Utah
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87-0543981
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(State or other jurisdiction of incorporation or organization )
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(I.R.S. Employer Identification Number)
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Large accelerated filer
o
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Accelerated filer
o
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Non-accelerated filer
o
(Do not check if a smaller reporting company)
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Smaller reporting company
x
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20
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March 31,
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September 30,
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|||||||
Assets
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2016
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2015
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||||||
Current assets:
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(Unaudited) | |||||||
Cash
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$ | 2,158,531 | $ | 4,903,045 | ||||
Accounts receivable, net of allowance for doubtful accounts of $4,618,343 and $4,156,963, respectively
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6,533,112 | 6,044,931 | ||||||
Note receivable, current portion
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324,928 | 306,434 | ||||||
Prepaid expenses and other
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937,326 | 1,266,277 | ||||||
Inventory, net of reserves of $98,150 and $225,900, respectively
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744,922 | 741,514 | ||||||
Total current assets
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10,698,819 | 13,262,201 | ||||||
Property and equipment, net of accumulated depreciation of $3,092,920 and $2,822,166, respectively
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1,384,070 | 1,697,630 | ||||||
Monitoring equipment, net of accumulated amortization of $3,042,341 and $2,225,480, respectively
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3,532,194 | 2,784,595 | ||||||
Intangible assets, net of accumulated amortization of $6,952,227 and $5,628,308, respectively
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25,980,867 | 25,884,087 | ||||||
Other assets
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2,703,498 | 2,619,035 | ||||||
Goodwill
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7,950,572 | 7,782,903 | ||||||
Total assets
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$ | 52,250,020 | $ | 54,030,451 | ||||
Liabilities and Stockholders’ Equity
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||||||||
Current liabilities:
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||||||||
Accounts payable
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2,681,394 | 2,363,441 | ||||||
Accrued liabilities
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2,618,886 | 2,705,403 | ||||||
Current portion of long-term debt, net of discount of $0 and $222,973, respectively
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69,672 | 796,225 | ||||||
Total current liabilities
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5,369,952 | 5,865,069 | ||||||
Stock payable - related party
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3,439,978 | 3,501,410 | ||||||
Long-term debt, net of current portion and discount of $520,270 and $408,784, respectively
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31,447,427 | 30,189,188 | ||||||
Other long-term liabilities
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- | 106,671 | ||||||
Total liabilities
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40,257,357 | 39,662,338 | ||||||
Stockholders’ equity:
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||||||||
Common stock, $0.0001 par value: 30,000,000 shares authorized; 10,290,671 outstanding
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1,029 | 1,026 | ||||||
Additional paid-in capital
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298,293,244 | 297,591,034 | ||||||
Accumulated deficit
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(284,893,800 | ) | (280,845,882 | ) | ||||
Accumulated other comprehensive income
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(1,407,810 | ) | (2,378,065 | ) | ||||
Total equity
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11,992,663 | 14,368,113 | ||||||
Total liabilities and stockholders’ equity
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$ | 52,250,020 | $ | 54,030,451 |
Three Months Ended
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Six Months Ended
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|||||||||||||||
March 31,
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March 31,
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March 31,
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March 31,
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|||||||||||||
2016
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2015
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2016
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2015
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Revenues:
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||||||||||||||||
Products
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$ | 163,694 | $ | 185,561 | $ | 254,612 | $ | 277,150 | ||||||||
Monitoring & other related services
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6,428,345 | 4,630,556 | 12,655,031 | 9,159,586 | ||||||||||||
Total revenues
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6,592,039 | 4,816,117 | 12,909,643 | 9,436,736 | ||||||||||||
Cost of revenues:
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||||||||||||||||
Products
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53,436 | 54,920 | 148,697 | 76,277 | ||||||||||||
Monitoring & other related services
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1,779,248 | 1,522,414 | 3,624,199 | 3,124,292 | ||||||||||||
Depreciation & amortization included in cost of revenues
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580,785 | 366,853 | 1,009,752 | 733,705 | ||||||||||||
Impairment of monitoring equipment and parts (Note2)
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60,000 | 85,221 | 120,000 | 140,301 | ||||||||||||
Total cost of revenues
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2,473,469 | 2,029,408 | 4,902,648 | 4,074,575 | ||||||||||||
Gross profit
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4,118,570 | 2,786,709 | 8,006,995 | 5,362,161 | ||||||||||||
Operating expenses:
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||||||||||||||||
General & administrative
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3,424,342 | 3,403,573 | 6,835,985 | 6,253,504 | ||||||||||||
Selling & marketing
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593,272 | 528,704 | 1,213,301 | 971,407 | ||||||||||||
Research & development
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612,595 | 378,321 | 1,159,745 | 695,103 | ||||||||||||
Depreciation & amortization
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734,569 | 709,924 | 1,434,604 | 1,304,367 | ||||||||||||
Loss from operations
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(1,246,208 | ) | (2,233,813 | ) | (2,636,640 | ) | (3,862,220 | ) | ||||||||
Other income (expense):
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||||||||||||||||
Interest expense, net
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(631,409 | ) | (633,361 | ) | (1,325,917 | ) | (1,305,852 | ) | ||||||||
Currency exchange rate gain (loss)
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(66,408 | ) | (454,564 | ) | (84,557 | ) | (374,002 | ) | ||||||||
Disgorgement funds received (Note 18)
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- | 4,700,000 | - | 4,700,000 | ||||||||||||
Other income, net
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23,336 | 9,208 | (804 | ) | 14,329 | |||||||||||
Net income (loss) attributable to common shareholders
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(1,920,689 | ) | 1,387,470 | (4,047,918 | ) | (827,745 | ) | |||||||||
Foreign currency translation adjustments
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755,160 | (177,896 | ) | 970,255 | (804,774 | ) | ||||||||||
Comprehensive income (loss)
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$ | (1,165,529 | ) | $ | 1,209,574 | $ | (3,077,663 | ) | $ | (1,632,519 | ) | |||||
Basic earnings (loss) per common share
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$ | (0.19 | ) | $ | 0.14 | $ | (0.39 | ) | $ | (0.08 | ) | |||||
Diluted earnings (loss) per common share
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$ | (0.19 | ) | $ | 0.14 | $ | (0.39 | ) | $ | (0.08 | ) | |||||
Weighted average common shares outstanding, basic
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10,271,000 | 10,144,000 | 10,266,000 | 10,126,000 | ||||||||||||
Weighted average common shares outstanding, diluted
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10,271,000 | 10,209,000 | 10,266,000 | 10,126,000 |
Six Months Ended
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||||||||
March 31,
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2016
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2015
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Cash flows from operating activities:
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||||||||
Net loss
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$ | (4,047,918 | ) | $ | (827,745 | ) | ||
Adjustments to reconcile net income to net cash used in operating activities:
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||||||||
Depreciation and amortization
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2,444,355 | 1,985,012 | ||||||
Impairment of monitoring equipment and parts
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120,000 | 140,301 | ||||||
Bad debt expense
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461,380 | 180,154 | ||||||
Amortization of debt discount
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111,487 | 193,065 | ||||||
Stock based compensation
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310,199 | 111,234 | ||||||
Vesting and re-pricing of stock options
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318,376 | 190,093 | ||||||
Loss on disposal of property and equipment
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12,279 | 40,558 | ||||||
Change in assets and liabilities:
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||||||||
Accounts receivable, net
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(867,327 | ) | (1,933,939 | ) | ||||
Notes receivable
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(18,494 | ) | (15,496 | ) | ||||
Inventories
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(23,439 | ) | (511,618 | ) | ||||
Prepaid expenses and other assets
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412,014 | (276,259 | ) | |||||
Accounts payable
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416,624 | 1,647,497 | ||||||
Accrued expenses
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1,167,541 | (240,520 | ) | |||||
Deferred revenue
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- | (10,451 | ) | |||||
Net cash provided by operating activities
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817,077 | 671,886 | ||||||
Cash flow from investing activities:
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||||||||
Purchase of property and equipment
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(49,182 | ) | (519,409 | ) | ||||
Capitalized software
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(1,089,454 | ) | - | |||||
Purchase of monitoring equipment and parts
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(1,435,210 | ) | (1,486,893 | ) | ||||
Leasehold improvements
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- | (27,060 | ) | |||||
Payment related to acquisition
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- | (1,782,849 | ) | |||||
Net cash used in investing activities
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(2,573,846 | ) | (3,816,211 | ) | ||||
Cash flow from financing activities:
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||||||||
Principal payments on notes payable
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(986,292 | ) | (1,197,366 | ) | ||||
Repurchase of Series D Convertible Preferred Stock and warrants
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- | (10,500 | ) | |||||
Net cash used by financing activities
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(986,292 | ) | (1,207,866 | ) | ||||
Effect of exchange rate changes on cash
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(1,453 | ) | (63,185 | ) | ||||
Net increase (decrease) in cash
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(2,744,514 | ) | (4,415,376 | ) | ||||
Cash, beginning of period
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4,903,045 | 11,101,822 | ||||||
Cash, end of period
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$ | 2,158,531 | $ | 6,686,446 |
2016
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2015
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|||||||
Cash paid for interest
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$ | 25,513 | $ | 931,503 | ||||
Supplemental schedule of non-cash investing and financing activities:
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||||||||
Issuance of warrants for accrued Board of Director fees
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95,968 | 477,142 | ||||||
Payment of interest from an increase in interest bearing debt
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1,399,644 | - | ||||||
Common stock issuance for the acquisition of a subsidiary and milestone achievement
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61,432 | 531,900 |
March 31,
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March 31,
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|||||||
2016
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2015
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|||||||
Exercise of outstanding common stock options and warrants
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436,705 | 262,603 | ||||||
Total common stock equivalents
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436,705 | 262,603 |
Three Months Ended
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Six Months Ended
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|||||||||||||||
March 31,
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March 31,
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March 31,
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March 31,
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|||||||||||||
2016
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2015
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2016
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2015
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Revenues:
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6,592,039 | 4,816,117 | 12,909,643 | 9,801,883 | ||||||||||||
Loss from operations
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(1,246,208 | ) | (2,233,813 | ) | (2,636,640 | ) | (3,917,377 | ) | ||||||||
Net income (loss) from continuing operations
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(1,920,689 | ) | 1,387,470 | (4,047,918 | ) | (878,804 | ) | |||||||||
Basic earnings (loss) per common share
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$ | (0.19 | ) | $ | 0.14 | $ | (0.08 | ) | $ | (0.09 | ) | |||||
Diluted earnings (loss) per common share
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$ | (0.19 | ) | $ | 0.14 | $ | (0.08 | ) | $ | (0.09 | ) | |||||
Net income (loss) attributable to common shareholders
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(1,920,689 | ) | 1,387,470 | (4,047,918 | ) | (878,804 | ) | |||||||||
Basic earnings (loss) per common share
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$ | (0.19 | ) | $ | 0.14 | $ | (0.08 | ) | $ | (0.09 | ) | |||||
Diluted earnings (loss) per common share
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$ | (0.19 | ) | $ | 0.14 | $ | (0.08 | ) | $ | (0.09 | ) |
March 31,
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September 30,
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|||||||
2016
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2015
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|||||||
Finished goods inventory
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$ | 843,072 | $ | 967,414 | ||||
Reserve for damaged or obsolete inventory
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(98,150 | ) | (225,900 | ) | ||||
Total inventory, net of reserves
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$ | 744,922 | $ | 741,514 |
March 31,
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September 30,
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|||||||
2016
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2015
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|||||||
Equipment, software and tooling
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$ | 2,679,618 | $ | 2,823,685 | ||||
Automobiles
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86,623 | 33,466 | ||||||
Leasehold improvements
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1,297,908 | 1,351,017 | ||||||
Furniture and fixtures
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412,841 | 311,628 | ||||||
Total property and equipment before accumulated depreciation
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4,476,990 | 4,519,796 | ||||||
Accumulated depreciation
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(3,092,920 | ) | (2,822,166 | ) | ||||
Property and equipment, net of accumulated depreciation
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$ | 1,384,070 | $ | 1,697,630 |
March 31,
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September 30,
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|||||||
2016
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2015
|
|||||||
Monitoring equipment
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$ | 6,574,535 | $ | 5,010,075 | ||||
Less: accumulated amortization
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(3,042,341 | ) | (2,225,480 | ) | ||||
Monitoring equipment, net of accumulated depreciation
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$ | 3,532,194 | $ | 2,784,595 |
March 31,
2016
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September 30,
2015
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|||||||
Patent & royalty agreements
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$ | 21,170,565 | $ | 21,170,565 | ||||
Technology
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8,804,050 | 7,442,186 | ||||||
Customer relationships
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2,561,674 | 2,538,496 | ||||||
Trade name
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318,604 | 310,762 | ||||||
Website
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78,201 | 50,386 | ||||||
Total intangible assets
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32,933,094 | 31,512,395 | ||||||
Accumulated amortization
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(6,952,227 | ) | (5,628,308 | ) | ||||
Intangible assets, net of
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||||||||
accumulated amortization
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$ | 25,980,867 | $ | 25,884,087 |
March 31,
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September 30,
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|||||||
2016
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2015
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Balance - beginning of period
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$ | 7,782,903 | $ | 6,577,609 | ||||
Additions resulting from acquisitions:
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||||||||
Acquisition of Track Group Analytics Limited
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- | 1,653,815 | ||||||
Effect of foreign currency translation on goodwill
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167,669 | (448,521 | ) | |||||
Balance - end of period
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$ | 7,950,572 | $ | 7,782,903 |
March 31,
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September 30,
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|||||||
2016
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2015
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Accrued royalties
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$ | 21,202 | $ | 7,077 | ||||
Accrued payroll, taxes and employee benefits
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1,409,175 | 1,154,168 | ||||||
Accrued consulting and professional fees
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180,776 | 449,973 | ||||||
Accrued taxes - foreign and domestic
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12,599 | 93,407 | ||||||
Accrued settlement costs
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80,000 | 30,000 | ||||||
Accrued board of directors fees
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127,167 | 248,830 | ||||||
Accrued rent, office and other expenses
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120,835 | 69,478 | ||||||
Accrued cellular costs
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98,412 | 20,000 | ||||||
Accrued warranty and manufacturing costs
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152,036 | 39,050 | ||||||
Accrued interest
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416,684 | 593,420 | ||||||
Total accrued expenses
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$ | 2,618,886 | $ | 2,705,403 |
March 31,
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September 30,
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|||||||
2016
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2015
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|||||||
Unsecured facility agreement with an entity whereby, as of June 30, 2015, the Company can borrow up to
$30.4 million bearing interest at a rate of 8% per annum, payable in arrears
semi-annually,with all principal and accrued and unpaid interest due on July 31, 2018.
A $1.2 million origination fee was paid and recorded as a debt discount and will be amortized as
interest expense over the term of the loan. The remaining debt discount was $520,270 and
$631,757 at March 31, 2016 and September 30, 2015, respectively.
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$ | 29,879,730 | $ | 29,768,243 | ||||
The Loan Agreement, whereby the Company can borrow up to $5 million at 8% per annum on borrowed funds maturing on September 30, 2017.
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1,399,644 | - | ||||||
The Company entered into an agreement whereby the Company was granted a non- exclusive, irrevocable, perpetual and royalty-free license to certain patents with an entity. The Company agreed to pay $4,500,000 over two years or $187,500 per month through February 2016. | - | 937,500 | ||||||
Capital leases with effective interest rates that range between 8.51% and 17.44%. Leases mature between June 2015 and November 2016. $154,410 was assumed through the sale of Midwest Monitoring & Surveillance, Inc. to its former owners.
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21,383 | 24,754 | ||||||
Non-interest bearing notes payable to a governmental agency assumed in conjunction with the G2 acquisition.
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216,342 | 254,917 | ||||||
Total debt obligations
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31,517,099 | 30,985,414 | ||||||
Less current portion
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(69,672 | ) | (796,225 | ) | ||||
Long-term portion of related party debt
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- | - | ||||||
Long-term debt, net of current portion
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$ | 31,447,427 | $ | 30,189,189 |
Fiscal Year
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Total
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|||
2016
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$ | 34,836 | ||
2017
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1,469,317 | |||
2018
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30,456,140 | |||
2019
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42,608 | |||
2020 & thereafter
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34,468 | |||
Debt discount
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(520,270 | ) | ||
Total
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$ | 31,517,099 |
March 31,
|
September 30,
|
|||||||
2016
|
2015
|
|||||||
Beginning balance
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$ | 3,501,410 | $ | 3,000,000 | ||||
Stock payable resulting from the acquisition of Track Group Analytics
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- | 1,170,000 | ||||||
Payment of shares for achieving performance milestones
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(61,432 | ) | (668,590 | ) | ||||
Ending balance
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$ | 3,439,978 | $ | 3,501,410 |
2016
|
2015
|
|||||||
Expected stock price volatility
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71 | % | 76 | % | ||||
Risk-free interest rate
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0.86 | % | 0.54 | % | ||||
Expected life of options
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2 Years
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2 Years
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Shares Under Option
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Weighted Average Exercise Price
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Weighted Average Remaining Contractual Life
|
Aggregate Intrinsic Value
|
||||||||||
Outstanding as of September 30, 2015
|
381,656
|
$
|
15.71
|
||||||||||
Granted
|
78,076
|
$
|
18.09
|
||||||||||
Expired
|
(23,027
|
)
|
$
|
23.99
|
|||||||||
Exercised
|
-
|
$
|
-
|
||||||||||
Outstanding as of March 31, 2016
|
436,705
|
$
|
11.65
|
1.11
|
$
|
20,798
|
|||||||
Exercisable as of March 31, 2016
|
436,705
|
$
|
11.65
|
1.11
|
$
|
20,798
|
(a)
|
Exhibits Required by Item 601 of Regulation S-K
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Exhibit Number
|
Title of Document
|
||
3(i)(1) |
Amended and Restated Articles of Incorporation of SecureAlert, Inc., filed May 19, 2015 (incorporated by reference to our Current Report on Form 8-K, filed May 21, 2015).
|
||
3(i)(2) |
Articles of Amendment to the Articles of Incorporation of Track Group, Inc., dated February 23, 2016 (incorporated by reference to our Current Report on Form 8-K, filed March 2, 2016).
|
||
3(ii)
|
Amended and Restated Bylaws (incorporated by reference to our Form 10-Q for the three months ended March 31, 2010). | ||
4.01 |
2012 Equity Incentive Award Plan (incorporated by reference to our Definitive Proxy Statement, filed October 25, 2011).
|
||
10.1 |
Settlement and Royalty and Share Buy Back among Borinquen Container Corporation, Sapinda Asia Limited, and SecureAlert, effective February 4, 2013 (incorporated by reference to our Current Report on Form 8-K, filed in February 2013).
|
||
10.2 |
Notice of Conversion from Sapinda Asia Limited, dated September 24, 2013 (incorporated by reference to our Form 10-K for the fiscal year ended September 30, 2013).
|
||
10.3 |
Facility Agreement between Tetra House Pte. Ltd. and SecureAlert, Inc., dated January 3, 2014 (incorporated by reference to our Current Report on Form 8-K, filed in January 2014).
|
||
10.4 |
Supplemental Settlement Agreement between Satellite Tracking of People, LLC and SecureAlert, Inc., effective March 1, 2014 (incorporated by reference to our Form 10-Q for the three months ended March 31, 2015).
|
||
10.5 |
Amended and Restated Facility Agreement, dated June 30, 2015, by and between Track Group, Inc. and Conrent Invest S.A, acting on behalf of its compartment “Safety 2“
(incorporated by reference to our Current Report on Form 8-K, filed on July 15, 2015).
|
||
10.6 |
Loan Agreement, by and between Sapinda Asia Limited and Track Group, Inc., dated September 14, 2015 (incorporated by reference to our Current Report on Form 8-K, filed on September 28, 2015).
|
||
10.7 |
Agreement between the Virginia Department of Corrections and the Company dated September 21, 2015 (incorporated by reference to our Current Report on Form 8-K, filed on October 2, 2015).
|
||
10.8 |
Executive Employment Agreement, by and between Track Group, Inc. and John Merrill, dated November 20, 2014 (incorporated by reference to our Current Report on Form 8-K, filed November 25, 2014.
|
||
10.9 | Loan Agreement, by and between Conrent Invest S.A ., acting with respect to its Compartment Safety III, and Track Group, Inc., dated May 1, 2016 (filed herewith). | ||
14.1 |
Code of Ethics (previously filed as Exhibit on Form 10-K for the fiscal year ended September 30, 2013, filed in January 2014).
|
||
21 |
Subsidiaries of the Registrant (previously filed as Exhibit on Form 10-K for the fiscal year ended September 30, 2013, filed in January 2014).
|
||
31(i) |
Certification of Chief Executive Officer under Section 302 of Sarbanes-Oxley Act of 2002 (filed herewith).
|
||
31(ii)
|
Certification of Chief Financial Officer under Section 302 of Sarbanes-Oxley Act of 2002 (filed herewith). | ||
32 |
Certifications under Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350) (filed herewith).
|
||
101.INS
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XBRL INSTANCE DOCUMENT
|
||
101.SCH
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XBRL TAXONOMY EXTENSION SCHEMA
|
||
101.CAL
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XBRL TAXONOMY EXTENSION CALCULATION LINKBASE
|
||
101.DEF
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XBRL TAXONOMY EXTENSION DEFINITION LINKBASE
|
||
101.LAB
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XBRL TAXONOMY EXTENSION LABEL LINKBASE
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||
101.PRE
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XBRL TAXONOMY EXTENSION PRESENTATION LINKBASE
|
Track Group, Inc.
|
||
Date: May 6, 2016
|
By:
|
/s/ Guy Dubois
|
Guy Dubois, Member of Executive Committee
(Acting Principal Executive Officer)
|
||
Date: May 6, 2016
|
By:
|
/s/ John R. Merrill
|
John R. Merrill, Chief Financial Officer
(Principal Accounting Officer)
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Track Group, 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(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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(a)
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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;
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(b)
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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 consolidated financial statements for external purposes in accordance with generally accepted accounting principles;
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(c)
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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
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(d)
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Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent three months (the registrant's fourth three months 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
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5.
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The registrant's other certifying officer(s) 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 the registrant's board of directors (or persons performing the equivalent functions):
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(a)
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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
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(b)
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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.
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Date: May 6, 2016
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/s/ Guy Dubois
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Guy Dubois, Member of Executive Committee
(Acting Principal Executive Officer)
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1.
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I have reviewed this quarterly report on Form 10-Q of Track Group, Inc.;
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2.
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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;
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3.
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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;
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4.
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The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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(a)
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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;
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(b)
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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 consolidated financial statements for external purposes in accordance with generally accepted accounting principles;
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(c)
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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
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(d)
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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
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5.
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The registrant's other certifying officer(s) 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 the registrant's board of directors (or persons performing the equivalent functions):
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(a)
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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
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(b)
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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.
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Date: May 6, 2016
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/s/ John R. Merrill
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John R. Merrill
Chief Financial & Principal Accounting Officer
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By:
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/s/ Guy Dubois
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Guy Dubois, Member of Executive Committee
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(Acting Principal Executive Officer)
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By:
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/s/ John R. Merrill
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John R. Merrill,
Chief Financial Officer
(Principal Accounting Officer)
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