SECURITIES
AND EXCHANGE COMMISSION


WASHINGTON,
D.C.20549




FORM
10-K




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





For the
Fiscal Year Ended December 31, 2010





 ̈ TRANSITION REPORT
PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF
1934





For the
transition period from __________ to __________





Commission file number 333-131224









UNIVERSAL
TRACKING SOLUTIONS, INC.


(Name of
small business issuer in its charter)





Nevada
                
                20-5249860(State
      or Other Jurisdiction of Incorporation or Organization)
                
                (I.R.S.
      Employer Identification No.)3317 S. Higley Road, Suite
      114-475
                  Gilbert, AZ
                
                85297(Address
      of Principal Executive Offices)
                
                (Zip
      Code)Registrant’s
      Telephone Number:
877-279-8877




Securities registered under
Section 12(b) of the Act: None




Securities registered under
Section 12(g) of the Act: Common Stock, par value $0.0001




Indicate by check mark if the
registrant is a well known seasoned issuer, as defined in Rule 405 of the
Securities Act Yes ̈Nox





Indicate
by check mark if the registrant is not required to file reports pursuant to
Section 13 or Section 15(d) of the Act. Yes  ̈ No x





Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
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. Yes  ̈ No x





Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K is not contained herein, and will not be contained, to the best
of registrant’s knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. x





Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
definition of “large accelerated filer,” “accelerated filer,” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act. Check one:





Large
accelerated filer  ̈   Accelerated
filer  ̈   Non-accelerated
filer  ̈   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  ̈ No x





The
number of shares outstanding of each of the Registrant’s classes of common
stock, as of December 31, 2010 was 20,124,373 shares, all of one class, $0.0001
par value per share.





The
Registrant’s common stock is currently listed on the Pink Sheets under the
symbol UTRK. As of December 31, 2010, it was trading at $0.0013. Accordingly,
the aggregate “market value” of the outstanding shares held by non-affiliates,
based upon the price listed on the Pink Sheets on December 31, 2010, is
$14,970.





DOCUMENTS
INCORPORATED BY REFERENCE




The
following documents are herewith incorporated by reference:
NONE





UNIVERSAL
TRACKING, INC.


TABLE OF
CONTENTS





PART
      IITEM
      1
                                                                                                    BUSINESS
                                                                                                    3ITEM
      1A
                                                                                                    RISK
      FACTORS
                                                                                                    6ITEM
      1B
                                                                                                    UNRESOLVED
      STAFF COMMENTS
                                                                                                    12ITEM
      2
                                                                                                    PROPERTIES
                                                                                                    12ITEM
      3
                                                                                                    LEGAL
      PROCEEDINGS
                                                                                                    12ITEM
      4
                                                                                                    SUBMISSION
      OF MATTERS TO A VOTE OF SECURITY HOLDERS
                                                                                                    12PART
      IIITEM
      5
                                                                                                    MARKET
      FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER
      PURCHASES OF EQUITY SECURITIES
                                                                                                    13ITEM
      6
                                                                                                    SELECTED
      FINANCIAL DATA
                                                                                                    13ITEM
      7
                                                                                                    MANAGEMENT’S
      DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
      OPERATIONS
                                                                                                    14ITEM
      7A
                                                                                                    QUANTITATIVE
      AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
                                                                                                    15ITEM
      8
                                                                                                    FINANCIAL
      STATEMENTS AND SUPPLEMENTARY DATA
                                                                                                    15ITEM
      9
                                                                                                    CHANGES
      IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
      DISCLOSURE
                                                                                                    15ITEM
      9A
                                                                                                    CONTROLS
      AND PROCEDURES
                                                                                                    15ITEM
      9B
                                                                                                    OTHER
      INFORMATION
                                                                                                    16PART
      IIIITEM
      10
                                                                                                    DIRECTORS,
      EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
                                                                                                    17ITEM
      11
                                                                                                    EXECUTIVE
      COMPENSATION
                                                                                                    18ITEM
      12
                                                                                                    SECURITY
      OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
      STOCKHOLDER MATTERS
                                                                                                    18ITEM
      13
                                                                                                    CERTAIN
      RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR
      INDEPENDENCE
                                                                                                    20ITEM
      14
                                                                                                    PRINCIPAL
      ACCOUNTANT FEES AND SERVICES
                                                                                                    20PART
      IVITEM
      15
                                                                                                    EXHIBITS
      AND FINANCIAL STATEMENT SCHEDULES
                                                                                                    21





PART
I


Explanatory
Note





This
Annual Report includes forward-looking statements within the meaning of the
Securities Exchange Act of 1934 (the “Exchange Act”). These statements are based
on management's beliefs and assumptions, and on information currently available
to management. Forward-looking statements include the information concerning
possible or assumed future results of operations of the Company set forth under
the heading “Management's Discussion and Analysis of Financial Condition and
Results of Operations.” Forward-looking statements also include statements in
which words such as “expect,” “anticipate,” “intend,” “plan,” “believe,”
“estimate,” “consider” or similar expressions are used.





Forward-looking
statements are not guarantees of future performance. They involve risks,
uncertainties and assumptions. The Company's future results and shareholder
values may differ materially from those expressed in these forward-looking
statements. Readers are cautioned not to put undue reliance on any
forward-looking statements.




ITEM
1. BUSINESS





Merger




On May 2,
2008, the shareholders of UTS entered into a share exchange agreement with
Dynamic Merger Shell, Inc. (later amended to substitute Dynamic Merger Sub,
Inc.), a wholly-owned subsidiary of the Issuer. The share exchange agreement is
included in a 14C filed with the Securities and Exchange Commission on September
18, 2008. The acquisition of UTS as a subsidiary of the Issuer was consummated
on October 8, 2008.




The Share
Exchange Agreement between Dynamic and the Shareholders of Universal Tracking
Solutions, Inc. (the “Plan of Share Exchange”) generally provides for the
following:




1)
              Universal
      Tracking Solutions, Inc. will become a wholly-owned subsidiary of Dynamic
      Natural Resources, Inc. upon the execution of the terms of the Plan of
      Share Exchange and compliance with the requirements of the laws of Nevada
      with respect to share exchange
transactions;




2)
              Dynamic
      Natural Resources, Inc. shall issue and deliver to UTS shareholders Seven
      Million Eighty-Two Thousand Five Hundred (7,082,500) shares of Dynamic’s
      validly issued, fully-paid and non-assessable restricted Common Stock,
      $0.0001 par value per share in exchange for UTS’ shareholders’ transfer of
      their 64% ownership interest in UTS or 7,082,500 book entry shares of UTS
      common stock, $0.0001 par value per share (the "UTS Shares") constituting
      all of the issued and outstanding capital stock of UTS not owned by
      Dynamic Natural Resources, Inc., upon the terms, provisions, and
      conditions and for the consideration hereinafter set forth in the Share
      Exchange Agreement, and thereby making UTS a wholly-owned subsidiary of
      the Issuer;




3)
              Upon
      the effectiveness of the Plan of Share Exchange, each outstanding share of
      Universal Tracking Solutions, Inc. will be converted into a single share
      of Dynamic Natural Resources, Inc. without any action on the part of the
      holder thereof; and




4)
              The
      Plan of Share Exchange shall be effected by the filing of respective
      articles and plans of share exchange with the State of Nevada Secretary of
      State.




5)
              Dynamic
      Common Stock Certificates will be distributed after the Effective Date of
      the Plan of Share Exchange.  The Effective Date will occur at least
      20 days after the filing of an Information Statement with the SEC and at
      least 10 days after mailing of the Information Statement to the Issuer’s
      shareholders.




6)
              UTS shareholders of record as of May
      1, 2008 are eligible to participate in the share
      exchange.




The
determination of the exchange ratio in the share exchange was based on the
relative degree of control UTS’ controlling shareholders agreed to relinquish in
exchange for the potential benefits that ownership of a public issuer may offer,
on the one hand, and, on the other hand, the assurance of continued
opportunities to increase the value of Issuer holdings.




At the
Effective Date of the share exchange, holders of UTS common stock ceased to be
stockholders of UTS and will no longer have any rights as UTS stockholders,
other than the right to receive the applicable consideration in the share
exchange.  After the Effective Date, there will be no transfers on
UTS’ stock transfer books of any shares of UTS common stock.


Page
3




The term
sheet also contained a condition precedent to the Share Exchange Agreement that
the Issuer shall have effected a reverse split of its common stock and have
issued a stock dividend to the September 15, 2006 shareholders of the Issuer.
These actions occurred in April 2008.




Changes to the Board of Directors
and Executive Officers





Effective
April 2010, the Board of Directors accepted the resignation of Mr. Terry Horne.
Keith A. Tench and Daniel Seifer are currently the only officers and
directors.





Accounting
Treatment





The
merger was accounted for as a reverse acquisition and recapitalization. UTS is
the acquirer for accounting purposes and Dynamic is the issuer. Accordingly,
UTS’ historical financial statements for periods prior to the acquisition become
those of the acquirer retroactively restated for the equivalent number of shares
issued in the merger. Operations prior to the transaction are those of UTS.
Earnings per share for the period prior to the transaction are restated to
reflect the equivalent number of shares outstanding.




The
Company




Universal
Tracking Solutions, Inc. was incorporated on July 19, 2006 in the state of
Nevada (hereinafter “UTS”, “we”, “us”, or the “Company”). UTS is a provider of
Global Positioning Satellite (“GPS”) asset tracking systems. Our systems are
typically applied to monitor fleets of motor vehicles.





UTS
produces and services a world wide web-based asset tracking technology primarily
designed to track the location, speed, and heading of a customer’s motor vehicle
in real time. Customers purchase and install our monitoring device in their
motor vehicle.  Using integrated GPS and wireless communications
technologies, the device broadcasts data to UTS. Customers then use our
proprietary web site to remotely monitor and control their motor vehicle
containing the UTS device, whether the vehicle is in authorized or unauthorized
use.





UTS’
software platform can be customized to the customer’s needs. Our applications
and code are written on an open interface so we can integrate with legacy
systems worldwide. Key features of our GPS tracking systems
include:





· Real-time
location tracking


· Historical
location tracking


· Alarm
monitoring


· Device
configuration


· System
configuration




The
market for GPS tracking technologies is growing. While we currently target our
products to the automotive segment of the GPS market, our products and services
can be used to track any physical object in which our monitoring box can be
installed. Our tracking units can be used as an effective asset management
solution to a variety of organizations seeking to track
assets.




UTS
targets mid-level enterprise customers who have fleets of trucks, trailers,
delivery vans, heavy equipment, generators, and mobile mini storage units. Our
target industries include: construction, electrical, transportation, plumbing,
delivery and government. In Mexico our target industries include all of the
above plus vehicle theft and personal safety applications.




Products
and Services




The
physical product is a small black box, approximately 2.6”W x 3.5”L x 1.05”H. It
operates by two modems inside the unit. The GPS modem captures the location,
speed, heading while the memory in the box, captures runtime, start/stop and
other types of data requested by the customer. The cellular modem then transmits
all that data back to our server via GPRS or CDMA which is then accessible to
the customer to view.




We
currently offer two main products. First is a fleet tracking device that can
perform all of the services that we offer. The second is a finance or dealership
product that performs a limited number of functions. Generally, starter disable
and GPS location when a vehicle needs to be recovered.


Page
4


UTS
provides customers with an installation guide and wiring harness. Once the unit
is installed, customers use the product by going to our website,
www.totallocate.com, and entering in a login and password that they select and
their vehicles will all be accessible for tracking. In addition to tracking and
monitoring a vehicle, customers can also control certain functions. For example,
our services can include:




·
            GPS Location determined through
      the Internet


·
            Lock and unlock
      doors


·
            Enable and disable
      starter


·
            Low battery and oil level
      notification


·
            Speed and direction
      detection


·
            Real time stolen vehicle
      location


·
            Alarm
      functions


·
            Outside of boundary notification
      (Geofence)


·
            Start/Stop
      reports


·
            Idle
  Alerts


·
            Engine Hour run
      time





The
software support tools that we offer start with a Diagnostics application that
the customer can run for any unit in their fleet. The support application will
tell them if the unit is not receiving a strong GPRS or GPS signal, the power
voltage is too low to properly power the unit and if their a malfunction of some
type with the unit.





UTS also
offers 24/7 online email and interactive software support tool that can be
accessed by all of our customers, as well as a support staff on hand that can go
to a customer’s site and troubleshoot problems if necessary.





Typical
Revenue Producing Transaction





UTS sells
GPS tracking units and provides on going services and support related to the
units. Revues are generated from both the sale of the unit, as well as the on
going maintenance and support the products. Approximately 70% of our sales are
recurring in nature. Once a unit is sold, the customer pays a monthly monitoring
fee to stay connected to their units, similar to a security monitoring or
cellular phone fee. Our monthly plans range from $12 - $49.99 depending on the
size of the fleet and the extent of the tracking servicesprovided.




We
recognize revenue at the time that all services have been substantially
completed.




Strategic
Relationships




UTS has
several distribution partners who are strategically focused on large scale
applications. We are also working with master distributors to expand out point
of presence in the marketplace. A copy of our distribution agreement is included
in the exhibits. Partnering with companies who have experience selling into
verticals such as finance, construction, fleet and automotive has been our focus
as we move further toward creating a niche in the marketplace. UTS also has
strategic relationships with a variety of vendors who supply various products
and software support. This includes the manufacturing of our tracking units,
mapping software, cellular coverage, etc.




Our
distribution partners are assigned exclusive territories and are required to
maintain a minimum number of unit sales, per quarter, in order to maintain
exclusivity in their assigned territories. These relationships can be terminated
upon the proper written notice, or due to failure to meet specific quarterly
sales.




UTS
currently has approximately 26 distributors nationwide to sell our product
direct to customers. UTS also has an internal sales force, consisting of five
employees, that sells directly to larger customers.




The
Market




The
market for GPS tracking technologies is large. While we currently target our
products to the automotive segment of the GPS market, our products and services
can be used to track any assets. Our tracking units can be used as an effective
asset management solutions to a variety of organizations seeking to track
assets.





Our
customer base is spread throughout the United States. Our current focus is in
the West and Southwest United States. We currently have over 650 units in
service.


Page
5


Competition





Several
competitors or potential competitors are marketing or have announced the
development of products, including those that are based on GPS technology. We
also believe that makers of auto theft prevention devices and GPS devices can be
viewed as competition. Several of the competitors and potential entrants into
the vehicle tracking market have greater resources than we do. In addition,
there can be no assurance that a competitor will not develop a system which
would compete with or be superior to our systems.




We
believe that we face competition from companies selling similar tracking
products such as LoJack® and OnStar®, vehicle alarms and third party warranty
and insurance products; not because the products are comparable to the products
we offer, but because they are competing for available consumer funds in the
automobile security and tracking products after-market.





Unlike
other competitors in the market, UTS is web based and allows users to pinpoint
location, speed, direction, as well as manage complex fleet solutions from any
web based environment. Additionally, we offer a customized package of hardware
and software services rather than are packaged solution.





Employees





UTS
currently has 5 full-time employees. UTS also utilizes both internal and
independent sales forces, as well as a varying number of independent dealers.
UTS has 15 dealers in the United States and 4 in Mexico who purchase devices and
service from the Company at  wholesale rates and resell the product
under their own companies name and affiliation. The dealers can also sell under
the UTS company affiliation and utilize existing marketing
materials.  The internal sales force sells to and supports these
dealers. The internal sales force also sells directly to businesses
nationwide.




Our
Offices




Our
executive offices are located at 3317 S. Higley Rd., Suite 114-475, Gilbert, AZ
85297. Out telephone number is 877-279-8877. Our executive offices are leased on
a quarter-by-quarter basis. Payments are made in advance and there are no
on-going lease obligations. The current lease rate is $1,200 per
month.




ITEM
1A – RISK FACTORS




Risks
Related to the Business





Wemakeestimatesofourfutureinforward-lookingstatements





The
statements contained in this prospectus that are not historical fact are
"forward-looking statements," which can be identified by the use of
forward-looking terminology such as "believes," "expects," "may," "should," or
"anticipates," the negatives thereof or other variations thereon or comparable
terminology, and include statements as to the intent, belief or current our
expectations with respect to the future operations, performance or position.
These forward-looking statements are predictions. We cannot assure you that the
future results indicated, whether expressed or implied, will be achieved. While
sometimes presented with numerical specificity, these forward-looking statements
are based upon a variety of assumptions relating to our business, which,
although currently considered reasonable by us, may not be realized. Because of
the number and range of the assumptions underlying our forward-looking
statements, many of which are subject to significant uncertainties and
contingencies beyond our reasonable control, some of the assumptions inevitably
will not materialize and unanticipated events and circumstances may occur
subsequent to the date of this prospectus. These forward-looking statements are
based on current information and expectation, and we assume no obligation to
update them at any stage. Therefore, our actual experience and results achieved
during the period covered by any particular forward-looking statement may differ
substantially from those anticipated. Consequently, the inclusion of
forward-looking statements should not be regarded as a representation by us or
any other person that these estimates will be realized, and actual results may
vary materially. We can not assure that any of these expectations will be
realized or that any of the forward-looking statements contained herein will
prove to be accurate.


Page
6


Our growth depends in part
on the development, production and market acceptance of new products which we
cannot assure will happen successfully.





To
maintain competitiveness in our industry we must support and enhance our
existing products and develop new products in response to market demands.
Product development involves a high degree of risk and uncertainty due to
unforeseen difficulties and costs. We may not be successful in developing,
marketing and releasing new products that we believe are necessary to respond to
technological developments, evolving industry standards or changing customer
requirements. In addition, our new product enhancements may not adequately meet
the requirements of the marketplace and may not achieve the broad market
acceptance necessary to generate significant revenues. If the release date of
any future products or enhancements is delayed, or if these products or
enhancements fail to achieve market acceptance when released, our revenues may
decrease, we may not be able to recover our costs and our competitive position
may be harmed.





Repeat sales to existing
customers will occur so long as our customers acquire new vehicles and purchase
our tracking system for the newly acquired vehicle.





One
tracking device is installed per vehicle.  Repeat sales to existing
customers will reasonably occur when the customer acquires an additional vehicle
and chooses to install our tracking device in the newly acquired vehicle. We may
Therefore, we experience customer fleet saturation





Economic downturns could
reduce the level of consumer spending within the automobile industry, which
could adversely affect demand for our products and services.





Consumer
spending in the automobile industry is often discretionary and may decline
during economic downturns, when consumers have less disposable income. Our
primary focus for domestic growth involves increasing our sales through existing
automobile dealer channels and markets. Consequently, any change in general
economic conditions resulting in a significant decrease in dealer automobile
sales could adversely impact our future revenues and earnings.




If a court determines that
our technology infringes on third parties’ intellectual property, we will likely
face significant costs and we may lose our rights to the technology, which would
harm our business.





We may be
subject to infringement claims as the number of products and competitors in our
industry grows. It is possible that we will inadvertently violate the
intellectual property rights of other parties and those third parties may choose
to assert infringement claims against us. If we are unsuccessful in any
litigation based on a claim of infringement, in addition to exposure to
substantial damages, we could be required to expend considerable resources to
modify our products, to develop non-infringing technology or to obtain licenses
to permit our continued use of the technology that is the subject matter of the
litigation. If we are unsuccessful at these endeavors we may be enjoined from
using the technology subject to the infringement claim which, depending on its
importance to our product line and business, could cause us to incur substantial
liabilities and could adversely affect our profits, perhaps significantly. In
addition, any future litigation to defend ourselves against allegations that we
have infringed the rights of others could result in substantial costs to us,
impede the development and sale of the affected product or intellectual property
and divert the efforts of our technical and management personnel, even if we
ultimately prevail.




We depend on a limited
number of third parties to manufacture and supply infrastructure components for
our principal products. If our suppliers cannot provide the components or
services we require, our ability to market and sell our products could be
harmed.





Currently
we rely on suppliers to manufacture our products. If our suppliers fails to
supply these components in a timely manner that meet our quantity, quality or
cost requirements, or technical specifications, we cannot be assured that we
will be able to access alternative sources of these components within a
reasonable period of time or at commercially reasonable rates. A reduction or
interruption in supply of products that we purchase from our suppliers, or a
significant increase in the price of these units, could have a material adverse
effect on our marketing and sales initiatives regarding our products, which
would hurt our business objectives and financial results.


Page
7


As a public company, our
administrative costs will be significantly higher than they are now, which will
make it more difficult for us to be profitable and cash flow positive.
Difficulties in complying with the Sarbanes-Oxley Act and other legal and
accounting requirements applicable to public companies could affect our market
value.




As a
public company, we will incur significant legal, accounting and other expenses
that we did not incur as a private company. In addition, the Sarbanes-Oxley Act
of 2002, as well as new rules subsequently implemented by the SEC, have imposed
various new requirements on public companies, including requiring changes in
corporate governance practices. Our management and other personnel will need to
devote a substantial amount of time to these compliance requirements. Moreover,
these rules and regulations will increase our legal and financial compliance
costs and will make some activities more time-consuming and costly. Expenses as
a result of our being a public company include additional amounts for legal and
accounting services, transfer agent fees, additional insurance costs, printing
and filing fees and fees for investor and public relations.




The timing and amount of
capital requirements are not entirely within our control and cannot accurately
be predicted and as a result, we may not be able to raise capital in time to
satisfy our needs.





If we do
not increase our revenue significantly we may need to procure additional
financing. If capital is required, we may require financing sooner than
anticipated. We have no commitments for financing, and we cannot be sure that
any financing would be available in a timely manner, on terms acceptable to us,
or at all. Further, any equity financing could reduce ownership of existing
shareholders and any borrowed money could involve restrictions on future capital
raising activities and other financial and operational matters. If we were
unable to obtain financing as needed, we could be bankrupt.





We compete with numerous
larger competitors, many of which are better financed and have a stronger
presence in the industry than ourselves.





As many
of these firms have significantly stronger name recognition than ourselves, they
are in a position to quickly attract clients which are in need of products and
services thus adversely impacting our potential pool of clients. Our sales and
marketing structure is not proprietary and it would not be difficult for a
company to offer similar services. Further, entry into the marketplace by new
competitors is relatively easy especially considering their existing presences
and their greater resources for financing, advertising and
marketing.




We have a limited operating
history and have losses which we expect to continue in the future. As a result,
we may have to suspend or cease operations.





We were
incorporated on July 19, 2006. Thus, we have little operating history upon which
an evaluation of our future success or failure can be made. We have generated
minimal revenue since our inception. Our ability to achieve and maintain
profitability and positive cash flow is dependent upon our ability to procure
new business and generate revenues.




Based
upon current plans, we expect to incur operating losses in future periods. This
will happen because our minimum operating expenses continue to exceed our
projected revenues. Our failure to generate sufficient revenues in the future
may cause us to suspend or cease operations.




We are dependent on the
services of key employees; do not have written employment agreements with them
or have their lives insured, and their departure could have a material adverse
effect upon us.




We have
key employees that are an integral part of our business, and we do not have
written employment agreements with them. There can be no assurance that these
employees will remain with us. In the event that we were to lose any of these
employees, there can be no assurances that we would be able to retain qualified
staff. Further, we do not maintain any key man life insurance policies on our
officers and/or directors. Therefore, the loss of the service of either of our
employees could have a material adverse effect upon us.




We may not be able to
generate adequate revenue to meet our obligations and fund our operating
expenses.





Even if
we raise sufficient capital and generate revenues to support our operating
expenses, there can be no assurances that the revenue will be sufficient to
enable us to develop business to a level where it will generate profits and cash
flows from operations.


Page
8


UTS has substantially no
financial resources which makes it difficult for us to raise capital or other
financing. Absent financial resources, we will be unable to undertake programs
designed to execute our business plan or expand our
business.





UTS has
extremely limited financial resources and has not established a source of equity
or debt financing. If we are unable to generate additional revenue or obtain
financing or if the financing we do obtain is insufficient, we will be unable to
commence revenue producing operations or expand operations.





Keith Tench, our chief
executive officer, has no meaningful accounting or financial reporting education
or experience and, accordingly, our ability to meet Exchange Act reporting
requirements on a timely basis is dependent to a significant degree upon
others.





Keith
Tench has no meaningful financial reporting education or experience. They are
heavily dependent on advisors and consultants. As such, there is risk about our
ability to comply with all financial reporting requirements accurately and on a
timely basis.





Having only two directors
limits our ability to establish effective independent corporate governance
procedures and increases the control of our president.





We have
only two directors. Accordingly, we cannot establish board committees comprised
of independent members to oversee functions like compensation or audit issues.
In addition, a tie vote of board members is decided in favor of the chairman,
which gives him significant control over all corporate issues.




Until we
have a larger board of directors that would include some independent members, if
ever, there will be limited oversight of our president’s decisions and
activities and little ability for minority shareholders to challenge or reverse
those activities and decisions, even if they are not in the best interests of
minority shareholders.





Risks
Related to Our Common Stock





Shareholders may be diluted
significantly through our efforts to obtain financing and satisfy obligations
through issuance of additional shares of our common stock.





We have
no committed source of financing. Wherever possible, our board of directors will
attempt to use non-cash consideration to satisfy obligations. In many instances,
we believe that the non-cash consideration will consist of restricted shares of
our common stock. Our board of directors has authority, without action or vote
of the shareholders, to issue all or part of the authorized (100,000,000) but
unissued (79,875,627) common shares. In addition, if a trading market develops
for our common stock, we may attempt to raise capital by selling shares of our
common stock, possibly at a discount to market. These actions will result in
dilution of the ownership interests of existing shareholders, may further dilute
common stock book value, and that dilution may be material.





The interests of
shareholders may be hurt because we can issue shares of our common stock to
individuals or entities that support existing management with such issuances
serving to enhance existing management’s ability to maintain control of our
Company.





Our board
of directors has authority, without action or vote of the shareholders, to issue
all or part of the authorized (100,000,000) but unissued (79,875,927) common
shares. Such issuances may be issued to parties or entities committed to
supporting existing management and the interests of existing management may not
be the same as the interests of other shareholders. Our ability to issue shares
without shareholder approval serves to enhance existing management’s ability to
maintain control of our Company.





Our board of directors has
the authority, without stockholder approval, to issue preferred stock with terms
that may not be beneficial to common stockholders and with the ability to affect
adversely stockholder voting power and perpetuate their control over
us.





Our
articles of incorporation as amended to date allow us to issue shares of
preferred stock without any vote or further action by our stockholders. Our
board of directors has the authority to fix and determine the relative rights
and preferences of preferred stock. Our board of directors also has the
authority to issue preferred stock without further stockholder approval,
including large blocks of preferred stock. As a result, our board of directors
could authorize the issuance of a series of preferred stock that would grant to
holders the preferred right to our assets upon liquidation, the right to receive
dividend payments before dividends are distributed to the holders of common
stock and the right to the redemption of the shares, together with a premium,
prior to the redemption of our common stock.


Page
9


Our Articles of
Incorporation provide for indemnification of officers and directors at our
expense and limit their liability. These provisions may result in a major cost
to us and hurt the interests of our shareholders because corporate resources may
be expended for the benefit of officers and/or directors.





Our
Articles of Incorporation and applicable Nevada law provide for the
indemnification of our directors, officers, employees, and agents, under certain
circumstances, against attorney's fees and other expenses incurred by them in
any litigation to which they become a party arising from their association with
or activities on our behalf. We will also bear the expenses of such litigation
for any of our directors, officers, employees, or agents, upon such person's
written promise to repay us therefore, if it is ultimately determined that any
such person shall not have been entitled to indemnification. This
indemnification policy could result in substantial expenditures by us that we
may be unable to recoup.





We have
been advised that, in the opinion of the SEC, indemnification for liabilities
arising under federal securities laws is against public policy as expressed in
the Securities Act of 1933 and is, therefore, unenforceable. In the event that a
claim for indemnification for liabilities arising under federal securities laws,
other than the payment by us of expenses incurred or paid by a director, officer
or controlling person in the successful defense of any action, suit or
proceeding, is asserted by a director, officer or controlling person in
connection with the securities being registered, we will (unless in the opinion
of our counsel, the matter has been settled by controlling precedent) submit to
a court of appropriate jurisdiction, the question whether indemnification by us
is against public policy as expressed in the Securities Act and will be governed
by the final adjudication of such issue. The legal process relating to this
matter if it were to occur is likely to be very costly and may result in us
receiving negative publicity, eitherof which factors is
likely to materially reduce the market and price for our shares, if such a
market ever develops.




Our stock is subject to the
penny stock regulations and restrictions pertaining to low priced stocks that
create a lack of liquidity and make trading difficult or
impossible.





The
trading of our securities is currently on the pink sheets. As a result, an
investor may find it difficult to dispose of, or to obtain accurate quotations
as to the price of our securities.





Rule
3a51-1 of the Securities Exchange Act of 1934 establishes the definition of a
"penny stock," for purposes relevant to us, as any equity security that has a
minimum bid price of less than $4.00 per share or with an exercise price of less
than $4.00 per share, subject to a limited number of exceptions which are not
available to us. It is likely that our shares will be considered to be penny
stocks for the immediately foreseeable future. This classification severely and
adversely affects any market liquidity for our common stock.





For any
transaction involving a penny stock, unless exempt, the penny stock rules
require that a broker or dealer approve a person's account for transactions in
penny stocks and the broker or dealer receive from the investor a written
agreement to the transaction setting forth the identity and quantity of the
penny stock to be purchased. In order to approve a person's account for
transactions in penny stocks, the broker or dealer must obtain financial
information and investment experience and objectives of the person and make a
reasonable determination that the transactions in penny stocks are suitable for
that person and that that person has sufficient knowledge and experience in
financial matters to be capable of evaluating the risks of transactions in penny
stocks.




The
broker or dealer must also deliver, prior to any transaction in a penny stock, a
disclosure schedule prepared by the SEC relating to the penny stock market,
which, in highlight form, sets forth:





·
            the
      basis on which the broker or dealer made the suitability determination,
      and


·
            that
      the broker or dealer received a signed, written agreement from the
      investor prior to the transaction.





Disclosure
also has to be made about the risks of investing in penny stock in both public
offerings and in secondary trading and commissions payable to both the
broker-dealer and the registered representative, current quotations for the
securities and the rights and remedies available to an investor in cases of
fraud in penny stock transactions. Finally, monthly statements have to be sent
disclosing recent price information for the penny stock held in the account and
information on the limited market in penny stocks.




Because
of these regulations, broker-dealers may not wish to engage in the
above-referenced necessary paperwork and disclosures and/or may encounter
difficulties in their attempt to sell shares of our common stock, which may
affect the ability of our shareholders to sell their shares in any secondary
market and have the effect of reducing the level of trading activity in any
secondary market. These additional sales practice and disclosure requirements
could impede the sale of our securities, if and when our securities become
actively publicly traded. In addition, the liquidity for our securities may
decrease, with a corresponding decrease in the price of our securities. Our
shares, in all probability, if they trade at all, will be subject to such penny
stock rules for the foreseeable future, and our shareholders will, in all
likelihood, find it difficult to sell their securities.


Page
10


The market for penny stocks
has experienced numerous frauds and abuses that could adversely impact investors
in our stock.




Company
management believes that the market for penny stocks has suffered from patterns
of fraud and abuse. Such patterns include:





·
            Control
      of the market for the security by one or a few broker-dealers that are
      often related to the promoter or
issuer;


·
            Manipulation
      of prices through prearranged matching of purchases and sales and false
      and misleading press releases;


·
            "Boiler
      room" practices involving high pressure sales tactics and unrealistic
      price projections by sales persons;


·
            Excessive
      and undisclosed bid-ask differentials and markups by selling
      broker-dealers; and


·
            Wholesale
      dumping of the same securities by promoters and broker-dealers after
      prices have been manipulated to a desired level, along with the inevitable
      collapse of those prices with consequent investor
  losses.





We do not expect to pay cash
dividends in the foreseeable future





We have
never paid cash dividends on our common stock. We do not expect to pay cash
dividends on our common stock at any time in the foreseeable future. The future
payment of dividends directly depends upon our future earnings, capital
requirements, financial requirements and other factors that our board of
directors will consider. Since we do not anticipate paying cash dividends on our
common stock, return on your investment, if any, will depend solely on an
increase, if any, in the market value of our common stock.





Because we are not subject
to compliance with rules requiring the adoption of certain corporate governance
measures, our stockholders have limited protections against interested director
transactions, conflicts of interest and similar matters.





The
Sarbanes-Oxley Act of 2002, as well as rule changes proposed and enacted by the
SEC, the New York and American Stock Exchanges and the NASDAQ Stock Market, as a
result of Sarbanes-Oxley, require the implementation of various measures
relating to corporate governance. These measures are designed to enhance the
integrity of corporate management and the securities markets and apply to
securities that are listed on those exchanges or the NASDAQ Stock Market.
Because we are not presently required to comply with many of the corporate
governance provisions and because we chose to avoid incurring the substantial
additional costs associated with such compliance any sooner than legally
required, we have not yet adopted these measures.





Because
our directors are not independent directors, we do not currently have
independent audit or compensation committees. As a result, our directors have
the ability, among other things, to determine their own level of compensation.
Until we comply with such corporate governance measures, regardless of whether
such compliance is required, the absence of such standards of corporate
governance may leave our stockholders without protections against interested
director transactions, conflicts of interest, if any, and similar matters and
any potential investors may be reluctant to provide us with funds necessary to
expand our operations.





We intend
to comply with all corporate governance measures relating to director
independence as and when required. However, we may find it very difficult or be
unable to attract and retain qualified officers, directors and members of board
committees required to provide for our effective management as a result of
Sarbanes-Oxley Act of 2002. The enactment of the Sarbanes-Oxley Act of 2002 has
resulted in a series of rules and regulations by the SEC that increase
responsibilities and liabilities of directors and executive officers. The
perceived increased personal risk associated with these recent changes may make
it more costly or deter qualified individuals from accepting these
roles.




Our internal controls may be
inadequate, which could cause our financial reporting to be unreliable and lead
to misinformation being disseminated to the public.




Our
management is responsible for establishing and maintaining adequate internal
control over financial reporting. As defined in Exchange Act Rule 13a-15(f),
internal control over financial reporting is a process designed by, or under the
supervision of, the principal executive and principal financial officer and
effected by the board of directors, management and other personnel, to provide
reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with
generally accepted accounting principles and includes those policies and
procedures that:





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


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


·
            provide
      reasonable assurance regarding prevention or timely detection of
      unauthorized acquisition, use or disposition of the Company’s assets that
      could have a material effect on the financial
      statements.




Because
of our limited resources and personnel, our internal controls may be inadequate
or ineffective, which could cause our financial reporting to be unreliable and
lead to misinformation being disseminated to the public. Investors relying upon
this misinformation may make an uninformed investment decision.


Page
11




Legislation, including the
Sarbanes-Oxley Act of 2002, may make it more difficult for us to retain or
attract officers and directors.





The
Sarbanes-Oxley Act of 2002 was enacted in response to public concerns regarding
corporate accountability in connection with recent accounting scandals. The
stated goals of the Sarbanes-Oxley Act are to increase corporate responsibility,
to provide for enhanced penalties for accounting and auditing improprieties at
publicly traded companies, and to protect investors by improving the accuracy
and reliability of corporate disclosures pursuant to the securities laws. The
Sarbanes-Oxley Act generally applies to all companies that file or are required
to file periodic reports with the SEC, under the Securities Exchange Act of
1934. We are required to comply with the Sarbanes-Oxley Act. The enactment of
the Sarbanes-Oxley Act of 2002 has resulted in a series of rules and regulations
by the SEC that increase responsibilities and liabilities of directors and
executive officers. The perceived increased personal risk associated with these
recent changes may deter qualified individuals from accepting these roles. As a
result, it may be more difficult for us to attract and retain qualified persons
to serve on our board of directors or as executive officers. We continue to
evaluate and monitor developments with respect to these rules, and we cannot
predict or estimate the amount of additional costs we may incur or the timing of
such costs.





ITEM 1B - UNRESOLVED STAFF
COMMENTS





None





ITEM 2 -
PROPERTIES





Our
executive offices are located at 3317 S. Higley Rd., Suite 114-475, Gilbert, AZ
85297. Out telephone number is 877-279-8877. Our executive offices are leased on
a quarter-by-quarter basis. Payments are made in advance and there are no
on-going lease obligations. The current lease rate is $1,200 per
month.





ITEM
3 - LEGAL PROCEEDINGS





We are
not currently involved in any litigation.





ITEM
4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS





There
were no submissions of matters to a vote of security
holders.


Page
12


Part
II





ITEM
5 - MARKET FOR COMMON EQUITY, RELATED STOCKHOLDER
MATTERS AND PURCHASES OF EQUITY SECURITIES





The
trading symbol for our common stock is UTRK. However, there is currently no
trading market for the shares of our common stock.  We are in the
process of completing the filings required to become trading on the Pink Sheets.
However, there is no guarantee that we will complete or meet the necessary
requirements to begin trading.





As of the
close of business on December 31, 2010, there were 217 stockholders of record of
our common stock, and 20,124,373 shares were issued and
outstanding.




Dividend
Policy





We have
never paid any cash dividends on shares of our common stock and do not
anticipate that we will pay dividends in the foreseeable future. We intend to
apply any earnings to fund the development of our business. The purchase of
shares of common stock is inappropriate for investors seeking current or near
term income.




Recent
Sales of Unregistered Securities




We had no
sales of unregistered securities.




Purchases
of Equity Securities




We made no purchases of our common
stock.




Equity
Compensation Plan Information




We
currently have no Stock Incentive Plan.




ITEM
6 - SELECTED FINANCIAL DATA




Balance Sheet Data
                          December 31, 2010Total
      Current Assets
                        
                        
                        88,847Property
      and Equipment, net
                        
                        
                        1,738Total other assets
                        
                        
                        35,069Total
      Assets
                        
                        
                        125,654Total
      Current Liabilities
                        
                        
                        158,984Total
      Long Term Liabilities
                        
                        
                        52,984Stockholders’ Equity
                        
                        
                        (86,314
                        )Total
      Liabilities and Stockholders' Equity (Deficit)
                        
                        $
                        125,654




Page
13





Income Statement Data
                          Year Ended December 31, 2010Revenue
                        
                        $
                        553,603Cost of Revenue
                        
                        
                        341,442Gross
      Profit
                        
                        
                        212,161Total
      Operating Expenses
                        
                        
                        203,286Total Other (Expense)
                        
                        
                        (652
                        )Net
      (Loss)
                        
                        $
                        8,223





ITEM
7 - MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS





Safe
Harbor Statement under the Private Securities Litigation Reform Act of
1995





Certain
matters discussed in this annual report on Form 10-K are forward-looking
statements. Such forward-looking statements contained in this annual report
involve risks and uncertainties, including statements as to:





·
            our
      future operating results,


·
            our
      business prospects,


·
            our
      contractual arrangements and relationships with third
    parties,


·
            the
      dependence of our future success on the general economy and its impact on
      the industries in which we may be
involved,


·
            the
      adequacy of our cash resources and working capital,
  and


·
            other factors
      identified in our filings with the SEC, press releases and other public
      communications.




These forward-looking
statements can generally be identified as such because the context of the
statement will include words such as we “believe," “anticipate,” “expect,”
“estimate” or words of similar meaning. Similarly, statements that describe our
future plans, objectives or goals are also forward-looking statements. Such
forward-looking statements are subject to certain risks and uncertainties which
are described in close proximity to such statements and which could cause actual
results to differ materially from those anticipated as of the date of this Form
10-K. Shareholders, potential investors and other readers are urged to consider
these factors in evaluating the forward-looking statements and are cautioned not
to place undue reliance on such forward-looking statements. The forward-looking
statements included herein are only made as of the date of this report and we
undertake no obligation to publicly update such forward-looking statements to
reflect subsequent events or circumstances.





The
following discussion and analysis provides information which the Company’s
management believes to be relevant to an assessment and understanding of the
Company's results of operations and financial condition. This discussion should
be read together with the Company's financial statements and the notes to
financial statements, which are included in this report.





Results of
Operations




Results
of Operations 2010 to 2009





We
recognize revenues at the time that all services have been substantially
completed or products have been delivered.





Revenue
for the year ended December 31, 2010 was $553,603, a decrease of $254,971 over
2009. The decrease in Sales is attributable to our limited marketing efforts in
2010 due to decreased working capital.





Our cost
of sales was $341,442 in 2010, compared to $560,005 in 2009. This decrease is
partially attributable to the decrease in revenue. As a percent of Sales, our
costs decrease from approximately 69% to 62%.





Our
operating expenses were $203,286 in 2010, a decrease of $66,915. This decrease
is attributable to the decrease in sales. As a percent of sales, our operating
expenses increased slightly from 33% in 2009 to 37% in 2010. This is
attributable to the fixed nature of our operating expenses.




Other
income (expense) was $(652) in 2010 and $(6,234) in 2009.


Page
14




As a
result of the above, the net income for the year ended December 31, 2010 was
$8,223, compared to a net loss of $27,866 in 2009.




Please
refer to our financial statements, beginning on Page F-1, for additional details
pertaining to our operations.




Seasonality





We have not noted a
significant seasonal impact in our business.





Liquidity
and Capital Resources





We ended
2010 with working capital (deficit) of approximately $(70,137). Our working
capital (deficit) at the end of 2009 was approximately $(86,522). This decrease
in working capital is attributable to our decrease in revenues, which resulted
in a decrease in our accounts payable.





Off-Balance
Sheet Arrangements





We do not
have any off-balance sheet arrangements.




Other





Except
for historical information contained herein, the matters set forth above are
forward-looking statements that involve certain risks and uncertainties that
could cause actual results to differ from those in the forward-looking
statements. Potential risks and uncertainties include such factors as the level
of business and consumer spending, the amount of sales of our products, the
competitive environment within our industry, the ability to continue to expand
our operations, the level of costs incurred in connection with our expansion
efforts, economic conditions and the financial strength of our customers and
suppliers.





ITEM
7A - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK




Pursuant
to Item 305(e) of Regulation S-K (§ 229.305(e)), the Company is not required to
provide the information required by this Item as it is a “smaller reporting
company,” as defined by Rule 229.10(f)(1).





ITEM
8 - FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA





UTS’
consolidated financial statements for the years ended December 31, 2010 start on
page 22.




ITEM 9 – CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ON ACCOUNTING AND FINANCIAL DISCLOSURE CHANGES





None





ITEM
9A-CONTROLS
AND PROCEDURES





Management’s
Annual Report on Internal Control over Financial Reporting





The
Company’s management is responsible for establishing and maintaining adequate
internal control over financial reporting for the Company. Our disclosure
controls and procedures are designed to ensure that information required to be
disclosed in reports that we file or submit under the Securities Exchange Act of
1934 is recorded, processed, summarized and reported within the time periods
specified in the rules and forms of the SEC.





Evaluation
of Disclosure Controls and Procedures





Our
principal executive officer and principal financial officer (one person) has
reviewed the effectiveness of our "disclosure controls and procedures" (as
defined in the Securities Exchange Act of 1934 Rules 13a-14(c) and 15d-14(c)) as
of the end of the period covered by this report and has concluded that the
disclosure controls and procedures are effective to ensure that material
information relating to the Company is recorded, processed, summarized, and
reported in a timely manner. There were no significant changes in our internal
controls or in other factors that could significantly affect these controls
subsequent to the last day they were evaluated by our principal executive
officer and principal financial officer.


Page
15


Changes
in Internal Control over Financial Reporting





There
have been no changes in the Company's internal control over financial reporting
during the last quarterly period covered by this report that have materially
affected, or are reasonably likely to materially affect, the Company's internal
control over financial reporting.




ITEM
9B – OTHER INFORMATION




No event
occurred during the fiscal year ended December 31, 2010 that would have required
disclosure in a report on Form 8-K, except for those Forms 8K filed with the SEC
during that period.


Page
16


PART
III




ITEM
10 – DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE





As of
December 31, 2010, UTS had a total of two officers and directors, Keith Tench
and Daniel Seifer. The following table identifies each executive officer and
director of the Company during 2010 and 2009.





Name
              
              Age
              
              PositionKeith
      A. Tench
              
              40
              
              Chairman,
      CEO and CFOTerrell
      J. Horne (1)
              
              30
              
              CFODaniel
      Seifer
              
              35
              
              Director




(1) Mr.
Horne resigned as CFO in April 2010. Mr. Tench has assumed responsibilities as
CFO.




Background
of Executive Officers, Directors and Significant Employees





Keith A. Tench -Mr. Tench has
been Chairman and CEO of UTS since inception. Mr. Tench is responsible for the
growth and development of Universal Tracking Solutions. Prior to UTS, Mr. Tench
spent the past five years working as President of a publicly traded GPS company
and as a Global Account Executive at AT&T Wireless, where he was responsible
for the advancement of Hewlett-Packard, Compaq Computers and Agilent
Technologies. Mr. Tench coordinated a national team of over 80 representatives
that provided sales implementations with remote national locations. His
experience, and knowledge, of the industry is a valuable attribute. Mr. Tench
was also Mr. Tench graduated from Sonoma State University with a BA in
Communication and Information Studies.





Terrell J. Horne -Mr. Horne
was the CFO of UTS since inception. He wasresponsible for the
profitability and financial accuracy of Universal Tracking Solutions. He assists
in the audits as well as driving costs out of the business by continuing to
focus on every expense. Mr. Horne resigned in April 2010.





Daniel Seifer - Mr. Seifer
joined UTS as a Director at its inception. Mr. Seifer has spent the last 12
years working in the public markets as an independent consultant. His
experience includes investor relations, consulting, raising capital, mergers and
acquisitions, and public relations. Mr. Seifer graduated from Michigan State
with a degree in Engineering and a Business Minor.





Additional
information required by this Item 9 concerning directors and executive officers
of the Company appears under the heading “Executive Officers of the Registrant”
in this report.





Presently,
UTS has a total of 2 officers and directors, Keith Tench and Daniel
Seifer.


Page
17


ITEM
11. EXECUTIVE COMPENSATION




Executive
Compensation




The
following Summary Compensation Table sets forth certain information regarding
the compensation of our officers as of December 31, 2010.




Summary Compensation
Table




Year
                          
                          Fees
                            Earnedor
                            Paidin
                            Cash
                          
                          
                          Options
                            Awarded
                          
                          
                          AllOther
                            Compensation
                          
                          
                          TotalKeith
      A. Tench, CEO
                          
                          2010
                          
                          $
                          65,000
                          
                          
                          $
                          -
                          
                          
                          $
                          -
                          
                          
                          $
                          65,0002009
                          
                          
                          65,000
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          65,000Terrell
      J. Horne, CFO
                          
                          2010
                          
                          
                          27,083
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          27,0832009
                          
                          
                          65,000
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          65,000Daniel
      Seifer, Director
                          
                          2010
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -2009
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -




Option
Grants During Last Fiscal Year




No options, warrants or similar rights
to purchase our Common Stock have been granted to any officers or
directors.




Employment
Agreements




There are no employment
agreementsto
date.




Compensation
of Directors




Our
directors receive no compensation as members of our board. Our directors are
reimbursed for travel and out-of-pocket expenses in connection with attendance
at board meetings.




ITEM
12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT




As of
December 31, 2010, there were 20,124,373 shares of common stock, par value
$.0001 outstanding. The following table sets forth certain information regarding
the beneficial ownership of our common stock as of December 31,
2010.




•
            all
    directors


•
            each person who is known by us to
      be the beneficial owner of more than five percent (5%) of the outstanding
      common stock


•
            each executive officer named in
      the Summary Compensation
Table


•
            all directors and executive
      officers as a group


Page
18




The
number of shares beneficially owned by each director or executive officer is
determined under rules of the SEC, and the information is not necessarily
indicative of beneficial ownership for any other purpose. Under the SEC rules,
beneficial ownership includes any shares as to which the individual has the sole
or shared voting power or investment power. In addition, beneficial ownership
includes any shares that the individual has the right to acquire within 60 days.
Unless otherwise indicated, each person listed below has sole investment and
voting power (or shares such powers with his or her spouse). In certain
instances, the number of shares listed includes (in addition to shares owned
directly), shares held by the spouse or children of the person, or by a trust or
estate of which the person is a trustee or an executor or in which the person
may have a beneficial interest.





NameandAddressof
                              BeneficialOwner(1)
                            
                            TitleofClass
                            
                            AmountofBeneficialOwnership
                            
                            
                            PercentofClassKeith
      A. Tench
                            
                            Common
      Stock
                            
                            
                            2,900,000
                            
                            
                            
                            14.41
                            %Terrell
      J. Horne
                            
                            Common
      Stock
                            
                            
                            1,010,000
                            
                            
                            
                            5.02
                            %Daniel Seifer (2)
                            
                            Common Stock
                            
                            
                            4,699,284
                            
                            
                            
                            23.35
                            %Total as a Group
                            
                            
                            
                            
                            8,609,284
                            
                            
                            
                            42.78
                            %




(1) The
address for the listed owners is 3317 S. Higley Rd., Suite 114-475, Gilbert, AZ
85297.




(2)
Includes 2,696,784 shares owned by Smarts Financial Services, a company owned by
Daniel Seifer.




Unless
otherwise indicated, UTS believes that all persons named in the table have sole
voting and investment power with respect to all shares of the common stock
beneficially owned by them. A person is deemed to be the beneficial owner of
securities which may be acquired by such person within 60 days from the date
indicated above upon the exercise of options, warrants or convertible
securities. Each beneficial owner’s percentage ownership is determined by
assuming that options, warrants or convertible securities that are held by such
person (but not those held by any other person) and which are exercisable within
60 days of the date indicated above, have been exercised.




Stock
Option and Incentive Plans




There are no stock option or incentive
plans.




Committees
of the Board of Directors





Concurrent
with having sufficient members and resources, the UTS board of directors will
establish an audit committee and a compensation committee. We believe that we
will need a minimum of five directors to have effective committee systems. The audit committee will
review the results and scope of the audit and other services provided by the
independent auditors and review and evaluate the system of internal controls.
The compensation committee will manage any stock option plan we may continue or
establish and review and recommend compensation arrangements for the officers.
No final determination has yet been made as to the memberships of these
committees or when we will have sufficient members to establish
committees.




Shareholder
Matters




As a
Nevada corporation, we are subject to the Nevada Revised Statutes ("NRS" or
"Nevada law"). Certain provisions of Nevada law create rights that might be
deemed material to our shareholders. Other provisions might delay or make more
difficult acquisitions of our stock or changes in our control or might also have
the effect of preventing changes in our management or might make it more
difficult to accomplish transactions that some of our shareholders may believe
to be in their best interests.


Page
19


Directors'
Duties





Section
78.138 of the Nevada law allows our directors and officers, in exercising their
powers to further our interests, to consider the interests of our employees,
suppliers, creditors and customers. They can also consider the economy of the
state and the nation, the interests of the community and of society and our
long-term and short-term interests and shareholders, including the possibility
that these interests may be best served by our continued independence. Our
directors may resist a change or potential change in control if they, by a
majority vote of a quorum, determine that the change or potential change is
opposed to or not in our best interest. Our board of directors may consider
these interests or have reasonable grounds to believe that, within a reasonable
time, any debt which might be created as a result of the change in control would
cause our assets to be less than our liabilities, render us insolvent, or cause
us to file for bankruptcy protection





Amendments
to Bylaws





Our
articles of incorporation provide that the power to adopt, alter, amend, or
repeal our bylaws is vested exclusively with the board of directors. In
exercising this discretion, our board of directors could conceivably alter our
bylaws in ways that would affect the rights of our shareholders and the ability
of any shareholder or group to effect a change in our control; however, the
board would not have the right to do so in a way that would violate law or the
applicable terms of our articles of incorporation.




ITEM
13 - CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS AND CIRECTOR
INDEPENDENCE





There are
no relationships or related transactions to report.




Director
Independence




For
purposes of determining director independence, we have applied the definitions
set out in NASDAQ Rule 4200(a)(15). Under NASDAQ Rule 4200(a)(15), a director is
not considered to be independent if he or she is also an executive officer or
employee of the corporation. Accordingly, Dan Seifer is the only independent
director as of December 31, 2010.





ITEM
14 – PRINCIPAL ACCOUNTANT FEES AND SERVICES





Audit
Fees





Audit
fees consist of fees billed for professional services rendered for the audit of
our year-end financial statements. The financials included in this 10-K filing
have not been audited. Therefore, we have incurred no audit fees as part of this
filing.




Audit-Related
Fees





Audit-related
services consist of fees billed for assurance and related services that are
reasonably related to the performance of the audit or review of our financial
statements and are not reported under “Audit Fees.” These services include
attest services that are not required by statute or regulation and consultations
concerning financial accounting and reporting standards and were not
incurred.




Tax
Services Fees





Tax fees
consist of fees billed for professional services for tax compliance. These
services include assistance regarding federal, state, and local tax compliance.
Tax fees were not incurred during the fiscal year ended December 31,
2010.




All
Other Fees





Other
fees, which were not incurred, would include fees for products and services
other than the services reported above.


Page
20




PART
IV




ITEM
15 – EXIHIBITS AND FINANCIAL STATEMENTS




(a)
Financial Statements




The
financial statements included in this document have not been audited by an
Independent Auditor.





PageBalance
      Sheet at December 31, 2010 and 2009
                F-1Statement
      of Income Years Ended December 31, 2010 and 2009
                F-2Statement
      of Stockholders’ Equity Years Ended December 31, 2010 and
    2009
                F-4Statement
      of Cash Flows Years Ended December 31, 2010 and 2009
                F-3Notes
      to Financial Statements
                F-5




(b)
Exhibits




No.
              Description31.1
              Certification
      of Chief Executive Officer and Chief Financial Officer pursuant to Rule
      13a-14(a).32.1
              Certification
      pursuant to 18 U.S.C. Section
1350.




SIGNATURES




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




Universal
Tracking Solutions, Inc.





/s/ Keith A. Tench
                Dated:
      January 24, 2011By:
      Keith Tench, President, CEO, Chairman of the Board




In
accordance with the requirements of the Securities Act of 1933, as amended, this
registration statement was signed by the following persons in the capacities and
on the dates stated.




Universal
Tracking Solutions, Inc.




/s/ Keith A. Tench
                Dated:
      January 24, 2011By:
      Keith Tench, President, CEO, Chairman of the Board




Page
21


Universal
Tracking Solutions, Inc.


Balance
Sheet


Years
Ended December 31, 2010 and 2009





(Unaudited)
                                  
                                  
                                  (Unaudited)2010
                                  
                                  
                                  2009ASSETSCurrent
      Assets:Cash
                                  
                                  $
                                  12,045
                                  
                                  
                                  $
                                  28,983Accounts
      receivable
                                  
                                  
                                  71,193
                                  
                                  
                                  
                                  62,806Inventory
                                  
                                  
                                  740
                                  
                                  
                                  
                                  6,496Other
      Current Assets
                                  
                                  
                                  4,869
                                  
                                  
                                  
                                  1,106Total
      Current Assets
                                  
                                  
                                  88,847
                                  
                                  
                                  
                                  99,391Property
      and Equipment, net
                                  
                                  
                                  1,738
                                  
                                  
                                  
                                  1,738Other
      Assets:
                                  
                                  
                                  35,069
                                  
                                  
                                  
                                  50,120Total
      Assets
                                  
                                  
                                  125,654
                                  
                                  
                                  
                                  151,249LIABILITIES
      AND STOCKHOLDERS' EQUITY (DEFICIT)Current
      Liabilities:Accounts
      payable
                                  
                                  
                                  42,051
                                  
                                  
                                  
                                  75,420Notes
      Payable, Short Term
                                  
                                  
                                  30,718
                                  
                                  
                                  
                                  35,641Unearned
      Access Revenue
                                  
                                  
                                  75,884
                                  
                                  
                                  
                                  50,180Accrued
      liabilities
                                  
                                  
                                  10,331
                                  
                                  
                                  
                                  24,672Total
      Current Liabilities
                                  
                                  
                                  158,984
                                  
                                  
                                  
                                  185,913Long
      term LiabilitiesNotes
      Payable, long term
                                  
                                  
                                  20,000
                                  
                                  
                                  
                                  20,000Unearned
      Access Revenue
                                  
                                  
                                  32,984
                                  
                                  
                                  
                                  39,873Total
      Long Term Liabilities
                                  
                                  
                                  52,984
                                  
                                  
                                  
                                  59,873Total
      Liabilities:
                                  
                                  
                                  211,968
                                  
                                  
                                  
                                  245,786Stockholders'
      Equity (Deficit):Common
      stock at $0.0001 par value; 100,000,000 shares authorized; issued and
      outstanding: December 31, 2010 -  20,124,373 shares; December
      31, 2009 - 20,124,373 shares
                                  
                                  
                                  2,012
                                  
                                  
                                  
                                  2,012Additional
      paid-in capital
                                  
                                  
                                  551,087
                                  
                                  
                                  
                                  551,087Accumulated
      deficit
                                  
                                  
                                  (639,413
                                  )
                                  
                                  
                                  (647,636
                                  )Stockholders’
      Equity
                                  
                                  
                                  (86,314
                                  )
                                  
                                  
                                  (94,537
                                  )Total
      Liabilities and Stockholders' Equity (Deficit)
                                  
                                  $
                                  125,654
                                  
                                  
                                  $
                                  151,249





See
accompanying notes


Page F
-1




Universal
Tracking Solutions, Inc.


Statement
of Operation


For
the Years Ended December 31, 2010 and 2009





(Unaudited)
                                  
                                  
                                  (Unaudited)2010
                                  
                                  
                                  2009Revenue
                                  
                                  $
                                  553,603
                                  
                                  
                                  $
                                  808,574Cost
      of Revenue
                                  
                                  
                                  341,442
                                  
                                  
                                  
                                  560,005Gross
      Profit
                                  
                                  
                                  212,161
                                  
                                  
                                  
                                  248,569Operating
      Expenses:General
      and Administrative
                                  
                                  
                                  195,534
                                  
                                  
                                  
                                  258,465Professional
      Fees
                                  
                                  
                                  3,798
                                  
                                  
                                  
                                  10,199Miscellaneous
      Expense
                                  
                                  
                                  3,954
                                  
                                  
                                  
                                  1,537Total
      Operating Expenses
                                  
                                  
                                  203,286
                                  
                                  
                                  
                                  270,201Other
      Income (Expense):Miscellaneous
      Income
                                  
                                  
                                  7,863
                                  
                                  
                                  
                                  -Interest
      Income (Expense)
                                  
                                  
                                  (8,515
                                  )
                                  
                                  
                                  (6,234
                                  )Total
      Other (Expense)
                                  
                                  
                                  (652
                                  )
                                  
                                  
                                  (6,234
                                  )Net
      (Loss)
                                  
                                  $
                                  8,223
                                  
                                  
                                  $
                                  (27,866
                                  )Basic
      and diluted loss per share
                                  
                                  $
                                  0.00
                                  
                                  
                                  $
                                  (0.00
                                  )Weighted
      average number of common shares outstanding
                                  
                                  
                                  20,124,373
                                  
                                  
                                  
                                  20,124,373





See
accompanying notes


Page F
-2




Universal
Tracking Solutions, Inc.


Statement
of Cash Flows


Years
ended December 31, 2010 and 2009




(Unaudited)
                                              
                                              
                                              (Unaudited)2010
                                              
                                              
                                              2009Cash
      Flows From Operating ActivitiesNet
      loss
                                              
                                              $
                                              8,223
                                              
                                              
                                              $
                                              (27,866
                                              )Adjustments
      to reconcile net loss to net cash flows from operating
      activities:Depreciation
                                              
                                              
                                              -
                                              
                                              
                                              
                                              -Changes
      in operating assets and liabilities:Accounts
      receivable
                                              
                                              
                                              (8,387
                                              )
                                              
                                              
                                              36,123Inventory
                                              
                                              
                                              5,756
                                              
                                              
                                              
                                              14,516Other
      current assets
                                              
                                              
                                              (3,763
                                              )Accounts
      payable
                                              
                                              
                                              (33,369
                                              )
                                              
                                              
                                              (10,271
                                              )Notes
      Payable, Short Term
                                              
                                              
                                              (4,923
                                              )
                                              
                                              
                                              24,308Unearned
      Access Revenue
                                              
                                              
                                              25,704
                                              
                                              
                                              
                                              2,882Accrued
      liabilities
                                              
                                              
                                              (14,341
                                              )
                                              
                                              
                                              (1,929
                                              )Total
      adjustments
                                              
                                              
                                              (33,323
                                              )
                                              
                                              
                                              65,629Net
      cash flows from operating activities
                                              
                                              
                                              (25,100
                                              )
                                              
                                              
                                              37,763Cash
      Flows From Investing ActivitiesPurchases
      of property and equipment
                                              
                                              
                                              -
                                              
                                              
                                              
                                              -Other
      Assets
                                              
                                              
                                              15,051
                                              
                                              
                                              
                                              23,128Net
      cash flows from investing activities
                                              
                                              
                                              15,051
                                              
                                              
                                              
                                              23,128Cash
      Flows From Financing ActivitiesProceed
      from notes payable
                                              
                                              
                                              -Unearned
      Access Revenue
                                              
                                              
                                              -6889
                                              
                                              
                                              
                                              -49377Proceeds
      from sale of common stock
                                              
                                              
                                              -
                                              
                                              
                                              
                                              -Net
      cash provided by financing activities
                                              
                                              
                                              (6,889
                                              )
                                              
                                              
                                              (49,377
                                              )Net
      Change in Cash
                                              
                                              
                                              (16,938
                                              )
                                              
                                              
                                              11,514Cash,
      Beginning of the Period
                                              
                                              
                                              28,983
                                              
                                              
                                              
                                              17,469Cash,
      End of the Period
                                              
                                              $
                                              12,045
                                              
                                              
                                              $
                                              28,983




See
accompanying notes


Page F
-3


Universal
Tracking Solutions, Inc.


Statement
of Changes in Stockholders' Equity


For
the Years Ended December 31, 2010 and 2009





Common Stock
                                                
                                                
                                                Paid-in
                                                
                                                
                                                AccumulatedShares
                                                
                                                
                                                Amount
                                                
                                                
                                                Capital
                                                
                                                
                                                Deficit
                                                
                                                
                                                TotalBalance,
      December 31, 2008
                                                
                                                
                                                20,124,373
                                                
                                                
                                                $
                                                2,012
                                                
                                                
                                                $
                                                551,087
                                                
                                                
                                                $
                                                (619,770
                                                )
                                                
                                                $
                                                (66,671
                                                )Sale
      of Common Stock
                                                
                                                
                                                -
                                                
                                                
                                                
                                                -
                                                
                                                
                                                
                                                -
                                                
                                                
                                                
                                                -
                                                
                                                
                                                
                                                -Net
      loss, year end December 31, 2009
                                                
                                                
                                                -
                                                
                                                
                                                
                                                -
                                                
                                                
                                                
                                                -
                                                
                                                
                                                
                                                (27,866
                                                )
                                                
                                                
                                                (27,866
                                                )Balance,
      December 31, 2009
                                                
                                                
                                                20,124,373
                                                
                                                
                                                $
                                                2,012
                                                
                                                
                                                $
                                                551,087
                                                
                                                
                                                $
                                                (647,636
                                                )
                                                
                                                $
                                                (94,537
                                                )Sale
      of common stock
                                                
                                                
                                                -
                                                
                                                
                                                
                                                -
                                                
                                                
                                                
                                                -
                                                
                                                
                                                
                                                -
                                                
                                                
                                                
                                                -Net
      Loss, year ended December 31, 2010
                                                
                                                
                                                -
                                                
                                                
                                                
                                                -
                                                
                                                
                                                
                                                -
                                                
                                                
                                                
                                                8,223
                                                
                                                
                                                
                                                8,223Balance,
      December 31, 2010
                                                
                                                
                                                20,124,373
                                                
                                                
                                                $
                                                2,012
                                                
                                                
                                                $
                                                551,087
                                                
                                                
                                                $
                                                (639,413
                                                )
                                                
                                                $
                                                (86,314
                                                )




See
accompanying notes


Page F
-4




Universal
Tracking Solutions, Inc.


Notes
to Financial Statements




Note
A - Nature of Operations and Basis of Presentation




The
accompanying December 31, 2010 consolidated financial statements have been
prepared by the Company without audit. In the opinion
of management, all adjustments (which include only normal recurring adjustments)
necessary to present fairly the financial position, results of operations and
cash flows at December 31, 2010 and for all periods presented have been
made.





Nature of
Operations





Universal
Tracking Solutions, Inc. was incorporated on July 11, 2006 in the state of
Nevada (“UTS”, or the “Company”). UTS is an application based solutions provider
of telemetry tracking systems. UTS specialize in fleet management, law
enforcement, and finance applications as well as the motorcycle and auto
industries.





Merger




On May 2,
2008, the shareholders of UTS entered into a share exchange agreement with
Dynamic Merger Shell, Inc. (later amended to substitute Dynamic Merger Sub,
Inc.), a wholly-owned subsidiary of the Issuer. The share exchange agreement is
included in a 14C filed with the Securities and Exchange Commission on September
18, 2008. The acquisition of UTS as a subsidiary of the Issuer was consummated
on October 8, 2008.




The Share
Exchange Agreement between Dynamic and the Shareholders of Universal Tracking
Solutions, Inc. (the “Plan of Share Exchange”) generally provides for the
following:




1)
              Universal
      Tracking Solutions, Inc. will become a wholly-owned subsidiary of Dynamic
      Natural Resources, Inc. upon the execution of the terms of the Plan of
      Share Exchange and compliance with the requirements of the laws of Nevada
      with respect to share exchange
transactions;




2)
              Dynamic
      Natural Resources, Inc. shall issue and deliver to UTS shareholders Seven
      Million Eighty-Two Thousand Five Hundred (7,082,500) shares of Dynamic’s
      validly issued, fully-paid and non-assessable restricted Common Stock,
      $0.0001 par value per share in exchange for UTS’ shareholders’ transfer of
      their 64% ownership interest in UTS or 7,082,500 book entry shares of UTS
      common stock, $0.0001 par value per share (the "UTS Shares") constituting
      all of the issued and outstanding capital stock of UTS not owned by
      Dynamic Natural Resources, Inc., upon the terms, provisions, and
      conditions and for the consideration hereinafter set forth in the Share
      Exchange Agreement, and thereby making UTS a wholly-owned subsidiary of
      the Issuer;




3)
              Upon
      the effectiveness of the Plan of Share Exchange, each outstanding share of
      Universal Tracking Solutions, Inc. will be converted into a single share
      of Dynamic Natural Resources, Inc. without any action on the part of the
      holder thereof; and




4)
              The
      Plan of Share Exchange shall be effected by the filing of respective
      articles and plans of share exchange with the State of Nevada Secretary of
      State.




5)
              Dynamic
      Common Stock Certificates will be distributed after the Effective Date of
      the Plan of Share Exchange.  The Effective Date will occur at least
      20 days after the filing of an Information Statement with the SEC and at
      least 10 days after mailing of the Information Statement to the Issuer’s
      shareholders.




6)
              UTS shareholders of record as of May
      1, 2008 are eligible to participate in the share
      exchange.




The
determination of the exchange ratio in the share exchange was based on the
relative degree of control UTS’ controlling shareholders agreed to relinquish in
exchange for the potential benefits that ownership of a public issuer may offer,
on the one hand, and, on the other hand, the assurance of continued
opportunities to increase the value of Issuer holdings.




At the
Effective Date of the share exchange, holders of UTS common stock ceased to be
stockholders of UTS and will no longer have any rights as UTS stockholders,
other than the right to receive the applicable consideration in the share
exchange.  After the Effective Date, there will be no transfers on
UTS’ stock transfer books of any shares of UTS common stock.


Page F
-5




The term
sheet also contained a condition precedent to the Share Exchange Agreement that
the Issuer shall have effected a reverse split of its common stock and have
issued a stock dividend to the September 15, 2006 shareholders of the Issuer.
These actions occurred in April 2008.




The
merger was accounted for as a reverse acquisition and recapitalization.
Universal Tracking Solutions is the acquirer for accounting purposes and Dynamic
Natural Resources is the issuer. Accordingly, Universal Tracking Solutions’
historical financial statements for periods prior to the acquisition become
those of the acquirer retroactively restated for the equivalent number of shares
issued in the merger.




Basis of
Presentation




Use of
Estimates




The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.




Revenue
Recognition




Product and service revenue
and the related labor costs and payroll are recorded in the period in which
services are performed or products are delivered. All revenues are accounted for
once they are earned. Units Sales are reported upon delivery of the product and
the month maintenance fees are recognized when service is provided. Customers
typically pay for monitoring services on a monthly
basis.





Accounts
Receivable





UTS’
trade accounts receivable result from the sale of its products and services, and
consist of private and public companies. UTS uses the allowance method to
account for uncollectible accounts. Bad debt expense for the year ended December
31, 2010 was $9,062.





Concentration of Credit
Risk





Financial
instruments, which potentially expose UTS to concentrations of credit risk
consist principally of trade accounts receivable.





UTS’
trade accounts receivable result from the sale of its products and services to
customers, and customers consist of public and private companies. In order to
minimize the risk of loss from these companies, credit limits, ongoing credit
evaluation of its customers, and account monitoring procedures are utilized.
Collateral is not generally required. Management analyzes historical bad debt,
customer concentrations, customer credit-worthiness, current economic trends,
and changes in customer payment tendencies, when evaluating the allowance for
doubtful accounts. UTS had
one customer account for more than 10% of sales in 2010. That customer was
Enterprise GPS, representing 10% of sales. UTS had 1 customers account for more
that 10% of accounts receivable in 2010. Enterprise GPS
(10%).




The
Company is obligated to pay the salaries, wages, related benefit costs, and
expenses. Accordingly, the Company's ability to collect amounts due from
customers could be affected by economic fluctuations in its markets or these
industries.





Financial
Instruments





UTS
estimates that the fair value of all financial instruments at December 31, 2010
do not differ materially from the aggregate carrying value of its financial
instruments recorded in the accompanying balance sheets.




Property and
Equipment





Property
and equipment are recorded at historical cost and include expenditures, which
substantially increase the useful lives of existing property and equipment.
Maintenance and repairs are charged to operations when incurred.





Depreciation
of property and equipment is computed primarily using the straight-line method
based on estimated useful lives (furniture and fixtures, 6 to 7 years, office
equipment 5 to 7 years, and computers and software, 3 to 5 years). Depreciation
for income tax purposes is computed principally using the straight line method
and estimated useful lives.


Page F
-6




Advertising
Cost





Advertising
costs, except for costs associated with direct-response advertising, are charged
to operations when incurred. The costs of direct-response advertising are
capitalized and amortized over the period during which future benefits are
expected to be received. UTS did not have direct-response advertising costs
during the year ended December 31, 2010.




Accounting for Stock-based
Compensation





UTS
accounts for and reports its stock-based employee compensation arrangements
using the intrinsic value method as prescribed in Accounting Principles Board
Opinion No. 25, Accounting for Stock Issued
to Employees ("APB No. 25"), Financial Accounting Standards Board
Interpretation No. 44, Accounting for Certain
Transactions Involving Stock Compensation ("FIN 44"), and Statement of
Financial Accounting Standards No. 148 Accounting for Stock-Based
Compensation - Transition and Disclosure (“SFAS 148”). Accordingly,
compensation costs for stock options and warrants are measured as the excess, if
any, of the fair value of the stock at the date of grant, over the stock option
exercise price. Value Consulting accounts for stock issued to non-employees in
accordance with the provisions of Statement of Financial Accounting Standards
No. 123, Accounting
for Stock-Based Compensation ("SFAS No. 123") Under SFAS No. 123, stock
option awards issued to non-employees are accounted for at their fair value on
the date issued, where fair value is determined using the Black-Scholes option
pricing method.




Income
Taxes





UTS
records its federal and state income tax liability in accordance with Statement
of Financial Accounting Standards Statement No. 109 "Accounting for Income
Taxes". Deferred taxes are provided for differences between the basis of assets
and liabilities for financial statements and income tax purposes, using current
tax rates. Deferred tax assets represent the expected benefits from net
operating losses carried forward and general business credits that are available
to offset future income taxes.





Loss Per
Share




Net loss
per share is computed based upon the weighted average number of outstanding
shares of the Company’s common stock for each period presented.




Recent Accounting
Pronouncements





In April
2003, the FASB issued SFAS No. 149, “Amendment of Statement 133 on Derivative
Instruments and Hedging Activities”. The statement amends and clarifies
accounting and reporting for derivative instruments, including certain
derivative instruments embedded in other contracts, and hedging activities. This
statement is designed to improve financial reporting such that contracts with
comparable characteristics are accounted for similarly. The statement is
generally effective for contracts entered into or modified after June 30, 2003.
The Company currently has no such financial instruments outstanding or under
consideration and does not expect the adoption of this standard to effect the
Company’s financial position or results of operations.





In May
2003, the FASB issued SFAS No. 150, “Accounting for Certain Financial
Instruments with Characteristics of Both Liabilities and Equity”. This statement establishes
standards for how an issuer classifies and measures certain financial
instruments with characteristics of both liabilities and equity. This statement
is effective for financial instruments entered into or modified after May 31,
2003, and is otherwise effective at the beginning of the first interim period
beginning after June 15, 2003. The Company currently has no such financial
instruments outstanding or under consideration and therefore adoption of this
standard currently has no financial reporting implications.





In June
2003, the United States Securities and Exchange Commission adopted final rules
under Section 404 of the Sarbanes-Oxley Act of 2002. Commencing with our annual
report for the year ended September 30, 2010, we will be required to include a
report of management on our internal control over financial reporting. The
internal control report must include a statement.





·
            of
      management’s responsibility for establishing and maintaining adequate
      internal control over our financial
reporting;


·
            of
      management’s assessment of the effectiveness of our internal control over
      financial reporting as of year end;
and


·
            of
      the framework used by management to evaluate the effectiveness of our
      internal control over financial
reporting.





Furthermore,
in the following fiscal year, it is required to file the registered accounting
firm’s attestation report separately on the Company’s internal control over
financial reporting on whether it believes that the Company has maintained, in
all material respects, effective internal control over financial
reporting.


Page F
-7




In
December 2003, the FASB issued FASB Interpretation No. 46, “Amended
Consolidation of Variable Interest Entities” (“FIN No. 46”). This interpretation
clarifies rules relating to consolidation where entities are controlled by means
other than a majority voting interest and instances in which equity investors do
not bear the residual economic risks. This interpretation is effective
immediately for variable interest entities created after January 31, 2003 and,
for interim periods beginning after December 15, 2003, for interests acquired
prior to February 1, 2003. The Company does not currently have relationships
with entities meeting the criteria set forth in FIN No. 46 and is not required
to include any such entities in its financial statements pursuant to the
provisions of FIN No. 46.





Effective
as of December 31, 2004, the Company adopted the revised interpretation of
Financial Accounting Standards Board (FASB) Interpretation No. 46 (FIN 46),
“Consolidation of Variable Interest Entities,” (FIN 46-R). FIN 46-R requires
that certain variable interest entities be consolidated by the primary
beneficiary of the entity if the equity investors in the entity do not have the
characteristics of a controlling financial interest or do not have sufficient
equity at risk for the entity to finance its activities without additional
subordinated financial support from other parties. The Company does not have any
investments in entities it believes are variable interest entities for which the
Company is the primary beneficiary.





In
December 2004, FASB issued SFAS No. 123 (revised 2004) "Share Based Payment"
(SFAS No. 123R), a revision to Statement No. 123, Accounting for Stock-Based
Compensation which supersedes APB Opinion No. 25, Accounting for Stock Issued to
Employees. The revised SFAS 123 eliminates the alternative to use Opinion 25's
intrinsic value method of accounting and, instead, requires entities to
recognize the cost of employee services received in exchange for awards of
equity instruments based on the grant-date fair value of those awards.
Furthermore, public entities are required to measure liabilities incurred to
employees in share-based payment transactions at fair value as well as estimate
the number of instruments for which the requisite service is expected to be
rendered. Any incremental compensation cost for a modification of the terms or
conditions of an award is measured by comparing the fair values before and after
the modification. The Company has yet to determine the effect SFAS No. 123R may
have on its financial statements, if any.





In
December 2007, the FASB issued FASB Statement No. 141 (Revised 2007),Business Combinations (“SFAS
No. 141(R)”), which requires the Company to record fair value estimates of
contingent consideration and certain other potential liabilities during the
original purchase price allocation, expense acquisition costs as incurred and
does not permit certain restructuring activities previously allowed under
Emerging Issues Task Force Issue No. 95-3 to be recorded as a component of
purchase accounting.  SFAS No. 141(R) applies prospectively to
business combinations for which the acquisition date is on or after the
beginning of the first annual reporting period beginning on or after December
15, 2008, except for the presentation and disclosure requirements, which shall
be applied retrospectively for all periods presented. The Company will adopt
this standard at the beginning of the Company’s fiscal year ending September 30,
2009 for all prospective business acquisitions. The Company has not determined
the effect that the adoption of SFAS No. 141(R) will have on its financial
statements.





In
December 2007, the FASB issued FASB Statement No. 160,Noncontrolling Interests in
Consolidated Financial Statements - an amendment of ARB No. 51 (“SFAS No.
160”), which causes noncontrolling interests in subsidiaries to be included in
the equity section of the balance sheet.  SFAS No. 160 applies
prospectively to business combinations for which the acquisition date is on or
after the beginning of the first annual reporting period beginning on or after
December 15, 2008, except for the presentation and disclosure requirements,
which shall be applied retrospectively for all periods presented.  The
Company will adopt this standard at the beginning of the Company’s fiscal year
ending September 30, 2009 for all prospective business
acquisitions.  The Company has not determined the effect that the
adoption of SFAS No. 160 will have on its consolidated financial
statements.


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In March
2008, the FASB issued FASB Statement No. 161,Disclosures about Derivative
Instruments and Hedging Activities an amendment of FASB Statement No. 133
(“SFAS No. 161”), which changes the disclosure requirements for derivative
instruments and hedging activities.  Pursuant to SFAS No.161, Entities are
required to provide enhanced disclosures about (a) how and why an entity uses
derivative instruments, (b) how derivative instruments and related hedged items
are accounted for under Statement 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.  SFAS No. 161 is
effective for financial statements issued for fiscal years and interim periods
beginning after November 15, 2008 with early application encouraged. SFAS No.
161 encourages but does not require disclosures for earlier periods presented
for comparative purposes at initial adoption.  In years after initial
adoption, this Statement requires comparative disclosures only for periods
subsequent to initial adoption.  The Company will adopt this standard at
the beginning of the Company’s year ending September 30, 2009.  The
Company does not expect the adoption of SFAS No. 161 to have a material impact
on the financial results of the Company.





The FASB,
the Emerging Issues Task Force and the Securities and Exchange Commission have
issued certain other accounting pronouncements and regulations as of September
30, 2008 that will become effective in subsequent periods; however, management
of Laufer does not believe that any of those pronouncements would have
significantly affected Laufer’s financial accounting measurements or disclosures
had they been in effect during 2008, and it does not believe that any of those
pronouncements will have a significant impact on Laufer’s financial statements
at the time they become effective.




Critical
Accounting Policies





The
preparation of financial statements and related notes requires us to make
judgments, estimates, and assumptions that affect the reported amounts of
assets, liabilities, revenue and expenses, and related disclosure of contingent
assets and liabilities.





An
accounting policy is considered to be critical if it requires an accounting
estimate to be made based on assumptions about matters that are highly uncertain
at the time the estimate is made, and if different estimates that reasonably
could have been used, or changes in the accounting estimates that are reasonably
likely to occur periodically, could materially impact the financial
statements.





Financial
Reporting Release No. 60 requires all companies to include a discussion of
critical accounting policies or methods used in the preparation of financial
statements.  There are no critical policies or decisions that rely on
judgments that are based on assumptions about matters that are highly uncertain
at the time the estimate is made.  Note 2to the financial
statements includes a summary of the significant accounting policies and methods
used in the preparation of our financial statements.




Furthermore,
public entities are required to measure liabilities incurred to employees in
share-based payment transactions at fair value as well as estimate the number of
instruments for which the requisite service is expected to be rendered. Any
incremental compensation cost for a modification of the terms or conditions of
an award is measured by comparing the fair values before and after the
modification. The Company has yet to determine the effect SFAS No. 123R may have
on its financial statements, if any.





There are
no differences between historical and pro-forma stock based compensation
value.




Note
B - Income Taxes





For
income tax purposes UTS had an accumulated deficit of $639,413 as of December
31, 2010, which can be used to offset future federal and state taxable income.
No income tax benefit has been recorded in the accompanying financial statements
since the recoverability of such assets is not reasonably assured through known
future revenue sources.





Note
C- Note Receivable





On
October 1, 2006, UTS entered into a short-term, month to month loan with a
shareholder for $20,000. As of December 31, 2010 the balance of the loan was
$20,000.





Note
D - Cash Flow Supplemental Information





Cash paid
for interest during the period ended December 31, 2010 amounted to
$8,515.





Note
E - Stockholders’ Equity





Issuance of Common
Stock





No stock
was issued in 2010 or 2009.


Page F
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Common Stock
Warrants





As of
December 31, 2010, there were no stock warrants outstanding.





Note
F - Commitments and Contingencies





Operating
Leases





UTS
currently has no lease obligations. Our executive offices our located
in Gilbert, AZ. Our executive offices are leased on a quarter-by-quarter
basis. Payments are made in advance and there are no on-going lease obligations.
The current lease rate is $1,200 per month.





Litigation





As of
December 31, 2010, UTS did not have any outstanding legal issues outside of the
ordinary course of business.





Note
G – Consolidated Financials





The
merger with Universal Tracking Solutions, Inc. was accounted for as a reverse
acquisition and recapitalization. Universal Tracking Solutions is the acquirer
for accounting purposes and Dynamic Natural Resources is the issuer.
Accordingly, Universal Tracking Solutions’ historical financial statements for
periods prior to the acquisition become those of the acquirer retroactively
restated for the equivalent number of shares issued in the merger.





Note
H - Subsequent Events





There are
no subsequent events.


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