-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, U/b9Di7vO+8ov51t+wo7sPtlGqEp/FI19HXAwErAAH7FrUqy4qabpaCrIVyGStep tfDQ+XAachov0UKRJKK9cA== 0001096906-01-000060.txt : 20010308 0001096906-01-000060.hdr.sgml : 20010308 ACCESSION NUMBER: 0001096906-01-000060 CONFORMED SUBMISSION TYPE: S-8 POS PUBLIC DOCUMENT COUNT: 5 FILED AS OF DATE: 20010306 EFFECTIVENESS DATE: 20010306 FILER: COMPANY DATA: COMPANY CONFORMED NAME: TRACKER CORP OF AMERICA CENTRAL INDEX KEY: 0000789853 STANDARD INDUSTRIAL CLASSIFICATION: OIL ROYALTY TRADERS [6792] IRS NUMBER: 860767918 STATE OF INCORPORATION: DE FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: S-8 POS SEC ACT: SEC FILE NUMBER: 333-51428 FILM NUMBER: 1561617 BUSINESS ADDRESS: STREET 1: 180 DUNDAS ST W STREET 2: STE 1502 CITY: TORONTO ONTARIO CANA STATE: A6 BUSINESS PHONE: 4165932604 MAIL ADDRESS: STREET 1: 180 DUNDSS ST W 26TH FL STREET 2: TORONTO ONTARIO CITY: CANADA STATE: A6 S-8 POS 1 0001.txt SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ----------------------- FORM S-8/A REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 ----------------------- THE TRACKER CORPORATION OF AMERICA (Exact name of registrant as specified in its character) DELAWARE 86-0767918 (State of other jurisdiction of (I.R.S. Employer incorporation or organization) Identification number) 1120 FINCH AVENUE WEST, SUITE #303 NORTH YORK, ONTARIO, CANADA M3J 3H8 (Address of Principal Executive Offices) (Zip Code) ----------------------- AMENDED 2001 STOCK WAGE AND FEE PAYMENT PLAN (Full title of the Plan) ----------------------- BRUCE I. LEWIS, CEO The Tracker Corporation of America 1120 Finch Avenue West, Suite #303 Toronto, Ontario, Canada M3J 3H8 (Name and address of agent for service) (416) 663-8222 (Telephone number, including area code, of agent for service) ----------------------- Approximate date of commencement of proposed sales pursuant to the plan: From time to time after this registration statement becomes effective. CALCULATION OF REGISTRATION FEE Proposed Maximum Proposed Maximum Aggregate Amount of Title of Securities Amount to be Offering Price Offering Registration to be Registered Registered per Share(1) Price Fee(1) - ------------------- --------------- ------------------ ------------ ------------ Common Stock, $.001 par value 15,000,000 $.075 $1,125,000 $297.00 - ---------------------- (1) Computed pursuant to Rules 457(h)(1) and 457(c) for the purpose of calculation of the registration fee on the basis of the average of the bid and asked price of a share of our common stock on March 1, 2001, as reported by the National Quotation Bureau, Inc. We hereby submit $149.16 for the difference in the registration fee as originally filed on December 1, 2000. PART I. INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS The document(s) containing the information specified in Items 1 and 2 of Part I of Form S-8 will be sent or given to employees as specified in Rule 428(b)(1). In accordance with the instructions to Part I, these documents are not filed with the SEC as part of this registration statement. PART II. INFORMATION REQUIRED IN THE REGISTRATION STATEMENT ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE We previously filed the following documents with the SEC. They are incorporated herein by reference and made a part hereof: 1. Our Annual Report on Form 10-K for the fiscal year ended March 31, 2000. 2. All other reports we filed pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 since March 31, 1999. All documents subsequently filed by us pursuant to sections 13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934, prior to the filing of a post-effective amendment which indicates that all securities offered have been sold or which deregisters all securities then remaining unsold, shall be deemed to be incorporated by reference in this registration statement and to be a part hereof from the date of filing of such documents. Any statement contained in a document incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded for purposes of this registration statement to the extent that a statement contained herein or in any subsequently filed document which also is or is deemed to be incorporated by reference herein modifies or supersedes such statement. Any statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this registration statement. ITEM 4. DESCRIPTION OF SECURITIES Not applicable. ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL A. Todd Merolla, of A. Todd Merolla, P.C., acted as our outside securities counsel from October 1999 through the present. Over this time period, he has received both cash and stock for his legal services, including $25,000 worth of our common stock under this registration statement. He currently holds approximately 200,000 shares of our common stock. ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS Pursuant to our bylaws, we may indemnify, purchase indemnity insurance, or pay and advance expenses to our directors, officers and other persons who are eligible or entitled to such indemnification, payments or advances. Any such indemnification or payment must be expressly authorized by our board of directors and in accordance with the provisions of the laws of Delaware. Our right to indemnify such persons shall include our authority to enter into written agreements for indemnification with such provisions. 2 Subject to the provisions of the laws of Delaware, our directors shall not be liable to the company or our shareholders for monetary damages for an act or omission in the director's capacity of a director, as long as the director acted in good faith. Indemnification of officers or persons controlling us for liabilities arising under the Securities Act of 1933 is held to be against public policy by the SEC and is therefore unenforceable. ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED We issued the securities to be reoffered or resold pursuant to this registration statement in reliance on ss.4(2) of the Securities Act of 1933 as an isolated sale to our employees, not part of any public offering. ITEM 8. EXHIBITS Exhibit 4.1* Certificate of Incorporation, as corrected by Certificate of Correction of Certificate of Incorporation dated March 27, 1995, and as amended by Certificate of Amendment to the Certificate of Incorporation dated November 1, 1995, and Certificate of Designation of Rights, Preferences and Privileges of $1,000.00 6% Cumulative Convertible Preferred Stock of the Registrant dated April 19, 1996, and Certificate of Designation of Rights, Preferences and Privileges of Series B $1,000.00 6% Cumulative Convertible Preferred Stock of the Registrant dated June 5, 1996 4.2* Bylaws 4.3 2001 Stock Wage and Fee Payment Plan 5.1 Opinion of A. Todd Merolla, P.C. 23.1 Consent of J. L. Stephan Co., P.C. 23.2 Consent of A. Todd Merolla, P.C. (included in Exhibit 5.1) 24.1 Power of Attorney (see below signature page on page 6 of this registration statement) - -------- * Incorporated by reference from our registration statement on Form S-1 (No.33-99686 and amendments thereto) ITEM 9. UNDERTAKINGS The Registrant hereby undertakes: (1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement: 3 (i) To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933; (ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20 percent change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement. (iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement; Provided, however, that paragraphs 1(i) and 1(ii) do not apply if the registration statement is on Form S-3 or Form S-8, and the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed by the Registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the registration statement. (2) That, for the purposes of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. (4) That, for purposes of determining any liability under the Securities Act of 1933, each filing of the Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the Securities exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (5) Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by its is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. 4 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-8 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of North York, Province of Ontario, Canada on March 1, 2001. THE TRACKER CORPORATION OF AMERICA BY: /s/ Bruce I. Lewis -------------------------------- BRUCE I. LEWIS CHIEF EXECUTIVE OFFICER Pursuant to the requirements of the Securities Act of 1933, the trustees (or other persons who administer the employee benefit plan) have duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of North York, Province of Ontario, Canada on March 1, 2001. AMENDED 2001 STOCK WAGE AND FEE PAYMENT PLAN BY: /s/ Bruce I. Lewis -------------------------------- BRUCE I. LEWIS CHIEF EXECUTIVE OFFICER THE TRACKER CORPORATION OF AMERICA 5 Exhibit 24.1 POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears on this Form S-8 registration statement hereby constitutes and appoints Bruce I. Lewis and Jay S. Stulberg, or either of them, with full power to act without the other, his true and lawful attorney-in-fact and agent, with full power of substitution and re-substitution, for him and in his name, place and stead, in any and all capacities (unless revoked in writing) to sign any or all amendments (including post-effective amendments thereto) to this Form S-8/A registration statement relating to the AMENDED 2001 Stock Wage and Fee Payment Plan to which this power of attorney is attached, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting to said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated. SIGNATURE TITLE DATE - ---------------------------- --------------------------- ----------------------- /s/ Bruce I. Lewis Chief Executive Officer March 1, 2001 - --------------------------- Bruce I. Lewis (Principal Executive Officer), Director /s/ Jay S. Stulberg President, Chief Operating March 1, 2001 - --------------------------- Jay S. Stulberg Officer, Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer), Secretary, Director /s/ David G. R. Butler Director, Compensation March 1, 2001 - --------------------------- David G. R. Butler Committee Director, Compensation March 1, 2001 - --------------------------- Carl J. Corcoran Committee Director March 1, 2001 /s/ H. Joseph Greenberg - --------------------------- H. Joseph Greenberg 6 EXHIBIT NUMBER EXHIBIT -------------- ------- 4.3 Amended 2001 Stock Wage and Fee Payment Plan 5.1 Opinion of A. Todd Merolla, P.C. 23.1 Consent of J. L. Stephan Co., P.C. 23.2 Consent of A. Todd Merolla, P.C. (included in Exhibit 5.1) 24.1 Power of Attorney (see below signature page on page 6 of this registration statement) 99.1 Reoffer Prospectus EX-4.3 2 0002.txt AMENDED 2001 STOCK WAGE AND FEE PAYMENT PLAN Exhibit 4.3 AMENDED 2001 STOCK WAGE AND FEE PAYMENT PLAN THIS PLAN is amended and adopted as of this 1st day of March, 2001, for the benefit of certain employees, consultants and directors of The Tracker Corporation of America, a Delaware corporation (the "Company"). Introduction ------------ A. The Company wishes to preserve its operating capital and reduce its monthly cash needs. B. The Company wishes to retain and motivate eligible employees, consultants and directors, and to provide them with incentives and rewards more directly linked to the profitability of the Company's business and increases in stockholder value. C. The Company believes its best interests will be served by issuing shares of the Company's $0.001 par value common stock (the "Common Stock"), where possible, in lieu of otherwise payable wage payments or fees. Agreement --------- NOW, THEREFORE, on the stated premises and for and in consideration of the mutual benefits to the Company and eligible employees and directors who so elect, to be derived from their employment or directorship by the Company, the parties hereby agree as follows: 1. 2000 Year. --------- 1.1. Any full-time employee, consultant and non-employee (outside) director who deferred all or part of his or her wage payments or fees due from the Company during the period from January 1, 2000 to December 1, 2000 (the "2000 Year") is eligible to participate in the Plan. 1.2. Any eligible full-time employee, consultant or director may elect to receive his or her compensation for the 2000 Year in the form of shares of Common Stock issuable under the Plan (the "Shares"), in lieu of cash, based upon the "Stock Price." For purposes hereof, "Stock Price" means the average quoted closing bid of the last five business days ending December 1, 2000 during which the Common Stock traded on the over the counter market. 1.3. Eligible full-time employees, consultants or directors electing to receive Common Stock in lieu of cash compensation should complete and submit to the Company the election form attached hereto as Exhibit A to denote those months during the 2000 Year for which he or she desires that Common Stock be issued. The election is binding. 1.4. Participating employees, consultants or directors will receive that number of Shares equal to his or her compensation (not including discretionary bonuses, overtime, and other extra payments) for those months during the 2000 Year denoted on the election form. 2. 2001 Calendar Year. ------------------ 2.1. Full Election. 2.1.1. Any full-time employee, consultant and non-employee (outside) director who intends to defer all or part of his or her wage payments or fees due from the Company during the period from January 1, 2001 to December 31, 2001 (the "2001 Calendar Year") is eligible to participate in the Plan. 2.1.2. Any eligible full-time employee, consultant or director may elect to receive all of his or her compensation for the 2001 Calendar Year in the form of Shares of Common Stock, in lieu of cash, based upon the Stock Price. Employees, consultants or directors so electing to receive Common Stock in lieu of 2001 cash compensation (not including discretionary bonuses, overtime, and other extra payments) should complete and submit to the Company the election form attached hereto as Exhibit B. The election is binding. 2.1.3. Participating employees, consultants or directors will receive that number of Shares equal to his or her 2001 compensation. 2.1.4. If an electing employee, consultant or director terminates service before the end of the 2001 Calendar Year, he or she will return to the Company the portion of Shares (or their then cash-value) that corresponds to the remainder of the 2001 Calendar Year. However, in the case of an employee, consultant or director who is laid off or otherwise terminated by the Company (other than for cause) before the end of the 2001 Calendar Year, he or she will not be obligated to return such Shares or cash value. 2.2. Partial Election. 2.2.1. Eligible employees consultants or directors who do not make the election described at Section 2.1 may elect to receive compensation for months the Company may designate during the 2001 Calendar Year (the "Designated Months") as follows: As cash ("Option A"); as 50% discounted stock ("Option B"); or as Stock at market value, with a guaranteed three times future value ("Option C"). 2.2.2. Any eligible employee, consultants or director may elect, by completing and submitting the election form attached hereto as Exhibit C, to receive his or her compensation for the Designated Months in any combination of Options A, B or C. The election is binding with respect to compensation for the Designated Months. 2.2.3. Before the beginning of each calendar month in the period January 1, 2001 through December 31, 2001, the Company will notify each eligible employee, consultant or director selecting Option B or C on an election form whether the month will be a Designated Month. If it is, then the affected employee, consultant or director will receive his or her compensation for the Designated Month in the manner set forth in the election form. 2 2.2.4. An employee, consultant or director who elects Option B will receive on the first business day of each Designated Month (or shortly thereafter) a number of Shares equal to his or her compensation (not including discretionary bonuses, overtime, and other extra payments) for the month, divided by one-half of the "Month's Price." The "Month's Price" means the average quoted closing bid for the last five business days of the preceding month. 2.2.5. An employee, consultant or director who elects Option C will receive on the first business day of each Designated Month (or shortly thereafter) a number of Shares equal to his or her compensation (not including discretionary bonuses, overtime, and other extra payments) for the month, divided by the Month's Price. 2.2.6. If an employee, consultant or director who elects Option B or Option C terminates service before the end of the Designated Month for which the Shares are allocated, he or she will return to the Company the portion of Shares (or their then cash value) that corresponds to the remainder of the Designated Month. However, in the case of an employee, consultant or director who is laid off or otherwise terminated by the Company (other than for cause) before the end of the Designated Month, he or she will not be obligated to return such Shares or cash value. 2.2.7. If an electing employee, consultant or director does not dispose of any Option C Shares for 30 months after the Shares are allocated and remains an employee, consultant or director of the Company for such period, then the Company will make a payment to the employee, consultant or director equal to the excess, if any, of the following equation: (i) Three-times the amount of cash compensation that the employee or director elected to receive in the form of Option C Shares for all the Designated Months (or for such shorter period if an employee was laid off or otherwise terminated by the Company (other than for cause) before December 31, 2002) (the "Guaranty Price"), minus (ii) the product of (A) the average quoted bid price for the five business days before the conclusion of the 30-month period (the "30 Month Price"), multiplied by (B) the number of Option C Shares. (However, an employee, consultant or director who is laid off or otherwise terminated by the Company (other than for cause) before the end of the 30-month period is nonetheless entitled to receive the payment specified in the first sentence of this section.) The Company has the option to pay the excess in the form of cash, additional stock, or both. In the alternative, the Company may purchase the Option C Shares for the Guaranty Price. 3. Form S-8 Registration. --------------------- 3.1. The Company will register 15,000,000 Shares for the Plan on Form S-8. Upon the effectiveness of the Form S-8 registration statement, the Shares issued under the plan may be freely traded, subject to the applicable resale limitations set forth in General Instruction C to Form S-8. Shares issued to participants may be authorized but unissued Shares or treasury shares. 3 3.2. If for any reason the number of remaining authorized, but unissued, Shares under the Plan is less than the number of Shares that eligible employees, consultants and directors would otherwise be entitled to receive, each eligible employee or director who elected to receive Shares under Option B or Option C (an "Electing Participant") shall receive the following number of Option B or Option C Shares: (A/B) x C, where A is the number of remaining authorized but unissued Shares under the Plan; B is the total number of Shares (Option B and Option C) which the Electing Participant would otherwise be entitled to receive, and C is the number or Option B or Option C Shares that the Electing Participant would otherwise be entitled to receive. 4. Fees and Commissions. No fees, commissions or other charges will be --------------------- paid by the electing participants in connection with the grants of Shares to such persons under the Plan. 5. Taxes. No later than the dates of which the value of any Shares granted ------ pursuant to this Plan first becomes includible in the gross income of an electing participant for US federal income tax purposes, he or she will pay to the Company, or make arrangements satisfactory to the Company, regarding payment of, any federal, state or local taxes of any kind required by law to be withheld with respect to the Shares. The obligations of the Company under this Agreement shall be conditioned upon such payment or arrangements, and the Company shall, to the extent permitted by law, have the right to deduct any such taxes from any payment of any kind otherwise due to any electing participant. 6. Securities Laws. Any future sale of any Shares granted pursuant to this --------------- Plan will be regulated by the Securities Act of 1933 Act, as amended, and any applicable state or provincial law, rule or regulation. The transfer of any such Shares by an electing participant will be permitted only if the request for transfer is accompanied by evidence satisfactory to the Company and its counsel that such transfer will not result in a violation of any applicable federal, state or provincial law, rule or regulation. 7. Market Risk. The risk of an increase in the market price of the ------------ Shares shall be borne solely by the Company. The risk of a decrease in the market price of the Shares shall be borne solely by the electing participants. 8. Conflicting Agreements. In the event of any conflict or inconsistency ----------------------- between the terms of this Agreement and the employment or directorship agreements of the electing participants, the terms of this Agreement shall prevail. 9. Assignment. Participants in the Plan may unconditionally assign their ---------- interests under the Plan. 4 10. Governing Law. The terms of this Agreement shall be governed by Georgia -------------- law, without regard to its conflicts of law principles. 11. Counterparts. This Agreement may be executed in several counterparts, ------------- each of which shall be deemed to be an original but all of which together shall constitute one and the same instrument. 12. Entire Agreement. This Agreement, together with the election form ---------------- completed by an electing participant, constitutes the entire agreement between the Company and the electing participant. 13. Amendments. This Agreement shall not be altered, amended or modified ---------- except by written agreement signed by the parties hereto. IN WITNESS WHEREOF, the undersigned, being duly authorized, hereby executes this Agreement on behalf of the Company as of the date first above written. THE TRACKER CORPORATION OF AMERICA By: /s/ Bruce I. Lewis ---------------------------------------- Bruce I. Lewis Its: Chief Executive Officer 5 EXHIBIT A --------- ELECTION UNDER 2001 STOCK WAGE AND FEE PAYMENT PLAN This election is made by the undersigned eligible employee or director under the 2001 Stock Wage and Fee Payment Plan adopted by The Tracker Corporation of America, a Delaware corporation. Capitalized terms not otherwise defined herein have the meaning ascribed in the Plan. 1. The undersigned hereby elects to receive his or her compensation (not including discretionary bonuses, overtime, and other extra payments) for each of the months of the 2000 Calendar Year denoted below in the form of Common Stock: __________ January 2000 __________ February 2000 __________ March 2000 __________ April 2000 __________ May 2000 __________ June 2000 __________ July 2000 __________ August 2000 __________ September 2000 __________ October 2000 __________ November 2000 __________ December 2000 2. The undersigned has read the Plan and the prospectus for the Shares to be issued pursuant to the Plan, and, for and in consideration of the benefits to be derived from the undersigned by this election, hereby agrees to be bound by all of the terms and conditions, and agreements in the Plan, which is hereby incorporated by reference. ACKNOWLEDGED AND AGREED: Signature: ------------------------------------------ Name: ----------------------------------------------- Date: ----------------------------------------------- 6 EXHIBIT B --------- ELECTION UNDER 2001 STOCK WAGE AND FEE PAYMENT PLAN This election is made by the undersigned eligible employee or director under the 2001 Stock Wage and Fee Payment Plan adopted by The Tracker Corporation of America, a Delaware corporation. Capitalized terms not otherwise defined herein have the meaning ascribed in the Plan. 2. The undersigned hereby elects to receive his or her compensation (not including discretionary bonuses, overtime, and other extra payments) for each of the months of the 2001 Calendar Year denoted below in the form of Common Stock: __________ January 2001 __________ February 2001 __________ March 2001 __________ April 2001 __________ May 2001 __________ June 2001 __________ July 2001 __________ August 2001 __________ September 2001 __________ October 2001 __________ November 2001 __________ December 2001 2. The undersigned has read the Plan and the prospectus for the Shares to be issued pursuant to the Plan, and, for and in consideration of the benefits to be derived from the undersigned by this election, hereby agrees to be bound by all of the terms and conditions, and agreements in the Plan, which is hereby incorporated by reference. ACKNOWLEDGED AND AGREED: Signature: ------------------------------------------ Name: ----------------------------------------------- Date: ----------------------------------------------- 7 EXHIBIT C --------- ELECTION UNDER 2001 STOCK WAGE AND FEE PAYMENT PLAN This election is made by the undersigned eligible employee or director under the 2001 Stock Wage and Fee Payment Plan adopted by The Tracker Corporation of America, a Delaware corporation. Capitalized terms not otherwise defined herein have the meaning ascribed in the Plan. 3. The undersigned hereby elects to receive his or her compensation (not including discretionary bonuses, overtime, and other extra payments) in the following forms during each Designated Month of the 2001 Calendar Year denoted below in the form of Common Stock: Percentage Options _________% Option A - Cash _________% Option B - 50% Discounted Stock _________% Option C - Stock at market value, with guaranteed three times future value Total _________% 2. The undersigned has read the Plan and the prospectus for the Shares to be issued pursuant to the Plan, and, for and in consideration of the benefits to be derived from the undersigned by this election, hereby agrees to be bound by all of the terms and conditions, and agreements in the Plan, which is hereby incorporated by reference. ACKNOWLEDGED AND AGREED: Signature: ------------------------------------------ Name: ----------------------------------------------- Date: ----------------------------------------------- 8 EX-5.1 3 0003.txt OPINION AND CONSENT OF A. TODD MEROLLA, P.C. OPINION & CONSENT OF A. TODD MEROLLA, P.C. EXHIBIT 5.1 [A. TODD MEROLLA, P.C. LETTERHEAD] December 5, 2000 The Tracker Corporation of America 1120 Finch Avenue West, Suite 303 North York, Ontario, Canada M3J 3H8 Re: The Tracker Corporation of America Registration Statement on Form S-8 Gentlemen: We have acted as special counsel to The Tracker Corporation of America, a Delaware corporation (the "Company"), in connection with the Registration Statement on Form S-8 (the "Registration Statement"), to be filed by the Company with the Securities and Exchange Commission (the "Commission"). The Registration Statement relates to the registration under the Securities Act of 1933, as amended (the "Act"), of 15,000,000 shares (the "Shares") of the Company's Common Stock, par value $.001 per share, to be issued under the Company's Amended 2001 Stock Wage and Fee Payment Option Plan (the "Plan"). In connection with this opinion, we have examined originals or copies, certified or otherwise identified to our satisfaction, of (i) the Plan, (ii) the Certificate of Incorporation and the Bylaws of the Company, (iii) certain resolutions of the Board of Directors of the Company relating to the Plan, (iv) the form of Registration Statement proposed to be filed with the Commission, and such other documents as we have deemed necessary or appropriate as a basis for the opinions set forth below. In such examination, we have assumed the genuineness of all signatures, the legal capacity of natural persons, the authenticity of all documents submitted to us as originals, the conformity to original documents of all documents submitted to us as certified or photostatic copies and the authenticity of the originals of such latter documents. As to any facts material to this opinion, which we did not independently establish or verify, we have relied upon statements and representations of officers and other representatives of the Company and others. Based upon and subject to the foregoing and the limitations set forth below, we are of the opinion that the Shares have been duly authorized and, after the Registration Statement becomes effective and when the Shares are issued and sold in accordance with the Plan and the Form S-8 prospectus to be delivered to the Plan participants, the Shares will be duly issued, fully paid and nonassessable. We are qualified to practice law only in the State of Georgia and we do not purport to express any opinion herein concerning any law other than the Delaware General Corporation law. With respect to such law, our opinions are as to what the law is or, in circumstances where the status of the law is uncertain, what the law might reasonably be expected to be at the date hereof, and we assume no obligation to revise or supplement this opinion due to any change in the law by legislative action, judicial decision or otherwise. We do not render any opinion with respect to any matters than those expressly set forth in the immediately preceding paragraph. Without limiting the generality of the immediately preceding sentence, we express no opinion as to the applicability or effect of any securities or Blue Sky laws of any state. This opinion is furnished to you solely for your benefit in connection with the filing of the Registration Statement and is not to be used, circulated, quoted or otherwise referred to for any other purpose without our prior written consent. Notwithstanding the foregoing, we hereby consent to the filing of this opinion with the Commission as Exhibit 5.1 to the Registration Statement. In giving this consent, we do not thereby admit that we are included in the category of persons whose consent is required under Section 7 of the Act or the rules and regulations of the Commission. Very truly yours, A. TODD MEROLLA, P.C. /s/ A. Todd Merolla - ------------------- EX-23.1 4 0004.txt CONSENT OF J.L. STEPHAN CO., P.C. Exhibit 23.1 INDEPENDENT AUDITORS' CONSENT ----------------------------- We consent to the incorporation by reference in this Annual Statement of The Tracker Corporation of America on Form S-8 of our report dated July 3, 2000 for the Year Ended March 31, 2000. J. L. Stephan Co., P.C. Traverse City, Michigan March 1, 2001 EX-99.1 5 0005.txt REOFFER PROSPECTUS Exhibit 99.1 MARCH 1, 2001 REOFFER PROSPECTUS The Tracker Corporation of America Up to 15,000,000 Shares of Common Stock The selling stockholders pursuant to the Amended 2001 Stock Wage and Fee Payment Plan of The Tracker Corporation of America may offer up to 15,000,000 shares of our common stock. The security holders may sell their shares of common stock after delivery of this prospectus to purchasers, from time to time, through broker-dealers or underwriters at the prevailing market price as listed on the OTC Bulletin Board under the symbol "TRKR." We will not receive any of the proceeds from the secondary offering and sale of the common stock by the security holders. See, RISK FACTORS on page 1. Our principal offices are located at 1120 Finch Avenue West, Suite 303, North York, Ontario, Canada M3J 3H7. For more information, contact Bruce Lewis at 1-800-822-8757. ------------------------------------ THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED. ------------------------------------ NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE ADEQUACY OR ACCURACY OF THE PROSPECTUS. ANY REPRESENTATION TO TABLE OF CONTENTS RISK FACTORS..............................................1 USE OF PROCEEDS...........................................6 SELLING SECURITY HOLDERS..................................6 PLAN OF DISTRIBUTION......................................8 INTEREST OF NAMED EXPERTS AND COUNSEL.....................9 INCORPORATION OF CERTAIN INFORMATION BY REFERENCE.......10 DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION FOR SECURITIES ACT LIABILITIES...................11 RISK FACTORS The securities offered in this prospectus involve a high degree of risk. In addition to the other information contained in this prospectus, you should consider the following risk factors before making an investment. The occurrence of any the following risks could materially adversely affect our business, financial condition and results of operations. Additional risks and uncertainties not presently known to us or that we currently view as immaterial might also materially adversely affect our business, financial condition or results of operations. In such a case, the value of your investment could decline and you may lose all or part of your investment. This prospectus contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in such forward-looking statements as a result of a variety of factors, including those set forth in the following risk factors and elsewhere in this prospectus. THE CONVERSION OF THE BRIDGE FINANCING NOTES AND THE EXERCISE OF THE WARRANTS MAY CREATE IMMEDIATE AND SUBSTANTIAL DILUTION TO THE EXISTING SHAREHOLDERS. As of December 31, 2000, we had 66,540,186 shares of common stock outstanding, with a book value of $-0.01 per share. By a previous registration statement, we have reserved shares of common stock for future issuance pursuant to the conversion of notes and the exercise of certain warrants. We cannot assure that the issuance of the common stock reserved for future issuance will not materially adversely affect the prevailing market price of the common stock. Furthermore, issuance of the shares of common stock as described below could result in significant dilution to our stockholders. We issued $1,700,000 in principal amount of bridge financing notes. The notes are convertible into shares of common stock by the holders at a conversion price dependent on the market price as of the date of issue and the date of redemption. The notes also carry an attached repricing warrant that entitled the holder to additional shares of common stock if the price drops below certain levels. The conversion of the notes and the exercise of the repricing warrants will not result in the receipt of any additional funds, but will eliminate approximately $1,700,000 in debt. Should we issue additional shares in the future, the book value of our common stock may experience further dilution. BECAUSE THE CONVERSION AND/OR EXERCISE PRICE IS TIED TO THE MARKET PRICE, THE NUMBER OF SHARES THAT MAY BE ISSUED WILL INCREASE AS OUR STOCK PRICE DECREASES. A potentially unlimited number of shares can be issued under the conversion terms of the notes and related warrants since the exercise price of the warrants is tied to the market price of our common stock. As such, the number of shares that can be issued will increase as the price decreases. Should this occur, the book value of our common stock may experience further dilution. RESALE RESTRICTIONS We are registering restricted securities that were issued under an employee benefit plan. Consequently, certain limitations apply to the resale of these securities. Any sale of the securities subject to this registration statement by the selling shareholders may not exceed, during any three-month period, greater than the greater of: o 1% of our outstanding common stock; or 1 o the average weekly reported trading volume of the common stock during the four calendar weeks preceding the sale BECAUSE NO CLEARLY IDENTIFIED MARKET EXISTS FOR OUR PRODUCTS AND SERVICES, WE MAY LACK THE FINANCIAL RESOURCES TO DEVELOP ANY MARKET ACCEPTANCE. Our future success entirely depends on the successful development, commercialization and market acceptance of our personal property marking and monitoring system. Our initial marketing efforts, which focused primarily on consumer applications of our technology, were not successful. Identifying markets that will respond favorably to our products and services will present marketing and financial challenges to us. We are experimenting with new business models that are speculative and untested to date. We cannot assure that we will gain a significant level of commercial acceptance for our products and services in any commercial market. We have a large number of competitors across a variety of industries that have substantially greater financial, technical, marketing, and management resources. For example, we currently offer a pet registration service using our technology. However, Pets.com and Petopia.com have recently launched web pages as a lead in to the sale of pet related products. These marketing efforts may hinder our success in the pet registration market. Similarly, we recently launched a business asset management system in certain niche markets. One of our competitors, Tangram Enterprise Solutions, has over twenty times greater assets than us and ten times the work force. Should we compete directly with them, their financial and personnel strength could prevent us from capturing those markets. As a result, demand and market acceptance for our products and services are subject to a high level of uncertainty. OUR FUTURE SUCCESS DEPENDS ON THE EXPERIENCE AND RETENTION OF KEY PERSONNEL. Our success is largely dependent on our ability to attract and retain key management and operating personnel. We particularly depend on the efforts and skills of Bruce I. Lewis, Jay S. Stulberg, Christopher Creed, and Tizio Panara. We have entered into employment agreements with Mr. Lewis and Mr. Stulberg and are planning to enter into agreements with Mr. Creed and Mr. Panara. The loss, incapacity, or unavailability of any of these individuals could materially adversely affect our business, financial condition or results of operation. It may also be necessary for us to attract and retain additional individuals to support our growth or to replace key personnel in the event of their termination of employment. Because qualified individuals are in high demand and are often subject to competing offers, we cannot assure that we can attract and retain qualified personnel needed for our business. BECAUSE OF OUR HISTORY OF OPERATING LOSSES AND EXPECTATION OF FUTURE LOSSES, OUR INDEPENDENT AUDITORS EXPRESSED SUBSTANTIAL DOUBT ABOUT OUR FUTURE VIABILITY AS A GOING CONCERN IN THEIR MOST RECENT AUDIT REPORT. We have generated only modest revenue and have sustained significant operating losses each year since our inception. In fact, we have not generated any significant revenue since September 1997. We have accumulated a deficit of $21,068,140 as of December 31, 2000. Our ability to generate revenue from operations and achieve profitability is largely dependent upon a successful transition from a development stage company to a fully operating company. In order to achieve that, we will require significant additional financing to penetrate new markets for our products and services. If we are unable to attract such financing or achieve profitable operations, we may be forced to cease or significantly limit our operations. As a result of the foregoing conditions, our independent public accountants expressed doubt about our future viability as a going concern in their audit report dated July 3, 2000. 2 OUR STOCK MAY EXPERIENCE SEVERE VOLATILITY BECAUSE OF THE LIMITED TRADING MARKET AVAILABLE. Our common stock is traded in the over-the-counter market and is quoted on the OTC Bulletin Board. The market for the common stock must be characterized as extremely limited due to the low trading volume and the small number of brokerage firms acting as market makers. Because stocks traded on the OTC Bulletin Board generally have limited brokerage and news coverage, the market price of our common stock may not reflect our true value. As a result, you may find it difficult to dispose of our common stock or to obtain accurate quotations as to our value. Over the past eighteen months our stock has traded at a price as low as $.05 per share and as high as $.41 per share. We cannot assure that the over-the-counter market for our securities will continue, that a more active market will develop, or that the prices in any such market will be maintained at their current levels or otherwise. Furthermore, technological innovations, new product developments, general trends in our industry and quarterly variations in our results of operations may cause the market price of the common stock to fluctuate significantly. PENNY STOCK RULES Our common stock is subject to the penny stock rules promulgated under the Exchange Act of 1934. The penny stock rules regulate broker-dealer practices in connection with transactions in equity securities with a price of less than $5.00. This does not include securities registered on certain national securities exchanges or quoted on the NASDAQ system as long as exchange or system provides current price and value information with respect to transactions in such securities. The penny stock rules require a broker-dealer to deliver a standardized risk disclosure document prepared by the SEC that provides information about penny stocks and the nature and level of risks in the penny stock market. This must occur prior to a transaction involving a penny stock not otherwise exempt from the rules. The broker-dealer must provide the customer with current bid and offer quotation for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction, and monthly account statements showing the market value of each penny stock held in the customer's account. The bid/offer quotations and the broker-dealer and salesperson compensation information must be given to the customer orally or in writing prior to effectuating the transaction. It also must be given to the customer in writing before or with the customer's confirmation. In addition, the penny stock rules require that he broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser's written agreement to the transaction. These disclosure requirements may have the effect of reducing the level of trading activity in the secondary market for our common stock. As such, you may find it more difficult to sell our common stock in the over-the-counter market. OUR CURRENT OWNERSHIP STRUCTURE AND THE PROVISIONS OF OUR ARTICLES OF INCORPORATION AND BYLAWS MAY HINDER ANY MATERIAL CHANGE IN CONTROL. Our directors, officers, principal stockholders and their affiliates will continue to beneficially own approximately 7% of the common stock immediately following this registration. This assumes the full exercise of currently exercisable options and warrants and the conversion of outstanding convertible debentures. As a result of such ownership, our directors, officers, principal stockholders and their affiliates will effectively have the ability to maintain, control and direct our business and affairs. Such concentration of ownership may have the effect of delaying, deferring or preventing a change in control. In addition, our articles of incorporation and bylaws contain provisions that have the effect of retaining the control of current management and may discourage any acquisition bids. Such provisions could limit the price that investors might be willing to pay in the future for shares of the common stock. It may also impede the ability of stockholders to replace management should factors warrant such a change. 3 OUR FUTURE SUCCESS DEPENDS ON THE ACCEPTANCE OF OUR TECHNOLOGY IN THE MARKETPLACE AND OUR FINANCIAL ABILITY TO KEEP UP WITH TECHNOLOGICAL CHANGES IN OUR INDUSTRY. We cannot assure that our competitors and potential competitors will not succeed in developing or marketing technologies and products that will be more accepted in the marketplace or render our technology obsolete or noncompetitive. Most of our competitors and potential competitors have substantially greater capital resources, research and development staffs and facilities than us. Products based on new technologies such as radio frequency or new industry standards may render our existing products obsolete and unmarketable. Over the past two years we have invested minimal capital to maintain and update our technology. Any delay in developing, testing and releasing enhanced or new products could materially adversely affect our business, operating results and financial condition. OUR LACK OF SIGNED AGREEMENTS WITH SUPPLIERS MAY PREVENT US FROM EFFECTIVELY DISTRIBUTING OUR PRODUCTS AND SERVICES TO THE MARKET. The ability to market, sell and operate our products and services depends on the procurement of necessary goods and services. Although we have preliminary understandings with suppliers, these may be difficult to enforce. We cannot assure that we will achieve and maintain product quality and reliability in the quantities required for commercial operations or within a period that will permit us to introduce our products in a timely fashion. We also cannot assure that we will be able to assemble and manufacture our products at an acceptable cost. OUR FUTURE RELATIONSHIP WITH SYMBOL TECHNOLOGIES IS DEPENDENT ON OUR SALE OF A MINIMUM NUMBER OF THEIR SCANNERS, WHICH WE PRESENTLY CANNOT FULFILL. We procure scanning equipment from Symbol Technologies, particularly the PDF 1000 laser scanner. This is the first laser scanner to read two-dimensional bar code. On May 18, 1999 we entered into an agreement with Symbol whereby we were granted the exclusive right to use the PDF 1000 laser scanners in the United States, Canada, and Europe for personal property identification and recovery purposes. This contract is subject to a minimum annual purchase requirement of 5000 laser scanner units having a purchasing effect of at least $10,000,000. We will likely not meet this requirement and Symbol will be permitted to terminate the contract should it so choose. Should Symbol terminate the agreement, our business may be harmed in two ways: (1) we may no longer be capable of securing future orders due to a lack of supply; and (2) we may not be able to honor existing service agreements with current customers using the Symbol scanners Consequently, the termination of the Symbol Contract would directly affect our general viability as a going concern. 4 BECAUSE OUR PRODUCTS AND SERVICES ARE SUBJECT TO LENGTHY SALES CYCLES, WE MAY LACK THE FINANCIAL RESOURCES TO MAINTAIN OPERATIONS. We typically experience long sales cycles that generally vary from three to six months. Because the implementation of our products and services involves significant capital expenditures by the customer, our sales are subject to lengthy approval processes and delays. We often devote significant time and resources to a prospective customer, including costs associated with multiple site visits, product demonstrations, and feasibility studies without any assurance that the prospective customer will decide to purchase our products. OUR FUTURE SUCCESS IS DEPENDANT ON PATENTS AND PROPRIETARY TECHNOLOGY. WE CURRENTLY DO NOT HAVE ANY PATIENTS, REGISTERED TRADEMARKS OR SERVICE MARKS. Our success partly depends on our ability to obtain patent protection for our proposed products and processes, to preserve our trade secrets and to operate without infringing the proprietary rights of third parties. We rely on a combination of trade secret, nondisclosure and other contractual agreements, and technical measures to protect the confidential information, know-how and proprietary rights relating to our personal property identification and recovery system. In addition, we have an exclusive license with Global Tracker to use the technology associated with an international patent application filed pursuant to the Patent Cooperation Treaty for our personal property identification and recovery system. We cannot assure, however, that this will mature into an issued patent or that any patent, trademark or service mark obtained or licensed by us will be held valid and enforceable if asserted by us against another party. In addition, these protections may not preclude third parties from asserting infringement claims against us. The successful assertion of such claims could materially adversely affect our business, operating results and financial condition. We do not have any registered trademarks or service marks. Furthermore, we do not have any active trademark or service mark applications pending before the U.S. Patent and Trademark Office or with any other regulatory authorities. Even if our pending patent is ultimately issued, other parties may hold or receive patents that contain claims covering our technology. Should this occur, it may delay or prevent the sale of our products and services. It may also require licenses resulting in the payment of fees or royalties by us in order to continue operations. We cannot assure that needed or potentially useful licenses will be available to us in the future on acceptable terms. An adverse determination in any litigation with respect to proprietary infringement could subject us to significant liabilities to third parties. In such a case, we may be required to seek licenses from, or pay royalties to, third parties. We could also be prevented from manufacturing, selling or using our proposed products. WE WILL REQUIRE SIGNIFICANT FUTURE CAPITAL IN ORDER TO CONTINUE OPERATIONS. WE CANNOT ASSURE THAT FUTURE CAPITAL WILL BE AVAILABLE. We will require additional funds in the amount of $1,000,000 over the next six months to successfully market and operate our business. We estimate needing an additional $700,000 over the following twelve months. Our inability to obtain financing or to raise additional capital when needed on favorable terms could prevent or delay the marketing, sale and operation of our products and services. Insufficient funds may require us to delay, scale back or eliminate some or all of our programs designed to facilitate the commercial introduction of our products and services or prevent such commercial introduction altogether. 5 USE OF PROCEEDS We will not receive any part of the proceeds from the sale of the shares of common stock offered by or for the account of the selling security holders. SELLING SECURITY HOLDERS We are registering up to 15,000,000 shares of our common stock issued, or to be issued, pursuant to the Amended 2001 Stock Wage and Fee Payment Plan. The following table describes the number of securities issued under this Plan and the total number of securities to be sold after the offering. As of February 12, 2001, there were approximately 365 record holders of common stock. Percentage of ownership is based upon 73,243,304 issued and outstanding shares of common stock beneficially owned on February 12, 2001, including currently exercisable warrants to purchase 1,250,000 shares of common stock, currently exercisable options to purchase 40,000 shares of common stock, currently exercisable options to purchase 2,498,578 shares of common stock, and currently exercisable options to purchase 200,000 shares reserved under an option issued to Toda Corporation Limited for financial consulting services. Shares Issued Percentage Name and Position Under Plan (if >1%) - ------------------------------------------------------------------- Bob Pense 50,000 N/A Consultant Dennis Obert 46,000 N/A Consultant Steve Olson 150,000 N/A Consultant George Wood 150,000 N/A Consultant Tony Wagner 230,000 N/A Consultant Alan Caruthers 150,000 N/A Consultant Steve Sheriff 150,000 N/A Consultant Alan Hamm 280,000 N/A Consultant John Andrews 365,000 N/A Consultant Eitan Schibi 1,251,000 N/A Consultant 6 Terry Hensley 800,000 N/A Employee Todd Merolla 370,000 N/A Consultant Wendy Wolman 579,000 N/A Consultant Arnold Zweig 360,000 N/A Consultant Nena-Cenic Ciric 201,000 N/A Employee Tom McCullough 75,000 N/A Consultant Roseanne Baker Thornley 150,000 N/A Consultant Leandro Guterriez 950,000 N/A Consultant Patricia Townsend 72,000 N/A Consultant Rena Leibovitz 102,000 N/A Consultant Christina Folino 55,000 N/A Consultant Bodi Klamph 136,000 N/A Consultant Konstantin Misnik 98,000 N/A Consultant Bruce Lewis 2,813,857 3.00 Employee Barry Milavsky 200,000 N/A Consultant Jay Stulberg 2,542,857 2.00 Employee Christopher Creed 1,698,857 N/A Employee 7 Athanasios Drivas 113,000 N/A Consultant Al Pirriera 80,000 N/A Consultant Steve Hallock 150,000 N/A Consultant Tizio Panara 300,000 N/A Employee Fred Care 45,000 N/A Consultant - ------ PLAN OF DISTRIBUTION We will not receive any of the proceeds from the sale of the common stock by the selling security holders. We anticipate the selling security holders will offer the shares of common stock for sale either directly or through broker-dealers or underwriters. The broker-dealers or underwriters may act solely as agents or may acquire the shares of common stock as principals. They may receive compensation in the form of usual and customary or specifically negotiated underwriting discounts, concessions or commissions from the selling security holders or the secondary purchasers of the shares of common stock registered in this prospectus for whom they may act as agent. The net proceeds to the selling security holders from the sale of common stock will be the purchase price of the common stock sold less the aggregate agents' commissions and underwriters' discounts, if any. The selling security holders and any dealers or agents that participate in the distribution of the common stock may be deemed to be an underwriter within the meaning of the Securities Act of 1933. The shares of common stock being offered by the selling security holders will be sold in one or more transactions on the OTC Bulletin Board or on any other market on which our common stock may be trading. The sale price to the public may be the market price prevailing at the time of sale, or a different price negotiated by the selling security holders. The selling security holders shall have the sole and absolute discretion not to accept any purchase offer or make any sale of shares of common stock if they deem the purchase price to be unsatisfactory. Certain limitations apply to the resale of these securities. Any sale of the securities subject to this registration statement by the selling shareholders may not exceed, during any three-month period, greater than the greater of: o 1% of our outstanding common stock; or o the average weekly reported trading volume of the common stock during the four calendar weeks preceding the sale 8 The selling security holders participating in the sale or distribution of the shares of common stock will be subject to applicable provisions of the Securities Exchange Act of 1934 and the rules and regulations passed by the SEC. This may limit the timing of purchases and sales of any of the shares of the common stock by the selling security holders. It may also affect the marketability of the shares of common stock. INTERESTS OF NAMED EXPERTS AND COUNSEL A. Todd Merolla, of A. Todd Merolla, P.C., acted as our outside securities counsel from October 1999 through the present. Over this time period, he has received both cash and stock for his legal services, including $25,000 worth of our common stock under this registration statement. He currently holds approximately 200,000 shares of our common stock. 9 INCORPORATION OF CERTAIN INFORMATION BY REFERENCE We filed the following documents with the SEC which are hereby incorporated herein by reference: (1) Our annual report on Form 10-K for the year ended March 31, 2000; and (2) All other reports filed pursuant to Section 13(a) or 15(d) of the Exchange Act since March 31, 2000. In addition, all documents subsequently filed by us pursuant to sections 13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934, prior to the filing of a post-effective amendment which indicates that all securities offered have been sold or which deregisters all securities then remaining unsold, shall be deemed incorporated by reference in this registration statement and to be a part hereof from the date of filing such documents. We will provide to each person, including any beneficial owner, to whom a prospectus is delivered, a copy of any or all of the information that has been incorporated by reference in the prospectus but not delivered with the prospectus. We will provide this information upon written or oral request at no cost to the requester. Any such request should be made in writing to 1120 Finch Avenue West, Suite 303, North York, Ontario, Canada M3J 3H7 or by telephone to Bruce I. Lewis at 1-800-822-8757. We are required to file reports with the SEC. These reports include: (1) an annual report on Form 10-K containing financial information examined and reported upon by our certified public accountants; (2) quarterly reports on Form 10-Q containing unaudited financial statements for each of the first three quarters of the fiscal year; and (3) additional information on Form 8-K concerning our business and operations deemed appropriate by our board of directors. You may read and copy any materials we file with the SEC by visiting the public reference room located at 450 Fifth Street, N.W., Washington, D.C. 20549 or by calling the SEC at 1-800-SEC-0330. Since we are an electronic filer, you may also receive information about us through the SEC's internet website that contains reports, proxy and information statements, and other information at http://www.sec.gov. - ------------------- 10 DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION FOR SECURITIES ACT LIABILITIES We shall indemnify to the fullest extent permitted by the laws of Delaware any person made or threatened to be made, a party to any legal action or proceeding by reason of the fact the individual is or was our director, officer or employee, or served as an agent for any other enterprise at our request. The board of directors shall have the power to indemnify any person, other than a director or officer, made a party to any legal action, suit or proceeding by reason of the fact the individual was our employee. Pursuant to our bylaws, we may indemnify and/or purchase indemnity insurance for our directors, officers or other employees. We may also pay and/or advance expenses to our directors, officers and other employees who are eligible for or entitled to such payments or advances. The extent of any such indemnification, payment or advance shall be expressly authorized by the board of directors. Our right to indemnify such persons shall include, but not be limited to, our authority to enter into written agreements for indemnification. Subject to the laws of Delaware, our directors shall not be liable to the company or our shareholders for monetary damages for an act or omission in the director's capacity of a director, as long as the director acted in good faith. Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to our directors, officers and controlling persons pursuant to the foregoing provisions, or otherwise, we have been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act of 1933 and is therefore unenforceable. In the event that a claim for indemnification against such is asserted by such director, officer or controlling person in connection with the securities being registered, we will, unless in the opinion of our counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification is against public policy as expressed in the Securities Act of 1933 and will be governed by the final adjudication of such issue. This excludes any payment of expenses incurred or paid by a director, officer or controlling person in the successful defense of any action, suit or proceeding. Indemnification of officers or persons controlling us for liabilities arising under the Securities Act of 1933 is held to be against public policy by the SEC, and is therefore unenforceable. 11 -----END PRIVACY-ENHANCED MESSAGE-----