UNITED STATES


SECURITIES AND EXCHANGE
COMMISSION


Washington, D.C.
20549







FORM 10-Q





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





For the quarterly period
ended September 30,
2008





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





For the transition period
from_______to_______.





Commission file number000-33309




GLOBETRAC
      INC.(Exact
      name of
      registrant asspecified in its
charter)




Delaware
              (State
      or other jurisdiction of
              incorporation
      or organization)
            33-0953557
              (I.R.S.
      Employer
              Identification
      No.)1100 Melville Street,
      Suite610,
      Vancouver, British Columbia, V6E 4A6
              (Address
      of principal executive offices)1-800-648-4287
              (Issuer’s
      telephone number)____________________________________________________________
              (Former
      name, former address and former fiscal year, if changed since last
      report)





Indicate by check markwhether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.


[ X ] Yes [   ]
No


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.
 Large
      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 Exchange Act).


[ 
 ] Yes [ X ]  No




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 November 13, 2008Common
      Stock - $0.001 par value
            
            89,883,198









PART
I – FINANCIAL INFORMATION
 
 Item
1.                      Financial
Statements.
  GLOBETRAC
INC. BALANCE
SHEETS


Septemebr
      30,
                
                
                December
      31,2008
                
                
                2007(Unaudited)
                
                
                (Consolidated)ASSETSCurrent
      assetsCash
                
                $
                61,606
                
                
                $
                16,922Accounts
      receivableNet
      of allowance for doubtful accounts of $7,327 atSeptember
      30, 2008 and December 31, 2007
                
                
                23,551
                
                
                
                41,955Prepaids
                
                
                999
                
                
                
                5,034Total
      current assets
                
                $
                86,156
                
                
                $
                63,911LIABILITIES
      AND STOCKHOLDERS' DEFICITCurrent
      liabilitiesAccounts
      payable
                
                $
                86,759
                
                
                $
                91,442Accrued
      expenses
                
                
                48,928
                
                
                
                64,885Convertible
      notes payable, including accrued interest
                
                
                -
                
                
                
                2,015,576Advances
      payable
                
                
                -
                
                
                
                32,346Due
      to related parties
                
                
                -
                
                
                
                414,406Note
      payable to related party, including accrued interest
                
                
                -
                
                
                
                754,795Total
      current liabilities
                
                
                135,687
                
                
                
                3,373,450Commitments
      and contingenciesStockholders'
      deficitPreferred
      stock $0.001 par value, 5,000,000 authorized, none issued
    andoutstanding
      at September 30, 2008 and December 31, 2007Common
      stock $0.001 par value, 200,000,000 common shares
    authorized,89,883,198
      and 22,190,000 issued and outstanding at September 30, 2008
      andDecember
      31, 2007, respectively
                
                
                89,883
                
                
                
                22,190Additional
      paid in capital
                
                
                1,167,085
                
                
                
                1,167,085Accumulated
      deficit
                
                
                (1,323,400
                )
                
                
                (4,511,922
                )Accumulated
      other comprehensive income
                
                
                16,901
                
                
                
                13,108Total
      stockholders' deficit
                
                
                (49,531
                )
                
                
                (3,309,539
                )Total
      liabilities and stockholders' deficit
                
                $
                86,156
                
                
                $
                63,911
   The
accompanying notes are an integral part of these financial
statements
 1
 GLOBETRAC
INC.
 STATEMENTS
OF OPERATIONS (UNAUDITED)
 Three
      Months Ended
                
                
                Nine
      Months EndedSeptember
      30,
                
                
                September
      30,2008
                
                
                2007
                
                
                2008
                
                
                2007(Consolidated)
                
                
                
                
                
                (Consolidated)Royalty
      income
                
                $
                51,781
                
                
                $
                68,933
                
                
                $
                124,685
                
                
                $
                105,271Operating
      expenses:General
      and administrative
                
                
                39,949
                
                
                
                21,945
                
                
                
                85,608
                
                
                
                78,863Net
      income (loss) from operations
                
                
                11,832
                
                
                
                46,988
                
                
                
                39,077
                
                
                
                26,408Interest
      expense
                
                
                -
                
                
                
                (47,260
                )
                
                
                (46,618
                )
                
                
                (140,239
                )Net
      income (loss) from operations before franchise tax and forgiveness of
      debt
                
                
                11,832
                
                
                
                (272
                )
                
                
                (7,541
                )
                
                
                (113,831
                )Franchise
      tax
                
                
                -
                
                
                
                (1,701
                )
                
                
                -
                
                
                
                (7,890
                )Net
      income (loss) from operations before forgivenes of debt
                
                
                11,832
                
                
                
                (1,973
                )
                
                
                (7,541
                )
                
                
                (121,721
                )Forgiveness
      of debt
                
                
                -
                
                
                
                -
                
                
                
                3,196,063
                
                
                
                -Net
      income (loss)
                
                $
                11,832
                
                
                $
                (1,973
                )
                
                $
                3,188,522
                
                
                $
                (121,721
                )Net
      income (loss) per share - basic and diluted
                
                $
                0.00
                
                
                $
                (0.00
                )
                
                $
                0.07
                
                
                $
                (0.01
                )Weighted
      average number of shares outstanding - basic and diluted
                
                
                89,883,198
                
                
                
                22,190,000
                
                
                
                45,166,158
                
                
                
                22,190,000
   The
accompanying notes are an integral part of these financial
statements
  2
 GLOBETRAC
INC.
 STATEMENT
OF STOCKHOLDERS' DEFICIT AND COMPREHENSIVE INCOME (UNAUDITED)
 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 nine  monthsended
      September 30, 2007
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  (121,721
                  )
                  
                  
                  -
                  
                  
                  
                  (121,721
                  )Foreign
      currency exchange loss
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  (7,559
                  )
                  
                  
                  (7,559
                  )Comprehensive
      loss
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  (129,280
                  )Balance
      at September 30, 2007
                  
                  
                  22,190,000
                  
                  
                  
                  22,190
                  
                  
                  
                  1,167,085
                  
                  
                  
                  (4,431,724
                  )
                  
                  
                  11,564
                  
                  
                  
                  (3,230,885
                  )Net
      loss for the three monthsended
      December 31, 2007
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  (80,198
                  )
                  
                  
                  -
                  
                  
                  
                  (80,198
                  )Foreign
      currency exchange gain
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  1,544
                  
                  
                  
                  1,544Comprehensive
      loss
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  (78,654
                  )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 nine monthsended
      September 30, 2008
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  3,188,522
                  
                  
                  
                  -
                  
                  
                  
                  3,188,522Foreign
      currency exchange gain
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  3,793
                  
                  
                  
                  3,793Comprehensive
      income
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  3,192,315Balance
      at September 30, 2008
                  
                  
                  89,883,198
                  
                  
                  $
                  89,883
                  
                  
                  $
                  1,167,085
                  
                  
                  $
                  (1,323,400
                  )
                  
                  $
                  16,901
                  
                  
                  $
                  (49,531
                  )
 The
accompanying notes are an integral part of these financial
statements
  
 3
 GLOBETRAC
INC.
 STATEMENTS
OF CASH FLOWS FOR
THE NINE MONTHS ENDED SEPTEMBER 30, 2008 AND 2007 (UNAUDITED)
 2008
                  
                  
                  2007(Consolidated)Cash
      flows from operating activities:Net
      income (loss)
                  
                  $
                  3,188,522
                  
                  
                  $
                  (121,721
                  )Adjustments
      to reconcile net income (loss) to net cash provided by (used in) operating
      activities:Forgiveness
      of convertible notes payable
                  
                  
                  (1,472,825
                  )
                  
                  
                  -Forgiveness
      of interest on convertible notes payable
                  
                  
                  (540,014
                  )
                  
                  
                  -Forgiveness
      of advances payable
                  
                  
                  (31,705
                  )
                  
                  
                  -Forgiveness
      of debt due to related parties
                  
                  
                  (404,292
                  )
                  
                  
                  -Forgiveness
      of debt on note payable to related party
                  
                  
                  (480,000
                  )
                  
                  
                  -Forgiveness
      of interest on note payable to related party
                  
                  
                  (267,227
                  )
                  
                  
                  -Changes
      in operating assets and liabilities:Accounts
      receivable
                  
                  
                  18,404
                  
                  
                  
                  (32,857
                  )Prepaids
                  
                  
                  4,035
                  
                  
                  
                  (5,307
                  )Accounts
      payable
                  
                  
                  (4,682
                  )
                  
                  
                  (22,422
                  )Accrued
      expenses
                  
                  
                  (15,957
                  )
                  
                  
                  514Accrued
      interest on convertible notes payable
                  
                  
                  34,187
                  
                  
                  
                  102,842Advances
      payable
                  
                  
                  14
                  
                  
                  
                  -Due
      to related parties
                  
                  
                  -
                  
                  
                  
                  5,947Accrued
      interest on note payable to related party
                  
                  
                  12,431
                  
                  
                  
                  37,398Net
      cash provided by (used in) operating activities
                  
                  
                  40,891
                  
                  
                  
                  (35,606
                  )Effect
      of foreign currency exchange
                  
                  
                  3,793
                  
                  
                  
                  (7,559
                  )Net
      increase (decrease) in cash
                  
                  
                  44,684
                  
                  
                  
                  (43,165
                  )Cash,
      beginning of period
                  
                  
                  16,922
                  
                  
                  
                  44,175Cash,
      end of period
                  
                  $
                  61,606
                  
                  
                  $
                  1,010Supplemental
      disclosure of cash flow information:Cash
      paid during the period for:Income
      taxes
                  
                  $
                  -
                  
                  
                  $
                  6,189Interest
                  
                  $
                  -
                  
                  
                  $
                  2,650Non-cash
      changes in assets and liabilities:Conversion
      of convertible notes payable into common shares
                  
                  $
                  (36,924
                  )
                  
                  $
                  -Conversion
      of advances payable into common shares
                  
                  $
                  (655
                  )
                  
                  $
                  -Conversion
      of debt due to related parties to common shares
                  
                  $
                  (10,114
                  )
                  
                  $
                  -Conversion
      of note payable to related party to common shares
                  
                  $
                  (20,000
                  )
                  
                  $
                  -Issuance
      of common shares for debt
                  
                  $
                  67,693
                  
                  
                  $
                  -Advance
      receivable offset against accounts payable
                  
                  $
                  -
                  
                  
                  $
                  5,000
 The
accompanying notes are an integral part of these financial
statements
  
 4
 
 GLOBETRAC
INC.
 NOTES
TO FINANCIAL STATEMENTS
 SEPTEMBER
30, 2008
 (UNAUDITED)
   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.
 
 Basis
of Presentation
 
 The
unaudited financial statements included herein have been prepared in accordance
with accounting principles generally accepted in the United States for interim
financial information and with the instructions to Form 10-Q and Article 8 of
Regulation S-X.  They do not include all information and notes
required by generally accepted accounting principles for complete financial
statements.  However, except as disclosed herein, there has been no
material change in the information disclosed in the notes to the financial
statements included in the Annual Report on Form 10-KSB of GlobeTrac Inc. for
the year ended December 31, 2007. In the opinion of management, all adjustments
(including normal recurring accruals) considered necessary for a fair
presentation have been included.  Operating results for the three and
nine months ended September 30, 2008 are not necessarily indicative of the
results that may be expected for any other interim period or the entire
year.  For further information, these unaudited financial statements
and the related notes should be read in conjunction with the Company’s audited
financial statements for the year ended December 31, 2007 included in the
Company’s report on Form 10-KSB.
 
 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.
  5
  GLOBETRAC
INC.
 NOTES
TO FINANCIAL STATEMENTS
 SEPTEMBER
30, 2008
 (UNAUDITED)
   2.  SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES, continued
 
 Recent
Accounting Pronouncements
  On
January 1, 2008, the Company adopted Statement of Financial Accounting
Standards (SFAS) No. 157 (SFAS 157), Fair Value
Measurements.  SFAS 157 relates to financial assets and
financial liabilities. In February 2008, the Financial Accounting Standards
Board (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 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
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.
  6
  GLOBETRAC
INC.
 NOTES
TO FINANCIAL STATEMENTS
 SEPTEMBER
30, 2008
 (UNAUDITED)
   2.  SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES, continued
 
 Recent
Accounting Pronouncements, continued
 
 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
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.  SFAS 161 will be effective for the
Company on January 1, 2009.  Early adoption of this provision is
prohibited. The Company is currently evaluating the impact adoption of SFAS 161
may have on its financial statement disclosures.
 
 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). SFAS 162 is effective 60 days following
the U.S. Securities and Exchange Commission’s (SEC’s) approval of the Public
Company Accounting Oversight Board amendments to AU Section 411, The Meaning of Present Fairly in
Conformity With Generally Accepted Accounting Principles. The Company is
currently reviewing the effect, if any, the proposed guidance will have on its
financial statement disclosures.
  In May,
2008, FASB issued SFAS No. 163, Accounting for Financial Guarantee
Insurance Contracts—an interpretation of FASB Statement No.
60.  Diversity exists in practice in accounting for financial
guarantee insurance contracts by insurance enterprises under FASB Statement No.
60, Accounting and Reporting
by Insurance Enterprises. That diversity results in inconsistencies in
the recognition and measurement of claim liabilities because of differing views
about when a loss has been incurred under FASB Statement No. 5, Accounting for Contingencies.
This Statement requires that an insurance enterprise recognize a claim liability
prior to an event of default (insured event) when there is evidence that credit
deterioration has occurred in an insured financial obligation. This Statement
also clarifies how Statement 60 applies to financial guarantee insurance
contracts, including the recognition and measurement to be used to account for
premium revenue and claim liabilities. Those clarifications will increase
comparability in financial reporting of financial guarantee insurance contracts
by insurance enterprises. This Statement requires expanded disclosures about
financial guarantee insurance contracts. The accounting and disclosure
requirements of the Statement will improve the quality of information provided
to users of financial statements. SFAS 163 will be effective for financial
statements issued for fiscal years beginning after December 15, 2008, and
interim periods within those fiscal years; disclosure requirements in paragraphs
30(g) and 31 are effective for the first period (including interim periods)
beginning after May 23, 2008. We do not expect the adoption of SFAS 163 to have
a significant impact on our financial statements.
  7
 
 GLOBETRAC
INC.
 NOTES
TO FINANCIAL STATEMENTS
 SEPTEMBER
30, 2008
 (UNAUDITED)
   2.  SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES, continued
 
 Recent
Accounting Pronouncements, continued
  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. The Company has not yet evaluated the impact that FSP APB 14-1
will have on its 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. The Company is currently evaluating the requirements of FSP
No. EITF 03-6-1 and the impact that its adoption will have on
the  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.  The Company is currently evaluating the impact that
adoption of EITF 07-5 will have on its financial statements.
 
 In June
2008, FASB released a proposed SFAS, Disclosure of Certain Loss
Contingencies, an amendment of FASB Statements No. 5 and 141) (the
proposed Statement),
for a comment period that ended during August 2008. The proposed Statement would
(a) expand the population of loss contingencies that are required to be
disclosed, (b) require disclosure of specific quantitative and qualitative
information about those loss contingencies, (c) require a tabular
reconciliation of recognized loss contingencies and (d) provide an
exemption from disclosing certain required information if disclosing that
information would be prejudicial to an entity’s position in a dispute. The
proposed Statement would be effective for financial statements issued for fiscal
years ending after December 15, 2008, and for interim and annual periods in
subsequent fiscal years. When and if the proposed Statement is approved in final
form by FASB, the Company will evaluate whether the adoption of the proposed
Statement will have any material impact on its financial position or results of
operations.
  8
 
 GLOBETRAC
INC.
 NOTES
TO FINANCIAL STATEMENTS
 SEPTEMBER
30, 2008
 (UNAUDITED)
   2.  SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES, continued
 
 Recent
Accounting Pronouncements, continued
 
 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.  The Company is currently evaluating the impact that
adoption of EITF 07-5 will have on its 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 $1,323,400
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 controlling its operating expenses and seeking out new business
opportunities.   However, there is no assurance that the Company
will be able to obtain additional financing, control 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 these uncertainties.
 
 NOTE
4 – CONVERTIBLE NOTES PAYABLE AND RELATED CONVERTIBLE ACCRUED INTEREST DUE ON
DEMAND
 
 September 30,
                2008
              
              
              December
      31,2007Notes
      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)
              
              $
              -
              
              
              $
              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 (b)
              
              
              -
              
              
              
              835,940Convertible accrued
      interest (c)
              
              
              -
              
              
              
              505,827Total
      convertible notes payable and related convertible accrued
      interest
              
              $
              -
              
              
              $
              2,015,576
   9
  GLOBETRAC
INC.
 NOTES
TO FINANCIAL STATEMENTS
 SEPTEMBER
30, 2008
 (UNAUDITED)
   NOTE
4 – CONVERTIBLE NOTES PAYABLE AND RELATED CONVERTIBLE ACCRUED INTEREST DUE ON
DEMAND, continued
 
 (a)  On
June  23, 2008, the holders of convertible notes payable totaling
$667,323 agreed to forgive the debt and on June  30, 2008, $6,486 in
convertible notes payable were  converted into 6,485,970 shares of the
Company’s common stock.  (Note 8)
 
 (b)   On
June  23, 2008, the holders of convertible notes payable in the amount
of $805,502 agreed to forgive the notes and on June  30, 2008,
convertible notes payable totaling $30,437 were converted into 30,437,600 shares
of the Company’s common stock.  (Note 8)
 
 (c)  On
June 23, 2008, $540,014 in interest accrued on convertible notes payable was
forgiven.
 
 NOTE
5 – ADVANCES PAYABLE
 
 At
September 30, 2008 and December 31, 2007, the Company had advances payable of $0
and $32,346 respectively, to outside third parties.  On June 23, 2008
$31,705 in advances payable were forgiven and on June 30, 2008, $655 in advances
payable were converted into 655,400 shares of the Company’s common
stock.  (Note 8)
  NOTE
6 – DUE TO RELATED PARTIES
 
  September 30,
                2008
              
              
              December
      31,
                2007Due
      to companies sharing a common officer (a)
              
              $
              -
              
              
              $
              161,550Advance
      payable to a director (b)
              
              
              -
              
              
              
              13,766Accrued
      management fees due to a director (c)
              
              
              -
              
              
              
              239,090Due
      to related parties
              
              $
              -
              
              
              $
              414,406
 
 (a)  On
June 23, 2008, $161,550 in debt was forgiven by these related
companies.  During the nine months ended September 30, 2008 and 2007
the Company paid $47,250 and $47,700 respectively, in administrative fees to a
company sharing a common officer.
 
 (b)  On
June 23, 2008, $13,215 in debt was forgiven by a director of the Company
and on June 30, 2008, $551 in advances payable to a director was converted
into 550,626 shares of the Company’s common stock.  (Note
8)
 
 (c)  On
June 23, 2008, $229,526 in accrued management fees were forgiven by a director
of the Company and on June  30, 2008, $9,564 in accrued management
fees due to a director were converted into 9,563,602 shares of the Company’s
common stock.  (Note 8)
  10
 
 GLOBETRAC
INC.
 NOTES
TO FINANCIAL STATEMENTS
 SEPTEMBER
30, 2008
 (UNAUDITED)
   NOTE
7 – NOTE PAYABLE TO RELATED PARTY
 
  September 30,

                2008
              
              
              December 31,2007Note
      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 23, 2008, a note payable to a related party in the amount of $480,000 was
forgiven and on June 30, 2008, a note payable to a related party in the amount
of $20,000 was converted into 20,000,000 shares of the Company’s common
stock.  (Note 8)
 
 (b)  On
June 23, 2008, $267,227 in accrued interest was forgiven.
 
 NOTE
8 – COMMON STOCK
 
 On June
30, 2008, 67,693,198 shares of the Company’s common stock were issued at $0.001
per share in settlement of $67,693 in debt.  (Notes 4, 5, 6 and
7)
 
 NOTE
9 – SALE OF SUBSIDIARY
 
 On June
12, 2008 the Company sold all of its shares in Global Axxess for $2 to an
unrelated party.  The sale of Global Axxess did not have any effect on
the Companies operations because Global Axxess was inactive.
  11
  Item
2.  Management’s Discussion and Analysis of Financial Condition and
Results of Operation.
 
 Forward
Looking Statements
 
 The
information in this quarterly report on Form 10-Q contains forward-looking
statements.  These forward-looking statements involve risks and
uncertainties, including statements regarding our 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 from those events or results included in the
forward-looking statements.  In evaluating these statements, you
should consider various factors, including the risks outlined from time to time
in the reports we file with the Securities and Exchange
Commission.  Some, but not all, of these risks include, among other
things:
 
 *
              our
      inability to obtain the financing we need to continue our
      operations;
 
 *
              changes
      in regulatory requirements that adversely affect our
    business;
 
 *
              a
      decline in our royalty revenue; and
 
 *
              risks
      over which we have no control, such as a general downturn in the economy
      which may adversely affect our royalty revenue and ability to obtain
      working capital.
 
 We do not
intend to update forward-looking statements.  You should refer to and
carefully review the information in future documents we file with the Securities
and Exchange Commission.
 
 General
 
 This
discussion and analysis should be read in conjunction with our interim unaudited
consolidated financial statements and related notes included in this Form 10-Q
and the audited consolidated financial statements and related notes thereto
included in our Annual Report on Form 10-KSB for the fiscal year ended December
31, 2007.  The inclusion of supplementary analytical and related
information herein may require us to make estimates and assumptions to enable us
to fairly present, in all material respects, our analysis of trends and
expectations with respect to our results of operations and financial position
taken as a whole.  Actual results may vary from the estimates and
assumptions we make.
  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”.
 
 On June
12, 2008 we sold all of the shares of our subsidiary, Global Axxess Corporation
Limited to an unrelated party.
 
 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
our shares of Global Axxess, our 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 our operations in Europe, we
are seeking new business opportunities.
  12
 
 At
September 30, 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 $3,196,063 in debt.  On June 30,
2008 certain debt holders agreed to convert $67,693 in debt into 67,693,198
shares of our common stock.
 
 Results
of Operation
 
 Our
operating results for the three and nine months ended September 31, 2008 and
2007 and the changes between those periods for the expenses are summarized as
follows:
 
  Three
      Months Ended
                September
      30,
              
              
              
              Increase
      (Decrease) Between the Three Months Ended September 30,
              
              
              
              Nine
      Months Ended
                September
      30,
              
              
              
              Increase
      (Decrease) Between the NineMonths
      Ended September 30,2008
              
              
              
              2007
              
              
              
              2008
      and 2007
              
              
              
              2008
              
              
              
              2007
              
              
              
              2008
      and 2007Royalty
      income
              
              $
              51,781
              
              
              $
              68,933
              
              
              $
              (17,152
              )
              
              $
              124,685
              
              
              $
              105,271
              
              
              $
              19,414Operating
      expenses:General
      and
                administrative
              
              
              39,949
              
              
              
              21,945
              
              
              
              18,004
              
              
              
              85,608
              
              
              
              78,863
              
              
              
              6,745Net
      income from operations
              
              
              11,832
              
              
              
              46,988
              
              
              
              (35,156
              )
              
              
              39,077
              
              
              
              26,408
              
              
              
              12,669Interest
      expense
              
              
              -
              
              
              
              (47,260
              )
              
              
              47,260
              
              
              
              (46,618
              )
              
              
              (140,239
              )
              
              
              93,621Net
      income (loss) from operations before franchise tax and forgiveness of
      debt
              
              
              11,832
              
              
              
              (272
              )
              
              
              12,104
              
              
              
              (7,541
              )
              
              
              (113,831
              )
              
              
              106,290Franchise
      tax
              
              
              -
              
              
              
              (1,701
              )
              
              
              1,701
              
              
              
              -
              
              
              
              (7,890
              )
              
              
              7,890Net
      income (loss) from operations before forgiveness of debt
              
              
              11,832
              
              
              
              (1,973
              )
              
              
              13,805
              
              
              
              (7,541
              )
              
              
              (121,721
              )
              
              
              114,180Forgiveness
      of debt
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              3,196,063
              
              
              
              -
              
              
              
              3,196,063Net
      income (loss)
              
              $
              11,832
              
              
              $
              (1,973
              )
              
              $
              13,805
              
              
              $
              3,188,522
              
              
              $
              (121,721
              )
              
              $
              3,310,243
 
 Revenues
 
 Our
royalty revenue decreased by $17,152 or 25% from $68,933 for the three months
ended September 30, 2007 to $51,781 during the three months ended September 30,
2008.
  13
 
 Our
royalty revenue increased by $19,414 or 18% from $105,271 for the nine months
ended September 30, 2007 to $124,685 for the nine months ended September 30,
2008.
 
 All of
the revenue was the result of a 6% royalty which relates to the Termination and
Transfer Agreement signed on October 18, 2005. The 18% increase in revenue
during the nine months ended September 30, 2008 was due to WebTech securing some
large contracts during the period and the 25% decrease in royalty revenue during
the three months ended September 30, 2008 was due to the loss of certain
contracts during the period.  We expect our revenue to be
approximately $160,000 over the next year.  We do not expect revenue
to increase unless we locate a new revenue generating business
opportunity.
 
 Operating
Expenses
 
 Our
operating expenses increased by $18,004 or 82% from $21,945 for the three months
ended September 30, 2007 to $39,949 for the three months ended September 30,
2008.  This increase was primarily caused by an increase in
professional fees of approximately $6,000 and an increase in realized foreign
exchange transaction gains between the UK pound and the US dollar of
approximately $12,000.
 
 Our
operating expenses increased by $6,745 or 9% from $78,863 for the nine months
ended September 30, 2007 to $85,608 for the nine months ended September 30,
2008.  This increase was primarily caused by realized foreign exchange
transaction gains between the UK pound and the US dollar of approximately
$11,000 offset by a decrease in professional fees of approximately
$3,000.
 
 Over the
next year our plan is to continue to control our operating costs.  We
expect our operating costs to be approximately $110,000 over the next year,
unless we locate a new viable business.
 
 Interest
Expense
 
 Our
interest expense decreased by $47,260 or 100% from $47,260 for the three months
ended September 30, 2007 to $0 for the three months ended September 30,
2008.
 
 Our
interest expense decreased by $93,621 or 67% from $140,239 for the nine months
ended September 30, 2007 to $46,618 for the nine months ended September 30,
2008.
 
 Our
interest expense decreased due to the holders of $1,472,825 in convertible notes
payable and $480,000 of the note payable to a related party agreeing to forgive
the debt and when $36,924 in convertible notes payable and $20,000 of a note
payable to a related party were converted into 56,923,570 shares of our
common stock.  We do not expect to have any interest expense during
the next year.
 
 Liquidity
and Capital Resources
 
 Going
Concern
 
 The notes
to our financial statements at September 30, 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 $1,323,400 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.
  14
 
 The
following table summarizes our sources and uses of cash for the nine months
ended:
 
 September
      30,2008
              
              
              2007Net
      cash provided by (used in) operating activities
              
              $
              40,891
              
              
              $
              (35,606
              )Net
      cash provided by investment activities
              
              
              -
              
              
              
              -Net
      cash provided by financing activities
              
              
              -
              
              
              
              -Effect
      of foreign currency exchange
              
              
              3,793
              
              
              
              (7,559
              )Net
      increase (decrease) in cash
              
              $
              44,684
              
              
              $
              (43,165
              )
 
 Net
Cash Used In Operating Activities
 
 Net cash
used in operating activities during the nine months ended September 30,
2007 was $35,606. This cash was primarily used to pay down accounts payable by
$22,422, on a prepayment of $5,307, an increase in our royalty revenue
receivable of $32,857 and to cover an excess of expenses over revenue of
$121,721, which includes an increases in unpaid accrued interest on convertible
notes of $102,842, accrued expenses of $514, and unpaid accrued interest to a
related party of $37,398 and professional fees payable to a related party of
$5,947.
 
 Net cash
provided by operating activities during the nine months ended September 30,
2008 was $40,891. This cash was primarily provided by a collection of $18,404 in
royalty revenue receivable, utilization of $4,035 in prepaid legal fees, an
increase of $34,187 in accrued interest on the convertible notes payable, an
increase of $14 in advances payable and an increase of $12,431 in accrued
interest on the note payable to a related party.  These amounts were
offset by the paying down accounts payable and accrued expenses by $4,682 and
$15,957 respectively, forgiveness of convertible notes payable of $1,472,825,
forgiveness of interest on convertible notes payable of $540,014, forgiveness of
advances payable of $31,705, forgiveness of debt due to related parties of
$404,292 forgiveness of a note payable to a related party of $480,000 and
forgiveness of interest on a note payable to a related party of
$267,227.
 
 Net
Cash Used In Investing Activities
 
 We did
not have any investing activities during the nine months ended September 30,
2008 and 2007.
 
 Net
Cash Provided By Financing Activities
 
 We did
not have any financing activities during the nine months ended September 30,
2008 and 2007.
 
 As of
September 30, 2008, we had a cash balance of $61,606 and cash flows from
operations of $40,891 for the nine months then ended. During the nine months
ended September 30, 2008, we primarily funded our operations with the royalty
revenue we received from WebTech.
 
 Debt
Conversion and Forgiveness
 
 On June
23, 2008, $3,196,063 in debt (including accrued interest) was forgiven and on
June 30, 2008, 67,693,198 shares of our common stock were issued at $0.001 per
share in settlement of $67,693 in debt.
 
 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. Our financial statements do
not include any adjustments that might result from the outcome of these
uncertainties.
  15
 
 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 quarterly 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.
 
 Contingencies
and Commitments
 
 We had no
contingencies or long-term commitments at September 30, 2008.
 
 Contractual
Obligations
 
 Due to
the forgiveness of debt and conversion of debt to common shares we have no
contractual obligations at September 30, 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.
 
 A summary
of our significant accounting policies is included in our Annual Report on form
10-KSB for the year ended December 31, 2007.
  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 September 30, 2007 balance sheet,
accounts payable and accrued liabilities were reported on one
line.  On the September 30, 2008 balance sheet, we reported the
September 30, 2007 accounts payable and accrued expenses on separate
lines.
 
 Recently
Adopted and Recently Issued Accounting Standards
 
 Refer to
Note 2 of our Notes to Consolidated Financial Statements included in our Form
10-KSB for the fiscal year ended December 31, 2007 for a discussion of recent
accounting standards and pronouncements.  Accounting pronouncements
that have been issued or adopted subsequent to December 31, 2007 are described
below:
  16
 
 On
January 1, 2008, the Company adopted Statement of Financial Accounting
Standards (SFAS) No. 157 (SFAS 157), Fair Value
Measurements.  SFAS 157 relates to financial assets and
financial liabilities. In February 2008, the Financial Accounting Standards
Board (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.
 
 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
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 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.
  17
 
 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.  SFAS 161 will be effective for us
on January 1, 2009. Early adoption of this provision is prohibited. We are
currently evaluating the impact adoption of SFAS 161 may have on our financial
statement disclosures.
 
 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). SFAS 162 is effective 60 days following
the U.S. Securities and Exchange Commission’s (SEC’s) approval of the Public
Company Accounting Oversight Board amendments to AU Section 411, The Meaning of Present Fairly in
Conformity With Generally Accepted Accounting Principles. We are
currently reviewing the effect, if any, the proposed guidance will have on our
financial statement disclosures.
  In May,
2008, FASB issued SFAS No. 163, Accounting for Financial Guarantee
Insurance Contracts—an interpretation of FASB Statement No.
60.  Diversity exists in practice in accounting for financial
guarantee insurance contracts by insurance enterprises under FASB Statement No.
60, Accounting and Reporting
by Insurance Enterprises. That diversity results in inconsistencies in
the recognition and measurement of claim liabilities because of differing views
about when a loss has been incurred under FASB Statement No. 5, Accounting for Contingencies.
This Statement requires that an insurance enterprise recognize a claim liability
prior to an event of default (insured event) when there is evidence that credit
deterioration has occurred in an insured financial obligation. This Statement
also clarifies how Statement 60 applies to financial guarantee insurance
contracts, including the recognition and measurement to be used to account for
premium revenue and claim liabilities. Those clarifications will increase
comparability in financial reporting of financial guarantee insurance contracts
by insurance enterprises. This Statement requires expanded disclosures about
financial guarantee insurance contracts. The accounting and disclosure
requirements of the Statement will improve the quality of information provided
to users of financial statements. SFAS 163 will be effective for financial
statements issued for fiscal years beginning after December 15, 2008, and
interim periods within those fiscal years; disclosure requirements in paragraphs
30(g) and 31 are effective for the first period (including interim periods)
beginning after May 23, 2008. We do not expect the adoption of SFAS 163 to have
a significant 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. We have not yet evaluated the impact that FSP APB 14-1 will have
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.  We are currently evaluating the requirements of
FSP No. EITF 03-6-1 and the impact that its adoption will have on our results of
operations and  financial position.
  18
 
 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.  We are currently evaluating the impact that adoption of
EITF 07-5 will have on our financial statements.
 
 In June
2008, FASB released a proposed SFAS, Disclosure of Certain Loss
Contingencies, an amendment of FASB Statements No. 5 and 141) (the
proposed Statement),
for a comment period that ended during August 2008. The proposed Statement would
(a) expand the population of loss contingencies that are required to be
disclosed, (b) require disclosure of specific quantitative and qualitative
information about those loss contingencies, (c) require a tabular
reconciliation of recognized loss contingencies and (d) provide an
exemption from disclosing certain required information if disclosing that
information would be prejudicial to an entity’s position in a dispute. The
proposed Statement would be effective for financial statements issued for fiscal
years ending after December 15, 2008, and for interim and annual periods in
subsequent fiscal years. When and if the proposed Statement is approved in final
form by FASB, we will evaluate whether the adoption of the proposed Statement
will have any material impact on our financial position or results of
operations.
 
 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.  We are currently evaluating the impact that adoption of
EITF 07-5 will have on our financial statements.
 
 Item
3.  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
4.  Controls and Procedures.
 
 Disclosure Controls and
Procedures
 
 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.  Disclosure controls and procedures include,
without limitation, controls and procedures designed to ensure that information
required to be disclosed in the reports filed under the Exchange Act is
accumulated and communicated to management, including John daCosta, GlobeTrac’s
Chief Executive Officer and Chief Financial Officer, as appropriate, to allow
timely decisions regarding required disclosure.
  19
 
 Mr.
daCosta has evaluated the effectiveness of the design and operation of
GlobeTrac’s disclosure controls and procedures (as such term is defined in Rules
13a-15 and 15d-15 under the Securities Exchange Act of 1934 (the “Exchange Act”) as of the end
of the period covered by this quarterly report (the “Evaluation
Date”).  Based on such evaluation, Mr. daCosta has concluded
that, as of the Evaluation Date, GlobeTrac’s disclosure controls and procedures
are effective to ensure that information required to be disclosed in the reports
GlobeTrac files and submits under the Exchange Act is recorded, processed,
summarized and reported as and when required.
 
 Changes in Internal Control
Over Financial Reporting
 
 During
the quarter of the fiscal year covered by this report, there were no changes in
GlobeTrac’s internal control over financial reporting or, to GlobeTrac’s
knowledge, in other factors that have materially affected, or are reasonably
likely to materially affect, GlobeTrac’s internal control over financial
reporting.
 
 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 property or assets are the subject of any pending
legal proceedings.
 
 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
2.  Unregistered Sales of Equity Securities and Use of
Proceeds.
 
 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 that have
not previously been disclosed in a Form 8-K filed with the SEC.
 
 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.
 
 Item
5.  Other Information.
 
 During
the quarter of the fiscal year covered by this report, GlobeTrac reported all
information that was required to be disclosed in a report on Form
8-K.
  20
 
 Item
6.  Exhibits
 
 (a)
              Index
      to and Description of Exhibits
 
 All
Exhibits required to be filed with the Form 10-Q are included in this quarterly
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.gov under SEC
File Number 000-33309 and SEC File Number 333-66590.
 
 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 (Annual Report) 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 (Annual Report) 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 (Annual Report) 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 (Current Report) filed on December 22,
      2004, and incorporated herein by reference.
              Filed10.6
              Termination
      and Transfer Agreement dated November 1, 2004 among GlobeTrac Inc., Global
      Axxess Corporation Limited, Globetrac Limited, WebTech Wireless Inc., and
      WebTech Wireless International, filed as an exhibit to GlobeTrac’s Form
      8-K (Current Report) 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
  21
 
 SIGNATURES
 
 In
accordance with the requirements of the Securities Exchange Act of 1934,
GlobeTrac Inc. has caused this report to be signed on its behalf by the
undersigned duly authorized person.
  GLOBETRAC
      INC.Dated:
      November 13, 2008
                By:
                /s/ John
      daCostaJohn
      daCosta
                  CEO, President and CFO

                    (Principal
      Executive Officer and
                    Principal
      Financial Officer)