ITRACKR SYSTEMS INC - FORM 10-Q

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EX-31.1 - CERTIFICATION - ITRACKR SYSTEMS INC	itrackr_ex311.htm
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U.S. SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

þ Quarterly report under Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended June 30, 2011

¨ Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Commission File No. 0-52810

ITRACKR SYSTEMS, INC.

(Exact name of registrant as specified in its charter)

Florida		05-0597678
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification Number)

1191 E Newport Center Drive Suite PH-D Deerfield Beach, FL		33442
(Address of principal executive offices)		(Zip Code)

(561) 213-4458
(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirement for the past 90 days. Yes þ 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 (§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 (Check One):

Large accelerated filer	o	Accelerated filer	o
Non-accelerated filer	o	Smaller reporting company	þ

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12(b)-2 of the Exchange Act) Yes ¨ No þ

Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date. At August 11, 2011 the registrant had outstanding 20,819,997 shares of common stock, no par value per share.

ITRACKR SYSTEMS, INC.

FORM 10-Q

TABLE OF CONTENTS

PART I - FINANCIAL INFORMATION

Item 1.	Financial Statements	PAGE
	Consolidated Balance Sheets as of June 30, 2011 (Unaudited) and December 31, 2010		3
	Consolidated Statements of Operations (Unaudited) For the Three And Six Months Ended June 30, 2011 and 2010		4
	Consolidated Statement of Stockholders' Equity (Unaudited) For the Six Months Ended June 30, 2011		5
	Consolidated Statements of Cash Flows (Unaudited) For the Three and Six Months Ended June 30, 2011 and 2010		6
	Notes to Consolidated Financial Statements (Unaudited)		7

Item 2	Management's Discussion and Analysis of Financial Condition and Results of Operations		13
Item 3.	Quantitative and Qualitative Disclosures About Market Risk		18
Item 4.	Controls and Procedures		18
Item 4(T).	Controls and Procedures		18

PART II - OTHER INFORMATION

Item 1.	Legal Proceedings		20
Item 1A.	Risk Factors		20
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		20
Item 3.	Defaults Upon Senior Securities		20
Item 4.	Submission of Matters to a Vote of Security Holders		20
Item 5.	Other Information		20
Item 6.	Exhibits		20
	Signatures		21

ITEM 1. FINANCIAL STATEMENTS.

iTrackr Systems, Inc.
Consolidated Balance Sheets

	June 30,			December 31,
	2011			2010
	(Unaudited)			(Audited)
Assets
Current Assets
Cash	$	102,297		$	9,051
Accounts receivable (Note B)		19,036			24,335
Other current assets		-			-

Total Current Assets		121,333			33,386

Fixed assets (Note C)		206,211			206,211
Accumulated depreciation		(159,586	)		(142,339	)
Net fixed assets		46,625			63,872

Total Assets	$	167,958		$	97,258

Liabilities and Stockholders' Deficit
Current Liabilities
Accounts payable & accrued expenses (Note D)	$	114,738		$	108,051
Accrued Compensation (Note D)		764,500			639,500
Accrued Interest payable (Note E)		26,900			15,949
Convertible promissory notes (Note E)		56,000			56,000
Promissory notes - related party (Note E)		192,812			192,812

Total Current Liabilities		1,154,950			1,012,312

Total Liabilities		1,154,950			1,012,312

Stockholders' Deficit (Note F)
Common stock, no par value 100,000,000 shares authorized; issued and outstanding 20,819,997 and 20,319,997 at June 30, 2011 and December 31, 2010, respectively.		3,327,338			3,142,538
Common stock payable		37,500			37,500
Accumulated deficit		(4,351,830	)		(4,095,092	)
Total Stockholders' Deficit		(986,992	)		(915,054	)
Total Liabilities and Stockholders' Deficit	$	167,958		$	97,258

The accompanying notes are an integral part of these financial statements

iTrackr Systems, Inc.

Consolidated Statements of Operations (Unaudited)

For the Three and Six Months Ended June 30, 2011 and 2010

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2011			2010			2011			2010


Revenue	$	46,826		$	7,833		$	93,076		$	18,575

Operating expenses
General and administrative		104,677			95,511			216,966			208,779
Research and development		45,200			34,355			94,851			74,002
Depreciation		8,551			8,872			17,246			17,923
Stock compensation		9,800			52,500			9,800			430,959

Total operating expenses		168,228			191,238			338,863			731,663

Loss from operations		(121,402	)		(183,405	)		(245,787	)		(713,088	)

Other Income and (Expense)
Interest expense		(5,506	)		(3,418	)		(10,951	)		(7,161	)
Total other income and expense		(5,506	)		(3,418	)		(10,951	)		(7,161	)
Earnings before taxes		(126,908	)		(186,823	)		(256,738	)		(720,249	)
Provision for income taxes		-			-			-			-
NET LOSS	$	(126,908	)	$	(186,823	)	$	(256,738	)	$	(720,249	)

Net (loss) per common share basic	$	(0.006	)	$	(0.009	)	$	(0.013	)	$	(0.037	)
Weighted average common shares outstanding basic		20,544,654			19,933,928			20,432,325			19,680,568

The average shares listed below were not included in the computation of diluted losses
per share because to do so would have been antidilutive for the periods presented:

Warrants		1,880,676			2,905,333			1,993,005			2,371,615
Stock options		5,505,000			5,505,000			5,505,000			5,505,000
Convertible promissory notes		452,669			-			448,130			-

The accompanying notes are an integral part of these financial statements

iTrackr Systems, Inc.

Consolidated Statement of Stockholders' Deficit (Unaudited)

For the Six Months Ended June 30, 2011

	Common Stock									Total
	Number of						Accumulated			Stockholders'
	Shares		Amount		Payable		(Deficit)			(Deficit)
BALANCES December 31, 2010		20,319,997	$	3,142,538	$	37,500	$	(4,095,092	)	$	(915,054	)

Stock issued for warrant exercise		500,000		175,000							175,000
Fair market value of warrants modified				9,800							9,800
Net loss								(256,738	)		(256,738	)
BALANCES June 30, 2011		20,819,997	$	3,327,338	$	37,500	$	(4,351,830	)	$	(986,992	)

The accompanying notes are an integral part of these financial statements

iTrackr Systems, Inc.
Consolidated Statements of Cash Flows (Unaudited)
For the Six Months Ended June 30, 2011 and 2010

	Six Months Ended
	June 30,
	2011			2010

CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(256,738	)	$	(720,249	)
Adjustments to reconcile net loss
to net cash provided (used) by operating activities:
Depreciation		17,246			17,923
Compensation expense on fair value of warrants issued		9,800			270,459
Stock compensation expense		-			160,500
Common stock issued for accrued interest		-			466
Common stock issued for accounts payable		-			32,000
Changes in operating accounts:
Accounts receivable		5,299			761
Other current assets		-			1,562
Accounts payable and accrued expenses		6,688			83,427
Accrued compensation		125,000			-
Accrued interest		10,951			-

CASH USED BY OPERATING ACTIVITIES		(81,754	)		(153,151	)

CASH FLOWS FROM INVESTING ACTIVITIES:
Cash acquired in merger		-			95
CASH PROVIDED BY INVESTING ACTIVITIES		-			95

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from the issuance of stock warrants		-			50,000
Issuance of common stock for cash		175,000			100,000
Proceeds from promissory notes		-			17,000
Proceeds from related party notes		-			1,000

CASH PROVIDED BY FINANCING ACTIVITIES		175,000			168,000

NET INCREASE (DECREASE) IN CASH		93,246			14,944
CASH, beginning of period		9,051			3,223
CASH, end of period	$	102,297		$	18,167

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
CASH PAID DURING THE YEAR FOR:
Taxes paid	$	-		$	-
Interest paid	$	-		$	-

NON-CASH OPERATING ACTIVITIES:
Value of Common Stock issued in exchange for services	$	-		$	160,500
Value of Common Stock issued for accrued interest	$	-		$	466
Value of Common Stock issued for debt principle	$	-		$	42,000
Value of Common Stock issued for accounts payable	$	-		$	32,000

The accompanying notes are an integral part of these financial statements

ITRACKR SYSTEMS, INC

NOTES TO FINANCIAL STATEMENTS (Unaudited)

THREE AND SIX MONTHS ENDED JUNE 30, 2011 AND 2010

Note A-Organization

Basis of Presentation

The unaudited financial statements of iTrackr Systems, Inc. as of June 30, 2011 and for the three and six months ended June 30, 2011 and 2010 have been prepared in accordance with accounting principles generally accepted in the United States for interim financial reporting. Accordingly, they do not include all of the disclosures required by accounting principles generally accepted in the United States for complete financial statements and should be read in conjunction with the audited consolidated financial statements and notes thereto for the year ended December 31, 2010 as filed with the Securities and Exchange Commission as part of our Form 10-K/A. In the opinion of management, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair presentation of the interim financial information have been included. The results of operations for any interim period are not necessarily indicative of the results of operations for the entire year.

Organization

iTrackr, Inc. (the “Company” or “iTrackr”) was formed on May 10, 2006 to develop, market and commercialize a product and inventory search application through a social networking site designed to leverage the best of Internet and Mobile technologies. iTrackr has taken several markets, including eCommerce, social networking and mobile content, and developed a platform that drives value to consumers, retailers and advertising and marketing firms.

In 2009, iTrackr purchased online customer support software technology from ChatStat for approximately $95,000. iTrackr has launched its customer support chat software which facilitates real-time customer support, expert advice, and paid transactions.

On January 12, 2010, the Company closed a share exchange transaction pursuant to which it (i) became the 100% parent of iTrackr, Inc., a Florida corporation (“iTrackr”), (ii) assumed the operations of iTrackr, and (iii) changed its name from Must Haves, Inc. to iTrackr Systems, Inc. iTrackr, Inc. was deemed to be the acquirer in the reverse merger. Consequently, the assets and liabilities and the historical operations of iTrackr, Inc. prior to the Merger are reflected in the financial statements and have been recorded at the historical cost basis of iTrackr, Inc. Our financial statements, after completion of the Merger, include the assets and liabilities of both Must Haves, Inc. and iTrackr, Inc. We accounted for the merger under recapitalization accounting whereby the equity of the acquiring enterprise (iTrackr, Inc.) is presented as the equity of the combined enterprise and the capital stock account of the acquiring enterprise is adjusted to reflect the par value of the outstanding stock of the legal acquirer (Must Haves, Inc.) after giving effect to the number of shares issued in the business combination (1,303,638 shares). Shares retained by the legal acquirer (Must Haves, Inc. 1,303,638 shares) are reflected as an issuance as of the reverse merger date (January 12, 2010) for the historical amount of the net assets of the acquired entity which is in this case is a net liability of $27,515.

Going Concern

The accompanying financial statements have been prepared in conformity with generally accepted accounting principles in the United States of America, which contemplate continuation of the Company as a going concern. In the course of funding development and sales and marketing activities, the Company has sustained operating losses since inception and has an accumulated deficit of $4,351,830 and $4,095,092 at June 30, 2011 and December 31, 2010, respectively. In addition, the Company has negative working capital of $1,033,617 and $978,926 at June 30, 2011 and December 31, 2010, respectively.

The Company has and will continue to use significant capital to commercialize its products. These factors raise substantial doubt about the ability of the Company to continue as a going concern. In this regard, management is proposing to raise any necessary additional funds not provided by operations through loans or through additional sales of their common stock. There is no assurance that the Company will be successful in raising this additional capital or in achieving profitable operations. The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts and classification of liabilities that might result from this uncertainty.

ITRACKR SYSTEMS, INC

NOTES TO FINANCIAL STATEMENTS (Unaudited)

THREE AND SIX MONTHS ENDED JUNE 30, 2011 AND 2010

NOTE B – ACCOUNTS RECEIVABLE

The accounts receivable balance of $19,036 ($16,667 due from Respond Q and $2,369 due from Saveology) and $24,335 ($10,867 due from Respond Q and $13,468 due from Saveology) as of June 30, 2011 and December 31, 2010, respectively, is reported at the gross amount without an allowance. The Company has not experienced any bad debts to date. However, the Company periodically reviews accounts receivable for collectibility and will create an allowance for bad debts if the analysis so warrants.

NOTE C – FIXED ASSETS

Fixed assets consisted of the following:

	June 30,			December 31,
	2011			2010
Computers and office equipment		78,974			78,974
Software	$	127,237		$	127,237
Total fixed assets		206,211			206,211
Accumulated depreciation		(159,586	)		(142,339	)
Fixed assets, net	$	46,625		$	63,872

During the three months ended June 30, 2011 and 2010, the Company recognized $8,551 and $8,872, respectively in depreciation expense. During the six months ended June 30, 2011 and 2010, the Company recognized $17,246 and $17,923, respectively in depreciation expense.

NOTE D – ACCOUNTS PAYABLE AND ACCRUED PAYROLL

Accounts payable and accrued expenses at June 30, 2011 consisted of $49,000 of health insurance premium reimbursement due to John Rizzo, CEO, for which one payment of $5,000 was made on June 16, 2011 and no other payments made since January 2007, $46,208 of professional services and $19,530 of trade payables.

Accounts payable and accrued expenses at December 31, 2010 consisted of $48,000 of health insurance premium reimbursement due to John Rizzo, CEO, $48,397 of professional services and $11,654 of trade payables.

Accrued compensation represents amounts accrued and unpaid as of the related balance sheet date and due to our CEO, John Rizzo. Pursuant to Mr. Rizzo’s employment agreement(s) effective each year starting in January 2007, the Company has been and is obligated to pay Mr. Rizzo and annual salary of $250,000. Mr. Rizzo, received 5,000,000 shares in lieu of salary for the fiscal year ended December 31, 2007 and $90,000 in cash payments during 2009. Mr. Rizzo has received no other cash payments.

NOTE E – NOTES

Promissory Notes – 3rd Party

	June 30,		December 31,
	2011		2010
Note payable bears interest at 9% per year, Matures July 31, 2011 and is convertible into shares of common stock upon default at a conversion price of $0.25 per share.		25,000		25,000
Note payable bears interest at 8% per year, Matures March 31, 2011 and is convertible into shares of common stock upon default at a conversion price of $0.25 per share.		25,000		25,000
Note payable bears interest at 8% per year, Matures December 31, 2011 and is convertible into shares of common stock upon default at a conversion price of $0.25 per share.		6,000		6,000
Totals		56,000		56,000

ITRACKR SYSTEMS, INC

NOTES TO FINANCIAL STATEMENTS (Unaudited)

THREE AND SIX MONTHS ENDED JUNE 30, 2011 AND 2010

NOTE E – NOTES (Continued)

Promissory Notes – 3rd Party (Continued)

During the six months ended June 30, 2011, the Company did not receive any loan proceeds or make any payments against the above outstanding notes.

During the year ended December 31, 2010, the Company 1) received $17,000 in exchange for two convertible notes that were also converted along with the $25,102 of notes outstanding on December 31, 2009, 2) received a short term loan totaling $25,000 that was repaid seven days later, and 3) received $56,000 in exchange for promissory notes that accrue interest at eight (8%) and nine (9%) per annum (see table above). In total, during the year ended December 31, 2010, the Company received $98,000 of notes, repaid $25,000 and converted $42,466, including $42,000 of principle and $466 of accrued interest into 121,332 shares of common stock.

On our non related party notes payable, the Company recognized interest expense during the three months ended June 30, 2011and 2010 of $1,179 and $0, respectively compared to the six months ended June 30, 2011 and 2010 of $2,346 and $0, respectively. As of June 30, 2011 and December 31, 2010, the Company has outstanding $3,415 and $694, respectively, of accrued interest due under the notes above.

Promissory Notes - Related Party

	June 30,		December 31,
	2011		2010
Note payable convertible into common stock (conversion price 50% below
the previous 10 day average closing price) upon default, bears interest at
9% per year, Matured December 31, 2010	$	192,812	$	192,812

On our related party note payable, the Company recognized interest expense during the three months ended June 30, 2011and 2010 of $4,326 and $3,418, respectively compared to the six months ended June 30, 2011 and 2010 of $8,605 and $6,796, respectively. As of June 30, 2011 and December 31, 2010, the Company has outstanding $23,485 and $14,879, respectively, of accrued interest due under the note above.

NOTE F – STOCKHOLDERS EQUITY

Preferred Stock

The Company has authorized 10,000,000 shares of no par value preferred stock available for issuance. No shares of preferred stock have been issued as of June 30, 2011.

Common Stock

The Company has authorized 100,000,000 shares of no par value common stock available for issuance. 20,819,997 shares have been issued as of June 30, 2010.

Stock Issued for Debt Repayment

No stock was issued to repay any debt during the six months ended June 30, 2011.

During the year ended December 31, 2010, the Company converted $42,000 of principle and $466 of accrued interest into 121,332 shares of restricted common stock.

Stock Issued for Cash

During the six months ended June 30, 2011, the company received $175,000 and issued 500,000 shares upon the exercise of a warrant.

During the year ended December 31, 2010, the Company 1) received $50,000 as a direct purchase and issued 166,666 shares of restricted common stock, and 2) received $50,000 upon the exercise of warrants to purchase 166,666 shares of restricted common stock.

ITRACKR SYSTEMS, INC

NOTES TO FINANCIAL STATEMENTS (Unaudited)

THREE AND SIX MONTHS ENDED JUNE 30, 2011 AND 2010

NOTE F – STOCKHOLDERS EQUITY (Continued)

Stock Issued for Services

No stock was issued in exchange for services during the six months ended June 30, 2011.

During the year ended December 31, 2010, the Company finalized a legal settlement with Marc Falcone whereby in exchange for $108,000 or $0.30 per share we issued 360,000 shares of restricted common stock.

During the year ended December 31, 2010, the Company:

1) Issued 100,000 shares of restricted common stock for services valued at $30,000 or $0.30 per share. The shares were issued for services to be provided through the end of 2010.

2) Issued 125,000 shares valued at $37,500, or $0.30 per share. The shares were issued for services performed during the quarter and have been fully expensed.

3) Is obligated to issue 125,000 shares which are valued at $37,500, or $0.30 per share and included in common stock payable.

Stock issued for Accounts Payable

No stock was issued in exchange for accounts payable during the six months ended June 30, 2011.

During the year ended December 31, 2010, the Company issued 101,000 shares of restricted common stock at $0.32 per share to settle $32,000 of the balance owing ChatStat for the purchase of their Chat software.

Stock Options (See footnote H below)

During the six months ended June 30, 2011 and the year ended December 31, 2010, no option activity occurred.

NOTE G – WARRANTS

At June 30, 2011, the Company had 1,605,333 Warrants outstanding entitling the holder thereof the right to purchase one share of common stock for each warrant held as follows:

			Exercise
Issuance	Number of		Price Per		Expiration
Date	Warrants		Warrant		Date
1/19/2010		36,000	$	0.75	1/19/15
1/19/2010		56,000	$	0.75	1/19/15
2/1/2010		13,333	$	0.75	2/1/15
2/5/2010		500,000	$	0.35	12/31/15
3/1/2010		1,000,000	$	0.10	10/31/11
Total		1,605,333

During the three months ended June 30, 2011, the Company modified the above warrant dated February 5, 2010 to reduce the conversion price from $0.40 per share to $0.35 per share on the original warrant total of 1,000,000 shares. The owner of the warrant exercised 500,000 warrants in exchange for 500,000 shares of common stock and paid the Company $175,000. As a result of the modification, the Company determined the difference in the fair value of the warrants using the Black-Scholes Options Pricing Model and recorded $9,800 of stock compensation expense.

During the year ended December 31, 2010, the Company:

·	Issued 2,271,999 warrants to purchase one share of common stock for each warrant issued.

·	Received $50,000 upon the exercise of a warrant and issued 166,666 shares of restricted common stock.

·	Received $50,000 upon the sale of a warrant to an accredited investor.

·	Canceled two warrants totaling 800,000 shares as a result of expiration.

ITRACKR SYSTEMS, INC

NOTES TO FINANCIAL STATEMENTS (Unaudited)

THREE AND SIX MONTHS ENDED JUNE 30, 2011 AND 2010

NOTE G – WARRANTS (Continued)

All the warrants issued through December 31, 2010 are classified as equity on our balance sheet as they require physical settlement, contain no performance contingencies, have a fixed exercise price and are exercisable by the holder at any time through the expiration date of the warrant. Each warrants fair value was calculated on the date of grant using the Black-Scholes Option Pricing Model. The fair value of the warrants issued was $320,459 offset by the $50,000 warrant sale resulting in $270,459 of net stock compensation expense.

NOTE H – 2007 LONG-TERM EQUITY INCENTIVE PLAN

In June 2007 the Board of Directors of the Company adopted the 2007 Long-Term Equity Incentive Plan. The purpose of this Plan is to attract and retain directors, officers and other employees of iTrackr, Inc. and its Subsidiaries and to provide to such persons incentives and rewards for performance.

The Company may issue each of the following under this Plan: Incentive Option, Nonqualified Option, Stock Appreciation Right, Restricted Stock Award or Performance Stock Award. The Plan was ratified at the 2007 shareholder’s meeting (the "Effective Date"). No Incentive Option, Nonqualified Option, Stock Appreciation Right, Restricted Stock Award or Performance Stock Award shall be granted pursuant to the Plan ten years after the Effective Date. The total number of shares available under the Plan is Fifteen Million (15,000,000). No Plan participant will be granted the right, in the aggregate, for more than Two Million (2,000,000) Common Shares during any calendar year.

Stock Options

During the six months ended June 30, 2011, no option activity occurred.

During the year ended December 31, 2010, the Company made one grant of 250,000 fully vested common stock options. The options value was nominal as calculated on the date of grant using the Black-Scholes Option Pricing Model using the following inputs: volatility; 38% based on the Dow Jones Internet Composite Index, risk free interest rate; 3.28%, spot price; $0.20, expected term; 1.5 years and exercise price; $0.25.

The following table summarizes the Company's stock option activity for the six months ended June 30, 2011:

	June 30, 2011
			Weighted Average
	Shares		Exercise Price

Outstanding at beginning of year		5,505,000	$	0.18
Granted		-		-
Forfeited		-		-
Exercised		-		-
Outstanding at end of quarter		5,505,000	$	0.18

Options exerciseable at June 30, 2011		5,505,000

ITRACKR SYSTEMS, INC

NOTES TO FINANCIAL STATEMENTS (Unaudited)

THREE AND SIX MONTHS ENDED JUNE 30, 2011 AND 2010

NOTE H – 2007 LONG-TERM EQUITY INCENTIVE PLAN (Continued)

Stock Options (Continued)

The following table summarizes information about the Company's stock options outstanding at June 30, 2011:

		Options Outstanding						Options Exercisable
		Number		Weighted		Weighted				Weighted
Range of		Outstanding		Average		Average				Average
Exercise		At June 30,		Contractural		Exercise		Number		Exercise
Prices		2011		Life (years)		Price		Outstanding		Price

$	0.40		1,000,000		-	$	0.40		1,000,000	$	0.07
	0.25		1,250,000		-		0.25		1,250,000		0.06
	0.10		2,375,000		-		0.10		2,375,000		0.04
	0.05		880,000		-		0.05		880,000		0.01

Total			5,505,000		-	$	0.18		5,505,000	$	0.18

The Company measures the fair market value of stock options granted using the Black-Scholes Option Pricing Model on the date of grant and recognizes related compensation expense ratably over the options vesting period for all future grants.

During the six months ended June 30, 2011 and the year ended December 31, 2010, the Company recognized $0 of compensation expense related to stock options. From inception to date, the Company has recognized $178,844 of compensation expense related to stock options.

NOTE J – RELATED PARTY TRANSACTIONS

During the three and six months ended June 30, 2011, the Company generated 94.7%, or $44,350 and 88.5% or $82,450, respectively of our sales from RespondQ, LLC pursuant to the Master “Click2Chat Software as a Service” Managed Services Agreement dated November 1, 2010. RespondQ, LLC is 30% owned by Idiama, LLC which is 100% owned by Mrs. Rizzo the spouse of our CEO, John Rizzo. Mrs. Rizzo holds no position as an officer, director or otherwise in RespondQ, LLC or iTrackr Systems, Inc.

NOTE K – SUBSEQUENT EVENTS

Pursuant to FASB Accounting Standards Codification 855, Subsequent Events, Including ASC 855-10-S99-2, the Company evaluated subsequent events through August 11, 2011.

On July 12, 2011, the Company acquired 100% of the issued and outstanding membership interests of RespondQ, LLC by issuing 5 million shares of common stock and two promissory notes totaling $100,000. Please see our Form 8-K filed on July 14, 2011 with the Securities and Exchange Commission.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

This quarterly report contains forward-looking statements including statements regarding our expectations, beliefs, intentions or future strategies that are signified by the words “expects,” “anticipates,” “intends,” “believes” or similar language. These forward-looking statements involve risks, uncertainties and other factors. All forward-looking statements included in this quarterly report are based on information available to us on the date hereof and speak only as of the date hereof. We undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events, or otherwise. The factors discussed elsewhere in this quarterly report are among those factors that in some cases have affected our results and could cause the actual results to differ materially from those projected in the forward-looking statements.

The following discussion should be read in conjunction with our condensed consolidated financial statements and related notes included elsewhere in this quarterly report.

Recent Events

Overview

iTrackr Systems, Inc. (“iTrackr”, the “Company”, “we”, “us” or “our”) was formed in May 2006 to develop, market and commercialize a product and inventory search application through a social networking site designed to leverage the best of Internet and Mobile technologies. We have taken the best of several burgeoning markets, including eCommerce, social networking and mobile content, and developed what we believe is a powerful platform that drives value to consumers, retailers and advertising and marketing firms.

iTrackr Systems intends to introduce and commercialize Internet and Mobile social merchandizing technology platforms to retailers and consumers. “Social merchandizing” applies the variety of traditional marketing practices to promote products and services to a community of individuals via social networking technologies. iTrackr is similar to MySpace and Facebook; however, our members’ interests are not in diary or event blogging, but in the timely location of products and services which can be acquired and consumed on a local level.

iTrackr Systems’ technology enables consumers to search and track merchandise, letting the consumer know which retail locations in a local zip code are stocking the queried merchandise, as well as the comparative prices. In addition, if the item is not in stock, the consumer can request that iTrackr Systems notify them via mobile text message or email when the item is delivered to a local retailer and where that retailer is located.

In 2009, iTrackr purchased online customers support software technology from Chatstat for approximately $95,000. iTrackr has subsequently launched its customer support chat software (“ChatTrackr”) which facilitates real-time customer support and expert advice, and paid transactions.

iTrackr generates revenues primarily through the licensing of its ChatTrackr to Saveology and RespondQ. These customers use our application service provider (“ASP”) system, outsourcing our chat applications for a monthly fee-per-agent, or license fee and in certain cases, an annual enterprise fee.

In addition, we offer customers a hosted ChatTrackr solution, enabling them to download our software on their website, where agents download a fee-based desktop application, while we manage the service on our network for an additional fee. Examples of websites we manage include www.buycomcast.com and www.buytimewarner.com. We also bill customers for maintenance and upgrades to our service.

Our plans to grow our customer support business is to position ChatTrackr as a sales tool for online retailers, increasing fees through customer additions, traffic and through the number of agents using ChatTrackr. We intend to expand our product search business by offering this service to existing ChatTrackr customers as a means of driving further traffic to their own websites and transactional volume. Our target markets include all ecommerce businesses, financial services, healthcare and automotive.

Our primary sources of operating funds have been historically through the issuance of debt and equity. For the year ended December 31, 2010 we raised $50,000 from the sale of a warrant, $100,000 from the sale of common stock and $139,500 in debt. For the year ended December 31, 2009, we raised $333,312 in debt. To finance our growth strategy, we may continue to actively pursue additional funds through equity financing, including the sale of additional shares of common stock and debt financing, or a combination thereof.

At June 30, 2011, iTrackr Systems had assets of $167,958, including cash on hand of $102,297 and accounts receivable of $19,036. For the six months ended June 30, 2011 and the year ended December 31, 2010 the Company had revenue of $93,076 and $106,409, respectively. For the six months ended June 30, 2011 and the year ended December 31, 2010 the Company had and net losses of $256,738 and $1,002,638, respectively, of which $9,800 and $483,459, respectively, was related to stock compensation expense. iTrackr has incurred losses since inception and may not be able to generate sufficient net revenue from its business in the future to achieve or sustain profitability. The Company believes that its cash on hand is insufficient to continue operations for the next twelve months. However, on July 12, 2011, the Company purchased our Customer RespondQ, LLC. RespondQ posted revenues of $121,484 for the year ended December 31, 2010 and $312,785 for the three months ended March 31, 2011. With the purchase of RespondQ, the Company will be in a better financial position as we expect sales to grow steadily. In the near term, we expect that the cash on hand of $102,297 combined with the accounts receivable of RespondQ of approximately $123,000 as of June 30, 2011 will be sufficient to cover approximately 4-5 months of operations. Additionally, management is working to secure additional sales and debt and equity financing. In the event no outside funding is achieved or sales remain flat, Mr. Rizzo, our CEO will provide personal funds as needed to fund our operations. During the six months ended June 30, 2011 no borrowings from Mr. Rizzo were required. During 2010, Mr. Rizzo loaned the Company $41,500. Mr. Rizzo is an accredited investor and has committed to fund up to and additional $250,000. However, the Company does not expect to need the full commitment amount.

Impact of Inflation

General inflation in the economy has driven the operating expenses of many businesses higher, and, accordingly we have experienced increased salaries and higher prices for supplies, goods and services. We continuously seek methods of reducing costs and streamlining operations while maximizing efficiency through improved internal operating procedures and controls. While we are subject to inflation as described above, our management believes that inflation currently does not have a material effect on our operating results. However, inflation may become a factor in the future.

Critical Accounting Estimates

The preparation of financial statements and related disclosures in conformity with accounting principles generally accepted in the United States requires us to make judgments, assumptions and estimates that affect the amounts reported. Note A of Notes to Financial Statements describes the significant accounting policies used in the preparation of the financial statements. Certain of these significant accounting policies are considered to be critical accounting policies, as defined below.

A critical accounting policy is defined as one that is both material to the presentation of our financial statements and requires management to make difficult, subjective or complex judgments that could have a material effect on our financial condition and results of operations. Specifically, critical accounting estimates have the following attributes:

	·	We are required to make assumptions about matters that are highly uncertain at the time of the estimate; and
	·	Different estimates we could reasonably have used, or changes in the estimate that are reasonably likely to occur, would have a material effect on our financial condition or results of operations.

Estimates and assumptions about future events and their effects cannot be determined with certainty. We base our estimates on historical experience and on various other assumptions believed to be applicable and reasonable under the circumstances. These estimates may change as new events occur, as additional information is obtained and as our operating environment changes. These changes have historically been minor and have been included in the consolidated financial statements as soon as they became known. Based on a critical assessment of our accounting policies and the underlying judgments and uncertainties affecting the application of those policies, management believes that our financial statements are fairly stated in accordance with accounting principles generally accepted in the United States, and present a meaningful presentation of our financial condition and results of operations.

In preparing our financial statements to conform to accounting principles generally accepted in the United States, we make estimates and assumptions that affect the amounts reported in our financial statements and accompanying notes. These estimates include useful lives for fixed assets for depreciation calculations and assumptions for valuing options and warrants. Actual results could differ from these estimates.

Stock-Based Compensation

The Company accounts for all compensation related to stock, options and warrants using a fair value based method whereby compensation cost is measured at the grant date based on the value of the award and is recognized over the service period, which is usually the vesting period. We use the Black-Scholes pricing model to calculate the fair value of options and warrants issued to both employees and non-employees.

In calculating this fair value, there are certain assumptions that we use consisting of:

The expected life of the option. No incentive stock options have been granted to date. In the event the Company issues employee options, we will base our determination of expected life on the guidance in ASC 718-10-55-29 to 34. The Company utilizes the contract term of each non qualified option except in the event that the option is not transferrable in which case we apply the aforementioned guidance in determining the expected term.

2)	Risk-free interest rate. We use the treasury bill rate that most closely aligns with the duration of the derivative.

3)	Dividend yield. Until a dividend is offered this input will always be zero.

4)	Volatility. We use the Dow Jones Internet Composite Index (Ticker: FDN) from inception of the index to the date of grant.

5)	Forfeiture rate. To date this rate has been zero.

6)	Stock price (see discussion below).

The use of a different estimate for any one of these components could have a material impact on the amount of calculated compensation expense.

We periodically issue common stock as compensation. Pursuant to ASC 505-50-30-6 issuances are valued using the market price of the stock or value of the services rendered on the date of the related agreement, whichever is more readily determinable. To date, common stock granted and issued for services has been issued free of obligation to the recipient and for no consideration. The shares are valued at the price non-employees are willing to accept as payment in lieu of cash, which, historically, has been the price per share of recent sales of unregistered securities or value of debt converted to common stock.

Long-lived Assets

Long-lived assets, comprised of equipment, and identifiable intangible assets, are evaluated for impairment whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Factors that may cause an impairment review include significant changes in technology that make current computer-related assets that we use in our operations obsolete or less useful and significant changes in the way we use these assets in our operations. When evaluating long-lived assets for potential impairment, we first compare the carrying value of the asset to the asset’s estimated future cash flows (undiscounted and without interest charges). If the estimated future cash flows are less than the carrying value of the asset, we calculate an impairment loss. The impairment loss calculation compares the carrying value of the asset to the asset’s estimated fair value, which may be based on estimated future cash flows (discounted and with interest charges). We recognize an impairment loss if the amount of the asset’s carrying value exceeds the asset’s estimated fair value. If we recognize an impairment loss, the adjusted carrying amount of the asset becomes its new cost basis. The new cost basis will be depreciated (amortized) over the remaining useful life of that asset. Using the impairment evaluation methodology described herein, there have been no long-lived asset impairment charges for each of the last two years.

Our impairment loss calculations contain uncertainties because they require management to make assumptions and to apply judgment to estimate future cash flows and asset fair values, including forecasting useful lives of the assets and selecting the discount rate that reflects the risk inherent in future cash flows.

We have not made any material changes in our impairment loss assessment methodology during the past two fiscal years. We do not believe there is a reasonable likelihood that there will be a material change in the estimates or assumptions we use to calculate long-lived asset impairment losses. However, if actual results are not consistent with our estimates and assumptions used in estimating future cash flows and asset fair values, we may be exposed to losses that could be material.

Income Taxes

Provisions for income taxes are based on taxes payable or refundable for the current period and deferred taxes on temporary differences between the amount of taxable income and pretax financial income and between the tax bases of assets and liabilities and their reported amounts in the financial statements. Deferred tax assets and liabilities are included in the financial statements at currently enacted income tax rates applicable to the period in which the deferred tax assets and liabilities are expected to be realized or settled.

When accounting for Uncertainty in Income Taxes, first, the tax position is evaluated to determine the likelihood that it will be sustained upon external examination. If the tax position is deemed “more-likely-than-not” to be sustained, the tax position is then assessed to determine the amount of benefit to recognize in the financial statements. The amount of the benefit that may be recognized is the largest amount that has a greater than 50 percent likelihood of being realized upon ultimate settlement. As changes in tax laws or rates are enacted, deferred tax assets and liabilities are adjusted through the provision for income taxes. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. The Company underwent a change of control for income tax purposes on October 8, 2003 according to Section 381 of the Internal Revenue Code. The Company’s utilization of U.S. Federal net operating losses will be limited in accordance to Section 381 rules. As changes in tax laws or rates are enacted, deferred tax assets and liabilities are adjusted through the provision for income taxes. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized.

Results of Operations

Three and Six Months Ended June 30, 2011 Compared With the Three and Six Months Ended June 30, 2010.

Revenues

Revenues for the three months ended June 30, 2011 were $46,826 representing a $38,993 increase from revenues of $7,833 for the three months ended June 30, 2010. Revenues for the six months ended June 30, 2011 were $93,076 representing a $74,501 increase from revenues of $18,575 for the six months ended June 30, 2010. The increase in revenue is primarily due to revenue from RespondQ who became a customer in November 2010. Two customers, Saveology and RespondQ, accounted for 4.6% and 95.3%, respectively of our ChatTrackr related sales.

Operating Expenses

Total operating expenses for the three months ended June 30, 2011 were $168,228, a decrease of $23,010 from $191,238 for the three months ended June 30, 2010. Total operating expenses for the six months ended June 30, 2011 were $338,863, a decrease of $392,800 from $731,663 for the six months ended June 30, 2010. The six month decrease in expense is mainly due to a year-over-year $421,159 decrease in the recognition of non-cash stock compensation primarily related to the issuance of stock for services and grant of warrants, offset by an increase of approximately $29,000 in General and administrative and research and development expenses. Excluding stock compensation expense of $9,800 through the six months ended June 30, 2011 and $430,959 through the six months ended June 30, 2010, operating expenses were $329,063 for the six months ended June 30, 2011 compared to $300,704 for the six months ended June 30, 2010, or $28,359 higher in the current year compared to 2010.

Other Income and Expense

Other expense consists solely of interest expense related to our promissory notes. Interest expense increased $2,088 to $5,506 for the three months ended June 30, 2011 compared to $3,418 for the three months ended June 30, 2010. Other expense increased $3,790 to $10,951 for the six months ended June 30, 2011 compared to $7,161 for the six months ended June 30, 2010. The increase is due to an increase in the balance of notes payable in the current year compared to 2010.

Net Loss

As a result of the foregoing, our net loss was $126,908, or $0.006 per share, for the three months ended June 30, 2011 compared to a loss of $186,823, or $0.009 per share for the three months ended June 30, 2010. Our net loss was $256,738, or $0.013 per share, for the six months ended June 30, 2011 compared to a loss of $720,249, or $0.037 per share for the six months ended June 30, 2010. Excluding one-time, non-cash charges totaling $9,800 in 2011 and $430,959 in 2010 related to stock compensation, the Company’s loss decreased $42,352, or 15% to $246,938 for the six months ended June 30, 2011 compared to $289,290 for the six months ended June 30, 2010.

Liquidity and Capital Resources

From inception to June 30, 2011, we have incurred an accumulated deficit of $4,351,830. This loss has been incurred through a combination of stock compensation of $1,164,116, professional fees and expenses supporting our plans to develop our website and brand our services as well as continued operating losses. Since inception, we have financed our operations primarily through debt and equity financing. However, we cannot provide assurance that management will be successful in acquiring such sources of capital in the future. During the six months ended June 30, 2011 we had a net increase in cash of $93,246. Total cash resources as of June 30, 2011 were $102,297 compared with $9,051 at December 31, 2010.

Our accounts payable and accrued expense balance at June 30, 2011 were approximately $879,238 and includes $813,500 due to our CEO for unpaid salary and benefits and $65,738 of accounts payable and accrued liabilities excluding accrued interest expense. As of June 30, 2011, we have $2,369 (excluding $16,667 due from RespondQ that will not be paid due to the merger) of accounts receivable and cash of $102,297. Additionally, with the purchase of RespondQ on July 12, 2011 we have acquired approximately $123,000 of additional accounts receivable. Thus, between accounts receivable and cash on hand we estimate there is enough to fund approximately 4-5 months of operations (See discussion below).

Our available working capital and capital requirements will depend upon numerous factors, including the sale of live chat services, the timing and cost of expanding into new markets, the cost of developing competitive technologies, the resources that we devote to developing new products and commercializing capabilities, the status of our competitors, our ability to establish collaborative arrangements with other organizations, and our ability to attract and retain key employees. We believe that approximately $45,000 to $55,000 per month or $540,000 to $660,000 will be required to maintain and expand our sales and operations and cover our operating and public company administrative expenses for the next 12 months. These costs are comprised of wages, professional fees, communications (i.e., cell phone and internet service) internet hosting and supplies. In addition to covering our operating expenses, we may require additional cash resources due to changing business conditions or other future developments, including any acquisitions we may decide to pursue.

With the acquisition of RespondQ, the Company expects to receive approximately $30,000 to $40,000 per month in gross profit compared to approximately $35,000 to $40,000 per month in required minimum cash outflows. Due to our limited operating history, we cannot estimate the level of future sales and may not generate enough cash to cover our required minimum cash outflows. In order to expand our sales efforts we will gradually need approximately $45,000 to $55,000 per month. The difference between the required minimum cash outflows of $35,000 to $40,000 per month and $45,000 to $55,000 per month primarily represents the salaries of 2 to 3 additional sales and administrative personnel, whom we intend to gradually hire as our cash flow increases. In order to meet this increase our management continues to work diligently to secure either debt or equity based financing for which we are currently in discussions. In the event no outside funding is achieved or sales remain flat, Mr. Rizzo, our CEO will provide personal funds as needed to fund our operations. During the six months ended June 30, 2011 no borrowings from Mr. Rizzo were required. During 2010, Mr. Rizzo loaned the Company $41,500. Mr. Rizzo is an accredited investor and has committed to fund up to and additional $250,000. However, the Company does not expect to need the full commitment amount.

Net cash used by operating activities was $81,754 for the six months ended June 30, 2011 as compared to $153,151 for the six months ended June 30, 2010.

Net cash provided by investing activities was $0 for the six months ended June 30, 2011 as compared to $95 for the six months ended June 30, 2010.

Net cash provided by financing activities was $175,000 for the six months ended June 30, 2011 as compared to $168,000 for the six months ended June 30, 2010.

During the six months ended June 30, 2011, iTrackr Systems, Inc.:

·	Received $175,000 upon the partial exercise of a warrant and the issuance of 500,000 shares of restricted common stock.

During the year ended December 31, 2010, iTrackr Systems, Inc.:

·	Received $50,000 in exchange for the issuance of 166,666 shares of restricted common stock.

·	Received $50,000 upon the exercise of warrants to purchase 166,666 shares of restricted common stock.

·	Received $50,000 in exchange for a warrant to purchase 1,000,000 shares of common stock.

·	Converted $42,000 of principle and $466 of accrued interest into 121,332 shares of restricted common stock.

·	Received gross proceeds of $139,500 from promissory notes.

·	Issued 360,000 shares of restricted common stock valued at $108,000 to settle a legal dispute with Marc Falcone.

·	Issued 101,000 shares of restricted common stock to settle accounts payable valued at $32,000.

·	Issued 350,000 shares of restricted common stock in exchange for services valued at 105,000.

Off-Balance Sheet Arrangements

We have no material off-balance sheet transactions.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Not applicable.

ITEM 4. CONTROLS AND PROCEDURES.

See Item 4(T) below.

ITEM 4(T). CONTROLS AND PROCEDURES.

Evaluation of Disclosure Controls and Procedures

As of June 30, 2011, under the direction of the Chief Executive Officer and Chief Financial Officer, the Company evaluated the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rule 13a — 15(e) under the Securities Exchange Act of 1934, as amended. Based on the evaluation of these controls and procedures required by paragraph (b) of Sec. 240.13a-15 or 240.15d-15 the disclosure controls and procedures have been found to be ineffective.

The Company maintains a set of disclosure controls and procedures designed to ensure that information required to be disclosed by us in our reports filed under the securities Exchange Act, is recorded, processed, summarized, and reported within the time periods specified by the SEC’s rules and forms. Disclosure controls are also designed with the objective of ensuring that this information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

Evaluation of Internal Control Over Financial Reporting

Management conducted an evaluation of the effectiveness of the Company’s internal control over financial reporting as of June 30, 2011. In making this assessment, management used the criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission, or COSO. The COSO framework summarizes each of the components of a company’s internal control system, including (i) the control environment, (ii) risk assessment, (iii) control activities, (iv) information and communication, and (v) monitoring. In management’s assessment of the effectiveness of internal control over financial reporting (as defined in Exchange Act Rule 13a-15(f)) as required by Exchange Act Rule 13a-15(c), our management concluded as of the end of the period covered by this Report, due to a lack of segregation of duties that our internal control over financial reporting has not been effective. However, at this time, our resources and size prevent us from being able to employ sufficient resources to enable us to have adequate segregation of duties within our internal control system. Management will periodically reevaluate this situation. If the volume of business increases and sufficient capital is secured, it is the Company’s intention to further increase staffing to mitigate the current lack of segregation of duties within the general, administrative and financial functions.

This report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit us to provide only management’s report in this prospectus.

Changes in Internal Controls

Management of the Company has evaluated, with the participation of the Chief Executive Officer of the Company, any change in the Company’s internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the three months ended June 30, 2011. There was no change in the Company’s internal control over financial reporting identified in that evaluation that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting, other than what has been reported above.

Limitations on the Effectiveness of Controls and Other Matters

Management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934, as amended). Internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls may be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control.

The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, a control may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

Risk Factor Related to Controls and Procedures

The Company has limited segregation of duties amongst its employees with respect to the Company’s preparation and review of the Company’s financial statements due to the limited number of employees, which is a material weakness in internal controls, and if the Company fails to maintain an effective system of internal controls, it may not be able to accurately report its financial results or prevent fraud. As a result, current and potential stockholders could lose confidence in the Company’s financial reporting which could harm the trading price of the Company’s stock.

Management has found it necessary to limit the Company’s administrative staffing in order to conserve cash until the Company’s level of business activity increases. As a result, there is limited segregation of duties amongst the employees. The Company and its independent public accounting firm have identified this as a material weakness in the Company’s internal controls. The Company intends to remedy this material weakness by hiring additional employees and reallocating duties, including responsibilities for financial reporting, among the employees as soon as there are sufficient resources available. However, until such time, this material weakness will continue to exist.

PART II -- OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

Not applicable.

ITEM 1A. RISK FACTORS.

Not applicable.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

During the six months ended June 30, 2011, the company received $175,000 and issued 500,000 shares upon the exercise of a warrant.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

Not applicable.

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

Not applicable.

ITEM 5. OTHER INFORMATION.

Not applicable.

ITEM 6. EXHIBITS.

Exhibit No.		Identification of Exhibit

31.1*		Certification of John Rizzo, Chief Executive Officer and Chief Financial Officer of iTrackr Systems, Inc., pursuant to 18 U.S.C. §1350, as adopted pursuant to §302 of the Sarbanes-Oxley Act of 2002.

32.1*		Certification of John Rizzo, Chief Executive Officer and Chief Financial Officer of iTrackr Systems, Inc., pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002.

* Filed Herewith

SIGNATURES

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

	ITRACKR SYSTEMS, INC.

Date: August 11, 2011	By:	/s/ John Rizzo
		John Rizzo, Chief Executive Officer


	By:	/s/ John Rizzo
		John Rizzo, Chief Financial Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this report has been signed by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Signature		Title		Date
/s/ John Rizzo		Chief Executive Officer, Chief Financial Officer and Director		August 11, 2011

ITRACKR SYSTEMS INC - FORM 10-Q - August 15, 2011

Attached files

ITRACKR SYSTEMS INC Reports