ITEM 1. DESCRIPTION OF BUSINESS 1
ITEM 1A.
ITEM 1A. RISK FACTORS 12
ITEM 2.
ITEM 2. DESCRIPTION OF PROPERTY
In January, 2007 we opened our US corporate office located at 1270 Broadway, #208, New York, New York and 106-E, Main Street, Mattawan, New Jersey. The NY office is subleased from the current lessor without rental payment and NJ office is subleased from the current lessor for $975 per month starting February 20, 2009.. Also, 2-Track USA filed an application to open a liaison office in Korea and obtained permission from the Korean Government on March 21, 2008. The purpose of the liaison office is to have our own research and development facility in Korea. This office will replace the current research and development sub-contractor located at #501 Jinmi Paragon, 13 Yeouido-dong, Yeongdeungpo-gu, Seoul, Korea.
ITEM 3.
ITEM 3. LEGAL PROCEEDINGS
From time to time, we may be involved in litigation relating to claims arising out of our operations in the normal course of business, including claims of alleged infringement, misuse or misappropriation of intellectual property rights of third parties. As of the date of this report, we are not a party to any such litigation which we believe would have a material adverse effect on us.
ITEM 4.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None during the fourth quarter of fiscal 2008
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PART II
ITEM 5.
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER MATTERS
Our common stock is listed and traded on the NASDAQ Electronic Bulletin Board (OTCBB) under the symbol "TOTG". The following chart sets forth the known high and low price on a bid basis for our stock for each quarter during the last two fiscal years. The quotations set forth below reflect inter-dealer prices, without retail mark-up, mark-down or commissions and may not represent actual transactions.
Year Ended December 31, 2008LowHigh
Fourth Quarter$ 0.001$0.01
Third Quarter 0.015	 0.03
Second Quarter 0.011	 0.03
First Quarter 0.02	0.03
Year Ended December 31, 2007LowHigh
Fourth Quarter$ .02$ .07
Third Quarter .07 	 .09
Second Quarter .09	 .12
First Quarter .08 .18
As of April 10, 2009, there were approximately 2,500 holders of record of our Common Stock. This amount does not include shares held in street name.
Dividend Policy
We have never paid any cash dividends on our common stock. We currently anticipate that we will retain all future earnings for use in our business. Consequently, we do not anticipate paying any cash dividends in the foreseeable future.
Securities Authorized for Issuance under Equity Compensation Plans
On January 31, 2006, the Board approved and stockholder's ratified an Employee Stock Incentive Plan and a Non-Employee Directors and Consultants Retainer Stock Incentive Plan.
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The Employee Stock Incentive Plan is a qualified plan authorizing the issuance of up to 3,000,000 shares pursuant to the Plan. Awards would be in the form of incentive stock options or restricted stock awards and will be administered by a compensation committee or, in the absence of such committee, by the Board of Directors. The Plan has a term of ten (10) years. 102,000 options were granted to employees in 2006.
The Non-Employee Directors and Consultants Retainer Stock Incentive Plan is a non-qualified plan authorizing the issuance of up to 3,000,000 shares pursuant to the Plan. Awards would be in the form of stock options or restricted stock awards and will be administered by a compensation committee or, in the absence of such committee, by the Board of Directors. The Plan has a term of ten (10) years. 198,000 options were granted in 2006 and 500,000 shares were granted in 2007. No options were granted in 2008.
Of the stock options issued pursuant to any equity compensation plan. No options were exercised in 2008.
Recent Sales of Unregistered Securities
During the fiscal year ended December 31, 2008, 2-Track issued the following equity securities pursuant to exemption from registration under the Securities Act of 1933 (the "Securities Act")
On January, 2008, 2-Track issued 39,947 shares of restricted common stock valued at $0.07 per share were issued to a director as compensation bonus . The issuance of stock was made without any public solicitation to one person and was acquired for investment purposes only. The individual had access to complete information about 2-Track and was deemed capable of evaluating the merits and risks of acquiring shares in 2-Track. The securities were issued pursuant to the private placement exemption provided by Section 4(2) of the Securities Act. These shares are deemed to be "restricted securities" as defined in Rule 144 under the 1933 Act and bear a legend stating the restrictions on resale.
During the fiscal year ended December 31, 2007, 2-Track issued the following equity securities pursuant to exemption from registration under the Securities Act.
On December 31, 2007, the Company issued 200,000 shares of restricted common stock at $0.015 per share as an interest payment of $3,000 for the $28,000 loan from Tin Long Investment Company. The shares were issued to one entity with no public solicitation. Consequently, this issuance of securities was exempt from the registration requirements of the Securities Act under Regulation S thereof. These shares are deemed to be "restricted securities" as defined in Rule 144 under the Securities Act and bear a legend stating the restrictions on resale.
On November 20, 2007, the Board of Directors of 2-Track issued 12,485,580 shares of its restricted common stock, par value $.001, to Nolboo & Co., in Korea in exchange for the cancellation of $624,279 of accounts payable that two subsidiaries of the Company owed to Nolboo & Co. The shares were issued to one entity with no public solicitation. Consequently, this issuance of securities was exempt from the registration requirements of the Securities Act
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under Regulation S thereof. These shares are deemed to be "restricted securities" as defined in Rule 144 under the Securities Act and bear a legend stating the restrictions on resale.
On May 9, 2007, the Company sold 2,571,900 shares of restricted common stock at $0.07 per share for aggregate proceeds of $180,033. The issuance of stock was made without any public solicitation to 8 investors who acquired the shares for investment purposes only. The individuals had access to complete information about 2-Track and were deemed capable of evaluating the merits and risks of this investment. The securities were issued pursuant to the private placement exemption provided by Section 4(2) of the Securities Act. These shares are deemed to be "restricted securities" as defined in Rule 144 under the Securities Act and bear a legend stating the restrictions on resale.
On May 7, 2007, the Company issued 5,542,287 shares of restricted common stock at $0.07 per share in satisfaction of $387,960 in liabilities due to the Company's President, Mike Jung. The issuance of the shares was made without any public solicitation and was acquired for investment purposes. Mr. Jung had access to complete information about the Company and was deemed capable of evaluating the merits and risks of this investment. The shares were issued pursuant to the private placement exemption provided by Section 4(2) of the Securities Act. These shares are deemed to be "restricted securities" as defined in Rule 144 under the Securities Act and the certificates bear a legend stating the restrictions on resale.
On January 8, 2007, the Company issued 500,000 shares of restricted common stock valued at $0.07 per share to a new Director in consideration of his accepting a position on the Company's Board of Directors. The issuance of the shares was made without any public solicitation and were acquired for investment purposes. The individual had access to complete information about the Company and was deemed capable of evaluating the merits and risks of this investment. The shares were issued pursuant to the private placement exemption provided by section 4(2) of the Securities Act. These shares are deemed to be "restricted securities" as defined in Rule 144 under the Securities Act and the certificate bears a legend stating the restrictions on resale. These shares vested on January 8, 2008.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
For more detailed financial information, please refer to the audited December 31, 2008 Financial Statements included in this Form 10-K.
Caution about forward-looking statements
This Form 10-K includes "forward-looking" statements about future financial results, future business changes and other events that haven't yet occurred. For example, statements like we "expect," we "anticipate" or we "believe" are forward-looking statements. Investors should be aware that actual results may differ materially from our expressed expectations because of risks
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and uncertainties about the future. We do not undertake to update the information in this Form 10-K if any forward-looking statement later turns out to be inaccurate. Details about risks affecting various aspects of the Company's business are discussed throughout this Form 10-K and should be considered carefully.
Plan of Operation for the Next Twelve Months
Our plan of operation during 2009 is set forth below.
Our budget for fiscal 2009 is predicated on an aggregate cash requirement of $3.5 million of which $1.5million is expected to be met through operational revenues, with the balance of $2.0 million expected to be met from financing activities.
The majority of these costs are short-term in nature and can be reduced substantially in the event that the business falls behind in either its core research and development program, or underperforms in its sales and marketing activities or finance raising.
As a minimum we expect to raise $2. million during fiscal 2009 from debt/equity finance activities. If however such expectations are not met then in these circumstances its expenditure or payments for liabilities will be curtailed significantly from the figures outlined in the table below.
CASH ALLOCATION BY ACTIVITY - BUDGET 2008US Dollars (in 000)
All Payroll$ 1,000
All Overheads$ 400
Net Changes in Working Capital$ 1,500
All Capital Expenditure$ 500
All Finance Charges$ 100
GROSS ANTICIPATED CASH REQUIREMENT$3,500
Less Gross Margin from Operations$1,500
NET ANTICIPATED CASH REQUIREMENT$2,000
Technical Roll-Out
Barring unexpected occurrences, management anticipates the following schedule of roll-outs for its family of products during 2009:
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Condor FMS 	ASP servicesMar 2009
Condor FMS New Hardware Nov 2009
Starfish FMS LEO + GSMDec 2009
Starfish VMS LEO (with Iridium) Dec 2009
PRISMS™ Working prototypesNov 2009
DF Card Personnel Accountable systemApr 2009
Active RFID Asset Tracking Sep 2009
Business Development
The primary business development targets for 2009 will be the continued expansion of distributor networks and OEM partners for the Condor FMS vehicle fleet management solution, the iTrac personal tracking system and the Starfish vessel fleet management solution. Condor, which currently sells in the UK and Africa in a GPRS format, will be expended rapidly through the addition of LEO + GPRS as well as higher spec hardware for US market during the summer of 2009.
Territorially there will be a strong emphasis on developing emerging markets in Africa, the Middle East, Asia, and India markets characterized by a strong security need and being underserved through lack of GIS mapping technology, poor wireless network infrastructure, or political risk.
The arrival of the Starfish marks 2-Track's first satellite equipped product. Starfish is targeted principally at the leisure marine market in the USA (east coast initially with some Caribbean markets), the Mediterranean, and Australasia. This market is characterized by fast growing consumer expenditure on marine products, equipment and services, and 2-Track anticipates good support within the distribution and dealership communities once working models are available to demonstrate.
PRISMS™ is expected to be demonstrated in a commercial environment towards the middle of the year with a major carrier partner, although beta versions of some of the key hardware may be ready for structured trials as early as the summer.
Results of Operations
Operating Results for the Fiscal Year Ended December 31, 2007 and 2008.
Fiscal year 2008 as used in this section refers to the 12 month period ended December 31, 2008.
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Consolidated revenues for fiscal year 2008 were $703,990 compared to revenues of $471,870 for the year ended December 31, 2007. This increase was due primarily to sales to new customers in Nigeria and India.
Cost of sales increased from $375,788 in 2007 to $453,420 in 2008 due primarily to increased sales. Due to the increased sales with better gross margin, gross profits increased to $250,570 for 2008 compared to $96,081 in 2007.
Operating expenses decreased from $1,400,309 in 2007 to $969,303 in 2008.
Operating Expenses included the following:
	Operating expenses decreased by $431,006 for fiscal year 2008 as compared to the same period a year earlier mainly due to a decrease of $227,593 of research and development expenses due to reduction of employees. Also, telephone and communication expenses were decreased by $21,245. 	
	2-Track incurred research and development expenses of $398,199 for fiscal year 2008 for software and enhancements related to FMS, Starfish and PRISMS™ products. 	
	Professional fees decreased by $66,720 for fiscal year 2008 as compared to the same period a year earlier primarily due to decrease in consulting fees on funding services. 	
	Salary and benefits decreased by $50,993 for fiscal year 2008 as compared to the same period a year earlier primarily due to decrease in number of employees and replacement of full time with part time employees. An additional $41,407 was saved by not paying compensation and director fees in 2008. 	
	Travel and entertainment expenses decreased by $27,865 for fiscal year 2008 as compared to the same period a year earlier primarily due to a decrease in marketing and fund raising activities. 	
	2-Track incurred no financial consulting expenses for fiscal year 2008 for raising funds.
We had a net loss of $270,707 for fiscal year 2008, or less than 1 cent loss per share, compared to a net loss of $1,315,277 for 2007, or $ 0.03 per share. The decrease in net loss was primarily due to the substantial increase in gross profit, decreases in selling, general and administrative expenses and $445,805 of gain from forgiveness of debt by chief executive officer during 2008.
No provision was made for income taxes for the years ended December 31, 2008 and 2007.
Liquidity and Capital Resources
2-Track has incurred operating losses during the last two fiscal years which has resulted in an accumulated deficit of $4,514,455 as of the end of fiscal year 2008. At December 31, 2008, we had cash of $2,900 and a negative net working capital of $2,054,345. Since the inception of its business in March 2002, 2-Track has been dependent on borrowed or invested funds in order to
Page - 20
finance its ongoing operations.
Capital Financing
On April 5, 2007 we received a loan of $28,000 from the Tin Long Investment Company. On December 31, 2007 we issued 200,000 shares of stock in satisfaction of $3,000 of accrued interest on this loan
During 2007, 2-Track issued 2,571,900 shares of its restricted common stock to raise invested cash proceeds of $180,033 to fund its operating expenses and issued 18,227,867 shares of it common stock in lieu of cash to pay for an aggregate $1,047,443 of liabilities and services rendered to 2-Track.
As of December 31, 2008 our principal commitments include a lease for one year at $975 per month for our branch office in New Jersey and $2,000 per month for our liaison office in Korea.
We anticipate requiring a minimum of $2 million in additional working capital during the current year to fund our business development and growth although management hopes to achieve a higher figure based on our price per share valuations. It is our intention to pursue equity and debt-based funding strategies through the issue of additional stock and/or long-term borrowing commensurate with a responsible level of debt service commitments.
Due to our limited cash flow, operating losses and limited assets, it is unlikely that we could obtain financing through commercial or banking sources. Consequently, we are dependent on continuous cash infusions from our major stockholders or other outside sources. If these investors were unwilling or unable to provide necessary working capital to us, we would probably not be able to sustain our full range of operations. There is no current written agreement or contractual obligation, which would require any investors to fund our operations up to a certain amount or indeed continue to finance our operations at all.
Management of 2-Track believes that it will need to raise additional capital to continue to develop, promote and conduct its technology business. Such additional capital may be raised through public or private financing as well as borrowing from other sources. 2-Track may also issue its restricted common stock to various service providers in lieu of cash when acceptable to the service provider. Although 2-Track believes that its current investors will continue to fund 2-Track's expenses based upon their significant equity interest in 2-Track, there is no assurance that such investors will continue to invest in 2-Track. If adequate funds are not otherwise available, 2-Track would not be able to sustain its planned operations.
Critical Accounting Policies
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The discussion and analysis of our financial conditions and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with generally accepted accounting principles in the United States. The preparation of financial statements requires managers to make estimates and disclosures on the date of the financial statements. On an on-going basis, management evaluates its estimates, including, but not limited to, those related to revenue recognition. We use authoritative pronouncements, historical experience and other assumptions as the basis for making judgments. Actual results could differ from those estimates. We believe that the critical accounting policies set forth in Note 2 to the consolidated financial statements affect our more significant judgments and estimates in the preparation of our consolidated financial statements.
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ITEM 7. FINANCIAL STATEMENTS
REPORTS OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Consolidated Balance Sheet	
Consolidated Statement of Operations
Consolidated Statement of Cash Flows	
Consolidated Statement of Stockholders' Equity
Notes to Financial Statements		 -
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Michael T. Studer CPA PC
18 East Sunrise Highway, Suite 311
Freeport, NY 11520
Phone: (516) 378-1000
Fax: (516) 546-6220
Email: mts@studercpapc.com
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
	To the Board of Directors and Stockholders of
2-Track Global, Inc.
I have audited the accompanying consolidated balance sheets of 2-Track Global, Inc. and subsidiaries (the Company) as of December 31, 2008 and 2007 and the related consolidated statements of operations, stockholders' equity (deficiency), and cash flows for the years then ended. These financial statements are the responsibility of the Company's management. My responsibility is to express an opinion on these financial statements based on my audits.
I conducted my audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that I plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. I believe that my audits provide a reasonable basis for my opinion.
In my opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of 2-Track Global, Inc. and subsidiaries as of December 31, 2008 and 2007 and the results of their operations and their cash flows for the years then ended in conformity with accounting principles generally accepted in the United States.
The accompanying consolidated financial statements referred to above have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the consolidated financial statements, the Company's present financial situation raises substantial doubt about its ability to continue as a going concern. Management's plans in regard to this matter are also described in Note 1. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
/s/ Michael T. Studer CPA P.C.
	Freeport, New York
April 15, 2009
2-TRACK GLOBAL INC. AND SUBSIDIARIES
Consolidated Balance Sheets
(Expressed in US Dollars)
	See notes to consolidated financial statements.
2-TRACK GLOBAL INC. AND SUBSIDIARIES
Consolidated Statements of Operations
(Expressed in US Dollars)
	See notes to consolidated financial statements.
2-TRACK GLOBAL, INC. AND SUBIDIARIES
Consolidated Statements of Cash Flows
(Expressed in U.S.Dollars)
	See notes to consolidated financial statements.
Common Stock SharesCommon Stock Par ValueAdditional Paid-in CapitalRetained Earnings (Decifit)Accumulated
Other
Comprehensive
Income (loss)Total Stockholders' Equity
Balance, December 31, 2006 35,077,513 35,0771,164,018(2,928,471)(89,221)(1,818,597)
Sale of common stock 2,571,900 2,572177,461--180,033
Issuance of common stock in satisfaction of liabilities18,227,86718,228997,011--1,015,239
Issuance of common stock for services460,05346031,744 --32,204
Reversal of previous subscription--(7,500)--(7,500)
Stock options expense- -8,461--8,461
Net loss---(1,315,277)-(1,315,277)
Foreign currency translation adjustment----(68,893) (68,893)
Balance, December 31, 2007 56,337,33356,3372,371,195(4,243,748)(158,114) (1,974,330)
Issuance of common stock in satisfaction of liabilities200,000 2002,800--3,000
Issuance of common stock for services39,94740 2,756--2,796
Stock options expense--8,466--8,466
Net loss---(270,707)-(270,707)
Foreign currency translation adjustment----215,163215,163
Balance, December 31, 200856,577,28056,577 2,385,217 (4,514,455)57,049(2,015,612)
	See notes to consolidated financial statements.
Note 1. ORGANIZATION AND BUSINESS OPERATIONS
2-Track Global, Inc. ("TOTG") was incorporated in the state of Nevada on March 12, 2002 under the name ECP Ventures, Inc. From March 12, 2002 (inception) to November 30, 2004, TOTG pursued mineral exploration activities. Since November 30, 2004, TOTG has been a holding company.
On November 30, 2004, TOTG acquired 2-Track Limited ("Limited"), a British corporation formed in October 2002, in exchange for 18,000,000 shares of TOTG's common stock (representing 60% of TOTG's issued and outstanding common stock after the exchange transaction). Until November 17, 2008, Limited sold computer applications primarily used by customers for vessel and vehicle fleet management. On November 17, 2008, the Company decided to liquidate Limited and transferred certain assets and operations to 2-Track U.S.A., Inc. ("TTNY"), another wholly owned subsidiary of TOTG, which was incorporated in the state of New York on January 4, 2007. TTNY sells devices and software applications primarily used by business customers for security purposes.
The accompanying consolidated financial statements include the accounts of TOTG and its wholly owned subsidiaries Limited and TTNY (collectively, the "Company"). All inter company accounts and transactions have been eliminated in consolidation.
Going Concern
These financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America applicable to a going concern which assume that the Company will realize its assets and discharge its liabilities in the normal course of business. The Company has incurred losses of $4,514,455 since inception and has a working capital deficiency of $2,054,345 as at December 31, 2008. These factors create substantial doubt as to the ability of the Company to continue as a going concern. Realization values may be substantially different from the carrying values as shown in these financial statements should the Company be unable to continue as a going concern. Management is in the process of identifying sources for additional financing to fund the ongoing development of the Company's business.
Note 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying consolidated financial statements include the accounts of TOTG and its Subsidiaries Limited and TTNY (collectively, the "Company"). All inter company accounts and transactions have been eliminated in consolidation.
Basis of Presentation
The accompanying consolidated financial statements of 2-Track Global, Inc. have been prepared in accordance with accounting principles generally accepted in the United States of America (USGAAP).
Certain items have been reclassified to conform to the current year presentation.
Use of Estimates
The preparation of financial statements in conformity with US Generally Accepted Accounting Principles 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 dates of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.
Cash
Cash represents funds on deposit with the Company's banks and cash on hand.
Revenue Recognition
The Company enters into agreements to sell products (hardware or software), services, and other arrangements that include combinations of products and services. Revenue from product sales, net of trade discounts and allowances, is recognized provided that persuasive evidence of an arrangement exists, delivery has occurred, the price is fixed or determinable, and collectibility is reasonably assured. Delivery is considered to have occurred when title and risk of loss have transferred to the customer. Revenue is reduced for estimated product returns and distributor price protection, when appropriate. For sales that include customer-specified acceptance criteria, revenue is recognized after the acceptance criteria have been met. Revenue from services is deferred and recognized over the contractual period or as services are rendered and accepted by the customer. When arrangements include multiple elements, the Company uses objective evidence of fair value to allocate revenue to the elements and recognize revenue when the criteria for revenue recognition have been met for each element. The amount of product revenue recognized is affected by judgments as to whether an arrangement includes multiple elements and if so, whether vendor-specific objective evidence of fair value exists for those elements. Changes to the elements in an arrangement and the ability to establish vendor-specific objective evidence for those elements could affect the timing of the revenue recognition. Most of these conditions are subjective and actual results could vary from the estimated outcome, requiring future adjustments to revenue.
Research and Development
Research and development costs are expensed as incurred.
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 statement 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 as prescribed in FASB Statement No. 109, Accounting for Income Taxes. As changes in tax laws or rate are enacted, deferred tax assets and liabilities are adjusted through the provision for income taxes.
Compensated Absences
Employees of the corporation are entitled to paid vacations, sick days and other time off depending on job classification, length of service and other factors. All liabilities have been recorded in the accompanying financial statements.
Basic and Diluted Net Loss Per Share
The Company computes net income (loss) per share in accordance with SFAS No. 128, "Earnings per Share". SFAS No. 128 requires presentation of both basic and diluted earnings per share (EPS) on the face of the income statement. Basic EPS is computed by dividing net income (loss) available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method. In computing Diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential shares if their effect is anti dilutive.
Disclosure about Fair Value of Financial Instruments
The Company estimates that the fair value of all financial instruments at December 31, 2008 as defined in FASB 107, does not differ materially from the aggregate carrying values of its financial instruments recorded in the accompanying balance sheets. The estimated fair value amounts have been determined by using available market information and appropriate valuation methodologies. Considerable judgment is required in interpreting market data to develop the estimates of fair value, and accordingly, the estimates are not necessarily indicative of the amounts that could be realized in a current market exchange.
Comprehensive Income
Except for foreign currency translation adjustments, the Company has no items that represent other comprehensive income.
Long-lived Assets
Long-lived assets are reviewed annually for impairment and whenever events or changes in circumstances indicate that the carrying amount of the asset in question may not be recoverable. The Company measures impairment by comparing the carrying value of the long-lived assets to the estimated undiscounted future cash flows expected to result from the use of the assets and their eventual disposition. If the sum of the expected undiscounted cash flows is less than the carrying amount of the assets, the Company would recognize an impairment loss based on the fair value of the assets.
Foreign Currency Translation
The functional currency of TOTG and TTNY is the United States dollar. The functional currency of Limited is the United Kingdom pound sterling ("GBP"). The reporting currency of the Company is the United States dollar. Limited assets and liabilities are translated into United States dollars at the year-end exchange rates ($ 1.4854 at December 31, 2008). Limited revenues and expenses are translated into United States dollars at weighted average exchange rates for the period ($ 1.7507 for the year ended December 31, 2008). Resulting translation adjustments are recorded as a component of accumulated other comprehensive income (loss) within stockholders' equity.
Stock-based Compensation
In December 2004, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards (SFAS) No. 123 R, "Share Based Payment". SFAS 123R is a revision of SFAS No. 123, " Accounting for Stock-based Compensation", and supersedes APB Opinion No. 25, "Accounting for Stock Issued to Employees" and its related implementation guidance. SFAS 123R establishes standards for the accounting for transactions in which an entity exchanges its equity instruments for goods or services. It also addresses transactions in which an entity incurs liabilities in exchange for goods or services that are based on the fair value of the entity's equity instruments or that may be settled by the issuance of those equity instruments. SFAS 123R focuses primarily on accounting for transactions in which an entity obtains employee services in share-based payment transactions. SFAS 123R does not change the accounting guidance for share-based payment transactions with parties other than employees provided in SFAS 123 as originally issued and Emerging Issues Task Force Issue No. 96-18, "Accounting for Equity Instruments That are Issued to Other Than Employees for Acquiring, or in Conjunction with Selling, Goods or Services". SFAS 123R does not address the accounting for employee share ownership plans, which are subject to AICPA Statement of Position 93-6, "Employers' Accounting for Employee Stock Ownership Plans". SFAS 123R requires a public entity to measure the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award (with limited exceptions). That cost is recognized over the period during which an employee is required to provide service in exchange for the 123R does not address the accounting for employee share ownership plans, which are subject to AICPA Statement of Position 93-6, "Employers' Accounting for Employee Stock Ownership Plans". SFAS 123R requires a public entity to measure the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award (with limited exceptions). That cost is recognized over the period during which an employee is required to provide service in exchange for the award - the requisite service period (usually the vesting period). SFAS 123R requires that the compensation cost relating to share-based payment transactions be recognized in financial statements. That cost is measured based on the fair value of the equity or liability instruments issued. The scope of SFAS 123R includes a wide range of share-based compensation arrangements including share options, restricted share plans , performance-based awards, share appreciation rights, and employee share purchase plans.
Property and Equipment
The Company depreciates its furniture, fixtures and equipment using the straight-line method
over the assets' estimated useful lives.
Intangible assets
Intangible assets represent filing and other costs associated with patents relating to the Company's Positional Real-time Integrity and Status Monitoring System ("PRISMS'). The patent costs are amortized using the estimated economic life of 10 years.
Note 3. PROPERTY AND EQUIPMENT, NET
Property and equipment net, consist of:
Note 4. INTANGIBLE ASSET
Property and equipment net, consist of:
Estimated patent amortization expense for each of the Company's five succeeding fiscal years ending December 31, 2009, 2010, 2011, 2012, and 2013 is $3,507, $3,507, $3,507, and $3,507, respectively.
Note 5. DUE TO RELATED PARTIES AND FORMER DIRECTOR
Amounts due to related parties and former director consist of:
December 31, December 31,
2008 2007
(Unaudited)
Unpaid compensation
Chief executive officer$-$360,000
Consultant and former director 323,000 228,000
Director 24,000 24,000
Advances payable(non-interest bearing, due on demand
Chief executive officer 233,312 118,368
Consultant and former director 942 -
Director 5,089 -
Total$586,343$730,368
Total compensation costs paid and accrued to related parties and former director ( and included in selling, general and administrative expenses) for the years ended December 31, 2008 and 2007 were $240,000 and $372,000, respectively.
Note 6. LOANS PAYABLE
Loans payable consist of:
December 31, December 31,
2008 2007
Due Octagon Investment, S.A., interest at 5%,
	installmanet commencing February 22, 2010,
	shares of common stock at a price of $.39 per$
100,000$
100,000
Due investor, intereset at 10.7%, due on demand 28,000 28,000
Due investor, intereset at 0%, due on demand 3,500 -
Total$131,500$128,000
Note 7. INCOME TAXES
No provision for income taxes was recorded in the years ended December 31, 2008 and 2007 since TOTG, TTNY and Limited had taxable losses in these periods.
Based on management's assessment, the Company has not yet determined it to be more likely than not that a deferred tax asset attributable to the future utilization of the United States and United Kingdom net operating loss carryforwards as of December 31, 2008 will be realized. Accordingly, the Company has provided a 100% allowance against the deferred tax asset in the
financial statements at December 31, 2008. The Company will continue to review this valuaton allowance and make adjustments as appropriate. The net operating loss carryforwards expire in varying amounts from year 2002 to 2028.
Current United States income tax laws limit the amount of loss available to be offset against future taxable income when a substantial change in ownership occurs. Therefore, the amount available to offset future taxable income may be limited.
Note 8. PENSION AND EMPLOYMENT LIABILITIES
The Company does not have liabilities as at December 31, 2007, for pension, post-employment benefits or post-retirement benefits. The Company does not have a pension plan.
Note 9. STOCKHOLDERS' EQUITY
In January 2006, the Company adopted a stock incentive plan in order to provide an incentive to eligible employees, consultants, directors and officers of the Company. The Employee Stock Incentive Plan is a qualified plan authorizing the issuance of up to 3,000,000 shares pursuant to the Plan. Awards would be in the form of incentive stock options or restricted stock awards and will be administered by a compensation committee or, in the absence of such committee, by the Board of Directors. The Plan has a term of ten years.
The Non-Employee Directors and Consultants Retainer Stock Incentive Plan is a non-qualified plan authorizing the issuance of up to 3,000,000 shares pursuant to the Plan. Awards would be in the form of stock options or restricted stock awards and will be administered by a compensation committee or, in the absence of such committee, by the Board of Directors. The Plan has a term of ten years.
Common Stock Issuances
On January 9, 2007, the Company issued 500,000 shares of common stock to Frank Snortheim for accepting a position as director of the Company. This stock grant, which vested on January 18, 2008, was valued at a total of $35,000 and was charged to operations ratably over the one year requisite service period.
On May 7, 2007, the Company issued 5,542,287 shares of restricted common stock of the Company to Mike Jung, president, CEO and CFO, in exchange for the cancellation of $387,960 of loans made to the Company.
On May 9, 2007 the Company completed a sale of 2,571,900 shares of restricted common stock to a group of investors in Denmark for a total of $180,033. The share price received from the various parties was $.07 per share.
On November 22, 2007, the Company issued 12,485,580 shares of restricted common stock of the Company to Nolboo & Co., a research and development company, in exchange for the cancellation of $624,279 of accounts payable to Nolboo & Co.
On December 31, 2007, the Company issued 200,000 shares of restricted common stock of the Company to Tin Long Investment Company as an interest payment of $3,000 on a loan of $28,000.
Stock Options
On March 34, 2006, the Company granted a total of 300,000 stock options to nine parties: 51,000 options to an officer, 51,000 options to a director, a total of 39,150 options to two employees, and a total of 158,850 options to five consultants. The exercise price of the options is $0.21 per share. The 102,000 stock options granted to the officer and director vest at a rate of 12.5% per year and expire March 24, 2014; the remaining 198,000 stock options vest at a rate of 20% per year and expire March 24, 2011. For the years ended December 31, 2008 and 2007, no options were exercised or forfeited and 300,000 stock options are outstanding at December 31, 2008, 104,700 of which are exercisable.
The fair value of the stock options granted was estimated at $49,165 using a Black-Sholes option pricing model with the following assumptions: (1) risk-free interest rate- 4.7%, (2) expected dividend yield - 0%, (3) expected volatility-95%, and (4) expected term-8 years (for 102,000 stock options), 5 years for (198,000 stock options). This $49,165 compensation cost is being recognized over the requisite service period of the respective parties.
For the years ended December 31, 2008 and 2007, stock options expense charged to operations was $8,461 and $8,461, respectively. At December 31, 2008, the unrecognized compensation expense was $25,889.
Note 10. BUSINESS CONCENTRATIONS
Three commercial customers combined accounted for approximately 96% and 58% of the consolidated net sales of the Company for the fiscal years ended December 31, 2008 and 2007, respectively. The concentration of sales with a small group of customers places the Company in an adverse position should any of these customers reduce their volume of sales orders with the Company
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None
ITEM 9A. (T) CONTROLS AND PROCEDURES
Disclosure Controls and Procedures
We have adopted and maintain disclosure controls and procedures (as such term is defined in Rules 13a-15 (e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the "Exchange Act")_) that are designed to ensure that information required to be disclosed in our reports under the Exchange Act, is recorded, processed, summarized and reported within the time periods required under the SEC's rules and forms and that the information is gathered and communicated to our management, including our Chief Executive Officer (Principal Executive Officer) and Chief Financial Officer (Principal Financial Officer), as appropriate, to allow for timely decisions regarding required disclosure.
As required by SEC Rule 15d-15(b) we carried out an evaluation, under the supervision and with the participation of management, including our principal executive officer and principal financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Exchange Act 15d-14 as of the end of the year covered by this report. Based upon that evaluation, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures are effective in timely alerting them to material information relating to us that is required to be included in our periodic SEC reports and to ensure that information required to be disclosed in our periodic SEC reports is accumulated and communicated to our management, including our CEO and CFO, to allow timely decisions regarding required disclosure as a result of any deficiency detected in our internal control over financial reporting.
Management's Annual Report on Internal Control Over Financial Reporting.
Our Management is responsible for establishing and maintaining adequate internal control over financial reporting for 2-Track Global in accordance with and as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Our 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. Our internal control over financial reporting includes those policies and procedures that:
	 (i) 	require the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets;
	(ii) 	provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted
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	 accounting principles and that receipts and expenditures of 2-Track Global are being made in accordance with authorizations of management and directors of 2-Track Global; 	
	 (ii) 	provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of 2-Track Global's assets that could have a material effect on the financial statements.
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.
Management's assessment of the effectiveness of 2-Track Global's internal control over financial reporting as of the year ended December 31, 2008 is effective. We have not identified any, current material weaknesses considering the nature and extent of our current operations and any risks or errors in financial reporting under current operations
This annual report does not include an attestation report of 2-Track Global's registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by 2-Track Global's registered public accounting firm pursuant to temporary rules of the SEC that permit 2-Track Global to provide only management's report in this annual report.
Changes in Internal Control Over Financial Reporting.
There was no change in our internal control over financial reporting that occurred during the last fiscal quarter ended December 31, 2008 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting..
ITEM 9B. OTHER INFORMATION
Subsequent to the year ended December 31, 2008, we liquidated and dissolved one of the Company's wholly-owned subsidiaries 2-Track Limited and moved its assets and business operations to the Company's remaining wholly-owned subsidiary 2-Track USA, Inc. located in New York.
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PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CORPORATE GOVERNANCE
The following table sets forth information about the directors and executive officers of 2-Track together with the principal positions and offices with 2-Track held by each:
Name of PersonAgePosition and Office Presently Held With 2-TrackDirector Since
Woo Sun Mike Jung41Chief Executive Officer, Chairman, President and Chief Financial Officer11/30/04
Frank Snortheim (2)51Director 1/4/07
Woo Sun Mike Jung became a Director and President on November 30, 2004. On April 24, 2005 he also assumed the position of Chief Financial Officer. He is a Korean national and has been the managing director of 2-Track Limited since October 2002. He previously served as the Technical Director for Tiger Telematics for hardware purchase from February 2002 to July 2002. He was the European representative for Techway Inc. from September 2000 to January 2002 	
Frank Snortheim became a Director on January 4, 2007. Mr. Snortheim has been an investment director of InnFond P/S, Copenhagen, Denmark since 2003, with responsibility for identifying new investment opportunities, preparing business plans, identifying potential partners, coaching management teams and identifying new financing partners. Prior to this position, from December, 1999 to March, 2003, Mr. Snortheim was a vice president for Handelsbanken Capital Markets, a division of Svenska Handelsbanken AB, Sweden, Corporate Finance, Copenhagen, Denmark. Mr. Snortheim also spent two years working for Washington Equity Partners, Washington, D.C. where he was a director and partner. Prior to his work with Washington Equity Partners, Mr. Snortheim worked with DSC Communications, Plano, Texas as director for strategic marketing. Mr. Snortheim has an executive education from INSEAD, Fontainebleau, France and MBA studies from Marquette University Graduate School, MS in Economics with finance major from Copenhagen Business School and a BA in Business from Copenhagen Business School.
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The current Directors will serve and hold office until the next annual shareholders' meeting or until their respective successors have been duly elected and qualified. Our executive officers are appointed by the Board of Directors and serve at the discretion of the Board
Family Relationships
There are no family relationships between any director and executive officer.
Board Meetings and Actions
The Board of Directors of the Company held 1 meeting and acted by written consent on two occasions during the year ended December 31, 2008. Each director during the year 2008 participated in 75% or more of the aggregate number of meetings of the Board held or action by written consent taken during the year 2008.
Corporate Governance
We do not currently have a standing Nominating Committee due to the fact that the Board currently consists of one Director which makes having such a committee unnecessary at this time. The Board does not currently have separately-designated Audit, Executive or Compensation Committees nor does the Board have a designated audit committee financial expert. The functions of these committees are performed by the Board of Directors.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires our executive officers and directors, and persons who own more than 10% of our common stock to file reports of ownership on Form 3 and changes in ownership on Form 4 with the Securities and Exchange Commission (the "SEC"). Such executive officers, directors and 10% stockholders are also required by SEC rules to furnish us with copies of all Section 16(a) forms they file. Based solely upon our review of copies of such forms received by us, or on written representations from certain reporting persons that no other filings were required for such persons, we believe that, during the fiscal year ended December 31, 2008, our executive officers and directors and 10% stockholders complied with all applicable Section 16(a) filing requirements.
We have adopted a Code of Ethics applicable to our Chief Executive Officer and Chief Financial Officer. We will provide by mail to any person without charge, upon request, a copy of such code of ethics if we receive the request by e-mail at "www.2-TrackGlobal.com" or in writing by mail to: 2-Track Global, Inc., 1270 Broadway #208, New York, NY 10001, Attn: Corporate Secretary
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ITEM 11. EXECUTIVE COMPENSATION	
The following table sets forth the compensation of 2-Track's Principal Executive Officer during the last two most recently complete fiscal years. No other officer or director received annual compensation in excess of $100,000 during the last completed fiscal year.
(1)	 Amount included $120,000 paid as compensation by 2-Track Limited (a wholly owned subsidiary). $120,000 of this amount was accrued but not paid during 2007 or 2008.
Employment Agreements
There are no employment agreements with any officer or employee of 2-Track.
Incentive and Stock Option Plans
The 2-Track 2006 Employee Stock Incentive Plan was adopted by our Board of Directors and approved by our stockholders on January 31, 2006. This Plan will allow us to grant stock or options as compensation to officers and employees. The Plan is authorized to grant stock or options of up to 3,000,000 shares. Options to purchase 102,000 shares of 2-Track common stock were granted under this Plan during 2006. No options were granted during 2008.
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OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
Option Awards Stock Awards
Name
(a) Number of
Securities
Underlying
Unexercised
Option(#)
Exerisable
(b)Number of
Securities
Underlying
Unexercised
Option(#)
Unexercised
(c)Equity
Incentive
Plan
Awards:
Number of
Securities
Underlying
Unexercised
Unearned
Options(#)
(d)Option
Exercise
Price
($)
(e)Option
Expiration
Date
(f)Number of
Shares or
Units of
Stock
that
Have
Not
Vested
(#)
(g)Market
Value of
Shares or
Units of
Stock
That
Have
Not
Vested
($)
(h)Equity
Incentive
Plan
Awards:
Number of
Unearned
Shares,
Units or
Other
Rights
that have
Not
Vested
(#)
(i)Equity
Incentive
Plan
Awards:
Market or
Payout
Value of
Unearned
Shares,
Units of
Other
Rights
That
Have Not
Vested
($)
(j)
CEO51,000-0--0--0--0--0--0--0--0-
Frank
Snortheim-0--0--0--0--0--0--0--0--0-
Employee Pension, Profit Sharing or Other Retirement Plans
We do not have a defined benefit pension plan or profit sharing or other retirement plan.
Objectives and Philosophy of our Executive Compensation Program
We do not have a standing compensation committee. Our Board of Directors as a whole makes the decisions as to employee benefit programs and officer and employee compensation. The primary objectives of our executive compensation programs are to:
attract, retain and motivate skilled and knowledgeable individuals;
ensure that compensation is aligned with our corporate strategies and business objectives;
promote the achievement of key strategic and financial performance measures by linking long-term cash and equity incentives to the achievement of measurable corporate performance goals; and)
align executives' incentives with the creation of stockholder value.
To achieve these objectives, our Board of Directors evaluates our executive compensation program with the objective of setting compensation at levels it believes will allow us to attract and retain qualified executives. We also generally provide a portion of our executive
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compensation in the form of stock options, which we believe helps us retain our executives and align their interest with those of our stockholders by allowing the executives to participate in our longer term success as reflected in asset growth and stock price appreciation.
Components of our Executive Compensation Program
At this time, the primary elements of our executive compensation program are base salaries and option grant incentive awards, although the Board of Directors has the authority to award cash bonuses, benefits and other forms of compensation as it sees fit.
We do not have any formal or informal policy or target for allocating compensation between short-term and long-term compensation, between cash and non-cash compensation or among the different forms of non-cash compensation. Instead, we have determined subjectively on a case-by-case basis the appropriate level and mix of the various compensation components. Similarly, we do not rely extensively on benchmarking against our competitors in making compensation relation decisions, although we may consider industry compensation trends as one of many factors in our determination of proper compensation.
Base salaries
Base salaries are used to recognize the experience, skills, knowledge and responsibilities required of our named executive officers. Base salary, and other components of compensation, may be evaluated by our Board of Directors for adjustment based on an assessment of the individual's performance and compensation trends in our industry. In light of the level of the Company's performance during fiscal year 2008, and the significant efforts of the Company's sole executive officer during fiscal year 2008, the base salary for 2-Track's President was left unchanged for 2008.
Equity Awards
Our stock option award program is the primary vehicle for offering long-term incentives to our executives. Our equity awards to executives have typically been made in the form of shares or stock options issued from the 2-Track 2006 Employee Stock Incentive Plan. We believe that equity grants in the form of stock or options provide our executives with a direct link to our long-term performance, create an ownership culture, and align the interests of our executives and our stockholders. Due to the performance of 2-Track during 2008 no stock or stock options were granted to any officer of 2-Track during fiscal year 2008.
Cash Bonuses
Our Board of Directors has the discretion to award cash bonuses based on our financial performance and individual objectives. The corporate financial performance measures (revenues and profits) will be given the greatest weight in this bonus analysis. We have not yet granted any cash bonuses to any named executive officer nor have we yet developed any specific individual
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objectives while we wait to attain revenue and profitability levels sufficient to undertake any such bonuses. No bonuses were granted during fiscal year 2008.
Benefits and Other Compensation
Our named executive officers are permitted to participate in such health care, disability insurance, retirement and other employee benefit plans as may be in effect with the Company from time to time to the extent the executive is eligible under the terms of those plans. As of the end of fiscal year 2008, we have not implemented any such employee benefit plans.
Compensation of Directors
We currently have a policy of paying $1,000 - $3,000 per month to our non-employee directors as compensation for their services as members of the Board of Directors.
Effective January 31, 2006, we adopted the 2-Track Global, Inc.'s 2006 Non-Employee Directors and Consultants Retainer Stock Incentive Plan. This Plan will allow us to grant stock or options as compensation to non-employee directors and consultants. The Plan is authorized to grant stock or options of up to 3,000,000 shares. Options to purchase 198,000 shares of 2-Track common stock were granted under this Plan during 2006. During 2007 Mr. Snortheim was granted 500,000 shares of common stock under this Non-Employee Director Plan upon his appointment to the Board of Directors. These shares vested in January, 2008 upon the first anniversary date from the date of issuance. No shares or options were granted from this Plan during 2008.
DIRECTOR COMPENSATION
DURING 2008
NameFees
Earned
or Paid
in Cash
($)Stock
Awards
($)Option
Awards
($)Non-Equity
Incentive Plan
Compensation
($)Nonqualified
Deferred
Compensation
Earnings
($)All Other
Compensation
($)Total
($)
(a)(b)(c)(d)(e)(f)(g)(h)
Mike Jung -0-
Frank Snortheim-0--0- -0-
Objectives and Philosophy of our Director Compensation Program
We do not have a standing compensation committee. Consequently, our Board of Directors as a whole makes the decisions as to director benefit programs and compensation. Directors who are
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full or part time employees of 2-Track are not eligible for compensation or benefits as a director. The primary objectives of our director compensation program are to:
attract and retain experienced and knowledgeable individuals to serve as directors;
reimburse directors for the time and expenses incurred in serving as a director;
allow directors to participate in our longer term asset growth and stock appreciation.
Components of our Director Compensation Program
At the present time, the primary elements of our director compensation program are a base monthly compensation for a director's services to the Company and stock or option awards.
Monthly Payment
At the present time we offer a monthly stipend of between $1,000 and $3,000 for services rendered by each non-employee member of the Board. The precise amount is determined by the Board based on various factors including the level of Board activity, the level of experience and recognition each member brings to the Board, the length of service of the member and such other factors as deemed relevant to such member's participation on the Board. Due to the relatively low level of Board activity during 2008, the Board determined not to pay any monthly stipend payment during 2008.
Equity Awards
Our stock and stock option award program is the primary vehicle for offering long-term compensation to Board members. Our current policy is to grant an initial stock award of 500,000 shares to each non-employee director upon joining the Board. The shares typically vest over a one-year period. We may grant additional shares of stock or options to non-employee Board members depending on various factors including the level of Board activity, the level of experience and recognition each member brings to the Board, the overall performance of the Company, and such other factors as deemed relevant to such member's participation on the Board. Due to the low level of Board activity and the Company's performance during fiscal year 2008, no additional stocks or stock options were awarded to any non-employee director in 2008.
Limitation of Liability and Indemnification Matters
Our Articles of Incorporation provide that we will indemnify our officers and directors, employees and agents and former officers, directors, employees and agents unless their conduct is finally adjudged as involving intentional misconduct, fraud or a knowing violation of the law and were material to the cause of action. This indemnification includes expenses (including attorneys' fees), judgments, fines, and amounts paid in settlement actually and reasonably incurred by these individuals in connection with such action, suit, or proceeding, including any appeal thereof, subject to the qualifications contained in Nevada law as it now exists. Expenses (including attorneys' fees) incurred in defending a civil or criminal action, suit, or proceeding
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will be paid by us in advance of the final disposition of such action, suit, or proceeding upon receipt of an undertaking by or on behalf of the director, officer, employee or agent to repay such amount, unless it shall ultimately be determined that he or she is entitled to be indemnified by us as authorized in the Articles of Incorporation. This indemnification will continue as to a person who has ceased to be a director, officer, employee or agent, and will benefit their heirs, executors, and administrators. These indemnification rights are not deemed exclusive of any other rights to which any such person may otherwise be entitled apart from the Articles of Incorporation. Nevada law generally provides that a corporation shall have the power to indemnify persons if they acted in good faith in a manner reasonably believed to be in, or not opposed to, the best interests of the corporation and, with respect to any criminal action or proceeding, had no reasonable cause to believe the conduct was unlawful. In the event any such person is judged liable for negligence or misconduct, this indemnification will apply only if approved by the court in which the action was pending. Any other indemnification shall be made only after the determination by our Board of Directors (excluding any directors who were party to such action), by independent legal counsel in a written opinion, or by a majority vote of stockholders (excluding any stockholders who were parties to such action) to provide such indemnification.
Insofar as indemnification for liabilities arising under the Securities Act of 1933 (the "Securities Act") may be permitted to directors, officers and controlling persons of 2-Track pursuant to the foregoing provisions, or otherwise, 2-Track has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, enforceable.
ITEM 12. SSECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
The following table sets forth the number of shares of 2-Track's Common Stock beneficially owned as of April 10, 2009 by, (i) each executive officer and director of 2-Track; (ii) all executive officers and directors of 2-Track as a group; and (iii) owners of more than 5% of 2-Track's Common Stock.
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(1) Amount includes 51,000 shares issuable under stock options exercisable within 60 days of April 10, 2009.
(2) Mr. Snortheim resigned as a Director effective December 31, 2008.
Equity Compensation Plan Information
Information in the table below is as of December 31, 2008.
Plan Category Number of securities to be issued upon exercise of outstanding options, warrants and rights Weighted-average exercise price of outstanding options, warrants and right Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))
(a)(b)(c)
Equity compensation plans approved by security holders300,000$0.215,700,000
Equity compensation plans not approved by security holdersN/A____________
Total300,000$0.215,700,000
Changes of Control of Company
There were no current arrangements which may result in a future change in control of 2-Track.
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ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTION
The President of 2-Track made loans to the Company aggregating $311,780 during 2008 of which $233,312 was outstanding as of December 31, 2008. These loans bear no interest, are unsecured and due on demand. In conjunction with the liquidation of 2-Track Limited, the President of 2-Track forgave $455,805 of accrued compensation.
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
During 2-Track's fiscal years ended December 31, 2007 and December 31, 2008, 2-Track was billed the following aggregate fees by Michael T. Studer PCC ("Studer").
Audit Fees.
The aggregate fees billed by Studer to 2-Track for professional services rendered for the audit of 2-Track's financial statements for the last two fiscal years, for reviews of the financial statements included in 2-Track's Forms 10-Q for the fiscal year, and for services provided by Studer in connection with statutory or regulatory filings for the 2008 fiscal year, were $23,000 for the fiscal year 2007 and $23,000_ for the fiscal year 2008.
Audit Related Fees
None
Tax Fees
None
All Other Fees.
None
All of the services performed by Studer during 2008 were pre-approved by 2-Track's Board of Directors, which concluded that the provision of the non-audit services described above were compatible with maintaining the accountant's independence.
Pre-Approved Policies and Procedures
Prior to retaining Studer to provide services in any fiscal year, the Board of Directors first reviews and approves the accountant's fee proposal and engagement letter. In the fee proposal, each category of services (Audit, Audit Related, Tax and All Other) is broken down into subcategories that describe the nature of the services to be rendered, and the fees for such
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services. 2-Track's pre-approval policy provides that the Board of Directors must specifically pre-approve any engagement of Studer for services outside the scope of the fee proposal and engagement letter.
PART IV
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
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SIGNATURES
Pursuant to the requirements of Section 13 or 15 (d) of the Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
2-TRACK GLOBAL, INC.
Date: April 15, 2009 By /s/ Woosun Jung
Woosun Jung
President and Chief Executive
In accordance with the Exchange Act, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
SignatureTitleDate
/s/ Woosun Jung
Woosun JungChairman of the Board, President
and Chief Financial Officer
(Principal Financial and Accounting Officer)April 15, 20098
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CERTIFICATION FOR ANNUAL REPORTS ON FORM 10-K
I, Woosun Jung, certify that:
1. I have reviewed this annual report for the fiscal year ended December 31, 2008 on Form 10-K of 2-Track Global, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and internal control over financial reporting (as defined in Exchange Act Rules 13a-15d-15f) for the registrant and have:
a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the financial statements for external purposes in accordance with generally accepted accounting principles;
c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and;
5. The registrant's other certifying officer and I have disclosed, based on our most recent
EXHIBIT 31.1
evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function):
a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
Date: April 15 ,2009
/s/ Woosun Jung
Woosun Jung,
Chief Financial Officer
EXHIBIT 31.1
CERTIFICATION FOR ANNUAL REPORTS ON FORM 10-K
I, Woosun Jung, certify that:
1. I have reviewed this annual report for the fiscal year ended December 31, 2008 on Form 10-K of 2-Track Global, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and internal control over financial reporting (as defined in Exchange Act Rules 13a-15d-15f) for the registrant and have:
a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the financial statements for external purposes in accordance with generally accepted accounting principles;
c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and;
EXHIBIT 31.2
5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function):
a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
Date: April 15 ,2009
/s/ Woosun Jung
; Woosun Jung,
Chief Financial Officer
EXHIBIT 31.2
CERTIFICATION PURSUANT TO
18 U.S.C. Section 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
The undersigned, in his capacity as Chief Executive Officer and Chief Financial Officer, respectively, of 2-Track Global, Inc. (the "Registrant"), hereby certifies, for purposes of 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to the best of his knowledge that:
(1) the Annual Report of the Registrant on Form 10-K for the year ended December 31, 2008 (the "Report"), which accompanies this certification, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) the information contained in the Report fairly presents, in all material respects, the financial condition of the Registrant at the end of such year and the results of operations of the Registrant for such year.
Date: April 15 ,2009 2-TRACK GLOBAL, INC.
/s/ Woosun Jung
Woosun Jung,
Chief Executive Officer and Chief Financial Officer
EXHIBIT 32
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
For more detailed financial information, please refer to the audited December 31, 2008 Financial Statements included in this Form 10-K.
Caution about forward-looking statements
This Form 10-K includes "forward-looking" statements about future financial results, future business changes and other events that haven't yet occurred. For example, statements like we "expect," we "anticipate" or we "believe" are forward-looking statements. Investors should be aware that actual results may differ materially from our expressed expectations because of risks
Page - 17
and uncertainties about the future. We do not undertake to update the information in this Form 10-K if any forward-looking statement later turns out to be inaccurate. Details about risks affecting various aspects of the Company's business are discussed throughout this Form 10-K and should be considered carefully.
Plan of Operation for the Next Twelve Months
Our plan of operation during 2009 is set forth below.
Our budget for fiscal 2009 is predicated on an aggregate cash requirement of $3.5 million of which $1.5million is expected to be met through operational revenues, with the balance of $2.0 million expected to be met from financing activities.
The majority of these costs are short-term in nature and can be reduced substantially in the event that the business falls behind in either its core research and development program, or underperforms in its sales and marketing activities or finance raising.
As a minimum we expect to raise $2. million during fiscal 2009 from debt/equity finance activities. If however such expectations are not met then in these circumstances its expenditure or payments for liabilities will be curtailed significantly from the figures outlined in the table below.
CASH ALLOCATION BY ACTIVITY - BUDGET 2008US Dollars (in 000)
All Payroll$ 1,000
All Overheads$ 400
Net Changes in Working Capital$ 1,500
All Capital Expenditure$ 500
All Finance Charges$ 100
GROSS ANTICIPATED CASH REQUIREMENT$3,500
Less Gross Margin from Operations$1,500
NET ANTICIPATED CASH REQUIREMENT$2,000
Technical Roll-Out
Barring unexpected occurrences, management anticipates the following schedule of roll-outs for its family of products during 2009:
Page - 18
Condor FMS 	ASP servicesMar 2009
Condor FMS New Hardware Nov 2009
Starfish FMS LEO + GSMDec 2009
Starfish VMS LEO (with Iridium) Dec 2009
PRISMS™ Working prototypesNov 2009
DF Card Personnel Accountable systemApr 2009
Active RFID Asset Tracking Sep 2009
Business Development
The primary business development targets for 2009 will be the continued expansion of distributor networks and OEM partners for the Condor FMS vehicle fleet management solution, the iTrac personal tracking system and the Starfish vessel fleet management solution. Condor, which currently sells in the UK and Africa in a GPRS format, will be expended rapidly through the addition of LEO + GPRS as well as higher spec hardware for US market during the summer of 2009.
Territorially there will be a strong emphasis on developing emerging markets in Africa, the Middle East, Asia, and India markets characterized by a strong security need and being underserved through lack of GIS mapping technology, poor wireless network infrastructure, or political risk.
The arrival of the Starfish marks 2-Track's first satellite equipped product. Starfish is targeted principally at the leisure marine market in the USA (east coast initially with some Caribbean markets), the Mediterranean, and Australasia. This market is characterized by fast growing consumer expenditure on marine products, equipment and services, and 2-Track anticipates good support within the distribution and dealership communities once working models are available to demonstrate.
PRISMS™ is expected to be demonstrated in a commercial environment towards the middle of the year with a major carrier partner, although beta versions of some of the key hardware may be ready for structured trials as early as the summer.
Results of Operations
Operating Results for the Fiscal Year Ended December 31, 2007 and 2008.
Fiscal year 2008 as used in this section refers to the 12 month period ended December 31, 2008.
Page - 19
Consolidated revenues for fiscal year 2008 were $703,990 compared to revenues of $471,870 for the year ended December 31, 2007. This increase was due primarily to sales to new customers in Nigeria and India.
Cost of sales increased from $375,788 in 2007 to $453,420 in 2008 due primarily to increased sales. Due to the increased sales with better gross margin, gross profits increased to $250,570 for 2008 compared to $96,081 in 2007.
Operating expenses decreased from $1,400,309 in 2007 to $969,303 in 2008.
Operating Expenses included the following:
	Operating expenses decreased by $431,006 for fiscal year 2008 as compared to the same period a year earlier mainly due to a decrease of $227,593 of research and development expenses due to reduction of employees. Also, telephone and communication expenses were decreased by $21,245. 	
	2-Track incurred research and development expenses of $398,199 for fiscal year 2008 for software and enhancements related to FMS, Starfish and PRISMS™ products. 	
	Professional fees decreased by $66,720 for fiscal year 2008 as compared to the same period a year earlier primarily due to decrease in consulting fees on funding services. 	
	Salary and benefits decreased by $50,993 for fiscal year 2008 as compared to the same period a year earlier primarily due to decrease in number of employees and replacement of full time with part time employees. An additional $41,407 was saved by not paying compensation and director fees in 2008. 	
	Travel and entertainment expenses decreased by $27,865 for fiscal year 2008 as compared to the same period a year earlier primarily due to a decrease in marketing and fund raising activities. 	
	2-Track incurred no financial consulting expenses for fiscal year 2008 for raising funds.
We had a net loss of $270,707 for fiscal year 2008, or less than 1 cent loss per share, compared to a net loss of $1,315,277 for 2007, or $ 0.03 per share. The decrease in net loss was primarily due to the substantial increase in gross profit, decreases in selling, general and administrative expenses and $445,805 of gain from forgiveness of debt by chief executive officer during 2008.
No provision was made for income taxes for the years ended December 31, 2008 and 2007.
Liquidity and Capital Resources
2-Track has incurred operating losses during the last two fiscal years which has resulted in an accumulated deficit of $4,514,455 as of the end of fiscal year 2008. At December 31, 2008, we had cash of $2,900 and a negative net working capital of $2,054,345. Since the inception of its business in March 2002, 2-Track has been dependent on borrowed or invested funds in order to
Page - 20
finance its ongoing operations.
Capital Financing
On April 5, 2007 we received a loan of $28,000 from the Tin Long Investment Company. On December 31, 2007 we issued 200,000 shares of stock in satisfaction of $3,000 of accrued interest on this loan
During 2007, 2-Track issued 2,571,900 shares of its restricted common stock to raise invested cash proceeds of $180,033 to fund its operating expenses and issued 18,227,867 shares of it common stock in lieu of cash to pay for an aggregate $1,047,443 of liabilities and services rendered to 2-Track.
As of December 31, 2008 our principal commitments include a lease for one year at $975 per month for our branch office in New Jersey and $2,000 per month for our liaison office in Korea.
We anticipate requiring a minimum of $2 million in additional working capital during the current year to fund our business development and growth although management hopes to achieve a higher figure based on our price per share valuations. It is our intention to pursue equity and debt-based funding strategies through the issue of additional stock and/or long-term borrowing commensurate with a responsible level of debt service commitments.
Due to our limited cash flow, operating losses and limited assets, it is unlikely that we could obtain financing through commercial or banking sources. Consequently, we are dependent on continuous cash infusions from our major stockholders or other outside sources. If these investors were unwilling or unable to provide necessary working capital to us, we would probably not be able to sustain our full range of operations. There is no current written agreement or contractual obligation, which would require any investors to fund our operations up to a certain amount or indeed continue to finance our operations at all.
Management of 2-Track believes that it will need to raise additional capital to continue to develop, promote and conduct its technology business. Such additional capital may be raised through public or private financing as well as borrowing from other sources. 2-Track may also issue its restricted common stock to various service providers in lieu of cash when acceptable to the service provider. Although 2-Track believes that its current investors will continue to fund 2-Track's expenses based upon their significant equity interest in 2-Track, there is no assurance that such investors will continue to invest in 2-Track. If adequate funds are not otherwise available, 2-Track would not be able to sustain its planned operations.
Critical Accounting Policies
Page - 21
The discussion and analysis of our financial conditions and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with generally accepted accounting principles in the United States. The preparation of financial statements requires managers to make estimates and disclosures on the date of the financial statements. On an on-going basis, management evaluates its estimates, including, but not limited to, those related to revenue recognition. We use authoritative pronouncements, historical experience and other assumptions as the basis for making judgments. Actual results could differ from those estimates. We believe that the critical accounting policies set forth in Note 2 to the consolidated financial statements affect our more significant judgments and estimates in the preparation of our consolidated financial statements.
Page - 22
ITEM 7. FINANCIAL STATEMENTS
REPORTS OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Consolidated Balance Sheet	
Consolidated Statement of Operations
Consolidated Statement of Cash Flows	
Consolidated Statement of Stockholders' Equity
Notes to Financial Statements		 -
Page - 23
Michael T. Studer CPA PC
18 East Sunrise Highway, Suite 311
Freeport, NY 11520
Phone: (516) 378-1000
Fax: (516) 546-6220
Email: mts@studercpapc.com
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
	To the Board of Directors and Stockholders of
2-Track Global, Inc.
I have audited the accompanying consolidated balance sheets of 2-Track Global, Inc. and subsidiaries (the Company) as of December 31, 2008 and 2007 and the related consolidated statements of operations, stockholders' equity (deficiency), and cash flows for the years then ended. These financial statements are the responsibility of the Company's management. My responsibility is to express an opinion on these financial statements based on my audits.
I conducted my audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that I plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. I believe that my audits provide a reasonable basis for my opinion.
In my opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of 2-Track Global, Inc. and subsidiaries as of December 31, 2008 and 2007 and the results of their operations and their cash flows for the years then ended in conformity with accounting principles generally accepted in the United States.
The accompanying consolidated financial statements referred to above have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the consolidated financial statements, the Company's present financial situation raises substantial doubt about its ability to continue as a going concern. Management's plans in regard to this matter are also described in Note 1. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
/s/ Michael T. Studer CPA P.C.
	Freeport, New York
April 15, 2009
2-TRACK GLOBAL INC. AND SUBSIDIARIES
Consolidated Balance Sheets
(Expressed in US Dollars)
	See notes to consolidated financial statements.
2-TRACK GLOBAL INC. AND SUBSIDIARIES
Consolidated Statements of Operations
(Expressed in US Dollars)
	See notes to consolidated financial statements.
2-TRACK GLOBAL, INC. AND SUBIDIARIES
Consolidated Statements of Cash Flows
(Expressed in U.S.Dollars)
	See notes to consolidated financial statements.
Common Stock SharesCommon Stock Par ValueAdditional Paid-in CapitalRetained Earnings (Decifit)Accumulated
Other
Comprehensive
Income (loss)Total Stockholders' Equity
Balance, December 31, 2006 35,077,513 35,0771,164,018(2,928,471)(89,221)(1,818,597)
Sale of common stock 2,571,900 2,572177,461--180,033
Issuance of common stock in satisfaction of liabilities18,227,86718,228997,011--1,015,239
Issuance of common stock for services460,05346031,744 --32,204
Reversal of previous subscription--(7,500)--(7,500)
Stock options expense- -8,461--8,461
Net loss---(1,315,277)-(1,315,277)
Foreign currency translation adjustment----(68,893) (68,893)
Balance, December 31, 2007 56,337,33356,3372,371,195(4,243,748)(158,114) (1,974,330)
Issuance of common stock in satisfaction of liabilities200,000 2002,800--3,000
Issuance of common stock for services39,94740 2,756--2,796
Stock options expense--8,466--8,466
Net loss---(270,707)-(270,707)
Foreign currency translation adjustment----215,163215,163
Balance, December 31, 200856,577,28056,577 2,385,217 (4,514,455)57,049(2,015,612)
	See notes to consolidated financial statements.
Note 1. ORGANIZATION AND BUSINESS OPERATIONS
2-Track Global, Inc. ("TOTG") was incorporated in the state of Nevada on March 12, 2002 under the name ECP Ventures, Inc. From March 12, 2002 (inception) to November 30, 2004, TOTG pursued mineral exploration activities. Since November 30, 2004, TOTG has been a holding company.
On November 30, 2004, TOTG acquired 2-Track Limited ("Limited"), a British corporation formed in October 2002, in exchange for 18,000,000 shares of TOTG's common stock (representing 60% of TOTG's issued and outstanding common stock after the exchange transaction). Until November 17, 2008, Limited sold computer applications primarily used by customers for vessel and vehicle fleet management. On November 17, 2008, the Company decided to liquidate Limited and transferred certain assets and operations to 2-Track U.S.A., Inc. ("TTNY"), another wholly owned subsidiary of TOTG, which was incorporated in the state of New York on January 4, 2007. TTNY sells devices and software applications primarily used by business customers for security purposes.
The accompanying consolidated financial statements include the accounts of TOTG and its wholly owned subsidiaries Limited and TTNY (collectively, the "Company"). All inter company accounts and transactions have been eliminated in consolidation.
Going Concern
These financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America applicable to a going concern which assume that the Company will realize its assets and discharge its liabilities in the normal course of business. The Company has incurred losses of $4,514,455 since inception and has a working capital deficiency of $2,054,345 as at December 31, 2008. These factors create substantial doubt as to the ability of the Company to continue as a going concern. Realization values may be substantially different from the carrying values as shown in these financial statements should the Company be unable to continue as a going concern. Management is in the process of identifying sources for additional financing to fund the ongoing development of the Company's business.
Note 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying consolidated financial statements include the accounts of TOTG and its Subsidiaries Limited and TTNY (collectively, the "Company"). All inter company accounts and transactions have been eliminated in consolidation.
Basis of Presentation
The accompanying consolidated financial statements of 2-Track Global, Inc. have been prepared in accordance with accounting principles generally accepted in the United States of America (USGAAP).
Certain items have been reclassified to conform to the current year presentation.
Use of Estimates
The preparation of financial statements in conformity with US Generally Accepted Accounting Principles 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 dates of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.
Cash
Cash represents funds on deposit with the Company's banks and cash on hand.
Revenue Recognition
The Company enters into agreements to sell products (hardware or software), services, and other arrangements that include combinations of products and services. Revenue from product sales, net of trade discounts and allowances, is recognized provided that persuasive evidence of an arrangement exists, delivery has occurred, the price is fixed or determinable, and collectibility is reasonably assured. Delivery is considered to have occurred when title and risk of loss have transferred to the customer. Revenue is reduced for estimated product returns and distributor price protection, when appropriate. For sales that include customer-specified acceptance criteria, revenue is recognized after the acceptance criteria have been met. Revenue from services is deferred and recognized over the contractual period or as services are rendered and accepted by the customer. When arrangements include multiple elements, the Company uses objective evidence of fair value to allocate revenue to the elements and recognize revenue when the criteria for revenue recognition have been met for each element. The amount of product revenue recognized is affected by judgments as to whether an arrangement includes multiple elements and if so, whether vendor-specific objective evidence of fair value exists for those elements. Changes to the elements in an arrangement and the ability to establish vendor-specific objective evidence for those elements could affect the timing of the revenue recognition. Most of these conditions are subjective and actual results could vary from the estimated outcome, requiring future adjustments to revenue.
Research and Development
Research and development costs are expensed as incurred.
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 statement 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 as prescribed in FASB Statement No. 109, Accounting for Income Taxes. As changes in tax laws or rate are enacted, deferred tax assets and liabilities are adjusted through the provision for income taxes.
Compensated Absences
Employees of the corporation are entitled to paid vacations, sick days and other time off depending on job classification, length of service and other factors. All liabilities have been recorded in the accompanying financial statements.
Basic and Diluted Net Loss Per Share
The Company computes net income (loss) per share in accordance with SFAS No. 128, "Earnings per Share". SFAS No. 128 requires presentation of both basic and diluted earnings per share (EPS) on the face of the income statement. Basic EPS is computed by dividing net income (loss) available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method. In computing Diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential shares if their effect is anti dilutive.
Disclosure about Fair Value of Financial Instruments
The Company estimates that the fair value of all financial instruments at December 31, 2008 as defined in FASB 107, does not differ materially from the aggregate carrying values of its financial instruments recorded in the accompanying balance sheets. The estimated fair value amounts have been determined by using available market information and appropriate valuation methodologies. Considerable judgment is required in interpreting market data to develop the estimates of fair value, and accordingly, the estimates are not necessarily indicative of the amounts that could be realized in a current market exchange.
Comprehensive Income
Except for foreign currency translation adjustments, the Company has no items that represent other comprehensive income.
Long-lived Assets
Long-lived assets are reviewed annually for impairment and whenever events or changes in circumstances indicate that the carrying amount of the asset in question may not be recoverable. The Company measures impairment by comparing the carrying value of the long-lived assets to the estimated undiscounted future cash flows expected to result from the use of the assets and their eventual disposition. If the sum of the expected undiscounted cash flows is less than the carrying amount of the assets, the Company would recognize an impairment loss based on the fair value of the assets.
Foreign Currency Translation
The functional currency of TOTG and TTNY is the United States dollar. The functional currency of Limited is the United Kingdom pound sterling ("GBP"). The reporting currency of the Company is the United States dollar. Limited assets and liabilities are translated into United States dollars at the year-end exchange rates ($ 1.4854 at December 31, 2008). Limited revenues and expenses are translated into United States dollars at weighted average exchange rates for the period ($ 1.7507 for the year ended December 31, 2008). Resulting translation adjustments are recorded as a component of accumulated other comprehensive income (loss) within stockholders' equity.
Stock-based Compensation
In December 2004, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards (SFAS) No. 123 R, "Share Based Payment". SFAS 123R is a revision of SFAS No. 123, " Accounting for Stock-based Compensation", and supersedes APB Opinion No. 25, "Accounting for Stock Issued to Employees" and its related implementation guidance. SFAS 123R establishes standards for the accounting for transactions in which an entity exchanges its equity instruments for goods or services. It also addresses transactions in which an entity incurs liabilities in exchange for goods or services that are based on the fair value of the entity's equity instruments or that may be settled by the issuance of those equity instruments. SFAS 123R focuses primarily on accounting for transactions in which an entity obtains employee services in share-based payment transactions. SFAS 123R does not change the accounting guidance for share-based payment transactions with parties other than employees provided in SFAS 123 as originally issued and Emerging Issues Task Force Issue No. 96-18, "Accounting for Equity Instruments That are Issued to Other Than Employees for Acquiring, or in Conjunction with Selling, Goods or Services". SFAS 123R does not address the accounting for employee share ownership plans, which are subject to AICPA Statement of Position 93-6, "Employers' Accounting for Employee Stock Ownership Plans". SFAS 123R requires a public entity to measure the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award (with limited exceptions). That cost is recognized over the period during which an employee is required to provide service in exchange for the 123R does not address the accounting for employee share ownership plans, which are subject to AICPA Statement of Position 93-6, "Employers' Accounting for Employee Stock Ownership Plans". SFAS 123R requires a public entity to measure the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award (with limited exceptions). That cost is recognized over the period during which an employee is required to provide service in exchange for the award - the requisite service period (usually the vesting period). SFAS 123R requires that the compensation cost relating to share-based payment transactions be recognized in financial statements. That cost is measured based on the fair value of the equity or liability instruments issued. The scope of SFAS 123R includes a wide range of share-based compensation arrangements including share options, restricted share plans , performance-based awards, share appreciation rights, and employee share purchase plans.
Property and Equipment
The Company depreciates its furniture, fixtures and equipment using the straight-line method
over the assets' estimated useful lives.
Intangible assets
Intangible assets represent filing and other costs associated with patents relating to the Company's Positional Real-time Integrity and Status Monitoring System ("PRISMS'). The patent costs are amortized using the estimated economic life of 10 years.
Note 3. PROPERTY AND EQUIPMENT, NET
Property and equipment net, consist of:
Note 4. INTANGIBLE ASSET
Property and equipment net, consist of:
Estimated patent amortization expense for each of the Company's five succeeding fiscal years ending December 31, 2009, 2010, 2011, 2012, and 2013 is $3,507, $3,507, $3,507, and $3,507, respectively.
Note 5. DUE TO RELATED PARTIES AND FORMER DIRECTOR
Amounts due to related parties and former director consist of:
December 31, December 31,
2008 2007
(Unaudited)
Unpaid compensation
Chief executive officer$-$360,000
Consultant and former director 323,000 228,000
Director 24,000 24,000
Advances payable(non-interest bearing, due on demand
Chief executive officer 233,312 118,368
Consultant and former director 942 -
Director 5,089 -
Total$586,343$730,368
Total compensation costs paid and accrued to related parties and former director ( and included in selling, general and administrative expenses) for the years ended December 31, 2008 and 2007 were $240,000 and $372,000, respectively.
Note 6. LOANS PAYABLE
Loans payable consist of:
December 31, December 31,
2008 2007
Due Octagon Investment, S.A., interest at 5%,
	installmanet commencing February 22, 2010,
	shares of common stock at a price of $.39 per$
100,000$
100,000
Due investor, intereset at 10.7%, due on demand 28,000 28,000
Due investor, intereset at 0%, due on demand 3,500 -
Total$131,500$128,000
Note 7. INCOME TAXES
No provision for income taxes was recorded in the years ended December 31, 2008 and 2007 since TOTG, TTNY and Limited had taxable losses in these periods.
Based on management's assessment, the Company has not yet determined it to be more likely than not that a deferred tax asset attributable to the future utilization of the United States and United Kingdom net operating loss carryforwards as of December 31, 2008 will be realized. Accordingly, the Company has provided a 100% allowance against the deferred tax asset in the
financial statements at December 31, 2008. The Company will continue to review this valuaton allowance and make adjustments as appropriate. The net operating loss carryforwards expire in varying amounts from year 2002 to 2028.
Current United States income tax laws limit the amount of loss available to be offset against future taxable income when a substantial change in ownership occurs. Therefore, the amount available to offset future taxable income may be limited.
Note 8. PENSION AND EMPLOYMENT LIABILITIES
The Company does not have liabilities as at December 31, 2007, for pension, post-employment benefits or post-retirement benefits. The Company does not have a pension plan.
Note 9. STOCKHOLDERS' EQUITY
In January 2006, the Company adopted a stock incentive plan in order to provide an incentive to eligible employees, consultants, directors and officers of the Company. The Employee Stock Incentive Plan is a qualified plan authorizing the issuance of up to 3,000,000 shares pursuant to the Plan. Awards would be in the form of incentive stock options or restricted stock awards and will be administered by a compensation committee or, in the absence of such committee, by the Board of Directors. The Plan has a term of ten years.
The Non-Employee Directors and Consultants Retainer Stock Incentive Plan is a non-qualified plan authorizing the issuance of up to 3,000,000 shares pursuant to the Plan. Awards would be in the form of stock options or restricted stock awards and will be administered by a compensation committee or, in the absence of such committee, by the Board of Directors. The Plan has a term of ten years.
Common Stock Issuances
On January 9, 2007, the Company issued 500,000 shares of common stock to Frank Snortheim for accepting a position as director of the Company. This stock grant, which vested on January 18, 2008, was valued at a total of $35,000 and was charged to operations ratably over the one year requisite service period.
On May 7, 2007, the Company issued 5,542,287 shares of restricted common stock of the Company to Mike Jung, president, CEO and CFO, in exchange for the cancellation of $387,960 of loans made to the Company.
On May 9, 2007 the Company completed a sale of 2,571,900 shares of restricted common stock to a group of investors in Denmark for a total of $180,033. The share price received from the various parties was $.07 per share.
On November 22, 2007, the Company issued 12,485,580 shares of restricted common stock of the Company to Nolboo & Co., a research and development company, in exchange for the cancellation of $624,279 of accounts payable to Nolboo & Co.
On December 31, 2007, the Company issued 200,000 shares of restricted common stock of the Company to Tin Long Investment Company as an interest payment of $3,000 on a loan of $28,000.
Stock Options
On March 34, 2006, the Company granted a total of 300,000 stock options to nine parties: 51,000 options to an officer, 51,000 options to a director, a total of 39,150 options to two employees, and a total of 158,850 options to five consultants. The exercise price of the options is $0.21 per share. The 102,000 stock options granted to the officer and director vest at a rate of 12.5% per year and expire March 24, 2014; the remaining 198,000 stock options vest at a rate of 20% per year and expire March 24, 2011. For the years ended December 31, 2008 and 2007, no options were exercised or forfeited and 300,000 stock options are outstanding at December 31, 2008, 104,700 of which are exercisable.
The fair value of the stock options granted was estimated at $49,165 using a Black-Sholes option pricing model with the following assumptions: (1) risk-free interest rate- 4.7%, (2) expected dividend yield - 0%, (3) expected volatility-95%, and (4) expected term-8 years (for 102,000 stock options), 5 years for (198,000 stock options). This $49,165 compensation cost is being recognized over the requisite service period of the respective parties.
For the years ended December 31, 2008 and 2007, stock options expense charged to operations was $8,461 and $8,461, respectively. At December 31, 2008, the unrecognized compensation expense was $25,889.
Note 10. BUSINESS CONCENTRATIONS
Three commercial customers combined accounted for approximately 96% and 58% of the consolidated net sales of the Company for the fiscal years ended December 31, 2008 and 2007, respectively. The concentration of sales with a small group of customers places the Company in an adverse position should any of these customers reduce their volume of sales orders with the Company
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None
ITEM 9A. (T) CONTROLS AND PROCEDURES
Disclosure Controls and Procedures
We have adopted and maintain disclosure controls and procedures (as such term is defined in Rules 13a-15 (e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the "Exchange Act")_) that are designed to ensure that information required to be disclosed in our reports under the Exchange Act, is recorded, processed, summarized and reported within the time periods required under the SEC's rules and forms and that the information is gathered and communicated to our management, including our Chief Executive Officer (Principal Executive Officer) and Chief Financial Officer (Principal Financial Officer), as appropriate, to allow for timely decisions regarding required disclosure.
As required by SEC Rule 15d-15(b) we carried out an evaluation, under the supervision and with the participation of management, including our principal executive officer and principal financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Exchange Act 15d-14 as of the end of the year covered by this report. Based upon that evaluation, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures are effective in timely alerting them to material information relating to us that is required to be included in our periodic SEC reports and to ensure that information required to be disclosed in our periodic SEC reports is accumulated and communicated to our management, including our CEO and CFO, to allow timely decisions regarding required disclosure as a result of any deficiency detected in our internal control over financial reporting.
Management's Annual Report on Internal Control Over Financial Reporting.
Our Management is responsible for establishing and maintaining adequate internal control over financial reporting for 2-Track Global in accordance with and as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Our 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. Our internal control over financial reporting includes those policies and procedures that:
	 (i) 	require the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets;
	(ii) 	provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted
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	 accounting principles and that receipts and expenditures of 2-Track Global are being made in accordance with authorizations of management and directors of 2-Track Global; 	
	 (ii) 	provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of 2-Track Global's assets that could have a material effect on the financial statements.
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.
Management's assessment of the effectiveness of 2-Track Global's internal control over financial reporting as of the year ended December 31, 2008 is effective. We have not identified any, current material weaknesses considering the nature and extent of our current operations and any risks or errors in financial reporting under current operations
This annual report does not include an attestation report of 2-Track Global's registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by 2-Track Global's registered public accounting firm pursuant to temporary rules of the SEC that permit 2-Track Global to provide only management's report in this annual report.
Changes in Internal Control Over Financial Reporting.
There was no change in our internal control over financial reporting that occurred during the last fiscal quarter ended December 31, 2008 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting..
ITEM 9B. OTHER INFORMATION
Subsequent to the year ended December 31, 2008, we liquidated and dissolved one of the Company's wholly-owned subsidiaries 2-Track Limited and moved its assets and business operations to the Company's remaining wholly-owned subsidiary 2-Track USA, Inc. located in New York.
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PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CORPORATE GOVERNANCE
The following table sets forth information about the directors and executive officers of 2-Track together with the principal positions and offices with 2-Track held by each:
Name of PersonAgePosition and Office Presently Held With 2-TrackDirector Since
Woo Sun Mike Jung41Chief Executive Officer, Chairman, President and Chief Financial Officer11/30/04
Frank Snortheim (2)51Director 1/4/07
Woo Sun Mike Jung became a Director and President on November 30, 2004. On April 24, 2005 he also assumed the position of Chief Financial Officer. He is a Korean national and has been the managing director of 2-Track Limited since October 2002. He previously served as the Technical Director for Tiger Telematics for hardware purchase from February 2002 to July 2002. He was the European representative for Techway Inc. from September 2000 to January 2002 	
Frank Snortheim became a Director on January 4, 2007. Mr. Snortheim has been an investment director of InnFond P/S, Copenhagen, Denmark since 2003, with responsibility for identifying new investment opportunities, preparing business plans, identifying potential partners, coaching management teams and identifying new financing partners. Prior to this position, from December, 1999 to March, 2003, Mr. Snortheim was a vice president for Handelsbanken Capital Markets, a division of Svenska Handelsbanken AB, Sweden, Corporate Finance, Copenhagen, Denmark. Mr. Snortheim also spent two years working for Washington Equity Partners, Washington, D.C. where he was a director and partner. Prior to his work with Washington Equity Partners, Mr. Snortheim worked with DSC Communications, Plano, Texas as director for strategic marketing. Mr. Snortheim has an executive education from INSEAD, Fontainebleau, France and MBA studies from Marquette University Graduate School, MS in Economics with finance major from Copenhagen Business School and a BA in Business from Copenhagen Business School.
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The current Directors will serve and hold office until the next annual shareholders' meeting or until their respective successors have been duly elected and qualified. Our executive officers are appointed by the Board of Directors and serve at the discretion of the Board
Family Relationships
There are no family relationships between any director and executive officer.
Board Meetings and Actions
The Board of Directors of the Company held 1 meeting and acted by written consent on two occasions during the year ended December 31, 2008. Each director during the year 2008 participated in 75% or more of the aggregate number of meetings of the Board held or action by written consent taken during the year 2008.
Corporate Governance
We do not currently have a standing Nominating Committee due to the fact that the Board currently consists of one Director which makes having such a committee unnecessary at this time. The Board does not currently have separately-designated Audit, Executive or Compensation Committees nor does the Board have a designated audit committee financial expert. The functions of these committees are performed by the Board of Directors.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires our executive officers and directors, and persons who own more than 10% of our common stock to file reports of ownership on Form 3 and changes in ownership on Form 4 with the Securities and Exchange Commission (the "SEC"). Such executive officers, directors and 10% stockholders are also required by SEC rules to furnish us with copies of all Section 16(a) forms they file. Based solely upon our review of copies of such forms received by us, or on written representations from certain reporting persons that no other filings were required for such persons, we believe that, during the fiscal year ended December 31, 2008, our executive officers and directors and 10% stockholders complied with all applicable Section 16(a) filing requirements.
We have adopted a Code of Ethics applicable to our Chief Executive Officer and Chief Financial Officer. We will provide by mail to any person without charge, upon request, a copy of such code of ethics if we receive the request by e-mail at "www.2-TrackGlobal.com" or in writing by mail to: 2-Track Global, Inc., 1270 Broadway #208, New York, NY 10001, Attn: Corporate Secretary
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ITEM 11. EXECUTIVE COMPENSATION	
The following table sets forth the compensation of 2-Track's Principal Executive Officer during the last two most recently complete fiscal years. No other officer or director received annual compensation in excess of $100,000 during the last completed fiscal year.
(1)	 Amount included $120,000 paid as compensation by 2-Track Limited (a wholly owned subsidiary). $120,000 of this amount was accrued but not paid during 2007 or 2008.
Employment Agreements
There are no employment agreements with any officer or employee of 2-Track.
Incentive and Stock Option Plans
The 2-Track 2006 Employee Stock Incentive Plan was adopted by our Board of Directors and approved by our stockholders on January 31, 2006. This Plan will allow us to grant stock or options as compensation to officers and employees. The Plan is authorized to grant stock or options of up to 3,000,000 shares. Options to purchase 102,000 shares of 2-Track common stock were granted under this Plan during 2006. No options were granted during 2008.
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OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
Option Awards Stock Awards
Name
(a) Number of
Securities
Underlying
Unexercised
Option(#)
Exerisable
(b)Number of
Securities
Underlying
Unexercised
Option(#)
Unexercised
(c)Equity
Incentive
Plan
Awards:
Number of
Securities
Underlying
Unexercised
Unearned
Options(#)
(d)Option
Exercise
Price
($)
(e)Option
Expiration
Date
(f)Number of
Shares or
Units of
Stock
that
Have
Not
Vested
(#)
(g)Market
Value of
Shares or
Units of
Stock
That
Have
Not
Vested
($)
(h)Equity
Incentive
Plan
Awards:
Number of
Unearned
Shares,
Units or
Other
Rights
that have
Not
Vested
(#)
(i)Equity
Incentive
Plan
Awards:
Market or
Payout
Value of
Unearned
Shares,
Units of
Other
Rights
That
Have Not
Vested
($)
(j)
CEO51,000-0--0--0--0--0--0--0--0-
Frank
Snortheim-0--0--0--0--0--0--0--0--0-
Employee Pension, Profit Sharing or Other Retirement Plans
We do not have a defined benefit pension plan or profit sharing or other retirement plan.
Objectives and Philosophy of our Executive Compensation Program
We do not have a standing compensation committee. Our Board of Directors as a whole makes the decisions as to employee benefit programs and officer and employee compensation. The primary objectives of our executive compensation programs are to:
attract, retain and motivate skilled and knowledgeable individuals;
ensure that compensation is aligned with our corporate strategies and business objectives;
promote the achievement of key strategic and financial performance measures by linking long-term cash and equity incentives to the achievement of measurable corporate performance goals; and)
align executives' incentives with the creation of stockholder value.
To achieve these objectives, our Board of Directors evaluates our executive compensation program with the objective of setting compensation at levels it believes will allow us to attract and retain qualified executives. We also generally provide a portion of our executive
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compensation in the form of stock options, which we believe helps us retain our executives and align their interest with those of our stockholders by allowing the executives to participate in our longer term success as reflected in asset growth and stock price appreciation.
Components of our Executive Compensation Program
At this time, the primary elements of our executive compensation program are base salaries and option grant incentive awards, although the Board of Directors has the authority to award cash bonuses, benefits and other forms of compensation as it sees fit.
We do not have any formal or informal policy or target for allocating compensation between short-term and long-term compensation, between cash and non-cash compensation or among the different forms of non-cash compensation. Instead, we have determined subjectively on a case-by-case basis the appropriate level and mix of the various compensation components. Similarly, we do not rely extensively on benchmarking against our competitors in making compensation relation decisions, although we may consider industry compensation trends as one of many factors in our determination of proper compensation.
Base salaries
Base salaries are used to recognize the experience, skills, knowledge and responsibilities required of our named executive officers. Base salary, and other components of compensation, may be evaluated by our Board of Directors for adjustment based on an assessment of the individual's performance and compensation trends in our industry. In light of the level of the Company's performance during fiscal year 2008, and the significant efforts of the Company's sole executive officer during fiscal year 2008, the base salary for 2-Track's President was left unchanged for 2008.
Equity Awards
Our stock option award program is the primary vehicle for offering long-term incentives to our executives. Our equity awards to executives have typically been made in the form of shares or stock options issued from the 2-Track 2006 Employee Stock Incentive Plan. We believe that equity grants in the form of stock or options provide our executives with a direct link to our long-term performance, create an ownership culture, and align the interests of our executives and our stockholders. Due to the performance of 2-Track during 2008 no stock or stock options were granted to any officer of 2-Track during fiscal year 2008.
Cash Bonuses
Our Board of Directors has the discretion to award cash bonuses based on our financial performance and individual objectives. The corporate financial performance measures (revenues and profits) will be given the greatest weight in this bonus analysis. We have not yet granted any cash bonuses to any named executive officer nor have we yet developed any specific individual
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objectives while we wait to attain revenue and profitability levels sufficient to undertake any such bonuses. No bonuses were granted during fiscal year 2008.
Benefits and Other Compensation
Our named executive officers are permitted to participate in such health care, disability insurance, retirement and other employee benefit plans as may be in effect with the Company from time to time to the extent the executive is eligible under the terms of those plans. As of the end of fiscal year 2008, we have not implemented any such employee benefit plans.
Compensation of Directors
We currently have a policy of paying $1,000 - $3,000 per month to our non-employee directors as compensation for their services as members of the Board of Directors.
Effective January 31, 2006, we adopted the 2-Track Global, Inc.'s 2006 Non-Employee Directors and Consultants Retainer Stock Incentive Plan. This Plan will allow us to grant stock or options as compensation to non-employee directors and consultants. The Plan is authorized to grant stock or options of up to 3,000,000 shares. Options to purchase 198,000 shares of 2-Track common stock were granted under this Plan during 2006. During 2007 Mr. Snortheim was granted 500,000 shares of common stock under this Non-Employee Director Plan upon his appointment to the Board of Directors. These shares vested in January, 2008 upon the first anniversary date from the date of issuance. No shares or options were granted from this Plan during 2008.
DIRECTOR COMPENSATION
DURING 2008
NameFees
Earned
or Paid
in Cash
($)Stock
Awards
($)Option
Awards
($)Non-Equity
Incentive Plan
Compensation
($)Nonqualified
Deferred
Compensation
Earnings
($)All Other
Compensation
($)Total
($)
(a)(b)(c)(d)(e)(f)(g)(h)
Mike Jung -0-
Frank Snortheim-0--0- -0-
Objectives and Philosophy of our Director Compensation Program
We do not have a standing compensation committee. Consequently, our Board of Directors as a whole makes the decisions as to director benefit programs and compensation. Directors who are
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full or part time employees of 2-Track are not eligible for compensation or benefits as a director. The primary objectives of our director compensation program are to:
attract and retain experienced and knowledgeable individuals to serve as directors;
reimburse directors for the time and expenses incurred in serving as a director;
allow directors to participate in our longer term asset growth and stock appreciation.
Components of our Director Compensation Program
At the present time, the primary elements of our director compensation program are a base monthly compensation for a director's services to the Company and stock or option awards.
Monthly Payment
At the present time we offer a monthly stipend of between $1,000 and $3,000 for services rendered by each non-employee member of the Board. The precise amount is determined by the Board based on various factors including the level of Board activity, the level of experience and recognition each member brings to the Board, the length of service of the member and such other factors as deemed relevant to such member's participation on the Board. Due to the relatively low level of Board activity during 2008, the Board determined not to pay any monthly stipend payment during 2008.
Equity Awards
Our stock and stock option award program is the primary vehicle for offering long-term compensation to Board members. Our current policy is to grant an initial stock award of 500,000 shares to each non-employee director upon joining the Board. The shares typically vest over a one-year period. We may grant additional shares of stock or options to non-employee Board members depending on various factors including the level of Board activity, the level of experience and recognition each member brings to the Board, the overall performance of the Company, and such other factors as deemed relevant to such member's participation on the Board. Due to the low level of Board activity and the Company's performance during fiscal year 2008, no additional stocks or stock options were awarded to any non-employee director in 2008.
Limitation of Liability and Indemnification Matters
Our Articles of Incorporation provide that we will indemnify our officers and directors, employees and agents and former officers, directors, employees and agents unless their conduct is finally adjudged as involving intentional misconduct, fraud or a knowing violation of the law and were material to the cause of action. This indemnification includes expenses (including attorneys' fees), judgments, fines, and amounts paid in settlement actually and reasonably incurred by these individuals in connection with such action, suit, or proceeding, including any appeal thereof, subject to the qualifications contained in Nevada law as it now exists. Expenses (including attorneys' fees) incurred in defending a civil or criminal action, suit, or proceeding
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will be paid by us in advance of the final disposition of such action, suit, or proceeding upon receipt of an undertaking by or on behalf of the director, officer, employee or agent to repay such amount, unless it shall ultimately be determined that he or she is entitled to be indemnified by us as authorized in the Articles of Incorporation. This indemnification will continue as to a person who has ceased to be a director, officer, employee or agent, and will benefit their heirs, executors, and administrators. These indemnification rights are not deemed exclusive of any other rights to which any such person may otherwise be entitled apart from the Articles of Incorporation. Nevada law generally provides that a corporation shall have the power to indemnify persons if they acted in good faith in a manner reasonably believed to be in, or not opposed to, the best interests of the corporation and, with respect to any criminal action or proceeding, had no reasonable cause to believe the conduct was unlawful. In the event any such person is judged liable for negligence or misconduct, this indemnification will apply only if approved by the court in which the action was pending. Any other indemnification shall be made only after the determination by our Board of Directors (excluding any directors who were party to such action), by independent legal counsel in a written opinion, or by a majority vote of stockholders (excluding any stockholders who were parties to such action) to provide such indemnification.
Insofar as indemnification for liabilities arising under the Securities Act of 1933 (the "Securities Act") may be permitted to directors, officers and controlling persons of 2-Track pursuant to the foregoing provisions, or otherwise, 2-Track has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, enforceable.
ITEM 12. SSECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
The following table sets forth the number of shares of 2-Track's Common Stock beneficially owned as of April 10, 2009 by, (i) each executive officer and director of 2-Track; (ii) all executive officers and directors of 2-Track as a group; and (iii) owners of more than 5% of 2-Track's Common Stock.
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(1) Amount includes 51,000 shares issuable under stock options exercisable within 60 days of April 10, 2009.
(2) Mr. Snortheim resigned as a Director effective December 31, 2008.
Equity Compensation Plan Information
Information in the table below is as of December 31, 2008.
Plan Category Number of securities to be issued upon exercise of outstanding options, warrants and rights Weighted-average exercise price of outstanding options, warrants and right Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))
(a)(b)(c)
Equity compensation plans approved by security holders300,000$0.215,700,000
Equity compensation plans not approved by security holdersN/A____________
Total300,000$0.215,700,000
Changes of Control of Company
There were no current arrangements which may result in a future change in control of 2-Track.
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ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTION
The President of 2-Track made loans to the Company aggregating $311,780 during 2008 of which $233,312 was outstanding as of December 31, 2008. These loans bear no interest, are unsecured and due on demand. In conjunction with the liquidation of 2-Track Limited, the President of 2-Track forgave $455,805 of accrued compensation.
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
During 2-Track's fiscal years ended December 31, 2007 and December 31, 2008, 2-Track was billed the following aggregate fees by Michael T. Studer PCC ("Studer").
Audit Fees.
The aggregate fees billed by Studer to 2-Track for professional services rendered for the audit of 2-Track's financial statements for the last two fiscal years, for reviews of the financial statements included in 2-Track's Forms 10-Q for the fiscal year, and for services provided by Studer in connection with statutory or regulatory filings for the 2008 fiscal year, were $23,000 for the fiscal year 2007 and $23,000_ for the fiscal year 2008.
Audit Related Fees
None
Tax Fees
None
All Other Fees.
None
All of the services performed by Studer during 2008 were pre-approved by 2-Track's Board of Directors, which concluded that the provision of the non-audit services described above were compatible with maintaining the accountant's independence.
Pre-Approved Policies and Procedures
Prior to retaining Studer to provide services in any fiscal year, the Board of Directors first reviews and approves the accountant's fee proposal and engagement letter. In the fee proposal, each category of services (Audit, Audit Related, Tax and All Other) is broken down into subcategories that describe the nature of the services to be rendered, and the fees for such
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services. 2-Track's pre-approval policy provides that the Board of Directors must specifically pre-approve any engagement of Studer for services outside the scope of the fee proposal and engagement letter.
PART IV
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
Page - 37
SIGNATURES
Pursuant to the requirements of Section 13 or 15 (d) of the Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
2-TRACK GLOBAL, INC.
Date: April 15, 2009 By /s/ Woosun Jung
Woosun Jung
President and Chief Executive
In accordance with the Exchange Act, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
SignatureTitleDate
/s/ Woosun Jung
Woosun JungChairman of the Board, President
and Chief Financial Officer
(Principal Financial and Accounting Officer)April 15, 20098
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CERTIFICATION FOR ANNUAL REPORTS ON FORM 10-K
I, Woosun Jung, certify that:
1. I have reviewed this annual report for the fiscal year ended December 31, 2008 on Form 10-K of 2-Track Global, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and internal control over financial reporting (as defined in Exchange Act Rules 13a-15d-15f) for the registrant and have:
a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the financial statements for external purposes in accordance with generally accepted accounting principles;
c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and;
5. The registrant's other certifying officer and I have disclosed, based on our most recent
EXHIBIT 31.1
evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function):
a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
Date: April 15 ,2009
/s/ Woosun Jung
Woosun Jung,
Chief Financial Officer
EXHIBIT 31.1
CERTIFICATION FOR ANNUAL REPORTS ON FORM 10-K
I, Woosun Jung, certify that:
1. I have reviewed this annual report for the fiscal year ended December 31, 2008 on Form 10-K of 2-Track Global, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and internal control over financial reporting (as defined in Exchange Act Rules 13a-15d-15f) for the registrant and have:
a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the financial statements for external purposes in accordance with generally accepted accounting principles;
c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and;
EXHIBIT 31.2
5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function):
a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
Date: April 15 ,2009
/s/ Woosun Jung
; Woosun Jung,
Chief Financial Officer
EXHIBIT 31.2
CERTIFICATION PURSUANT TO
18 U.S.C. Section 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
The undersigned, in his capacity as Chief Executive Officer and Chief Financial Officer, respectively, of 2-Track Global, Inc. (the "Registrant"), hereby certifies, for purposes of 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to the best of his knowledge that:
(1) the Annual Report of the Registrant on Form 10-K for the year ended December 31, 2008 (the "Report"), which accompanies this certification, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) the information contained in the Report fairly presents, in all material respects, the financial condition of the Registrant at the end of such year and the results of operations of the Registrant for such year.
Date: April 15 ,2009 2-TRACK GLOBAL, INC.
/s/ Woosun Jung
Woosun Jung,
Chief Executive Officer and Chief Financial Officer
EXHIBIT 32
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None
ITEM 9A.
ITEM 9A. (T) CONTROLS AND PROCEDURES
Disclosure Controls and Procedures
We have adopted and maintain disclosure controls and procedures (as such term is defined in Rules 13a-15 (e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the "Exchange Act")_) that are designed to ensure that information required to be disclosed in our reports under the Exchange Act, is recorded, processed, summarized and reported within the time periods required under the SEC's rules and forms and that the information is gathered and communicated to our management, including our Chief Executive Officer (Principal Executive Officer) and Chief Financial Officer (Principal Financial Officer), as appropriate, to allow for timely decisions regarding required disclosure.
As required by SEC Rule 15d-15(b) we carried out an evaluation, under the supervision and with the participation of management, including our principal executive officer and principal financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Exchange Act 15d-14 as of the end of the year covered by this report. Based upon that evaluation, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures are effective in timely alerting them to material information relating to us that is required to be included in our periodic SEC reports and to ensure that information required to be disclosed in our periodic SEC reports is accumulated and communicated to our management, including our CEO and CFO, to allow timely decisions regarding required disclosure as a result of any deficiency detected in our internal control over financial reporting.
Management's Annual Report on Internal Control Over Financial Reporting.
Our Management is responsible for establishing and maintaining adequate internal control over financial reporting for 2-Track Global in accordance with and as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Our 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. Our internal control over financial reporting includes those policies and procedures that:
	 (i) 	require the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets;
	(ii) 	provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted
Page - 25
	 accounting principles and that receipts and expenditures of 2-Track Global are being made in accordance with authorizations of management and directors of 2-Track Global; 	
	 (ii) 	provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of 2-Track Global's assets that could have a material effect on the financial statements.
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.
Management's assessment of the effectiveness of 2-Track Global's internal control over financial reporting as of the year ended December 31, 2008 is effective. We have not identified any, current material weaknesses considering the nature and extent of our current operations and any risks or errors in financial reporting under current operations
This annual report does not include an attestation report of 2-Track Global's registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by 2-Track Global's registered public accounting firm pursuant to temporary rules of the SEC that permit 2-Track Global to provide only management's report in this annual report.
Changes in Internal Control Over Financial Reporting.
There was no change in our internal control over financial reporting that occurred during the last fiscal quarter ended December 31, 2008 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting..
ITEM 9B.
ITEM 9B. OTHER INFORMATION
Subsequent to the year ended December 31, 2008, we liquidated and dissolved one of the Company's wholly-owned subsidiaries 2-Track Limited and moved its assets and business operations to the Company's remaining wholly-owned subsidiary 2-Track USA, Inc. located in New York.
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PART III
ITEM 10.
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CORPORATE GOVERNANCE
The following table sets forth information about the directors and executive officers of 2-Track together with the principal positions and offices with 2-Track held by each:
Name of PersonAgePosition and Office Presently Held With 2-TrackDirector Since
Woo Sun Mike Jung41Chief Executive Officer, Chairman, President and Chief Financial Officer11/30/04
Frank Snortheim (2)51Director 1/4/07
Woo Sun Mike Jung became a Director and President on November 30, 2004. On April 24, 2005 he also assumed the position of Chief Financial Officer. He is a Korean national and has been the managing director of 2-Track Limited since October 2002. He previously served as the Technical Director for Tiger Telematics for hardware purchase from February 2002 to July 2002. He was the European representative for Techway Inc. from September 2000 to January 2002 	
Frank Snortheim became a Director on January 4, 2007. Mr. Snortheim has been an investment director of InnFond P/S, Copenhagen, Denmark since 2003, with responsibility for identifying new investment opportunities, preparing business plans, identifying potential partners, coaching management teams and identifying new financing partners. Prior to this position, from December, 1999 to March, 2003, Mr. Snortheim was a vice president for Handelsbanken Capital Markets, a division of Svenska Handelsbanken AB, Sweden, Corporate Finance, Copenhagen, Denmark. Mr. Snortheim also spent two years working for Washington Equity Partners, Washington, D.C. where he was a director and partner. Prior to his work with Washington Equity Partners, Mr. Snortheim worked with DSC Communications, Plano, Texas as director for strategic marketing. Mr. Snortheim has an executive education from INSEAD, Fontainebleau, France and MBA studies from Marquette University Graduate School, MS in Economics with finance major from Copenhagen Business School and a BA in Business from Copenhagen Business School.
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The current Directors will serve and hold office until the next annual shareholders' meeting or until their respective successors have been duly elected and qualified. Our executive officers are appointed by the Board of Directors and serve at the discretion of the Board
Family Relationships
There are no family relationships between any director and executive officer.
Board Meetings and Actions
The Board of Directors of the Company held 1 meeting and acted by written consent on two occasions during the year ended December 31, 2008. Each director during the year 2008 participated in 75% or more of the aggregate number of meetings of the Board held or action by written consent taken during the year 2008.
Corporate Governance
We do not currently have a standing Nominating Committee due to the fact that the Board currently consists of one Director which makes having such a committee unnecessary at this time. The Board does not currently have separately-designated Audit, Executive or Compensation Committees nor does the Board have a designated audit committee financial expert. The functions of these committees are performed by the Board of Directors.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires our executive officers and directors, and persons who own more than 10% of our common stock to file reports of ownership on Form 3 and changes in ownership on Form 4 with the Securities and Exchange Commission (the "SEC"). Such executive officers, directors and 10% stockholders are also required by SEC rules to furnish us with copies of all Section 16(a) forms they file. Based solely upon our review of copies of such forms received by us, or on written representations from certain reporting persons that no other filings were required for such persons, we believe that, during the fiscal year ended December 31, 2008, our executive officers and directors and 10% stockholders complied with all applicable Section 16(a) filing requirements.
We have adopted a Code of Ethics applicable to our Chief Executive Officer and Chief Financial Officer. We will provide by mail to any person without charge, upon request, a copy of such code of ethics if we receive the request by e-mail at "www.2-TrackGlobal.com" or in writing by mail to: 2-Track Global, Inc., 1270 Broadway #208, New York, NY 10001, Attn: Corporate Secretary
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ITEM 11.
ITEM 11. EXECUTIVE COMPENSATION	
The following table sets forth the compensation of 2-Track's Principal Executive Officer during the last two most recently complete fiscal years. No other officer or director received annual compensation in excess of $100,000 during the last completed fiscal year.
(1)	 Amount included $120,000 paid as compensation by 2-Track Limited (a wholly owned subsidiary). $120,000 of this amount was accrued but not paid during 2007 or 2008.
Employment Agreements
There are no employment agreements with any officer or employee of 2-Track.
Incentive and Stock Option Plans
The 2-Track 2006 Employee Stock Incentive Plan was adopted by our Board of Directors and approved by our stockholders on January 31, 2006. This Plan will allow us to grant stock or options as compensation to officers and employees. The Plan is authorized to grant stock or options of up to 3,000,000 shares. Options to purchase 102,000 shares of 2-Track common stock were granted under this Plan during 2006. No options were granted during 2008.
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OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
Option Awards Stock Awards
Name
(a) Number of
Securities
Underlying
Unexercised
Option(#)
Exerisable
(b)Number of
Securities
Underlying
Unexercised
Option(#)
Unexercised
(c)Equity
Incentive
Plan
Awards:
Number of
Securities
Underlying
Unexercised
Unearned
Options(#)
(d)Option
Exercise
Price
($)
(e)Option
Expiration
Date
(f)Number of
Shares or
Units of
Stock
that
Have
Not
Vested
(#)
(g)Market
Value of
Shares or
Units of
Stock
That
Have
Not
Vested
($)
(h)Equity
Incentive
Plan
Awards:
Number of
Unearned
Shares,
Units or
Other
Rights
that have
Not
Vested
(#)
(i)Equity
Incentive
Plan
Awards:
Market or
Payout
Value of
Unearned
Shares,
Units of
Other
Rights
That
Have Not
Vested
($)
(j)
CEO51,000-0--0--0--0--0--0--0--0-
Frank
Snortheim-0--0--0--0--0--0--0--0--0-
Employee Pension, Profit Sharing or Other Retirement Plans
We do not have a defined benefit pension plan or profit sharing or other retirement plan.
Objectives and Philosophy of our Executive Compensation Program
We do not have a standing compensation committee. Our Board of Directors as a whole makes the decisions as to employee benefit programs and officer and employee compensation. The primary objectives of our executive compensation programs are to:
attract, retain and motivate skilled and knowledgeable individuals;
ensure that compensation is aligned with our corporate strategies and business objectives;
promote the achievement of key strategic and financial performance measures by linking long-term cash and equity incentives to the achievement of measurable corporate performance goals; and)
align executives' incentives with the creation of stockholder value.
To achieve these objectives, our Board of Directors evaluates our executive compensation program with the objective of setting compensation at levels it believes will allow us to attract and retain qualified executives. We also generally provide a portion of our executive
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compensation in the form of stock options, which we believe helps us retain our executives and align their interest with those of our stockholders by allowing the executives to participate in our longer term success as reflected in asset growth and stock price appreciation.
Components of our Executive Compensation Program
At this time, the primary elements of our executive compensation program are base salaries and option grant incentive awards, although the Board of Directors has the authority to award cash bonuses, benefits and other forms of compensation as it sees fit.
We do not have any formal or informal policy or target for allocating compensation between short-term and long-term compensation, between cash and non-cash compensation or among the different forms of non-cash compensation. Instead, we have determined subjectively on a case-by-case basis the appropriate level and mix of the various compensation components. Similarly, we do not rely extensively on benchmarking against our competitors in making compensation relation decisions, although we may consider industry compensation trends as one of many factors in our determination of proper compensation.
Base salaries
Base salaries are used to recognize the experience, skills, knowledge and responsibilities required of our named executive officers. Base salary, and other components of compensation, may be evaluated by our Board of Directors for adjustment based on an assessment of the individual's performance and compensation trends in our industry. In light of the level of the Company's performance during fiscal year 2008, and the significant efforts of the Company's sole executive officer during fiscal year 2008, the base salary for 2-Track's President was left unchanged for 2008.
Equity Awards
Our stock option award program is the primary vehicle for offering long-term incentives to our executives. Our equity awards to executives have typically been made in the form of shares or stock options issued from the 2-Track 2006 Employee Stock Incentive Plan. We believe that equity grants in the form of stock or options provide our executives with a direct link to our long-term performance, create an ownership culture, and align the interests of our executives and our stockholders. Due to the performance of 2-Track during 2008 no stock or stock options were granted to any officer of 2-Track during fiscal year 2008.
Cash Bonuses
Our Board of Directors has the discretion to award cash bonuses based on our financial performance and individual objectives. The corporate financial performance measures (revenues and profits) will be given the greatest weight in this bonus analysis. We have not yet granted any cash bonuses to any named executive officer nor have we yet developed any specific individual
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objectives while we wait to attain revenue and profitability levels sufficient to undertake any such bonuses. No bonuses were granted during fiscal year 2008.
Benefits and Other Compensation
Our named executive officers are permitted to participate in such health care, disability insurance, retirement and other employee benefit plans as may be in effect with the Company from time to time to the extent the executive is eligible under the terms of those plans. As of the end of fiscal year 2008, we have not implemented any such employee benefit plans.
Compensation of Directors
We currently have a policy of paying $1,000 - $3,000 per month to our non-employee directors as compensation for their services as members of the Board of Directors.
Effective January 31, 2006, we adopted the 2-Track Global, Inc.'s 2006 Non-Employee Directors and Consultants Retainer Stock Incentive Plan. This Plan will allow us to grant stock or options as compensation to non-employee directors and consultants. The Plan is authorized to grant stock or options of up to 3,000,000 shares. Options to purchase 198,000 shares of 2-Track common stock were granted under this Plan during 2006. During 2007 Mr. Snortheim was granted 500,000 shares of common stock under this Non-Employee Director Plan upon his appointment to the Board of Directors. These shares vested in January, 2008 upon the first anniversary date from the date of issuance. No shares or options were granted from this Plan during 2008.
DIRECTOR COMPENSATION
DURING 2008
NameFees
Earned
or Paid
in Cash
($)Stock
Awards
($)Option
Awards
($)Non-Equity
Incentive Plan
Compensation
($)Nonqualified
Deferred
Compensation
Earnings
($)All Other
Compensation
($)Total
($)
(a)(b)(c)(d)(e)(f)(g)(h)
Mike Jung -0-
Frank Snortheim-0--0- -0-
Objectives and Philosophy of our Director Compensation Program
We do not have a standing compensation committee. Consequently, our Board of Directors as a whole makes the decisions as to director benefit programs and compensation. Directors who are
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full or part time employees of 2-Track are not eligible for compensation or benefits as a director. The primary objectives of our director compensation program are to:
attract and retain experienced and knowledgeable individuals to serve as directors;
reimburse directors for the time and expenses incurred in serving as a director;
allow directors to participate in our longer term asset growth and stock appreciation.
Components of our Director Compensation Program
At the present time, the primary elements of our director compensation program are a base monthly compensation for a director's services to the Company and stock or option awards.
Monthly Payment
At the present time we offer a monthly stipend of between $1,000 and $3,000 for services rendered by each non-employee member of the Board. The precise amount is determined by the Board based on various factors including the level of Board activity, the level of experience and recognition each member brings to the Board, the length of service of the member and such other factors as deemed relevant to such member's participation on the Board. Due to the relatively low level of Board activity during 2008, the Board determined not to pay any monthly stipend payment during 2008.
Equity Awards
Our stock and stock option award program is the primary vehicle for offering long-term compensation to Board members. Our current policy is to grant an initial stock award of 500,000 shares to each non-employee director upon joining the Board. The shares typically vest over a one-year period. We may grant additional shares of stock or options to non-employee Board members depending on various factors including the level of Board activity, the level of experience and recognition each member brings to the Board, the overall performance of the Company, and such other factors as deemed relevant to such member's participation on the Board. Due to the low level of Board activity and the Company's performance during fiscal year 2008, no additional stocks or stock options were awarded to any non-employee director in 2008.
Limitation of Liability and Indemnification Matters
Our Articles of Incorporation provide that we will indemnify our officers and directors, employees and agents and former officers, directors, employees and agents unless their conduct is finally adjudged as involving intentional misconduct, fraud or a knowing violation of the law and were material to the cause of action. This indemnification includes expenses (including attorneys' fees), judgments, fines, and amounts paid in settlement actually and reasonably incurred by these individuals in connection with such action, suit, or proceeding, including any appeal thereof, subject to the qualifications contained in Nevada law as it now exists. Expenses (including attorneys' fees) incurred in defending a civil or criminal action, suit, or proceeding
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will be paid by us in advance of the final disposition of such action, suit, or proceeding upon receipt of an undertaking by or on behalf of the director, officer, employee or agent to repay such amount, unless it shall ultimately be determined that he or she is entitled to be indemnified by us as authorized in the Articles of Incorporation. This indemnification will continue as to a person who has ceased to be a director, officer, employee or agent, and will benefit their heirs, executors, and administrators. These indemnification rights are not deemed exclusive of any other rights to which any such person may otherwise be entitled apart from the Articles of Incorporation. Nevada law generally provides that a corporation shall have the power to indemnify persons if they acted in good faith in a manner reasonably believed to be in, or not opposed to, the best interests of the corporation and, with respect to any criminal action or proceeding, had no reasonable cause to believe the conduct was unlawful. In the event any such person is judged liable for negligence or misconduct, this indemnification will apply only if approved by the court in which the action was pending. Any other indemnification shall be made only after the determination by our Board of Directors (excluding any directors who were party to such action), by independent legal counsel in a written opinion, or by a majority vote of stockholders (excluding any stockholders who were parties to such action) to provide such indemnification.
Insofar as indemnification for liabilities arising under the Securities Act of 1933 (the "Securities Act") may be permitted to directors, officers and controlling persons of 2-Track pursuant to the foregoing provisions, or otherwise, 2-Track has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, enforceable.
ITEM 12.
ITEM 12. SSECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
The following table sets forth the number of shares of 2-Track's Common Stock beneficially owned as of April 10, 2009 by, (i) each executive officer and director of 2-Track; (ii) all executive officers and directors of 2-Track as a group; and (iii) owners of more than 5% of 2-Track's Common Stock.
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(1) Amount includes 51,000 shares issuable under stock options exercisable within 60 days of April 10, 2009.
(2) Mr. Snortheim resigned as a Director effective December 31, 2008.
Equity Compensation Plan Information
Information in the table below is as of December 31, 2008.
Plan Category Number of securities to be issued upon exercise of outstanding options, warrants and rights Weighted-average exercise price of outstanding options, warrants and right Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))
(a)(b)(c)
Equity compensation plans approved by security holders300,000$0.215,700,000
Equity compensation plans not approved by security holdersN/A____________
Total300,000$0.215,700,000
Changes of Control of Company
There were no current arrangements which may result in a future change in control of 2-Track.
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ITEM 13.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTION
The President of 2-Track made loans to the Company aggregating $311,780 during 2008 of which $233,312 was outstanding as of December 31, 2008. These loans bear no interest, are unsecured and due on demand. In conjunction with the liquidation of 2-Track Limited, the President of 2-Track forgave $455,805 of accrued compensation.
ITEM 14.
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
During 2-Track's fiscal years ended December 31, 2007 and December 31, 2008, 2-Track was billed the following aggregate fees by Michael T. Studer PCC ("Studer").
Audit Fees.
The aggregate fees billed by Studer to 2-Track for professional services rendered for the audit of 2-Track's financial statements for the last two fiscal years, for reviews of the financial statements included in 2-Track's Forms 10-Q for the fiscal year, and for services provided by Studer in connection with statutory or regulatory filings for the 2008 fiscal year, were $23,000 for the fiscal year 2007 and $23,000_ for the fiscal year 2008.
Audit Related Fees
None
Tax Fees
None
All Other Fees.
None
All of the services performed by Studer during 2008 were pre-approved by 2-Track's Board of Directors, which concluded that the provision of the non-audit services described above were compatible with maintaining the accountant's independence.
Pre-Approved Policies and Procedures
Prior to retaining Studer to provide services in any fiscal year, the Board of Directors first reviews and approves the accountant's fee proposal and engagement letter. In the fee proposal, each category of services (Audit, Audit Related, Tax and All Other) is broken down into subcategories that describe the nature of the services to be rendered, and the fees for such
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services. 2-Track's pre-approval policy provides that the Board of Directors must specifically pre-approve any engagement of Studer for services outside the scope of the fee proposal and engagement letter.
PART IV
ITEM 15.
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
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SIGNATURES
Pursuant to the requirements of Section 13 or 15 (d) of the Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
2-TRACK GLOBAL, INC.
Date: April 15, 2009 By /s/ Woosun Jung
Woosun Jung
President and Chief Executive
In accordance with the Exchange Act, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
SignatureTitleDate
/s/ Woosun Jung
Woosun JungChairman of the Board, President
and Chief Financial Officer
(Principal Financial and Accounting Officer)April 15, 20098
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CERTIFICATION FOR ANNUAL REPORTS ON FORM 10-K
I, Woosun Jung, certify that:
1. I have reviewed this annual report for the fiscal year ended December 31, 2008 on Form 10-K of 2-Track Global, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and internal control over financial reporting (as defined in Exchange Act Rules 13a-15d-15f) for the registrant and have:
a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the financial statements for external purposes in accordance with generally accepted accounting principles;
c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and;
5. The registrant's other certifying officer and I have disclosed, based on our most recent
EXHIBIT 31.1
evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function):
a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
Date: April 15 ,2009
/s/ Woosun Jung
Woosun Jung,
Chief Financial Officer
EXHIBIT 31.1
CERTIFICATION FOR ANNUAL REPORTS ON FORM 10-K
I, Woosun Jung, certify that:
1. I have reviewed this annual report for the fiscal year ended December 31, 2008 on Form 10-K of 2-Track Global, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and internal control over financial reporting (as defined in Exchange Act Rules 13a-15d-15f) for the registrant and have:
a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the financial statements for external purposes in accordance with generally accepted accounting principles;
c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and;
EXHIBIT 31.2
5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function):
a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
Date: April 15 ,2009
/s/ Woosun Jung
; Woosun Jung,
Chief Financial Officer
EXHIBIT 31.2
CERTIFICATION PURSUANT TO
18 U.S.C. Section 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
The undersigned, in his capacity as Chief Executive Officer and Chief Financial Officer, respectively, of 2-Track Global, Inc. (the "Registrant"), hereby certifies, for purposes of 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to the best of his knowledge that:
(1) the Annual Report of the Registrant on Form 10-K for the year ended December 31, 2008 (the "Report"), which accompanies this certification, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) the information contained in the Report fairly presents, in all material respects, the financial condition of the Registrant at the end of such year and the results of operations of the Registrant for such year.
Date: April 15 ,2009 2-TRACK GLOBAL, INC.
/s/ Woosun Jung
Woosun Jung,
Chief Executive Officer and Chief Financial Officer
EXHIBIT 32