UNITED STATES


SECURITIES AND EXCHANGE COMMISSION


Washington, D.C. 20549





FORM 10-QSB





[ X ]
QUARTERLY REPORT UNDER SECTION 13 0R 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934





For the quarterly period ended  June 30, 2004





[ ]
TRANSITION REPORT UNDER SECTION 13 0R 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934





For the transition period from     to








Commission file number 000-33309








GLOBETRAC INC.(Exact name of small business issuer as specified in its charter)








Incorporated in the State of Delaware
(State or other jurisdiction of incorporation or organization)
33-0953557
(I.R.S. Employer Identification No.)Wyvols Court, Old Basingstoke Road, Swallowfield, Reading, Berkshire, United Kingdom, RG7 1WY
(Address of principal executive offices)44-118-988-0233
(Issuers telephone number)42 Brook Street, London, W1K 5DB, United Kingdom
(Former name, former address and former fiscal year, if changed since last report)











APPLICABLE ONLY TO CORPORATE ISSUERS





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 August 13, 2004Common Stock - $0.001 par value
22,190,000





Transitional Small Business Disclosure Format (Check one): Yes [   ]    No [ X ]





Page - 1




PART I  FINANCIAL INFORMATION





Item 1.  Financial Statements.





GLOBETRAC INC.





CONSOLIDATED FINANCIAL STATEMENTS








As at June 30, 2004 and December 31, 2003 and


for the three and six month periods ended June 30, 2004 and 2003


UNAUDITED














CONSOLIDATED BALANCE SHEETS





CONSOLIDATED STATEMENTS OF OPERATIONS





CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS DEFICIT AND COMPREHENSIVE INCOME





CONSOLIDATED STATEMENTS OF CASH FLOWS





NOTES TO CONSOLIDATED FINANCIAL STATEMENTS





Page - 2





GLOBETRAC INC.
CONSOLIDATED BALANCE SHEETS
UNAUDITED
June 30,

December 31,2004


2003ASSETSCURRENT ASSETSCash

$
72,918

$
8,810Accounts receivableNet of allowance for doubtful accounts of $31,414 and $30,396


305,093


62,756Inventory


183,351


378,713Prepaids


14,048


19,145575,410


469,424Fixed assetsNet of $5,041 and $3,443 accumulated depreciation


7,738


7,127TOTAL ASSETS

$
583,148

$
476,551LIABILITIES AND STOCKHOLDERS' DEFICITCURRENT LIABILITIESAccounts payable and accrued liabilities

$
224,638

$
149,418Convertible notes payable on demand


1,551,572


673,805Due to related parties


359,790


160,003Note payable to related party


500,000


500,0002,636,000


1,483,226Advances payable


2,175


380,6492,638,175


1,863,875Commitment and ContingenciesSTOCKHOLDERS' DEFICITShare capitalAuthorized200,000,000 common shares, $0.001 par value5,000,000 preferred shares, $0.001 par valueIssued and outstanding:22,190,000 common shares


22,190


22,190Additional paid in capital


1,167,085


1,167,085Accumulated deficit


(3,261,975
)

(2,599,335
)Other comprehensive income:Foreign currency translation adjustment


17,673


22,736Total Stockholders' Deficit


(2,055,027
)

(1,387,324
)TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT

$
583,148

$
476,551





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








Page - 3




GLOBETRAC INC.
 CONSOLIDATED STATEMENTS OF OPERATIONS
 UNAUDITED
   Three Months Ended


Six Months EndedJune 30,


June 30,2004


2003


2004


2003REVENUESales

$
315,496

$
57,180

$
817,732

$
132,625Cost of Goods Sold


230,355


40,588


549,298


90,195Gross Profit


85,141


16,592


268,434


42,430OPERATING EXPENSESAdministrative expenses


381,380


398,426


801,884


717,112Selling expenses


55,492


3,090


84,005


50,634Total Operating Expenses


436,872


401,516


885,889


767,746Loss from operations


(351,731
)

(384,924
)

(617,455
)

(725,316
)OTHER EXPENSESForeign exchange transaction gains


1,810


-


6,501


-Interest expense


(25,238
)

(24,543
)

(51,686
)

(48,498
)Total Other Expenses


(23,428
)

(24,543
)

(45,185
)

(48,498
)NET LOSS FOR THE PERIOD

$
(375,159
)
$
(409,467
)
$
(662,640
)
$
(773,814
)BASIC AND DILUTEDLOSS PER SHARE

$
(0.02
)
$
(0.02
)
$
(0.03
)
$
(0.04
)WEIGHTED AVERAGESHARES OUTSTANDING


22,190,000


21,040,000


22,190,000


21,040,000




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




Page - 4




GLOBETRAC INC.
 CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT AND COMPREHENSIVE INCOME
 FOR THE SIX MONTHS ENDED JUNE 30, 2004 AND 2003
 UNAUDITED
   Common Stock IssuedCommon StockSubscribedAdditional


AccumulatedOtherNumber of

Paid-in
Number of

Accumulated
ComprehensiveShares
Amount
Capital
Shares
Amount
Deficit
Income
TotalBalance, July 1, 2002

21,040,000
$ 21,040
$ 18,235
-
$               -
$ (48,638)
$                   -
$ (9,363)-Net loss for the six month period ended








-December 31, 2002

-
-
-
-
-
(777,999)
-
(777,999)-Foreign currency translation adjustments

-
-
-
-
-
-
9,941
9,941Balance, December 31, 2002

21,040,000
21,040
18,235
-
-
(826,637)
9,941
(777,421)Net loss for the six month period endedJune 30, 2003

-
-
-
-
-
(773,814)
-
(773,814)Foreign currency translation adjustments

-
-
-
-
-
-
(1,227)
(1,227)Balance, June 30, 2003

21,040,000
21,040
18,235
-
-
(1,600,451)
8,714
(1,552,462)Reg S, Private Placement, shares issuedfor cash, November 24, 2003

900,000
900
899,100
-
-
-
-
900,000Common stock subscribed,November 21, 2003

-
-
-
250,000
250,000
-
-
250,000Net loss for the six month period endedDecember 31, 2003

-
-
-
-
-
(998,884)
-
(998,884)Foreign currency translation adjustments

-
-
-
-
-
-
14,022
14,022Balance, December 31, 2003

21,940,000
21,940
917,335
250,000
250,000
(2,599,335)
22,736
(1,387,324)Reg S, Private Placement, shares issuedfor cash, June 9, 2004

250,000
250
249,750
(250,000)
(250,000)
-
-
-Net loss for the six month period endedJune 30, 2004

-
-
-
-
-
(662,640)
-
(662,640)Foreign currency translation adjustments

-
-
-
-
-
-
(5,063)
(5,063)Balance, June 30, 2004

22,190,000
$       22,190
$  1,167,085
-
$              -
$ (3,261,975)
$          17,673
$ (2,055,027)




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




Page - 5


GLOBETRAC INC.


CONSOLIDATED STATEMENTS OF CASH FLOWS
 UNAUDITED
   Six Months EndedJune 30,2004


2003CASH FLOWS FROM OPERATING ACTIVITIESNet loss for the period

$
(662,640
)
$
(773,814
)Adjustment to reconcile net loss to net cashused in operating activities:Depreciation


1,598


772Change in operating assets and liabilities:(Increase) in accounts receivable


(242,337
)

(9,809
)Decrease (Increase) in inventory


195,362


(29,893
)Decrease in prepaids


5,097


81,454Increase (Decrease) in accounts payable


75,220


(17,096
)Increase in accrued interest payable to related party


24,863


24,795Increase in accounts payable to related parties


174,924


60,291Increase in accrued interest payable on convertible notes


26,823


23,755NET CASH USED IN OPERATING ACTIVITIES


(401,090
)

(639,545
)CASH FLOWS FROM FINANCING ACTIVITIESIncrease in convertible notes payable on demand


472,470


-Increase in advances payable


-


482,970CASH FLOWS FROM FINANCING ACTIVITIES


472,470


482,970NET CASH USED IN INVESTING ACTIVITIESPurchase of fixed assets


(2,209
)

(2,174
)Effect of exchange rate changes on cash


(5,063
)

(1,227
)INCREASE (DECREASE) IN CASH


64,108


(159,976
)CASH, BEGINNING OF PERIOD


8,810


210,229CASH, END OF PERIOD

$
72,918

$
50,253Supplemental disclosure of cash flow information:Cash paid during the period for:Interest

$
51,686

$
48,550Non-cash financing transactions:Conversion of advances payable to convertible notes payable

$
378,474

$
-




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





Page - 6





GLOBETRAC INC.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


UNAUDITED


June 30, 2004





NOTE 1  NATURE OF OPERATIONS AND BASIS OF PRESENTATION





Nature of Operations





GlobeTrac Inc. (the Company) is in the business of selling, marketing, distributing and installing global wireless tracking and telematics equipment. The Company was incorporated in the state of Delaware on March 2, 2000, and its principal executive offices are headquartered in London, England.





Basis of Presentation





The unaudited consolidated financial statements included herein have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-QSB and Item 310(b) of Regulation S-B. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and six month periods ended June 30, 2004 and 2003 are not necessarily indicative of the results that may be expected for any interim period or the entire year. For further information, these consolidated financial statements and the related notes should be read in conjunction with the Companys audited financial statements for the year ended December 31, 2003 included in the Companys annual report on Form 10-KSB.





NOTE 2  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES





A summary of the Companys significant accounting policies is included in the Companys 2003 Annual Report. Additional significant accounting policies which affect the Company or which have been developed since December 31, 2003 are summarized below:





Principles of Consolidation





The consolidated financial statements include the accounts of the Company and its wholly owned subsidiary Global Axxess Corporation Limited (Global Axxess). Investment in Global Axxess is carried at cost and all intercompany balances and transactions have been eliminated.





Foreign Currency





The financial statements of the Companys foreign subsidiary are measured using British Pounds and the Euro as the functional currencies. Assets and liabilities of these subsidiaries are translated at exchange rates as of the balance sheet date. Revenues and expenses are translated at the average exchange rates for the period. The resulting cumulative translation adjustments have been recorded as a separate component of stockholders equity. Foreign currency transaction gains and losses are included in consolidated net losses.





Comprehensive Income





The Company presents comprehensive income in its Consolidated Statements of Changes in Stockholders Deficit and Comprehensive Income. Total comprehensive income includes, in addition to net loss, changes in equity that are excluded from the consolidated statements of operations and are recorded directly into the separate section of stockholders deficit on the consolidated balance sheets.





New Accounting Pronouncements


In December 2003, the Financial Accounting Standards Board (FASB) issued a revised Interpretation No. 46 (FIN 46R), Consolidation of Variable Interest Entities. Fin 46R addresses consolidation by business enterprises of variable interest entities and significantly changes the consolidation application of consolidation polices to variable interest entities and, thus improves comparability between enterprises engaged in similar activities when those activities are conduced through variable interest entities. As of June 30, 2004, the Company is not a party to any variable interest entity. The Company does not expect that adoption of FIN No. 46 or FIN 46R will have a material effect on its financial position or results of operations.








Page - 7




GLOBETRAC INC.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


UNAUDITED








NOTE 3  CONVERTIBLE NOTES PAYABLE





At June 30, 2004 and December 31, 2003, the Company had a note payable in the amount of $162,149. At June 30, 2004 and December 31, 2003, $6,468 and $nil interest had been accrued on this note. This note is unsecured, bears interest at 8%, is payable on demand and at the option of the Company is convertible into common shares of the Company at $0.50 per share.





At June 30, 2004 and December 31, 2003, the Company had notes payable totaling $511,660. At June 30, 2004 and December 31, 2003, $20,355 and $nil interest had been accrued on these notes. These notes are unsecured, bear interest at 8% are payable on demand and at the option of the Company are convertible into common shares of the Company at $0.50 per share.





At June 30, 2004 the Company issued notes payable totaling $850,940. These notes are unsecured, bear interest at 10% are payable on demand and at the option of either the Company or the lender are convertible into common shares of the Company at market price less 20%, with a minimum conversion price of $0.15 per share.







NOTE 4  DUE TO RELATED PARTIES





At June 30, 2004 and December 31, 2003, the Company was indebted to a company sharing a common officer with the Company in the amount of $4,755. This debt is unsecured, non-interest bearing and has no fixed terms of repayment. During the six month periods ended June 30, 2004 and 2003, this same related company was paid $nil and $120,000, for administrative and corporate communication fees.





At June 30, 2004 and December 31, 2003, the Company was indebted to a company controlled by an officer of the Company in the amounts of $84,448 and $20,171. This debt is unsecured, non-interest bearing and has no fixed terms of repayment. During the six month periods ended June 30, 2004 and 2003, this same company was paid $120,000 and $nil for administrative fees.





At June 30, 2004 and December 31, 2003, the Company was indebted to a company sharing a common director in the amounts of $14,586 and $13,173. This debt is unsecured, non-interest bearing and has no fixed terms of repayment.





At June 30, 2004 and December 31, 2003, the Company was indebted to a company controlled by an officer of the Company in the amounts of $6,063 and $7,946. This debt is unsecured, non-interest bearing and has no fixed terms of repayment. During the six month periods ended June 30, 2004 and 2003, this related party provided consulting services to the Company amounting to $50,081 and $nil.





At June 30, 2004 and 2003, the Company paid or had payable $102,422 and $9,000 to directors and officers of the Company in salary and management fees.





At June 30, 2004 and December 31, 2003, the Company was indebted to a director in the amounts of $161,182 and $59,163. At June 30, 2004 and 2003 the Company had paid or had payable, to this same director, $143,665 and $145,831 for rent and management fees.







NOTE 5  NOTE PAYABLE TO RELATED PARTY





At June 30, 2004 and December 31, 2003, the Company had a note payable to a director of the Company in the amount of $500,000, plus accrued interest of $79,658 and $54,795. This note is unsecured, bears interest at 10% and is due November 27, 2004.







NOTE 6  ADVANCE PAYABLE





The advance payable bears no interest, is unsecured and has no fixed terms of repayment.








Page - 8




GLOBETRAC INC.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


UNAUDITED








NOTE 7  COMMON STOCK





On June 21, 2002, the Company cancelled 3,800,000 of its issued and outstanding common shares and returned the shares to treasury.





On July 29, 2002, the authorized share capital of the Company increased from 55,000,000 shares to 205,000,000 shares with a par value of $0.001, consisting of 200,000,000 common shares and 5,000,000 preferred shares.





On August 8, 2003, the directors of the Company approved a private placement for up to 1 million units at $1 per unit, under Regulation S of the United States Securities Act of 1933. Each unit consists of one restricted common share of the Company and one non-transferable share purchase warrant. Each warrant entitles the subscriber to purchase one additional restricted common share of the Company at a price of $1.10 per share. On November 25, 2003, the directors of the Company approved an increase in the private placement to 2 million units.





On August 22, 2003, the Company entered into two Regulation S private placement agreements whereby the Company agreed to issue 750,000 restricted units at $1 per unit, consisting of 750,000 restricted common shares and one share purchase warrant exercisable by the holder at $1.10 per share for up to 750,000 restricted common shares of the Company, until August 26, 2005.





On October 1, 2003, the Company entered into a Regulation S private placement agreement whereby the Company agreed to issue 150,000 restricted units at $1 per unit, consisting of 150,000 restricted common shares and one share purchase warrant exercisable by the holder at $1.10 per share for up to 150,000 restricted common shares of the Company, until October 7, 2005.





On November 21, 2003, the Company entered into two Regulation S subscription agreements whereby the Company agreed to issue 250,000 restricted units at $1 per unit, consisting of 250,000 restricted common shares and one share purchase warrant exercisable by the subscriber at $1.10 per share for up to 150,000 and 100,000 restricted common shares of the Company, until November 28, 2005 and December 1, 2005.







NOTE 8  DEPENDENCE ON KEY SUPPLIER





On June 19, 2002, the Companys wholly owned subsidiary entered into a two year master distribution agreement with the manufacturer and supplier of a wireless vehicle tracking, communications and telematics system, whereby the Company has the rights to market and distribute the telematics hardware and software products throughout Europe. By letter agreement dated June 4, 2003, the master distribution agreement was extended to October 15, 2006 and the Companys purchase requirements changed to ordering a minimum of 1,000 units before September 15, 2003 and ordering a minimum of 6,000 units by October 15, 2004, the minimum ordering requirements subsequent to October 15, 2004 have not been determined. Due to the uniqueness of the telematics equipment, the Company is dependent on this supplier, thus failure to obtain product or meet the unit minimum purchase requirements may have an adverse financial effect on the Company. On March 8, 2004, the Company entered into a letter agreement with the supplier of their wireless vehicle tracking products whereby the supplier agreed to allow the Company to delay meeting their minimum purchase requirements until May 1, 2004, in exchange for giving up their exclusive rights to sell their products in the following countries in Europe; Belarus, Bulgaria, Cyprus, Estonia, Finland, Iceland, Latvia, Lithuania, Malta, Moldavia, Russia, Romania, Turkey and the Ukraine. On June 30, 2004, the Company had not met their minimum purchase requirements under their master distribution agreement.





Page - 9





GLOBETRAC INC.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


UNAUDITED





NOTE 9  COMMITMENT AND CONTINGENCIES





During the period the Company has been focusing on effectuating and implementing its business plan which includes building product recognition, gaining market share, meeting customer expectations, tailoring products to meet customer specifications, following up and ensuring customer satisfaction. As such, the Company has accumulated a deficit of $3,261,975 to date and additional financing will be required by the Company to fund its sales and marketing program and to support operations. Management plans to mitigate its losses in future years by increasing sales and reducing certain operating expenses that were associated with launching the product, changes in management, technical problems with the tracking units and tailoring the products to meet customer specifications, expectations and demands. However, there is no assurance that the Company will be able to obtain additional financing. There is no assurance that they will be able to build product recognition, gain market share, meet customer expectations, tailor products to meet customer specifications, follow up or ensure customer satisfaction. Furthermore there is no assurance that the Company will be able to keep up with rapid technological changes, changing customer needs and evolving industry standards and that the Company will be able to grow their market share or introduce new products and services on a continual and timely basis.  The financial statements do not include any adjustments that might result from the outcome of those uncertainties.








NOTE 10  SUBSEQUENT EVENTS





On July 1, 2004, the Company entered into a stock option agreement with an employee whereby the Company granted the employee an option to acquire 500,000 restricted common shares. Under the terms of this option agreement 250,000 optioned shares are exercisable at a price of $0.50 per optioned share and 250,000 optioned shares are exercisable at a price of $0.70 per optioned share. This option can be exercised at anytime between July 1, 2006 and June 30, 2009.





On July 1, 2004, the Company entered into a stock option agreement with an officer of the Companys subsidiary, whereby the Company granted the officer an option to acquire 350,000 restricted common shares. Under the terms of this option agreement 175,000 optioned shares are exercisable at a price of $0.50 per optioned share and 175,000 optioned shares are exercisable at a price of $0.70 per optioned share. This option can be exercised at anytime between July 1, 2006 and June 30, 2009.





Page - 10





Item 2  Managements Discussion and Analysis of Results of Operations and Financial Condition





THE FOLLOWING IS A DISCUSSION AND ANALYSIS THAT MANAGEMENT BELIEVES IS RELEVANT TO AN ASSESSMENT AND UNDERSTANDING OF THE CONSOLIDATED RESULTS OF OPERATIONS AND FINANCIAL CONDITION OF GLOBETRAC AND ITS SUBSIDIARY (COLLECTIVELY, GLOBETRAC OR THE COMPANY) FOR THE THREE AND SIX MONTH PERIODS ENDED JUNE 30, 2004 AND 2003. THE FOLLOWING SHOULD BE READ IN CONJUNCTION WITH THE CONSOLIDATED FINANCIAL STATEMENTS AND RELATED NOTES APPEARING ELSEWHERE HEREIN AND MANAGEMENTS DISCUSSION AND ANALYSIS INCLUDED IN GLOBETRACS ANNUAL REPORT ON FORM 10-KSB FOR THE YEAR ENDED DECEMBER 31, 2003.





Overview





GlobeTrac is in the business of selling, marketing, distributing and installing global wireless tracking and telematics equipment. The Company was incorporated in the state of Delaware on March 2, 2000 and its principal executive offices are headquartered in London, England.





On June 19, 2002, Global Axxess entered into a master distributorship agreement with WebTech Wireless Inc. (WebTech) whereby WebTech granted Global Axxess the exclusive right to distribute the Quadrant System TM, a wireless vehicle tracking, communications and telematics system composed of hardware and software products in Europe . On June 4, 2003, GlobeTrac England and WebTech entered into a letter agreement whereby Global Axxesss exclusive distribution rights were extended to October 15, 2006 and the minimum purchase requirements were amended. On March 8, 2004, Global Axxess mutually  entered into a letter agreement with WebTech whereby WebTech agreed to allow Global Axxess to delay meeting its minimum purchase requirements until May 1, 2004, in exchange for Global Axxess giving up its exclusive rights to sell WebTechs products in Belarus, Bulgaria, Cyprus, Estonia, Finland, Iceland, Latvia, Lithuania, Malta, Moldavia, Russia, Romania, Turkey and the Ukraine.





During the second quarter of 2004, our sales continued to improve however, it is not anticipated that even the current growth momentum will be sufficient to allow us to meet the minimum order requirements for some time to come . We have informed WebTech that we will not be able to meet the order commitments for year two of the agreement for some time, if at all. WebTech has unofficially acknowledged this information and for the moment has elected to work with us to try to increase the penetration of their product into the European marketplace with some growing successes. Our revisions to the order commitment for year two of our contract with WebTech and our original targetsis based upon the following factors: a) the product was new and unproven in the European marketplace , b) product modifications required to meet European specifications were more significant than initially anticipated, c) an integral part of our product solution, (MapPoint mapping) is only available for 13 of the original 46 countries covered by the terms of the WebTech contract, d) product pricing reductions up to the end of June 2004 did not adequately meet market demandsand e) foreign language capabilities were not adequately met b y WebTech until just recently .


We offer an end-to-end platform of wireless and mobile services using a Global System for Mobile communications/General Packet Radio Service (GSM/GPRS) network that provides commercial fleets with affordable vehicle tracking, communications and telematics services delivered over the Internet and in a user-friendly format. Supported by the WebTech suite of products we will be able to provide a variety of wireless and mobile services that can be separated into four key areas:





Location Based Services (LBS)
Navigation, Automatic Vehicle Location (AVL)/tracking, proximity-based services, traffic reporting, geofencing, vehicle monitoring.Telematics
Safety & security, anti-theft, vehicle recovery, air-bag deployment notification, remote door lock/unlock, remote vehicle diagnostics.Communications
Dispatch, voice, data, messaging.Internet
Mobile computing, invoicing, Intranet/Extranet connectivity, Internet access.





Page - 11




With the WebTech suite of products, fleet managers can track their vehicles and ensure that their vehicles are operated efficiently, economically and safely, thus maximizing their customers satisfaction.





We began as a start-up business in the fall of 2002 and since inception we have been concentrating on training and building our sales team while ensuring that the entire WebTech suite of products sold meets or exceeds customer expectations. We are a new age, high tech company and as such have been directing our marketing efforts towards gaining brand recognition and increasing our market share through direct and indirect marketing and advertising in the form of; outside sales staff, brochures, telemarketing and direct mailings. Our marketing has been directed towardsThis effort has focused on companies with commercial fleets. Our sales and marketing program is continuing to proving improve the correct sales model and, as a result, continues to result in increasedincrease salesrevenues. In fact our revenue result for the six months ended June 30, 2004 has surpassed the entire revenue resultwas up by 80% over for the whole of 2003 by 80%. However, we need to concentrate more on increasing the deployment of the Quadrant portal thereby increasing the monthly recurring income element of our business. While our end user activities continue we are progressively appointing new resellers throughout Europe. We now have representation in UK, France, Spain, Italy, Norway, Sweden and are in discussion with resellers in Austria, Switzerland, Netherlands, Belgium and Portugal. To a great extent, growth and further development in Europe is very dependent on support from our supplier WebTech as since applications & solutions development, product enhancement, and customization & integration and product marketability including pricing rests with them.





During the course of the second quarter of 2004:





* Despite ongoing major support problems with the L2000 model WebTech rejected our request for some consideration to compensate us for these failed units.





* Product pricing pressure continued to increase as some competitors at the lower end of the market attempt to customize similar products. After feeding back to WebTech our market research data indicating our pricing requirements for the European market to remain competitive, WebTech finally responded at the very end of June with better pricing for the new WT5000 Locator units, which we launched at the Stuttgart Motor show in Germany in mid June. However, while this new product and pricing is better than previously made available it simply puts us on par with competitors rather than being more price competitive. Immediate positive impact is unlikely as dissemination of these new prices into the market will take some time. It does make us competitive and as a result we should see fewer sales lost due to pricing.





* At long last foreign language capability on the portal are now available albeit not quite 100% complete. The portal is now available in French, Italian, German, Spanish and Norwegian.





* Technical support from WebTech remained a significant issue causing a serious drain on our technical resources and slowing down of proactive applications development and customization. This issue continues to be addressed with WebTech who continually express their willingness to improve this area.




* Growth in our network of resellers continues but has been slower than desired due to our inability to offer sufficient margin. The new pricing on the new WT5000 product should restore these margins and enable us to attract several more resellers.





* Interest in the subject of AVL and Telematics continues to increase significantly from the Wireless Telcos and GlobeTrac has been in various degrees of discussion/negotiations with no less than five of these companies.





* GlobeTracs brand name continues to grow and unsolicited enquiries continue to increase.





* Our research and investigation into the pending EU mandatory introduction of Digital Tachographs in vehicles over 3.5 tones in weight continues with little indication of when these standards will be agreed and legislated.





Page - 12




* What is of significance is that the prospect list continues to grow with both previously unidentified companies indicating they are now in the market for product as well as previously identified companies who have been in holding mode for several years. It would appear more and more that the market is at last shaping to take off but only time will tell.





* Another realization is that while more companies in Europe declare they are now in the market for product, their application needs are tending more to be bespoke in nature. We strongly believe that the suppliers that can modify and customize to suit customers needs in a fast to market style will be the winners. It is GlobeTracs declared intention to become one of those very suppliers but this currently can only be achieved with greatly improved support from WebTech.








During the six month period ending June 30, 2004, we have been focusing on effectuating and implementing our business plan that includes building product recognition, gaining market share, meeting customer expectations, tailoring products to meet customer specifications, following up and ensuring customer satisfaction, and staying on the leading edge of technology. As such, we  have accumulated a deficit of approximately  $3.3 million to date and will require additional financing to continue implementing our business plan. We plan to mitigate our losses in future years by increasing sales and reducing certain operating expenses that were associated with changes in management, technical problems with the tracking units, and tailoring our products to meet customer specifications, expectations and demands. However, there is no assurance that we will be able to obtain additional financing. There is no assurance that we will be able to build product recognition, gain market share, meet customer expectations, tailor products to meet customer specifications, follow up and ensure customer satisfaction, or stay on the leading edge of technology. Furthermore there is no assurance that we will be able to keep up with rapid technological changes, changing customer needs and evolving industry standards or that we will be able to grow our market share or introduce new products and services on a continual and timely basis.  The financial statements do not include any adjustments that might result from the outcome of those uncertainties.





Results of Operations





Revenues





Revenue increased by $258,316 or 452% from $57,180 for the three month period ended June 30, 2003 to $315,496 for the three month period ended June 30, 2004. The increase in revenue was achieved through the continuation of our sales and marketing programs aimed at gaining market share through brand recognition. We are continuing to implement our business plan concentrating our efforts on selling to resellers and with our newly reduced pricing expect to attract more resellers.





Revenue increased by $685,107 or 517% from $132,625 for the six month period ended June 30, 2003 to $817,732 for the six month period ended June 30, 2004. The increase in revenue was achieved through the continuation of our sales and marketing programs aimed at gaining market share through brand recognition. We continue to implement our business plan concentrating our efforts on selling to resellers and with our newly reduced pricing expect to attract more resellers.





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Cost of Sales





Cost of sales increased by $189,767 or 468% from $40,588 for the three month period ended June 30, 2003 to $230,355 for the three month period ended June 30, 2004,. The increase was due to an approximately coinciding with our increase in sales during the period. Our gross margin increased $68,549 or 413% from $16,592 for the three month period ended June 30, 2003 to $85,141 for the three month period ended June 30, 2004. As a percentage of revenue, our gross margin was 27% for the three month period ended June 30, 2004 compared to a gross margin of 29% for the three month period ended June 30, 2003. During 2004, we expect margins to be under constant pressure as competition intensifies. However, for the moment sincewe have been receiving better pricing breaks from WebTech via the new WT5000 product and we expect to maintain margins at around 30%+ with a reasonable expectation that volume will increase.

Cost of sales increased by $459,102 or 509% from $90,195 for the six month period ended June 30, 2003 to $549,297 for the six month period ended June 30, 2004. The increase was due to an, roughly coinciding with our increase in sales during the period. Our gross margin increased $226,004 or 533% from $42,430 for the six month period ended June 30, 2003 to $268,434 for the six month period ended June 30, 2004. As a percentage of revenue, our gross margin was 33% for the six month period ended June 30, 2004 compared to a gross margin of 32% for the six month period ended June 30, 2003. During 2004, we expect margins to be under constant pressure as competition intensifies. However, for the moment sincewe have been receiving better pricing breaks from WebTech via the new WT5000 product and we expect to maintain margins at around 30%+ with a reasonable expectation that volume will increase.




GlobeTrac expects cost of sales to decrease as a percentage of sales and gross margin to increase as unit sales increase because each unit sold has the potential to continue to generate higher margin, recurring revenue on monthly portal and airtime income.





Operating Expenses





Operating expenses increased by $33,545 or 8% from $401,517 for the three month period ended June 30, 2003 to $435,062 for the three month period ended June 30, 2004. The increase was primarily due to increases of $11,214 in office expenses, $357 in depreciation, $1,277 in rent, $34,413 in marketing and advertising, $17,989 in travel and $74,240 in wages offset by decreases of $22,211 in professional fees, $17,833 in management fees, $1,273 in telephone, $41,321 in consulting fees, $16,353 in installation expenses, $76 in bank charges, $61 in filing fees, $4,114 in bad debts and $2,703 in foreign exchange. The increase in operating costs was primarily caused by increased marketing costs and the hiring of sales and marketing people. As a percentage of sales our operating expenses decreased by 564% from 702% for the three month period ended June 30, 2003 to 138% for the three month period ended June 30, 2004. We expect operating expenses as a percentage of sales to continue to decline.





Operating expenses increased by $111,642 or 15% from $767,746 for the six month period ended June 30, 2003 to $879,388 for the six month period ended June 30, 2004. The increase was primarily due to increases of $25,584 in office expenses, $49 in bank charges, $826 in depreciation, $464 in filing fees, $15,891 in rent, $1,930 in telephone, $196,815 in wages, $27,070 in marketing and advertising and $6,302 in travel, offset by decreases of $5,467 in professional fees $87,819 in consulting fees, $46,312 in installation expenses, $14,833 in management fees, $4,114 in bad debts and $4,743 in foreign exchange. The increase in operating costs was primarily caused by increased marketing costs and the hiring of sales and marketing people. As a percentage of sales our operating expenses decreased by 471% from 579% for the six month period ended June 30, 2003 to 108% for the six month period ended June 30, 2004. We expect operating expenses as a percentage of sales to continue to decline.





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Deferred Tax Assets





We had deferred tax assets of approximately $800,000 and $400,000 at June 30, 2004 and 2003. We have established a valuation allowance equal to the full amount of the deferred tax assets because our ability to use these losses is uncertain.





Interest Expense





Interest expense increased by $696 or 3% from $24,542 for the three months ended at June 30, 2003 to $25,238 for the six months ended June 30, 2004 primarily due to interest on convertible notes payable and the note payable to a related party. Interest expense will increase during 2004 if we receive more funding through promissory notes, however it may decrease if any of the debt is repaid or if the convertible debt is converted to common stock of GlobeTrac.





Interest expense increased by $3,188 or 7% from $48,498 for the six months ended at June 30, 2003 to $51,686 for the six months ended June 30, 2004 primarily due to interest on convertible notes payable and the note payable to a related party. Interest expense will increase during 2004 if we receive more funding through promissory notes, however it may decrease if any of the debt is repaid or if the convertible debt is converted to common stock of GlobeTrac.





Interest expense increased during the three month period ended June 30, 2003 compared to the three month period ended June 30, 2002 by $24,543 or 100% primarily due to interest on convertible notes payable and the note due to a related party.





Interest expense increased during the six month period ended June 30, 2003 compared to the six month period ended June 30, 2002 by $48,498 or 100% primarily due to interest on convertible notes payable and the note due to a related party.





Liquidity and Capital Resources





We had cash of $72,918 and a working capital deficit of $2,060,590 at June 30, 2004. During the six month period ended June 30, 2004, we used $401,090 in cash for operating activities, primarily due to an operating loss of $662,640, an increase in accounts receivable of $242,337, offset by depreciation of $1,598, a decrease in inventory of $195,362, a decrease in prepaid expenses of $5,097, an increase in accounts payable and accrued liabilities of $75,220, an increase in accrued interest payable to a related party of $24,863, an increase in accounts payable to related parties of $174,924 and an increase in accrued interest payable on convertible debt of $26,823. Cash used in operations of $401,090 was financed by an increase in convertible notes payable on demand of $472,470 offset by an equipment purchase of $2,209 and the effect of exchange rate changes on cash of $5,063. A decrease in working capital of $1,046,788 was due to an increase in current assets of $105,986 offset by an increase in current liabilities of $1,152,774. We have accumulated a deficit of $3,261,975 since inception and have a stockholders deficit of $2,055,027. We have no contingencies or long-term commitments except for the agreement with WebTech Wireless Inc.





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Plan of Operation for the Next Twelve Months





As a high tech company we need to continually (1) work out technical difficulties, (2) improve the product, (3) tailor the product to customer needs, (4) grow brand recognition, and (5) grow our market share. To be able to achieve the above it is essential that WebTech support continues to improve. Over the next 12 months, we expect to have continual and consistent growth. However, in order to implement our business plan, we expect that during 2004 our operating costs will more than offset our gross profit.





We anticipate funding our working capital needs for the next 12 months through an increase in sales, the equity capital markets, private advances and loans. Although the foregoing actions are expected to cover our anticipated cash needs for working capital and capital expenditures for at least the next 12 months, no assurance can be given that we will be able to raise sufficient cash to meet these cash requirements.





We plan to improve cash flow and operating results by selling the WebTech suite of products, raising additional capital through private placements of stock, private advances, and loans. In addition new steps are being taken to reduce the monthly running operating expenses with the view that our current prospect list need to be addressed with the objective of closing as many sales as possible negating the need to expend any additional monies for the moment on major sales and marketing activities other than ongoing marketing support for existing resellers and any new resellers that sign with us.





We are not currently conducting any research and development activities other than the development of our website and the development of customer applications and solutions. Such activities will continue into the future as they are an integral part of normal business growth in this industry.  As we expand our customer base and product lines, we will need to hire additional employees, agents, distributors or independent contractors as well as purchase or lease additional equipment.





Critical Accounting Policies





GlobeTracs financial statements and accompanying notes are prepared in accordance with accounting principles generally accepted in the United States of America. Preparing financial statements requires management to make estimates and assumption that affect the reported amounts of assets, liabilities, revenue and expenses. The following paragraphs include a discussion of accounting policies critical to GlobeTrac:





Revenue Recognition





Revenue is recognized when the product is shipped to a reseller or end-user or when installation of the wireless tracking and telematics equipment has been completed; price is fixed or determinable and collectability is reasonably assured.





Accounts Receivable





Receivables represent valid claims against debtors for sales 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.





Inventories





Inventory is stated at the lower of cost (first-in, first-out) or market value. Market value represents the lower of replacement cost or estimated net realizable value.





Foreign Currency





The financial statements of the Companys English and Irish subsidiaries are measured using the British Pound and Euro as the functional currencies. Assets and liabilities of these subsidiaries are translated at exchange rates as of the balance sheet date. Revenues and expenses are translated at average exchange rates for the year. The resulting cumulative translation adjustments have been recorded as a separate component of stockholders equity. Foreign currency transaction gains and losses are included in consolidated net income.





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Comprehensive Income





Comprehensive income reflects changes in equity that result from transactions and economic events from non-owner sources. Comprehensive income for the current period represents foreign currency translation items associated with the Companys English and Irish operations.





Contractual Obligations





The following table provides a summary of GlobeTracs debt obligation as of June 30, 2004. This table excludes obligations under the master distributorship agreement because commitments under that agreement have been verbally waived and GlobeTrac cannot predict what its commitments will be, if any at June 30, 2004. At the date of writing these contractual commitments are still under negotiation with WebTech and it is still not known whether WebTech will try to enforce said commitments and thereby effectively remove our exclusivity for Europe by our resultant failure to do so or whether they will agree to forego or defer this commitment. GlobeTrac has not included advances payable because these advances have no fixed terms of repayment and GlobeTrac cannot predict when they will repay them.





CONTRACTUAL PAYMENTS DUE BY YEAR





Current Year 2004Note and accrued interest payable to related party
$ 579,658Convertible notes and accrued interest payable on demand
1,551,572





Internal and External Sources of Liquidity





GlobeTrac has funded its operations principally from issuance and subscription for common stock and borrowings in the form of advances and notes payable.





Inflation





GlobeTrac does not believe that inflation will have a material impact on its future operations.





Uncertainties relating to Forward Looking Statements





This Form 10-QSB Quarterly Report contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements may be identified by their use of words like plans, expect, aim, believe, projects, anticipate, intend, estimate, will, should, could and other expressions that indicate future events and trends. All statements that address expectations or projections about the future, including statements about GlobeTracs strategy for growth, product development, market position, expenditures and financial results are forward-looking statements.





Forward-looking statements in this Form 10-QSB include statements regarding the following expectations:





1. The current growth momentum will not be sufficient to allow GlobeTrac to meet the minimum orderrequirements under the MDA with WebTech forsome time to come, if at all.
2. Penetration of GlobeTracs product into the European marketplace will have growing success.
3. Supported by the WebTech suite of products GlobeTrac will provide a variety of wireless and mobile servies in four key areas; location based services, telematics, communications and internet.
4. The WebTech suite of products allow, fleet managers to track their vehicles and ensure that their vehicles are operated efficiently, economically and safely, thus maximizing their customers satisfaction.
5. All of the WebTech suite of products sold will meet or exceed customer expectations.
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6. GlobeTrac will increase its market share through direct and indirect marketing and advertising.
7. GlobeTracs sales and marketing program will continue to result in increased sales.
8. GlobeTrac will increase the deployment of the Quadrant portal which will in turn increase monthly recurring income.
9. GlobeTrac will continue to appoint new resellers throughout Europe.
10. Globetrac  will continue to grow and develop in Europe due to support from our supplier Webtech.
11. New pricing on the Locator units will enable Globetracs pricing to be on par with their competitors, will make them competitive, will reduce the number of lost sales due to pricing, will restore their gross margins and will enable them to attract several more resellers.
12. WebTech will improve their level of support to GlobeTrac reducing the heavy time, effort and money burden currently incurred by GlobeTrac having to provide technical support to its customers.
13. Product pricing pressures will continue to increase as the European market gets more competitive.
14. Interest in AVL and telematics will increase significantly in the wireless telco market.
15. GlobeTrac will negotiate contracts with no less than five companies in the telco market area.
16. GlobeTracs brand name will continue to grow and unsolicited enquiries will continue to increase.
17. EU legislation will make it mandatory to introduce Digital Tachographs in vehicles over 3.5 tones in weight and this will have a positive impact on GlobeTracs business.
18. GlobeTracs prospect list will continue to grow and both previously identified and unidentified companies in Europe are now in the market for GlobeTracs product.
19. GlobeTrac believes that the market is at last shaping up to take off.
20. GlobeTrac will be able to quickly modify and customize products to meet customer needs which will cause them to become one of the top suppliers of products in Europe.
21. GlobeTrac will continue to implement its business plan, which includes building product recognition, gaining market share, meeting customer expectations, tailoring its products to meet customer specifications, following up to ensure customer satisfaction, and staying on the leading edge of technology.
22. GlobeTrac will require additional financing to continue to implement its business plan.
23. GlobeTrac will mitigate its losses in future years by increasing sales and reducing certain operating expenses that were associated with changes in management, technical problems with the tracking units, and tailoring its products to meet customer specification, expectations and demands.
24. GlobeTrac will be able to keep up with rapid technological changes, changing customer needs and evolving industry standards and GlobeTrac will be able to grow its market share and introduce new products and services on a continual and timely basis.
25. GlobeTrac will be able to change its market focus from selling its products to end-users to selling its products to resellers.
26. GlobeTrac will attract more resellers due to its newly reduced pricing.
27. Competition will intensify causing GlobeTrac to be under pressure to reduce their selling price.
28. GlobeTrac will maintain or exceeda gross margin of 30% and volume will increase.
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29. GlobeTracs cost of sales will decrease as a percentage of sales and gross margin will increase as unit sales increase as each unit sold will continue to generate higher margin and recurring revenue on monthly portal and airtime income.
30. GlobeTracs operating expenses as a percentage of sales will continue to decline.
31. GlobeTrac will not be able to use its deferred tax assets.
32. Interest expense will increase during 2004 if GlobeTracs receives more funding through issuance of more promissory notes.
33. Interest expense will decrease if any of the promissory notes are repaid or if any of the convertible debt is converted into Common Stock of GlobeTrac.
34. GlobeTrac will be able to continually (a) work out technical difficulties, (b) improve the product, (c) tailor the product to customer needs, (d) grow brand recognition, and (e) grow market share.
35. GlobeTrac will have continual and consistent growth.
36. GlobeTracs operating costs will more than offset gross profit.
37. GlobeTrac will be able to fund its working capital needs for the next 12 months through an increase in sales, the equity capital markets, private advances, and loans.
38. GlobeTrac will be able to improve cash flows and operating results by selling the WebTech suite of products, raising additional capital through private placements of stock, private advances, and loans.
39. GlobeTrac will reduce monthly operating expenses.
40. GlobeTrac will close enough sales that they will not need to expend additional money on major sales and marketing activities.
41. GlobeTrac will conduct research and development in the future because they are an integral part of Globetrac's future business growth.
42. As GlobeTrac increases its customer base and product lines they will hire additional employees, agents, distributors or independent contractors.
43. As GlobeTrac expands its customer base and product lines GlobeTrac will purchase or lease additional equipment.
44. Inflation will not have a material impact on GlobeTracs future operations.




All forward-looking statements are made as of the date of filing of this Form 10-QSB and GlobeTrac disclaims any duty to update such statements.





Certain parts of this Form 10-QSB may contain forward-looking statements within the meaning of the Securities Exchange Act of 1934 based on current managements expectations. Actual results could differ materially from those in the forward looking statements due to a number of uncertainties including, but not limited to, those discussed in this section. Factors that could cause future results to differ from these expectations include general economic conditions, particularly related to demand for GlobeTracs products and services; changes in business direction or strategy; competitive factors (including competitors introducing superior products); pricing pressure (including competitors offering similar products at lower prices); inability to attract, develop or retain technical, consulting managerial, sales personnel, agents, distributors or independent contractors; changes in consumer tastes; inability to obtain product from the manufacturer and evolving industry products and standards. 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.





Page - 19




GlobeTrac may, from time to time, make oral forward-looking statements. GlobeTrac strongly advises that the above paragraph 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.





Item 3. Controls and Procedures.





Based on their most recent evaluation, which was completed within 90 days of the filing of this Form 10-QSB, GlobeTracs Chief Executive Officer and Chief Financial Officer believe GlobeTracs disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) are effective to ensure that information required to be disclosed by GlobeTrac in this report is accumulated and communicated to GlobeTracs management, including its principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure. There were no significant changes in GlobeTracs internal controls or other factors that could significantly affect these controls subsequent to the date of their evaluation and there were no corrective actions with regard to significant deficiencies and material weaknesses.





PART II  OTHER INFORMATION





Item 1. Legal Proceedings.





GlobeTrac is not a party to any pending legal proceedings and, to the best of GlobeTracs knowledge, none of GlobeTracs assets are the subject of any pending legal proceedings.





Item 2. Changes in Securities.





During the quarter of the fiscal year covered by this report, (i) GlobeTrac did not modify the instruments defining the rights of its shareholders, (ii) no rights of any shareholders were limited or qualified by any other class of securities, and (iii) GlobeTrac did not sell any unregistered equity securities.





Item 3. Defaults Upon Senior Securities.





During the quarter of the fiscal year covered by this report, no material default has occurred with respect to any indebtedness of GlobeTrac. Also, during this quarter, no material arrearage in the payment of dividends has occurred.





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 quarter of the fiscal year covered by this report.





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Item 6. Exhibits and Reports on Form 8-K





(a) Exhibits





All Exhibits required to be filed with the Form 10-QSB are incorporated by reference to GlobeTracs previously filed Form SB-2 and Form 10-KSB.





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.
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.
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.
Included99.1
Code of Ethics filed as an exhibit to GlobeTracs Form 10-KSB filed on April 15, 2003, and incorporated herein by reference.
Filed








(b)  Reports on Form 8-K.





No reports were filed during the quarter of the fiscal year covered by this report.





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SIGNATURES





In accordance with the requirements of the Securities Exchange Act of 1934, GlobeTrac has caused this report to be signed on its behalf by the undersigned duly authorized person.





GLOBETRAC INC.







*/s/ Jim Pratt*





Name:  Jim Pratt


Title :  Director and CEO


Dated:  August 16, 2004











*/s/ John daCosta*





Name:  John daCosta


Title :  CFO


Dated:  August 16, 2004





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Exhibit 31











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GLOBETRAC INC.  CERTIFICATIONS PURSUANT TO  SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002





CERTIFICATION





I, Jim Pratt, certify that:





1.   I have reviewed this quarterly report on Form 10-QSB of GlobeTrac Inc.;





2.   Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;





3.   Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;





4.   The registrants other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:





a)   designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;





b)   evaluated the effectiveness of the registrants disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the Evaluation Date); and





c)   presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;





5.   The registrants other certifying officer and I have disclosed, based on our most recent evaluation, to the registrants auditors and the audit committee of registrants board of directors (or persons performing the equivalent function):





a)   all significant deficiencies in the design or operation of internal controls which could adversely affect the registrants ability to record, process, summarize and report financial data and have identified for the registrants auditors any material weaknesses in internal controls; and





b)   any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal controls; and


6.   The registrants other certifying officer and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.





Date: August 16, 2004





/s/ Jim Pratt  Jim Pratt  Chief Executive Officer








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GLOBETRAC INC.  CERTIFICATIONS PURSUANT TO  SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002





CERTIFICATION





I, John daCosta, certify that:





1.   I have reviewed this quarterly report on Form 10-QSB of GlobeTrac Inc.;





2.   Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;





3.   Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;





4.   The registrants other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:





a)   designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;





b)   evaluated the effectiveness of the registrants disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the Evaluation Date); and





c)   presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;





5.   The registrants other certifying officer and I have disclosed, based on our most recent evaluation, to the registrants auditors and the audit committee of registrants board of directors (or persons performing the equivalent function):





a)   all significant deficiencies in the design or operation of internal controls which could adversely affect the registrants ability to record, process, summarize and report financial data and have identified for the registrants auditors any material weaknesses in internal controls; and





b)   any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal controls; and





6.   The registrants other certifying officer and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.





Date: August 16, 2004





/s/ John daCosta  John daCosta  Chief Financial Officer





Page - 25











Exhibit 32








Page - 26





CERTIFICATION PURSUANT TO  18 U.S.C. SECTION 1350,  AS ADOPTED PURSUANT TO  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002








In connection with the Quarterly Report of GlobeTrac Inc. (GlobeTrac) on Form 10-QSB for the period ending June 30, 2004 as filed with the Securities and Exchange Commission on the date hereof (the Report), I, Jim Pratt, President, Chief Executive Officer of GlobeTrac and a member of the Board of Directors, certify, pursuant to s.906 of the Sarbanes-Oxley Act of 2002, that:





(1)   The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and





(2)   The information contained in the Report fairly represents, the financial condition and result of operations of the Company.





/s/ Jim Pratt  Jim Pratt  Chief Executive Officer  August 16, 2004





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CERTIFICATION PURSUANT TO  18 U.S.C. SECTION 1350,  AS ADOPTED PURSUANT TO  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002








In connection with the Quarterly Report of GlobeTrac Inc. (GlobeTrac) on Form 10-QSB for the period ending June 30, 2004 as filed with the Securities and Exchange Commission on the date hereof (the Report), I, John daCosta, Secretary, Treasurer, and Chief Financial Officer of GlobeTrac, certify, pursuant to s.906 of the Sarbanes-Oxley Act of 2002, that:





(1)   The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and





(2)   The information contained in the Report fairly represents, the financial condition and result of operations of the Company.





/s/ John daCosta John daCosta  Chief Financial Officer  August 16, 2004








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