Triton Emission Solutions Inc. - FORM 10-Q

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

[ X ]

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

For the quarterly period ended June 30, 2011

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

For the transition period from to

Commission file number 000-33309

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

Delaware (State or other jurisdiction of incorporation or organization)	33-0953557 (I.R.S. Employer Identification No.)

1100 Melville Street, Suite #610, Vancouver, British Columbia, Canada (Address of principal executive offices)	V6E 4A6 (Zip Code)

1-800-648-4287 (Registrant’s telephone number, including area code)
n/a (Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) 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.

[ X ] Yes [ ] No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (s. 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

[ ] Yes [ ] No

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

	Larger accelerated filer	[ ]		Accelerated filer	[ ]
	Non-accelerated filer	[ ] (Do not check if a smaller reporting company)		Smaller reporting company	[ X ]

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

[ ] Yes [ X ] No

APPLICABLE ONLY TO CORPORATE ISSUERS

State the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date.

Class	Outstanding at August 11, 2011
common stock - $0.001 par value	95,183,198

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements.

GLOBETRAC INC.
BALANCE SHEETS

	June 30, 2011			December 31, 2010
	unaudited
ASSETS

Current assets

Cash	$	1,329		$	5,400
Accounts receivable		8,127			5,611
Prepaids		999			999

Total current assets	$	10,455		$	12,010

LIABILITIES AND STOCKHOLDERS' DEFICIT

Current liabilities

Accounts payable	$	4,548		$	56,019
Accrued liabilities		-			3,730
Accrued professional fees		5,500			49,281
Convertible note payable to related parties, including accrued interest		51,975			50,206
Due to related parties		56,984			34,607

Total current liabilities		119,007			193,843

Commitments and contingencies		-			-

Stockholders' deficit
Preferred stock $0.001 par value, 5,000,000 authorized, none issued and outstanding at June 30, 2011 and December 31 , 2010		-			-
Common stock $0.001 par value, 200,000,000 common shares authorized, 95,183,198 issued and outstanding at June 30, 2011 and 89,883,198 at December 31, 2010		95,183			89,883
Additional paid in capital		1,228,565			1,167,085
Accumulated deficit		(1,443,965	)		(1,452,213	)
Accumulated other comprehensive income		11,665			13,412

Total stockholders' deficit		(108,552	)		(181,833	)

Total liabilities and stockholders' deficit	$	10,455		$	12,010

The accompanying notes are an integral part of these financial statements

GLOBETRAC INC.
STATEMENTS OF OPERATIONS
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2011 AND 2010
(UNAUDITED)

	Three months ended June 30,						Six months ended June 30,
	2011			2010			2011			2010

Royalty income	$	12,007		$	12,195		$	28,240		$	23,200

Operating expenses:

General and administrative		31,072			18,427			53,907			37,725

Operating loss		(19,065	)		(6,232	)		(25,667	)		(14,525	)

Other Income (expense):
Interest expense		(14,676	)		-			(15,548	)		-
Gain on extinguishment of debt		49,463			-			49,463			-

Net income (loss)	$	15,722		$	(6,232	)	$	8,248		$	(14,525	)


Net income (loss) per share - basic and diluted	$	0.00		$	(0.00	)	$	0.00		$	(0.00	)

Weighted average number of shares outstanding - basic and diluted		89,999,682			89,883,198			89,941,762			89,883,198

The accompanying notes are an integral part of these financial statements

GLOBETRAC INC.
STATEMENT OF STOCKHOLDERS' DEFICIT AND COMPREHENSIVE INCOME (LOSS)
FOR THE SIX MONTHS ENDED June 30, 2011 AND 2010

										Accumulated
	Common Stock Issued				Additional					Other
	Number of				Paid-in		Accumulated			Comprehensive
	Shares		Amount		Capital		Deficit			Income (Loss)			Total

Balance at January 1, 2010		89,883,198	$	89,883	$	1,167,085	$	(1,408,292	)	$	13,412		$	(137,912	)
Net loss for the six months ended June 30, 2010		-		-		-		(14,525	)		-			(14,525	)

Balance at June 30, 2010 (unaudited)		89,883,198		89,883		1,167,085		(1,422,817	)		13,412			(152,437	)
Net loss for the six months ended December 31, 2010		-		-		-		(29,396	)		-			(29,396	)

Balance at December 31, 2010		89,883,198		89,883		1,167,085		(1,452,213	)		13,412			(181,833	)
Issue shares for debt		5,300,000		5,300		61,480		-			-			66,780
Net income for the six months ended June 30, 2011		-		-		-		8,248			-			8,248
Comprehensive loss		-		-		-		-			(1,747	)		(1,747	)

Balance at June 30, 2011 (unaudited)		95,183,198	$	95,183	$	1,228,565	$	(1,443,965	)	$	11,665		$	(108,552	)

Note: There is no Preferred Stock issued and outstanding.

The accompanying notes are an integral part of these financial statements

STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 2011 AND 2010
(UNAUDITED)

	2011			2010

Cash flows from operating activities:

Net gain (loss)	$	8,248		$	(14,525	)

Adjustments to reconcile net income (loss) to net cash provided by (used in ) operating activities:
Stock issued for accrued interest		13,780			-
Foreign currency gain		(1,747	)		-
Changes in operating assets and liabilities:
Accounts receivable		(2,516	)		(1,009	)
Prepaids		-			-
Accounts payable		(51,471	)		(5,393	)
Accrued liabilities		(3,730	)		(4,313	)
Accrued professional fees		9,219			(5,500	)
Related party loan payable		1,769			-
Due to related party		22,377			19,195

Net cash used in operating activities		(4,071	)		(11,545	)

Effect of foreign currency exchange		-			-

Net decrease in cash		(4,071	)		(11,545	)

Cash, beginning of period		5,400			13,438

Cash, end of period	$	1,329		$	1,893

The accompanying notes are an integral part of these financial statements

GLOBETRAC INC.

NOTES TO FINANCIAL STATEMENTS

June 30, 2011

UNAUDITED

NOTE 1 – ORGANIZATION AND NATURE OF OPERATIONS

Nature of Operations

GlobeTrac Inc. (GlobeTrac or the Company) was incorporated in the state of Delaware on March 2, 2000 as 411 Place.com, Inc. On February 28, 2001, the Company changed its name to Artescope, Inc. and on July 29, 2002 changed its name to GlobeTrac Inc. The Company’s principal executive offices are headquartered in Canada. On August 27, 2002 the Company acquired 100% of the shares of Global Axxess Corporation Limited (Global Axxess), a company incorporated in Ireland. On June 12, 2008 the Company sold its shares of Global Axxess, its only subsidiary. Global Axxess owned 100% of the issued and outstanding shares of Globetrac Limited (Limited), a company incorporated in the United Kingdom, until March 20, 2007 when Limited was officially dissolved and all of Limited’s assets and liabilities were assumed by GlobeTrac. As a result of terminating its operations in Europe, the Company is seeking new business opportunities.

The Company was in the business of selling, marketing, distributing and installing global wireless tracking and telematics equipment in Europe until November 1, 2004 when they exchanged certain of their assets and certain liabilities in Globetrac Limited and their rights to the global wireless tracking and telematics business in Europe for a six percent royalty on gross sales of all existing and qualified potential customers that the Company has in Europe.

In these notes, the terms “Company”, “we”, “us” or “our” mean GlobeTrac Inc. whose operations are included in these unaudited financial statements.

Basis of Presentation

The unaudited financial statements included herein have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X. They do not include all information and notes required by generally accepted accounting principles for complete financial statements. However, except as disclosed herein, there has been no material change in the information disclosed in the notes to the financial statements included in the Annual Report on Form 10-K of GlobeTrac Inc. for the year ended December 31, 2010. In the opinion of management, all adjustments (including normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and six months ended June 30, 2011 are not necessarily indicative of the results that may be expected for any other interim period or the entire year. For further information, these unaudited financial statements and the related notes should be read in conjunction with the Company’s audited financial statements for the year ended December 31, 2010 included in the Company’s report on Form 10-K.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Accounting Estimates

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

Cash Equivalents

For purposes of the balance sheets and statements of cash flows, the Company considers all amounts on deposit with financial institutions and highly liquid investments with an original maturity of 90 days or less to be cash equivalents. At June 30, 2011 and December 31, 2010, the Company had no cash equivalents.

Accounts Receivable

Receivables represent valid claims against debtors for royalties arising on or before the balance sheet date and are reduced to their estimated net realizable value. An allowance for doubtful accounts is based on an assessment of the collectibility of all past due accounts. At June 30, 2011 and December 31, 2010, our allowance for doubtful accounts was $0.

GLOBETRAC INC.

NOTES TO FINANCIAL STATEMENTS

June 30, 2011

UNAUDITED

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Revenue Recognition

Royalty revenue is recognized when pervasive evidence of an agreement exists, when it is received or when the royalty income is determinable and collectibility is reasonably assured.

Financial Instruments

Foreign Exchange Risk

The Company is subject to foreign exchange risk on our royalty revenue which is denominated in UK pounds and some purchases which are denominated in Canadian dollars. Foreign currency risk arises from the fluctuation of foreign exchange rates and the degree of volatility of these rates relative to the United States dollar. Foreign exchange rate fluctuations may adversely impact the Company’s results of operations as exchange rate fluctuations on transactions denominated in currencies other than our functional currency (the US dollar) result in gains and losses that are reflected in our Income Statement. To the extent the U.S. dollar weakens against foreign currencies, the translation of these foreign currency-denominated transactions will result in increased net revenue. Conversely, the Company’s net revenue will decrease when the U.S. dollar strengthens against foreign currencies. The Company does not believe that it has any material risk due to foreign currency exchange.

Foreign exchange gains or losses were $1,747 for the six months ending June 30, 2010.

Fair Value of Financial Instruments

The Company’s financial instruments include cash, accounts receivable, accounts payable, accrued liabilities and accrued professional fees. The fair value of these financial instruments approximate their carrying values due to their short maturities.

Concentration of Credit Risk

Financial instruments that potentially subject the Company to significant concentrations of credit risk consist principally of cash and trade accounts receivable.

At June 30, 2011 and December 31, 2010, the Company had $1,329 and $5,400 respectively, in cash on deposit with a large chartered Canadian bank. At June 30, 2011 and December 31, 2010, $437 and $635 respectively, of this cash was not insured. As part of its cash management process, the Company performs periodic evaluations of the relative credit standing of this financial institution. The Company has not experienced any losses in cash balances and does not believe it is exposed to any significant credit risk on its cash.

Accounts receivable consists of royalty income from one customer and is not collateralized. Management continually monitors the financial condition of its customer to reduce the risk of loss. The Company routinely assesses the financial strength of its source of revenue income and as a consequence, concentration of credit risk is limited. At June 30, 2011 and December 31, 2010, the Company had $8,127 and $5,611 in royalties’ receivable from this customer.

Comprehensive Income (Loss)

Comprehensive income reflects changes in equity that results from transactions and economic events from non-owner sources. At June 30, 2011 and December 31, 2010 the Company had $11,665 and $13,412 in accumulated other comprehensive losses from its foreign currency translation. The Company recorded a $1,747 adjustment of comprehensive loss due to an extinguished debt transaction.

GLOBETRAC INC.

NOTES TO FINANCIAL STATEMENTS

June 30, 2011

UNAUDITED

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Income Taxes

Income tax expense is based on pre-tax financial accounting income. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets, including tax loss and credit carryforwards, and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Deferred income tax expense represents the change during the period in the deferred tax assets and deferred tax liabilities. The components of the deferred tax assets and liabilities are individually classified as current and non-current based on their characteristics. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized.

Stock-Based Compensation

The Company accounts for Stock-Based Compensation in accordance with Financial Accounting Standards Board (FASB) Accounting Standard Codification (ASC) 718 “Compensation – Stock Compensation”, which requires recording expense for stock compensation based on a fair value based method.

The Company uses the “modified prospective method” which requires the Company to recognize compensation costs for all stock-based payments granted, modified or settled in financial statements.

The Company had no outstanding options or warrants at June 30, 2011 and December 31, 2010.

Basic and Diluted Net Earnings (Loss) Per Common Share (EPS)

Basic net earnings (loss) per share is computed by dividing the net earnings (loss) attributable to the common stockholders by the weighted average number of common shares outstanding during the reporting period. Diluted net income per common share includes the potential dilution that could occur upon exercise of the options and warrants to acquire common stock computed using the treasury stock method which assumes that the increase in the number of shares is reduced by the number of shares which could have been repurchased by the Company with the proceeds from the exercise of the options and warrants (which were assumed to have been made at the average market price of the common shares during the reporting period).

The Company had convertible debt to a related party at June 30, 2011 and December 31, 2010, of $49,500, and convertible interest of $2,475 and $706 respectively.

Segment Reporting

The Company is centrally managed, has limited operations and operates in one business segment.

Recent Accounting Pronouncements

In May 2011, the FASB has issued Accounting Standards Update (“ASU”) No. 2011-04, Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs. This ASU represents the converged guidance of the FASB and the IASB (the Boards) on fair value measurement. The collective efforts of the Boards and their staffs, reflected in ASU 2011-04, have resulted in common requirements for measuring fair value and for disclosing information about fair value measurements, including a consistent meaning of the term “fair value.” The Boards have concluded the common requirements will result in greater comparability of fair value measurements presented and disclosed in financial statements prepared in accordance with U.S. GAAP and IFRSs. The amendments to the FASB Accounting Standards Codification (Codification) in this ASU are to be applied prospectively. For public entities, the amendments are effective during interim and annual periods beginning after December 15, 2011. For nonpublic entities, the amendments are effective for annual periods beginning after December 15, 2011. Early application by public entities is not permitted. Nonpublic entities may apply the amendments in ASU 2011-04 early, but no earlier than for interim periods beginning after December 15, 2011. The Company is currently assessing the impact that the adoption will have on its financial statements.

GLOBETRAC INC.

NOTES TO FINANCIAL STATEMENTS

June 30, 2011

UNAUDITED

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

FASB ASC 810 Consolidation (“ASC 810”) became effective for us on January 1, 2010, and was amended to change how a company determines when an entity that is insufficiently capitalized or is not controlled through voting (or similar rights) should be consolidated. The determination of whether a company is required to consolidate an entity is based on, among other things, an entity’s purpose and design and a company’s ability to direct the activities of the entity that most significantly impact the entity’s economic performance. The new authoritative accounting guidance requires additional disclosures about the reporting entity’s involvement with variable-interest entities and any significant changes in risk exposure due to that involvement as well as its affect on the entity’s financial statements. The new authoritative accounting guidance under ASC 810 was effective January 1, 2010 and did not have a significant impact on our financial statements.

FASB ASC 860 Transfers and Servicing (“ASC 860”) was amended to enhance reporting about transfers of

financial assets, including securitizations, and where companies have continuing exposure to the risks related to transferred financial assets. The new authoritative accounting guidance eliminates the concept of a “qualifying special-purpose entity” and changes the requirements for derecognizing financial assets. The new authoritative accounting guidance also requires additional disclosures about all continuing involvements with transferred financial assets including information about gains and losses resulting from transfers during the period. The new authoritative accounting guidance under ASC 860 was effective January 1, 2010 and did not have a significant impact on our financial statements.

In April 2010, the FASB issued ASU 2010-17, Revenue Recognition – Milestone Method (“ASU 2010-17”). ASU 2010-17 provides guidance on the criteria that should be met for determining whether the milestone method of revenue recognition is appropriate. A vendor can recognize consideration that is contingent upon achievement of a milestone in its entirety as revenue in the period in which the milestone is achieved only if the milestone meets all criteria to be considered substantive. The following criteria must be met for a milestone to be considered substantive. The consideration earned by achieving the milestone should (1) be commensurate with either the level of effort required to achieve the milestone or the enhancement of the value of the item delivered as a result of a specific outcome resulting from the vendor’s performance to achieve the milestone; (2) related solely to past performance; and (3) be reasonable relative to all deliverables and payment terms in the arrangement. No bifurcation of an individual milestone is allowed and there can be more than one milestone in an arrangement. Accordingly, an arrangement may contain both substantive and nonsubstantive milestones. ASU 2010-17 is effective on a prospective basis for milestones achieved in fiscal years, and interim periods within those years, beginning on or after June 15, 2010. Management is currently evaluating the potential impact of ASU 2010-17 on our financial statements.

NOTE 3 – GOING CONCERN

The Company was in the business of selling, marketing, distributing and installing global wireless tracking and telematics equipment in Europe until November 1, 2004 when it exchanged its rights to sell, market, distribute and install global wireless tracking and telematics equipment in Europe as well as specific assets and liabilities, for a royalty of 6% on future gross sales to current customers and qualified potential customers in Europe. There is no cap on the royalties and royalties are to be paid for the duration of 11 years, ending October 31, 2015. The Company has an accumulated deficit of $1,433,965 at June 30, 2011. Additional financing will be required by the Company to fund and support its operations. Management plans to mitigate its losses in future years by controlling its operating expenses and seeking out new business opportunities. However, there is no assurance that the Company will be able to obtain additional financing, control their operating expenses or be successful in locating or acquiring a viable business. The financial statements do not include any adjustments that might result from the outcome of these uncertainties.

NOTE 4 – DUE TO RELATED PARTIES

	June 30,		December 31,
	2010		2010
Due to a company sharing a common director (a)	$	23,877	$	1,500
Due to a company controlled by a relative of a major shareholder		33,107		33,107

Due to related parties	$	56,984	$	34,607

(a) During the six months ended June 30, 2011 and 2010 the Company was billed $33,670 and $32,700 respectively, in administrative fees by a company sharing a common director. These fees are included in General and Administrative expenses on the Statement of Operations.

GLOBETRAC INC.

NOTES TO FINANCIAL STATEMENTS

June 30, 2011

UNAUDITED

NOTE 5 – CONVERTIBLE NOTES AND INTEREST PAYABLE TO RELATED PARTIES

	June 30,		December 31,
	2011		2010
Convertible notes and interest payable to a relative of a major shareholder unsecured, bears interest at 7% per annum, due on demand	$	34,500	$	34,500
Convertible note and interest payable to a company controlled by a major shareholder unsecured, bears interest at 7% per annum, due on demand		15,000		15,000
Accrued interest		2,475		706

Total convertible notes and interest payable to related parties	$	51,975	$	50,206

The lender may, in its sole discretion, provide the Borrower with written instructions to convert any payment of principal sum or interest into restricted shares of common stock in the capital of the borrower. Payments will be converted into fully paid, nonassessable and restricted shares of common stock in the capital of the Borrower (“the conversion shares”) at a conversion price of the lower of $0.50 per share or the Company's market price on the date of conversion.

NOTE 6 – ROYALTY AGREEMENT

On November 1, 2004 the Company agreed, pursuant to a termination and transfer agreement, to discontinue marketing, distributing and installing global wireless tracking and telematics equipment in Europe, which was carried on through its wholly-owned subsidiary, GlobeTrac Limited, in exchange for certain assets and liabilities and a six percent royalty to be paid to GlobeTrac Inc. on gross sales of all existing and qualified potential customers that the Company had in Europe. This royalty agreement expires on October 31, 2015.

NOTE 7 – COMMITMENTS

The Company had no contingencies or long-term commitments at June 30, 2011.

NOTE 8 – FAIR VALUE

Effective January 1, 2009, the Company adopted ASC 820-10, Fair Value Measurements and Disclosures – Overall. ASC 820-10 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value hierarchy prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. Level 1 inputs are quoted prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. Level 2 inputs are those other than quoted prices included within Level 1 that are observable for the asset or liability. Level 3 inputs are unobservable inputs for the asset or liability. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The Company did not have any financial assets or liabilities at December 31, 2011 for which fair value measurements are applicable.

NOTE 9 – COMMON STOCK

On June 24, 2011 the Company voted to increase its authorized capital to 900,000,000 common shares, this change will be implemented once the State of Delaware has approved the increase.

On June 29, 2011, in a non cash transaction, the Company issued 5,300,000 shares of our common stock at $0.0126 per share in settlement of $53,000 in debt. (Note 11)

NOTE 10 – EXTINGUISHMENT OF DEBT

Other income included $49,463 of income related to the extinguishment of debt, as to which the statute of limitations expired.

NOTE 11 – STOCK ISSUED FOR ACCRUED INTEREST

In conjunction with the issuance of 5,300,000 shares of our common stock for $53,000 in debt we recorded interest expense of $13,780. (Note 9)

GLOBETRAC INC.

NOTES TO FINANCIAL STATEMENTS

June 30, 2011

UNAUDITED

NOTE 12 – SUBSEQUENT EVENTS

The Company has evaluated subsequent events for recognition or disclosure in the financial statements filed on Form 10-Q with the SEC and no other events, other than those described in these notes, have occurred that require disclosure.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Forward Looking Statements

The information in this annual report on Form 10-Q contains forward-looking statements. These forward-looking statements involve risks and uncertainties, including statements regarding our capital needs, business strategy and expectations. Any statements contained herein that are not statements of historical facts may be deemed to be forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as may, will, should, expect, plan, intend, anticipate, believe, estimate, predict, potential or continue, the negative of such terms or other comparable terminology. Actual events or results may differ materially from those events or results included in the forward-looking statements. In evaluating these statements, you should consider various factors, including the risks outlined from time to time in the reports we file with the Securities and Exchange Commission. Some, but not all, of these risks include, among other things:

*	our inability to obtain the financing we need to continue our operations;

*	changes in regulatory requirements that adversely affect our business;

*	a decline in our royalty revenue; and

*	risks over which we have no control, such as a general downturn in the economy which may adversely affect our royalty revenue and ability to obtain working capital.

We do not intend to update forward-looking statements. You should refer to and carefully review the information in future documents we file with the Securities and Exchange Commission.

General

This discussion and analysis should be read in conjunction with our interim unaudited financial statements and related notes included in this Form 10-Q and the audited financial statements and related notes thereto included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2010. The inclusion of supplementary analytical and related information herein may require us to make estimates and assumptions to enable us to fairly present, in all material respects, our analysis of trends and expectations with respect to our results of operations and financial position taken as a whole. Actual results may vary from the estimates and assumptions we make.

When we use the words “we”, “us” or “our” in this report, we are referring to GlobeTrac Inc. which we sometimes refer to in this report as “GlobeTrac”.

Overview

We were incorporated in the state of Delaware on March 2, 2000 as 411 Place.com Inc. On February 28, 2001, we changed our name to Artescope, Inc. and on July 29, 2002 changed the name to GlobeTrac Inc. Our principal executive offices are headquartered in Canada. On August 27, 2002, we acquired 100% of the shares of Global Axxess Corporation Limited (Global Axxess), a company incorporated in Ireland. On June 12, 2008 we sold our shares of Global Axxess, our only subsidiary. Global Axxess owned 100% of the issued and outstanding shares of Globetrac Limited (Limited), a company incorporated in the United Kingdom, until March 20, 2007 when Limited was officially dissolved and all of Limited’s assets and liabilities were assumed by GlobeTrac. As a result of terminating our operations in Europe, we are seeking new business opportunities.

At June 30, 2011, our only source of income was a six percent commission/royalty that we receive from WebTech Wireless Inc. (“WebTech”), based on all qualified sales of any product or service offered by WebTech. A qualified sale means all of WebTech’s invoiced sales of products or services to a customer that has ordered at least one product or service before November 26, 2005, whether sold by WebTech or by a licensee, affiliate or agent of WebTech. A list of customers was provided to WebTech by GlobeTrac. There is no cap on the royalty receivable and royalties are to be paid by WebTech for eleven years, beginning November 1, 2004 and ending October 31, 2015.

Results of Operation

Our operating results for the three and six months ended June 30, 2011 and 2010 and the changes between those periods, are summarized as follows:

	Three Months Ended June 30,						Increase (Decrease) Between the Three Months Ended June 30,			Six Months Ended June 30,						Increase (Decrease) Between the Six Months Ended June 30,
	2011			2010			2011 and 2010			2011			2010			2011 and 2010
Royalty income	$	12,007		$	12,195		$	(188	)	$	28,240		$	23,200		$	5,040
Operating expenses:
General and administrative		31,072			18,427			12,645			53,907			37,725			16,182
Net income (loss) before other items	$	(19,065	)	$	(6,232	)	$	12,833		$	(25,667	)	$	(14,525	)	$	(11,142	)
Interest		(896	)		-			896			(1,768	)		-			1,768
Loss on forgiveness of debt		(13,780	)		-			13,780			(13,780	)		-			13,780
Gain on Extinguishment of debt		49,463			-			49,463			49,463			-			49,463
Net income (loss)	$	15,722		$	(6,232	)	$	21,954		$	8,248		$	(14,525	)	$	22,773

Revenues

Our royalty revenue decreased by $188 or 2% from $12,195 for the three months ended June 30, 2010 to $12,007 for the three months ended June 30, 2011.

Our royalty revenue increased by $5,040 or 22% from $23,200 for the six months ended June 30, 2010 to $28,240 for the six months ended June 30, 2011.

All of our revenue was the result of a 6% royalty which relates to the Termination and Transfer Agreement signed on October 18, 2005. The revenue we receive from WebTech is in British Pounds. The 22% increase in revenue during the six months ended June 30, 2011 was due primarily to an increase in the revenue earned in British Pounds of 16%. Changes in the exchange rates contributed a further 6% of the increase. We do not expect our revenue to increase unless we locate a new, revenue generating business opportunity. On June 9, 2011 we signed a letter of intent with a company named Thermoforte Green Inc. and Angelo Scola, to acquire certain of their assets. At present we are proceeding with our due diligence with regard to the purchase.

Operating Expenses

Our operating expenses increased by $12,645 or 69% from $18,427 for the three months ended June 30, 2010 to $31,072 for the three months ended June 30, 2011. This increase was primarily caused by increases in professional fees of $6,033, and administrative fees of $7,662. These increases were offset primarily by a decrease in franchise taxes of $1,200, due to withdrawal from registration for business in California.

Our operating expenses increased by $16,182 or 43% from $37,725 for the six months ended June 30, 2010 to $53,907 for the six months ended June 30, 2011. This increase was primarily caused by increases in professional fees of $7,312, in filing fees of $1,498, Franchise taxes of $3,394, all due to over accruals in 2009 that were reversed in the six months ended June 30, 2010. For the six months ended June 30, 2010 we had a gain on foreign exchange of $831 and for the six months ended June 30, 2011 we had a foreign exchange loss of $1,583 for a net increase in cash of $2,414. We also had an increase in administration fees of $1,525 that was charged by the company doing our administration.

Over the next year our plan is to continue to control our operating costs. We expect our operating costs to remain approximately the same over the next year, unless we locate a new viable business. If the purchase of the assets of Thermoforte Green goes forward we expect that our operating costs will increase.

Franchise Tax

Our franchise tax recovery decreased by $3,394 from a recovery of $3,455 for the six months ended June 30, 2010 to a recovery of $61 for the six months ended June 30, 2011. The recovery for the six months ended June 30, 2010 was caused by an over accrual of franchise tax in 2008 that had been based on 2007’s franchise tax expense. The recovery of $61 for the six months ended June 30, 2011 was due to a refund from the State of California for overpayment of franchise taxes.

Liquidity and Capital Resources

Going Concern

The notes to our financial statements at June 30, 2011 disclose our uncertain ability to continue as a going concern. We were in the business of selling, marketing, distributing and installing global wireless tracking and telematics equipment in Europe until November 1, 2004 when we exchanged our rights to sell, market, distribute and install global wireless tracking and telematics equipment in Europe as well as specific assets and liabilities, for a royalty of 6% on future gross sales to current customers and qualified potential customers in Europe. There is no cap on the royalties and royalties are to be paid for the duration of 11 years, ending October 31, 2015. We have accumulated a deficit of $1,443,965 since inception and additional financing will be required to fund and support our operations. We plan to mitigate our losses in future years by controlling our operating expenses and seeking out new business opportunities. However, there is no assurance that we will be able to obtain additional financing, control our operating expenses or be successful in locating or acquiring a viable business. The financial statements do not include any adjustments that might result from the outcome of these uncertainties.

As of June 30, 2011, we had a cash balance of $1,329 a working capital deficit of $108,552 and negative cash flows from operations of $4,071 for the six months then ended. During the six months ended June 30, 2011, we primarily funded our operations with $49,500 in convertible loans from related parties that were received in the prior year and the royalty revenue we receive from WebTech.

The following table summarizes our sources and uses of cash for the six months ended June 30, 2011 and 2010:

	June 30,
	2011			2010
Net cash used in operating activities	$	(4,071	)	$	(11,545	)
Net cash used in investment activities		-			-
Net cash provided by financing activities		-			-
Effect of foreign currency exchange		-			-
Net decrease in cash	$	(4,071	)	$	(11,545	)

Net Cash Used in Operating Activities

Net cash used in operating activities during the six months ended June 30, 2011 was $4,071. This cash was primarily used to cover our operating loss of $25,667, a decrease in accounts payable of $51,471, a decrease in accrued liabilities of $3,730, an increase in accounts receivable of $2,516 and a gain on extinguishment of debt related to comprehensive income from foreign currency translation of $1,747. These uses were primarily offset by the non cash forgiveness of debt of $13,780 and increases in due to related parties of $22,377 and an increase in the cash portion of accrued professional fees of $9,219.

Net cash used in operating activities during the six months ended June 30, 2010 was $11,545. This cash was primarily used to cover our net loss of $14,525 an increase in accounts receivable of $1,009 and decreases in accounts payable of $5,393,accrued liabilities of $4,313 and accrued professional fees of $5,500. These uses of cash were offset by an increase in the amounts due to related parties of $19,195.

Net Cash Used In Investing Activities

We did not have any investing activities during the six months ended June 30, 2011 and 2010.

Net Cash Provided By Financing Activities

During the six months ended June 30, 2011 and 2010 we did not have any financing activities.

Non-Cash Financing

During the six months ended June 30, 2011 we converted $53,000 in Accounts Payable owed to a supplier to 5,300,000 shares of common stock at a price of $0.0126 per share. We recorded a loss on the conversion of this debt of $13,780.

Challenges and Risks

We have accumulated a deficit of approximately $1.4 million to date and will require additional debt or equity financing to continue operations and to seek out new business opportunities. We plan to mitigate our losses in future years through the receipt of the royalty payments from Webtech and locating a viable business.

There is no assurance that we will be able to obtain additional financing, be successful in seeking new business opportunities, receive any royalties from WebTech or that we will be able to reduce operating expenses.

Other Trends, Events or Uncertainties that may Impact Results of Operations or Liquidity

Trends, Events, and Uncertainties

The economic downturn may make it harder for us to raise capital if we need it. Therefore, in the future, the economic downturn may have a material adverse effect on our ability to raise operating capital. Other than as discussed in this 10-K, we know of no other trends, events or uncertainties that have or are reasonably likely to have a material impact on our short-term or long-term liquidity.

Off-balance Sheet Arrangements

We have no off-balance sheet arrangements and no non-consolidated, special-purpose entities.

Contingencies and Commitments

We had no contingencies or long-term commitments at June 30, 2011 and December 31, 2010.

Contractual Obligations

We had no contractual obligations at June 30, 2011 and December 31, 2010.

Critical Accounting Judgments

An appreciation of our critical accounting policies is necessary to understand our financial results. These policies may require management to make difficult and subjective judgments regarding uncertainties, and as a result, such estimates may significantly impact our financial results. The precision of these estimates and the likelihood of future changes depend on a number of underlying variables and a range of possible outcomes. Other than our accounting for our royalty revenue, our critical accounting policies do not involve the choice between alternative methods of accounting. We have applied our critical accounting policies and estimation methods consistently.

Revenue Recognition

Royalty revenue is recognized when pervasive evidence of an agreement exists, when it is received or when the royalty income is determinable and collectibility is reasonably assured.

Accounts Receivable

At June 30, 2011, accounts receivable consists of estimated royalty revenue for the months of May and June 2011. Our estimate was based on the amounts we received from WebTech for the months from October 2010 to April 2011. As of the date of filing we had not received payment of the accrued royalty revenue and thus our estimated accrual could vary materially from the amount we accrued at June 30, 2011.

Financial Instruments

Foreign Exchange Risk

We are subject to foreign exchange risk on our royalty revenue which is denominated in UK pounds and some purchases which are denominated in Canadian dollars. Foreign currency risk arises from the fluctuation of foreign exchange rates and the degree of volatility of these rates relative to the United States dollar. Foreign exchange rate fluctuations may adversely impact our results of operations as exchange rate fluctuations on transactions denominated in currencies other than our functional currency result in gains and losses that are reflected in our Statement of Operations. To the extent the U.S. dollar weakens against foreign currencies, the translation of these foreign currency-denominated transactions will result in increased net revenue. Conversely, our net revenue will decrease when the U.S. dollar strengthens against foreign currencies. We do not believe that we have any material risk due to foreign currency exchange.

Fair Value of Financial Instruments

Our financial instruments include cash, accounts receivable, accounts payable, accrued liabilities and accrued professional fees. We believe the fair value of these financial instruments approximate their carrying values due to their short maturities.

Concentration of Credit Risk

Financial instruments that potentially subject us to significant concentrations of credit risk consist principally of cash and trade accounts receivable.

At June 30, 2011, we had approximately $1,329 in cash on deposit with a large chartered Canadian bank. At June 30, 2011, $892 of this cash was insured. As part of our cash management process, we perform periodic evaluations of the relative credit standing of this financial institution. We have not experienced any losses in cash balances and do not believe we are exposed to any significant credit risk on our cash.

Accounts receivable consists of royalty income from one source and is not collateralized. We continually monitor the financial condition of our customer to reduce the risk of loss. We routinely assess the financial strength of our source of revenue income and as a consequence, concentration of credit risk is limited. At June 30, 2010, we had $8,127 in royalties’ receivable from this source.

Recent Accounting Standards and Pronouncements

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

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

Item 4. Controls and Procedures.

Disclosure Controls and Procedures

Disclosure controls and procedures are designed to ensure that information required to be disclosed in the reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported, within the time period specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in the reports filed under the Exchange Act is accumulated and communicated to management, including John daCosta, GlobeTrac’s Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

Mr. daCosta has evaluated the effectiveness of the design and operation of GlobeTrac’s disclosure controls and procedures (as such term is defined in Rules 13a-15 and 15d-15 under the Securities Exchange Act of 1934 (the “Exchange Act”)) as of the end of the period covered by this quarterly report (the “Evaluation Date”). Based on such evaluation, Mr. daCosta has concluded that, as of the Evaluation Date, GlobeTrac’s disclosure controls and procedures are effective to ensure that information required to be disclosed in the reports GlobeTrac files and submits under the Exchange Act is recorded, processed, summarized and reported as and when required.

Changes in Internal Control Over Financial Reporting

During the quarter of the fiscal year covered by this report, there were no changes in GlobeTrac’s internal control over financial reporting or, to GlobeTrac’s knowledge, in other factors that have materially affected, or are reasonably likely to materially affect, GlobeTrac’s internal control over financial reporting.

PART II – OTHER INFORMATION

Item 1. Legal Proceedings.

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

Item 1A. Risk Factors.

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

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

During the quarter of the fiscal year covered by this report, (i) GlobeTrac did not modify the instruments defining the rights of its shareholders, (ii) no rights of any shareholders were limited or qualified by any other class of securities, and (iii) GlobeTrac did not sell any unregistered equity securities that have not previously been disclosed in a Form 8-K filed with the SEC.

Item 3. Defaults Upon Senior Securities.

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

Item 4. (Removed and Reserved)

Item 5. Other Information.

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

Item 6. Exhibits

(a)	Index to and Description of Exhibits

All Exhibits required to be filed with the Form 10-Q are included in this quarterly report or incorporated by reference to GlobeTrac’s previous filings with the SEC, which can be found in their entirety at the SEC website at www.sec.gov under SEC File Number 000-33309 and SEC File Number 333-66590.

Exhibit	Description	Status
3.1	Articles of Incorporation filed as an Exhibit to GlobeTrac’s registration statement on Form SB-2 filed on August 2, 2001, and incorporated herein by reference.	Filed
3.2	Bylaws filed as an Exhibit to GlobeTrac’s registration statement on Form SB-2 filed on August 2, 2001, and incorporated herein by reference.	Filed
3.3	Certificate of Amendment to Articles of Incorporation changing the Issuer’s name to GlobeTrac Inc. filed as an exhibit to GlobeTrac’s Form 10-KSB filed on April 15, 2003, and incorporated herein by reference.	Filed
3.4	Notification of Dissolution for Globetrac Limited dated March 14, 2007, filed as an exhibit to GlobeTrac’s Form 10-KSB filed on April 16, 2007, and incorporated herein by reference.	Filed
10.1	Master Distributorship Agreement dated June 19, 2002 among WebTech Wireless International, WebTech Wireless Inc. and Global Axxess Corporation Limited filed as an attached exhibit to GlobeTrac’s Form 8-K (Current Report) filed on September 11, 2002, and incorporated herein by reference.	Filed
10.2	Loan Agreement dated November 27, 2002 between GlobeTrac Inc. and David Patriquin with attached promissory note dated November 27, 2002 filed as an exhibit to GlobeTrac’s Form 10-KSB (Annual Report) filed on April 15, 2003, and incorporated herein by reference.	Filed
10.3	Amendment Letter Agreement dated June 4, 2003, between WebTech Wireless International Inc. and Globetrac Limited for the purpose of amending terms of the Master Distributorship Agreement filed as an exhibit to GlobeTrac’s Form 10-KSB (Annual Report) filed on April 7, 2004, and incorporated herein by reference.	Filed
10.4	Amendment Letter Agreement dated March 8, 2004 between WebTech Wireless International Inc. and Globetrac Limited for the purpose of amending terms of the Master Distributorship Agreement filed as an exhibit to GlobeTrac’s Form 10-KSB (Annual Report) filed on April 7, 2004, and incorporated herein by reference.	Filed
10.5	Letter Agreement dated November 26, 2004 among Global Axxess Corporation Limited, WebTech Wireless International and WebTech Wireless Inc., filed as an exhibit to GlobeTrac’s Form 8-K (Current Report) filed on December 22, 2004, and incorporated herein by reference.	Filed
10.6	Termination and Transfer Agreement dated November 1, 2004 among GlobeTrac Inc., Global Axxess Corporation Limited, Globetrac Limited, WebTech Wireless Inc., and WebTech Wireless International, filed as an exhibit to GlobeTrac’s Form 8-K (Current Report) filed on November 14, 2005, and incorporated herein by reference.	Filed
14	Code of Ethics filed as an exhibit to GlobeTrac’s Form 10-KSB filed on April 15, 2003, and incorporated herein by reference.	Filed
31	Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.	Included
32	Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.	Included
101.INS	XBRL Instance	**
101.SCH	XBRL Taxonomy Extension Schema	**
101.CAL	XBRL Taxonomy Extension Calculation	**
101.DEF	XBRL Taxonomy Extension Definition	**
101.LAB	XBRL Taxonomy Extension Labels	**
101.PRE	XBRL Taxonomy Extension Presentation	**

XBRL information is furnished and not filed or a part of a registration statement or prospectus for purposes of sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.

SIGNATURES

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

	GLOBETRAC INC.

Dated: August 11, 2011	By:	/s/ John daCosta
	Name:	John daCosta
	Title:	CEO, President and CFO (Principal Executive Officer and Principal Financial Officer)

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