exchange Commission.





The
information constitutes forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995.  The forward-looking
statements in this Form 10-K for the fiscal year ended December 31, 2008, are
subject to risks and uncertainties that could cause actual results to differ
materially from the results expressed in or implied by the statements contained
in this report.  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, the
outcome may vary substantially from anticipated or projected results, and
accordingly, no opinion is expressed on the achievability of those
forward-looking statements.  No assurance can be given that any of the
assumptions relating to the forward-looking statements specified in the
following information are accurate.





All
forward-looking statements are made as of the date of filing of this Form 10-K
and GlobeTrac disclaims any obligation to publicly update these statements, or
disclose any difference between its actual results and those reflected in these
statements.  GlobeTrac may, from time to time, make oral
forward-looking statements.  GlobeTrac strongly advises that the above
paragraphs and the risk factors described in this Annual Report and in
GlobeTrac’s other documents filed with the United States Securities and Exchange
Commission should be read for a description of certain factors that could cause
the actual results of GlobeTrac to materially differ from those in the oral
forward-looking statements. GlobeTrac disclaims any intention or obligation to
update or revise any oral or written forward-looking statements whether as a
result of new information, future events or otherwise.





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, the
Company changed its name to “Artescope, Inc.”





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 89,883,198shares 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.  See Exhibit 10.1 – Master
Distributorship Agreement for more information.





On June
12, 2008 we sold all of the shares of our subsidiary, Global Axxess Corporation
Limited, to an unrelated party.





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 10.1 – Master Distributorship Agreement and
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.





3




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.





(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.





4




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.





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-K are advised to determine if GlobeTrac has subsequently filed a Form
8-K.





5




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.





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.





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.





Item
1A. Risk Factors.





GlobeTrac
is a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and
is not required to provide the information required under this
item.





Item
1B. Unresolved Staff Comments.





GlobeTrac
is a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and
is not required to provide the information required under this
item.




6




Item
2. Description of Property.





GlobeTrac's
principal executive office 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 Registrant’s Common Equity, Related Stockholder Matters and 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 25, 2009.  The bid information was obtained
from Pink OTC Markets 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
            Source25
      March 2009
            $0.012
            $0.0006
            Pink
      OTC Markets Inc.31
      December 2008
            $0.003
            $0.0001
            Pink
      OTC Markets Inc.30
      September 2008
            $0.0085
            $0.003
            Pink
      OTC Markets Inc.30
      June 2008
            $0.009
            $0.001
            Pink
      OTC Markets Inc.31
      March 2008
            $0.007
            $0.0012
            Pink
      OTC Markets Inc.31
      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 LLC





(b)           Holders
of Record





GlobeTrac
has approximately 39 holders of record of GlobeTrac’s Common Stock as of
December 31, 2008 according to a shareholders’ list provided by GlobeTrac’s
transfer agent as of that date.  The number of registered shareholders
does not include any estimate by GlobeTrac of the number of beneficial owners of
common stock held in street name.  The transfer agent for GlobeTrac’s
common stock is Pacific Stock Transfer Company, Suite #240, 500 East Warm
Springs Road, Las Vegas, Nevada, 89119 and their telephone number is
702-361-3033.





(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.





7




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-K, with the exception of the
following:





On June 23, 2008, GlobeTrac entered into
various agreements (the “Agreements”) with certain of its creditors for the
purpose of restructuring the majority of liabilities of
GlobeTrac.  Pursuant to the terms of these Agreements, the following
creditors agreed to forgive certain obligations due from GlobeTrac without
consideration:





Debt
            
            Amount
      RetiredWet
      Coast Management Corp.
            
            $
            786,086.93Da
      Costa Management Corp.
            
            
            156,795.56Bayshore
      Management Corp.
            
            
            4,754.99Richard
      N. Jeffs
            
            
            15,974.74Totals
            
            $
            963,612.22





Also on
June 23, 2008, GlobeTrac and other creditors agreed to convert the principal on
certain loans granted into shares of Common Stock of GlobeTrac, at a rate of
$0.025 for every dollar owed on such loans.  Pursuant to such
Agreements, GlobeTrac issued a total of 67,693,198 shares of its Common Stock
(the “Shares”) to the
following persons and entities, in full settlement of payments due on the
following loans:







Name
      of Lender
            
            Amount
      to
              Convert
      to Shares
              in
      US $
            
            
            Amount
      of
              Interest
      on
              Loans
      Forgiven in US $
            
            
            Total
      Shares to
              be
      Received at a
              Conversion
      Price
              of
      $0.025Kinnaman
      Trading Company Limited
            
            $
            264,600.00
            
            
            $
            96,927.84
            
            
            
            10,584,000Pilenga
      Limited
            
            
            392,644.00
            
            
            
            143,939.56
            
            
            
            15,705,760Money
      Layer Limited
            
            
            202,075.26
            
            
            
            70,108.41
            
            
            
            8,083,010Undershot
      Overseas Limited
            
            
            51,220.00
            
            
            
            18,756.82
            
            
            
            2,048,800David
      Patriquin
            
            
            513,765.66
            
            
            
            -
            
            
            
            20,550,626Marble
      Hall Investments Ltd.
            
            
            28,935.00
            
            
            
            10,854.58
            
            
            
            1,157,400James
      Pratt
            
            
            239,090.05
            
            
            
            267,226.21
            
            
            
            9,563,602Totals
            
            $
            1,692,329.97
            
            
            $
            607,813.42
            
            
            
            67,693,198





The
issuance of the Shares to the creditors was not registered under the Securities
Act of 1933, as amended (the “Securities Act”), but was made
in reliance upon the exemptions from registration requirements of the Securities
Act set forth in Section 4(2) thereof and Section 3(a)(9) based on each
creditor’s level of sophistication, their access to information about GlobeTrac,
and the fact that the issuance of the Shares was made to a limited group of
existing holders of GlobeTrac’s securities.





There are
no outstanding options or warrants to purchase, or securities convertible into,
shares of GlobeTrac’s Common Stock.





(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.  The
application of the “penny stock” rules may affect your ability to resell
GlobeTrac’s securities.





8




Item
6. Selected Financial Data.





GlobeTrac
is a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and
is not required to provide the information required under this
item.





Item
7.  Management’s Discussion and Analysis of Financial Condition and
Results of Operations.




MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
 
 Overview
 
 We were
incorporated in the state of Delaware on March 2, 2000 as 411 Place.com
Inc.  On February 28, 2001, we changed our name to Artescope, Inc. and
on July 29, 2002 changed the name to GlobeTrac Inc.  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.  On June 12, 2008 we sold
all of our shares of our subsidiary, Global Axxess, to an unrelated
party.  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, 2008, our only source of income is a six percent 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 list of customers
was provided to WebTech by GlobeTrac. There is no cap on the royalty receivable
and royalties are to be paid by WebTech for eleven years, beginning November 1,
2004 and ending October 31, 2015.
  On June
23, 2008 certain debt holders forgave $1,571,425 in debt.  On June 30,
2008 certain debt holders agreed to convert $1,692,330 in debt into 67,693,198
shares of our common stock.
 
 When we
use the words “we”, “us” or “our” in this report, we are referring to GlobeTrac
Inc. which we sometimes refer to in this report as “GlobeTrac”.
 
 Results
of Operation
 
 Our
operating results for the years ended December 31, 2008 and 2007 and the changes
between those periods for the expenses are summarized as follows:
  Years
      endedDecember
      31,
              
              
              Change
      Between the Years Ended2008
              
              
              2007
              
              
              December 31,Royalty
      income
              
              $
              144,963
              
              
              $
              115,654
              
              
              $
              29,309Operating
      expenses:General
      and administrative
              
              
              112,832
              
              
              
              122,184
              
              
              
              9,352Net
      income (loss) from operations
              
              
              32,131
              
              
              
              (6,530
              )
              
              
              38,661Interest
      expense
              
              
              (46,618
              )
              
              
              (187,499
              )
              
              
              140,881Net
      loss before franchise tax and forgiveness of debt
              
              
              (14,487
              )
              
              
              (194,029
              )
              
              
              179,542Franchise
      tax
              
              
              (4,787
              )
              
              
              (7,890
              )
              
              
              3,103Net
      loss before forgiveness of debt
              
              
              (19,274
              )
              
              
              (201,919
              )
              
              
              182,645Forgiveness
      of debt
              
              
              3,196,062
              
              
              
              -
              
              
              
              3,196,062Net
      income (loss)
              
              $
              3,176,788
              
              
              $
              (201,919
              )
              
              $
              3,378,707
 
 9
  Revenues
 
 Our
royalty revenue increased by $29,309 or 25% from $115,654 for the year ended
December 31, 2007 to $144,963 during the year ended December 31,
2008.
 
 All of
our revenue was the result of a 6% royalty which relates to the Termination and
Transfer Agreement signed on October 18, 2005. The 25% increase in revenue
during the year ended December 31, 2008 was due to WebTech securing some large
contracts during the period. The revenue received from WebTech is domiciled in
British pounds and fluctuates due to foreign exchanges when reported by the
Company. We do not expect revenue to increase unless we locate a new revenue
generating business opportunity.
 
 Operating
Expenses
 
 Our
operating expenses decreased by $9,352 or 8% from $122,184 for the year ended
December 31, 2007 to $112,832 for the year ended December 31,
2008.  This decrease was primarily caused by a decrease in
professional fees of approximately $18,000 due to a decrease in legal
fees.  This decrease was partially offset by an increase in realized
foreign exchange transaction gains between the UK pound and the US dollar of
approximately $7,000.
 
 Over the
next year our plan is to continue to control our operating costs.  We
expect our operating costs to remain approximately the same over the next year,
unless we locate a new viable business.
 
 Interest
Expense
 
 Our
interest expense decreased by $140,881 or 75% from $187,499 for the year ended
December 31, 2007 to $46,618 for the year ended December 31, 2008.
 
 Our
interest expense decreased due to the holders of $586,660 in convertible notes
payable agreeing to forgive the debt and when holders of $923,089 in convertible
notes payable and a $500,000 note payable to a related party were converted into
shares of our common stock.  We do not expect to have any interest
expense during the next year.
 
 Franchise
Tax
  Our
franchise tax expense decreased by $3,103 or 39% from $7,890 for the year ended
December 31, 2007 to $4,787 for the year ended December 31, 2008. The decrease
in our franchise tax expense was mainly decreased due to the winding up
Globetrac Limited.
  Forgiveness
of Debt
  On June
30, 2008, our creditors forgave $1,571,425 in debt consisting of $586,660 in
principle and $540,014 in accrued interest on our convertible notes payable
$15,974 in advances payable, $161,550 in debt due to related parties, and
$267,227 in interest on a note payable to a related party.
 
 On June
30, 2008, we converted a total of $1,692,330 in debt consisting of $923,089 in
convertible notes payable, $16,385 in advances payable, $252,856 in debt to
related parties, and a $500,000 note to a related party into 67,693,198 shares
of common stock at $0.025 per share. The difference between the conversion price
of $0.025 and market price of the common stock on the date of conversion of
$0.001 per share resulted in our recording of forgiveness of debt of
$1,624,637.
  10
  Liquidity
and Capital Resources
 
 Going
Concern
 
 The notes
to our financial statements at December 31, 2008 disclose our uncertain ability
to continue as a going concern.  We were in the business of selling,
marketing, distributing and installing global wireless tracking and telematics
equipment in Europe until November 1, 2004 when we exchanged our 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.  We have accumulated a
deficit of $1,335,134 since inception and additional financing will be required
to fund and support our operations. We plan to mitigate our losses in future
years by controlling our operating expenses and seeking out new business
opportunities.  However, there is no assurance that we will be able to
obtain additional financing, control our operating expenses or be successful in
locating or acquiring a viable business.  The financial statements do
not include any adjustments that might result from the outcome of these
uncertainties.
 
 As of
December 31, 2008, we had a cash balance of $26,538, a working capital deficit
of $61,358 and cash flows from operations of $5,916 for the twelve months then
ended. During the year ended December 31, 2008, we primarily funded our
operations with the royalty revenue we received from WebTech.
 
 The
following table summarizes our sources and uses of cash for the years
ended:
 
 December
      31,2008
              
              
              2007Net
      cash provided by (used in) operating activities
              
              $
              5,916
              
              
              $
              (21,238
              )Net
      cash provided by investment activities
              
              
              -
              
              
              
              -Net
      cash provided by financing activities
              
              
              -
              
              
              
              -Effect
      of foreign currency exchange
              
              
              3,700
              
              
              
              (6,015
              )Net
      increase (decrease) in cash
              
              $
              9,616
              
              
              $
              (27,253
              )
 
 Net
Cash Provided (Used In) Operating Activities
 
 Net cash
provided by operating activities during the year ended December 31, 2008 was
$5,916. This cash was primarily provided by a utilization of $4,035 in prepaid
legal fees, increases of $5,287 in accrued legal fees, $34,187 in accrued
interest on the convertible notes payable, a $13 adjustment for foreign exchange
in advances payable, and $12,431 in accrued interest on the note payable to a
related party.  These increases in cash  were primarily
offset by a $1,874 decrease in collection of royalty revenue receivable, paying
down accounts payable and accrued professional fees by $15,263 and $13,628
respectively, forgiveness of convertible notes payable of $586,660, forgiveness
of interest on convertible notes payable of $540,014, forgiveness of advances
payable of $15,974, forgiveness of debt due to related parties of $161,550,
forgiveness of interest on a note payable to a related party of $267,227 and
forgiveness of debt of $1,624,637 which was the difference between the
conversion price ($0.025) and market price $(0.001) of our common stock on the
date $1,692,330 in debt was converted into 67,693,198 shares of our common
stock.
 
 11
  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; to 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 Used In Investing Activities
 
 We did
not have any investing activities during the years ended December 31, 2008 and
2007.
 
 Net
Cash Provided By Financing Activities
 
 We did
not have any financing activities during the years ended December 31, 2008 and
2007.
 
 Conversion
of Debt
 
 On June
23, 2008, we converted $923,089 in convertible notes payable, $16,385 in
advances payable, $252,856 in debt due to related parties and a $500,000 note
payable to a related party into 67,693,198 shares of our common
stock.
 
 Challenges
and Risks
 
 We have
accumulated a deficit of approximately $1.3 million to date and will require
additional debt or equity financing to continue operations and to seek out new
business opportunities. We plan to mitigate our losses in future years through
the receipt of the royalty payments from Webtech 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.
  Other
Trends, Events or Uncertainties that may Impact Results of Operations or
Liquidity
 Trends,
Events, and Uncertainties
 
 The
economic downturn may make it harder for us to raise capital if we need
it.  Therefore, in the future, the economic downturn may have a
material adverse effect on our ability to raise operating
capital.  Other than as discussed in this 10-K report, we know of no
other trends, events or uncertainties that have or are reasonably likely to have
a material impact on our short-term or long-term liquidity.
 
 Off-balance
Sheet Arrangements
 
 We have
no off-balance sheet arrangements and no non-consolidated, special-purpose
entities.
 
 Income
Taxes
  Income
tax expense has not been recognized for the years ended December 31, 2008 and
2007 and no taxes were payable at December 31, 2008 or 2007 because we have
incurred losses since its inception.
  The
following table sets out our net tax gains (losses) at December 31:
  2008
              
              
              2007Net
      tax losses
              
              $
              19,274
              
              
              $
              151,918
  12
  The
entire forgiveness of debt in the amount of $3,196,062 is deemed non-taxable due
to our technical insolvency as of June 30, 2008, as described in Section 108 of
the Internal Revenue Code.  At June 30, 2008, liabilities exceed total
assets by approximately $3.3 million.  In addition, in accordance with
Federal Income Tax Regulation 1.108-7(a) (2), our net operating loss carry
forward has been permanently offset by $3,196,062, the amount of the forgiveness
of debt deemed to be non-taxable by our technical insolvency.  Therefore,
we have no remaining U.S. net operating loss carry forward at December 31,
2008.
 
 At
December 31, 2008 and 2007 we had the following deferred tax assets that
primarily relate to net operating losses.  A 100% valuation allowance
has been established; as we believe it is more likely than not that the deferred
tax assets will not be realized:
 2008
              
              
              2007Federal
      loss carryforwards
              
              $
              -
              
              
              $
              679,924State
      loss carryforwards
              
              
              -
              
              
              
              154,253Less:
      Valuation allowance
              
              
              -
              
              
              
              (834,177
              )$
              -
              
              
              $
              -
  Our
valuation allowance decreased during 2008 and 2007 by $834,177 and $356,965,
respectively.
 
 At
December 31, 2008 and 2007, we had the following net operating loss
carryforwards (NOLs):
 
 2008
              
              
              2007Net
      operating loss carryforwards
              
              $
              -
              
              
              $
              2,125,657
 
 The
federal and state NOL’s expire at various dates up to December 31,
2028.
 
 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.
 
 Contingencies and
Commitments
 
 We had no
contingencies or long-term commitments at December 31, 2008.
 
 Contractual
Obligations
 
 Due to
the forgiveness of debt and conversion of debt to common shares we had no
contractual obligations at December 31, 2008.
 
 Critical
Accounting Judgments
 
 An
appreciation of our critical accounting policies is necessary to understand our
financial results. These policies may require management to make difficult and
subjective judgments regarding uncertainties, and as a result, such estimates
may significantly impact our financial results. The precision of these estimates
and the likelihood of future changes depend on a number of underlying variables
and a range of possible outcomes. Other than our accounting for our royalty
revenue, our critical accounting policies do not involve the choice between
alternative methods of accounting. We have applied our critical accounting
policies and estimation methods consistently.
 
 13
  Reclassifications
  Certain
prior year amounts in the accompanying financial statements have been
reclassified to conform to the current year’s presentation.  These
reclassifications had no effect on the results of operations or financial
position for any period presented. On the December 31, 2008 balance sheet,
$33,106 in accounts payable was reclassified to due to related parties and
$254,795 that was recorded in due to related parties was reclassified to note
payable to related party, including accrued interest.
 
 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.
 
 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 collectability of all past due accounts. At December 31, 2008, our
allowance for doubtful accounts was $0.
 
 At
December 31, 2008, accounts receivable consists of estimated royalty revenue for
the months of November and December 2008.  Our estimate was based on
the amounts we received from WebTech in the prior months of 2008.  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, 2008.
 
 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.  Foreign exchange rate fluctuations may adversely impact our
results of operations as exchange rate fluctuations on transactions denominated
in currencies other than our functional currency result in gains and losses that
are reflected in our Income Statement. To the extent the U.S. dollar
weakens against foreign currencies, the translation of these foreign
currency-denominated transactions will result in increased net revenue.
Conversely, our net revenue will decrease when the U.S. dollar strengthens
against foreign currencies. We do not believe that we have any material risk due
to foreign currency exchange.
 
 Fair
Value of Financial Instruments
 
 Our
financial instruments include cash, accounts receivable, accounts payable,
accrued liabilities and accrued professional fees. We believe 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 us to significant concentrations of credit
risk consist principally of cash and trade accounts receivable.
 
 At
December 31, 2008, we had approximately $26,000 in cash on deposit with a large
chartered Canadian bank.  At December 31, 2008, $800 of this cash was
not insured.  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.
 
 14
  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, 2008, we had $43,829 in
royalties’ receivable from this source.
 
 Recent
Accounting Standards and Pronouncements
 
 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. The adoption
of SFAS 158 did not have a material impact on our 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 measurement of certain
financial assets and financial liabilities at fair value.  If the fair
value option is elected, the unrealized gains and losses are reported in
earnings at each reporting date.  Generally, the fair value option may
be elected on an instrument-by-instrument basis, as long as it is applied to the
instrument in its entirety.  The fair value option election is
irrevocable, unless a new election date occurs.  SFAS 159 was
effective for us on January 1, 2008. The adoption of SFAS 159 did not have
a material impact on our financial statements as we did not elect the fair value
option for any of our financial assets or liabilities.
 
 In
June 2007, the Emerging Issues Task Force (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.  EITF 07-03 was effective for us on January 1,
2008.  The pronouncement did not have a material effect on our
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.  This statement is effective for us on January
1, 2009.  We expect SFAS 141(R) will have an impact on our accounting
for future business combinations once adopted, but the effect is dependent upon
the acquisitions that are made in the future.
 
 15
  In
December 2007, the 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.
EITF 07-1 will be effective for us on January 1, 2009.  We do not
expect Adoption of EITF 07-1 to have a significant impact on our 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.
This statement will be effective for us on January 1, 2009.  We do not
expect adoption of SFAS 160 to have a significant impact on our financial
statements.
  On
January 1, 2008, the Company adopted SFAS No. 157 (SFAS 157), Fair Value
Measurements.  SFAS 157 relates to financial assets and
financial liabilities. In February 2008, the FASB issued FASB Staff Position
(FSP) No. FAS 157-2, Effective
Date of FASB Statement No. 157, which delayed the effective date of
SFAS 157 for all nonfinancial assets and nonfinancial liabilities, except those
that are recognized or disclosed at fair value in the financial statements on at
least an annual basis, until January 1, 2009 for calendar year-end
entities. Also in February 2008, the FASB issued FSP No. FAS 157-1, Application of FASB Statement
No. 157 to FASB Statement No. 13 and Other Accounting Pronouncements
That Address Fair Value Measurements for Purposes of Lease Classification or
Measurement under Statement 13, which states that SFAS No. 13, Accounting for Leases, (SFAS
13) and other accounting pronouncements that address fair value measurements for
purposes of lease classification or measurement under SFAS 13 are excluded from
the provisions of SFAS 157, except for assets and liabilities related to leases
assumed in a business combination that are required to be measured at fair value
under SFAS No. 141, Business Combinations, (SFAS
141) or SFAS No. 141 (revised 2007), Business Combinations, (SFAS
141(R)).
 
 SFAS 157
defines fair value, establishes a framework for measuring fair value in
accounting principles generally accepted in the United States of America (GAAP),
and expands disclosures about fair value measurements. The provisions of this
standard apply to other accounting pronouncements that require or permit fair
value measurements and are to be applied prospectively with limited exceptions.
The adoption of SFAS 157, as it relates to financial assets and financial
liabilities had no impact on our financial statements.
 
 16
  SFAS 157
defines fair value as the price that would be received to sell an asset or paid
to transfer a liability in an orderly transaction between market participants at
the measurement date. This standard is now the single source in GAAP for the
definition of fair value, except for the fair value of leased property as
defined in SFAS 13. SFAS 157 establishes a fair value hierarchy that
distinguishes between (1) market participant assumptions developed based on
market data obtained from independent sources (observable inputs) and
(2) an entity’s own assumptions about market participant assumptions
developed based on the best information available in the circumstances
(unobservable inputs). The fair value hierarchy consists of three broad levels,
which gives the highest priority to unadjusted quoted prices in active markets
for identical assets or liabilities (Level 1) and the lowest priority to
unobservable inputs (Level 3). The three levels of the fair value hierarchy
under SFAS 157 are described below:
  •
              
              Level
      1 - Unadjusted quoted prices in active markets that are accessible at the
      measurement date for identical, unrestricted assets or
      liabilities.
  •
              
              Level
      2 - Inputs other than quoted prices included within Level 1 that are
      observable for the asset or liability, either directly or indirectly,
      including quoted prices for similar assets or liabilities in active
      markets; quoted prices for identical or similar assets or liabilities in
      markets that are not active; inputs other than quoted prices that are
      observable for the asset or liability (e.g., interest rates); and inputs
      that are derived principally from or corroborated by observable market
      data by correlation or other means.
  •
              
              Level
      3 - Inputs that are both significant to the fair value measurement and
      unobservable.
 
 In
March 2008, the FASB issued SFAS No. 161 (SFAS 161), Disclosures about Derivative
Instruments and Hedging Activities – An Amendment of FASB Statement No. 133
(SFAS 133). This statement is intended to improve financial
reporting of derivative instruments and hedging activities by requiring enhanced
disclosures about (a) how and why an entity uses derivative instruments, (b) how
derivative instruments and related hedged items are accounted for under SFAS 133
and its related interpretations and (c) how derivative instruments and related
hedged items affect an entity’s financial position, financial performance and
cash flows. The provisions of SFAS 161 are effective for fiscal years beginning
after November 15, 2008.  This statement is effective for us
on January 1, 2009.  Early adoption of this provision is prohibited.
We do not expect this statement to have a material impact on our financial
statements.
 
 In April
2008, the FASB issued FSP No. 142-3, Determination of the Useful Life of
Intangible Assets (FSP 142-3). FSP 142-3 amends the factors to be
considered in developing renewal or extension assumptions used to determine the
useful life of intangible assets under SFAS No. 142, Goodwill and Other Intangible
Assets. Its intent is to improve the consistency between the useful life
of an intangible asset and the period of expected cash flows used to measure its
fair value. This FSP is effective prospectively for intangible assets acquired
or renewed after January 1, 2009. We do not expect FSP 142-3 to have a
material impact on our accounting for future acquisitions of intangible
assets.
 
 In May,
2008, FASB issued SFAS No. 162, The Hierarchy of Generally Accepted
Accounting Principles (SFAS 162). SFAS 162 identifies the sources of
accounting principles and the framework for selecting the principles used in the
preparation of financial statements of nongovernmental entities that are
presented in conformity with generally accepted accounting principles (GAAP) in
the United States (the GAAP hierarchy). This statement was effective for us on
November 15, 2008 and did not have a material impact on our financial
statements.
  On May 9,
2008, the FASB issued FASB Staff Position No. APB 14-1 (FSP APB 14-1), Accounting for Convertible Debt
Instruments That May Be Settled in Cash upon Conversion (Including Partial Cash
Settlement).FSP APB 14-1 clarifies that convertible debt instruments
that may be settled in cash upon conversion (including partial cash settlement)
are not addressed by paragraph 12 of APB Opinion No. 14, Accounting for Convertible Debt and
Debt Issued with Stock Purchase Warrants.  Additionally, FSP
APB 14-1 specifies that issuers of such instruments should separately account
for the liability and equity components in a manner that will reflect the
entity’s nonconvertible debt borrowing rate when interest cost is recognized in
subsequent periods. FSP APB14-1 is effective for financial statements issued for
fiscal years beginning after December 15, 2008, and interim periods within those
fiscal years. FSP APB 14-1 will be effective for us on January 1,
2009.  The adoption of FSP APB 14-1 is not expected to have a material
impact on our results of operations or financial position.
 
 17
  On June
16, 2008, the FASB issued FASB Staff Position No. EITF 03-6-1 (FSP No. EITF
03-6-1), Determining Whether
Instruments Granted in Share-Based Payment Transactions Are Participating
Securities, to address the question of whether instruments granted in
share-based payment transactions are participating securities prior to vesting.
FSP EITF 03-6-1 indicates that unvested share-based payment awards that contain
rights to dividend payments should be included in earnings per share
calculations. The guidance will be effective for fiscal years beginning after
December 15, 2008. FSP EITF 03-6-1 will be effective for us on January 1,
2009.  The adoption of FSP EITF 03-6-1 is not expected to have a
material impact on our results of operations or financial position.
 
 In June
2008, the FASB issued EITF Issue 07-5 (EITF 07-5), Determining whether an Instrument
(or Embedded Feature) is indexed to an Entity’s Own
Stock.  EITF No. 07-5 is effective for financial statements
issued for fiscal years beginning after December 15, 2008, and interim periods
within those fiscal years. Early application is not permitted. Paragraph 11(a)
of SFAS No. 133 Accounting for
Derivatives and Hedging Activities, specifies that a contract that would
otherwise meet the definition of a derivative but is both (a) indexed to the
Company’s own stock and (b) classified in stockholders’ equity in the statement
of financial position would not be considered a derivative financial instrument.
EITF 07-5 provides a new two-step model to be applied in determining whether a
financial instrument or an embedded feature is indexed to an issuer’s own stock
and thus able to qualify for the SFAS No. 133 paragraph 11(a) scope
exception.  EITF 07-5 is effective for us on January 1,
2009.  Adoption of EITF 07-5 is not expected to have a material impact
on our financial statements.
 
 In June
2008, the FASB issued FSP EITF 03-6-1, Determining Whether Instruments
Granted in Share-Based Payment Transactions are Participating Securities
(FSP 03-6-1). FSP 03-6-1 clarifies that unvested share-based payment awards that
contain nonforfeitable rights to dividends or dividend equivalents (whether paid
or unpaid) are participating securities and are to be included in the
computation of earnings per share under the two-class method described in SFAS
No. 128, Earnings Per
Share.  This FSP is effective for us on January 1, 2009
and requires all prior-period earnings per share data that is presented to be
adjusted retrospectively. We do not expect FSP 03-6-1 to have a material impact
on our earnings per share calculations.
 
 In
October 2008, the FASB issued FSP No. 157-3, Determining the Fair Value of a
Financial Asset When the Market for That Asset Is Not Active (FSP 157-3).
FSP 157-3 clarifies the application of SFAS 157 in a market that is not active
and provides an example to illustrate key considerations in determining the fair
value of a financial asset when the market for that financial asset is not
active. As it relates to our financial assets and liabilities recognized or
disclosed at fair value in our financial statements on a recurring basis (at
least annually), the adoption of FSP 157-3 did not have a material impact on our
financial statements.
 
 In December 2008, the FASB issued FASB
Staff Position FAS 140-4 and FIN 46(R)-8,Disclosures by
Public Entities (Enterprises) About Transfers of Financial Assets and Interest
in Variable Interest Entities. FSP 140-4 requires additional
disclosure about transfers of financial assets and an enterprise’s involvement
with variable interest entities. FSP 140-4 was effective for the first
reporting period ending after December 15, 2008. The adoption of
FSP 140-4 did not have a material impact on our consolidated financial
statements.
  In
December 2008, the FASB issued FASB Staff Position (FSP) No.132 (R)-1, Employers’ Disclosures about
Pensions and Other Postretirement Benefits (FSP 132R-1). FSP 132R-1
requires enhanced disclosures about the plan assets of a Company’s defined
benefit pension and other postretirement plans. The enhanced disclosures
required by this FSP are intended to provide users of financial statements with
a greater understanding of: (1) how investment allocation decisions are
made, including the factors that are pertinent to an understanding of investment
policies and strategies; (2) the major categories of plan assets;
(3) the inputs and valuation techniques used to measure the fair value of
plan assets; (4) the effect of fair value measurements using significant
unobservable inputs (Level 3) on changes in plan assets for the period; and
(5) significant concentrations of risk within plan assets. This FSP is
effective for us for the year ending December 31, 2009 and is not expected
to have a material impact on our financial statements.
  18


Item
7A.  Quantitative and Qualitative Disclosures About Market
Risk.





GlobeTrac
is a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and
is not required to provide the information required under this
item.





Item
8.   Financial Statements and Supplementary Data.




GLOBETRAC
INC.
 
 FINANCIAL
STATEMENTS
 
 AS
OF DECEMBER 31, 2008 AND 2007
 AND
FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007
  PageReport
      of Independent Registered Public Accounting Firm
              F-1Balance
      Sheets
              F-2Statements
      of Operations
              F-3Statement
      of Stockholders’ Deficit and Comprehensive Income
              F-4Statements
      of Cash Flows
              F-5Notes
      to 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 balance sheet of GlobeTrac, Inc., as of December 31,
2008 and the related statement of operations, stockholders’ deficit and
comprehensive loss, and cash flows for the year then ended.  We have
also audited the accompanying consolidated balance sheet of GlobeTrac, Inc., as
of December 31, 2007, and the related consolidated statement of operations,
stockholders’ deficit and comprehensive loss, and cash flows for the year 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 financial statements referred to above present fairly, in all
material respects, the financial position of GlobeTrac, Inc. as of December 31,
2008 and 2007 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 financial statements have been prepared assuming that the Company
will continue as a going concern.  As discussed in Note 3 to the
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 financial statements do not
include any adjustments that might result from the outcome of this
uncertainty.
  /s/
      Mendoza Berger &
      Company, LLPMendoza Berger & Company,
      LLP
                      Irvine,
      California
                      March  30,
      2009
 F-1





GLOBETRAC INC.
 BALANCE SHEETS
 FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007


2008
              
              
              2007ConsolidatedASSETSCurrent
    assetsCash
              
              $
              26,538
              
              
              $
              16,922Accounts
      receivableNet of allowance for doubtful
      accounts of $0 and $7,327 at December 31, 2008 and 2007,
      respectively
              
              
              43,829
              
              
              
              41,955Prepaids
              
              
              999
              
              
              
              5,034Total current
      assets
              
              $
              71,366
              
              
              $
              63,911LIABILITIES AND STOCKHOLDERS'
      DEFICITCurrent
      liabilitiesAccounts
      payable
              
              $
              43,074
              
              
              $
              58,336Accrued
      liabilities
              
              
              5,287
              
              
              
              -Accrued professional
      fees
              
              
              51,257
              
              
              
              64,885Convertible notes payable,
      including accrued interest
              
              
              -
              
              
              
              2,015,576Advances
      payable
              
              
              -
              
              
              
              32,346Due to related
      parties
              
              
              33,106
              
              
              
              447,512Note payable to related party,
      including accrued interest
              
              
              -
              
              
              
              754,795Total current
      liabilities
              
              
              132,724
              
              
              
              3,373,450Commitments and
      contingencies
              
              
              -
              
              
              
              -Stockholders'
      deficitPreferred stock $0.001 par value,
      5,000,000 authorized, noneissued and
      outstanding at December 31, 2008 and 2007
              
              
              -
              
              
              
              -Common stock $0.001 par value,
      200,000,000 common sharesauthorized,
      89,883,198 and 22,190,000 issued and outstandingat December 31, 2008
      and 2007, respectively
              
              
              89,883
              
              
              
              22,190Additional paid in
      capital
              
              
              1,167,085
              
              
              
              1,167,085Accumulated
      deficit
              
              
              (1,335,134
              )
              
              
              (4,511,922
              )Accumulated other comprehensive
      income
              
              
              16,808
              
              
              
              13,108Total stockholders'
      deficit
              
              
              (61,358
              )
              
              
              (3,309,539
              )Total liabilities and
      stockholders' deficit
              
              $
              71,366
              
              
              $
              63,911
  The accompanying notes are an integral
part of these financial statements
  F-2




GLOBETRAC INC.
 STATEMENTS OF
OPERATIONS
 FOR THE YEARS ENDED DECEMBER 31, 2008
AND 2007


2008
              
              
              2007ConsolidatedRoyalty
    income
              
              $
              144,963
              
              
              $
              115,654Operating
      expenses:General and
      administrative
              
              
              112,832
              
              
              
              122,184Net income (loss) from
      operations
              
              
              32,131
              
              
              
              (6,530
              )Interest
      expense
              
              
              (46,618
              )
              
              
              (187,499
              )Net
      loss before franchise tax and forgiveness of
    debt
              
              
              (14,487
              )
              
              
              (194,029
              )Franchise tax
              
              
              (4,787
              )
              
              
              (7,890
              )Net loss before forgiveness of
      debt
              
              
              (19,274
              )
              
              
              (201,919
              )Forgiveness of
      debt
              
              
              3,196,062
              
              
              
              -Net income
      (loss)
              
              $
              3,176,788
              
              
              $
              (201,919
              )Net income (loss) per share -
      basic and diluted
              
              $
              0.06
              
              
              $
              (0.01
              )Weighted average number of shares
      outstanding - basic and diluted
              
              
              56,221,553
              
              
              
              22,190,000
  The accompanying
notes are an integral part of these financial statements
  F-3
  GLOBETRAC
INC.
 STATEMENT
OF STOCKHOLDERS' DEFICIT AND COMPREHENSIVE INCOME
 FOR
THE YEARS ENDED DECEMBER 31, 2008 AND 2007
 Common Stock
      Issued
                
                
                
                
                
                AccumulatedAdditional
                
                
                
                
                
                OtherNumber of
                
                
                
                
                
                Paid-in
                
                
                Accumulated
                
                
                ComprehensiveShares
                
                
                Amount
                
                
                Capital
                
                
                Deficit
                
                
                Income
    (Loss)
                
                
                TotalBalance at January 1,
      2007
                
                
                22,190,000
                
                
                $
                22,190
                
                
                $
                1,167,085
                
                
                $
                (4,310,003
                )
                
                $
                19,123
                
                
                $
                (3,101,605
                )Net loss for the
      year
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                (201,919
                )
                
                
                -
                
                
                
                (201,919
                )Foreign currency exchange
      loss
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                (6,015
                )
                
                
                (6,015
                )Net 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
                )Shares issued for
      debt
                
                
                67,693,198
                
                
                
                67,693
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                67,693(3,241,846
                )Net income for the
      year
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                3,176,788
                
                
                
                -
                
                
                
                3,176,788Foreign currency exchange
      gain
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                3,700
                
                
                
                3,700Net comprehensive
      income
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                3,180,488Balance at December 31,
      2008
                
                
                89,883,198
                
                
                $
                89,883
                
                
                $
                1,167,085
                
                
                $
                (1,335,134
                )
                
                $
                16,808
                
                
                $
                (61,358
                )
  The accompanying
notes are an integral part of these financial statements
  F-4
  GLOBETRAC INC.
 STATEMENTS OF CASH
FLOWS
 FOR THE YEARS ENDED DECEMBER 31, 2008
AND 2007


2008
              
              
              2007ConsolidatedCash flows from operating
      activities:Net income
      (loss)
              
              $
              3,176,788
              
              
              $
              (201,919
              )Adjustments to reconcile net
      income (loss) to net cash provided by (used in) operating
      activities:Forgiveness of
      debt
              
              
              (1,624,637
              )
              
              
              -Forgiveness of convertible notes
      payable
              
              
              (586,660
              )
              
              
              -Forgiveness of accrued interest on
      convertible notes payable
              
              
              (540,014
              )
              
              
              -Forgiveness of advances
      payable
              
              
              (15,974
              )
              
              
              -Forgiveness of debt due to related
      parties
              
              
              (161,550
              )
              
              
              -Forgiveness of interest on note
      payable to related party
              
              
              (267,227
              )
              
              
              -Changes in operating assets and
      liabilities:Accounts
      receivable
              
              
              (1,874
              )
              
              
              (1,279
              )Prepaids
              
              
              4,035
              
              
              
              (5,034
              )Accounts
      payable
              
              
              (15,262
              )
              
              
              (20,361
              )Accrued
      liabilities
              
              
              5,287
              
              
              
              -Accrued professional
      fees
              
              
              (13,628
              )
              
              
              19,655Accrued interest payable on
      convertible notes payable
              
              
              34,187
              
              
              
              137,499Advances
      payable
              
              
              13
              
              
              
              201Accrued interest payable on note
      payable to related party
              
              
              12,432
              
              
              
              50,000Net cash provided by (used in)
      operating activities
              
              
              5,916
              
              
              
              (21,238
              )Effect of foreign currency
      exchange
              
              
              3,700
              
              
              
              (6,015
              )Net increase (decrease) in
      cash
              
              
              9,616
              
              
              
              (27,253
              )Cash, beginning of
      year
              
              
              16,922
              
              
              
              44,175Cash, end of
      year
              
              $
              26,538
              
              
              $
              16,922Supplemental disclosure of cash
      flow information:Cash
      paid during the year for:Income
taxes
              
              $
              -
              
              
              $
              7,890Interest
              
              $
              -
              
              
              $
              2,650Non-cash changes in assets and
      liabilities:Amount due to former related party
      reclassified to advances payable
              
              $
              -
              
              
              $
              15,760Accounts receivable offset against
      interest payable on convertible notes
              
              $
              -
              
              
              $
              2,650Accounts receivable offset against
      accounts payable
              
              $
              -
              
              
              $
              2,350Conversion of convertible notes
      payable into common shares
              
              $
              (923,089
              )
              
              $
              -Conversion of advances payable
      into common shares
              
              $
              (16,385
              )
              
              $
              -Conversion of debt due to related
      parties to common shares
              
              $
              (252,856
              )
              
              $
              -Conversion of note payable to
      related party to common shares
              
              $
              (500,000
              )
              
              $
              -Issuance of common shares for
      debt
              
              $
              1,692,330
              
              
              $
              -
  The accompanying
notes are an integral part of these financial statements
  F-5
  GLOBETRAC
INC.
 NOTES
TO FINANCIAL STATEMENTS
 DECEMBER
31, 2008 AND 2007
   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.  On June 12, 2008 the Company sold its shares
of Global Axxess, its only subsidiary.  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.
 
 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.
 
 In these
notes, the terms “Company”, “we”, “us” or “our” mean GlobeTrac Inc. whose
operations are included in these unaudited financial statements.
 
 NOTE
2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 
 Reclassifications
 
 Certain
prior period amounts in the accompanying financial statements have been
reclassified to conform to the current period’s presentation. These
reclassifications had no effect on the results of operations or financial
position for any period presented.
 
 Accounting
Estimates
 
 The
preparation of the 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 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 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, 2008 and 2007, 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 collectability of all past due accounts. At December 31, 2008 and 2007,
our allowance for doubtful accounts was $0 and $7,327,
respectively.  Our December 31, 2007 allowance for doubtful accounts
was related to other receivables that were deemed uncollectible.
  F-6
  GLOBETRAC
INC.
 NOTES
TO FINANCIAL STATEMENTS
 DECEMBER
31, 2008 AND 2007
 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 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.  Foreign exchange rate fluctuations may adversely impact the
Company’s results of operations as exchange rate fluctuations on transactions
denominated in currencies other than our functional currency result in gains and
losses that are reflected in our Income Statement. To the extent the
U.S. dollar weakens against foreign currencies, the translation of these
foreign currency-denominated transactions will result in increased net revenue.
Conversely, the Company’s net revenue will decrease when the U.S. dollar
strengthens against foreign currencies. The Company does not believe that it has
any material risk due to foreign currency exchange.
 
 Fair
Value of Financial Instruments
 
 The
Company’s financial instruments include cash, accounts receivable, accounts
payable, accrued liabilities and accrued professional fees. 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, 2008 and 2007, the Company had approximately $26,000 and $17,000
respectively, in cash on deposit with a large chartered Canadian
bank.  At December 31, 2008 and 2007, $800 and $7,000 respectively, of
this cash was not insured.  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 customer 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, 2008 and
2007, the Company had $43,829 and $41,955 in royalties’ receivable from this
source.
  F-7
 GLOBETRAC
INC.
 NOTES
TO FINANCIAL STATEMENTS
 DECEMBER
31, 2008 AND 2007
   NOTE
2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
 
 Comprehensive
Income
 
 Comprehensive
income reflects changes in equity that results from transactions and economic
events from non-owner sources.  The Company had $16,808 and $13,108 in
accumulated other comprehensive income for the years ended December 31, 2008 and
2007, respectively, from its foreign currency translation.  As a
result, total other comprehensive income (loss) for the years ended December 31,
2008 and 2007 were $3,180,488 and ($207,934), respectively.
  Income
Taxes
 
 Income
tax expense is based on pre-tax financial accounting income.  Deferred
tax assets and liabilities are recognized for the future tax consequences
attributable to differences between the 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
 
 The
Company accounts for Stock-Based Compensation in accordance with the Financial
Accounting Standards Board (FASB) issued Statement of Financial Accounting
Standards (SFAS) No. 123(R), Share-Based Payment (SFAS
123(R)), which requires recording expense for stock compensation based on a fair
value based method.
 
 The
Company uses the “modified prospective method” which requires the Company to
recognize compensation costs for all stock-based payments granted, modified or
settled in financial statements.
 
 The
Company has no outstanding options or warrants at December 31,
2008.
 
 Basic
and Diluted Net Earnings (Loss) Per Common Share (EPS)
 
 Basic net
earnings (loss) per share is computed by dividing the net earnings (loss)
attributable to the common stockholders by the weighted average number of common
shares outstanding during the reporting period.  Diluted net income per
common share includes the potential dilution that could occur upon exercise of
the options and warrants to acquire common stock computed using the treasury
stock method which assumes that the increase in the number of shares is reduced
by the number of shares which could have been repurchased by the Company with
the proceeds from the exercise of the options and warrants (which were assumed
to have been made at the average market price of the common shares during the
reporting period).
 
 At
December 31, 2008, the Company did not have any outstanding options or warrants
and all of the Company’s convertible debt was converted or forgiven during the
year.  Potential common shares have been excluded from the diluted
loss per share computation in net loss periods as their inclusion would be
anti-dilutive.
  Segment
Reporting
 
 The
Company is centrally managed, has limited operations and operates in one
business segment.
  F-8
  GLOBETRAC
INC.
 NOTES
TO FINANCIAL STATEMENTS
 DECEMBER
31, 2008 AND 2007
   NOTE
2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
 
 Recent
Accounting Pronouncements
 
 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. The adoption
of SFAS 158 did not have a material impact on the Company’s 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 measurement of certain
financial assets and financial liabilities at fair value.  If the fair
value option is elected, the unrealized gains and losses are reported in
earnings at each reporting date.  Generally, the fair value option may
be elected on an instrument-by-instrument basis, as long as it is applied to the
instrument in its entirety.  The fair value option election is
irrevocable, unless a new election date occurs.  SFAS 159 was
effective for the Company on January 1, 2008. The adoption of SFAS 159 did
not have a material impact on the Company’s financial statements as the Company
did not elect the fair value option for any of its financial assets or
liabilities.
 
 In
June 2007, the Emerging Issues Task Force (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.  EITF 07-03 was effective for the Company on January 1,
2008.  The pronouncement did not have a material effect on our
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.  This statement is effective for us on January
1, 2009.  We expect SFAS 141(R) will have an impact on our accounting
for future business combinations once adopted, but the effect is dependent upon
the acquisitions that are made in the future.
  F-9
  GLOBETRAC
INC.
 NOTES
TO FINANCIAL STATEMENTS
 DECEMBER
31, 2008 AND 2007
   NOTE
2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
 
 Recent
Accounting Pronouncements (Continued)
 
 In
December 2007, the 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.
EITF 07-1 will be effective for the Company on January 1, 2009.  We do
not expect Adoption of EITF 07-1 to have a significant impact on our 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.
This statement will be effective for us on January 1, 2009.  We do not
expect adoption of SFAS 160 to have a significant impact on our financial
statements.
  On
January 1, 2008, the Company adopted SFAS No. 157 (SFAS 157), Fair Value
Measurements.  SFAS 157 relates to financial assets and
financial liabilities. In February 2008, the FASB issued FASB Staff Position
(FSP) No. FAS 157-2, Effective
Date of FASB Statement No. 157, which delayed the effective date of
SFAS 157 for all nonfinancial assets and nonfinancial liabilities, except those
that are recognized or disclosed at fair value in the financial statements on at
least an annual basis, until January 1, 2009 for calendar year-end
entities. Also in February 2008, the FASB issued FSP No. FAS 157-1, Application of FASB Statement
No. 157 to FASB Statement No. 13 and Other Accounting Pronouncements
That Address Fair Value Measurements for Purposes of Lease Classification or
Measurement under Statement 13, which states that SFAS No. 13, Accounting for Leases, (SFAS
13) and other accounting pronouncements that address fair value measurements for
purposes of lease classification or measurement under SFAS 13 are excluded from
the provisions of SFAS 157, except for assets and liabilities related to leases
assumed in a business combination that are required to be measured at fair value
under SFAS No. 141, Business Combinations, (SFAS
141) or SFAS No. 141 (revised 2007), Business Combinations, (SFAS
141(R)).
  F-10
 GLOBETRAC
INC.
 NOTES
TO FINANCIAL STATEMENTS
 DECEMBER
31, 2008 AND 2007
 NOTE
2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
 
 Recent
Accounting Pronouncements (Continued)
 
 SFAS 157
defines fair value, establishes a framework for measuring fair value in
accounting principles generally accepted in the United States of America (GAAP),
and expands disclosures about fair value measurements. The provisions of this
standard apply to other accounting pronouncements that require or permit fair
value measurements and are to be applied prospectively with limited exceptions.
The adoption of SFAS 157, as it relates to financial assets and financial
liabilities, had no impact on the Company’s financial statements.
 
 SFAS 157
defines fair value as the price that would be received to sell an asset or paid
to transfer a liability in an orderly transaction between market participants at
the measurement date. This standard is now the single source in GAAP for the
definition of fair value, except for the fair value of leased property as
defined in SFAS 13. SFAS 157 establishes a fair value hierarchy that
distinguishes between (1) market participant assumptions developed based on
market data obtained from independent sources (observable inputs) and
(2) an entity’s own assumptions about market participant assumptions
developed based on the best information available in the circumstances
(unobservable inputs). The fair value hierarchy consists of three broad levels,
which gives the highest priority to unadjusted quoted prices in active markets
for identical assets or liabilities (Level 1) and the lowest priority to
unobservable inputs (Level 3). The three levels of the fair value hierarchy
under SFAS 157 are described below:
  •
                  
                  Level
      1 - Unadjusted quoted prices in active markets that are accessible at the
      measurement date for identical, unrestricted assets or
      liabilities.
  •
                  
                  Level
      2 - Inputs other than quoted prices included within Level 1 that are
      observable for the asset or liability, either directly or indirectly,
      including quoted prices for similar assets or liabilities in active
      markets; quoted prices for identical or similar assets or liabilities in
      markets that are not active; inputs other than quoted prices that are
      observable for the asset or liability (e.g., interest rates); and inputs
      that are derived principally from or corroborated by observable market
      data by correlation or other means.
  •
                  
                  Level
      3 - Inputs that are both significant to the fair value measurement and
      unobservable.
 
 In
March 2008, the FASB issued SFAS No. 161 (SFAS 161), Disclosures about Derivative
Instruments and Hedging Activities – An Amendment of FASB Statement No. 133
(SFAS 133). This statement is intended to improve financial
reporting of derivative instruments and hedging activities by requiring enhanced
disclosures about (a) how and why an entity uses derivative instruments, (b) how
derivative instruments and related hedged items are accounted for under SFAS 133
and its related interpretations and (c) how derivative instruments and related
hedged items affect an entity’s financial position, financial performance and
cash flows. The provisions of SFAS 161 are effective for fiscal years beginning
after November 15, 2008.  This statement is effective for us
on January 1, 2009.  Early adoption of this provision is prohibited.
We do not expect this statement to have a material impact on our financial
statements.
 
 In April
2008, the FASB issued FSP No. 142-3, Determination of the Useful Life of
Intangible Assets (FSP 142-3). FSP 142-3 amends the factors to be
considered in developing renewal or extension assumptions used to determine the
useful life of intangible assets under SFAS No. 142, Goodwill and Other Intangible
Assets. Its intent is to improve the consistency between the useful life
of an intangible asset and the period of expected cash flows used to measure its
fair value. This FSP is effective prospectively for intangible assets acquired
or renewed after January 1, 2009. We do not expect FSP 142-3 to have a
material impact on our accounting for future acquisitions of intangible
assets.
  F-11
  GLOBETRAC
INC.
 NOTES
TO FINANCIAL STATEMENTS
 DECEMBER
31, 2008 AND 2007
   NOTE
2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
 
 Recent
Accounting Pronouncements (Continued)
 
 In May,
2008, FASB issued SFAS No. 162, The Hierarchy of Generally Accepted
Accounting Principles (SFAS 162). SFAS 162 identifies the sources of
accounting principles and the framework for selecting the principles used in the
preparation of financial statements of nongovernmental entities that are
presented in conformity with generally accepted accounting principles (GAAP) in
the United States (the GAAP hierarchy). This statement was effective for us on
November 15, 2008 and did not have a material impact on our financial
statements.
  On May 9,
2008, the FASB issued FASB Staff Position No. APB 14-1 (FSP APB 14-1), Accounting for Convertible Debt
Instruments That May Be Settled in Cash upon Conversion (Including Partial Cash
Settlement).FSP APB 14-1 clarifies that convertible debt instruments
that may be settled in cash upon conversion (including partial cash settlement)
are not addressed by paragraph 12 of APB Opinion No. 14, Accounting for Convertible Debt and
Debt Issued with Stock Purchase Warrants.  Additionally, FSP
APB 14-1 specifies that issuers of such instruments should separately account
for the liability and equity components in a manner that will reflect the
entity’s nonconvertible debt borrowing rate when interest cost is recognized in
subsequent periods. FSP APB14-1 is effective for financial statements issued for
fiscal years beginning after December 15, 2008, and interim periods within those
fiscal years. FSP APB 14-1 will be effective for the Company on January 1,
2009.  The adoption of FSP APB 14-1 is not expected to have a material
impact on our results of operations or financial position.
 
 On June
16, 2008, the FASB issued FASB Staff Position No. EITF 03-6-1 (FSP No. EITF
03-6-1), Determining Whether
Instruments Granted in Share-Based Payment Transactions Are Participating
Securities, to address the question of whether instruments granted in
share-based payment transactions are participating securities prior to vesting.
FSP EITF 03-6-1 indicates that unvested share-based payment awards that contain
rights to dividend payments should be included in earnings per share
calculations. The guidance will be effective for fiscal years beginning after
December 15, 2008. FSP EITF 03-6-1 will be effective for the Company on January
1, 2009.  The adoption of FSP EITF 03-6-1 is not expected to have a
material impact on our results of operations or financial position.
 
 In June
2008, the FASB issued EITF Issue 07-5 (EITF 07-5), Determining whether an Instrument
(or Embedded Feature) is indexed to an Entity’s Own
Stock.  EITF No. 07-5 is effective for financial statements
issued for fiscal years beginning after December 15, 2008, and interim periods
within those fiscal years. Early application is not permitted. Paragraph 11(a)
of SFAS No. 133 Accounting for
Derivatives and Hedging Activities, specifies that a contract that would
otherwise meet the definition of a derivative but is both (a) indexed to the
Company’s own stock and (b) classified in stockholders’ equity in the statement
of financial position would not be considered a derivative financial instrument.
EITF 07-5 provides a new two-step model to be applied in determining whether a
financial instrument or an embedded feature is indexed to an issuer’s own stock
and thus able to qualify for the SFAS No. 133 paragraph 11(a) scope
exception.  EITF 07-5 is effective for us on January 1,
2009.  Adoption of EITF 07-5 is not expected to have a material impact
on our financial statements.
 
 In June
2008, the FASB issued FSP EITF 03-6-1, Determining Whether Instruments
Granted in Share-Based Payment Transactions are Participating Securities
(FSP 03-6-1). FSP 03-6-1 clarifies that unvested share-based payment awards that
contain nonforfeitable rights to dividends or dividend equivalents (whether paid
or unpaid) are participating securities and are to be included in the
computation of earnings per share under the two-class method described in SFAS
No. 128, Earnings Per
Share.  This FSP is effective for us on January 1, 2009
and requires all prior-period earnings per share data that is presented to be
adjusted retrospectively. We do not expect FSP 03-6-1 to have a material impact
on our earnings per share calculations.
  F-12
  GLOBETRAC
INC.
 NOTES
TO FINANCIAL STATEMENTS
 DECEMBER
31, 2008 AND 2007
 NOTE
2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
 
 Recent
Accounting Pronouncements (Continued)
 
 In
October 2008, the FASB issued FSP No. 157-3, Determining the Fair Value of a
Financial Asset When the Market for That Asset Is Not Active (FSP 157-3).
FSP 157-3 clarifies the application of SFAS 157 in a market that is not active
and provides an example to illustrate key considerations in determining the fair
value of a financial asset when the market for that financial asset is not
active. As it relates to our financial assets and liabilities recognized or
disclosed at fair value in our financial statements on a recurring basis (at
least annually), the adoption of FSP 157-3 did not have a material impact on our
financial statements.
 
 In December 2008, the FASB issued FASB
Staff Position FAS 140-4 and FIN 46(R)-8,Disclosures by
Public Entities (Enterprises) About Transfers of Financial Assets and Interest
in Variable Interest Entities. FSP 140-4 requires additional
disclosure about transfers of financial assets and an enterprise’s involvement
with variable interest entities. FSP 140-4 was effective for the first
reporting period ending after December 15, 2008. The adoption of
FSP 140-4 did not have a material impact on our consolidated financial
statements.
  In
December 2008, the FASB issued FASB Staff Position (FSP) No.132 (R)-1, Employers’ Disclosures about
Pensions and Other Postretirement Benefits (FSP 132R-1). FSP 132R-1
requires enhanced disclosures about the plan assets of a Company’s defined
benefit pension and other postretirement plans. The enhanced disclosures
required by this FSP are intended to provide users of financial statements with
a greater understanding of: (1) how investment allocation decisions are
made, including the factors that are pertinent to an understanding of investment
policies and strategies; (2) the major categories of plan assets;
(3) the inputs and valuation techniques used to measure the fair value of
plan assets; (4) the effect of fair value measurements using significant
unobservable inputs (Level 3) on changes in plan assets for the period; and
(5) significant concentrations of risk within plan assets. This FSP is
effective for us for the year ending December 31, 2009 and is not expected
to have a material impact on our 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 $1,335,134
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 financial statements do not include any adjustments
that might result from the outcome of those uncertainties.
  F-13
  GLOBETRAC
INC.
 NOTES
TO FINANCIAL STATEMENTS
 DECEMBER
31, 2008 AND 2007
   NOTE
4 – CONVERTIBLE NOTES PAYABLE AND RELATED ACCRUED INTEREST DUE ON
DEMAND
 
 December
      31,2008
                  
                  
                  2007Notes
      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 (a) (b)
                  
                  $
                  -
                  
                  
                  $
                  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 (c) (d)
                  
                  
                  -
                  
                  
                  
                  835,940Convertible
      accrued interest (e)
                  
                  
                  -
                  
                  
                  
                  505,827Total
      convertible notes payable and related convertible accrued
      interest
                  
                  $
                  -
                  
                  
                  $
                  2,015,576
 
 (a)  On
June 23, 2008, the holders of convertible notes payable totaling $511,660 agreed
to forgive the debt.
 
 (b)  On
June 30, 2008, a convertible note payable in the amount of $162,149 was
converted into 6,485,970 shares of the Company’s common stock at $0.025 per
share.  A difference between the conversion price of $0.025 and market
price on the date of conversion of $0.001 per share resulted in the Company
recording $155,663 to forgiveness of debt.  (Note 8)
  (c)   On
June 23, 2008, the holder of a convertible note payable in the amount of $75,000
agreed to forgive the note.
 
 (d) On
June 30, 2008, convertible notes payable totaling $760,940 were converted into
30,437,600 shares of the Company’s common stock at $0.025 per
share.  A difference between the conversion price of $0.025 and market
price on the date of conversion of $0.001 per share resulted in the Company
recording forgiveness of debt of $730,503.  (Note 8)
 
 (e)  On
June 23, 2008, $540,014 in interest accrued on the convertible notes payable was
forgiven.
 
 NOTE
5 – ADVANCES PAYABLE
 
 At
December 31, 2008 and 2007, the Company had advances payable of $0 and $32,346
respectively, to outside third parties.
 
 On June
23, 2008 $15,974 in advances payable were forgiven.
 
 On June
30, 2008, $16,385 in advances payable were converted into 655,400 shares of the
Company’s common stock at $0.025 per share.  The difference between
the conversion price of $0.025 and the market price on the date of conversion of
$0.001 per share resulted in the Company recording forgiveness of debt of
$15,730.  (Note 8)
  F-14
  GLOBETRAC
INC.
 NOTES
TO FINANCIAL STATEMENTS
 DECEMBER
31, 2008 AND 2007
 NOTE
6 – DUE TO RELATED PARTIES
 
 December
      31,2008
                  
                  
                  2007Due
      to companies sharing a common director (a)
                  
                  $
                  -
                  
                  
                  $
                  161,550Advance
      payable to a director (b)
                  
                  
                  -
                  
                  
                  
                  13,766Accrued
      management fees due to a director (c)
                  
                  
                  -
                  
                  
                  
                  239,090Due
      to a company controlled by a relative of major shareholder
                  
                  
                  33,106
                  
                  
                  
                  33,106Due
      to related parties
                  
                  $
                  33,106
                  
                  
                  $
                  447,512
 
 (a)  On
June 23, 2008, $161,550 in debt was forgiven by these related
companies.  During the years ended December 31, 2008 and 2007 the
Company paid $65,625 and $63,600 respectively, in administrative fees to a
company sharing a common director.
 
 (b)  On
June 30, 2008, $13,766 in advances payable to this director was converted
into 550,626 shares of the Company’s common stock at $0.025 per
share.  The difference between the conversion price of $0.025 and the
market price on the date of conversion of $0.001 per share resulted in the
Company recording forgiveness of debt of $13,215.  (Note
8)
 
 (c)  On
June 30, 2008, $239,090 in accrued management fees due to this director were
converted into 9,563,602 shares of the Company’s common stock at $0.025 per
share. The difference between the conversion price of $0.025 and the market
price on the date of conversion of $0.001 per share resulted in the Company
recording forgiveness of debt of $229,526.  (Note 8)
  NOTE
7 – NOTE PAYABLE TO RELATED PARTY
 
 December
      31,2008
                  
                  
                  2007Note
      payable, unsecured, bears interest at 10% per annum, note was due on
      November 27, 2004 (a)
                  
                  $
                  -
                  
                  
                  $
                  500,000Accrued
      interest (b)
                  
                  
                  -
                  
                  
                  
                  254,795Note
      payable to related party including accrued interest
                  
                  $
                  -
                  
                  
                  $
                  754,795
 
 a)  On
June 30, 2008, the note payable to a related party in the amount of $500,000 was
converted into 20,000,000 shares of the Company’s common stock at $0.25 per
share. The difference between the conversion price of $0.025 and the market
price on the date of conversion of $0.001 per share resulted in the Company
recording forgiveness of debt of $480,000. (Note 8)
 
 (b)  On
June 23, 2008, $267,227 in accrued interest was forgiven.
 
 NOTE
8 – COMMON STOCK
 
 On June
30, 2008, the Company issued 67,693,198 shares of their common stock at $0.025
per share in settlement of $1,692,330 in debt. A difference between the
conversion price of $0.025 and market price on the date of conversion of $0.001
per share resulted in the Company recording $1,624,637 as forgiveness of debt.
(Notes 4, 5, 6 and 7)
  F-15
  GLOBETRAC
INC.
 NOTES
TO FINANCIAL STATEMENTS
 DECEMBER
31, 2008 AND 2007
  NOTE
9 – SALE OF SUBSIDIARY
 
 On June
12, 2008 the Company sold all of its shares in Global Axxess for $2 to unrelated
parties. The sale of Global Axxess did not have any effect on the Companies
operations because Global Axxess was inactive.
 
 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
  Income
tax expense has not been recognized for the years ended December 31, 2008 and
2007 and no taxes were payable at December 31, 2008 or 2007 because the Company
has incurred losses since its inception.
    2008
                    
                    
                    2007California
                    
                    
                    800
                    
                    
                    
                    1,726Delaware
                    
                    
                    3,987
                    
                    
                    
                    6,1644,787
                    
                    
                    
                    7,890
 The
following table sets out the Company’s net tax gains (losses) at December
31:
  2008
                  
                  
                  2007Net
      tax losses
                  
                  $
                  19,274
                  
                  
                  $
                  151,918
 
 The
entire forgiveness of debt in the amount of $3,196,062 is deemed non-taxable due
to the Company’s technical insolvency as of June 30, 2008, as described in
Section 108 of the Internal Revenue Code.  At June 30, 2008, liabilities
exceed total assets by approximately $3.3 million.  In addition, in
accordance with Federal Income Tax Regulation 1.108-7(a) (2), the Company’s net
operating loss carry forward has been permanently offset by $3,196,062, the
amount of the forgiveness of debt deemed to be non-taxable by the Company’s
technical insolvency.  Therefore, the Company has no remaining U.S. net
operating loss carry forward at December 31, 2008.
 
 At
December 31, 2008 and 2007 the Company had the following deferred tax assets
that primarily relate 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:
  2008
                  
                  
                  2007Federal
      loss carryforwards
                  
                  $
                  -
                  
                  
                  $
                  679,924State
      loss carryforwards
                  
                  
                  -
                  
                  
                  
                  154,253Less:
      Valuation allowance
                  
                  
                  ( -
                  )
                  
                  
                  (834,177
                  )$
                  -
                  
                  
                  $
                  -
  The
Company’s valuation allowance decreased during 2008 and 2007 by $834,177 and
$356,965, respectively.
  F-16
 
 GLOBETRAC
INC.
 NOTES
TO FINANCIAL STATEMENTS
 DECEMBER
31, 2008 AND 2007
  NOTE
11 – INCOME TAXES (Continued)
 
 At
December 31, 2008 and 2007, the Company had the following net operating loss
carryforwards (NOLs):
 
 2008
                  
                  
                  2007Net
      operating loss carryforwards
                  
                  $
                  -
                  
                  
                  $
                  2,125,657
 
 The
federal and state NOL’s expire at various dates up to December 31,
2028.
 
 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.
 
 NOTE
12 – COMMITMENT
 
 The
Company had no contingencies or long-term commitments at December 31,
2008.  Due to the forgiveness of debt and conversion of debt into
common shares of the Company, the Company had no contractual obligations at
December 31, 2008.
  F-17


Item
9.  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 principalindependentregistered publicaccounting firmsince February 21, 2006 to the current
date isMendoza 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 9A.  Controls and
Procedures.





Disclosure Controls and
Procedures





In
connection with the preparation of this annual report on Form 10-K, an
evaluation was carried out by GlobeTrac’s management, with the participation of
the Chief Executive Officer and the Chief Financial Officer, of the
effectiveness of GlobeTrac’s disclosure controls and procedures (as defined in
Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934
(“Exchange Act”)) as of December 31, 2008.  Disclosure controls and
procedures are designed to ensure that information required to be disclosed in
reports filed or submitted under the Exchange Act is recorded, processed,
summarized, and reported within the time periods specified in the SEC rules and
forms and that such information is accumulated and communicated to management,
including the Chief Executive Officer and the Chief Financial Officer, to allow
timely decisions regarding required disclosures.





20




Based on
that evaluation, GlobeTrac’s management concluded, as of the end of the period
covered by this report, that GlobeTrac’s disclosure controls and procedures were
effective in recording, processing, summarizing, and reporting information
required to be disclosed, within the time periods specified in the Securities
and Exchange Commission’s rules and forms.





Management’s Report on
Internal Controls over Financial Reporting





Disclosure controls and procedures are
designed to ensure that information required to be disclosed in the reports
filed or submitted under the Exchange Act is recorded, processed, summarized and
reported, within the time period specified in the SEC’s rules and
forms.  Management is responsible for establishing and maintaining
adequate internal control over financial reporting, as required by
Sarbanes-Oxley (SOX) Section 404 A.  GlobeTrac’s internal control over
financial reporting is a process designed under the supervision of GlobeTrac’s
Chief Executive Officer and Chief Financial Officer to provide reasonable
assurance regarding the reliability of financial reporting and the preparation
of GlobeTrac’s financial statements for external purposes in accordance with
U.S. generally accepted accounting principles.Internal
control over financial reporting includes those policies and procedures
that:





·
            pertain
      to the maintenance of records that in reasonable detail accurately and
      fairly reflect the transactions and dispositions of GlobeTrac’s
      assets;





·
            provide
      reasonable assurance that transactions are recorded as necessary to permit
      preparation of the financial statements in accordance with generally
      accepted accounting principles, and that receipts and expenditures are
      being made only in accordance with authorizations of management and the
      Board of Directors; and





·
            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.





Because
of its inherent limitations, internal control over financial reporting may not
prevent or detect misstatements. Also, projections of any evaluation of
effectiveness to future periods are subject to the risk that controls may become
inadequate because of changes in conditions or that the degree of compliance
with the policies or procedures may deteriorate.





Management
conducted an assessment of the effectiveness of the Company’s internal control
over financial reporting as of December 31, 2008, based on criteria established
in Internal Control
–Integrated Frameworkissued by the Committee of Sponsoring Organizations
of the Treadway Commission (“COSO”).  As a result of this assessment,
it was found that the internal controls can be relied upon.





GlobeTrac’s
independent auditors have not issued an attestation report on management’s
assessment of GlobeTrac’s internal control over financial
reporting.  As a result, this annual report does not include an
attestation report of GlobeTrac’s independent registered public accounting firm
regarding internal control over financial reporting.  GlobeTrac was
not required to have, nor has GlobeTrac, engaged its independent registered
public accounting firm to perform an audit of internal control over financial
reporting pursuant to the rules of the Securities and Exchange Commission that
permit GlobeTrac to provide only management’s report in this annual
report.





Changes in Internal
Controls





As of the
end of the period covered by this report, there have been no changes in
GlobeTrac’s internal controls over financial reporting (as defined in Rule
13a-15(f) of the Exchange Act) during the quarter ended December 31, 2008, that
materially affected, or are reasonably likely to materially affect, GlobeTrac’s
internal control over financial reporting.




Item
9B.  Other Information





During
the fourth quarter of the fiscal year covered by this Form 10-K, GlobeTrac
reported all information that was required to be disclosed in a report on Form
8-K.




21





PART
III





Item
10.  Directors, Executive Officers, and Corporate
Governance.





(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
management team is listed below.





Management
      TeamCompanyOfficer’s
      Name
            GlobeTrac
      Inc.David
      Patriquin
            DirectorJohn
      daCosta
            Director
              Chief
      Executive Officer, President, Chief Financial Officer,
              Treasurer,
      Corporate Secretary





David
Patriquin ●  Mr. Patriquin (66)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 since 1984, and a real estate investment company since
1979.





John
daCosta ●  Mr. daCosta (44)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.





22




(e)           Compliance
with Section 16(a) of the Exchange Act.





All reports
were filed with theSEC 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 filea Form 5
(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.





(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.  GlobeTrac’s
Board of Directors has determined that it does not presently need an audit
committee financial expert on the Board of Directors to carry out the duties of
the Audit Committee.  GlobeTrac’s Board of Directors has determined
that the cost of hiring a financial expert to act as a director of GlobeTrac and
to be a member of the Audit Committee or otherwise perform Audit Committee
functions outweighs the benefits of having a financial expert on the Audit
Committee.





(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
and John daCosta are the only members of GlobeTrac’s audit
committee.  Mr. Patriquin meets GlobeTrac’s independent requirements
for an audit committee member but Mr. daCosta does not meetGlobeTrac’s independent requirements for an audit committee
member.  See Item 13. (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, 2008, 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
11.  Executive Compensation.





GlobeTrac
has paid $65,625 in compensation to its named executive officers during its 2008
fiscal year.





23




SUMMARY
COMPENSATION TABLE





Name and
              principal
      position
              (a)
            Year
              (b)
            Salary($)
              (c)
            Bonus($)
              (d)
            Stock
              Awards($)
              (e)
            Option
              Awards($)
              (f)
            Non-Equity
      Incentive
              Plan($)
              (g)
            Non-qualified Deferred
      Compensation Earnings
      ($)
              (h)
            All other
              compensation($)
              (i)
            Total($)
              (j)John
      daCosta
              CEO
      (1)
              Feb
      2006 - present
              CFO
              May
      2002–Present
            2006
              2007
              2008
            nil
              nil
              nil
            nil
              nil
              nil
            nil
              nil
              nil
            nil
              nil
              nil
            nil
              nil
              nil
            nil
              nil
              nil
            69,250(2)
              63,600(2)
              65,625(2)
            69,250
              63,600
              65,625Jim
      Pratt
              CEO
              Sept
      ‘02 –Feb ‘06
            2006
              2007
              2008
            nil
              n/a
              n/a
            nil
              n/a
              n/a
            nil
              n/a
              n/a
            nil
              n/a
              n/a
            nil
              n/a
              n/a
            nil
              n/a
              n/a
            nil
              n/a
              n/a
            nil
              n/a
              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.





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.





Item
12.  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
            Karen
      Briginshaw
              Suite
      610 – 1100 Melville Street
              Vancouver,
      BC     V6E 4A6
            26,289,760
            29.3%Common
      Stock
            David
      Patriquin
              3438
      Shuswap Road
              Kamloops,
      BC   V2H 1T2
            20,870,626
      [3]
            23.2%Common
      Stock
            Gregory
      M. Pek
              9
      Tehran Street, Merville Village
              Paranaque
      City, Metro Manila
              The
      Philippines
            12,083,010
            13.4%Common
      Stock
            Jim
      Pratt
              32
      Greenwich Road, Greenwich
              Sydney,
      NSW   2065   Australia
            13,563,602
            15.1%





(1)
      The listed beneficial owner has no right to acquire any shares within 60
      days of the date of this Form 10-K from options, warrants, rights,
      conversion privileges or similar obligations excepted as otherwise
      noted.


(2) Based on
      89,883,198 shares of Common Stock issued and outstanding as
      of March 31,
      2009.


(3)
      This number includes 320,000 shares that are beneficially owned
      indirectly.




24




(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
            20,870,626
      [2]
            23.2%Common
      Stock
            John
      daCosta
              600
      - 1100 Melville Street
              Vancouver,
      BC   V6E 4A6
            0
            0%Common
      Stock
            Directors
      and Executive Officers (as a group)
            20,870,626
            23.2%


(1) Based on 89,883,198
shares of Common Stock issued and outstanding as of
March 31,
2009.


(2)This
number includes 320,000 shares that are beneficially owned
indirectly.





(c)           Changes
in Control





Management
is not aware of any arrangement that may result in a change in control of
GlobeTrac.





Item
13.  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 a director of GlobeTrac billed
      $65,625 in administrative fees.  At December 31, 2008, GlobeTrac
      owed DaCosta Management Corp. $0.


-
            $12,432
      in interest was accrued during the fiscal year ended December 31, 2008 on
      the $500,000 note payable to David Patriquin. This note was converted to
      shares and the interest was
forgiven.


-
            On
      June 23, 2008, GlobeTrac issued the following amount of shares of Common
      Stock for settlement of debt at a price of $0.025 per
    share:




Name
      of Lender
            
            Amount
      to
              Convert
      to Shares
              in
      USD $
            
            
            Total
      Shares to
              be
      received at a
              conversion
      price
              of
      $0.025David
      Patriquin
            
            
            513,765.66
            
            
            
            20,550,626Pilenga
      Limited (Karen Briginshaw)
            
            
            392,644.00
            
            
            
            15,705,760Kinnaman
      Trading Company Limited (Karen Briginshaw)
            
            
            264,600.00
            
            
            
            10,584,000James
      Pratt
            
            
            239,090.05
            
            
            
            9,563,602Money
      Layer Limited (Richard Jeffs)
            
            
            202,075.26
            
            
            
            8,083,010Undershot
      Overseas Limited (Richard Jeffs)
            
            
            51,220.00
            
            
            
            2,048,800





(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.





25




(c)           Director
independence





GlobeTrac’s
board of directors currently consists of David Patriquin and John
daCosta.  Pursuant to Item 407(a)(1)(ii) of Regulation S-K 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 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 within 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 but Mr. daCosta does not 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 and John daCosta serve on
GlobeTrac’s audit committee.  GlobeTrac’s board of directors has
determined that (1) 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, and (2) Mr. daCosta is not
“independent”.





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-Q’s or services that are normally provided by
the accountant in connection with statutory and regulatory filings or
engagements for those fiscal years was:





2008 -
$30,027 – Mendoza Berger & Company, L.L.P.


2007 -
$29,929 – 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:





2008 -
$3,076 – Mendoza Berger & Company, L.L.P.


2007 -
$750 – 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:





2008 -
$3,235 – Mendoza Berger & Company, L.L.P.


2007 -
$2,923 – Mendoza Berger &
Company, L.L.P.





26




(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:





2008 - $0
– Mendoza Berger & Company, L.L.P.


2007 - $0
– Mendoza Berger & Company,
L.L.P.





(6)  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 %.





Item
15.  Exhibits, Financial Statements Schedules.





(a)           Index
to and Description of Exhibits.





All
Exhibits required to be filed with the Form 10-K are included in this annual
report or incorporated by reference to GlobeTrac’s previous filings with the
SEC, which can be found in their entirety at the SEC website at www.sec.govunder SEC File Number 000-33309 and SEC File
Number333-66590.





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




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.Date
              By:
              /s/ John
      daCostaJohn daCosta
                CEO,
      President, and Principal Executive Officer
                March 31,
      2009




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, 2009John daCosta
              
              Principal
      Executive Officer, Chief Financial Officer,Principal
      Financial Officer, Principal Accounting Officer,Corporate Secretary,
      Treasurer andMember
      of the Board of Directors/s/
      David Patriquin
              
              Member
      of the Board of Directors
              
              March
      31, 2009David
      Patriquin






28