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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

(Mark One)

For the fiscal year ended February 28, 2003

OR

Commission file number: 0-14356

HEALTHTRAC, INC.

Registrant’s telephone number, including area code: (650) 839-5500

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

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

     Indicate by check mark whether the registrant (i) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (ii) has been subject to such filing requirements for the past 90 days. Yes [X] No [  ]

     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. Yes [X] No [  ]

     Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Securities Exchange Act of 1934). Yes [  ] No [X]

     As of May 21, 2003, there were outstanding 223,104,598 shares of Common Stock of the registrant.

DOCUMENTS INCORPORATED BY REFERENCE

     Portions of the Registrant’s Proxy Statement to be submitted to the Commission on or before June 28, 2003, are incorporated by reference into Part III.

The Exhibit Index begins on page F-24.

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INTRODUCTORY NOTE

     The Annual Report on Form 10-K contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 and the Company intends that certain matters discussed in this report are “forward-looking statements” intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. These forward-looking statements can generally be identified by the context of the statement which may include words such as the Company “believes”, “anticipates”, “expects”, “forecasts”, “estimates”, or other words of similar meaning and context. Similarly, statements that describe future plans, objectives, outlooks, targets, models or goals are also deemed forward-looking statements. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those forecasted or anticipated as of the date of this report. Certain of such risks and uncertainties are described in close proximity to such statements and elsewhere in this report, including Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations”. Stakeholders, 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 or construe such statements to be a representation by the Company that the objectives or plans of the Company will be achieved. The forward-looking statements included in this report are made only as of the date of this report, and the Company undertakes no obligation to publicly update such forward-looking statements to reflect subsequent events or circumstances.

Item 1. Business

Available Information

     The Company maintains an Internet website at www.healthtrac.com which includes an investor relations page available to all interested parties, where links to recent filings with the United States Securities and Exchange Commission, along with any amendments to those reports are available free of charge, as reasonably practicable following the time they are filed with or furnished to the SEC.

General

     Our company was incorporated under the laws of the Province of British Columbia on January 29, 1982 under the name “Thunder Oil & Gas Ltd.”. Our name was changed to “Thunder Explorations Ltd.” on May 9, 1983. On April 22, 1985, we changed our name to “CAM-NET Communications Network Inc.” and on February 1, 1991, our company was continued under the Canada Business Corporations Act. On August 1, 1997, we changed our name to “Suncom Telecommunications, Inc.” and on May 31, 1999, we changed our name to “Virtualsellers.com, Inc.”. Following our Annual General and Special Meeting for the year ended February 28, 2001, on February 22, 2002, we changed our name to “Healthtrac, Inc.”.

     The Company is currently structured into two business units: Health Management, and Call Center Operations. Prior to September 23, 2002, the Company had a third business segment called the Professional Services and Software Products (PSSP) Group (formerly referred to as the e’commerce segment). In September 2002, management distributed the company’s information technology resources between its Greenwood, Indiana call center and Redwood City, California headquarters where the information technology staff has assumed responsibility for all of Healthtrac’s information technology products and services. Prior to February 28, 2002, the Company has a fourth business segment called Call Direct, a catalog telecommunication equipment resale business.

     The Company’s principal offices and subsidiaries are located in North America. Unless the context otherwise requires, the term “Company” refers to Healthtrac, Inc. and its subsidiaries.

Summary of Material Acquisitions During the Previous Five Years

NorthNet Telecommunications Inc. d/b/a “NorthStar Telesolutions”

     On January 1, 1998, we purchased our first call center for $105,000. As consideration for the acquisition, we issued a convertible note for $105,000 which was convertible into our common shares at the rate of $0.10 per common share. On January 5, 1999, the convertible note was converted into 1,050,000 of our common shares. The call center is operated through our subsidiary, NorthNet Telecommunications Inc. doing business as NorthStar Telesolutions. For details of the operations of our call center, see the section entitled “Call Center Operations” below.

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VirtualSellers.com, Inc.

     In April, 1999, we purchased certain assets and the business of VirtualSellers.com, Inc., an Illinois corporation. As consideration for the acquisition, we paid cash of $170,000, assumed indebtedness of US$28,929, issued 500,000 of our common shares and issued share purchase warrants to purchase up to 361,710 of our common shares. Each share purchase warrant entitled the holder to purchase one common share at a price of $1.50 per common share for a period of two years. As part of the acquisition, we entered into employment agreements with two of the founders of this company.

     Although we discontinued the operations of VirtualSellers.com, Inc. in fiscal 2002, we subsequently launched our Professional Services and Software Products (“PSSP”) which continued some of the services of VirtualSellers.com, Inc. The primary purpose of this Group was to market our TAME V software, provide the information technology services for our Healthtrac division and provide application development and Web-enabling solutions. This division was discontinued in fiscal 2003 and these operations are classified as discontinued operations in our annual financial statements filed under Item 8 of this Annual Report on Form 10-K.

CallDirect Enterprises Inc.

     In May, 1999, we purchased certain assets of CallDirect Enterprises Inc. As consideration for the acquisition, we issued 1,200,000 of our common shares and assumed the outstanding indebtedness of approximately CDN$500,000, which we settled for approximately CDN$109,000.

     On February 28, 2002, we announced that our subsidiary, Preferred Telemanagement Inc., doing business as CallDirect Enterprises, ceased operation on the last day of our fiscal year, February 28, 2002. As a result, we no longer operate as a catalogue reseller of telephone-related equipment, as well as of products such as multimedia, entertainment, travel, security and computer accessories for offices and homes. These operations are classified as discontinued operations in our annual financial statements filed under Item 8 of this Annual Report on Form 10-K.

TAME Software and Customer Base

     In June, 1999, we purchased the rights to a proprietary e-commerce shopping cart software system and language interpreter called TAME (Tag Activated Markup Enhancement) from Seth Russell and Nathan Bawden, doing business as Clickshop. As consideration for the acquisition, we assumed liabilities of $20,000 and issued 300,000 of our common shares (150,000 shares to each of Seth Russell and Nathan Bawden). As part of the acquisition, we entered into an employment agreement with Nathan Bawden. We also agreed to issue a further 300,000 of our common shares one year from closing if Nathan Bawden successfully trained our employees in the use, operation and development of TAME. These additional 300,000 shares were issued on February 13, 2001 (150,000 shares to each of Seth Russell and Nathan Bawden).

     For further details on TAME, see the section entitled “TAME (Tag Activated Markup Enhancement)” below.

Sullivan Park LLC

     On June 1, 2000, our subsidiary Sullivan Park Inc. acquired all of the assets of the Internet services development business carried on by Sullivan Park LLC in exchange for 6,500,000 of our common shares, which were issued to the owner, Edward Sharpless, on July 18, 2001. As part of the acquisition, our subsidiary Sullivan Park Inc. entered into an employment agreement with the former owner and retained several of its employees.

     The former owner of Sullivan Park, which was acquired by our company on June 1, 2000, had filed a claim against our company alleging that the company was in default of the terms of the purchase agreement. A counter claim was filed by the company, and on July 18, 2001 we reached a settlement and agreed to issue 6,500,000 common shares to the former owner of Sullivan Park. We also agreed to pay the former owner $8,885 to reimburse him for expenses he had incurred on our behalf.

     The operations of Sullivan Park were rolled into the company’s e-commerce division. On July 19, 2001, we discontinued the operations of Sullivan Park Inc. to focus our efforts and resources on our new health promotion business.

MedWired Corporation

     On April 20, 2001, we purchased certain assets of MedWired Corporation including the copyright, object code and source code for MedWired’s Practiceportal software, certain registered and unregistered trade or brand names, domain names and trademarks and MedWired’s customer list for a purchase price of $200,000 which we paid by issuing 241,935 of our common shares at an issue price of $0.62 per share (the fair market value of our stock at February 27, 2001) and $50,000 in cash. We abandoned these assets in fiscal 2003 to focus on our current programs.

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Healthscape, Inc.

     On June 26, 2001, we acquired Healthscape, Inc.’s proprietary software (and related intellectual property) for the sum of $245,000, $5,000 of which was paid in cash, with the balance paid in 631,579 shares of our common stock having a fair value of $0.38 per share. The Healthscape Expert System analyzes each user’s progress and the user health profile and provides tailored information to help each user meet their unique health goals. The Healthscape software, known as the Healthscape Expert System, is expandable to include new healthcare related applications and scalable to accommodate a growing user base. We abandoned these assets in fiscal 2003 to focus on our current programs.

Healthtrac, Inc.

     On August 3, 2001, our wholly-owned Nevada subsidiary, Healthtrac Corporation, acquired Healthtrac, Inc., a California corporation, pursuant to a Merger Agreement dated July 11, 2001. We acquired the shares of Healthtrac, Inc. in exchange for 13,529,412 common shares in the capital of our company. After we acquired all of the shares of Healthtrac, Inc., we merged it into Healthtrac Corporation as provided for in the Merger Agreement. As a result of the merger, we assumed a debt owed to a third party of $892,459, which we settled for $500,000 and paid in shares of our common stock at a price per share of $0.265. Also as a result of the merger, we obtained a loan for $110,000 at an interest rate of 1% over the Bank of America’s prime rate from Queensland Teachers Union Health Fund Limited. The loan is convertible at Queensland’s option into shares of our common stock on the date of maturity of the loan at a price that is equal to the price per share equal to the ten-day average closing price for the ten trading day period ending on the repayment date. Queensland also converted approximately $484,764 of debt owed it by Healthtrac, Inc. into shares of our common stock at a price of $0.265. Queensland also agreed to lend Healthtrac Corporation (the surviving corporation in the merger) money as needed over a period of nine months after the closing of the merger, for the purpose of purchasing books for resale to Healthtrac’s customers. The acquisition of Healthtrac, Inc. closed on August 3, 2001, although there are a number of post-closing obligations to be complied with, including the issuance of 316,436 of the total of 13,529,412 common shares that we agreed to issue in the exchange, which will be issued upon the submission to us by some of the shareholders of Healthtrac, Inc., of certain paperwork still required of them pursuant to the merger agreement.

     For further details on the operations of our health promotion division, see the section entitled “Health Promotion Management” below.

Health Management Operations

     Healthtrac Corp. provides health management services to health plans, self-insured employers and government agencies via programs designed to postpone disease and disability through preventive practices and chronic disease self-management. Our health risk assessment identifies high-risk constituents prior to high claims utilization, our tailored interventions reduce health risks and costs by supporting healthy changes and condition management, and our reporting capabilities track changes over time and evaluate each program’s impact. Healthtrac measures return on investment, participant and group changes in health risks, health consumerism, and productivity, and tracks reductions in healthcare usage.

     Healthtrac’s products and services are designed to enhance the quality of care while reducing the overall cost of health care. Our programs are intended to not only lead the way to better health but to do so in a way that can be continually measured in terms of effectiveness and results.

     The fundamental mission of Healthtrac#to improve the health status of the population#is reflected in all of our programs. Our goals are to reduce health risks and improve health status, reduce health care costs, and provide sound data on program impact.

     Healthtrac offers a variety of programs ranging from minimal intervention (Healthtrac Premier) for the entire client population, to intensive interventions for those at greatest risk (Healthtrac Enhanced). Our products are available to participants through the mail or via the Internet.

     The core components of the Healthtrac programs are:

•

Health Assessments (i.e. the tool used to measure and monitor the population’s health risks, and to identify those individuals at greatest risk for poor health status);

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	•		Self-Care (e.g. Take Care of Yourself book versions, health promotion newsletter, self-care books, online medical encyclopedia, medical Libraries, health news and content);
	•		Health Education and Promotion (e.g. health education materials, personalized letters and reports summarizing health assessment responses and providing encouragement to take action to improve health, online Learning Centers)
	•		High Risk Identification and Intervention (e.g., targeted risk and condition-specific health education materials and health education telephone counseling).

     Healthtrac Premier reduces the need and demand for health care services by helping participants increase their personal health self-confidence and their ability to employ effective self-management practices. This program provides essential health promotion intervention to participants through universal health information, education, and support to help participants achieve and maintain the highest possible level of well-being. Tailored and targeted feedback reinforces healthy changes based on their self-efficacy and readiness to make changes, wherever they may be on the health continuum. The results are reinforcement of gradual progress toward goals, improvements in health status and reductions in health risks, accompanied by a decrease in unnecessary and inappropriate use of medical care resources.

     The Healthtrac Enhanced program provides an intensive health education intervention for those who are at greatest risk to utilize high cost services. Effective interventions targeted to this high cost population can yield substantial savings. With proactive, early intervention, what might otherwise become major medical problems, with associated expenses, absenteeism and loss of productivity, can be minimized or, in some cases, completely avoided. As evidence of the effectiveness of this approach, the Healthtrac High Risk program yields ROI’s as high as 8:1, as proven through published research.

     There are twelve risk modules in the High Risk Program, more being developed in 2003, each emphasizing a specific lifestyle-related or chronic condition.

     The lifestyle risk modules are:

     The chronic condition modules are:

Our supporting services include:

	•		Client Services (e.g. assists with the day-to-day management of the program)
	•		Account Management (e.g. consults with the client to determine strategic needs and meet objectives)
	•		Medical Consultation (e.g. James Fries, MD, Medical Director for Healthtrac provides demand management, research, and other consultation for clients)
	•		Health Education Consultation (e.g. our health educators provide consultation on health promotion programs and educational materials)
	•		Claims Analysis (e.g. evaluation and comparison of healthcare, workers compensation, disability claims, and personnel measures with Healthtrac data).
	•		Call Center Counseling (e.g. health decision support-24 hours a day, seven days a week)

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     All Healthtrac programs employ four essential strategies:

	1.		Analysis of the participant’s health status through health assessment questionnaires
	2.		Development of a personal action plan#tailored to the individual’s needs and readiness to change#that is designed to increase self-efficacy and reduce health risks
	3.		Education in wise and appropriate medical care decision-making
	4.		Ongoing reinforcement of positive health habit changes through periodic health assessment, serial tracking of changes in health status and health risks, and targeted health promotion messages

Healthtrac’s Customers

     The majority of Healthtrac clients are self-funded employer groups, health plans/managed care organizations, hospital systems, and the military. Healthtrac generally has long-term relationships and long-term contracts with its clients. Many are in the process of renewing their agreements with Healthtrac. We target businesses that have an eligible base of 5,000 or more.

Distribution

     Healthtrac’s products and services have traditionally been delivered via paper/manual delivery, but Healthtrac now has its programs available over the Internet through its personal health portal, MyHealthtrac.com. Healthtrac distributes its products and services in the following manner: Healthtrac contracts with an organization, (e.g. a self-insured employer), to provide a health promotion program to the employer’s employees or the health plan’s members. Of the total eligible participants, a percentage of the employees or members become actual Healthtrac program participants. Healthtrac enrolls these participants into our proprietary system and then generates the initial health risk assessment for each participant. The participant completes the assessment, returns it to Healthtrac, and then Healthtrac analyzes the assessment using its predictive algorithms. Healthtrac then generates a letter and report uniquely tailored to each individual, addressing that individual’s health status and risks. Based on the findings of the analysis, the individual is either enrolled in a high risk program or placed in the basic or low risk, program. The participant then receives ongoing health information, educational materials, and self management tools (interventions) tailored to the individual’s health maintenance or improvement goals. The participants are then reassessed at periodic intervals. Healthtrac is exceptional in its market because of this “serial tracking” of its participants. This serial tracking reports the individual’s successes and progress toward meeting their health improvement goals over time. Healthtrac also provides aggregate reports to its clients to measure the program’s success.

     Healthtrac’s products and services were initially developed in 1984 when Healthtrac was founded. Healthtrac continually evaluates its health assessment tool to incorporate the most current (accepted and valid) scientific, medical, demand management, and lifestyle behavior change concepts. This requires ongoing design/redesign, testing, and monitoring of the questionnaire responses and the associated algorithms used to calculate risk scores and health status. We also encourage feedback from our clients’ medical teams.

     Development of our online health risk assessment is complete and we have already sold this product to our first client. A static version and tour of the online questionnaire and ancillary products is available for viewing through our sales group.

Industry Overview

     If the health of American citizens were improved, logic indicates we would spend less time and money treating the many diseases that are clearly preventable.

There is ample evidence that poor health habits cost dearly: By way of example:

	-		preventable illness makes up approximately 70 percent of the burden of illness and the associated costs. Well-developed national statistics such as those outlined in Healthy People 2000 (2010) document this central fact clearly. McGinnis and Foege have carefully reclassified the causes of death in the United States, using underlying actual causes rather than the traditional disease-oriented classifications; they found that preventable causes account for eight of the nine leading categories and for 980,000 deaths per year. (J. F. Fries, et.al. New England Journal of Medicine 1993; 329:321-325; and J.M. McGinnis, W. H. Foege, Journal of American Medical Association 1993; Volume 270, No. 18).
	-		the U.S. Congress Office of Technology Assessment estimated that, in 1985, smokers cost businesses $43 billion in lost earnings. (OTA, US Congress. Smoking-related Deaths and Financial Costs. Washington, DC: Health Program, OTA; 1985 OTA staff memorandum).

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	-		obesity in the US accounts for approximately 5% of all health care costs (Thompson, D., Edelsberg, J., Kinsey, K. L., Oster, G. Estimated economic costs of obesity of US business. Am J Health Promotion. 1998; 13:120-127.)
	-		current medical research, according to Nutritional Health Magazine (11/2001), shows that 50% of the American population is overweight.
	-		employees with six heart disease risk factors had future medical costs 149% higher than those with no risk factors. Those with three stroke risk factors had costs 52% higher than those without the same risk factors. (Jee S, O’Donnell M, Suh I, Kim I. The relationship between modifiable health risks and future medical expenditures: the Korea Medical Insurance Corporation employee study. Am J. Health Promotion. 2001; 15: 244-255).

     Today, there is an expanding demographic looking for new methods of increasing their well being through health promotion and disease management products. For individuals following a health promotion program or maintaining a healthy lifestyle, the results can be very dramatic: the individual is likely to have more energy, fewer physical problems, greater mental alertness, greater athletic prowess, feel better, look younger, and be healthier than his or her peers who did not adopt healthy living practices. For those individuals following an unhealthy lifestyle, the results can be just as dramatic: increased illness and disease, frequent absenteeism, prolonged disability, and early death.

     Interest in worksite health promotion has grown steadily since the mid-1980s when employers became concerned about rapidly rising health care costs. Employers, managed care providers and third party administrators all share the following needs:

- to manage and control participant health benefit costs; - - to decrease demand for unnecessary or avoidable healthcare services; - - to build participant satisfaction and increase productivity; - - to re-connect and focus on the participant as the primary stakeholder in healthcare; - - to empower, educate, inform, and guide participants to better health; - - to secure best of breed, best in class to affect the health and well being of participants; - - to improve health status of their participants; - - to reduce and/or stabilize the risks in their participants’ lives; and - - to achieve a return on investment.

Competition

     Generally speaking, Healthtrac competes in the health promotion and wellness market in which over 20 companies provide health promotion services with primary emphasis on health risk assessments, lifestyle, and behavioural modification and condition specific personal care management. Of these, the Mayo clinic, Wellmed, Staywell, Johnson & Johnson, and WebMD constitute Healthtrac’s competitors. This statement is biased towards health assessments as a core service and the ancillary non-core services that enhance the overall value proposition as it relates to overall health management. Each of these companies possesses unique strengths and weaknesses in delivery of health assessment technologies. We estimate that these five companies combined boast over 2300 current individual group clients and make up the critical mass of the marketplace.

     Healthtrac has over 18 years of experience providing comprehensive health assessment, health promotion, and self-care products and services in the United States and internationally. More than one million individuals have used the Healthtrac health assessment instrument and over three million health assessment questionnaires have been completed, making it one of the most highly used and tested questionnaires in the industry.

     Our health assessment and associated health promotion programs have been studied more extensively than any other such programs. Numerous studies, published in peer-reviewed medical and scientific literature, have found the health assessment and its educational programs to be highly effective in motivating positive change in health habits, resulting in lower risks and measurable reductions in the use of unnecessary, inappropriate and costly health care services.

     Healthtrac has won numerous awards over the years, and is the only six-time winner of the C. Everett Koop National Health Award that recognizes programs that are proven to reduce health risks and health care costs.

     Prior to our acquisition of Healthtrac in 2001, it had languished with few resources directed toward marketing, sales, and technology. We are rebuilding our sales and marketing efforts, reestablishing our visibility in the marketplace, and improving our technology platform. During the fiscal year ended February 28, 2002, Healthtrac

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expanded its marketing and sales efforts in an effort to increase its visibility in the market. We have increased our sales force in an effort to fully service our existing clients and to capture new clients. Healthtrac continues to pursue alliances with strategic sales partners to expand the market penetration of our products and services. Healthtrac is also focused on renewing existing client contracts and selling additional and enhanced products to our existing clients. In addition, Healthtrac completed the migration to our new software platform, the Windows NT/TAME platform, thus vastly improving our technology.

     Health Insurance Portability and Accountability Act of 1996

     The US Congress enacted the Health Insurance Portability and Accountability Act of 1996 (HIPAA), including Standards for Privacy of Individually Identifiable Health Information. The law included provisions designed to save money for health care businesses by encouraging electronic transactions, but also required new safeguards to protect the security and confidentiality of that information. Most states already have similar laws, but HIPAA ensured the closing of gaps in the protection of patients’ privacy and confidentiality.

     The privacy standards rule applies to our Healthtrac business because Healthtrac relates to participants in the healthcare industry. We believe that Healthtrac is a business associate under the HIPAA privacy standards rule. Therefore, we will provide satisfactory assurances to our clients who must comply with HIPAA that we will use its participants’ personal health information only for the purpose for which we were engaged by the client. In addition, we have developed our own privacy policy which assures our clients and our individual users that their information will remain confidential.

Call Center Operations

     We operate one call center through our subsidiary, NorthNet Telecommunications, Inc. doing business as NorthStar TeleSolutions. Our call center is located at 125 Airport Parkway, Greenwood, Indiana. Our call center provides back office services such as outbound and inbound customer support, centralized customer billing, customer sales and support, order entry, order fulfillment, bill collection, IT help desk support, as well as management reporting, database management, service scheduling and dispatch, marketing services and remote service maintenance. Our call center currently has the capacity for over 80 call center representatives and offers customer service support 24-hours a day, seven days a week. We provide our services for a flat monthly rate or on a per-transaction basis depending on the scope of services required.

     In the past, we have provided services to a limited number of cable television operators and Internet service providers in the United States. Even though we have recently lost some small clients primarily due to economic conditions, we have expanded our client base and now service over 60,000 homes with cable television and/or other broadband services. We target businesses that have a customer base of up to 20,000 customers, as we have found that businesses with more than 20,000 customers typically have well established in-house call centers. We market our call center services through periodic advertising, direct mail, strategic partnerships and outbound telemarketing, as well as by appearances at industry trade-shows.

     We concentrate our call center services on customer support and transaction processing, allowing our clients to concentrate on the marketing and growth of their businesses while still maintaining a high level of customer care and service. We are cultivating new customers for the call center, which have also begun to provide cable-related services such as local and long distance telecommunications and Internet access. By utilizing our service we are able to bundle and/or market together the services provided by our clients. We have also had quite a bit of success with our newest service that enables us to remotely control the services of our client’s subscribers. This service greatly reduces the operating cost to our clients by eliminating truck rolls while improving customer satisfaction as they are able to receive immediate service and enhanced service offerings.

     We are continuing to expand our scope of service that we provide. In the past, we provided limited services to cable television operators and Internet service providers in the United States. We have expanded the scope of our call center operations and are better positioned to support new and existing clients that offer the latest services and technologies. We currently handle approximately 45,000 transactions and 16,000 calls per month and have the resources to significantly increase each of these.

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Discontinued Operations

     In fiscal 2002, the Company discontinued its telecommunications catalogue resale business which was located in British Columbia, Canada. The division was closed and the Company did not realize any proceeds on disposition.

     In fiscal 2003, the Company discontinued its e-commerce division that had been substantially curtailed in fiscal 2002 as a result of cash flow and profitability concerns. The division was closed and the Company did not realize any proceeds on disposition in 2002 or 2003. Previously, the e’commerce division operated an internet shopping cart website whereby customers could purchase products for sale by the Company, and performed consulting services related to website design, development projects and hosting services.

Employees

     As of February 28, 2003, the Company employs approximately 37 full-time employees. All employees are located in the United States. The Company believes that its employee relations are excellent. The employees and the Company are not parties to any collective bargaining agreements.

Recent Developments

     In May 2003, the Company rolled out www.myhealthtrac.com to its first online client. The new portal allows program participants to complete their health risks assessments and receive real time feedback. In addition, participants can read comprehensive health materials and track their progress..

Item 2. Properties

     The Company’s executive offices and principal facility are located in an approximately 3,729 square foot building in Redwood City, California. The Company leases the facility pursuant to a lease expiring October 2006.

     The Company leases a facility in Greenwood, Indiana, that is used as a call center and operations support facility. The lease is for approximately 8,446 square feet. The lease expires in July 2006.

Item 3. Legal Proceedings

     On September 25, 2001, Rolling Meadows Associates, I, LLC, by Zaragon Holdings, Inc., filed a Complaint in Cook County, Illinois Circuit Court against VirtualSellers.com, Inc. for possession of the premises located at 3075 Tollview Drive, Rolling Meadows Illinois and for rent or damages for withholding possession of these premises for the period from September 1, 2001 through September 30, 2001 in the amount of $26,315 plus all rents accruing through the date of trial. A complaint was filed for rent and damages in the amount of $859,512. The Company’s position on this proceeding is that the building has been sublet and deny that they owe the Plaintiff any money. The outcome of this complaint is currently uncertain and consequently no amounts have been accrued as at November 30, 2002. Management is in current discussions with the plaintiff to settle the dispute.

     On July 25, 2001 in the Vancouver Registry of the Supreme Court of British Columbia, our company commenced a lawsuit against Telemetrix Solutions Inc. (formerly Telemetrix Resource Group, Inc.) and Tracy Corporation II dba Western Total Communications asserting a claim against Telemetrix and Tracy in the amount of CDN$64,658 jointly and severally (plus pre-judgment interest) pursuant to a letter agreement entered into between the parties on or about July 14, 1998 with respect to a possible business combination between the parties which was never completed. A provision in the agreement regarding the proposed business combination obligated Telemetrix and Tracy to pay our costs in connection with the proposed business combination. Although no Appearance or Statement of Defense has been filed on behalf of Telemetrix and Tracy, they have advised us that they take the position that the British Columbia Court has no jurisdiction over this matter and further, that any dispute must be dealt with by way of arbitration to be held in Denver, Colorado.

     On October 18, 2001, Steven & Marc Holdings, Inc. filed a lawsuit against our company in the Supreme Court of the State of New York, Court of New York, Case No. 604972/01. In this lawsuit, Steven & Marc Holdings, Inc., a public relations firm, is claiming that we owe them $61,480, plus interest and costs, for services rendered but not paid for between March and October of 2001. We have filed an Answer in this lawsuit and we are attempting to settle it at a reduced amount on a payment plan. The company is currently in discussion with the Plaintiff to settle the lawsuit.

     The Company is also involved in other legal proceedings and claims arising in the ordinary course of business. The Company does not believe that any liabilities related to the legal proceedings to which it is a party are likely to be, individually or in the aggregate, material to the Company’s consolidated financial condition, results of operations or cash flows.

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Item 4. Submission of Matters to a Vote of Security Holders

     Neither the Board of Directors, nor any security holder, submitted any matter during the fourth quarter of the fiscal year covered by this Report to a vote of the security holders through solicitation of proxies or otherwise.

PART II

Item 5. Market for Registrant’s Common Equity and Related Stockholder Matters

     The Common Stock of the Company is traded on the OTC Bulletin Board under the symbol “HTAC.” The following table sets forth high and low “sales” prices of the shares of Common Stock of the Company for the periods indicated (as reported by the National Quotation Bureau).

     On May 1, 2002, the shareholders’ list for our common shares showed 2,251 registered shareholders (42 residents of Canada holding 11,180,336 common shares; 2,202 residents of the United States holding 189,493,325 common shares; and 7 residents of other countries holding 5,699,638 common shares), and a total of 207,373,299 common shares outstanding.

     The Company has never paid cash dividends on its Common Stock and the Board of Directors intends to retain all of its earnings, if any, to finance the development and expansion of its business. However, there can be no assurance that the Company can successfully expand its operations or that such expansion will prove profitable. Future dividend policy will depend upon the Company’s earnings, capital requirements, financial condition and other factors considered relevant by the Company’s Board of Directors.

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Item 6. Selected Financial Data

     The following selected historical financial data has been derived from the audited consolidated financial statements of the Company. This information should be read in conjunction with the Company’s Consolidated Financial Statements and the Notes thereto as well as “Management’s Discussion and Analysis of Financial Condition and Results of Operations”, included in Item 7. In the fourth quarter of 2002, the Company discontinued CallDirect and closed its facility in British Columbia, Canada. In the third quarter of 2003, the Company discontinued the e’commerce division and closed its facility in Chicago, Illinois. CallDirect and the e’commerce division’s results of operations are included in the income (loss) from discontinued operations (see Note 5 to Notes to Consolidated Financial Statements). All prior year information has been adjusted to conform to 2003 presentation.

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

     The following is management’s discussion and analysis of certain significant factors that have affected the profitability of the Company’s business segments from its continuing operations and its consolidated results of operations and financial condition during the periods included in the accompanying consolidated financial statements. The following should be read in conjunction with the consolidated financial statements and related notes.

Critical Accounting Policies and Estimates

     The Company’s financial statements are based on the selection and application of significant accounting policies, which require management to make significant estimates and assumptions. The Company believes that the following are some of the more critical judgment areas in the application of its accounting policies that currently affect its consolidated financial condition and results of operations.

Revenue Recognition

     Healthtrac recognizes revenues from product sales at the time of shipment. On long-term contracts, Healthtrac recognizes revenue and profit as work progresses using the percentage-of-completion method, which relies on estimates of total expected contract revenue and costs. For Other program fees (postage, printing, books, data file distribution, etc.), revenues are recognized at the time of billing.

Accounts Receivable

     The Company is required to estimate the collectibility of its trade receivables and unbilled costs and fees. A considerable amount of judgment is required in assessing the ultimate realization of these receivables including the current credit-worthiness of each customer.

Inventory

     The Company is required to state its inventories at the lower of cost or market. In assessing the ultimate realization of inventories, the Company is required to exercise judgment in its assessment of future demand requirements and compare that with the current or committed inventory levels. The Company recorded charges for required reserves in the fiscal years 2003 and 2002 due to changes in strategic direction and market conditions. It is possible that changes in required inventory reserves may continue to occur in the future due to market conditions.

Capitalized Software Development Costs

     The Company’s policy on capitalized software costs determines the timing of recognition of certain development costs. In addition, this policy determines whether the cost is classified as development expense or cost of license fees. Management is required to use professional judgment in determining whether development costs meet the criteria for immediate expense or capitalization.

     Statement of Financial Accounting Standards (SFAS) No. 86, “Accounting for the Costs of Computer Software to be Sold, Leased or Otherwise Marketed,” requires capitalization of certain software development costs subsequent to the establishment of technological feasibility. Based upon the Company’s product development process, technological feasibility is established upon completion of a working model. Amortization of capitalized software development costs commences when the products are available for general release to customers and is determined using the straight-line method over the expected useful lives of the respective products. Software

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development costs are written-off when projects are abandoned or when the estimated cash flows from a product are not expected to be sufficient to recover the capitalized software development costs.

Outlook

     Our ability to continue as a going concern and to realize the carrying value of our assets is dependent on our ability to obtain additional financing to fund future operations and on our ability to translate our growth into profitable operations. The outcome of these matters cannot be predicted with any certainty at this time. Accordingly, our consolidated financial statements contain note disclosures describing the circumstances that lead there to be doubt over our ability to continue as a going concern. In their report on the annual consolidated financial statements for the year-ended February 28, 2003, our independent auditors included an explanatory paragraph regarding our ability to continue as a going concern. The consolidated financial statements included in this annual report have been prepared without any adjustments that would be necessary if we become unable to continue as a going concern and therefore required to realize upon our assets and discharge our liabilities in other than the normal course of operations.

FISCAL YEAR 2003 COMPARED TO FISCAL YEAR 2002

     On a consolidated basis, revenues from continuing operations for the year ended February 28, 2003 (“fiscal 2003”) were $3,604,433 an increase of $823,961 or 30% from the revenues of $2,780,472 reported for the year ended February 28, 2002 (“fiscal 2002”). The increase in revenues is primarily due to the addition of our new Healthtrac population health management division in August 2001, which recognized revenues of $3,604,433.

     NorthStar revenue increased $19,983 to $1,249,802 for fiscal 2003 compared to $1,229,819 for fiscal 2002. The Call Center generates revenue by providing transaction processing and backroom services including inbound and outbound telemarketing, customer and technical support, customer order entry, centralized billing and collection, order fulfillment, customer dispatch functions and other related services.

     Consolidated selling, general and administrative expenses from continuing operations decreased to $3,580,063 from $5,146,813 in fiscal 2002, an decrease of $1,566,750. Wages and benefits represent 51% (30% in fiscal 2002) of these costs. Wages and benefits increased by $270,398 due primarily to the addition of Healthtrac. An decrease in accounting and legal expense of $332,436 due to cost containment initiatives and conclusion of various lawsuits brought by and against our company, an decrease in consulting fees of $726,137 due to the issuance of non-cash share compensation paid to Healthtrac consultants of $450,000 in fiscal 2002.

     Direct product costs have increased to $663,894 in fiscal 2003 from $534,753 in fiscal 2002. Direct product costs relate to the product sold by Healthtrac to support its population health management business.

     Depreciation and amortization increased from $843,856 in fiscal 2002 to $1,393,988 in fiscal 2003, an increase of $550,132 or 65%. This increase is a result of the significant capital purchases, primarily related to the Healthtrac acquisition.

     For fiscal 2003, our company recognized a loss of $2,161,235 or $0.01 per share, compared to a loss of $9,916,809 or $0.06 per share for fiscal 2002. This loss is a result of the factors discussed above.

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FISCAL YEAR 2002 COMPARED TO FISCAL YEAR 2001

     On a consolidated basis, revenues from continuing operations for the year ended February 28, 2002 (“fiscal 2002”) were $2,780,472 an increase of $2,01,032 or 261% from the revenues of $770,153 reported for the year ended February 28, 2001 (“fiscal 2001”). The increase in revenues is primarily due to the addition of our new Healthtrac population health management division, which produced revenues of $1,550,653.

     NorthStar revenue increased $459,666 to $1,229,819 for fiscal 2002 compared to $770,153 for fiscal 2001. The Call Center generates revenue by providing transaction processing and backroom services including inbound and outbound telemarketing, customer and technical support, customer order entry, centralized billing and collection, order fulfillment, customer dispatch functions and other related services. The increase in revenues from the prior year is attributable to the signing of additional contracts in the fiscal year which resulted in an increase in the number of cable service customers.

     Consolidated selling, general and administrative expenses from continuing operations increased to $5,146,813 from $3,580,063 in fiscal 2001, an increase of $566,750. Wages and benefits represent 30% (31% in fiscal 2001) of these costs. Wages and benefits increased by $445,850 due primarily to the addition of Healthtrac. In the prior year, a significant portion of the compensation was paid through the issuance of shares to our officers and directors. An increase in accounting and legal expense of $338,610 due to various lawsuits brought by and against our company, an increase in consulting fees of $734,385 due to non-cash share compensation paid to Healthtrac consultants of $450,000 and increases in travel and promotion of $99,579 due to the acquisition of Healthtrac, whose offices are located in Redwood City, California. Corporate general and administrative expenses decreased to $2,068,132 from $2,714,560. This decrease is due primarily to the decrease in non-cash compensation paid to officers and directions of our company.

     Direct product costs have increased to $534,753 in fiscal 2002 from $0 in fiscal 2001. Direct product costs of $534,753 relate to the product sold by the population health management business.

     The Call Center’s selling, general and administrative expenses have increased to $1,386,035 compared to $908,953 in the prior year. This represents an increase of 53% whereas revenue from the segment increased 60%. The Call Center’s primary costs continue to be payroll, telephone, rent, printing, postage and office costs.

     Depreciation and amortization increased from $36,941 in fiscal 2001 to $843,856 in fiscal 2002, an increase of $806,915. This increase is a result of the significant capital purchases, primarily related to the Healthtrac acquisition.

     We curtailed our e-commerce operations in fiscal 2002 due to the decline in the business of technology and internet companies and the shift in focus towards the health promotion and disease management business. Our Sullivan Park operations and transaction processing services were closed and the remaining services curtailed. As a result, we wrote-off the remaining goodwill acquired on the Sullivan Park acquisition of $1,522,758 and we wrote-down our e-commerce equipment by $1,330,000 to its estimated net realizable value of approximately $160,000.

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     We recovered $104,980 from a former customer as a result of settlement of litigation that commenced in prior years. Other income (expense) changed from an income of $118,706 in fiscal 2001 to $6,284 in fiscal 2002, primarily the result of lower interest income as cash balances declined during the year.

     On February 28, 2002, we discontinued our CallDirect catalogue business. The CallDirect business earned revenue of $210,443 and had a loss of $170,639 for fiscal 2002 compared to revenue of $327,935 and a loss of $272,774 for fiscal 2001.

     For fiscal 2002, our company recognized a loss of $9,916,809 or $0.06 per share, compared to a loss of $6,711,117 or $0.05 per share for fiscal 2001. This loss is a result of the factors discussed above.

Liquidity and Capital Resources

     As at February 28, 2003, the company had a net working capital deficiency of $1,618,647, capital assets with a book value of $169,994, intellectual property with a book value of $4,133,359 and obligations under capital leases of $9,344 resulting in a net equity of $4,124,015.

     During fiscal 2003, we used $271,533 in cash to fund operations compared to $3,059,285 in fiscal 2002. We used $36,060 to fund investing activities which consisted primarily of capital asset additions. Cash of $210,807 was obtained during the year from financing activities for a net decrease in cash of $96,786. Cash at February 28, 2003 was $186,873.

     We have historically funded operations through the issuance of common shares. We expect the need to fund our working capital deficit, future operations and investments through the issuance of common shares. Subsequent to February 28, 2003, there have not been any sales of common shares.

     We estimate our cash requirements for capital asset additions and for operations for fiscal 2004 to be less than $500,000. We will continue to search for appropriate acquisitions to compliment our existing operations. Where possible, we will pay for acquisitions through the issuance of our common shares.

Item 7B. Risk Factors

     An investment in our securities involves significant risks, including those described below. These risks relate to our business model, our ability to generate revenues and gain operating efficiencies, our history of losses, significant changes, our ability to hire and retain key personnel, our reliance on technology providers and internal technology applications, the possible delisting of our common stock, and legal claims against us.

     Our actual results may differ materially from those expressed in any forward-looking statement as a result of certain factors, including but not limited to those set forth below and included in other portions of this document.

Foreign Exchange Rate Risk

     The Company operates internationally and has adopted local currencies as the functional currencies for its foreign subsidiaries because their principal economic activities are most closely tied to the respective local currencies. This exposes the Company to market risk from changes in foreign exchange rates to the extent that transactions are not denominated in the U.S. dollar. In consolidation, the Company converts the accounts of its foreign subsidiaries from the functional currency to the U.S. dollar. As a result, the Company faces the risk that the foreign currencies will have declined in value as compared to the U.S. dollar, resulting in a foreign currency translation loss.

Most Of Our Agreements Are Short Term And Our Financial Performance Could Be Damaged By A Significant Number Of Terminations Or Non-Renewals.

     The standard customer agreement for customers of the Call Center are short-term and can be terminated without cause by either party. We expect that there will be terminations and non-renewals from time to time and that we may not be able to replace all of these clients. Our ability to generate revenues and our financial performance could be damaged by a significant number of terminations or non-renewals of such contracts.

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We Could Be Sued For Medical Malpractice

     The information provided by us is intended to be in addition to, and not in substitution for, medical advice from a user’s own physician. However, medical advice may be dispensed both directly by doctors and indirectly through our Healthtrac products. Damage awards in medical malpractice suits can be very high, potentially creating a financial burden that we could not withstand if such a suit were successful and not fully covered by insurance.

Our Common Stock Is Traded On The Over-the-Counter Bulletin Board And As A Result, It May Be More Difficult To Dispose Of Or To Obtain Adequate Quotations As To The Prices Of Our Common Stock.

     Our common stock is quoted on the OTC Bulletin Board and is thinly traded. In the past, our trading price has fluctuated widely, depending on many factors that may have little to do with our operations or business prospectus. In addition, the OTC Bulletin Board is not an exchange and, because trading of the securities on the OTC Bulletin Board is often more sporadic than the trading of securities listed on an exchange of the Nasdaq Stock Market, Inc., you may have difficulty reselling any of the shares you purchase from the selling stockholders.

We May Not Be Able To Obtain The Additional Financing Necessary To Grow Our Business.

     In order to grow our business and finance future acquisitions, we will require additional financing. We currently have a working capital deficiency of $1,618,647. As of February 28, 2003, our accumulated deficit was $119,234,559. Furthermore, we have experienced negative cash flows during each of the last three years of operations. We have historically depended upon capital infusion from the issuance of long term debt and equity securities to provide the cash needed to fund operations. Our ability to continue in business depends upon our continued ability to obtain significant financing from external sources. If additional capital is raised through borrowing or other debt financing, we would incur substantial additional interest expense. Sales of additional equity securities, through a traditional underwritten offering, would dilute, on a pro rata basis, the percentage ownership of all holders of common shares. There can be no assurance that any such financing would be available upon terms and conditions acceptable to us, if at all. The inability to obtain additional financing in a sufficient amount when needed and upon acceptable terms and conditions could have a material adverse effect upon our company and our revenue growth may be adversely affected. If adequate funds are not available on acceptable terms when needed, we may be required to delay, scale-back or eliminate marketing of one or more of our products or development programs or obtain funds through arrangements with collaborative partners or others that may require us to relinquish rights to certain of our technologies, product candidates or potential products that we would not otherwise relinquish. Inadequate funding also could impair our ability to compete in the marketplace and could result in our dissolution.

Our Directors Are Authorized To Issue Preferred Stock Which May Adversely Affect The Voting Power Of Our Shareholders

     We are authorized to issue 150,000,000 each of Class A and Class B preference shares, with such designations, rights and preferences as may be determined from time to time by our board of directors. Accordingly, our board of directors is empowered, without stockholder approval, to issue such preference shares with dividend, liquidation, conversion or other rights which could adversely affect the rights of the our shareholders. The issuance of preference shares could, among other things, adversely affect the voting power of our shareholders and, under certain circumstances, make it more difficult for a third party to gain control of our company, discourage bids for common shares at a premium or otherwise adversely affect the market price for common shares.

We Are Dependent on a Small Number of Customers

     To date, Healthtrac Corporation has derived a significant portion of its revenues from a small number of customers. Many of our customers do not have contracts that extend beyond twelve months. A critical component of the company’s business plan is the acquisition of new customers and the renewal of current contracts. There can be no assurance that we will be successful in developing profitable relationships with new customers or that we will retain existing customers.

Foreign Exchange Rate Risk

     The Company operates internationally and has adopted local currencies as the functional currencies for its foreign subsidiaries because their principal economic activities are most closely tied to the respective local currencies. This exposes the Company to market risk from changes in foreign exchange rates to the extent that transactions are not denominated in the U.S. dollar. In consolidation, the Company converts the accounts of its foreign subsidiaries from the functional currency to the U.S. dollar. As a result, the Company faces the risk that the

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foreign currencies will have declined in value as compared to the U.S. dollar, resulting in a foreign currency translation loss.

Item 8. Financial Statements and Supplementary Data

     The Consolidated Financial Statements and Schedule of the Company are listed in Item 15(a) and included herein on pages F-1 through F-23.

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

     The Company has not had any disagreement with its independent auditors on any matter of accounting principles or practices or financial statement disclosure.

PART III

Item 10. Directors and Executive Officers of the Registrant

     Reference is made to the information appearing under the caption “Election of Directors” in the Company’s Proxy Statement to be submitted to the Commission on or before June 28, 2003.

Item 11. Executive Compensation

     Reference is made to the information appearing under the caption “Executive Compensation” in the Company’s Proxy Statement to be submitted to the Commission on or before June 28, 2003.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

     Reference is made to the information appearing under the caption “Security Ownership of Certain Beneficial Owners and Management” in the Company’s Proxy Statement to be submitted to the Commission on or before June 28, 2003.

     Reference is made to the information appearing under the caption “Equity Compensation Plan Information” in the Company’s Proxy Statement to be submitted to the Commission on or before June 28, 2003.

Item 13. Certain Relationships and Related Transactions

     Reference is made to the information appearing under the caption “Certain Relationships and Related Transactions” in the Company’s Proxy Statement to be submitted to the Commission on or before June 28, 2003.

Item 14. Controls and Procedures

     (a)  Evaluation of Disclosure Controls and Procedures

     The Chief Executive Officer and Chief Financial Officer of the Company have concluded, based on their evaluation as of the date within 90 days prior to the date of the filing of this annual report on Form 10-K, the effectiveness of the Company’s disclosure controls and procedures pursuant to Exchange Act Rule 13a-14 and 15d-14. Based on that evaluation, the Company’s Chief Executive Officer and Chief Financial Officer concluded that the disclosure controls and procedures were effective in ensuring that all material information required to be filed in this annual report have been made known to them, to allow timely decisions regarding required disclosure.

     (b)  Changes in Internal Controls

     There have been no significant changes in internal controls, or in other factors that could significantly affect internal controls subsequent to the date the Chief Executive Officer and Chief Financial Officer completed their evaluation.

Item 15. Exhibits, Financial Statements, Schedules and Reports on Form 8-K

     (a)  1. Consolidated Financial Statements

     Report of Independent Auditors

     Consolidated Balance Sheets at February 28, 2003 and 2002

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     Consolidated Statements of Operations for the years ended February 28, 2003, 2002 and 2001

     Consolidated Statements of Shareholders’ Equity for the years ended February 28, 2003, 2001 and 2000

     Consolidated Statements of Cash Flows for the years ended February 28, 2003, 2002 and 2001

     Notes to Consolidated Financial Statements

     All other schedules are omitted because they are not applicable or the required information is shown in the consolidated financial statements or notes thereto.

     3.     Exhibits

     (b)  Reports on Form 8-K

     On November 27, 2002, the Registrant filed a lawsuit in the U.S. District Court for the Northern District of California against Dennis Sinclair (“Sinclair”), Raymond Mol (“Mol”) and Mel Baillie (“Baillie”) (collectively the “Defendants”). The lawsuit is primarily based upon certain sales or acquisitions of the Registrant’s stock engaged in or authorized by the Defendants while they were directors and/or officers of the Registrant in violation of Section 16(b) of the Securities Exchange Act of 1934, 15 U.S.C. ss. 78p(b) (“Section 16”). Section 16 generally restricts certain corporate “insiders” from profiting due to the sale or acquisition of corporate securities within a six month period of the original transaction, by mandating that all such profits shall inure to, and be recoverable by, the issuer of the securities. In the lawsuit, the Registrant seeks the recovery of profits which it believes were received by the Defendants as a result of securities sales or purchases during the approximate period of November, 1999 through November, 2001, pursuant to Section 16 and applicable common law principles governing the conduct of corporate fiduciaries. In addition to the disgorgement of profits, the Registrant also seeks a complete accounting by the Defendants for all transactions which they conducted involving the Registrant’s securities or those of its predecessors while holding corporate office or membership on the Registrant’s Board of Directors.

     Exhibit 99.1 — Certification of Periodic Report, dated December 16, 2002, of the Principal Executive Officer and Principal Financial Officer of the Registrant pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

     On December 12, 2002 one of the Registrant’s directors, Richard Kessler, resigned from the Board of Directors. Mr. Kessler indicated to the Board that he resigned for personal reasons.

     On December 16, 2002, the Principal Executive Officer and Principal Financial Officer of the Registrant provided a written statement on the Registrant’s Quarterly Report on Form 10-Q for the quarter ended August 31, 2002, as amended, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

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SIGNATURES

     Pursuant to the requirements of 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.

Date: June 13, 2003

     Pursuant to the requirements of the Securities Exchange Act of 1934, this Report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

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CERTIFICATION

I, Edward W. Sharpless, certify that:

	1.		I have reviewed this annual report on Form 10-K of Healthtrac, Inc.;
	2.		Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report;
	3.		Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report;
	4.		The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

	a)		designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared;
	b)		evaluated the effectiveness of the registrant’s disclosure controls and procedures as of a date within 90 days prior to the filing date of this annual report (the “Evaluation Date”); and
	c)		presented in this annual report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

5.

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

	a)		all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant’s ability to record, process, summarize and report financial data and have identified for the registrant’s auditors any material weaknesses in internal controls; and
	b)		any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls; and

     6.     The registrant’s other certifying officers and I have indicated in this annual report whether there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

Dated: June 13, 2003

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CERTIFICATION

I, Tony Z. DiCostanzo, certify that:

	1.		I have reviewed this annual report on Form 10-K of Healthtrac, Inc.;
	2.		Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report;
	3.		Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report;
	4.		The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

	a)		designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared;
	b)		evaluated the effectiveness of the registrant’s disclosure controls and procedures as of a date within 90 days prior to the filing date of this annual report (the “Evaluation Date”); and
	c)		presented in this annual report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

5.

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

	a)		all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant’s ability to record, process, summarize and report financial data and have identified for the registrant’s auditors any material weaknesses in internal controls; and
	b)		any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls; and

     6.     The registrant’s other certifying officers and I have indicated in this annual report whether there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

Dated: June 13, 2003

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HEALTHTRAC, INC.
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
AND FINANCIAL STATEMENT SCHEDULE
For The Year Ended February 28, 2003

F-1

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REPORT OF INDEPENDENT AUDITORS

To the Board of Directors and Shareholders
Healthtrac, Inc.

     We have audited the accompanying consolidated balance sheets of Healthtrac, Inc. as at February 28, 2003 and 2002 and the related consolidated statements of operations, stockholders’ equity and cash flows for each of the years in the three-year period ended February 28, 2003. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

     We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

     In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as at February 28, 2003 and 2002 and the results of its operations and its cash flows for each of the years in the three-year period ended February 28, 2003 in accordance with accounting principles generally accepted in the United States of America.

     The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in note 1 to the financial statements, the Company has a working capital deficiency of $1,618,647 as at February 28, 2003 and the Company has suffered recurring losses from operations. These conditions raise substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Chartered Accountants

Vancouver, Canada
May 16, 2003

F-2

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HEALTHTRAC, INC.
CONSOLIDATED BALANCE SHEETS
(Expressed in United States dollars)

February 28, 2003 and 2002

See accompany notes

F-3

Table of Contents

HEALTHTRAC, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Expressed in United States dollars)

See accompanying notes

F-4

Table of Contents

HEALTHTRAC, INC.
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
(Expressed in United States dollars)

See accompanying notes

F-5

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HEALTHTRAC, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Expressed in United States dollars)