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SECURITIES AND EXCHANGE COMMISSION
Washington, DC. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934.
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934.
For the Quarterly Period Ended August 31, 1999
Commission file number 000-28506
TRACKPOWER, INC.
(Exact name of small business issuer as specified in its charter)
Wyoming 13-3411167
(State of Incorporation) (IRS. Employer ID No.)
67 Wall Street
Suite 2411, New York, NY 10005
(Address of Principal Executive Offices)
(212) 804-5704
(Registrant's Telephone No. including area code)
American Digital Communications, Inc.
745 Fifth Avenue, Suite 900
New York, NY 10151
(Former Name and Former Address if Changed Since Last Report)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports) and (2) has been subject to such filing
requirements for the past 90 days.
YES |X| NO |_|
The number of shares outstanding of each of the Registrant's class of common
equity, as of October 4, 1999 are as follows:
Class of Securities Shares Outstanding
------------------- ------------------
Common Stock, $.0001 par value 29,265,401
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TrackPower, Inc.
INDEX
PART I Financial Information
Item 1. Financial Statements
Balance Sheet................................................ 3
Statements of Operations..................................... 5
Statements of Cash Flows..................................... 6
Notes to Financial Statements................................ 7
Item 2. Management's Discussion and Analysis or Plan of Operations........ 8
PART II. Other Information
Item 1. Litigation ....................................................... 14
Item 2. Change in Securities and Use of Proceeds ......................... 14
Item 3. Defaults Upon Senior Securities .................................. 14
Item 4. Submission of Matters to a Vote of Security Holders .............. 14
Item 5. Other Information ................................................ 14
Item 6. Exhibits and Reports on Form 8-K.................................. 15
A) Exhibit Schedule
B) Reports on Form 8-K
Signatures........................................................ 16
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PART I. Financial Information
Item 1.Financial Statements.
TrackPower, Inc.
Balance Sheet
(UNAUDITED)
<TABLE>
<CAPTION>
ASSETS August 31, February 28,
---------- ------------
1999 1999
---- ----
<S> <C> <C>
Current Assets:
Cash 101,133 18,089
Accounts receivable 20,617 --
Notes receivable 10,764 10,764
Inventory 70,331 --
Marketable securities 10,318 616,880
Other current assets 7,446 331
- -----------------------------------------------------------------------------------------------
Total current assets 220,609 646,064
- -----------------------------------------------------------------------------------------------
Property and equipment:
Property and equipment 188,183 167,137
Less: Accumulated depreciation (149,633) (146,519)
- -----------------------------------------------------------------------------------------------
Net property and equipment 38,550 20,618
Other assets:
Distribution rights, net of accumulated amortization 117,096 129,493
Deposit on satellite uplink services -- 64,000
TrackPower trademarks and other intellectual property rights 68,531 378,491
485,627 571,984
TOTAL ASSETS 744,786 1,238,666
- -----------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes to financial statements.
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TrackPower, Inc.
Balance Sheet
(UNAUDITED)
<TABLE>
<CAPTION>
LIABILITIES AND SHAREHOLDERS' EQUITY August 31, February 28,
--------- -----------
1999 1999
---- ----
<S> <C> <C>
Current Liabilities:
Accounts payable 536,116 339,106
Accrued expenses 71,615 71,063
Accrued interest 24,485 75,242
Note payable -- 595,000
- -----------------------------------------------------------------------------------------------------------
Total non-related party current liabilities 632,216 1,080,411
Accounts payable - related parties 358,231 407,319
Accrued interest - related parties -- 56,652
Notes payable - related parties 10,370 30,370
Current portion note payable - related party -- 157,461
- -----------------------------------------------------------------------------------------------------------
Total related party current liabilities 368,601 651,802
- -----------------------------------------------------------------------------------------------------------
Total current liabilities 1,000,817 1,732,213
Long term convertible note payable 1,500,000 --
- -----------------------------------------------------------------------------------------------------------
Total liabilities 2,500,817 1,732,213
Shareholders' equity:
Convertible preferred stock, no par value, unlimited shares authorized, 1,000,000 1,000,000
(liquidation value $1,000,000)
Common stock, $.0001 par value; unlimited shares authorized, 29,152,068
shares, issued and outstanding on August 31, 1999 and 25,162,886 shares,
issued and outstanding on February 28, 1999 2,915 2,516
Additional paid in capital 7,785,722 7,169,700
Common stock subscribed 7,500 7,500
Warrants issued for guarantee 649,500 --
Accumulated deficit (11,234,598) (8,688,619)
Accumulated other comprehensive income 32,930 15,356
- -----------------------------------------------------------------------------------------------------------
Total shareholders' equity (1,756,031) (493,547)
- -----------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 744,786 1,238,666
- -----------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes to financial statements.
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TrackPower, Inc.
Statements of Operations and Comprehensive Income
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
August 31, August 31,
1999 1998 1999 1998
---- ---- ---- ----
<S> <C> <C> <C> <C>
Revenue
Royalties from distribution rights 1,569 3,118 4,516 7,747
Net subscription revenue 3,845 -- 4,663 --
Wagering commissions 562 -- 562 --
Other revenue 3,653 -- 4,297 --
- ---------------------------------------------------------------------------------------------------------------------
Total revenue 9,628 3,118 14,038 7,747
Operating expenses:
TrackPower - wages and consulting fees 79,812 151,106 167,324 285,486
TrackPower - mgmt fees related party 75,000 75,000 150,000 150,000
TrackPower - transponder fees 900,000 -- 1,000,000 --
Non-recurring Denver office costs -- -- -- 48,778
General & administrative 377,831 144,652 450,085 235,673
- ---------------------------------------------------------------------------------------------------------------------
Total operating expenses 1,432,643 370,758 1,767,409 719,937
Loss from operations: (1,423,015) (367,640) (1,753,371) (712,190)
Other expenses:
Interest on preferred shares -- -- 67,500 --
Interest 28,617 1,466 45,875 8,699
Non-cash financing expense 649,500 101,500 682,225 252,950
Realized gains on marketable securities (34,794) -- (28,463) --
Depreciation and amortization 13,220 20,850 25,471 41,704
- ---------------------------------------------------------------------------------------------------------------------
Total other expenses 656,543 123,816 792,608 303,352
Net loss (2,079,558) (491,456) (2,545,979) (1,015,542)
Other comprehensive income:
Unrealized holding (loss) gain on marketable securities (10,549) (910,735) 17,574 (521,640)
- ---------------------------------------------------------------------------------------------------------------------
Comprehensive loss (2,090,107) (1,402,191) (2,528,405) (1,537,182)
- ---------------------------------------------------------------------------------------------------------------------
Net loss per share of common stock (0.07) (0.06) (0.09) (0.06)
- ---------------------------------------------------------------------------------------------------------------------
Weighted average number of common shares outstanding 28,772,312 25,011,219 27,592,381 24,782,053
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes to financial statements.
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TrackPower, Inc.
Statements of Cash Flows
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
August 31, August 31,
Increase (Decrease) in Cash
1999 1998 1999 1998
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net cash used in operations
Net loss (2,079,558) (511,790) (2,545,979) (1,035,876)
Adjustments to reconcile net loss
to net cash used in operating activities:
Depreciation and amortization 13,220 20,850 25,472 41,704
Gain on sale of marketable securities (34,794) -- (28,463) --
Warrants issued as guarantee fee 649,500 -- 649,500 --
Issuance of stock for bridge financing -- 49,000 -- 144,000
Changes in:
Accounts receivable (19,799) -- (20,617) --
Due to related parties 52,465 34,044 (76,694) --
Inventory (70,331) -- (70,331) --
Other current assets (3,446) (300) (7,115) (300)
Accounts payable 178,147 49,120 197,010 (21,554)
Accrued expenses (115,858) 200 (102,058) (58,597)
Other accrued liabilities -- 25,500 2,807 32,733
- ------------------------------------------------------------------------------------------------------------
Net cash used in operating activities (1,430,454) (333,376) (1,976,468) (897,890)
- ------------------------------------------------------------------------------------------------------------
Cash flows from investing activities:
Proceeds from sale of marketable securities 507,419 -- 652,598 58,267
Deposits - recovery 150,000 -- 64,000 --
Sale/(purchase) of fixed assets (18,398) -- (21,046) (4,387)
- ------------------------------------------------------------------------------------------------------------
Net cash provided by (used in) investing activities 639,021 -- 695,552 53,880
- ------------------------------------------------------------------------------------------------------------
Cash flows from financing activities:
Proceeds from options exercised 110,500 -- 235,500 --
Proceeds from sale of common stock, net 105,199 -- 380,921 --
Payments of notes payable (548,711) -- (752,461) --
Proceeds on issuance of notes payable 995,000 350,000 1,500,000 850,000
- ------------------------------------------------------------------------------------------------------------
Net cash provided by (used in) financing activities: 661,988 350,000 1,363,960 850,000
- ------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------
Increase (decrease) in cash (129,445) 16,624 83,044 5,990
- ------------------------------------------------------------------------------------------------------------
Cash, beginning of period 230,578 8,924 18,089 19,558
- ------------------------------------------------------------------------------------------------------------
Cash, end of period 101,133 25,548 101,133 25,548
- ------------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes to financial statements.
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TrackPower, Inc.
Notes to Financial Statements
August 31, 1999
Summary of significant accounting policies
Basis of presentation:
The accompanying financial statements have been prepared by the Company
without audit. In the opinion of management, the accompanying unaudited
financial statements contain all adjustments (consisting of only normal
recurring accruals) necessary for a fair presentation of the financial position
as of August 31, 1999 and February 28, 1999, and the results of operations and
cash flows for the periods ended August 31, 1999 and 1998.
Nature of business:
The Company was organized June 30, 1993 under the laws of Wyoming. Prior
to August 26, 1999, the Company operated under the name American Digital
Communications, Inc. The Company had intended to provide wireless two-way
communications in the 220 mHz. band, and the Company held distribution rights
for various Midland brand commercial land mobile radios and radio parts acquired
in separate transactions during 1995 and 1996. During fiscal year 1998, the
Company sold, sub-licensed or wrote off all remaining distribution rights. On
January 15, 1998, the Company acquired the TrackPower trade name and other
intellectual property rights. The TrackPower service, when fully implemented,
will distribute live horse racing video to subscribers' homes via satellite and
such subscribers will be able to place wagers interactively through the World
Wide Web and television. The Company will not accept or place any wagering
transactions but will deliver the wager to a state-licensed account wagering
entity.
Certain matters discussed in this Quarterly Report may constitute
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995 (the "Reform Act") and as such may involve risks
and uncertainties. These forward-looking statements relate to, among other
things, expectations of the business environment in which the Company operates,
projections of future performance, perceived opportunities in the market and
statements regarding the Company's goals. The Company's actual results,
performance, or achievements expressed or implied in such forward-looking
statements may differ. For discussion of the factors that might cause such a
difference, see "Management's Discussion and Analysis or Plan of Operations" in
this Quarterly Report.
Use of estimates:
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
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Marketable securities:
The Company's marketable securities consist of unrestricted common stock
of publicly traded companies. The securities are considered held for sale and
therefore are recorded at the market value at the balance sheet date.
Depreciation:
Office equipment, furniture and fixtures, including assets under capital
leases, are stated at cost. Depreciation is computed over the estimated useful
life of three years using the straight line method.
Advertising costs:
The Company expenses advertising as incurred. Advertising expense totaled
approximately $137,395 in the six month period ended August 31, 1999.
Amortization of intangibles:
The cost of the remaining Midland distribution rights, which have been
sub-licensed to a third party, are being amortized over 10 years. However, due
to uncertainty surrounding future revenues from the distribution rights, the
Company uses the cost recovery method if that method produces a greater amount
of amortization.
The TrackPower trademark and other intellectual property rights are being
amortized over 20 years, the period estimated by management to be benefited.
Measurement of intangibles impairment:
The Company annually reviews the amount of the recorded intangible assets
for impairment. If the sum of expected cash flows from these assets is less than
the carrying amount of these assets, the Company will recognize an impairment
loss in such period.
Net loss per share:
Basic loss per common share is based on the weighted average number of
shares outstanding during each period presented. Options to purchase stock are
included as common stock equivalents when dilutive.
Item 2. Management's Discussion and Analysis or Plan of Operation.
Overview
The Company relaunched the TrackPower service under the EchoStar
Dishnetwork service on July 1, 1999. On August 29, 1999, the Company had 279
TrackPower subscribers and on October 11, 1999 had 905 subscribers. During the
quarter ended August 31, 1999, the Company also began earning wagering
commissions under its agreement with Penn National Gaming, Inc. ("Penn Gaming").
Subscription revenues and wagering commissions were insignificant during
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the quarter.
The Company currently charges $19.99 per month or $125 per year for the
TrackPower service and earns a fee of up to 4.75% of all wagering delivered to
Penn National arising from TrackPower subscribers.
The Company will continue to incur significant operating losses until a
break-even level of subscribers is attained. Operating losses in recent
quarters, prior to the launch of the TrackPower service, have been in the order
of $400,000 to $500,000. The loss, excluding a non-cash guarantee fee, for the
three month period August 31, 1999 has risen to approximately $1.4 million. The
increase is attributable to fixed transponder fees of $400,000 per month
required to provide the Trackpower service.
Management has received a positive reaction to its new marketing campaign,
begun in August 1999, but these efforts did not have an impact on the operating
results for the three month period ended August 31, 1999. Management believes
that the expanded, refocused marketing and advertising campaign, which began to
show results in September, has put the Company on course toward a break-even
level of operations.
Results of operations:
For the three month period ended August 31, 1999:
Revenues for the three month period ended August 31, 1999 were $9,628
representing Midland royalty revenue of $1,569, TrackPower net subscription
revenue of $3,845, wagering commissions of $562 and miscellaneous revenue of
$3,653.
The table below presents a monthly breakdown of subscribers, subscription,
and wagering revenues.
June July August
---- ---- ------
Subscribers 54 150 297
Subscription revenue $451 $1,009 $2,385
Wagering commissions -- $ 66 $ 496
Operating expenses totaled $1,432,643 during the three month period ended
August 31, 1999. Transponder fees were $900,000, general and administrative
expenses were $377,831, wages and consulting costs totaled $79,812 and
management fees to Simmonds Capital Limited ("Simmonds Capital") totaled
$75,000. General and administrative expenses included $137,395 of advertising
costs and $109,675 of legal fees incurred in connection with financing the
growth of the Company. The Company is incurring EchoStar transponder fees of
$400,000 per month, which began on July 1, 1999.
Other expenses totaled $656,543 during the three month period ended August
31, 1999, and included a one time $649,500 guarantee fee, interest of $28,617,
depreciation of capital assets and amortization of Midland distribution rights
and TrackPower technology rights of
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$13,220 and a gain of $34,794 on sales of marketable securities. The marketable
securities sold were 199,000 Intek Global Corporation ("Intek") shares for net
proceeds of $507,419. The sale represented the disposal of all remaining Intek
shares. Proceeds from the sale were used to repay the remaining April and July
1998 notes payable.
Simmonds Capital guaranteed the Company's performance under a satellite
distribution services agreement with EchoStar. The Company issued four year
warrants to purchase 1,000,000 common shares of the Company at $2.50 in return
for the guarantee. The Company has estimated the cost of the guarantee at
approximately $649,500.
The Company recorded an unrealized holding loss on marketable securities
of $10,549 during the three month period ended August 31, 1999. The loss is
attributable to the decline in the market value, after adjusting for a one for
five share consolidation, of Fifty Plus Network (formerly Ventel Inc.) shares
from $1.36 to $0.67 during the quarter.
The loss from operations during the three month period ended August 31,
1999 (prior to unrealized holding gains or losses on marketable securities) was
$2,079,558 compared to a loss of $491,456 during the comparative period last
year.
For the three month period ended August 31, 1998:
Revenues during the three month period ended August 31, 1998 were $3,118
representing royalty revenue from Midland distribution rights. Operating
expenses were $370,758 and consisted of $151,106 in wages, consulting and
management services agreements required for the development of the TrackPower
business and $75,000 in management fees paid to Simmonds Capital and $144,652
various general and administrative expenses.
Other expenses totaled $123,816 and consisted of $102,966 of interest and
non-cash financing expenses and $20,850 of depreciation of capital assets and
amortization of Midland distribution rights.
The Company recorded an unrealized holding loss on marketable securities
of $910,735 during the three month period ended August 31, 1998, due primarily
to the decrease in the market value of Intek shares from $4.00 to $1.56 during
the quarter.
The net loss (prior to unrealized holding losses on marketable securities)
for the three month period ended August 31, 1998 was $491,574 or a loss of $.02
per share.
For the six month period ended August 31, 1999:
Revenues for the six month period ended August 31, 1999 were $14,038
comprised of Midland distribution right royalties of $4,516, net TrackPower
subscription revenues of $4,663, TrackPower wagering commissions of $562 and
miscellaneous revenues of $4,297.
Operating expenses for the six month period ended August 31, 1999 were
$1,767,409 and were comprised of $1,000,000 in EchoStar transponder fees,
general and administrative expenses of $450,085, wages and consulting costs of
$167,324 and management fees paid to Simmonds Capital of $150,000.
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Other expenses for the six month period ended August 31, 1999 were
$792,608, consisting of a one time $649,500 non cash guarantee fee, $113,375 of
interest on notes payable and preferred shares, non-cash financing costs of
$32,725, a net gain on sales of marketable securities of $28,463 and
depreciation of capital assets and amortization of Midland distribution rights
and TrackPower technology rights of $25,471.
The one time non-cash guarantee fee represents the estimated value of a
guarantee provided by Simmonds Capital on the Company's obligations under a
satellite distribution services agreement with EchoStar.
During the six month period ended August 31, 1999, the Company sold
256,800 Intek common shares for net proceeds of $635,903 and 270,000 Fifty Plus
Network (formerly Ventel, Inc.) shares for net proceeds of $16,696. The net gain
of sales of Intek shares was $29,587 and the loss on sales of Fifty Plus Network
shares was $1,124.
The net loss, prior to unrealized holding gains or losses on marketable
securities, was $2,545,979.
For the six month period ended August 31, 1998:
Revenues during the six month period ended August 31, 1998 were $7,747
from Midland royalty distribution rights.
Operating expenses during the six month period ended August 31, 1998, were
$719,937 and consisted of $285,486 in wages and consulting costs, $150,000 in
management fees paid to Simmonds Capital, $48,778 in one time costs involved in
closing the Company's head office in Denver, and $235,673 in general and
administrative expenses.
Other expenses totaled $303,352 and consisted of $261,649 of interest and
non-cash financing expenses and $41,704 of depreciation of capital assets and
amortization of Midland distribution rights.
The Company recorded an unrealized holding loss on marketable securities
of $521,640 during the six month period ended August 31, 1998 due primarily due
to a decrease in the market value of Intek shares from $2.97 to $1.56.
The net loss (prior to unrealized holding losses on marketable securities)
was $1,015,542 during the six month period ended August 31, 1998.
Financial Condition
Total assets decreased from $1,408,651 on May 31, 1999 to $744,786 on
August 31, 1999. The decrease is attributable to the sale of the majority of the
Company's marketable securities and continued operating losses.
The value of marketable securities owned by the Company decreased from
$493,492 at May 31, 1999 to $10,318 at August 31, 1999 due to the sale of all
remaining 199,000 Intek
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common shares. At August 31, 1999 the Company's marketable securities consisted
of 15,400 shares of Fifty Plus Network valued at a market price of $0.67 per
share.
Upon the migration of the TrackPower service from the SkyVista platform to
the EchoStar Dishnetwork platform on July 1, 1999, $100,000 of the $150,000
deposit held by SkyVista was applied to the last months service with the
remainder returned to the Company.
During the three month period ended August 31, 1999 the remaining $391,250
of April and July 1998 notes payable were repaid from the proceeds of the sale
of the Intek common shares. In addition, $157,461 of related party notes payable
and $92,539 of related party accounts payable, held by Simmonds Capital, was
converted into new five year convertible debt. Third parties subscribed for an
additional $745,000 of convertible debt during the quarter. The new convertible
notes are for a five year term, pay interest at 8% and are convertible into
common shares of the Company at $1.25.
During the three month period ended August 31, 1999 the number of commons
shares outstanding increased from 27,911,578 to 29,152,068. The increase is
attributable to 453,829 warrants and 786,667 options being exercised.
The Company's shareholders equity deficit increased from $531,123 at May
31, 1999 to $1,756,031 at August 31, 1999. Management expects the deficit to
continue to rise until break even levels of subscribers are achieved.
Liquidity and Capital Resources
The Company's ability to fund losses arising from costs and expenses
exceeding revenue is connected to its ability to raise additional financing
prior to achieving break even levels of subscribers. Thus far the Company has
been successful in financing its growth. Initially, the Company borrowed amounts
primarily by way of short term notes payable secured by the Company's marketable
securities and secondarily through issues of new long term convertible notes.
Simmonds Capital has provided two guarantees to the Company; the first
being a general guarantee of all the obligations of the Company until March 1,
2000 and the second being the Company's obligations under the Transponder
Encryption Services Corporation agreement. In exchange, Simmonds Capital
received 1,000,000 warrants to purchase the Company's common stock at $2.50,
valued at $649,500, and also received the option to convert the $1.5 million
earnout, received in the January 1998 transaction, into 750,000 shares. The
earnout was based on 10% of annual EBITDA up to a maximum of $1,500,000, after
the Company's retained earnings become positive. Simmonds Capital has funded and
will continue to fund day-to-day operating cash flow shortages.
During the three month period ended May 31, 1999, the Company approved an
issue of $1,250,000 of convertible long term notes during the first quarter. The
notes are for a term of 5 years, pay interest at 8% and are convertible into
common equity at $1.25. Prior to end of the first quarter $505,000 was received
under these new notes. As of August 31, 1999 the new convertible long term notes
were fully subscribed for. On September 28, 1999, the Company
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approved an issue of $2.4 million of new convertible long term notes, with a
term of 5 years, interest at 8%, conversion privileges into common shares at
$0.60 and warrants issuable upon conversion to purchase common shares of the
company at anytime over the next two years at $0.75. At August 31, 1999 $250,000
of these notes had been subscribed for.
Year 2000
The Company is developing the new TrackPower technology to be Year 2000
compliant. The Company will, prior to consummating any new business agreements,
require Year 2000 compliance certification from the contracting party.
The incremental cost of Year 2000 compliance is not known at this time.
However, the Company believes that the cost will not be significant due to the
outsourcing philosophy of the majority of the operating task. If the systems of
the Company's business partners are not Year- 2000 compliant as of December 31,
1999, the Company may be subject to material effects to its financial condition
and results from operations.
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PART II. Other Information
Item 1.Litigation.
The Company believes that it is not presently a party to any pending litigation
or any proceeding contemplated by a government authority, the outcome of which
could reasonably be expected to have a material adverse effect on its financial
condition or results of operations.
Item 2.Change in Securities and Use of Proceeds.
Not applicable.
Item 3.Defaults Upon Senior Securities.
Not applicable.
Item 4.Submission of Matters to a Vote of Security Holders.
The Company held an Annual Meeting of Shareholders on Wednesday, August 25,
1999.
During the meeting the seven directors were elected for the upcoming year. The
successful candidates were:
John G. Simmonds
Kenneth J. Adelberg
Charles Cernansky
J. Harry Dunstan
Ian MacDonald
Lawrence P. Aziz
Arnold K. Smolen
Other matters voted upon at the meeting were:
1. Ratification of Pannell Kerr Forster PC as the Company's independent auditors
for the fiscal year ended February 28, 2000, and 2. Company name change from
American Digital Communications, Inc. to TrackPower, Inc.
All matters were successfully passed.
Item 5.Other Information.
Not applicable.
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Item 6.Exhibits and Reports on Form 8-K
(a) Exhibits.
Exhibit
Page Document
No.
3 Articles of Incorporation and Bylaws
3.01 Articles of Incorporation of Mont Rouge Resources, Inc. as filed with
the New York Department of State on March 19, 1987. (incorporated by
reference to Exhibit 3.1 to registration statement on Form S-1, File
No. 33-6343)
3.02 Articles of Incorporation of the Company, as filed with the Wyoming
Secretary of State on June 30, 1993 (incorporated by reference to
Exhibit 3.1 to report on Form 8-K dated July 14, 1993
3.03 Bylaws of the Company (incorporated by reference to Exhibit 3.2 to
report on Form 8-K dated July 14, 1993)
4 Instruments Establishing Rights of Security Holders
4.01 Specimen Stock Certificate of the Company (incorporated by reference to
Exhibit 4.1 to report on Form 8-K dated July 14, 1993)
4.02 Form of Warrant issued by Registrant to various investors, dated as of
April 17, 1998 (incorporated by reference to Exhibit 4.1 to report on
Form 8-K, dated May 7, 1998).
10 Material Contracts
10.01 1993 Incentive Stock Option Plan of the Company dated July 15, 1993
(incorporated by reference to Exhibit 10.1 to report on Form 8-K dated
July 14, 1993)
10.02 1993 Non-Statutory Stock Option Plan of the Company dated July 15, 1993
(incorporated by reference to Exhibit 10.2 to report in Form 8-K dated
July 14, 1993).
10.03 1993 Employee Stock Compensation Plan of the Company dated July 15,
1993 (incorporated by reference to Exhibit 10.3 to report on Form 8-K
dated July 14, 1993)
10.04 1993 Employee Stock Compensation Plan of the Company dated November 5,
1993 (incorporated by reference to Exhibit 10.4 to report on Form 8-K
dated February 14, 1994)
10.05 Asset purchase agreement dated November 8, 1996 for the sale of certain
licensing rights,by and between Simmonds Capital Limited, SCL
Distributors (Western) Ltd., Midland International Corporation, and
American Digital Communications, Inc. (incorporated by reference to
Exhibit 10.41 of the Registrant's 10-KSB for the year ended February
28, 1997)
10.06 Agreement, dated January 15, 1998, between Simmonds Capital Limited and
the Registrant (incorporated by reference to Exhibits 2 through 2.6 of
the Registrant's Form 8-K, dated May 7, 1998)
10.07 Amended and Restated Global Secured Demand Promissory Note, dated July
28, 1998, in the principal amount of $850,000, issued by the Registrant
in favour of Pellinore, for itself and as agent for certain investors
(incorporated by reference
10.08 Amended and Restated Pledge Agreement, dated July 28, 1998, between the
Registrant and Pellinore, for itself and as agent for certain investors
(incorporated by reference to Exhibit 10.2 of the Registrant's Form 8-K
dated September 10, 1998)
10.09 Placement Agent Agreement, dated July 28, 1998 between the Registrant
and Pellinore, for itself and as agent for certain investors
(incorporated by reference to Exhibit 1 of the Registrant's Form 8-K
dated September 10, 1998)
*27 Financial Data Schedule
99 Additional Exhibits
99.01 Press Release dated September 21, 1999
* Filed herewith.
(b) Reports Filed on Form 8-K
1. Report on Form 8-K, dated July 21, 1999
15
<PAGE>
SIGNATURES
Pursuant to the registration requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned, thereto duly authorized.
DATE: OCTOBER 15, 1999 BY: /s/ John G. Simmonds
John G. Simmonds
President / CEO / Director
(principal executive officer)
DATE: OCTOBER 15, 1999 BY: /s/ Gary N. Hokkanen
Gary N. Hokkanen
Chief Financial Officer,
(principal financial officer)
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Tuesday September 21, 2: 03 pm Eastern Time
Company Press Release
American Digital Communications, Inc. Announces Name Change
NEW YORK-(BUSINESS WIRE)-Sept. 21, 1999-The Board of Directors of American
Digital Communications, Inc. (OTCBB: ADCM- news) announced today that effective
Wednesday September 22, 1999, the company will be renamed TrackPower, Inc. to
better reflect its current operating focus. Since April 1999, the company has
been operating a live video broadcasting and remote wagering service for
horseracing fans throughout the United States, under the name TrackPower.
Coincident with the name change the company has moved its corporate office to 67
Wall Street, Suite 2411, New York, NY, 10005. The company will continue to trade
Over-the Counter Bulletin Board, and the new ticker symbol will be TPWR.
The company is recognized as TrackPower throughout the horseracing industry and
the recently launched advertising and marketing campaigns have branded the
company's services as TrackPower.com.
John G. Simmonds, Chairman and CEO, stated. "The name change will allow the
company to market its products more effectively and allow the public to better
associate the product with the public company. It also demonstrates that the
company and the board at TrackPower delivers high quality live horseracing video
to subscribers throughout the Continental United States. TrackPower has
contracted with Penn National Gaming, Inc (NASDAQ: PENN-news) a licensed racing
facility in Pennsylvania, to provide information and wagering services to
subscribers. TrackPower derives revenues from subscriber fees and a percentage
of all wagering bet by its subscribers.
TrackPower is available for purchase by calling 1-800-333-DISH (3474) or by
visiting one of the nearly 20,000 DISH Network retail locations nationwide. For
additional information, contact Graham Simmonds at (905) 839-1430, or by email
at [email protected].
This release contains forward-looking statements, which are made pursuant to the
safe harbour provisions of the Private Securities Litigation Reform Act of 1995.
Investors are cautioned that all forward-looking statements involve risk and
uncertainties.
Contact:
TrackPower, Inc.
J. Graham Simmonds, 905-839-1430 ext. 352
Email: [email protected]
